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16

Percentage

2005-06

2006-07

2007-08

2005-06

2006-07

2007-08

Private

82.30

88.75

90.33

17.70

11.25

9.67

LIC

29.76

46.31

62.31

70.24

53.69

37.69

Industry

41.77

56.91

70.30

58.23

43.09

29.70

ANNUAL REPORT 2007-08

Traditionally, endowment plans have invested in government securities, corporate bonds and the money market. ULIPs however, have a broader choice. They invest across the board in stocks, government securities, corporate bonds and money market instruments. Of course, within a ULIP there are options wherein equity investments are capped. The common types of funds available in ULIPs are Bond Fund, Protector Fund, Secure Fund, Balanced Fund, Growth Fund, Index Fund, and Enhancer Fund. Depending on one’s risk appetite one can choose the fund. However the investment risk is borne by the investor.

The common type of charges, fees and deductions in ULIPs are Premium allocation charges, Mortality charges, Fund management charges, Policy/administration charges, Surrender charges, Fund switching charges and Service tax.

Insurance companies are required to declare the NAV of various ULIPs on a daily basis. The movement of NAV enables the policy holder to assess the performance of his investment and accordingly make intervention in the form of switches,

withdrawal and top-ups.

After opening up of the insurance sector, Unit-linked insurance policies (ULIPs) have become increasingly popular. Analysis of figures for the last three years indicates the growth pattern of unit linked business.

TRENDS IN LIFE INSURANCE BUSINESS—UNIT LINKED INSURANCE PLANS

Unit Linked Business (%)

Non-linked Business (%)

Trend in Insurance Business in India -- Last Three Years

Linked Non-linked

70.3

Industry

Industry

62.31

41.77

46.31

LIC 2007-08

90.33

50

43.09

20

10

17.7

0

11.25

9.67

40

30

29.76

37.69

29.7

Private

LIC 2005-06

Private

100

53.69

56.91

Private

88.75

LIC 2006-07 Year

Industry

90

80

70

60

82.3

70.24

58.23

16

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