S. S. Gopalarathnam, Managing Director, Chola MS General Insurance, formerly known as Cholamandalam MS, on Thursday said the company wanted to get bigger its presence in the rural health insurance segment by leveraging the reach of the Murugappa Group companies.
At a press conference to announce its new pan-India identity with focus on its association with Mitsui Sumitomo Insurance of Japan, he said Chola MS wanted to use the attendance of Coromandel Fertilisers, EID Parry and Parry Agro to reach out to farmers with a rural health insurance product. Awareness among people in rural areas about insurance too needed to be better, he said.
The focus on the health sector was well-founded, he said, adding that the health insurance segment, that was a vital component of the general insurance segment, was growing at 40(%) per cent.
Whole-time director Tsuyoshi Yamane from Mitsui Sumitomo said being among the top five insurance groups worldwide, they were committed to provide the necessary support and knowledge to increase the business of Chola MS.
Friday, December 31, 2010
Thursday, December 30, 2010
ICICI Pru tops private life insurers in premium group
ICICI Prudential Life Insurance topped private sector life insurers in premium collection in the first 8 months of this financial year between April and November,
According to sales data released by Insurance Regulatory and Development Authority (Irda), ICICI Prudential mopped up Rs 4,053 crore followed by SBI Life, which garnered Rs 3,952 crore.
HDFC Standard Life garnered Rs 2,150 crore, Bajaj Allianz Rs 2,033 crore and Reliance Life Rs 1,791 crore. Insurance behemoth LIC collected a total premium of Rs 55,513 crore throughout the period.
Overall, 23 life insurers in the country together mopped up Rs 76,990 crore in first-year premiums during the period, a 39(%) per cent increase from Rs 55,357 crore in the year-ago period.
The private sector, comprising 22 life insurers, collectively registered Rs 21,476 crore worth of new business during the period.
However, Reliance Life Insurance outperformed its private sector peers in terms of the number of policies sold during this period.
Reliance Life sold 13, 12,389 policies between April and November compared with 12, 61,668 in the corresponding period of previous year.
“Our wide-ranging products, catering to every section of the society, and pan-India presence with quality service helped us notch up this business milestone," Reliance Life Insurance executive director and president Malay Ghosh said.
Bajaj Allianz and ICICI Prudential sold 9, 49,183 and 8, 26,904 policies, respectively, to stand second and third.
Life Insurance Corporation of India continued to lead the pack, notching up 1, 93, 54,765 new customers in the first 8 months, but the number was down 1(%) per cent from 1, 95, 77,088 sold a year ago.
The insurance industry as a whole saw a 6(%) per cent dip in policy sales to 2, 63, 51,967 during the period from 2, 78, 91,082 in the same period last year.
According to sales data released by Insurance Regulatory and Development Authority (Irda), ICICI Prudential mopped up Rs 4,053 crore followed by SBI Life, which garnered Rs 3,952 crore.
HDFC Standard Life garnered Rs 2,150 crore, Bajaj Allianz Rs 2,033 crore and Reliance Life Rs 1,791 crore. Insurance behemoth LIC collected a total premium of Rs 55,513 crore throughout the period.
Overall, 23 life insurers in the country together mopped up Rs 76,990 crore in first-year premiums during the period, a 39(%) per cent increase from Rs 55,357 crore in the year-ago period.
The private sector, comprising 22 life insurers, collectively registered Rs 21,476 crore worth of new business during the period.
However, Reliance Life Insurance outperformed its private sector peers in terms of the number of policies sold during this period.
Reliance Life sold 13, 12,389 policies between April and November compared with 12, 61,668 in the corresponding period of previous year.
“Our wide-ranging products, catering to every section of the society, and pan-India presence with quality service helped us notch up this business milestone," Reliance Life Insurance executive director and president Malay Ghosh said.
Bajaj Allianz and ICICI Prudential sold 9, 49,183 and 8, 26,904 policies, respectively, to stand second and third.
Life Insurance Corporation of India continued to lead the pack, notching up 1, 93, 54,765 new customers in the first 8 months, but the number was down 1(%) per cent from 1, 95, 77,088 sold a year ago.
The insurance industry as a whole saw a 6(%) per cent dip in policy sales to 2, 63, 51,967 during the period from 2, 78, 91,082 in the same period last year.
Religare get in-principle nod for insurance JVs, Edelweiss
The Insurance Regulatory and Development Authority (Irda) has given an in-principle approval to the proposed insurance ventures of Religare Enterprises and financial services firm Edelweiss Capital.
Edelweiss has produced a joint venture with Japanese insurer Tokio Marine Holdings to enter the life insurance space.
Two public sector lenders, Corporation Bank and Union Bank of India, have picked up 5(%) per cent and 7(%) per cent, respectively, in Religare’s separate health insurance venture.
Both can perhaps start operation in the next financial year. Irda is likely to approve the other two licences, R2 and R3, in the next six months. R1, R2 and R3 are the different stages of approval granted by Irda, with R3 being the final go-ahead.
Earlier, Religare Enterprises had formed a JV with Switzerland-based Swiss Re to enter the health insurance space. The company, however, parted ways with Swiss Re and decided to seek a licence from Irda after looking for a partner for a couple of months.
Religare already has an attendance in life insurance. In early 2008, it entered into a tie-up with the Netherlands-based insurer, Aegon.
Edelweiss has produced a joint venture with Japanese insurer Tokio Marine Holdings to enter the life insurance space.
Two public sector lenders, Corporation Bank and Union Bank of India, have picked up 5(%) per cent and 7(%) per cent, respectively, in Religare’s separate health insurance venture.
Both can perhaps start operation in the next financial year. Irda is likely to approve the other two licences, R2 and R3, in the next six months. R1, R2 and R3 are the different stages of approval granted by Irda, with R3 being the final go-ahead.
Earlier, Religare Enterprises had formed a JV with Switzerland-based Swiss Re to enter the health insurance space. The company, however, parted ways with Swiss Re and decided to seek a licence from Irda after looking for a partner for a couple of months.
Religare already has an attendance in life insurance. In early 2008, it entered into a tie-up with the Netherlands-based insurer, Aegon.
Wednesday, December 29, 2010
Tips to choose most suitable insurance product
India is a developing country. People have a general idea about Insurance thus majority is unaware of the importance of having an insurance policy.
Firstly, Insurance is important for everyone. Even the Indian Government has planned a postal rural insurance scheme in addition to the many other schemes they are running.
Few Benefits of Insurance:
1. It brings peace of mind as you and your family members are protected.
2. With investment linked policies, insurance becomes a tool to manage future expenses.
3. Medical insurance is a sure cure for any unforeseen medical expenses on account of an illness or an accident.
4. When Insurance is selected as a retirement investment option, it becomes tool for wealth accumulation for retirement.
Questions to be asked while choosing an insurance policy:
Q1. What is the purpose of insurance?
- The possible answers are: Pure risk cover or Investment tool. Based on your of answer you can determine the type of insurance you need.
Q2. How much insurance I need?
- The answer would vary from person to person. You can use various on-line calculators to arrive at your insurance amount.
Q3. Which insurer should I go for?
- Check the references and not advice of salesmen. Compare the quotes, facilities, options to select the best insurance company for you.
While taking an insurance policy you should consider existing policies and the type of policy if this is not your first. Also you should remember your monthly budget, monthly expenses and approximate insurance premium amount as well.
When insurance is taken as an investment tool, it should take into account the future expenses such as buying home, child birth, child education, marriage etc. The term (duration) and type of the policy are affected by insurance need. The term should be flexible enough allowing you to withdraw the money at required time. In case of fund requirement about long term, you may opt for equity linked investment as historically, equity has always given higher return than fixed income.
As mentioned above, one should also compare premium and the coverage of multiple options. There are new insurance plans available in the market which allows customers to buy insurance policies on-line.
After considering all the above mentioned factors, one should take an informed decision by selecting a good insurance company which offers the best insurance plans suiting your individual needs and providing for your entire family as well.
Firstly, Insurance is important for everyone. Even the Indian Government has planned a postal rural insurance scheme in addition to the many other schemes they are running.
Few Benefits of Insurance:
1. It brings peace of mind as you and your family members are protected.
2. With investment linked policies, insurance becomes a tool to manage future expenses.
3. Medical insurance is a sure cure for any unforeseen medical expenses on account of an illness or an accident.
4. When Insurance is selected as a retirement investment option, it becomes tool for wealth accumulation for retirement.
Questions to be asked while choosing an insurance policy:
Q1. What is the purpose of insurance?
- The possible answers are: Pure risk cover or Investment tool. Based on your of answer you can determine the type of insurance you need.
Q2. How much insurance I need?
- The answer would vary from person to person. You can use various on-line calculators to arrive at your insurance amount.
Q3. Which insurer should I go for?
- Check the references and not advice of salesmen. Compare the quotes, facilities, options to select the best insurance company for you.
While taking an insurance policy you should consider existing policies and the type of policy if this is not your first. Also you should remember your monthly budget, monthly expenses and approximate insurance premium amount as well.
When insurance is taken as an investment tool, it should take into account the future expenses such as buying home, child birth, child education, marriage etc. The term (duration) and type of the policy are affected by insurance need. The term should be flexible enough allowing you to withdraw the money at required time. In case of fund requirement about long term, you may opt for equity linked investment as historically, equity has always given higher return than fixed income.
As mentioned above, one should also compare premium and the coverage of multiple options. There are new insurance plans available in the market which allows customers to buy insurance policies on-line.
After considering all the above mentioned factors, one should take an informed decision by selecting a good insurance company which offers the best insurance plans suiting your individual needs and providing for your entire family as well.
Tuesday, December 28, 2010
Auto Insurance - Overview
Auto Insurance is mandatory and thus it will help if one can find cheap auto insurance. Besides being compulsory it is one of the most important types of insurance these days, after health insurance, life insurance, and home insurance.
Automotive or Motor insurance is required by law and one should be purchased as soon as the vehicle is purchased if it is the first vehicle owned by the person.
If you already have automotive insurance then you can transfer your policy from one car to another without any problem so long as the car title is in the name of the insurance holder. Auto insurance can be costly for some people, especially if they have a poor driving record or a bad credit score, but most people without traffic tickets or accidents will pay considerably less than other drivers.
One of the major benefits of acquiring a cheap auto insurance policy is
• the ability to pay the premiums on time, every time, without worrying where the money for the payments will come from.
Paying your insurance premium on time can get challenging for few. One should be careful not to miss even one payment of a premium, as this can cause the policy to become null and void, which means you will be driving without a valid auto insurance policy. Some auto insurance companies will provide their customers with the chance to pay their premiums in blocks, divided up into four payments every six months, so that they do not have to pay the entire premium at once. Make use of the competitive market situation to get the policy most suitable to you as an individual.
Automotive or Motor insurance is required by law and one should be purchased as soon as the vehicle is purchased if it is the first vehicle owned by the person.
If you already have automotive insurance then you can transfer your policy from one car to another without any problem so long as the car title is in the name of the insurance holder. Auto insurance can be costly for some people, especially if they have a poor driving record or a bad credit score, but most people without traffic tickets or accidents will pay considerably less than other drivers.
One of the major benefits of acquiring a cheap auto insurance policy is
• the ability to pay the premiums on time, every time, without worrying where the money for the payments will come from.
Paying your insurance premium on time can get challenging for few. One should be careful not to miss even one payment of a premium, as this can cause the policy to become null and void, which means you will be driving without a valid auto insurance policy. Some auto insurance companies will provide their customers with the chance to pay their premiums in blocks, divided up into four payments every six months, so that they do not have to pay the entire premium at once. Make use of the competitive market situation to get the policy most suitable to you as an individual.
Monday, December 27, 2010
Ulips | Regulatory changes
In India, minority are insured; out of which about 50% people buy insurance for the income-tax remission on insurance premiums in the annual tax statement and the exemption of maturity value of insurance policies from tax
Unit-linked insurance plans (Ulips) have gained enormous popularity in life insurance segment in the current decade. According to statistics, the total new business premium generated from Ulip sales for the year ended March 2009 was Rs447 billion, or 55% of total new business, as per reports of the Insurance Regulatory and Development Authority (Irda). This has grown to about Rs60, 000 crore in the latest year. Private life companies generate over 90% of their business from single and regular premium Ulips.
Irda has brought vast changes concerning Ulips since June’10 forcing life insurance companies to completely rework their Ulip strategies. Since September’10, Insurance companies have been required to re-launch their Ulips.
Reasons for regulatory changes
Three main reasons for application of several restrictions on Ulips:
1. Due to the tax benefits discussed above customers have bought Ulips as short-term investment without serious intention to continue the policy until the final maturity date.
According to Irda, the lapse rate on Ulips was 26% in FY06 (which continued to increase), and the 13-month persistency level of Ulips has significantly trailed the traditional plans. The low level of life cover embedded in Ulips and the ease of exit had contributed to an unhealthy growth in lapsation.
2. The regulator considered that the low persistency has been encouraged by the insurers because they gained from surrender charges, which have been as high as 70-90%. Thus the “profits” earned by shareholders from the surrender charges have fuelled aggressive distribution of Ulips, forming a vicious circle.
3. Ulip distributors have not made honest effort to develop a long-term relationship with customers or make a needs-based analysis of their insurance needs. This has not made customers recognize that insurance policy is an instrument of long-term protection and growth.
In August’09, the securities market regulator issued a directive requiring asset management companies not to deduct any distribution and other charges from the investment amount of customers on mutual fund schemes with a view to encouraging retail participation. This “no entry load structure” has led to a drastic reduction in the commission earning of mutual fund distributors, thus these agents promoted sale of Ulips which fetched attractive commission.
Unit-linked insurance plans (Ulips) have gained enormous popularity in life insurance segment in the current decade. According to statistics, the total new business premium generated from Ulip sales for the year ended March 2009 was Rs447 billion, or 55% of total new business, as per reports of the Insurance Regulatory and Development Authority (Irda). This has grown to about Rs60, 000 crore in the latest year. Private life companies generate over 90% of their business from single and regular premium Ulips.
Irda has brought vast changes concerning Ulips since June’10 forcing life insurance companies to completely rework their Ulip strategies. Since September’10, Insurance companies have been required to re-launch their Ulips.
Reasons for regulatory changes
Three main reasons for application of several restrictions on Ulips:
1. Due to the tax benefits discussed above customers have bought Ulips as short-term investment without serious intention to continue the policy until the final maturity date.
According to Irda, the lapse rate on Ulips was 26% in FY06 (which continued to increase), and the 13-month persistency level of Ulips has significantly trailed the traditional plans. The low level of life cover embedded in Ulips and the ease of exit had contributed to an unhealthy growth in lapsation.
2. The regulator considered that the low persistency has been encouraged by the insurers because they gained from surrender charges, which have been as high as 70-90%. Thus the “profits” earned by shareholders from the surrender charges have fuelled aggressive distribution of Ulips, forming a vicious circle.
3. Ulip distributors have not made honest effort to develop a long-term relationship with customers or make a needs-based analysis of their insurance needs. This has not made customers recognize that insurance policy is an instrument of long-term protection and growth.
In August’09, the securities market regulator issued a directive requiring asset management companies not to deduct any distribution and other charges from the investment amount of customers on mutual fund schemes with a view to encouraging retail participation. This “no entry load structure” has led to a drastic reduction in the commission earning of mutual fund distributors, thus these agents promoted sale of Ulips which fetched attractive commission.
Friday, December 24, 2010
Guaranteed returns only for traditional
Returns on NAV-guaranteed plans are higher than debt products
Last week, Pankaj Ramnath got a call from an insurance executive offering him a highest net asset value (NAV)-guaranteed unit-linked insurance plan (Ulip). Given the volatility in the equity markets, Ramnath felt a guaranteed plan was the perfect investment option.
Ramnath had various options to choose from. Birla Sun Life Insurance has launched Platinum Advantage Plan; ICICI Prudential has Pinnacle II; HDFC Standard Life Insurance has Crest, and the latest offering is from ING Vysya Life Insurance — Market Shield.
