Project Report

A
Project Report
On
“Study Of Investment Made By LIC Of India In Share Market Through Different ULIP Plans”


Submitted To
Rashtrasant Tukadoji Maharaj Nagpur University, Nagpur.
In Partial Fulfillment for the
Degree of Master of Business Administration
(2009-2010)


Submitted by
Mr. Vaibhav S. Bhalerao

Under the Guidance of
Prof. Pradip S. Mahajan






Through
Department of Management Studies
Nabira Mahavidyalaya, Katol
Dist :- Nagpur
(2009-2010)




Life Insurance Corporation of India

PROJECT TRAINING CERTIFICATE

PROJECT TRAINING CERTIFICATE



This is to certify that Mr. Vaibhav S. Bhalerao is M.B.A. student of Department of Management Studies, Nabira Mahavidyalaya, Katol who has undertook
A Project On
“Study Of Investment Made By LIC Of India In Share Market
Through Different ULIP Plans”
in our organization for a period from 26th Nov. 2009 to 9th Jan. 2010 and successfully completed the same.

We are happy to note the keen interest shown by him during the tenure of Project Work. We wish him bright future.



Date : 13 Jan 2010
Place : Katol Branch Manager
LIC Katol Branch (99-E)

CERTIFICATE

CERTIFICATE


This is to certify that Mr. Vaibhav S. Bhalerao is a bonafied student of the Master of Business Administration (M.B.A.) course doing Specialization in Financial Management subject for the Session 2009-10 of the Department of Management Studies, Nabira Mahavidyalaya, Katol.

The candidate has worked under my supervision and has satisfactorily conducted Project Work .

The Project submitted by him in his own work and is completed so as to warrant its presentation for examination.

His Project work entitled “Study Of Investment Made By LIC
Of India In Share Market Through Different ULIP Plans”

This is in Partial fulfillment of the requirement for the above course and is being forwarded to Rashtrasant Tukadoji Maharaj Nagpur University, Nagpur for examination.


Research Guide
Prof. Pradip S. Mahajan


Prof. A.S. Meena
Principal
Department of Management Studies,
Nabira Mahavidyalaya, Katol

DECLARATION

DECLARATION



The work presented in this dessertation Entitled “Study Of Investment Made By LIC Of India In Share Market Through Different ULIP Plans” has been carried out by me under the guidance of Prof. Pradip S. Mahajan during the academic session 2009-2010.

To the best of my knowledge this work has not been submitted earlier for any Degree, Diploma or Certificate Examination, since this is current Subject of year 2009-2010.


Place :
Date :
Mr. Vaibhav S. Bhalerao
Contact: 9960972386
(M.B.A. Student)
2008-2010

CONTENTS

CONTENTS

Sr. No.
Chapter
Page No.
1
Introduction
a) Title Introduction
b) Organization Profile

01 to 15
2
Objectives of Study

16 to 17
3
Hypothesis of Study

18 to 19
4
limittions

20 to 21
5
research methodology
a) Primary data
b) secondary data

22 to 24
6
data collection

25 to 57
7
data interpretation & its analysis

58 to 75
8
CONCLUSION

76 to 77
9
SUGGESTION

78 to 79
10
bibliography

80 to 81
11
ANNEXURE

82 to 85

TITLE INTRODUCTION

TITLE INTRODUCTION


k LIC, the Life Insurance Corporation of India is market leader in India, came into being on 1st September 1956 as an amalgamated Entity after the nationalization of 245 odd Private Insurance Companies. After completing 52 successful years and achieving Several Milestone it has transformed into a global financial conglomerated. Beginning its operation with a small business of 56.86 lakh in foree policies. LIC has earned the Status of being the world’s largest Life Insurance Company LIC’s life fund a yardstick to measure an insurance company strength has grown from Rs. 410.40 crore in 1956 to Rs. 8,07,317.43 crore in 2009.
k LIC has been won the distinction of being the largest financial institution in India on assets base.
k The LIC is the largest single investors in India and second largest investor amongst the insurers in Asia, with total investment of Rs. 6,38,961.70 Crore. LIC has been rendering resources for Economic Development of the Country. The Corporation is the largest single financial institutional investor in the equity market with investment of over Rs. 1,23,348.77 Crore in equity (book value). The LIC’s investment of around Rs. 70,935 Crore in infrastructural Projects Speaks volumes about its contribution forwards nations buildings activities.
k Different from the conventional policy business LIC enters into the ULIP business. The fund of the investor through these ULIP policies is invested by LIC in Equity Market, Debentures, Bonds and Other Approved Securities and Government Securities and Government Guarantee Bonds.
k LIC invest fund of different ULIP Plans and with diversified portfolio. LIC is giving the consistent return to the investor as compared to private insurer.
k As LIC is a market leader in Share Market the topic Entitled “Study Of Investment Made By LIC Of India In Share Market Through Different ULIP Plans” has unique value of study.
k For this study LIC’s ULIP Plans Fortune Plus (Table No. 187), Profit Plus (Table No. 188), Money Plus – I (Table No. 193), Market Plus – I (Table No. 191) are considered. Also their Portfolio and different funds like Bond, Secured, Balanced and growth are studied.

ORGANIZATION PROFILE

Organization Profile

L for Loyalty
I for Innovation
C for commitment

k LIC – Life Insurance Corporation of India the nations largest Financial Institutions and Insurer on Assets Base came into being on 1st September 1956.
k LIC is an organization which India and Indians love. LIC plays major role in national development. There is no project by the Central Government in which LIC is not involved. LIC under writes the shares of almost all the public issues. LIC is a top organization. because is accounts for every single paisa of investor.
k The variety of plans in LIC is yet another beauty. LIC is the nations pride.

