A CASE STUDY ANALYSIS ON BSLI DREAM ENDOWMENT PLAN

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1 322 A CASE STUDY ANALYSIS ON BSLI DREAM ENDOWMENT PLAN S.SARAVANAKUMAR*; B.L.SAIRAM SUBRAMANIAM**; G.PERIYASAMI***; G.BABY SAKILA**** ABSTRACT *Research Scholar & Associate Professor, Department of Management Studies, JKK Nattraja College of Engineering & Technology, Komarapalayam, Namakkal , Tamilnadu, India. **Research Scholar and Assistant Professor, Department of Management Studies, SSM College of Engineering, Komarapalayam, Namakkal , Tamilnadu, India. ***Assistant Professor, Department of Commerce, SSM Arts and Science College, Komarapalayam, Namakkal , Tamilnadu, India. ****Assistant Professor, Department of Management Studies, Excel Business School, Komarapalayam, Namakkal , Tamilnadu, India. BSLI Dream Endowment Plan is a unit linked insurance plan (ULIP) that gives the benefit the of life insurance protection and comprise the features investment. The premium invested in unit linked insurance plan is subdivided into units and invested in the funds selected by the policyholder; such part is called as Net Asset Value (NAV). The fund value under this policy varies according to the market movement of the portfolio. After deducting the allocation charges and all other contingency costs from the premium, the remaining portion gets invested in the units. Unit is the component in a fund; a fund consists of many companies usually called as portfolio. Hence the return from this unit linked insurance plan depends upon the portfolio performance in the market. Abundant benefits are associated with this policy but the important consideration is the risk in the investment portfolio is generally borne by the policyholder. ULIPs are designed with lot of innovative ideas and different from the traditional insurance plans. It provides flexibility in the life protection, investment and savings, adjustable life cover, fund options, transparency in charges, options to take additional cover against death due to accident or disability and liquidity through partial withdrawals etc. it is not possible in traditional package plans. KEYWORDS: Unit Linked Insurance Plan, Rider Options, Free-Look Period, Policy Loans, Policy Discontinuance, Legal Implications, Policy benefits. 1. INTRODUCTION There is anextensive range of investment opportunities available for the investing community, varied from financial assets to physical assets. Both the asset class has its own features. Among the two investment outlets, insurance is an inevitable tool, and no financial product can rival against insurance. Before the year 2001, insurance was sold in the form of term, endowment,

2 323 whole-life, and money-back policies by the monopoly insurer LIC. After the entry of private players in 2001 and growth of equity prices captured the attention of all investors to insurance segment. Traditional plans do not offer the return in the line of equity market. In order to satisfy existing customers and to capture more prospects, the life insurers introduced some plans with innovative features to strengthen and maximize premium income. Such kind of innovative ideas comes in the form of Unit Linked Insurance Plan. The private sector life insurance companies added extra fuels in this arena. A unit-linked insurance plan is a multi-featured product that combines the benefit of insurance, risk sharing and investment. The investment in a unit linked insurance plan works like a mutual fund and does not come with guaranteed returns, unlike money back, whole-life or endowment policies. Hence a unit linked insurance plan combines the features of investment and life protection. The premium of the customer can fetch life insurance cover and a part of it gets invested in specific investment funds of the customers choice in the form of units.a Unit is the component of the fund and its performance is depends upon the performance of capital market.under this plan, the policyholders have the choice of investing their premiums in a single premium / regular or limited premium mode and in addition to that monthly, quarterly, half-yearly and annually payment method is extended to regular and limited premium payments. The premium alteration is also allowed in the tenure of the premium payment period. For example, the customers of this plan are allowed to park their excess money in this scheme. Conversely, if any policyholder faced liquidity problem, it is allowed to pay lower premium. Shifting of the funds from one fund to another funds or fund options. 2. OBJECTIVES OF THE STUDY This case study is carried out with the following objectives. 1. To know how ULIPs differs from traditional savings plans. 2. To study the basic features of the BSLI Dream Endowment Plan. 3. To identify the basic requirements needed to purchase BSLI Dream Endowment Plan. 4. To analyze the policy benefits and all other relevant factors associated with the policy. 3. ULIPS VS. TRADITIONAL PLANS Unit linked insurance plan and traditional plans work very differently. While the risk is borne by the insurer in case of a traditional plan, but in case of unit linked insurance plan it is borne by the customer. The traditional plan mixes insurance and investment and assures the customer a certain sum at the end of given period. It includes sum assured and vested bonus. If the customer does not survive the policy term, the policyholder family gets the sum assured plus bonuses. Traditional plans are best for those with low financial discipline. They can consider including endowment plans in their insurance portfolio. For such investors, many private sector insurers have innovations that have worked on features, bonus payments structuring and riders. In an endowment plan, the big change has been in the structuring of bonus payments. Reversionary bonus is accumulated until the death or maturity of the life insured and paid whichever takes place first. The non-reversionary bonus if the policyholder is allowed to encash