Investors expect to get returns based on the highest NAV in these funds. Suppose the NAV in the first, second and third year is 20, 30 and 40, respectively, the company will offer returns at 40 per cent even if the equity markets undergo a correction thereafter.
AT A GLANCE
Majority investments made in debt instruments, restricting returns
Suitable for conservative investors, uncomfortable with volatility of equity markets
An additional charge of 0.1-0.5% levied for guaranteed returns
Mostly returns given based on highest NAV only if the person stays until maturity
In most plans, nominee receives either sum assured or fund value, in case of policyholder’s death
Ramnath’s financial advisor, however, ruled against his investing in the product. Reason: the returns from such products are slightly higher than debt products or at best comparable to balanced funds. “Guaranteed return products are for investors who have a conservative approach and do not mind sacrificing the upside in lieu of downside protection,” says Rahul Aggarwal, CEO, Optima Insurance.
Like Ramnath, many investors think that in NAV-guaranteed funds, the insurance company will invest money just like any other Ulip (say 100 per cent in equities) and give back returns based on the highest NAV it achieves during the policy tenure.
In reality, NAV-guaranteed plans are not pure equity products such as other Ulips, which use different funds for wealth creation. To give the returns based on the highest NAV; these funds use an investing strategy where the majority of investments are in debt, and a minority portion in equity. “Fund managers of such plans have a free mandate and can move the entire portion of the fund to debt instruments at any given point of time, bringing down the overall return of the fund.”
Insurance companies keep increasing the debt allocation to lock the highest NAV. In the last few years, usually seventh to tenth year, the entire allocation is debt. A lower equity allocation restricts their returns.
In the last six months, Tata AIG’s Ulip — Tata AIG Individual Life Equity fund — gave 14.9 per cent returns, while its NAV-guaranteed fund, Tata Apex Pension 10-year Return Lock-in Fund, has given 11.1 per cent returns.
Charges for these products are the same as the other Ulips, after the regulatory changes, except that some companies levy an additional charge for providing the guarantee. This annual charge can vary between 0.1 per cent and 0.5 per cent (ING Market Shield) each year.
Except for ING’s Market Shield, most products give returns based on the highest NAV only if the person stays until maturity. If the policyholder exits midway, he/she would get the prevailing returns based on the prevailing NAV.
Most insurance companies had this product even before the Insurance Regulatory and Development Authority, or Irda, changed the structure and charges on all Ulips. In many of the earlier products, if the policyholder passed away, the nominee would get either the fund value or the sum assured depending on which of the two was higher. This feature exists in the new products, as well. Out of the products mentioned earlier, only ICICI Pru Pinnacle II provides sum assured and fund value, if the policyholder passes away.
The structure of this product category allows the fund to protect the capital, while capturing the small upside in the equity market. Someone looking for market-linked returns can look at the regular Ulip policy.
Last week, Pankaj Ramnath got a call from an insurance executive offering him a highest net asset value (NAV)-guaranteed unit-linked insurance plan (Ulip). Given the volatility in the equity markets, Ramnath felt a guaranteed plan was the perfect investment option.
Ramnath had various options to choose from. Birla Sun Life Insurance has launched Platinum Advantage Plan; ICICI Prudential has Pinnacle II; HDFC Standard Life Insurance has Crest, and the latest offering is from ING Vysya Life Insurance — Market Shield.
Investors expect to get returns based on the highest NAV in these funds. Suppose the NAV in the first, second and third year is 20, 30 and 40, respectively, the company will offer returns at 40 per cent even if the equity markets undergo a correction thereafter.
AT A GLANCE
Majority investments made in debt instruments, restricting returns
Suitable for conservative investors, uncomfortable with volatility of equity markets
An additional charge of 0.1-0.5% levied for guaranteed returns
Mostly returns given based on highest NAV only if the person stays until maturity
In most plans, nominee receives either sum assured or fund value, in case of policyholder’s death
Ramnath’s financial advisor, however, ruled against his investing in the product. Reason: the returns from such products are slightly higher than debt products or at best comparable to balanced funds. “Guaranteed return products are for investors who have a conservative approach and do not mind sacrificing the upside in lieu of downside protection,” says Rahul Aggarwal, CEO, Optima Insurance.
Like Ramnath, many investors think that in NAV-guaranteed funds, the insurance company will invest money just like any other Ulip (say 100 per cent in equities) and give back returns based on the highest NAV it achieves during the policy tenure.
In reality, NAV-guaranteed plans are not pure equity products such as other Ulips, which use different funds for wealth creation. To give the returns based on the highest NAV; these funds use an investing strategy where the majority of investments are in debt, and a minority portion in equity. “Fund managers of such plans have a free mandate and can move the entire portion of the fund to debt instruments at any given point of time, bringing down the overall return of the fund.”
Insurance companies keep increasing the debt allocation to lock the highest NAV. In the last few years, usually seventh to tenth year, the entire allocation is debt. A lower equity allocation restricts their returns.
In the last six months, Tata AIG’s Ulip — Tata AIG Individual Life Equity fund — gave 14.9 per cent returns, while its NAV-guaranteed fund, Tata Apex Pension 10-year Return Lock-in Fund, has given 11.1 per cent returns.
Charges for these products are the same as the other Ulips, after the regulatory changes, except that some companies levy an additional charge for providing the guarantee. This annual charge can vary between 0.1 per cent and 0.5 per cent (ING Market Shield) each year.
Except for ING’s Market Shield, most products give returns based on the highest NAV only if the person stays until maturity. If the policyholder exits midway, he/she would get the prevailing returns based on the prevailing NAV.
Most insurance companies had this product even before the Insurance Regulatory and Development Authority, or Irda, changed the structure and charges on all Ulips. In many of the earlier products, if the policyholder passed away, the nominee would get either the fund value or the sum assured depending on which of the two was higher. This feature exists in the new products, as well. Out of the products mentioned earlier, only ICICI Pru Pinnacle II provides sum assured and fund value, if the policyholder passes away.
The structure of this product category allows the fund to protect the capital, while capturing the small upside in the equity market. Someone looking for market-linked returns can look at the regular Ulip policy.
Thursday, December 23, 2010
Need for Life Insurance Policy
Why do I need a Life Insurance Policy?
Everyone will ask this question before buying a Life Insurance. The answer is also very basic. Insurance is an integral part of our lives and primarily assists the intention to financially ensure the lives of our dependants after our death. With increasing uncertainty it has become imperative for people to invest in life insurance policies.
In simple terms insurance is a policy that individuals buy from a company that basically offers protection and of course financial stableness after the dying of the policy possessor. There are numerous companies offering various policies which are completely dependant on your needs (that is what kind of insurance policy you will require).
The few types of policies available are -
1. Term life insurance policy,
2. Whole life insurance,
3. Endowment Policy
4. Unit linked insurance policy etc.
Depending on your financial plans and demands you can select the one that fits you the best. Depending on how much of coverage you like to provide to your dear ones after your dying, you can decide which insurance policy you would like to go for.
Now which ever policy you choose, the monthly premium of the insurance policy always depends on the basics like the age, sum insured and also the medical history. Those with the ‘impaired risk’- the people who have critical health problem face difficulty in getting a suitable insurance policy for themselves and that, which will insure all their needs. The face amount or the sum that is insured and the total tenure of the policy decide the value of the life insurance policy.
At the time of purchasing the insurance policy, you will need to submit all-important papers supporting your application process and everything will be on pen and paper. You may even have to go through a thorough medical examination depending on the sum you are insuring.
But this does not mean that even if you know which plan is ideal for you, you just go and buy it. It is recommended that you do proper research online and compare various deals online. Then you can always equate the prices and decide best plan to suit your purpose and demands. Also, before signing on the policy, always ask your agent to make everything clear, including the lawful conditions, as the policy is a legal document.
Everyone will ask this question before buying a Life Insurance. The answer is also very basic. Insurance is an integral part of our lives and primarily assists the intention to financially ensure the lives of our dependants after our death. With increasing uncertainty it has become imperative for people to invest in life insurance policies.
In simple terms insurance is a policy that individuals buy from a company that basically offers protection and of course financial stableness after the dying of the policy possessor. There are numerous companies offering various policies which are completely dependant on your needs (that is what kind of insurance policy you will require).
The few types of policies available are -
1. Term life insurance policy,
2. Whole life insurance,
3. Endowment Policy
4. Unit linked insurance policy etc.
Depending on your financial plans and demands you can select the one that fits you the best. Depending on how much of coverage you like to provide to your dear ones after your dying, you can decide which insurance policy you would like to go for.
Now which ever policy you choose, the monthly premium of the insurance policy always depends on the basics like the age, sum insured and also the medical history. Those with the ‘impaired risk’- the people who have critical health problem face difficulty in getting a suitable insurance policy for themselves and that, which will insure all their needs. The face amount or the sum that is insured and the total tenure of the policy decide the value of the life insurance policy.
At the time of purchasing the insurance policy, you will need to submit all-important papers supporting your application process and everything will be on pen and paper. You may even have to go through a thorough medical examination depending on the sum you are insuring.
But this does not mean that even if you know which plan is ideal for you, you just go and buy it. It is recommended that you do proper research online and compare various deals online. Then you can always equate the prices and decide best plan to suit your purpose and demands. Also, before signing on the policy, always ask your agent to make everything clear, including the lawful conditions, as the policy is a legal document.
Wednesday, November 24, 2010
Life cover vs home loan protection
There is the good sales pitch. And there is the bad sales pitch. And between them is the not- so-bad sales pitch. Before you start scratching your head on what we mean, allow us to clarify. When an insurance agent asks you to invest in a unit linked insurance plan (Ulip), promising that your money will triple in 5 years, that’s the bad sales pitch. The money may or may not triple in 5 years. There are no guarantees.
When a financial planner asks you to buy a term insurance to insure your life, that’s the good sales pitch. In case something was to happen to you, your family will be financially secure. In between these lies the not-so-bad sales pitch, which you might just knowledge while applying for a home loan to fund your dream home.
The marketing manager at the bank/housing finance company (HFC) will try to sell you an insurance policy along with the home loan. Now, this is the not-so-bad sales pitch. The manager will tell you that if you buy this insurance policy, known as the home loan protection plan (HLPP), along with the home loan, then in case of your unforeseen demise, the insurance company will pay the bank the principal amount of the remaining portion of your home loan. This, in turn, means that your family can continue living in the dream house.
When a financial planner asks you to buy a term insurance to insure your life, that’s the good sales pitch. In case something was to happen to you, your family will be financially secure. In between these lies the not-so-bad sales pitch, which you might just knowledge while applying for a home loan to fund your dream home.
The marketing manager at the bank/housing finance company (HFC) will try to sell you an insurance policy along with the home loan. Now, this is the not-so-bad sales pitch. The manager will tell you that if you buy this insurance policy, known as the home loan protection plan (HLPP), along with the home loan, then in case of your unforeseen demise, the insurance company will pay the bank the principal amount of the remaining portion of your home loan. This, in turn, means that your family can continue living in the dream house.
I – genius scholarships declares by Max New York Life
The Max New York Life Insurance declared its first I-genius scholarships on Monday, last week. Delhi girl, Shruti Bhardwaj, won the highest prize of Rs 20 lakh in the junior category (class III to IV), while in senior group (class VI to VIII), there was a tie. Siddharth Yadav from Bulandsheher and Nityashree Ramakrishna from Bangalore, shared the prize money in this category of Rs 20 lakh with Rs 10 lakh each.
The scholarship program, launched in February, this year, by Max New York Life Insurance in association with The Times of India, rewards children with brilliance in both academics and extra-curricular activities to promote all-round development of the child.
Organisers said that over 10 lakh children from 500 cities were enrolled in the scholarship program and evaluation was done through a four-stage process increase over 10 months. "In addition to their performance in tests that evaluated their all round skills, the 3rd stage of the scholarship program entailed a live interaction with jury through video conference. Total 52 candidates appeared for the final evaluation at Siri Fort in the capital, of which three one from the junior category and two from the senior category - walked away with the prize. The 50 other finalists received scholarships worth Rs 1 lakh each,'' said the organiser. He added that jury included Derek O'Brien, Palash Sen and author Ruskin Bond.
Rajesh Sud, CEO and managing director of Max New York Life congratulated the winners at a glittering award ceremony. "The I-genius program was conceived to engage beyond business with the parent community to understand their needs and promote all round development of the children. We will continue to look at innovative engagement programs like this in future,'' Sud said.
Know more about Insurance
Child Plan
The scholarship program, launched in February, this year, by Max New York Life Insurance in association with The Times of India, rewards children with brilliance in both academics and extra-curricular activities to promote all-round development of the child.
Organisers said that over 10 lakh children from 500 cities were enrolled in the scholarship program and evaluation was done through a four-stage process increase over 10 months. "In addition to their performance in tests that evaluated their all round skills, the 3rd stage of the scholarship program entailed a live interaction with jury through video conference. Total 52 candidates appeared for the final evaluation at Siri Fort in the capital, of which three one from the junior category and two from the senior category - walked away with the prize. The 50 other finalists received scholarships worth Rs 1 lakh each,'' said the organiser. He added that jury included Derek O'Brien, Palash Sen and author Ruskin Bond.
Rajesh Sud, CEO and managing director of Max New York Life congratulated the winners at a glittering award ceremony. "The I-genius program was conceived to engage beyond business with the parent community to understand their needs and promote all round development of the children. We will continue to look at innovative engagement programs like this in future,'' Sud said.
Know more about Insurance
Child Plan
Thursday, November 18, 2010
New ULIP launched by Reliance Life
Anil Ambani Group Company Reliance Life Insurance launched a unit-linked insurance plan that will provide policyholders the advantage of regular savings with improved protection and market-linked returns.
The new unit-linked plan (Ulip), Reliance Life Insurance Classic Plan, would offer protection to policyholders in the age group of 7-65 years.
"The unique plan of Reliance Life Insurance Classic Plan is that it offers flexibility and triple benefit of savings, insurance and investment - all in one single plan," Reliance Life said in a statement.
The plan also offers liquidity through part withdrawals and loans, top-up payment option and rider benefits to increase protection cover, it added.
"The new Ulip offers multiple benefits and protection - from helping policyholders plan their finances wisely at different stages of life, to providing risk cover on loss of life," Reliance Life Executive Director and President Malay Ghosh said.
Under the plan, the recipient would get double the base sum assured plus total fund value in the event of accidental death, the statement added.
The plan is available under two minimum payment options - Regular option and the Single Premium option.
Under the Regular Option, the customers would have to pay Rs 20,000 annually -- which can also be paid in monthly, quarterly and half yearly options.
For the Single Premium option, customers will have to pay a minimum of Rs 50,000 only once at the beginning during the 15-year policy tenure.
"The flexibility offered to policyholders by the company allows liquidity through partial withdrawals after 5th policy anniversary, loan after the completion of 2nd policy year and top-up option to increase regular savings," Ghosh added.
This is the second Ulip scheme launched by Reliance Life after the insurance regulator Insurance Regulatory and Development Authority came out with its revised strategy on Ulips a few months ago.
In October, the company had launched the Highest NAV advantage Ulip plan, which offers guarantee on maturity with the highest NAV per unit achieved throughout the entire 15 years policy term.
The new unit-linked plan (Ulip), Reliance Life Insurance Classic Plan, would offer protection to policyholders in the age group of 7-65 years.
"The unique plan of Reliance Life Insurance Classic Plan is that it offers flexibility and triple benefit of savings, insurance and investment - all in one single plan," Reliance Life said in a statement.
The plan also offers liquidity through part withdrawals and loans, top-up payment option and rider benefits to increase protection cover, it added.
"The new Ulip offers multiple benefits and protection - from helping policyholders plan their finances wisely at different stages of life, to providing risk cover on loss of life," Reliance Life Executive Director and President Malay Ghosh said.
Under the plan, the recipient would get double the base sum assured plus total fund value in the event of accidental death, the statement added.
The plan is available under two minimum payment options - Regular option and the Single Premium option.