(A) LIC AT GLANCE

(A) LIC AT GLANCE

k LIC had 5 Zonal Offices, 33 divisional offices and 212 branch offices, apart from office in the year 1956. Since life Insurance contracts are long term contracts a currency of the policy it requires a variety of services need was felt in the I expand the operations and place a branch office at each district headquarter. Deorganizations servicing functions were transferred to the branches, and branch accounting units. It worked wonders with the performance of the corporation.
k Today LIC functions with 2048 full computerized branch offices 100 Divisional offices and the Corporate office. LIC’s wide area Network. has tied up with so Service providers to offer on line Premium collection facility. ATM premium payment facility is an additional to customer convenience. Apart Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With providing easy access to its policyholders, LIC has launched its SATELLITE SAM. The satellite offices are smaller, leaner and closer to the customer. The digitalize satellite offices will facilitate anywhere servicing.

4
k LIC continues to be the dominate life insurer even in the liberalized Insurance scene and is moving fast on a new growth trajectory surpassing its own past and has issued over crore policies during the current year.
k From then to now, LIC has crossed many milestones and has set unprecedented records in various aspects of Life Insurance into existence in the county inspire us at LIC message of protection to light the lamps of security in as many homes as possible for the people in providing security to their families.k LIC helps Govt. to build roads, bridges, infrastructure, providing electricity, water supply and everything i.e done for the public

(B) MEMBERS OF THE CORPORATION

B) MEMBERS OF THE CORPORATION
Shri. T.S.Vijayan, Chairman
Shri. D.K. Mahrotra, Managing Director
Shri. Thomas Mathew T., Managing Director
Shri. A.K. Dasgupta, Managing Director
Shri. Ashok Chawla (From 14.05.2009)
Shri. G.C. Chaturvedi (from 14.05.2009)
Shri. Yogesh Lohiya
Shri.T.C. Venkat Subramanian
Dr. Soorand Rajshekhran (From 02.01.2009)
Shri. Monis R. Kidwai (From 02.01.2009)

MEMBERS OF THE BUILDING ADVISORY COMMITTEE

MEMBERS OF THE BUILDING ADVISORY COMMITTEE
Shri. T.S.Vijayan, Chairman
Shri. A.K. Dasgupta, Managing Director
Shri. Monis R. Kidwai (From 02.01.2009)
Shri. K.T. GurumukhiShri. Y.N. Ramamurthy

MEMBERS OF THE INVESTMENT COMMITTEE

MEMBERS OF THE INVESTMENT COMMITTEE
Shri. T.S.Vijayan, Chairman
Shri. Thomas Mathew T.,
Managing Director
Shri. G.C. Chaturvedi
Shri. Yogesh Lohiya
Shri. B. Chakrabarty
Shri.T.C. Venkat Subramanian
Shri. T.Bhargava, Appointed Actuary
Shri. D.K. Mehrotra, Managing Director (Special Invitee)
Shri. A.K. Dasgupta, Managing Director (Special Invitee)

MEMBERS OF THE EXECTIVE COMMITTEE

Shri. T.S.Vijayan, Chairman
Shri. D.K. Mahrotra, Managing Director
Shri. Thomas Mathew T.,
Managing Director
Shri. Yogesh Lohiya
Shri.T.C. Venkat SubramanianShri. A.K. Dasgupta, Managing Director (Special Invitee

LIC’S PLANS

(D) LIC’S PLANS


CONVENTIONAL PLANS :


ULIP PLANS:
1)
Jeevan Tarang
1)
Bima Plus
2)
New Bima Gold
2)
Future Plus
3)
Jeevan Akshay
3)
Jeevan Plus
4)
Amulya Jeevan
4)
Money Plus
5)
C - Nidhi
5)
Market Plus
6)
Jeevan Anurag
6)
Fortune Plus
7)
Jeevan Shree – I
7)
Profit Plus
8)
Jeevan Kishore
8)
Market Plus – I
9)
Money Back Ploicy
9)
Money Plus – I
10)
Jeevan Mitra
10)
Jeevan Sathi Plus
11)
Jeevan Saathi
11)
Child Fortune Plus
12)
Marriage Endowonent / Education Annuity


13)
New Janraksha


14)
Jeevan Chhaya


15)
Jeevan Surbhi


16)
Jeevan Aadhar


17)
Jeevan Vishwas


18)
New Jeevan Suraksha – I


19)
Jeevan Anand


20)
Komal Jeevan


21)
Jeevan Bharati


23)
Anmol Jeevan


24)
Jeevan Saral


25)
Jeevan Pramukh


26)
Bima – Bachat.

(E) MISSION AND VISION

(E) MISSION AND VISION

k MISSION -
“Explore and enhance the quality of life of People through financial providing products and services of aspired with competitive by rendering resources for economic Development”.

k VISION -
“A trans-nationally competitive financial conglomerate of significance and pride of India.”.

(F) OBJECTIVE OF LIC

(F)OBJECTIVE OF LIC

1) Spread life insurance widely and in particular to the rural areas and to socially and Economically backward classes with a view to reachy all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost.
2) Maximize mobilization of people’s savings by making insurance linked savings adequately attractive.
3) Braz in mind in the investment of policy holder’s, whose money it holds in trust without losing sight of the interest of the community as a well as the community as a whole keeping in a view national priovities and obligation of attractive return.
4) Conduct business with almost economy and with the full realization that the moneys belong to the policy holders.
5) Act as a trustee of the insured public in their individears and Collective Capaciting.
6) Meet the various life Insurance needs of the community that would arise in the changing Social and Economic Environment.
7) Involve all people an agent working in the Corporation to the best of their capabilitie for the insured public by providing efficient service with courtesy.