3 324 it. Premiums in excess of the risk cover are invested as per the choice of the policyholder and go to a common fund and are then invested as decided by the insurer unlike in a unit linked insurance plan, where the return or the yield depends on the movement of the market and the risk is to be borne by the policyholder. The premium paid by the policyholder, net of premium allocation charge is invested in fund(s) chosen and units are allocated depending on the price of units for the fund(s). The fund value is the total value of units that the policyholders hold in the fund(s) ULIP AND ITS MULTI-FACE Now the unit linked insurance plan satisfies the needs of all segments, child, adult and senior citizens. It serves as child plan, protection plan, savings plan, protection against loan, pension plan, etc., to the investing community. The unit linked policy gives varied benefits to the life insured and it includes, life protection, investment and savings, flexibility, adjustable life cover, fund options, transparency in charges, options to take rider cover against death due to accident or disability or critical illness, liquidity in the form of partial withdrawals, switching etc. While considering the long term, unit linked insurance plan gives higher return than the traditional package. However, the unit linked plan customers to bear in mind that higher return come with greater risks. 4. BIRLA SUN LIFE INSURANCE COMPANY LIMITED BSLI is a joint venture between the Aditya Birla Group, a well-known Indian conglomerate and Sun Life Financial Inc, one of the leading international financial services organization from Canada. With an experience of over a decade, BSLI has contributed significantly to the growth and development of the Indian life insurance industry and currently is one of the leading life insurance companies in the country. Enjoying trust of its over 2 Million customers, BSLI is known for innovations. BSLI offers a complete range of offerings comprising of protection solutions, children's future solutions, wealth with protection, health and wellness as well as retirement solutions and has an extensive distribution reach over 500 cities through its network of over 600 branches, close to 1,40,000 empanelled advisors and over 700 partnerships with Corporate Agents and Banks. This is well supported by the sound financials that the Company has. The AUM of Birla Sun Life Insurance is close to Rs. 16,000 crs and it has a robust capital base of over Rs. 2,450crs as on March 31, It offers wide array of insurance products ranging from traditional plans, savings plans, protection plans, annuity plans, investment plans to the different segments like children, adult and aged persons. 4.1 ADITYA BIRLA FINANCIAL SERVICES GROUP ABFSG has a significant presence across various verticals, including life insurance, insurance broking, mutual funds, private equity, security based lending, factoring, insurance advisory services, retail broking and distribution of third party products. The seven companies representing Aditya Birla Financial Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla Capital Advisors Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd., Aditya Birla Finance Ltd and Birla Insurance Advisory & Broking Services Ltd.

4 325 The ABFSG is committed to being a leader and role model in a broad based and integrated financial services business. Its 7 lines of businesses, with over 5.5 million customers manages assets worth USD 18 billion approximately and prides itself for having a talent pool of over 16,000 committed employees. ABFSG has its wings spread across more than 500 cities in India through 1600 branches and over 2,00,000 channel partners. This allows ABFSG to offer its customers virtually anything other than a savings or current account. With over a billion dollar revenue, ABFSG is a significant non-bank player and one of the few players who have a top 5 position in both life insurance and mutual funds. ABFSG is a part of Aditya Birla Nuvo Ltd. (ABNL), a USD 3 billion conglomerate having leadership position across its manufacturing as well as services sector businesses. ABNL is a part of the Aditya Birla Group, a USD 29 billion Indian business house operating in 25 countries across the globe. 4.2 SUN-LIFE FINANCIAL INC Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2010, the Sun Life Financial group of companies had total assets under management of $435 billion. 5. BSLI DREAM ENDOWMENT PLAN BSLI offers a new plan Dream Endowment Plan (DEP) - with multiple features and highly suitable for all caters of people residing in the nation. This plan is a non-participating unit-linked life insurance plan. All unit-linked life insurance plans are different from traditional insurance plans and are subject to different risk factors. The name of this plan and that of the investment fund do not in any way indicate the quality of the plan or future returns.in this plan, the investment risk in the investment fund is borne by the policyholder. Investment funds are subject to investment risks and unit prices may go up or down reflecting the marketvalue of the underlying assets. Past performance is no guarantee for the future performance. 5.1 BSLI DEP -AT A GLANCE The following are the basic requirements for purchase of the policy.