Under the Regular Option, the customers would have to pay Rs 20,000 annually -- which can also be paid in monthly, quarterly and half yearly options.
For the Single Premium option, customers will have to pay a minimum of Rs 50,000 only once at the beginning during the 15-year policy tenure.
"The flexibility offered to policyholders by the company allows liquidity through partial withdrawals after 5th policy anniversary, loan after the completion of 2nd policy year and top-up option to increase regular savings," Ghosh added.
This is the second Ulip scheme launched by Reliance Life after the insurance regulator Insurance Regulatory and Development Authority came out with its revised strategy on Ulips a few months ago.
In October, the company had launched the Highest NAV advantage Ulip plan, which offers guarantee on maturity with the highest NAV per unit achieved throughout the entire 15 years policy term.
Wednesday, November 17, 2010
E-Insurance launched by Kotak Life Insurance
The options for those looking to fulfill insurance needs on their own are widening. Kotak Mahindra Old Mutual Life Insurance launched its online term insurance product this month. As the company doesn’t incur expenses to reach out to a customer to sell the product, including the agent’s commission, it is priced 10% cheaper than the term insurance cover available during the company’s agents and distributors.
The buying procedure is almost related to the rest of the online products namely ICICI Prudential Life Insurance iProtect Term Insurance and Aegon Religare Life Insurance’s iTerm plan. While ICICI Prudential and Aegon Religare Life Insurance offer only yearly options of payment, Kotak has monthly, quarterly, half-yearly and yearly options of payment.
The maximum age at maturity under ICICI Prudential’s iProtect is 75 years, 65 years under Aegon Religare’s iTerm, but 70 years under Kotak Life’s e-insurance.
The company also offers a facility of tele-underwriting wherein customers are asked questions and in case answers are acceptable, then no medical tests are required. For sum assured of `30 lakh, no tests or tele-underwriting is valid. If you need medical tests, you will have to go to the hospital to get the tests done. Rest of the documents are picked up from your residence.
Though Kotak Life Insurance and ICICI Prudential offer a maximum term of 30 years, Aegon Religare Life offers a maximum term of 25 years. The premium for the lower term is higher for Aegon Religare than the other two players in the non-smoker category.
But is lower than the Kotak premium in case of a non-smoker. Aegon Religare does not differentiate between a smoker and a non-smoking female, while deciding the premium. Kotak Life actually prices premium for smokers higher than any of the online players.
Unique Option: One feature offered here is the step-up life cover, where you are in a position to pay higher premium and realise you need a higher sum assured, you can opt for it. However, there are charges for taking the step-up option, which is dependent on the premium and the term.
In case the policy is taken for less than 15 years, then you have to pay 3% of the basic premium, while 5% of the basic premium is levied in case the term is above 15 years.
No medical tests are required if you opt for the step-up option.
Why Go For it?: If you are a non-smoking woman, then the online term cover of Kotak Life is the cheapest in the market.
Why Not?: The policy pegs risk for smoking customers much higher than other similar options. Premium for smoking men and women is higher by 7-26% vis-Ã -vis other players.
The buying procedure is almost related to the rest of the online products namely ICICI Prudential Life Insurance iProtect Term Insurance and Aegon Religare Life Insurance’s iTerm plan. While ICICI Prudential and Aegon Religare Life Insurance offer only yearly options of payment, Kotak has monthly, quarterly, half-yearly and yearly options of payment.
The maximum age at maturity under ICICI Prudential’s iProtect is 75 years, 65 years under Aegon Religare’s iTerm, but 70 years under Kotak Life’s e-insurance.
The company also offers a facility of tele-underwriting wherein customers are asked questions and in case answers are acceptable, then no medical tests are required. For sum assured of `30 lakh, no tests or tele-underwriting is valid. If you need medical tests, you will have to go to the hospital to get the tests done. Rest of the documents are picked up from your residence.
Though Kotak Life Insurance and ICICI Prudential offer a maximum term of 30 years, Aegon Religare Life offers a maximum term of 25 years. The premium for the lower term is higher for Aegon Religare than the other two players in the non-smoker category.
But is lower than the Kotak premium in case of a non-smoker. Aegon Religare does not differentiate between a smoker and a non-smoking female, while deciding the premium. Kotak Life actually prices premium for smokers higher than any of the online players.
Unique Option: One feature offered here is the step-up life cover, where you are in a position to pay higher premium and realise you need a higher sum assured, you can opt for it. However, there are charges for taking the step-up option, which is dependent on the premium and the term.
In case the policy is taken for less than 15 years, then you have to pay 3% of the basic premium, while 5% of the basic premium is levied in case the term is above 15 years.
No medical tests are required if you opt for the step-up option.
Why Go For it?: If you are a non-smoking woman, then the online term cover of Kotak Life is the cheapest in the market.
Why Not?: The policy pegs risk for smoking customers much higher than other similar options. Premium for smoking men and women is higher by 7-26% vis-Ã -vis other players.
Tuesday, November 16, 2010
Under Irda scanner NAV-guaranteed Products
After life insurance products, the sector’s regulator is now rotating its attention to unit-linked insurance products (Ulips) that guarantee the highest net asset value over its term. Two life insurance companies that have filed for Ulips guaranteeing such NAVs have been questioned by the Insurance Regulatory & Development Authority (Irda).
“The regulator has asked us why they should allow us to sell such a product,’’ admitted a senior executive of a life insurance company. “It is not influenced about the idea of guaranteeing the highest NAV.”
Unlike regular Ulips that calculate payouts on the basis of NAV at the time of maturity, these policies guarantee the highest NAV over the first seven-year term.
NAV is the current market value of a fund’s net assets divided by the number of outstanding shares.
Insurance companies have to maintain additional reserves to offer such guarantees. Most firms set aside 0.5-1(%) per cent of investments as reserves. This extra capital is maintained over and above the solvency requirement prescribed by the insurance regulator.
These new products are also facing problems because of an additional layer of scrutiny. Products now have to go through actuarial, life and finance departments. Earlier, only actuarial and life departments use to approve products.
“New products are facing difficulty in getting clearance, since a new department has been added. If it is an investment-related product, then it goes to the finance department. The actuarial department use to go through the mechanism earlier,” explained G N Agarwal, appointed actuary at Future Generali.
Before the new department was added, a few insurers — including SBI Life Insurance and HDFC Standard Life — launched Ulips guaranteeing the highest NAV. While SBI Life’s product is called Smart Performer, HDFC’s is branded HDFC Standard Life Crest.
Life Insurance Corporation of India collected a record Rs15,000 crore from Wealth Plus, its guaranteed NAV product. The plan offers payment of fund value at the end of the policy term, based on highest NAV over the first seven years of the policy or NAV applicable at the end of the term, whichever is higher, according to LIC’s website.
“The regulator has asked us why they should allow us to sell such a product,’’ admitted a senior executive of a life insurance company. “It is not influenced about the idea of guaranteeing the highest NAV.”
Unlike regular Ulips that calculate payouts on the basis of NAV at the time of maturity, these policies guarantee the highest NAV over the first seven-year term.
NAV is the current market value of a fund’s net assets divided by the number of outstanding shares.
Insurance companies have to maintain additional reserves to offer such guarantees. Most firms set aside 0.5-1(%) per cent of investments as reserves. This extra capital is maintained over and above the solvency requirement prescribed by the insurance regulator.
These new products are also facing problems because of an additional layer of scrutiny. Products now have to go through actuarial, life and finance departments. Earlier, only actuarial and life departments use to approve products.
“New products are facing difficulty in getting clearance, since a new department has been added. If it is an investment-related product, then it goes to the finance department. The actuarial department use to go through the mechanism earlier,” explained G N Agarwal, appointed actuary at Future Generali.
Before the new department was added, a few insurers — including SBI Life Insurance and HDFC Standard Life — launched Ulips guaranteeing the highest NAV. While SBI Life’s product is called Smart Performer, HDFC’s is branded HDFC Standard Life Crest.
Life Insurance Corporation of India collected a record Rs15,000 crore from Wealth Plus, its guaranteed NAV product. The plan offers payment of fund value at the end of the policy term, based on highest NAV over the first seven years of the policy or NAV applicable at the end of the term, whichever is higher, according to LIC’s website.
Thursday, November 11, 2010
SMS-based service launched by SBI Life
SBI Life Insurance launched SMS Solve - a first of its kind initiative in the insurance industry allowing customers to resolve their grievances in simple, paperless and faster manner!
The new project enables customers to easily access SBI Life 24/7 and register grievances about the service by sending an SMS ‘SOLVE' to 56161. The message along with the customers' mobile number, date and time would be registered at the central processing centre. This would be followed by a call within 24 hours to the customer from VCare cell, a cell with personnel exclusively trained for the SMS service, which takes note of the grievance and addresses it. In case the grievance failed to be addressed across the line, the cell would take it to the higher level and customers would be intimated in 48 hours.
The Insurance Regulatory and Development Authority Chairman, J. Hari Narayan, launched the service and interacted with the VCare cell in the presence of SBI Managing Director and Group Executive Director R. Sridharan. This new approach is much appreciated and will provide much better and prompt service to SBI customers. This innovative mechanism is bound to revolutionize the dealings with the customers.
About the company:
SBI Life, leads with a market share of 19.03 % among private insurers and a total market share of 5.09 %, posted a net profit of Rs.217 crore during the first-half of the current financial year, up 87 % over the corresponding period last year, and the company's new business premium surged to Rs. 3,173 crore, registering 30 % growth. SBI Life's assets under management grew to Rs. 34,406 crore.
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The new project enables customers to easily access SBI Life 24/7 and register grievances about the service by sending an SMS ‘SOLVE' to 56161. The message along with the customers' mobile number, date and time would be registered at the central processing centre. This would be followed by a call within 24 hours to the customer from VCare cell, a cell with personnel exclusively trained for the SMS service, which takes note of the grievance and addresses it. In case the grievance failed to be addressed across the line, the cell would take it to the higher level and customers would be intimated in 48 hours.
The Insurance Regulatory and Development Authority Chairman, J. Hari Narayan, launched the service and interacted with the VCare cell in the presence of SBI Managing Director and Group Executive Director R. Sridharan. This new approach is much appreciated and will provide much better and prompt service to SBI customers. This innovative mechanism is bound to revolutionize the dealings with the customers.
About the company:
SBI Life, leads with a market share of 19.03 % among private insurers and a total market share of 5.09 %, posted a net profit of Rs.217 crore during the first-half of the current financial year, up 87 % over the corresponding period last year, and the company's new business premium surged to Rs. 3,173 crore, registering 30 % growth. SBI Life's assets under management grew to Rs. 34,406 crore.
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Wednesday, November 10, 2010
LIC for high premium | Aam Aadmi scheme
Faced with a high claim ratio for Aam Aadmi Bima Yojana in Andhra Pradesh, the Life Insurance Corporation of India (LIC) has sought an increase in premium to Rs320 from Rs 200.
The group insurance plan was introduced by the Centre for the landless agricultural labourers.
About 5.2 million are covered under the Aam Aadmi scheme in 2010-11 in Andhra Pradesh. For the 2 year period 2008-10, the state paid Rs76 crore premium for while the LIC disbursed claims, including scholarships, worth Rs281.25 crore for the scheme.
According to officials, the LIC has moved the plan for increasing the premium. However, this might not be possible. “This is a nationwide scheme. If they have to increase the premium, they should do across the country or not do it at all (in Andhra Pradesh),” said a senior government official.
Rural Development minister Vatti Vasantha Kumar said a call on increasing the premium would be decided soon. He, however, clarified that the matter was between state and central governments and would not impact the implementation of the scheme at the grassroot level.
Under the Aam Aadmi scheme LIC provides an insurance cover of Rs30,000 for natural death, Rs75,000 for accidental death, Rs37,500 for permanent partial disability and Rs75,000 for permanent total disability due to accident.
When contracted, LIC regional manager Thyagarajan declined to comment on the issue.
In another central-sponsored scheme Janashree Bima Yojana, where the premium of Rs150 per member is shared by the Government of India and the member on a 50-50 basis, LIC has developed claims worth Rs122.94 crore for the premium of Rs44.34 crore collected in the state in the last 2 years.
However, there is no request for increasing the premium in this case. LIC has 3.9 million under Janashree Bima in the state for 2010-11.
A free add-on scholarship benefit for the children of the members of Aam Aasmi Bima and Janashree Bima is also comprehensive. Scholarships of Rs100 a month is also extended to two children studying between 9 and 12 standard. It is paid on a half yearly basis - in January and July each year.
According to Society for Elimination of Rural Poverty (Serp) chief executive officer B Raj Sehker, the claim ratio for these two schemes is high due to community participation.
The data of all the enrolled members is on the Internet. Call centres at the district level have been established with trained personnel to register the claims. An immediate assistance of Rs 5,000 to the bereaved families through 1,000 Bima Mitras (community members) in 22 districts is given. This amount is taken from the social capital raised from active self-help groups, he said.
Serp plans to bring all SHG members and their spouses under insurance cover. It targets to cover 18 million lives by 2014, he said.
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LIC Policy
The group insurance plan was introduced by the Centre for the landless agricultural labourers.
About 5.2 million are covered under the Aam Aadmi scheme in 2010-11 in Andhra Pradesh. For the 2 year period 2008-10, the state paid Rs76 crore premium for while the LIC disbursed claims, including scholarships, worth Rs281.25 crore for the scheme.
According to officials, the LIC has moved the plan for increasing the premium. However, this might not be possible. “This is a nationwide scheme. If they have to increase the premium, they should do across the country or not do it at all (in Andhra Pradesh),” said a senior government official.
Rural Development minister Vatti Vasantha Kumar said a call on increasing the premium would be decided soon. He, however, clarified that the matter was between state and central governments and would not impact the implementation of the scheme at the grassroot level.
Under the Aam Aadmi scheme LIC provides an insurance cover of Rs30,000 for natural death, Rs75,000 for accidental death, Rs37,500 for permanent partial disability and Rs75,000 for permanent total disability due to accident.
When contracted, LIC regional manager Thyagarajan declined to comment on the issue.
In another central-sponsored scheme Janashree Bima Yojana, where the premium of Rs150 per member is shared by the Government of India and the member on a 50-50 basis, LIC has developed claims worth Rs122.94 crore for the premium of Rs44.34 crore collected in the state in the last 2 years.
However, there is no request for increasing the premium in this case. LIC has 3.9 million under Janashree Bima in the state for 2010-11.
A free add-on scholarship benefit for the children of the members of Aam Aasmi Bima and Janashree Bima is also comprehensive. Scholarships of Rs100 a month is also extended to two children studying between 9 and 12 standard. It is paid on a half yearly basis - in January and July each year.
According to Society for Elimination of Rural Poverty (Serp) chief executive officer B Raj Sehker, the claim ratio for these two schemes is high due to community participation.
The data of all the enrolled members is on the Internet. Call centres at the district level have been established with trained personnel to register the claims. An immediate assistance of Rs 5,000 to the bereaved families through 1,000 Bima Mitras (community members) in 22 districts is given. This amount is taken from the social capital raised from active self-help groups, he said.
Serp plans to bring all SHG members and their spouses under insurance cover. It targets to cover 18 million lives by 2014, he said.
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LIC Policy
Tuesday, November 9, 2010
IRDA: Keep watch for fake insurance Representative
The Insurance Regulatory and Development Authority (IRDA) has warned the public to watch out for corrupt persons selling insurance policies by claiming to be the regulator's representatives.
IRDA has asserted that it is a regulatory body not involved directly or indirectly in the sale of insurance and financial products. As such, it said complaints should be stiff against persons claiming to be its representative for the reason of selling insurance policies.
"Any person making any kind of contract with such individuals or agents will be doing the same at their own risk. If any member of the public notices such instances, he or she may lodge a police complaint in the local police station," IRDA said in a public notice.
It said it has experimental that the general publics are receiving calls from individuals claiming to be IRDA's representatives, who offer insurance policies of different insurance companies with various benefits.
Meanwhile, in view of the large quantum of unclaimed life insurance settlement amounts lying with the insurers, the IRDA has asked all insurers to reproduce such sums in its balance sheet under the head, 'current liabilities'.