OBJECTIVE OF STUDY

OBJECTIVE OF STUDY

k For any research work it is quite important to decide well in advance the broader objectives of study. The broader objective highlights the path to be chosen and the guiding principles on which research efforts can be give right direction.
k The objective of the topic investment made by LIC of India in share market through different ULIP Plans are as followes.
1. To study the Services provided by LIC to the customer.
2. To find out investment made by LIC in share market through different ULIP PLANS. (Four Plans – Fortune Plus, Profit Plus, Money Plus – I, Market Plus – I)
3. To find out investment made by LIC in share market through different ULIP PLANS. (Four Plans – Fortune Plus, Profit Plus, Money Plus – I, Market Plus – I) through their different funds like Bond Fund, Secured Fund and Growth Fund.
4. To compare the NAV (Net Asset Value) of different funds of considered ULIP PLANS.
5. To find out rate of return on investment made by the LIC
6. To study the developed efficient quality system that is constantly matching the international standards.
7. To study the Diversified Portfolio of different ULIP PLANS and their different Funds across the segment.
8. To study of the Customers expectation from LIC.
9. To Study the investment made by LIC in Equities, Bonds, Securities and IPOS.
10. To study the investment made by LIC in Governments Infrastructural, Power and Water Supply Projects.
11. To study the reason behind the consistent rate of return by LIC through different ULIP Plans to the customer.

HYPOTHESIS OF STUDY

HYPOTHESIS OF STUDY

k Hypothesis can be defined as a tentative supposition of provisional guess which seems to explain the situation.
k The Hypothesis assumed by taking some assumption.
k The assumptions for the study are as follows :-
1) LIC is the Market Leader in India which gives more stress only on investment plan.
2) There is wide scope for life insurance Company i.e. LIC in Indian Insurance Market as well as Foreign Market.
3) LIC has a wide range of Product.
4) LICs ULIP Plans have Unique features compare to Private Insurance Companies.
5) LIC gives consistent rate of return to the policy holder.
6) The main aim of LIC is to collect Premium and Fund and Invest it through different conventional and ULIP Plans for the welfare for General Policy Holder.
7) Public trust much more on Life Insurance Corporation of India as compare to Private Insurance Companies.
8) LICS Portfolio of ULIP Plans is very much diversified as compare to Private Insurance Companies.
9) LICS rate of return on investment is good as compare to others.
10) LICS is the Number 1 Financial Institution in India.

LIMITATIONS OF STUDY

LIMITATIONS OF STUDY

k The Scope of the study denotes conceptual area within which the study is to be carried out. The study work is aimed to understand the fund collected by LIC from the investor and to invested in share market and other instruments available for investment. It is also deals with to compare the rate of returns of different funds of ULIP Plans. Scope of study is very wide.
k Every case is taken for making the information authentic and realistic one.
k But while carrying out the research work certain Limitation come across.
1) Study is Limited to only four ULIP Plans of LIC.
2) Study is Limited to maintaining profitability for policy holder.
3) Study is limited Katol branch only.
4) Study is done with available data but it is some time insufficient for study.
5) Study is done with the help of cooperation of staffs and other related persons. But sometimes they not cooperate as we want.
6) Some times reasons for investment in particular sector is not understood.
7) Some times agents don’t provide authentic data.
8) Study of Private Insurance Companies ULIP Plans is not considered to compare with LICs ULIP Plans.

RESEARCH METHODOLOGY

Research Methodology

k Research is the process of systematic and in depth study to search for a particular subject topic or area of investigation backed by the Collection, Compilation, Analysis or Interpretation of data. It is more systematic study or activity directed towards discovery and the development of organized body of knowledge.
k Success of Research depends upon the scientific methods used. There are various methods for Collecting the data. But it is not advisable and even possible to used all the methods.
k Every researcher must know the purpose of his study. For doing research one must set questions accordingly one has to find out and the answers through his own investigation. This Study is conducted to analyze the Investment made by Life Insurance Corporation of India in share market through different ULIP Plans for its investor.
k The data are basically Segrated into two parts.
a) Primary Data
b) Secondary Data.
a) Primary Data :-
Primary Data is collected during the course of doing experiments in an experimental research. There are several methods for collecting primary data.
These several methods of collecting primary data are as followes :-
1) Observation Method
2) Interview Method
3) Through Questionnaire
4) Through Schedules

For the study of topic “Investment Made by LIC of India in Share Market through Different ULIP Plans” Primary data is collected through Questionnaire Methods and the questions are open ended.
For this the questions are asked to :-
i) Branch Manager
ii) Staff of LIC
iii) Development OfficerAgents

b) Secondary Data :-

a) Secondary Data :-
Secondary data means that is already available.
For the study of topic “Investment Made by LIC of India in Share Market through Different ULIP Plans”.
Secondary Data is collected from :-
i) Various publications of the LIC of India.
ii) Financial Journals.
iii) Annual Report of LIC of India
iv) Various Brouchers and Pomplets.
v) Various Books, Magazines and News Paper.
vi) Various publications of the Central, State and Local Governments.
vii) Reports prepared by Research Scholars and Economists.
viii) Public Records and Statistics, Historical Documents and Other sources of published information.
ix) Through internate from Website of LIC of India i.e. www.licindia.in.
x) Reports and Publication of various Associations connected with Business and Industries, Stock Exchanges etc.