5 326 TABLE: 1 SNAPSHOT OF THE PLAN Policy Term Guaranteed Savings Date (GSD) Entry Age 10, 15, 20, 25 and 30 years Same as policy term 1 year to 65 years, subject to minimum age of 18 on GSD Minimum Rs. 12,000 p.a. if paid annually Basic Premium Minimum Rs. 15,000 p.a. if paid semi-annually Minimum Rs. 20,000 p.a. if paid quarterly Minimum Rs. 24,000 p.a. if paid monthly Pay Term Short Pay - 5 years Short Pay - 10 years Short Pay - 15 years Short Pay - 20 years To Guaranteed Savings Date For entry age up to 50 For entry age up to 55 For entry age up to 60 For entry age up to 65 For entry age up to 65 Enhanced Sum Assured Minimum Rs. 50,000 Entry Age 18 to 65 years, subject to maximum age of 75 on GSD Source: BSLI Dream Endowment Plan 5.2 CHOICES TO THE POLICYHOLDER BSLI Dream Endowment Plan offers many choices to the policyholder in the selection of the plans. These are: GUARANTEED SAVINGS DATE - The date, on which the policy matures, it is the policy anniversary on which the Guaranteed Savings Fund is guaranteed to equal the Guaranteed Savings Amount. Policyholder soptions are 10 th, 15 th, 20 th, 25 th or 30 th policy anniversary. BASIC PREMIUM - The premium amount the policyholder commits to pay every year during the pay term. The Basic Sum Assured and Guaranteed Savings Amount will be determined based on the premium amount committed by the policyholder.guaranteed Savings Amount is automatically determined based on the above choices and the entry age and gender of the life insured. Please ask financial advisor for the Guaranteed Savings Amount applicable to life to be

6 327 insured. Basic Sum Assured is the minimum death benefit payable on the death of the life insured. The Basic Sum Assured is automatically determined as Basic Premium multiplied by: The higher of 10 or the number of years to maturity divided by 2, for entry ages below 45; or The higher of 7 or the number of years to maturity divided by 4, for entry ages 45 and above. Based on insurance needs, policyholders can increase the amount of protection by opting for Enhanced Sum Assured at inception. Enhanced Sum Assured will be paid in addition to the Basic Sum Assured under the Death Benefit prior to the Guaranteed Savings Date. Policyholder can choose any amount of Enhanced Sum Assured, subject to a minimum of Rs. 50,000. Company will calculate the Enhanced SA Premium payable by the policyholder and this premium will be added to the Basic Premium. The Basic Premium (net of investment guarantee charge and premium allocation charge) and the Enhanced SA Premium will be used to purchase units in the investment fund Enhancer. The units purchased in the investment fund is the monetary amount allocated to the investment fund divided by its then prevailing unit price. PAY TERM - The Basic Premium is due every policy year prior to the Guaranteed Savings Date. BSLI also offers short pay options of 5-Pay, 10-Pay, 15-Pay or 20-Pay for life insured convenience. PAY MODE - The policyholders can pay in monthly, quarterly, semi-annual or annual installments. For monthly installments, two payments are required upfront at entry. It is better to ask financial advisor for details about the range of convenient payment methods we offer. FUND VALUE It represents the total value of investments to date and is the balance of all units allocated to the investment fund Enhancer multiplied by its then prevailing unit price. Guaranteed Savings Fund is the accumulation at 3% per annum of all Basic Premiums (net of investment guarantee charge and premium allocation charge) and Enhanced SA Premiums paid till date less policy charges deducted monthly less any partial withdrawals from the Fund Value. 5.3 BENEFITS TO THE POLICYHOLDER GUARANTEED ADDITIONS - in the form of additional units will be added to policy on:10 th policy anniversary and on every 5 th policy anniversary thereafter. Guaranteed Addition is 2.50% of the Basic Premiums paid in the last 60 months 11 th policy anniversary and every policy anniversary thereafter. Guaranteed Addition is 0.25% of the average Fund Value in the last 12 months. DEATH BENEFIT - in the unfortunate event of the death of the life insured prior tomaturity, company will pay to the nominee Basic Sum Assured; plus Fund Value; plus Enhanced Sum Assured, if any

