ING Life Insurance ties up with Vizag co-op bank

ING Life India, part of the ING Group, has tied up with Visakhapatnam District Central Co-op Bank in Andhra Pradesh.

The tie-up gives access to ING Life India to make its products available to more than 60,000 customers of the co-op bank through its 28 branches spread across Visakhapatnam, Anakapalli, Narsipatnam and Yelamanchili.

Commenting on the tie-up, T K Uthappa, director - sales, ING Life India, said, “ING Life India has a strong network of tie-ups with co-operative banks across India. We have been keen to develop our network in Andhra Pradesh, and this tie-up gives us the right start in the region to reach out to our customers to help them manage their financial future.”

Visakhapatnam District Central Co-op Bank is the fifth district central cooperative bank that the company has tied up with in AP.

B Satya Rao, chairman, Visakhapatnam District Central Coop Bank, said, “With the tie up we will now be able to add one more service to our customers by offering life insurance products.”

ING Life plan at Rs 1939 crore premium in 2010-11

ING Vysya Life Insurance Company Ltd has set a pan-India premium collection target of Rs 1939 crore in the current financial year. The insurance company also aims to come out with a couple of new products in the first quarter of 2011-12.
Addressing media persons here, R Vishnu Kumar, director (sales), ING Vysya Life Insurance Company Ltd said, “We have recorded an overall premium collection of Rs 1109 crore by the end of December 2010 and have recorded a secondary growth of 1.76(%) per cent so far in this fiscal at a time when the insurance industry in the country has witnessed a negative growth. The company is targeting a premium collection of Rs 1939 crore by the end of March this year.”
The agency channels have the highest share of ING Life's premium collection at 68(%) per cent followed by ING Vysya Bank at 20(%) per cent and interchange channels like brokers and corporate agents account for 12(%) per cent.
ING Life on Wednesday, rolled out a traditional insurance product in the city- ING Ace with features like high guaranteed additions, limited premium payment and tax benefit under Section 80 C of the Income Tax Act.
The new plan comes in two variants- ING Ace Pension and ING Ace Life. The pension alternative offers the customers a guaranteed addition of 8.75(%) per cent throughout the 10-year term of the policy. The life version of ING Life offers 7.75(%) per cent or 7(%) per cent per annum guaranteed additions depending on the premium paid.
"I am delighted to launch both variants of ING Ace which we believe will appeal to a lot of our customers looking for tax saving solutions apart from attractive additions. ING Ace offers high guaranteed additions, tax benefits under Section 80 C and is available with low commitment from their side as they need to pay only 3 annual premiums”, Kumar said at the launch of the product.
The pension variant of ING Ace is planned for people in the age group of 35-60 years who are looking at building their corpus for post retirement.

ING Life eyes 50% increase in biz from north

ING Life Insurance Company, the insurance arm of the ING Group, is eyeing 50(%) per cent increase in business from the northern region. The region for ING life comprises Jammu and Kashmir, Punjab, Haryana, Himachal Pradesh, Delhi and Rajasthan.
ING Life Insurance (North) Executive Vice-President Ajay Kapoor maintained, as against business of Rs 24 crore in the related period last year they were anticipating surge in business. In addition to new products which comprise both traditional products as well as unit-linked insurance plan (Ulip), the growth would be fuelled by the spike in sales of insurance products for the 3 months from January to March.
Many people still consider insurance as a tax-saving tool which results in business rolling for the insurance sector especially during 3 months from January to March.
Ajay Kapoor was here to launch the traditional insurance product ING ACE. The new plan comes in two variants – ING ACE Pension and ING ACE Life. While the pension variant offers customers guaranteed addition of 8.75(%) per cent p a throughout the 10-year term of the policy. ING ACE Life version offers 7.75(%) per cent or 7(%) per cent p a guaranteed additions, depending on the premium paid. In both the plans customers need to pay premium for only 3 years in an annual mode, and tax benefits.
Kapoor maintained ING Life insurance which ranked 13th among the insurance companies had ascended to the 11th position now, and was expecting to touch the 10th position by March-end this year.

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.