What is ULIP

What is ULIP ?

When we talk about insurance as an investment option. ULIPs have an important role as many of the investor nowadays goes for this as a profitable avenue. ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a Life Insurance Policy which provides an arrangement of risk cover and investment. The dynamics of the capital market have a direct impact on the performance of the ULIPs. remember that in a unit linked insurance policy, the investment risk is generally borne by the investor/the holder of the policy.
Under this policy the insurer allocated the total premium into various units. You are also given the opportunity to chose the option of investment units. Most of the investors prefer to allocate them in financial instruments and assets. The number of units you choose on each option might differ from individual to individual. Some of you may choose to invest more on Real Estate while the rest prefer to invest more on Financial Instruments such as shares, debentures etc.
Likewise the insurer takes care to allocate a unit of the premium for insurance maintenance and the related expenses. You are also excused from paying income tax for the profits received from the investment. However this policy does not guarantee profits like the traditional plan and is therefore risky as far as returns are concerned. But the Possibility of making more profit is very high in this policy.
ULIPs fundamentally work like a Mutual Fund with a life cover thrown in. they invest the premium in market linked instruments like Stocks, Debentures, Corporate Bonds and Government Securities. Investments in ULIPs help to gain tax benefits under Section 80C. Depending upon the performance of the unit linked funds chosen, the policy holder may realize gains or losses on his/her investments. It should also be noted that the past performance of a fund are not necessarily indicative of the future returns of the fund

k Types of Funds do ULIP Offer :-

k Types of Funds do ULIP Offer :- Most insurers offer a wide variety of funds to suit your investment objectives Risk Profile and Time Horizons. Different funds have different risk profiles. The possibility for returns also varies from fund to fund. Following are some of the common types of funds accessible along with an indication of their risk uniqueness

SALIENT FEATURES OF ULIP PLANS

k SALIENT FEATURES OF ULIP PLANS


1) An innovative aspect of ULIPs is the ‘Top-Up Facility’.
A top-up is a one time additional investment that is paid apart from the annual premium of the policy. This feature works well when you have a surplus that you are looking to invest in a market linked avenue. ULIPs also have the facility that allows you to skip premiums if you have paid your premiums regularly for the first three years. For instance, if you have paid your premium then the insurance company will make the necessary adjustments from your investment surplus and will make sure that the policy remains active. But it is always advisable to pay the premiums regularly to avoid troubles. Such facilities are not available with any other policy. This makes it a differentiating factor when compared to policies like endorsement, term or money back policies.
27

2) Another important feature is that ULIPs disclose their “Portfolios” regularly. This gives you an idea of how the money is being managed. Another important aspect is its “Liquidity Factor”. Since ULIPs investments are NAV based it is possible to withdraw a portion of your investments before maturity. It is possible only after the completion of the lock-in period. Such facility is not available with in a traditional endowment policy. With ULIPs one can also avail the tax benefits which is offered under section 80C. This is subject to a maximum limit of Rs. 1,00,000.

k Expenses Charged in a ULIP

k Expenses Charged in a ULIP

k Premium Allocation Charge :
A percentage of the premium is appropriated towards charges initial and renewal expenses apart from commission expenses before allocating the units under the policy.

k Mortality Charges :
These are charges for the cost of insurance coverage and depend on number of factors such as age, amount of coverage, state of health etc.

k Fund Management fees :
Fees levied for management of the fund and is deducted before arriving at the NAV.

k Surrender Charges :
Deducted for premature partial or full encashment of units.

k Funds Switching Charge :
Usually a limited number of fund switches are allowed each year without charge, with subsequent switches, subject to a charge.

k Service Tax Deductions :Service tax is deducted from the risk portion of the premium

1) LIC FORTUNE PLUS

1) LIC FORTUNE PLUS :-
LIC’s Fortune Plus ULIP Plan No. :- 187

Term
Age
Sum Assured
Minimum
5
12
100000
Maximum
20
60
No Limits

Premium Ceasing Age : 65, Premium Ceasing Term : 20

k Plan Highlights :
For only those, interested in making a fortune of a Lifetime !!!
LIC’s Fortune Plus, a Unit Linked Limited Endowment Plan (ULIP+Endowment) which provides twin benefits of Insurance and Capital Market Return. Brief stint with premium liability and longer period to stay invested makes it a worthy of note. It has entire range of fund options to accommodate both risk averse and aggressive investors. This plan has been designed to ensure that your money earns you handsome returns. Thus with a host of innovative options placed in front of you, Fortune Plus is definitely the right kind of insurance solution you could aim at.
Premium amount reduces to 25% after first year.
Policy term or first year TS annual premium determines your sum assured.
No limit for maximum premium.
Premium can be paid in yearly, half yearly, quarterly and monthly (ECS) installments.
Minimum and maximum age to purchase policy under this plan is 12 and 60 years respectively.
You an choose policy term between 5 to 20 years.
Funds available under this plan are : Bond, Secured, Balanced and Growth.
Policyholder can switch between any fund types during the policy term. 4 switches will be allowed free.
Flexibility of partially withdrawing the units after 3 policy years.