7 328 Death benefit shall never be less than 105% of total premiums paid to date (excluding any applicable rider premium and/or underwriting extras) less any previous partial withdrawals. SURRENDER BENEFIT - in case of emergencies, policyholder can surrender their policy to the company after the completion of five policy years and receive the Fund Value at that time. MATURITY BENEFIT Policyholderwill receive higher of the Fund Value or Guaranteed Savings Fund at maturity. PARTIAL WITHDRAWALS Policyholders are allowed to make unlimited partial withdrawals any time after (a) five complete policy years or (b) life insured attaining the age of 18, whichever is later. The minimum amount of partial withdrawal is Rs. 5,000. There is no maximum limit, but policyholders are required to maintain a minimum Fund Value of Rs. 25, ENHANCER SPECIALITY OF THE FUND OBJECTIVE - To grow capital through enhanced returns over a medium to long-term period through investments in equity and debt instruments, thereby providing a good balance between risk and return. It is suitable for individuals seeking, higher returns with a balanced equity-debt exposure. STRATEGY -To earn capital appreciation by maintaining a diversified equity portfolio and seek to earn regular returns on the fixed income portfolio by active management resulting in wealth creation for policy owners. The risk profile of the investment fund is medium and the asset allocation will be: 0-40% in Money Market & Cash; 65-80% in Debt Instruments; and 20-35% in Equities and Equity Related Securities Money Market Instruments are debt instruments of less than one year maturity. It includes mutual funds, collateralized borrowing & lending obligation, certificate of deposits, commercial papers etc. Investment in Money Market Instrument supports for better liquidity management. 5.5 LEGAL IMPLICATIONS POLICY DISCONTINUANCE - Throughout the Policy Term, policy owner are given a grace period of 30-days (15-days in case premium is paid on a monthly basis) to pay the due premium. If the company does not receive full premium by the end of the grace period, the company shall send a reminder notice within 15 days to revive the policy by paying due and unpaid premium or to choose to withdraw from the policy completely.if policyholder failed to pay due and unpaid premiums within 30 days as stipulated in our notice shall be deemed to have chosen the option to completely withdraw from the policy. Till this period, policy as well as all insurance

8 329 cover and charges will continue.during the first five policy years - should policyholder completely withdraw from the policy, the insurance cover will cease and policy fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a. and the proceeds from this will be payable to policyholder on the date corresponding to fifth policy anniversary or the date the life insured dies, if sooner. The charge is as follows: TABLE: 2 POLICY DISCONTINUANCE CHARGE Policy Discontinued In Policy Year 1 In Policy Year 2 In Policy Year 3 In Policy Year 4 For AP less than Rs.25,000 Lower of 20% of AP, 20% of FV, Rs. 3,000 Lower of 15% of AP, 15% of FV, Rs. 2,000 Lower of 10% of AP, 10% of FV, Rs. 1,500 Lower of 5% of AP, 5% of FV, Rs. 1,000 For AP of Rs.25,000 or more Lower of 6% of AP, 6% of FV, Rs. 6,000 Lower of 4% of AP, 4% of FV, Rs. 5,000 Lower of 3% of AP, 3% of FV, Rs. 4,000 Lower of 2% of AP, 2% of FV, Rs. 2,000 In Policy Year 5 Nil Nil Source: BSLI Dream Endowment Plan [AP Annual Premium, FV Fund Value] After five completed policy years, if thepolicyholder completely withdrawsamount from the policy, the insurance cover will cease and policy fund value shall be paid immediately to the policyholder. POLICY LOANS - Policyholder can avail of a loan on the policy purchased. The minimum loan amount is Rs. 5,000 and the maximum loan amount is 40% of the fund value net of any discontinuance charges. The interest charge on such loans will be fixed by the company from time to time. Any proceeds payable upon policy termination due to death, surrender or maturity shall be reduced by any outstanding policy loan at that time. RIDER OPTIONS - Rider is a condition that is added on a basic policy providing an additional benefit, with lowest cost. For example, if accidental death rider selected, the sum assured would be double at the event of death of the life insured. Riders can be with regard to additional payments on disability or sickness, or waiver of future premiums, partly or fully, under certain conditions.policyholder can further customize their plan by adding the following riders offered by the company.