At present, such unclaimed amounts are not disclosed independently.
These unclaimed amounts include claims settled but not paid to the policyholders or insured persons and excess premium or tax or any other charges that are refundable to the policyholders, among other things.
IRDA has asserted that it is a regulatory body not involved directly or indirectly in the sale of insurance and financial products. As such, it said complaints should be stiff against persons claiming to be its representative for the reason of selling insurance policies.
"Any person making any kind of contract with such individuals or agents will be doing the same at their own risk. If any member of the public notices such instances, he or she may lodge a police complaint in the local police station," IRDA said in a public notice.
It said it has experimental that the general publics are receiving calls from individuals claiming to be IRDA's representatives, who offer insurance policies of different insurance companies with various benefits.
Meanwhile, in view of the large quantum of unclaimed life insurance settlement amounts lying with the insurers, the IRDA has asked all insurers to reproduce such sums in its balance sheet under the head, 'current liabilities'.
At present, such unclaimed amounts are not disclosed independently.
These unclaimed amounts include claims settled but not paid to the policyholders or insured persons and excess premium or tax or any other charges that are refundable to the policyholders, among other things.
Tuesday, November 2, 2010
Bajaj Allianz Life Q2 net zoom 91(%) to Rs369 crore
Bajaj Allianz Life Insurance said its net profit increased 91% to Rs369 crore for the September 2010 quarter from Rs193 crore during the same period last year.
The company has cited reduction in fixed expenses and growth in assets under management (AUM) as the reasons for this rise.
During the first half to end-September, its new business premium increased to Rs1, 511 crore from Rs1, 441 crore, a year ago.
However, its gross written premium (GWP) fell to Rs4, 151 crore from Rs4, 521 due to dip in renewal premiums, a company's spokesperson said.
Bajaj Allianz General Insurance net profit increased 22% to Rs66 crore from Rs54 crore in the year-ago period. According to the company, strong auto sales, capital expenditure by corporates and strong economic conditions have lead to an increase in profits. The GWP collected by the company rose to Rs1, 420 crore from Rs1, 218 crore.
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The company has cited reduction in fixed expenses and growth in assets under management (AUM) as the reasons for this rise.
During the first half to end-September, its new business premium increased to Rs1, 511 crore from Rs1, 441 crore, a year ago.
However, its gross written premium (GWP) fell to Rs4, 151 crore from Rs4, 521 due to dip in renewal premiums, a company's spokesperson said.
Bajaj Allianz General Insurance net profit increased 22% to Rs66 crore from Rs54 crore in the year-ago period. According to the company, strong auto sales, capital expenditure by corporates and strong economic conditions have lead to an increase in profits. The GWP collected by the company rose to Rs1, 420 crore from Rs1, 218 crore.
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Cost-manage push up private insurers' profits
Private life insurance companies have posted robust profits in the second quarter of this fiscal aided by tight cost controls.
However, going forward, companies expect pressure on their profitability as the new regulations governing unit-linked plans could squeeze margins.
SBI Life Insurance posted a net profit of Rs 103 crore in the second quarter, against Rs 77 crore in the year-ago period, as the company reported one of the lowest expense to GWP (Gross Written Premium) ratio in the current fiscal. It brought down its expense to GWP ratio to 7.76 per cent from 9.18 per cent at the end of the first quarter. Mr M.N. Rao, Managing Director and Chief Executive Officer of SBI Life, said despite the challenging environment, the company could post good profits.
Bajaj Allianz Life Insurance reported a business profit of Rs 199 crore, against Rs 125 crore in the year ago period despite a slowdown in business in September.
Mr Sanjiv Bajaj, Managing Director, Bajaj Finserv, said the company focussed on cost rationalization measures to maintain its margins. “We brought down the total commission to GWP ratio to 7.52 per cent from 8.86 per cent. The ratio of operating expenses to GWP also came down to 16 per cent from 17.55 per cent,” he said.
New regulations
Kotak Life Insurance net profit increased to Rs 13.4 crore from Rs 4.4 crore. Mr G. Murlidhar, Chief Operating Officer, Kotak Life, said growth in new business premium along with stable expenditure helped the company register profits. “Our costs have always been under control as we have not been expanding much,” he said.
For most of the companies, new business premium growth slowed down in September after the new regulations came into effect. Going ahead, companies expect their profitability to be adversely impacted as sales slow down and margins get compressed.
Sales are likely to be sluggish for a few more quarters as agents get used to the new commission structures, said Mr Bajaj.
Margins will be adversely impacted in the new regulatory regime, said Mr Murlidhar.
However, going forward, companies expect pressure on their profitability as the new regulations governing unit-linked plans could squeeze margins.
SBI Life Insurance posted a net profit of Rs 103 crore in the second quarter, against Rs 77 crore in the year-ago period, as the company reported one of the lowest expense to GWP (Gross Written Premium) ratio in the current fiscal. It brought down its expense to GWP ratio to 7.76 per cent from 9.18 per cent at the end of the first quarter. Mr M.N. Rao, Managing Director and Chief Executive Officer of SBI Life, said despite the challenging environment, the company could post good profits.
Bajaj Allianz Life Insurance reported a business profit of Rs 199 crore, against Rs 125 crore in the year ago period despite a slowdown in business in September.
Mr Sanjiv Bajaj, Managing Director, Bajaj Finserv, said the company focussed on cost rationalization measures to maintain its margins. “We brought down the total commission to GWP ratio to 7.52 per cent from 8.86 per cent. The ratio of operating expenses to GWP also came down to 16 per cent from 17.55 per cent,” he said.
New regulations
Kotak Life Insurance net profit increased to Rs 13.4 crore from Rs 4.4 crore. Mr G. Murlidhar, Chief Operating Officer, Kotak Life, said growth in new business premium along with stable expenditure helped the company register profits. “Our costs have always been under control as we have not been expanding much,” he said.
For most of the companies, new business premium growth slowed down in September after the new regulations came into effect. Going ahead, companies expect their profitability to be adversely impacted as sales slow down and margins get compressed.
Sales are likely to be sluggish for a few more quarters as agents get used to the new commission structures, said Mr Bajaj.
Margins will be adversely impacted in the new regulatory regime, said Mr Murlidhar.
Saturday, October 30, 2010
HDFC SL hopes to break-even in FY-12
Insurer HDFC Standard Life Insurance Company Ltd expects to break-even in the 2011/12 financial year, helped by an increase in premium income and reduction in operating costs, its chief executive said.
The joint venture between India's top mortgage lender, HDFC, and Britain's Standard Life, had posted a loss of 2.75 billion rupees ($62 million) in the year ended March 2010, lower than 5.03 billion a year ago and is expected to stay in the red this year.
"If the premium continues to see the growth we are seeing and if we are able to manage the costs well, we should be able to break-even next year," Amitabh Chaudhry said in an interview late on Wednesday.
HDFC Standard Life could launch an initial public offering in the second half of 2011 if an insurance bill, which proposes raising the foreign holding in insurance firms to 49 per cent from 26 per cent, is approved by the Indian parliament.
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The joint venture between India's top mortgage lender, HDFC, and Britain's Standard Life, had posted a loss of 2.75 billion rupees ($62 million) in the year ended March 2010, lower than 5.03 billion a year ago and is expected to stay in the red this year.
"If the premium continues to see the growth we are seeing and if we are able to manage the costs well, we should be able to break-even next year," Amitabh Chaudhry said in an interview late on Wednesday.
HDFC Standard Life could launch an initial public offering in the second half of 2011 if an insurance bill, which proposes raising the foreign holding in insurance firms to 49 per cent from 26 per cent, is approved by the Indian parliament.
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Friday, October 29, 2010
Listing daytime still away for insurers
Insurance companies will have to wait for some more time before listing, despite SEBI clearing disclosure rules, as the final guidelines from IRDA have not come and the Insurance Bill has not been passed.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Listing daytime still away for insurers
Insurance companies will have to wait for some more time before listing, despite SEBI clearing disclosure rules, as the final guidelines from IRDA have not come and the Insurance Bill has not been passed.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Before insurance companies come out with IPOs, there are a couple of issues that need to be resolved: When will the 26 per cent FDI limit be increased to 49 per cent and two, will FII investments be included in the limit.
“There should be a clear idea on when the Insurance Bill is going to be passed,” said Mr Amitabh Chaudhry, Managing Director and CEO of HDFC Standard Life. “We would like to wait for the Bill before listing. But the final decision will depend on how much time it takes. It will take at least 9 more months for the companies to come out with an IPO.”
There is no clarification on the 25(%) per cent public shareholding clause, he added.
Companies that have evinced interest in listing include Reliance Life, HDFC Standard Life, ICICI Prudential and SBI Life.
Insurers said the SEBI disclosure requirements are on the lines of the recommendation of the SEBI-IRDA committee. The capital markets regulator had said that the SEBI (ICDR) Regulations, 2009, will also apply to insurance companies.
According to the recommendations of the committee, SEBI has asked insurers for additional disclosures, like risk factors specific to insurance companies and broad headings under which an overview of the insurance industry will be disclosed. However, companies were exempted exemption from appointing a monitoring agency.
Another stumbling block is that the IRDA may not relax the listing requirement that insurers have to be 10 years old for IPOs. The rule disqualifies Reliance Life Insurance.
Mr Malay Ghosh, Executive Director and President, Reliance Life Insurance, said: “As and when the guidelines come, and if they (the regulators) allow us, we will come out with an IPO.”
Insurance company officials say that most companies have seen some major changes in operating models in the last month after the new IRDA guidelines. “Investors will expect that some kind of an operating model be in place and will need to look at the emerging trends. But there is no trend currently due to the changes in the guidelines as there have been major changes in the operating model. It will take at least six months for a trend to emerge,” said Mr Chaudhry.
Monday, October 25, 2010
Bajaj Finserv Q2 net up 57 pc at Rs 69 crore
Bajaj Group's Financial services arm Bajaj Finserv reported a nearly 57 per cent jump in its consolidated net profit at Rs 69 crore, for the quarter ended September 30, over the same period last year.
The company had a net profit of Rs 44 crore in July-September quarter last fiscal, the company said in a statement.
The total income of the company rose to Rs 464 crore in the second quarter of the current fiscal compared to Rs 107 crore in the corresponding period.
Bajaj Finserv is a holding company, which operates through its subsidiairies and joint ventures. Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance and Bajaj Finance Limited are its subsidiaries.
Bajaj Finance, the company's retail arm, has reported a profit after tax of Rs 53 crore in the second quarter of the current fiscal as compared to Rs 22 crore in the corresponding period last year.
Click to apply for insurance.
Life Insurance
The company had a net profit of Rs 44 crore in July-September quarter last fiscal, the company said in a statement.
The total income of the company rose to Rs 464 crore in the second quarter of the current fiscal compared to Rs 107 crore in the corresponding period.
Bajaj Finserv is a holding company, which operates through its subsidiairies and joint ventures. Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance and Bajaj Finance Limited are its subsidiaries.
Bajaj Finance, the company's retail arm, has reported a profit after tax of Rs 53 crore in the second quarter of the current fiscal as compared to Rs 22 crore in the corresponding period last year.
Click to apply for insurance.
Life Insurance
Saturday, October 23, 2010
Auto Insurance Policy | Common Exclusions
The insurance policy jargon is such that most of us find it difficult to understand. In fact it is not surprising, that many people don’t even fully read their insurance policy. The reason is that all standard insurance policy contracts are long, boring, confusing, and actually, misleading. For example, in many cases a coverage is excluded in one section, only to be added back later on in the policy. It can get frustrating, that you need a lawyer or an expert, to help you understand what exactly is covered.
There are few common misconceptions about what is and what isn’t covered in an insurance contract, which can be cleared by understanding the policy exclusions.
1. Delivery for Commercial Purposes: If you pick up a job delivering pizzas a few nights a week, there will be no coverage from your personal auto insurance, if you happen to get in an accident while delivering. Commercial deliveries are excluded from the standard personal auto insurance policy.
Always check with the company you are working for, to see if they have a commercial auto policy, that will cover you, while you make deliveries.
2. Company Vehicles: The insuring agreement of personal auto policy excludes, “coverage for the use of a vehicle furnished or available for your regular use.”
For instance: Your employer supplies you a company vehicle. Suppose your spouse also has a car of their own, which is insured under a personal auto policy, which you are named under. If your spouse were driving your company car, she has no coverage under the commercial auto policy.
3. Vehicles not Considered Autos: Auto insurance doesn’t cover all things with a motor. Typical exclusions include boats, four wheelers, motorcycles, go carts, and golf carts.
Before adding this on to your auto policy, first check with homeowners insurance, to see if it’s covered through your policy. In most cases, you have to add a special endorsement, either to your home or auto insurance, or buy a separate policy.
4. Personal Contents: The gadgets we carry in our cars today are not cheap. The combined cost of even a cheap cell phone costs, your CD collection and iPod, you’re easily approaching Rs20, 000 of personal contents in the car. Unfortunately, if someone were to break into you car and steal these items, none of that is covered under your auto insurance policy.
However, personal contents are covered under your home/renters insurance policy.
Endorsements to Insurance Contracts: All of the above are excluded from the standard insurance contract. That doesn’t mean that individual carriers, can’t add them back in. Adding coverage to a policy is called an endorsement.
The next time you’re reviewing your insurance agreement, check to see what your policy is endorsed for. There are a lot of special perks, the better insurance companies will give, that often go unnoticed.
To conclude: It is a good practice to read your insurance contract. Set aside just a few minutes of your time, to get through your auto, home, life, and health insurance contracts. It is bound to prove beneficial and you will definitely learn a lot.
There are few common misconceptions about what is and what isn’t covered in an insurance contract, which can be cleared by understanding the policy exclusions.
1. Delivery for Commercial Purposes: If you pick up a job delivering pizzas a few nights a week, there will be no coverage from your personal auto insurance, if you happen to get in an accident while delivering. Commercial deliveries are excluded from the standard personal auto insurance policy.
Always check with the company you are working for, to see if they have a commercial auto policy, that will cover you, while you make deliveries.
2. Company Vehicles: The insuring agreement of personal auto policy excludes, “coverage for the use of a vehicle furnished or available for your regular use.”
For instance: Your employer supplies you a company vehicle. Suppose your spouse also has a car of their own, which is insured under a personal auto policy, which you are named under. If your spouse were driving your company car, she has no coverage under the commercial auto policy.
3. Vehicles not Considered Autos: Auto insurance doesn’t cover all things with a motor. Typical exclusions include boats, four wheelers, motorcycles, go carts, and golf carts.
Before adding this on to your auto policy, first check with homeowners insurance, to see if it’s covered through your policy. In most cases, you have to add a special endorsement, either to your home or auto insurance, or buy a separate policy.
4. Personal Contents: The gadgets we carry in our cars today are not cheap. The combined cost of even a cheap cell phone costs, your CD collection and iPod, you’re easily approaching Rs20, 000 of personal contents in the car. Unfortunately, if someone were to break into you car and steal these items, none of that is covered under your auto insurance policy.
However, personal contents are covered under your home/renters insurance policy.
Endorsements to Insurance Contracts: All of the above are excluded from the standard insurance contract. That doesn’t mean that individual carriers, can’t add them back in. Adding coverage to a policy is called an endorsement.
The next time you’re reviewing your insurance agreement, check to see what your policy is endorsed for. There are a lot of special perks, the better insurance companies will give, that often go unnoticed.
To conclude: It is a good practice to read your insurance contract. Set aside just a few minutes of your time, to get through your auto, home, life, and health insurance contracts. It is bound to prove beneficial and you will definitely learn a lot.
Friday, October 22, 2010
Reasons for cancellation of an Insurance Policy
There has to be a very good reason for an Insurance company to cancel a policy. The top five reasons for having your policy cancelled are discussed below:
1. Failing to pay on time.
The first and most obvious reason for cancellation would be failing to pay or paying late. This applies to all types of insurance. Each state has rules governing when an insurance company may drop your policy. Grace periods will also vary depending on which line of insurance you purchase (health, auto, home, life) and which insurance company you choose. Some car insurance companies may seize the opportunity to drop you if you’re only a few days late – especially if you're habitually behind on payments. However, many insurers value your business and won't drop you if you're a few days late.