29
In case of maturity the policyholder will get an amount equal to the Value of Balance of the Units. In case of death the policyholder is eligible to get higher of sum assured or the value of the units.
Maturity returns can be amplified by exercising “Settlement Option where in the Policyholder can encash the units in regular installments”.
If premiums are not paid after paying at least 3 years premium then also the policyholder enjoys life cover and accident benefit (only if opted) subjected to condition.
Accident benefit rider option can be availed under this plan.
Enjoy tax benefit under section 80C.
Great mixtre of ULIP+Endowment Insurance Plan.
Flexibility to increase/decrease premium & withdraw money according to your needs.

) LIC PROFIT PLUS

2) LIC PROFIT PLUS :-
LIC’s pROFIT Plus ULIP Plan No. :- 188


Term
Age
Sum Assured
Minimum
5
0
50000
Maximum
20
65
No Limits

Premium Ceasing Age : 70 Premium Ceasing Term : 20

k Plan Highlights :
Profitable occasions come Rate, so be a part of it !!!
Presenting LIC’s profit Plus, a Unit Linked Limited Endowment Insurance Plan that provides security and reaps benefits with your investments, thus helping you meet your financial needs.
This plan primarily contributes to giving financial protection to your family and enhances your savings.
You can make your choice of funds, depending upon your ability to take risks.With excellent insurance coverage and versatile investments in one package, Profit Plus, is designed to suit your needs

k FEATURES OF THE PLAN

k FEATURES OF THE PLAN :
Plan that gives the benefits of various market related instruments coupled with insurance cover.
Premium payment term is limited to single 3, 4 or 5 years.
No limit for maximum premium
Premium can be paid in yearly, half yearly, quarterly, monthly (ECS) or single installments.
Minimum and Maximum age to purchase policy under this plan is 0 and 65 years respectively.
You can choose policy term between 5 to 20 years.
Plan offer a chose of 4 investment fund options viz. Bond, Secured, Balanced and Growth fund depending on your risk profile.
Policyholder can switch between any fund types during the policy term. 4 switches will be allowed free.
High liquidity in the form of partial withdrawals.
In case of maturity the policyholder will get an amount equal to the value of the units.
In case of death the policyholder is eligible to get higher of sum assured or the value of the units.
Maturity returns can be amplified by exercising “Settlement Option wherein the policyholder can encash the units in regular installments.
Flexibility to increase/decrease premium & withdraw money according to your needs.
Accident benefit rider and Critical illness rider options can be availed under this plan Enjoy tax benefit under section 80 CCE.

3) LIC MONEY PLUS- I :-

LIC’s MONEY Plus – I ULIP Plan No. :- 193
LIC’s New Money Plus – I Unit PlanThis is a Unit Linked Endowment plan with regular premium paying term which offers investment cum insurance during the term of the policy. You can choose the level of cover within the limits, which will depend on the level of premium you agree to pay.

TYPES OF FUND OFFER

k TYPES OF FUND OFFER :-
For types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The unit fund is subject to various charges and value of units may increase or decrease, depending on the New Asset Value (NAV).
1. Payment of Premiums :
You may pay premiums regularly at yearly, half yearly, quarterly or monthly (ECS) intervals over the term of the policy. The minimum annual premium will be Rs. 5,000 increasing thereafter in multiples of Rs. 1,000/-. The minimum monthy (ECS) premium will be Rs. 1000/- increasing thereafter in multiples of Rs.250/-.
Premium can be paid in yearly, half
Premium payment term is limited to single 3, 4 or 5 years.
No limit for maximum premium
Premium can be paid in yearly, half yearly, quarterly, monthly (ECS) or single installments.
Minimum and Maximum age to purchase policy under this plan is 0 and 65 years respectively.
You can choose policy term between 5 to 20 years.
Plan offer a chose of 4 investment fund options viz. Bond, Secured, Balanced and Growth fund depending on your risk profile.
Policyholder can switch between any fund types during the policy term. 4 switches will be allowed free.
High liquidity in the form of partial withdrawals.
In case of maturity the policyholder will get an amount equal to the value of the units.
In case of death the policyholder is eligible to get higher of sum assured or the value of the units.
Maturity returns can be amplified by exercising “Settlement Option wherein the policyholder can encash the units in regular installments”. Accident benefit rider and Critical illness rider options can be availed under this plan Enjoy tax benefit under section 80 CCE.

3) LIC MARKET PLUS - I

3) LIC MARKET PLUS - I :-

LIC’s MARKET Plus – I ULIP Plan No. :- 191

Launched on 17th June 2008, is a unit Linked Deferred Pension Plan where the policy holder can choose the plan with or without risk cover.

k Benefits :-
On death of the policyholder within the defferment term where life cover is opted for and is in force, the nominee is eligible to get the sum Assured under the Basis Plan together with the Policyholder’s Fund Value.
On death of the policyholder where the policy is taken without life cover, then the Policyholder’s Fund value, is payable to the nominee.
On the Policyholder surviving upto the date of vesting, the Policyholder’s funds value will compulsorily be utilized to provide an annuity based on the then prevailing immediate annuity rates under the relevant annuity option.

k Top-Up (Additional Premium) :-
The policyholder can pay Top-up in multiples of Rs. 1,000/- without any limit at anytime during the term of the policy.