9 330 BSLI Accidental Death and Disability Rider BSLI Critical Illness Rider BSLI Surgical Care Rider BSLI Hospital Care Rider BSLI Waiver of Premium Rider For further details, please refer to detailed brochure on riders or consult financialadvisor or refer to our website. CURRENT TAX BENEFITS - As per extant tax laws this plan offers tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, Under Section 80C, premiums paid up to Rs. 1,00,000 are allowed as a deduction from total taxable income each year. Under Section 10 (10D), the benefits received from this plan are exempt from tax,subject to mentioned exclusions. FREE-LOOK PERIOD - Policyholder will have the right to return their policy to the company within 15 days from the date of receipt of the policy. BSLI will pay the fund value plus all charges levied till date (excluding the fund management charge) once BSLI receive written notice of cancellation (along with reasons thereof) together with the original policy documents. Depending oncurrent administration rules, BSLI may reduce the amount of the refund by expenditures incurred in issuing policy and as permitted by the IRDA in accordance to IRDA (Protection of Policyholders Interest) Regulations, UNIT PRICE - On each business day and for each investment fund, BSLI determine the unit price by dividing the net asset value (NAV) of the investment fund at the valuation time by the number of units in existence for the investment fund in question. It is available website of the company as well as leading newspapers in the country. The NAV is determined based on whether purchasing/appropriation price or selling/expropriation price assets in order to meet the daily transactions of unitallocation or redemption associated with the investment fund. When appropriation (expropriation) price is applied, the NAV of the investment fund is the market value of investments held by the fund; plus (less) the expenses incurred in purchasing (selling) assets; plus the value of current assets; plus any accrued income net of fund management charges; less the value of any current liabilities or provisions. This NAV divided by the number of units existing on the valuation date, before units are allocated (redeemed), gives the amount of money we put in to (take out of) the investment fund per unit allocated (redeemed).

10 331 PROVISIONS TO SUICIDE - BSLI will refund higher of the fund value or premiums paid to date in the event the life insured dies by suicide, whether medically sane or insane, within one year after the issue. PROVISIONS IN SECTION 45 OF THE INSURANCE ACT, No policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the life insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the application. 5.6 POLICY CHARGES There are different types of fees and charges are deducted on each and every policy. However, it may be noted that insurers have the right to revise fees and charges over a period of time. INVESTMENT GUARANTEE CHARGE - An investment guarantee charge of 2% is levied on the Basic Premium when received. PREMIUM ALLOCATION CHARGE - A premium allocation charge is levied on the Basic Premium when received: 7.50% of the Basic Premium received in the first policy year. 6.50% of the Basic Premium received in the second policy year. 5.00% of the Basic Premium received from the third year onwards. FUND MANAGEMENT CHARGE - The daily unit price of the investment fund is adjusted to reflect the fund management charge of 1.25% p.a. We may change this charge at any time in the future subject toirda approval. POLICY ADMINISTRATION CHARGE - The policy administration charge is Rs. 20 per month for the first five policy years. It shall increase to Rs. 25 per month in the sixth year and inflate at 5% p.a. thereafter. Thischarge is levied monthly by cancelling units from the investment fund at that time.