Advice - Pay your bills on time. This usually means your premium must be received by the due date. Dropping the payment in the mail on the due date may not be good enough. If you’re worried about being late on your payments, check with your insurance company about its grace period. If you've been cancelled by your car insurance company, it may require that you to pay the balance due for the full term before they reinstate your insurance.
2. Falsifying the truth.
If you knowingly tell lies to your insurance company, it has the right to cancel your policy. To an insurance company, it’s bad business to give you a lower rate for lying. For example, lying to your auto insurer about the number of miles you drive annually can be cause for cancellation. Some insurers may simply increase your car insurance rates for this particular lie, but they can also cancel your policy and refuse to pay your claim — assuming you provided inaccurate information intentionally.
Life insurance companies may also cancel your policy if you lie. For example, if you lie about your deep-sea diving hobby and then die during a dive, your life insurance company could deny your beneficiaries’ claim. Any lie caught within the two-year contestability period of a policy can provoke the insurer to scale down the death benefit or even rescind the policy, depending on state law.
Advice - When applying for any type of insurance ‘honesty is the best policy’.
3. Your driver’s license has been suspended or revoked during the policy period
If your auto insurance company finds out that your license has been suspended or revoked, it will cancel your policy. This rule also applies to other members of your household. For example, if you have a child listed on your policy who has had his or her license revoked/suspended, your insurance company may cancel your policy if you fail to disclose this information. Car insurance companies often check your DMV record (and that of other members of your household) at renewal time. They will also find out about a license suspension if the person in question is involved in a car accident.
Advice - If someone in your household experiences problems with their license, notify your insurer. Your policy will not be cancelled (unless you’re the culprit). Your insurer may simply exclude coverage for that person.
4. You ignoring telephone calls from your insurance company
Ignoring your insurance company is never a good idea. If your insurer makes an effort to contact you – especially during a claims-settlement process – you’re obligated to comply. For example, if you get into a car accident, your insurance company will surely want to interview you or may even require you to attend a deposition if a lawsuit is involved. Failing to comply could be grounds for policy cancellation. A standard car insurance policy states that the insurer has “no duty to provide coverage” unless the insured is in full compliance with a number of duties. These include promptly notifying your insurer where, when and how the accident happened. A standard policy states that “a person seeking coverage must cooperate with us in the investigation, settlement or defense of any claim or suit” and “promptly send us copies of any notices or legal papers received in connection with the accident or loss.” This can include exams by physicians and medical records.
5. You commit suicide
Generally, life insurance policies have a contestability clause that says, among other things, the policy will not pay out if you commit suicide within the first two years of the policy. However, if you commit suicide two years and one day after you purchase the policy, your beneficiaries will be paid!
1. Failing to pay on time.
The first and most obvious reason for cancellation would be failing to pay or paying late. This applies to all types of insurance. Each state has rules governing when an insurance company may drop your policy. Grace periods will also vary depending on which line of insurance you purchase (health, auto, home, life) and which insurance company you choose. Some car insurance companies may seize the opportunity to drop you if you’re only a few days late – especially if you're habitually behind on payments. However, many insurers value your business and won't drop you if you're a few days late.
Advice - Pay your bills on time. This usually means your premium must be received by the due date. Dropping the payment in the mail on the due date may not be good enough. If you’re worried about being late on your payments, check with your insurance company about its grace period. If you've been cancelled by your car insurance company, it may require that you to pay the balance due for the full term before they reinstate your insurance.
2. Falsifying the truth.
If you knowingly tell lies to your insurance company, it has the right to cancel your policy. To an insurance company, it’s bad business to give you a lower rate for lying. For example, lying to your auto insurer about the number of miles you drive annually can be cause for cancellation. Some insurers may simply increase your car insurance rates for this particular lie, but they can also cancel your policy and refuse to pay your claim — assuming you provided inaccurate information intentionally.
Life insurance companies may also cancel your policy if you lie. For example, if you lie about your deep-sea diving hobby and then die during a dive, your life insurance company could deny your beneficiaries’ claim. Any lie caught within the two-year contestability period of a policy can provoke the insurer to scale down the death benefit or even rescind the policy, depending on state law.
Advice - When applying for any type of insurance ‘honesty is the best policy’.
3. Your driver’s license has been suspended or revoked during the policy period
If your auto insurance company finds out that your license has been suspended or revoked, it will cancel your policy. This rule also applies to other members of your household. For example, if you have a child listed on your policy who has had his or her license revoked/suspended, your insurance company may cancel your policy if you fail to disclose this information. Car insurance companies often check your DMV record (and that of other members of your household) at renewal time. They will also find out about a license suspension if the person in question is involved in a car accident.
Advice - If someone in your household experiences problems with their license, notify your insurer. Your policy will not be cancelled (unless you’re the culprit). Your insurer may simply exclude coverage for that person.
4. You ignoring telephone calls from your insurance company
Ignoring your insurance company is never a good idea. If your insurer makes an effort to contact you – especially during a claims-settlement process – you’re obligated to comply. For example, if you get into a car accident, your insurance company will surely want to interview you or may even require you to attend a deposition if a lawsuit is involved. Failing to comply could be grounds for policy cancellation. A standard car insurance policy states that the insurer has “no duty to provide coverage” unless the insured is in full compliance with a number of duties. These include promptly notifying your insurer where, when and how the accident happened. A standard policy states that “a person seeking coverage must cooperate with us in the investigation, settlement or defense of any claim or suit” and “promptly send us copies of any notices or legal papers received in connection with the accident or loss.” This can include exams by physicians and medical records.
5. You commit suicide
Generally, life insurance policies have a contestability clause that says, among other things, the policy will not pay out if you commit suicide within the first two years of the policy. However, if you commit suicide two years and one day after you purchase the policy, your beneficiaries will be paid!
Thursday, October 21, 2010
New Term Insurance product launched| MetLife
MetLife India Insurance has launched a term insurance product - Met Protect - the first such life cover plan (by the company) which is made available online.
• Met Protect would allow customers within the age group of 21-45 years to avail of life cover protection through the Internet.
• Met Protect would offer customers single and semi-annual premium payment option - the first of its kind amongst all the term products available online.
What is Term Insurance?
Term Insurance is a product that provides protection only for a specified period of time.
About the Company:-
MetLife currently has over 55,000 financial advisers and bancassurance distribution channel offering products to 17 million customers.
MetLife India is a joint venture between the US-based MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and other private investors.
• Met Protect would allow customers within the age group of 21-45 years to avail of life cover protection through the Internet.
• Met Protect would offer customers single and semi-annual premium payment option - the first of its kind amongst all the term products available online.
What is Term Insurance?
Term Insurance is a product that provides protection only for a specified period of time.
About the Company:-
MetLife currently has over 55,000 financial advisers and bancassurance distribution channel offering products to 17 million customers.
MetLife India is a joint venture between the US-based MetLife International Holdings, The Jammu and Kashmir Bank, M Pallonji and other private investors.
Tuesday, October 19, 2010
2 New ULIPs & 2 Traditional products launched | DLF Pramerica Life
Private sector insurer DLF Pramerica Life Insurance launched four new insurance products, which include two traditional plans.
The traditional non-linked products
1. DLF Pramerica Assure Money Plus - provides minimum guaranteed earnings on maturity along with the advantage of high life insurance cover
2. DLF Pramerica Tatkaal Suraksha Gold
Both provide saving as well as protection.
Besides, it also launched two unit linked products namely
1. DLF Pramerica Wealth Plus Premier - is a good product for high net worth individuals seeking potentially high investment returns along with a well secured future for the family in case of any eventuality
2. DLF Pramerica Ezee Wealth Plus with simplified underwriting.
About the Company:-
DLF Pramerica Life is a joint venture between real estate company DLF Ltd and the US-based Prudential International Insurance Holdings.
The company became operational in September, 2008 and currently has 30 offices across Delhi NCR, Haryana, Punjab and Gujarat.
The traditional non-linked products
1. DLF Pramerica Assure Money Plus - provides minimum guaranteed earnings on maturity along with the advantage of high life insurance cover
2. DLF Pramerica Tatkaal Suraksha Gold
Both provide saving as well as protection.
Besides, it also launched two unit linked products namely
1. DLF Pramerica Wealth Plus Premier - is a good product for high net worth individuals seeking potentially high investment returns along with a well secured future for the family in case of any eventuality
2. DLF Pramerica Ezee Wealth Plus with simplified underwriting.
About the Company:-
DLF Pramerica Life is a joint venture between real estate company DLF Ltd and the US-based Prudential International Insurance Holdings.
The company became operational in September, 2008 and currently has 30 offices across Delhi NCR, Haryana, Punjab and Gujarat.
Friday, October 15, 2010
Insurance: Non-life business now enters development stage
After playing second fiddle to the life insurance industry for several years, the non-life business has roared back into growth mode. In the first six months of the current fiscal, the industry has recorded 23% growth and there are signs that profitability has improved as well.
“In a stable price environment, the non-life industry should grow by 2-2 .5 times the rate of GDP growth. What we are now seeing is some stability in pricing coupled with opening up of hitherto untapped sectors because of government schemes like the Rashtriya Swastha Bima Yojana,” said ICICI managing director Bhargav Dasgupta .
The growth rate in the first half is almost twice the 13% growth recorded in the whole of 2009-10.
The last time the non-life industry saw such growth was in 2005-06. After that, the insurance regulator freed pricing on all lines of businesses which led to a fall in prices. While the reduction was as high as 80% in the property insurance, the competition also ensured that prices of health and motor insurance — the fastest growing segments were kept under check despite high claims ratio.
“Pricing has improved in health, but in parts of motor insurance, it continues to remain very competitive,” said Mr. Dasgupta. What has kept the price war alive was the continuous entry of new players in the market who were willing to sacrifice margins to build up an underwriting book.
For the first half of the current fiscal, private insurers have recorded total premium of . 9,204 crore against. 7,312 crore in FY10 — recording a growth of 25.9%. Stateowned insurers have collected total premium of . 14,500 crore in the first half of FY11 against . 11,184 crore in the previous year — resulting in a 21% growth.
While health insurance continues to be a major driver of growth — with a 40% rise in health premium in the first half of FY11, all other segments, barring property insurance have recorded a healthy growth. Health insurance today accounts for more than one-fifth of total premium in the country.
Aviation insurance, which has seen some price hardening, coupled with an increase in fleet size, has grown by 40% in the first half. Marine Cargo, which is a reflection of trade in goods, grew 26.3%.
Among companies, HDFC Ergo continues to be one of the most aggressive growing by 49%. ICICI Lombard General Insurance — leader among private companies — has grown 32%. Tata AIG General has also managed a 33% growth despite its foreign parent’s troubles internationally.
Reliance General Insurance , which is currently in merger talks with Royal Sundaram General Insurance is the only private insurer to have shown a drop in premium income (-24 %).
“In a stable price environment, the non-life industry should grow by 2-2 .5 times the rate of GDP growth. What we are now seeing is some stability in pricing coupled with opening up of hitherto untapped sectors because of government schemes like the Rashtriya Swastha Bima Yojana,” said ICICI managing director Bhargav Dasgupta .
The growth rate in the first half is almost twice the 13% growth recorded in the whole of 2009-10.
The last time the non-life industry saw such growth was in 2005-06. After that, the insurance regulator freed pricing on all lines of businesses which led to a fall in prices. While the reduction was as high as 80% in the property insurance, the competition also ensured that prices of health and motor insurance — the fastest growing segments were kept under check despite high claims ratio.
“Pricing has improved in health, but in parts of motor insurance, it continues to remain very competitive,” said Mr. Dasgupta. What has kept the price war alive was the continuous entry of new players in the market who were willing to sacrifice margins to build up an underwriting book.
For the first half of the current fiscal, private insurers have recorded total premium of . 9,204 crore against. 7,312 crore in FY10 — recording a growth of 25.9%. Stateowned insurers have collected total premium of . 14,500 crore in the first half of FY11 against . 11,184 crore in the previous year — resulting in a 21% growth.
While health insurance continues to be a major driver of growth — with a 40% rise in health premium in the first half of FY11, all other segments, barring property insurance have recorded a healthy growth. Health insurance today accounts for more than one-fifth of total premium in the country.
Aviation insurance, which has seen some price hardening, coupled with an increase in fleet size, has grown by 40% in the first half. Marine Cargo, which is a reflection of trade in goods, grew 26.3%.
Among companies, HDFC Ergo continues to be one of the most aggressive growing by 49%. ICICI Lombard General Insurance — leader among private companies — has grown 32%. Tata AIG General has also managed a 33% growth despite its foreign parent’s troubles internationally.
Reliance General Insurance , which is currently in merger talks with Royal Sundaram General Insurance is the only private insurer to have shown a drop in premium income (-24 %).
Monday, October 11, 2010
How to find cheap auto insurance?
YES, Cheap Auto Insurance is possible. But getting it cheap is synonyms with little extra work to take advantage of savings that aren't always advertised. Here is heads up to what you need to know to find the best deal on auto insurance:
Shopping ability
If you want to cut down your insurance costs, you need to do two things;
1. Understand exactly how much coverage you need. The question is how much you'll pay for coverage in these three categories:
a. Bodily injury liability for a single person,
b. Bodily injury liability for all injured parties and
c. Property damage liability.
2. Compare before you shop. When it comes to getting the best deal on your auto insurance, you have to compare auto insurance quotes. You can use online calculators available on www.bimadeals.com to streamline your search as well as reach out to our customer care representatives for a quote.
Cut costs
There are various ways to save on auto insurance but nothing beats to cutting costs. How?
• You can raise your deductible, but the downside is that you'll pay more out of pocket after an accident.
• Or reduce your coverage. You don't want to go below your state's minimum guidelines, but if you're looking to save, you need to ask if you're overvaluing your assets and the coverage you need.
• You may want to drop some coverage altogether. It may not add up to much, but you may not need coverage that provides rental car and towing coverage.
Look for discounts
Yes, its true the key to cheap motor insurance is to maximize discounts. Insurers have been known to offer discounts based on the type of work you do, your driving record and whether you're married. Insurers also offer discounts for those who pay their yearly premium in full, and there's usually a discount for insuring more than one vehicle on the same policy.
So, follow these basic tips and get the cheapest auto insurance easily.
Shopping ability
If you want to cut down your insurance costs, you need to do two things;
1. Understand exactly how much coverage you need. The question is how much you'll pay for coverage in these three categories:
a. Bodily injury liability for a single person,
b. Bodily injury liability for all injured parties and
c. Property damage liability.
2. Compare before you shop. When it comes to getting the best deal on your auto insurance, you have to compare auto insurance quotes. You can use online calculators available on www.bimadeals.com to streamline your search as well as reach out to our customer care representatives for a quote.
Cut costs
There are various ways to save on auto insurance but nothing beats to cutting costs. How?
• You can raise your deductible, but the downside is that you'll pay more out of pocket after an accident.
• Or reduce your coverage. You don't want to go below your state's minimum guidelines, but if you're looking to save, you need to ask if you're overvaluing your assets and the coverage you need.
• You may want to drop some coverage altogether. It may not add up to much, but you may not need coverage that provides rental car and towing coverage.
Look for discounts
Yes, its true the key to cheap motor insurance is to maximize discounts. Insurers have been known to offer discounts based on the type of work you do, your driving record and whether you're married. Insurers also offer discounts for those who pay their yearly premium in full, and there's usually a discount for insuring more than one vehicle on the same policy.
So, follow these basic tips and get the cheapest auto insurance easily.
Sunday, October 10, 2010
Term Life Insurance Policy | Parties & Participants
The parties and participants in a term life insurance contract include
• The company providing the coverage - The policy owner and the insured individual of the policy are not necessarily the same person although they usually are.