k Eligibility & Conditions :
For Basic Plan Without Life Cover.
a) Minimum Sum Assured : Nil
b) Maximum Sum Assured : Nil
c) Minimum Premium :
Rs. 5,000 p.a. for Rgular premium (other than monthly (ECS) mode) Rs. 100 p.m. for monthly (ECS) mode, increasing thereafter in multiples of Rs. 250, thereafter in multiples of Rs. 250.
d) Maximum Premium : No limit
e) Minimum Entry Age : 18 years last birthday
f) Maximum Entry Age : 74 years nearest birthday
g) MinimumDefferment Team : 5 years
h) Minimum Vesting Age : 40 years completed.
i) Maximum Vesting Age : 79 years completed.Annulized premiums (other than monthly (ECS) is payable in multiples of Rs. 1,000

k FINANCIAL INSTRUMENT FOR INVESTMENT

k FINANCIAL INSTRUMENT FOR INVESTMENT :-

I) Equity Share :
B No maturity date.
B No guarantee of returns.
B Traded on Stock exchange & high liquidity.
B Market Prices go op & down.
B Does not provide regular income.
B Good for capita growth over long term.
B Can deliver 15 to 20 % returns over longer time horizons

II) Government Securities :
B Issued by Central/State Govt.
B Has fixed maturity date – 2 to 30 yrs.
B Provides regular income
B Principal & interest payment guaranteed by GOI
B High Liquidity
B Guaranteed returns 7 to 8 %
B Low volatility

III) Infrastructure Bonds :
B Issued by IDBI, IDFC, SIDBI
B 3 years lock in period
B Section 80 C benefit
B No liquidity
B Return of 6 %

IV) Corporate Bonds :
B Has fixed maturity date
B Provides regular income
B Market price Sensitive to interest rate & credit rating changes
B Return higher than Govt. Bonds
B Low Liquidity B Low Volatility

MONEY MARKET INSTRUMENT

V) MONEY MARKET INSTRUMENT :
B Mature within One year
B Capital Protected
B Safe & low returns of 4 to 6 %
B Minimum volatility
B High Liquidity
B Good for short term investment

VI) Call Money :
B Overnight lending & borrowing of money by banks. Insurance Companies, Mutual Funds permitted within certain limits to lend in the call money market.

VII) Treasury Bills :
B Issued by Banks for 91 days, 364 days at a discount to the face value.

viiI) Certificate of Deposit :
B Issued by Banks for 91 days to 1 year at a discount to the face value.

IX) Commercial Paper :
B Issued by Corporates for 91 days to 1 year to discount to the face value.

X) Repos :
B Lending against govt. Securities for a day or more.

XI) Bank Deposits :
B Has varying maturities maximum 10 years
B Offers assured but low returns
B Capital protected
B Not marketable
B Insured upto Rs. 1 lac for each Bank
B Auto Sweep, ATM cheque Book, over Draft Facilities allowed
B Premature encashment subject to penalty
35
B TDS deducted if interest exceed Rs. 5,000/-
B ‘No Frills Account’ can be opened even with Re. 1/-
B As per this notification an individual will get tax deduction upto Rs. 1 lacs u/s 80C on investments made in such product.
B The Bank Deposits is for a minimum period of 5 years.
B Quoting of PAN in such FD is Compulsory
B There is a lock-in period of 5 years

XII) MUtual Funds :
B Invest in Equities, Bonds, MM and Bank Deposits
B Market Linked Returns
B Risk Reward linked with fund choices
B Tax-free dividends

XIII) Individual Funds (PMS) :
B Investment Portfolio constructed as per individual risk appetite.
B Minimum wealth level at entry eg. Rs. 50 lacs or Rs. 1 core
B Fees as a percentage of portfolio or are linked with return on portfolio
B No guarantee of returns
B Meant for HNI’s.

XIV) Life Insurance :-
B Provided Risk 1 cover, survival Benefits & Returns
B Creates instant Estate & Preserves Human Life Value
B Ideal for unpredictable needs
B Lone term protection cum investment vehicle
B Section 80 C, 1 (10D) Benefits.

XV) 8 % GOI Savings Bonds 2003 :-
B Interest payable half yearly or cumulative
` B Effective yield 8.16 %
B Tentre - 6 years
B Non-transferable, non tradable, non pledgeableNo TDS deductions

XVI) 8 % MIS OF POST OFFICE

XVI) 8 % MIS of Post Office :
B 8 % interest paid monthly
B Tentre - 6 years
B Maximum limit for joint account Rs. 6 lacs
B 10 % bonus dis-contiunued from 13th February 2006
B Penalty for encashment after 1 year reduced from 3.5 % to 2 %
B For encashment after 3 years penalty of 1 % introduced

XVII) 8 % KVP :
B 8 % interest compounded quarterly
B Doubles after 8 years & 7 months
B Premature encashment – after 2.5 years with penalty
B Interest amount taxable

XVIII) 8% NSC :-
B Interest Compounded half yearly
B Investment & interest qualify for deduction u/s 80 C
B Rs. 1,000/- become 1601 after 6 years
B No premature encashment within 6 years
B Section 80C benefits for subscription and accrued interest
B Interest amount taxable

XIX) 8% GOI Senior Citizen Scheme :
B 9 % interest payable quarterly
B Tenure – 5 years
B Maximujm amount Rs. 15 lacs
B No TDS
B Premature withdrawal after 1 year with penalty.