11 332 MORTALITY CHARGE - Mortality charge is deducted every month for providing insurance cover. It is charged by canceling units from the investment fund at that time. The charge for thebasic Sum Assured will depend on the gender and attained age of the life insured. TABLE: 3CHARGES PER 1000 OF BASIC SUM ASSURED Attained age Age 25 Age 35 Age 45 Age 55 Age 65 Male Female Source: BSLI Dream Endowment Plan The charge for the Enhanced Sum Assured will depend on the Guaranteed SavingsDate, gender and entry age of the life insured. TABLE: 4CHARGES PER 1000 OF ENHANCED SUM ASSURED Guaranteed Savings Date Male Female Entry Age Entry Age Entry Age Entry Age Source: BSLI Dream Endowment Plan MISCELLANEOUS CHARGES - BSLI currently charge Rs. 50 per request for partial withdrawal. BSLI however reserve the right to charge up to Rs. 500 per request in the future. Present charge is Rs. 100 per policy revival. The company may increase this charge in the future subject to a maximum of Rs. 1,000 per revival. Any increase in the miscellaneous charges will be subject to IRDA approval. SERVICE TAX - Service Tax and other levies, as applicable, will be extra and levied as per the extant tax laws. IRDA APPROVAL AS TO INCREASE IN CHARGE - Only when specified and within stated limits, the companymay increase a particular charge at any time in the future. BSLI, however, need to get prior approval from the IRDA before such charge increase is effective.

12 333 Otherwise, all other charges in this policy are guaranteed to never increase during the tenure of the policy. 5.7 RISK FACTORS AND DISCLAIMERS This policy is underwritten by Birla Sun Life Insurance Company Limited. This is a nonparticipating unit linked life insurance plan. Birla Sun Life Insurance BSLI Dream Endowment Plan - Enhancer - are only the names of the Company, Policy and Investment Fund respectively and do not in any way indicate the quality of the policy, investment fund or their future prospects or returns. The charges are guaranteed throughout the term of the policy unless specifically mentioned and subject to IRDA approval. The value of the investment fund reflects the value of the underlying investments. These investments are subject to market risks and change in fundamentals affecting the investment portfolio. The premium paid in unit linked life insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of investment fund and factors influencing the capital market and the policyholder is responsible for their own decisions. There is no guarantee or assurance of returns above the guaranteed returns from the investment funds. BSLI reserves the right to recover levies such as the service tax levied by the authorities on insurance transactions. If there be any additional levies, they too will be recovered from the policy. This brochure contains the salient features of the plan. For further details please refer to the policy contract. Tax benefits are subject to changes in the tax laws. Insurance is the subject matter of solicitation. For more details and clarification call BSLI Insurance Advisor or visit the company website. 6. CONCLUSION BSLI Dream Endowment plan is an ULIP product that combines life insurance protection and investment. Here the premiums of the policyholder not only provide life insurance cover, but a major part gets invested in specific investment funds Enhancer - chosen by the policy owner.the purpose of purchasing life insurance is to replace an income that is lost when the income earner dies. Every investment have some benefits, some investments like bank deposits, provident funds offer fixed rate of return without any risk. Many investments like mutual funds, equity shares, and derivatives of stock, currency and commodity, venture capital funds, real estate properties give high return but the risk profile also very high. But among the various investment alternatives, none of the asset can compensate for the unfortunate demise of the investor. Life insurance ensures life protection in the form of sum assured to the diseased person s nominee along with the fund value. If the policyholder survives until the maturity, the maturity proceeds are definitely high.they are more flexible than other financial and real assets and also ensures maximum transparent. It is the cost effective plan and suitable savings for generating wealth to the low income caters. It is optimum and advisable to include unit linked insurance plan in the investment portfolio.

13 334 REFERENCE [1] Balachandran S. (2006), IC 33 - Life Insurance, Insurance Institute of India, 11 th Edition. [2] Bharathan D. (1999). Perception of policyholders in buying Policy, Journal of Insurance Studies, Vol.3, pp [3] Mike William (1987). Psychology of Policy purchasers as to New Policy, Journal Industrial Psychology, Vol.16, pp [4] Sivaprakash R. (2008), Multi-Role of ULIP in Life Insurance, RLIC Conference,Yercaud. [5] Smith R. (2001). Life Insurance and Life Awareness, Journal of Insurance Review, Vol. 11,, pp [6] Sunil Dhawan, (2008), Best ULIPS, Outlook Money. [7]