• The owner of the policy – The policy owner is the one who will pay for the policy. It can be, and usually is, the person who is covered by the contract. But the policy owner can be the spouse of the insured or a relative or even a business partner. Companies try to limit purchase of life insurance policies to those who have an insurable interest in the covered individual so the purchaser will actually suffer type of loss from the death of the individual.
• The insured individual - The insured individual is the one whose death causes the payment of the coverage amount of the policy. The insured individual is a participant but not necessarily a party to the contract. It is the this individual's health history, current health condition, family health history, status as a smoker, age, gender, etc. upon which the eligibility for coverage and premium amount are established.
• The beneficiary of the proceeds of the policy - The beneficiary is the named individual or entity who will receive the proceeds of the term insurance policy upon the death of the insured individual. The owner of the policy names who the beneficiary of the policy would be. The beneficiary is a participant but not a party to the contract. If the policy has an irrevocable beneficiary clause then that beneficiary must agree to any change in whom, the named beneficiary is.
Insurance companies have eliminated policy owners insuring individuals with whom the policy owner had no insurable interest (that is, who would not suffer a loss upon the death of, the insured). This was done to reduce speculative or scheming interest in insuring someone.
• The company providing the coverage - The policy owner and the insured individual of the policy are not necessarily the same person although they usually are.
• The owner of the policy – The policy owner is the one who will pay for the policy. It can be, and usually is, the person who is covered by the contract. But the policy owner can be the spouse of the insured or a relative or even a business partner. Companies try to limit purchase of life insurance policies to those who have an insurable interest in the covered individual so the purchaser will actually suffer type of loss from the death of the individual.
• The insured individual - The insured individual is the one whose death causes the payment of the coverage amount of the policy. The insured individual is a participant but not necessarily a party to the contract. It is the this individual's health history, current health condition, family health history, status as a smoker, age, gender, etc. upon which the eligibility for coverage and premium amount are established.
• The beneficiary of the proceeds of the policy - The beneficiary is the named individual or entity who will receive the proceeds of the term insurance policy upon the death of the insured individual. The owner of the policy names who the beneficiary of the policy would be. The beneficiary is a participant but not a party to the contract. If the policy has an irrevocable beneficiary clause then that beneficiary must agree to any change in whom, the named beneficiary is.
Insurance companies have eliminated policy owners insuring individuals with whom the policy owner had no insurable interest (that is, who would not suffer a loss upon the death of, the insured). This was done to reduce speculative or scheming interest in insuring someone.
Saturday, October 9, 2010
Is it possible to increase life insurance policy?
You could have numerous reasons to want to increase your life insurance coverage. Namely,
• If your insurance does not provide for growing inflation
• It could be due to a growing family,
• New job
Above mentioned could thereby require more insurance in order to keep up their quality of life.
For the above mentioned reasons you could be interested to expand your life insurance coverage. In order to do this firstly, it is important to consider how much life insurance you need.
Experts advise that ideally a life insurance policy worth should be roughly eight or 10 times the holder's annual salary. Thus, if you wish to expand your coverage then you could purchase an appropriate policy easily.
But you should bear in mind of how the cost of life insurance increases as you age, as well as various other factors.
• If your insurance does not provide for growing inflation
• It could be due to a growing family,
• New job
Above mentioned could thereby require more insurance in order to keep up their quality of life.
For the above mentioned reasons you could be interested to expand your life insurance coverage. In order to do this firstly, it is important to consider how much life insurance you need.
Experts advise that ideally a life insurance policy worth should be roughly eight or 10 times the holder's annual salary. Thus, if you wish to expand your coverage then you could purchase an appropriate policy easily.
But you should bear in mind of how the cost of life insurance increases as you age, as well as various other factors.
Friday, October 8, 2010
How to find missing life insurance policies?
It happens…
It could even happen with you!
Suppose you cannot find an insurance policy which was paid by your parent over 20 years back.
This is a tough problem, yet one many beneficiaries have faced.
When you don't know the name of the life insurance company, a good first step is to look for evidence of premium payments by going through copies of canceled checks or credit card statements, which would show the name of the insurer. This may be difficult since your parent’s were making the payments.
Life insurance companies make efforts to contact policyholders after they stop sending premiums, but if no one ever steps forward, they can't pay out the death benefit. If the insurance company knows the person died but can't locate the beneficiaries, it turns the death benefit over to the state as unclaimed property. States maintain databases of beneficiaries who are heirs of lost policyholders. Check with your state to see how to look up whether you are listed. In addition, the National Association of Unclaimed Property Administrators offers a MissingMoney.com Web site that lets you search nationwide for missing money, including life insurance policies that have been deemed unclaimed and transferred to the state.
Know more about Life Insurance
It could even happen with you!
Suppose you cannot find an insurance policy which was paid by your parent over 20 years back.
This is a tough problem, yet one many beneficiaries have faced.
When you don't know the name of the life insurance company, a good first step is to look for evidence of premium payments by going through copies of canceled checks or credit card statements, which would show the name of the insurer. This may be difficult since your parent’s were making the payments.
Life insurance companies make efforts to contact policyholders after they stop sending premiums, but if no one ever steps forward, they can't pay out the death benefit. If the insurance company knows the person died but can't locate the beneficiaries, it turns the death benefit over to the state as unclaimed property. States maintain databases of beneficiaries who are heirs of lost policyholders. Check with your state to see how to look up whether you are listed. In addition, the National Association of Unclaimed Property Administrators offers a MissingMoney.com Web site that lets you search nationwide for missing money, including life insurance policies that have been deemed unclaimed and transferred to the state.
Know more about Life Insurance
Thursday, October 7, 2010
Dept of Posts wants IRDA to control its insurance schemes
In a first significant step towards consolidating similar financial products under one regulator, the department of posts (DoP) is exploring the option of handing over the regulation of its insurance products to the sector regulator, Insurance Regulatory and Development Authority (IRDA), a move prompted by the ugly spat between the insurance regulator and the stock market watchdog, Securities and Exchange Board Of India (SEBI), over the regulation of unit-linked insurance products (ULIPs).
The DoP has sought the law ministry’s opinion on whether the insurance schemes run by it could be brought under the regulatory ambit of the IRDA. It has also proposed to create a corporate entity to handle the schemes.
The decision to refer the matter to the law ministry was taken after the IRDA expressed its inability to regulate financial activities of the government (the DoP), which controls the insurance business of India Post, a government official told ET.
The finance ministry has favoured setting up of a corporate-like identity to handle India Post’s insurance business that can be regulated under IRDA norms, said the official, requesting anonymity. While the IRDA is not opposed to the idea, it wants greater clarity on the matter as it will require changes to the legal framework that govern the insurance policies of the postal department.
The opinion of the law ministry could pave the way for bringing the insurance business of the postal department under the IRDA’s jurisdiction. The department, which sells policies under the postal life insurance and rural postal life insurance schemes, acts within the framework of the Insurance Act. The IRDA has also pointed out that with the premium calculations of the postal department not on an actuarial basis, the postal life insurance schemes could be notching up serious deficits.
The postal department feels that an IRDA-regulated framework will allow it to make the scheme more flexible. The DoP, which acts as an agent of the finance ministry for its insurance schemes, lacks autonomy required to introduce new schemes or even providing attractive discounts to lure customers.
“The department is required to seek direction from the finance ministry for all policy matters like extension of scope to cover other clients and introduction of new products,” said an official with the ministry of telecommunications and IT.
Even as the debate on regulatory control of postal life insurance goes on, the department has also requested for greater autonomy to its insurance schemes as it looks to expand its financial services business. “Corporatisation of the life insurance business will enable the postal department to compete with private insurance players on a level playing field,” said the postal department official.
Private players have welcomed the move. “The move will help bring consistency in norms and activity pertaining to life insurance business,” said Kapil Mehta, MD & CEO of DLF Pramerica Life Insurance Company of India. He added that the proposal, when implemented, will provide the postal department a level playing field as regards right products and schemes into the rural segment, which has been the primary focus for private players as well.
The DoP has sought the law ministry’s opinion on whether the insurance schemes run by it could be brought under the regulatory ambit of the IRDA. It has also proposed to create a corporate entity to handle the schemes.
The decision to refer the matter to the law ministry was taken after the IRDA expressed its inability to regulate financial activities of the government (the DoP), which controls the insurance business of India Post, a government official told ET.
The finance ministry has favoured setting up of a corporate-like identity to handle India Post’s insurance business that can be regulated under IRDA norms, said the official, requesting anonymity. While the IRDA is not opposed to the idea, it wants greater clarity on the matter as it will require changes to the legal framework that govern the insurance policies of the postal department.
The opinion of the law ministry could pave the way for bringing the insurance business of the postal department under the IRDA’s jurisdiction. The department, which sells policies under the postal life insurance and rural postal life insurance schemes, acts within the framework of the Insurance Act. The IRDA has also pointed out that with the premium calculations of the postal department not on an actuarial basis, the postal life insurance schemes could be notching up serious deficits.
The postal department feels that an IRDA-regulated framework will allow it to make the scheme more flexible. The DoP, which acts as an agent of the finance ministry for its insurance schemes, lacks autonomy required to introduce new schemes or even providing attractive discounts to lure customers.
“The department is required to seek direction from the finance ministry for all policy matters like extension of scope to cover other clients and introduction of new products,” said an official with the ministry of telecommunications and IT.
Even as the debate on regulatory control of postal life insurance goes on, the department has also requested for greater autonomy to its insurance schemes as it looks to expand its financial services business. “Corporatisation of the life insurance business will enable the postal department to compete with private insurance players on a level playing field,” said the postal department official.
Private players have welcomed the move. “The move will help bring consistency in norms and activity pertaining to life insurance business,” said Kapil Mehta, MD & CEO of DLF Pramerica Life Insurance Company of India. He added that the proposal, when implemented, will provide the postal department a level playing field as regards right products and schemes into the rural segment, which has been the primary focus for private players as well.
Tuesday, October 5, 2010
IDBI Federal aim at 70% increase in total premium
IDBI Federal Life Insurance yesterday said it is aiming at a 70(%) per cent growth in total premium collections throughout the current fiscal.
Established in March, 2008, IDBI Federal Life had recorded a total business premium of Rs 400 crore in the 2009-10 financial years.
"Our premium income during the April-August period grew by 70(%) per cent to Rs 251 crore. We are hoping to close the fiscal with a related growth in premium income," IDBI Federal MD and CEO G V Nageswara Rao told PTI.
The company also plans to come with one new product in both the ULIP and traditional section by the end of the fiscal.
"We will focus on retirement and child plan products under the category of ULIP and traditional products, for which we would be filing to the regulator, IRDA," Rao said.
IDBI Federal is a joint venture of IDBI Bank, Federal Bank and European Insurance firm Ageas (earlier known as Fortis Insurance International), with a shareholding of 48(%) per cent, 26(%) per cent and 26(%) per cent, respectively.
The insurer has issued over 2.10 lakh policies offering an assured sum of Rs 9,819 crore till July, 2010, and has a presence in 53 cities.
In terms of premium collections from new business, the company's incomes grow by 23(%) per cent to Rs 135 crore at the end of August.
"We aim at a similar growth trend in new business income for the remaining half of the fiscal," Rao said.
The company had last month launched a new ULIP product, Federal Wealthsurance Milestone Plan, which was compliant with the new IRDA guidelines.
As per the new IRDA guidelines effective from September 1, the commission paid to distributors and expenses charged by insurers will no longer be front-loaded and will be distributed over the lock-in period of the schemes, which has been raised to 5 years from 3 years earlier.
Currently, ULIP products account for about 80(%) per cent of the total premium collected by the 23 private life insurance companies.
Established in March, 2008, IDBI Federal Life had recorded a total business premium of Rs 400 crore in the 2009-10 financial years.
"Our premium income during the April-August period grew by 70(%) per cent to Rs 251 crore. We are hoping to close the fiscal with a related growth in premium income," IDBI Federal MD and CEO G V Nageswara Rao told PTI.
The company also plans to come with one new product in both the ULIP and traditional section by the end of the fiscal.
"We will focus on retirement and child plan products under the category of ULIP and traditional products, for which we would be filing to the regulator, IRDA," Rao said.
IDBI Federal is a joint venture of IDBI Bank, Federal Bank and European Insurance firm Ageas (earlier known as Fortis Insurance International), with a shareholding of 48(%) per cent, 26(%) per cent and 26(%) per cent, respectively.
The insurer has issued over 2.10 lakh policies offering an assured sum of Rs 9,819 crore till July, 2010, and has a presence in 53 cities.
In terms of premium collections from new business, the company's incomes grow by 23(%) per cent to Rs 135 crore at the end of August.
"We aim at a similar growth trend in new business income for the remaining half of the fiscal," Rao said.
The company had last month launched a new ULIP product, Federal Wealthsurance Milestone Plan, which was compliant with the new IRDA guidelines.
As per the new IRDA guidelines effective from September 1, the commission paid to distributors and expenses charged by insurers will no longer be front-loaded and will be distributed over the lock-in period of the schemes, which has been raised to 5 years from 3 years earlier.
Currently, ULIP products account for about 80(%) per cent of the total premium collected by the 23 private life insurance companies.
Thursday, September 30, 2010
IndiaFirst Life received Rs 125 cr capital infusion
Jointly promoted by Bank of Baroda, Andhra Bank and Britain’s, on Wednesday said its shareholders have infused Rs 125 crore capital for expanding distribution network.
"With the Rs 125 crore infusion, the total paid up capital of the company now stands at Rs 455 crore," IndiaFirst Life Managing Director and CEO P Nandagopal.
He said the company will take up the capital base to Rs 2,500 crore in 10 years.
"In the next fiscal we will infuse about Rs 200 crore. We will take up the equity base to Rs 1,500 crore by the end of the first five years. We have finished our for this fiscal," Nandagopal said.
IndiaFirst, which started operations in November 2009, is the 23rd player in the life insurance space. While BoB holds 44(%) per cent, Andhra Bank has an equity stake of 30(%) per cent and the remaining 26 per cent is with the British partner.
"We will be coming out with two traditional products for which we will file with (insurance regulator) IRDA in two weeks time. We will come out with health insurance plans next year," Nandagopal said.
The company has a network of 4,500 bank branches.
"With the Rs 125 crore infusion, the total paid up capital of the company now stands at Rs 455 crore," IndiaFirst Life Managing Director and CEO P Nandagopal.
He said the company will take up the capital base to Rs 2,500 crore in 10 years.
"In the next fiscal we will infuse about Rs 200 crore. We will take up the equity base to Rs 1,500 crore by the end of the first five years. We have finished our for this fiscal," Nandagopal said.
IndiaFirst, which started operations in November 2009, is the 23rd player in the life insurance space. While BoB holds 44(%) per cent, Andhra Bank has an equity stake of 30(%) per cent and the remaining 26 per cent is with the British partner.
"We will be coming out with two traditional products for which we will file with (insurance regulator) IRDA in two weeks time. We will come out with health insurance plans next year," Nandagopal said.
The company has a network of 4,500 bank branches.
Tuesday, September 28, 2010
Insurance firms squeeze outsourcing to cut costs
Hemmed in by regulatory changes and a potential squeeze in profitability, insurance companies are now increasingly looking to outsource many of their non-core functions to cut costs and remain competitive. ICICI Prudential, Max New York Life and HDFC Standard Life are among those who have initiated discussions to outsource some of their activities as focus shifts to cost control and consolidation.
Claims administration, analytics, customer care, policy administration, sales and distribution and even product development, are some of the areas that insurance companies are looking to outsource to specialist firms.
This is a departure from the past when insurance companies’ corporate strategies largely revolved around growth in policy sales and premium collection.
Max New York Life has engaged consulting firm McKinsey to carry out a comprehensive cost-benefit analysis across verticals.
“We are looking at ways to reduce costs and one of the options could be to outsource certain areas but we need to see what exactly the impact would be,” a senior official at a Mumbai-based private insurance company, who did not wish to be identified, told Hindustan Times.
Insurance companies are desperately seeking options to cut costs after sector watchdog Insurance Regulatory Development Authority (IRDA) enforced a new set of norms from this month for the controversial Unit Linked Insurance Products (ULIPs).