XX) Post Office Time Deposits :
B 1 years - 6.25 %
B 2 years - 6.50 %
B 3 years - 7.25 %
B 4 year - 7.50 %

] “NAV OF LIC’S PROFIT PLUS AS ON 30.06.2009

] “NAV OF LIC’S PROFIT PLUS AS ON 30.06.2009

k Observations (From the Graph) :
I) NAV of Bond Fund is higher than other funds i.e. Secured, Balanced and Growth Fund.
II) NAV of Bond Fund is higher than Basic Net Asset Value i.e. Rs. 10 on launching date.
III) NAV of Secured and Balanced Fund are higher than Growth Fund
IV) An NAV of Growth Fund falls down than Basic Net Asset Value i.e. Rs. 10 on launching date as the investment is much more in equities, but at that time share market falls down and the values of most of equities in which investment is made also falls down

“NAV OF LIC’S MONEY PLUS - I AS ON 30.06.2009

“NAV OF LIC’S MONEY PLUS - I AS ON 30.06.2009

k Observations (From the Graph) :
I) NAV of Secured Fund is higher than other funds i.e.Bond, Balanced and Growth Fund.
II) NAV of all the Funds are higher than Basic Net Asset Value i.e. Rs. 10 on launching date.
III) NAV of Growth Fund is lower than all the Fund

“NAV OF LIC’S MARKET PLUS - I AS ON 30.06.2009”

“NAV OF LIC’S MARKET PLUS - I AS ON 30.06.2009

k Observations (From the Graph) :
I) NAV of Growth Fund is higher than other funds i.e.Bond, Secured & Balanced Fund.
II) NAV of all the Funds are higher than Basic Net Asset Value i.e. Rs. 10 on launching date.
III) NAV of Secured Fund is lower than all the Fund
IV) NAV of Growth Fund is higher because the values of equities in share market increases

“NET ASSET VALUE (NAV) AS ON 30.09.2009

Sr. No
ULIP PLANS
DATE OF LAUNCH
BASIC UNIT VALUE ON LAUNCHING DATE
(In Rs.)
NAV AS ON 30.09.2009
(In Rs.)
Bond Fund
Secured Fund
Balanced Fund
Growth
Fund
1
Fortune Plus
(Tab. No. 187)

23.08.2007
10
12.1121
11.8285
11.4384
10.9436
2
Profit Plus
(Tab. No. 188)

23.08.2007
10
12.4682

11.9711
12.4042
10.8080
3
Money Plus – I
(Tab. No.193)

22.05.2008
10
12.3843
14.0609
13.8580
12.9164
4
Market Plus –I
(Tab. No. 191)

17.06.2008
10
11.4418
11.8530
12.1063
12.8108

15] “NAV OF LIC’S MONEY PLUS - I AS ON 31.12.2009”

15] “NAV OF LIC’S MONEY PLUS - I AS ON 31.12.2009”

Observations (From the Graph) :
I) NAV of Secured Fund is higher than other funds
II) NAV of all the Funds are higher than Basic Net Asset Value i.e. Rs. 10 on

[16] “NAV OF LIC’S MARKET PLUS - I AS ON 31.12.2009”

[16] “NAV OF LIC’S MARKET PLUS - I AS ON 31.12.2009”

Observations (From the Graph) :
I) NAV of Growth Fund is higher than other funds i.e. Bond, Secured & Balanced Fund.
II) NAV of all the Funds are higher than Basic Net Asset Value i.e. Rs. 10 on launching date.
III) NAV of Bond Fund is lower than all the Fund
IV) NAV of Growth Fund is higher because the values of equities in share market increases

“MAIN OBSERVATIONS FROM ALL THE GRAPHS”-

1) NAV of different funds of different ULIP Plans on different date varies.
2) Sometimes Bond Fund is higher in NAV, sometimes Secured, sometimes Balanced and sometimes Growth Funds NAV varies.
3) Most of the times NAV of Growth Fund is varies due to volatility of share market because much more investment is in equities.
4) As compare to Growth Fund other funds NAV are not affected much more because the fund investment is made in Government Guaranteed Securities, Bonds and Other Approved Securities and less investment is made in equities.
5) Thus returns of all the funds are consistent in short course of duration of investment.
6) But in long term investment period the returns of Growth Funds seems much more as compared to other funds.

k CONCLUSION

k CONCLUSION :-
Through the study of the topic “Investment made by LIC of India in share market through different ULIP Plans”, I came to following conclusion.
1) The ULIP Plans of LIC of India are flexible for investors point of view.
2) LIC’s ULIP Plans like Fortune Plus, Profit Plus, Money Plus – I and Market Plus – I have Divercified Portfolio as far as investment is concerned.
3) LIC of India invest all the money of the investors through ULIP Plans through different funds in the blue chip companies mostly.
4) LIC of India manages to give consistent rate of return to the investor who invest their money in LIC.
5) LIC of India invest investors money mostly in stocks like Reliance Industries Ltd., ITC Ltd., Tata Counsultancy Services Ltd., Hindustan Lever Ltd., Tata Moters Ltd., Mahindra and Mahindra Ltd., Tata Steel Ltd., ACC Ltd. through the ULIP Plans Growth Fund mostly.
6) LIC of India also invest investors money in Government Guarnteed Securities, Corporate Debt., Short Term Investments like, Money Market Instruments.
7) The NAV of the LIC of India ULIP Plans are increasing consistently as compared to the Private Insurance Companies.
8) That’s why LIC of India promises to give the Maximum return to the investment made by the investors.
9) The Portfolio of every customer has been determinated by the LIC of India and also the risk profile of every investors also determined.
10) LIC of India also invest their money in Infrastructural, Water Supply Projects which helps to Economic Development of Country.
11) LIC’s Insurance Product like Unit Linked, Endowment Plan, Savings Plan and Pension Plans are better as compare to Private Insurance Companies..
12) Public trust on LIC because LIC is the Market Leader and also No. 1 Financial Institutions in India.
13) LIC gives better return on Investment due to Expert Fund Manager.
14) LIC also provide better and faster service to their customer as compare to Private Insurance Companies.
15) LIC also invest in small cap and mid cap companies.
16) Sometimes due to volatility in Share Market the performance and rate of returns of ULIP Plans Secured Fund, Balanced Fund and Growth Fund are affected.

SUGGESSION

1) LIC should do more advertising in rural area to Sale Insurance.
1) LIC should launch Insurance Plan and Investment Plan for student also.
2) LIC should organize more and more Training Campaign for financial consultant.
3) LIC should organize more Training and Development Programm for the LIC Agent who sales the LIC product.
4) LIC should have Special Investment Plan for Agri People (Farmer)
5) LIC should increase the awarness about ULIP Plan.
6) LIC should manage the Divercified Portfolio across the different funds of ULIP Plans
7) LIC should launch the ULIP Plans which offer guaranteed return like Highest NAV over the investment period.
8) LIC should launch awarness programs for the investors to Invest in ULIP Plans to get maximum rate of return.
10) LIC should Published the Portfolios of different funds of Different ULIP Plans for the investors understanding.
11) LIC should post the statements regarding fund values of investors and also the units hold under the policy to the investors address within particular periods.
12) LIC should understand and managed the investment according to the investors Time Horizon and Risk Profile.

k BIBLIOGRAPHY

1) News Paper like Economic Times and Times of India
2) Kranti Jyoti – A Journal Published by LIC
3) An Official Website of LIC www.licindia.com and www.licindia.in
4) Dalal Street Journals: Stock Market Book
5) R.M. Kothari
6) Financial Management – R.P. Rustugi.
7) Various Journals Published by Financial Institutions.
8) Brouchers, Pomplets and Leaflets of LIC.Annual Report of LIC of India

ANNEXURE

Primary Data regarding “the study of Investment made by LIC of India in share market through Different ULIP Plans” is collected the help of Questions asked to the concerned personnale.
For that, questionnaire is prepared for different personnale.
These are as followes :-
I) Questionnaire for the Branch Manager of LIC of India.
II) Questionnaire for the Staff Members of LIC of India Branch.
III) Questionnaire for the Development Officer of LIC of India Branch.
IV) Questionnaire for the Agents of LIC of India Branch.a

DETAIL QUESTIONNAIRE

Detail Questionnaire

I) Questionnaire for the Branch Manager of LIC of India :-
1. What is ULIP ?
2. What types of Funds do ULIP offer ?
3. Are investment returns guaranteed in ULIP ?
4. What are the Portfolios of Different Funds of LIC’s Different ULIP Plans ?
5. How does ULIP suit investors risk profile and their requirement ?
6. How does the fund of ULIP is invested through different available Financial Instruments ?
7. What was the performance of ULIP Plans while market crashed ?
8. How does ULIP is different from Term Insurance and Mutual Fund Combination ?
9. How does IRDA affect ULIP Plans ?
10. How does the LIC is the blunder of any Financial Plan ?
11. How does the Web Interface of LIC gives all the policy details ?
12. How does portfolio of ULIP of LIC are disclosed ?
13. Which is the composition of ULIP of LIC of India ?
14. How to make ULIP renewal contributions on line ?
15. Are LIC’s ULIP Plans good as compared to other insurers ?
83
II) Questionnaire for the Staff Members of LIC of India Branch :-
1) What are the Charges , Fees and Deductions in ULIP ?
2) How does the investment in LIC’s ULUP Plan Bond Fund is made ?
3) How does the investment in LIC’s ULUP Plan Secured Fund is made ?
4) How does the investment in LIC’s ULUP Plan Balanced Fund is made ?
5) How does the investment in LIC’s ULUP Plan Growth Fund is made ?
6) What does Switch Benefits in ULIP Plans means ?
7) How to make use of top of facility in LIC’s UKIP Plans ?
8) How does the service for ULIP Plans of LIC Provided ?
9) What is the minimum locking period for ULIP Plans of LIC ?
10) What is the procedure for surrendering LIC’s ULIP Plans ?

III) Questionnaire for the Development Officer of LIC of India Branch.

I) Questionnaire for the Development Officer of LIC of India Branch.
1) Does LIC’s ULIP are beneficial for investors for Investment and saving point of view ?
2) Does LIC’s ULIP Plans gives Tax Benefit U/s 80 C of I.T.
3) Does investor invest in ULIP of LIC for short term or long term ?
4) How ULIP of LIC are better than conventional Plan ?
5) Does ULIP will able to give consistent returns in future ?
6) What happens when one stop ULIP Premium before 3 years?
7) After how much years ULIP Plans can be surrender ?
8) How much Sum Assured does ULIP Plan Offer ?
9) Is investment in ULIP Plans risky option ?
10) Does ULIP Offer minimum guarantee ?

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II) Questionnaire for the Agents of LIC of India Branch :-
1) How much maximum and minimum returns does ULIP Plan can give ?
2) Which marketing strategy you apply while selling LIC ULIP Plans ?
3) Are Investors Positive while investing LIC’s ULIP Plans ?
4) How does you convenience ULIP investors while market crashed ?
5) How does You differently sale ULIP Plans compared to conventional plan ?
6) Are ULIP better options for good returns in future ?
7) What was the past performance of LIC ULIP Plans ?
8) Which ULIP Plans of LIC is considered as Pension Plan ?
9) What are the different funds in LIC ULIP Plans ?
10) Do you disclosed charges to the investors in ULIP Plans ?