ULIPs — a hybrid product where a part of the money is invested in equities and the balance is set aside as premium and charges and fees — accounts for more than half of the life insurance firms’ total business.
The new norms have capped surrender charges of policies, slashed agent commissions and seek to make charges more transparent to prevent mis-selling. This will reduce profitability of companies but also help consumers by making their investments more transparent.
Business process outsourcing companies expect a major jump in their insurance related services in India in the coming months.
“We are in healthy discussions with many of the insurance companies in India for providing specialist services across all sub-verticals,” said Keshav R Murugesh, Group CEO of WNS, a leading global business process outsourcing company.
Claims administration, analytics, customer care, policy administration, sales and distribution and even product development, are some of the areas that insurance companies are looking to outsource to specialist firms.
This is a departure from the past when insurance companies’ corporate strategies largely revolved around growth in policy sales and premium collection.
Max New York Life has engaged consulting firm McKinsey to carry out a comprehensive cost-benefit analysis across verticals.
“We are looking at ways to reduce costs and one of the options could be to outsource certain areas but we need to see what exactly the impact would be,” a senior official at a Mumbai-based private insurance company, who did not wish to be identified, told Hindustan Times.
Insurance companies are desperately seeking options to cut costs after sector watchdog Insurance Regulatory Development Authority (IRDA) enforced a new set of norms from this month for the controversial Unit Linked Insurance Products (ULIPs).
ULIPs — a hybrid product where a part of the money is invested in equities and the balance is set aside as premium and charges and fees — accounts for more than half of the life insurance firms’ total business.
The new norms have capped surrender charges of policies, slashed agent commissions and seek to make charges more transparent to prevent mis-selling. This will reduce profitability of companies but also help consumers by making their investments more transparent.
Business process outsourcing companies expect a major jump in their insurance related services in India in the coming months.
“We are in healthy discussions with many of the insurance companies in India for providing specialist services across all sub-verticals,” said Keshav R Murugesh, Group CEO of WNS, a leading global business process outsourcing company.
Friday, September 24, 2010
Car Insurance myths | what affects car insurance Premium?
1. New Cars Cost More to Insure - This is not always the case. Depending on the driver’s history, insurance for a brand new car is often cheaper than a five or ten year old version of the same vehicle. Newer models have top of the range security features installed, meaning that they are statistically less likely to be stolen, a fact that helps to bring insurance costs down. Older models also tend to be owned by younger or new drivers, who insurers class as a bigger risk and charge a higher premium.
2. Car Color Matters - Although insurers take many factors into account, including engine size, age and value of the car, driver’s record etc., they don’t take any notice of the color.
3. Being Loyal to Insurer leads to Cheaper Coverage - Staying with the same insurance company year on year won’t automatically lower your premiums. It always pays to shop around for a better deal and compare car insurance quotes when it’s time to renew your policy, because providers don’t necessarily reward your loyalty with a reduced price.
4. New Cars Are Stolen More - New models have much more advanced security equipment and anti-theft devices installed, meaning that criminals steer clear and target older vehicles that are easier to steal instead.
5. A Car is Worth What You Paid for It - If your car is totaled or stolen, insurers will only pay to replace it with a similar model at today’s market rate, not the value you paid for it originally.
6. Credit Scores Don’t Count - Sadly this isn’t the case. Most insurers now factor in a customer’s credit score when calculating their insurance quote. The better the credit score, the lower the premium will be. Build your score by keeping on top of credit cards debts and paying bills on time, and you’ll start to see a difference when you renew your auto insurance policy.
7. No Fault Insurance Means It’s Never My Fault - The only thing no fault insurance covers is your medical bills if you are in an accident, whoever is at fault. It doesn’t cover the other driver, it doesn’t cover damage to cars, and it certainly doesn’t mean you’re absolved of any responsibility if you are to blame.
8. I’ve never been in a Crash So I Don’t Need Insurance - Just because you’ve been lucky enough to avoid accidents so far doesn’t mean that’ll always be the case, no matter how good a driver you are. But it’s not just the peace of mind that having motor insurance can provide if something were to go wrong. It’s actually a legal requirement to have some form of insurance, so it’s not an even an option, you must have some sort of protection.
2. Car Color Matters - Although insurers take many factors into account, including engine size, age and value of the car, driver’s record etc., they don’t take any notice of the color.
3. Being Loyal to Insurer leads to Cheaper Coverage - Staying with the same insurance company year on year won’t automatically lower your premiums. It always pays to shop around for a better deal and compare car insurance quotes when it’s time to renew your policy, because providers don’t necessarily reward your loyalty with a reduced price.
4. New Cars Are Stolen More - New models have much more advanced security equipment and anti-theft devices installed, meaning that criminals steer clear and target older vehicles that are easier to steal instead.
5. A Car is Worth What You Paid for It - If your car is totaled or stolen, insurers will only pay to replace it with a similar model at today’s market rate, not the value you paid for it originally.
6. Credit Scores Don’t Count - Sadly this isn’t the case. Most insurers now factor in a customer’s credit score when calculating their insurance quote. The better the credit score, the lower the premium will be. Build your score by keeping on top of credit cards debts and paying bills on time, and you’ll start to see a difference when you renew your auto insurance policy.
7. No Fault Insurance Means It’s Never My Fault - The only thing no fault insurance covers is your medical bills if you are in an accident, whoever is at fault. It doesn’t cover the other driver, it doesn’t cover damage to cars, and it certainly doesn’t mean you’re absolved of any responsibility if you are to blame.
8. I’ve never been in a Crash So I Don’t Need Insurance - Just because you’ve been lucky enough to avoid accidents so far doesn’t mean that’ll always be the case, no matter how good a driver you are. But it’s not just the peace of mind that having motor insurance can provide if something were to go wrong. It’s actually a legal requirement to have some form of insurance, so it’s not an even an option, you must have some sort of protection.
Wednesday, September 22, 2010
Endowment Plus Policy launched | LIC
Life Insurance Corporation of India (LIC) launched another unit-linked pension plan named - Endowment Plus Policy, under the new Insurance Regulation and Development Authority (IRDA) regime.
Pension Plus being the first unit-linked product launched in unison with the new IRDA guidelines.
Endowment Plus offers:
• Investment-cum-insurance during the term of the policy and
• Available for people under 7-60 years for a policy term between 10 years and 20 years.
Other features:
• The minimum annual premium under the insurance policy is Rs 20,000 for regular modes and a risk cover of up to 11-30 times of annualized premium or 1.25 times of single premium.
• Critical illness and accident benefit riders are also available with this policy.
• The policy holder has the option to choose any of the 4 funds namely - Bond Fund, Secured Fund, Balanced Fund Growth Fund.
• The option of switching within the funds is available any number of times during the duration of policy. The first four switches every year are free of charge and Rs 100 is levied thereafter per switch.
Pension Plus being the first unit-linked product launched in unison with the new IRDA guidelines.
Endowment Plus offers:
• Investment-cum-insurance during the term of the policy and
• Available for people under 7-60 years for a policy term between 10 years and 20 years.
Other features:
• The minimum annual premium under the insurance policy is Rs 20,000 for regular modes and a risk cover of up to 11-30 times of annualized premium or 1.25 times of single premium.
• Critical illness and accident benefit riders are also available with this policy.
• The policy holder has the option to choose any of the 4 funds namely - Bond Fund, Secured Fund, Balanced Fund Growth Fund.
• The option of switching within the funds is available any number of times during the duration of policy. The first four switches every year are free of charge and Rs 100 is levied thereafter per switch.
Saturday, September 18, 2010
Loansurance Group Life Plan launched | IDBI Federal Life Insurance
IDBI Federal Life Insurance launched a group cover for loans - Loansurance Group Life Plan - a solution that will enable investors protect their borrower's assets and savings.
Customers of the plan gets to cover their borrowers, it could be a loan taken by any individual or by a business entity, against default in case of death of the person who is responsible for loan repayment.
To quote IDBI Federal Life Insurance Managing Director and CEO, G V Nageswara Rao - "Loansurance can help lending institutions to build strong bonds and customer loyalty by ensuring that their debt does not become a burden on their families in their unfortunate absence. They would also be protected from the risk of non-payment of the loan due to death of the borrower".
The unique feature of the plan is its cost-effective way to ensure that the outstanding debt is settled in the unfortunate event of death of the insured member.
The plan comes with two cover options
1. Reducing cover - the insurance cover reduces as per the benefit schedule
2. Level cover - the insurance cover remains unchanged throughout the cover term.
Customers of the plan gets to cover their borrowers, it could be a loan taken by any individual or by a business entity, against default in case of death of the person who is responsible for loan repayment.
To quote IDBI Federal Life Insurance Managing Director and CEO, G V Nageswara Rao - "Loansurance can help lending institutions to build strong bonds and customer loyalty by ensuring that their debt does not become a burden on their families in their unfortunate absence. They would also be protected from the risk of non-payment of the loan due to death of the borrower".
The unique feature of the plan is its cost-effective way to ensure that the outstanding debt is settled in the unfortunate event of death of the insured member.
The plan comes with two cover options
1. Reducing cover - the insurance cover reduces as per the benefit schedule
2. Level cover - the insurance cover remains unchanged throughout the cover term.
Thursday, September 9, 2010
3 new products launched by Aviva Life Insurance
Three new products are launched by the private insurer Aviva Life Insurance which includes two unit-linked insurance plans (or as we all call them, ULIPs).
The company says -
"... The two ULIP plans -- Aviva Freedom Life Advantage, Aviva Life Saver Advantage -- offer enhanced value to the customers and meet the new ULIP guidelines".
The third product - Aviva Life Shield Advantage - promises a return on the premium, with optional protection against disease and disability as well.
These products are in accordance with the new IRDA guidelines, as the commission paid to distributors and expenses charged by insurers will not be front-loaded and will be distributed over the lock-in period of the schemes, which has been raised to five years from three years (earlier).
A little about the Company –
Aviva Life Insurance is a joint venture between Dabur Group (74 %) and UK-based Aviva Group (26%).
The company says -
"... The two ULIP plans -- Aviva Freedom Life Advantage, Aviva Life Saver Advantage -- offer enhanced value to the customers and meet the new ULIP guidelines".
The third product - Aviva Life Shield Advantage - promises a return on the premium, with optional protection against disease and disability as well.
These products are in accordance with the new IRDA guidelines, as the commission paid to distributors and expenses charged by insurers will not be front-loaded and will be distributed over the lock-in period of the schemes, which has been raised to five years from three years (earlier).
A little about the Company –
Aviva Life Insurance is a joint venture between Dabur Group (74 %) and UK-based Aviva Group (26%).
Tuesday, September 7, 2010
Private insurers to espouse PSU rates for cashless mediclaim
Private non-life insurance companies are expected to implement the packaged rates prescribed by their public sector counterparts for cashless mediclaim.
“Private players have expressed interest in following the packaged rates decided by the PSU insurers,” said a senior General Insurance Public Sector Association (Gipsa) member who did not want to be quoted.
The rates worked out by Gipsa are likely to be 15-20(%) per cent less than what healthcare providers charge at the instant.
“We have in principal agreed to be part of the packaged charge. But the mechanics of packaging needs to be worked out. We will join them, but how soon will depend on how fast they move and incorporate us,” said Sanjay Datta, head of health insurance at ICICI Lombard.
The PSU insurers had graded hospitals fewer than 4 categories – primary, secondary, tertiary and tertiary plus, the Gipsa member said. He added they had made a list of 43 diseases. The rates, 15-20(%) per cent less than what the hospitals charge, will differ on the basis of provider, infrastructure, location and past experiences.
“We have not properly advised on the rates but would like to join them if it brings down our costs,” said T R Ramalingum, head of underwriting, Bajaj Allianz General Insurance.
By packaging rates and stabilising costs, insurers expect to cut expenses. “The claim ratio may not fall but the cost of treatment at individual hospitals will become standardised. The rates may differ from one hospital to another based on location and facilities,” said New India Assurance Chairman and Managing Director M Ramadoss.
State-run insurers have made a list of hospitals in the National Capital Region, Mumbai, Chennai and Bangalore. The rates are worked out on the basis of those accepting the rate packages. The rates include medical procedures and hospitalisation costs.
The public sector insurance companies — New India Assurance, National India, United India and Oriental Insurance —launched a new list for the preferred provider network after they stopped the cashless facility from July. Under the new list, only healthcare providers selected by the four insurance companies are covered by the cashless mediclaim policy.
Meanwhile, the Insurance Regulatory and Development Authority (IrDA) has asked insurance companies to provide the cashless facility if the policyholder is undergoing treatment in a hospital that has been put off the preferred network list.
The insurance industry has been incurring huge losses in the health segment. In the last financial year, PSUs paid claims of Rs 5,400 crore, as against a total collection of Rs 4,900 crore.
For policyholders willing to pay higher premium to be treated at any elite hospital, insurance companies are working on a different product.
“Private players have expressed interest in following the packaged rates decided by the PSU insurers,” said a senior General Insurance Public Sector Association (Gipsa) member who did not want to be quoted.
The rates worked out by Gipsa are likely to be 15-20(%) per cent less than what healthcare providers charge at the instant.
“We have in principal agreed to be part of the packaged charge. But the mechanics of packaging needs to be worked out. We will join them, but how soon will depend on how fast they move and incorporate us,” said Sanjay Datta, head of health insurance at ICICI Lombard.
The PSU insurers had graded hospitals fewer than 4 categories – primary, secondary, tertiary and tertiary plus, the Gipsa member said. He added they had made a list of 43 diseases. The rates, 15-20(%) per cent less than what the hospitals charge, will differ on the basis of provider, infrastructure, location and past experiences.
“We have not properly advised on the rates but would like to join them if it brings down our costs,” said T R Ramalingum, head of underwriting, Bajaj Allianz General Insurance.
By packaging rates and stabilising costs, insurers expect to cut expenses. “The claim ratio may not fall but the cost of treatment at individual hospitals will become standardised. The rates may differ from one hospital to another based on location and facilities,” said New India Assurance Chairman and Managing Director M Ramadoss.
State-run insurers have made a list of hospitals in the National Capital Region, Mumbai, Chennai and Bangalore. The rates are worked out on the basis of those accepting the rate packages. The rates include medical procedures and hospitalisation costs.
The public sector insurance companies — New India Assurance, National India, United India and Oriental Insurance —launched a new list for the preferred provider network after they stopped the cashless facility from July. Under the new list, only healthcare providers selected by the four insurance companies are covered by the cashless mediclaim policy.
Meanwhile, the Insurance Regulatory and Development Authority (IrDA) has asked insurance companies to provide the cashless facility if the policyholder is undergoing treatment in a hospital that has been put off the preferred network list.
The insurance industry has been incurring huge losses in the health segment. In the last financial year, PSUs paid claims of Rs 5,400 crore, as against a total collection of Rs 4,900 crore.
For policyholders willing to pay higher premium to be treated at any elite hospital, insurance companies are working on a different product.
Monday, September 6, 2010
Future Generali to move out 7 new products
Future Generali Life Insurance Company Ltd, a joint venture between Future Group and the Italy-based Generali Group, would move out 7 new products by March 2011. These products would be a mix up of traditional insurance products and Unit-Linked Insurance Products (ULIPs).
Addressing media persons here, Nirakar Pradhan, chief investment officer of Future Generali India said, “We would be launching 7 new products by March 2011. These would be a mix of traditional insurance products and ULIPs. Currently, we have 18 products in our portfolio which includes 15 conventional products and 3 ULIPs.”
Future Generali is also planning to foray into the micro-insurance section given its huge prospective but the modalities are yet to be worked out, he added.
The insurance firm is eyeing a total pan-India premium collection of Rs 1200 crore for the current financial year which would be a jump of 118.97 per cent over Rs 548 crore which it had actually achieved in 2009-10. TIN the eastern region, the company's premium collection stood at Rs 53 crore in the last financial.
Addressing media persons here, Nirakar Pradhan, chief investment officer of Future Generali India said, “We would be launching 7 new products by March 2011. These would be a mix of traditional insurance products and ULIPs. Currently, we have 18 products in our portfolio which includes 15 conventional products and 3 ULIPs.”
Future Generali is also planning to foray into the micro-insurance section given its huge prospective but the modalities are yet to be worked out, he added.
The insurance firm is eyeing a total pan-India premium collection of Rs 1200 crore for the current financial year which would be a jump of 118.97 per cent over Rs 548 crore which it had actually achieved in 2009-10. TIN the eastern region, the company's premium collection stood at Rs 53 crore in the last financial.
Thursday, September 2, 2010
Two new ULIPs Plan launches by SBI Life Insurance
Private insurer SBI Life launched two Unit-Linked Life Insurance Policies (ULIPs), which observe with the new IRDA guidelines that will become successful.
"SBI Life has launched Smart Performer and Unit Plus Super... In compliance with the new IRDA guidelines, these recently launched ULIPs are equipped with enhanced features such as benefits of higher protection, multiple investment options and a wide range of riders," SBI Life said in a release.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI has a 74(%) per cent stake in the insurance company, while BNP Paribas Assurance holds the remaining 26(%) per cent.
The Insurance Regulatory and Development Authority's (IRDA) new guidelines protecting ULIP-holders from mis-selling by dealers and onerous commissions are possible to make the equity-linked instruments more investor-friendly.
"Customers will find that the new range is highly beneficial, as it further reinforces the plan of security and long-term wealth creation," SBI Life Insurance MD & CEO M N Rao said.
"SBI Life has launched Smart Performer and Unit Plus Super... In compliance with the new IRDA guidelines, these recently launched ULIPs are equipped with enhanced features such as benefits of higher protection, multiple investment options and a wide range of riders," SBI Life said in a release.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance. SBI has a 74(%) per cent stake in the insurance company, while BNP Paribas Assurance holds the remaining 26(%) per cent.
The Insurance Regulatory and Development Authority's (IRDA) new guidelines protecting ULIP-holders from mis-selling by dealers and onerous commissions are possible to make the equity-linked instruments more investor-friendly.
"Customers will find that the new range is highly beneficial, as it further reinforces the plan of security and long-term wealth creation," SBI Life Insurance MD & CEO M N Rao said.
Wednesday, September 1, 2010
Two Latest Plan launches by Birla Sun Life Insurance
Leading private insurer Birla Sun Life Insurance launched two variants of its just launched savings plan, offering 20(%) per cent assured return at standard intervals.
Bachat Moneyback and Bachat Child plans follow the achievement of the Bachat Endowment Plan, launched this May, which contributed to over 10(%) per cent of overall sales in the first quarter of this financial, Birla Sun Life Insurance Chief Actuarial Officer Fabien Jeudy said.
"Our research shows that there is rising a demand for products on the traditional platform that will help consumers save for their long-term goals during regular and affordable premia. We hope Bachat Moneyback and Bachat Child plans will address these consumer needs effectively," he said.
These plans offer regular money back of 20(%) per cent of the monthly stand premia at every 5th, 10th and 15th policy year, Jeudy said.
In Q1 of this financial, the company reported a profit of Rs 9 crore against a loss of Rs 111 crore in Q1 last financial. Its asset under management grew 44(%) per cent to Rs 16,841 crore in Q1, on a total premium income of Rs 1,143 crore, up 18 per cent. Its new premium grow 7(%) per cent to Rs 473 crore while renewal premium rise by 27(%) per cent to Rs 669 crore.
Birla Sun Life, a JV between the Aditya Birla Group and Sun Life Financial of Canada, has over 2.3 million customers.
For More information about Life Insurance
Bachat Moneyback and Bachat Child plans follow the achievement of the Bachat Endowment Plan, launched this May, which contributed to over 10(%) per cent of overall sales in the first quarter of this financial, Birla Sun Life Insurance Chief Actuarial Officer Fabien Jeudy said.
"Our research shows that there is rising a demand for products on the traditional platform that will help consumers save for their long-term goals during regular and affordable premia. We hope Bachat Moneyback and Bachat Child plans will address these consumer needs effectively," he said.
These plans offer regular money back of 20(%) per cent of the monthly stand premia at every 5th, 10th and 15th policy year, Jeudy said.
In Q1 of this financial, the company reported a profit of Rs 9 crore against a loss of Rs 111 crore in Q1 last financial. Its asset under management grew 44(%) per cent to Rs 16,841 crore in Q1, on a total premium income of Rs 1,143 crore, up 18 per cent. Its new premium grow 7(%) per cent to Rs 473 crore while renewal premium rise by 27(%) per cent to Rs 669 crore.
Birla Sun Life, a JV between the Aditya Birla Group and Sun Life Financial of Canada, has over 2.3 million customers.
For More information about Life Insurance
Monday, August 30, 2010
Reliance Life tops in policy sales along with pvt insurers in July
Anil Dhirubhai Ambani Group Company Reliance Life Insurance has emerged as the leading private sector insurer in conditions of the number of policies sold in the month of July.
Reliance Life Insurance sold 2, 81,810 policies throughout the month, according to IRDA data.
However, in terms of total premium collections in July, ICICI Prudential was the top private player, mopping up Rs 584 crore, while SBI Life garnered Rs 563 crore and Reliance Life Insurance Rs 296 crore.
Meanwhile, state-owned LIC collected a total premium of Rs 5,690 crore in the same month.
During the first quarter of the current fiscal, Reliance Life sold 4, 93,899 policies as next to 4, 06,699 policies in the parallel period last year.
Among the private life insurance players, ICICI Prudential saw its premium collections from new business grow by 73(%) per cent to Rs 1,987 crore throughout the April-July period, while Reliance Life witnessed a growth of 23(%) per cent in new premium collections to Rs 901 crore for the 4 months ended July, 2010.
SBI Life's premium collections from new business grew to Rs 1,539 crore in April--July, 2010, from Rs 1,398 crore throughout the same period last year.
LIC recorded an over 70(%) per cent increase in new premium collections to Rs 24,430 crore during April--July this year from Rs 14,265 crore a year ago, according to the data.
Overall, the 23 life insurers in the country collectively mopped up Rs 34,249 crore as new first-year premium during the period, a 55(%) per cent increase from Rs 21,996 crore in the year-ago period.
The private sector, comprising 22 life insurers, together accounted for Rs 9,818 crore worth of new business in the April--July period, compared to Rs 7,730 crore a year earlier, a growth of 27(%) per cent.
Reliance Life Insurance sold 2, 81,810 policies throughout the month, according to IRDA data.
However, in terms of total premium collections in July, ICICI Prudential was the top private player, mopping up Rs 584 crore, while SBI Life garnered Rs 563 crore and Reliance Life Insurance Rs 296 crore.
Meanwhile, state-owned LIC collected a total premium of Rs 5,690 crore in the same month.
During the first quarter of the current fiscal, Reliance Life sold 4, 93,899 policies as next to 4, 06,699 policies in the parallel period last year.
Among the private life insurance players, ICICI Prudential saw its premium collections from new business grow by 73(%) per cent to Rs 1,987 crore throughout the April-July period, while Reliance Life witnessed a growth of 23(%) per cent in new premium collections to Rs 901 crore for the 4 months ended July, 2010.
SBI Life's premium collections from new business grew to Rs 1,539 crore in April--July, 2010, from Rs 1,398 crore throughout the same period last year.
LIC recorded an over 70(%) per cent increase in new premium collections to Rs 24,430 crore during April--July this year from Rs 14,265 crore a year ago, according to the data.
Overall, the 23 life insurers in the country collectively mopped up Rs 34,249 crore as new first-year premium during the period, a 55(%) per cent increase from Rs 21,996 crore in the year-ago period.
The private sector, comprising 22 life insurers, together accounted for Rs 9,818 crore worth of new business in the April--July period, compared to Rs 7,730 crore a year earlier, a growth of 27(%) per cent.
Wednesday, August 18, 2010
Revival of lapsed policies made easy
Once in a while there comes a time when the payment of premiums becomes difficult thus causing the policy to lapse. Policy lapsation can be dangerous as you or your financial dependants/beneficiaries may not get any benefit, which was the reason for buying the insurance cover in the first place.
You just need to know the reasons behind the policy lapsation and process of revival if ever there is any requirement in future (whatever the reason may be).
Reasons for policy lapse:
-because of carelessness
-because one doesn’t see value in continuing with the policy,
-because of a financial crisis and can’t afford it any longer
Policy will lapse only if you fail to pay your premiums regularly. If something happens to you during this period, the insurance company will honor its commitment and pay you or your beneficiaries, depending upon the type of policy you hold. However, if you stop paying your premium, then the insurance company will no longer be obliged to continue providing an insurance cover on your life. In this situation, your policy is said to have lapsed. The insurer might not provide any monetary benefits (the sum assured under the policy) to you or your beneficiaries if something were to happen to you.
Before your policy lapses, you still have a limited time period during which you can make well on a delayed premium payment. If you are late on your premium payment, the insurer will send you a reminder and give you a grace period within which to pay your premium. This is usually 15 days when you pay your premium monthly and 30 days in all other cases. If you fail to pay the premium even after this grace period, your policy will lapse. The insurer will send you a letter informing you about the same.
Revival: Most traditional policies (like term, whole-life and endowment plans) can be revived, subject to certain criteria that your insurer might impose on you.
Revival can happen at any time, but the conditions for revival might depend upon how long the policy has been lapsed for. Under the insurance laws, if the policy has been in force for at least three years, the insured gets up to two years to revive the policy. Some insurers like LIC have special schemes under which policies can be revived for up to five years from being lapsed.
- If you revive the policy within six months from the date of lapsation, the process might be as simple as paying the overdue premium (and interest) to catch up on the delay on your part.
- If you revive the policy after six months from the date of lapsation, you might be required to pay the overdue premium, penalty fees, as well as interest payment that could be up to 12-18% of the premium payment, depending upon the type of policy and the date of purchase.
At the time of revival, the insurer might impose a lot of conditions or even decline your request for a policy revival if the company is not convinced about the honesty of your application on grounds of suspected fraud or the like. It can be very likely that the insurer will ask you to appear for a medical test before the policy can be revived to ascertain whether you have developed a new medical condition during policy lapse that might expose the insurance company to a high risk in insuring your life.
At the time of revival, usually, full benefits that you or your beneficiaries are eligible for will be reinstated. However, if after revival, the insured commits suicide within one year, the insurer can deny the claim. Similarly, if the insured passes away within two years of the revival, the insurer has the option of conducting an inquiry before they decide to pay the claims to the beneficiaries.
You just need to know the reasons behind the policy lapsation and process of revival if ever there is any requirement in future (whatever the reason may be).
Reasons for policy lapse:
-because of carelessness
-because one doesn’t see value in continuing with the policy,
-because of a financial crisis and can’t afford it any longer
Policy will lapse only if you fail to pay your premiums regularly. If something happens to you during this period, the insurance company will honor its commitment and pay you or your beneficiaries, depending upon the type of policy you hold. However, if you stop paying your premium, then the insurance company will no longer be obliged to continue providing an insurance cover on your life. In this situation, your policy is said to have lapsed. The insurer might not provide any monetary benefits (the sum assured under the policy) to you or your beneficiaries if something were to happen to you.
Before your policy lapses, you still have a limited time period during which you can make well on a delayed premium payment. If you are late on your premium payment, the insurer will send you a reminder and give you a grace period within which to pay your premium. This is usually 15 days when you pay your premium monthly and 30 days in all other cases. If you fail to pay the premium even after this grace period, your policy will lapse. The insurer will send you a letter informing you about the same.
Revival: Most traditional policies (like term, whole-life and endowment plans) can be revived, subject to certain criteria that your insurer might impose on you.
Revival can happen at any time, but the conditions for revival might depend upon how long the policy has been lapsed for. Under the insurance laws, if the policy has been in force for at least three years, the insured gets up to two years to revive the policy. Some insurers like LIC have special schemes under which policies can be revived for up to five years from being lapsed.
- If you revive the policy within six months from the date of lapsation, the process might be as simple as paying the overdue premium (and interest) to catch up on the delay on your part.
- If you revive the policy after six months from the date of lapsation, you might be required to pay the overdue premium, penalty fees, as well as interest payment that could be up to 12-18% of the premium payment, depending upon the type of policy and the date of purchase.
At the time of revival, the insurer might impose a lot of conditions or even decline your request for a policy revival if the company is not convinced about the honesty of your application on grounds of suspected fraud or the like. It can be very likely that the insurer will ask you to appear for a medical test before the policy can be revived to ascertain whether you have developed a new medical condition during policy lapse that might expose the insurance company to a high risk in insuring your life.
At the time of revival, usually, full benefits that you or your beneficiaries are eligible for will be reinstated. However, if after revival, the insured commits suicide within one year, the insurer can deny the claim. Similarly, if the insured passes away within two years of the revival, the insurer has the option of conducting an inquiry before they decide to pay the claims to the beneficiaries.
Tuesday, August 17, 2010
Irda may cap charges on basic policies
After setting stiff norms for unit-linked insurance plans (Ulips), the Insurance Regulatory and Development Authority (Irda) is planning to cap charges on traditional products within three months.
“We will review the situation after September. If insurers try to cover the cost of squeeze in margins (due to new Ulip norms) by levying a higher charge on conventional products, we will cap it,” said a senior Irda official.
Last year, after the market regulator banned entry load on mutual funds, Irda capped overall charges on Ulips from January this year.
The difference between the net and the gross yield was capped at three per cent for products with a tenor of less than 10 years and at 2.25 per cent for those with a tenor of more than 10 years. In the new Ulip guidelines, the regulator capped this difference even during the policy term.
“At present, we are busy clearing Ulips. We will start working on the guidelines within three months of seeing the impact of the cap on Ulips,” the official added.
The regulations allow insurers to pay up to 40 per cent commission on life insurance products, including traditional plans. Insurers with more than 10 years of operation can pay only up to 35 per cent commission on selling both Ulips and conventional products.
Insurance companies are, however, against any price control and micro management by the regulator in conventional policies. “Fundamentally, we are against price control. But the industry also needs to become more responsible while designing products. On participatory products, the regulation is such that 90 per cent profit goes to policyholders and only 10 per cent to shareholders. Given the high protection and other features, there products need not be subject to price control,” said Rajesh Sud managing director and CEO, Max New York Life.
“There is nothing to cap in traditional products. These are a different class of products. There is a well defined premium and investment pattern stipulated by the regulator. They do not have any characteristic of Ulips,” said G V Nageswara Rao managing director and CEO, IDBI Fortis Life Insurance.
“We will review the situation after September. If insurers try to cover the cost of squeeze in margins (due to new Ulip norms) by levying a higher charge on conventional products, we will cap it,” said a senior Irda official.
Last year, after the market regulator banned entry load on mutual funds, Irda capped overall charges on Ulips from January this year.
The difference between the net and the gross yield was capped at three per cent for products with a tenor of less than 10 years and at 2.25 per cent for those with a tenor of more than 10 years. In the new Ulip guidelines, the regulator capped this difference even during the policy term.
“At present, we are busy clearing Ulips. We will start working on the guidelines within three months of seeing the impact of the cap on Ulips,” the official added.
The regulations allow insurers to pay up to 40 per cent commission on life insurance products, including traditional plans. Insurers with more than 10 years of operation can pay only up to 35 per cent commission on selling both Ulips and conventional products.
Insurance companies are, however, against any price control and micro management by the regulator in conventional policies. “Fundamentally, we are against price control. But the industry also needs to become more responsible while designing products. On participatory products, the regulation is such that 90 per cent profit goes to policyholders and only 10 per cent to shareholders. Given the high protection and other features, there products need not be subject to price control,” said Rajesh Sud managing director and CEO, Max New York Life.
“There is nothing to cap in traditional products. These are a different class of products. There is a well defined premium and investment pattern stipulated by the regulator. They do not have any characteristic of Ulips,” said G V Nageswara Rao managing director and CEO, IDBI Fortis Life Insurance.
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