As Indians grow richer and save more for retirement, the distribute of the Indian life insurance industry has improved in world markets. India’s ranking between life insurance markets has risen from number 10 last year to the number 9 position, displacing Taiwan.
When life insurance industry was opened for contest in 2000, India ranked number 20 among life insurance markets and accounted for a mere 0.5% per cent of the world premium. 10 years on, the share has better to 2.45% per cent, overtaking developed markets in the West such as Spain, the Netherlands, Switzerland, Sweden Belgium, Ireland and Finland, South Africa Australia and Canada.
According to Swiss Re’s annual study of world insurance markets on a price rises-adjusted basis, global insurance premiums contracted by 1.1% per cent to $4.06 trillion in 2009. This is a development over 2008 when global premiums shrank 3.6% per cent. Life premiums fell 2% per cent to $2.33 trillion in 2009 while non-life premiums remained flat at $1.73 trillion.
“In most countries (66%), insurance grew faster than GDP, which shows the robustness of the industry. As credit and stock markets recovered in 2009, the industry was able to restore its capital base. Investment results and overall productivity also improved. For 2010, it is expected that the overall premium growth in the industry will turn positive and profitability and balance sheets will continue to improve,” Swiss Re said in its World Insurance 2009 report.
The major drop in market share has been witnessed by the United States, which accounted for over 29% of world premium in 2000, but now has only 21% per cent of world life insurance premium. Japan too has seen its share drop from 26.4% per cent to 17.2% per cent. An interesting feature of the life insurance business in India is that it has developed significantly faster than the gross domestic product.
The level of insurance penetration (insurance as a percentage of GDP) in India at 4.6% per cent is dual the insurance penetration levels in China (2.3%). The report shows that adjusted for price rises, India’s life insurance industry grew 10% per cent to Rs 2,73,604 crore.
Those within the industry say the life insurance has grown mostly because individuals are channelising retirement savings through insurance because other savings instruments are not that well developed. According to insurers, the Indian market is not yet a mature market, which is reflected in the low levels of premium paid towards protection.
When it comes to non-life insurance, where premium is paid purely of protection (health, auto and property), India ranks 26th and its share of world insurance market is 0.46% per cent.
Showing posts with label Retirement Plan. Show all posts
Showing posts with label Retirement Plan. Show all posts
Tuesday, July 6, 2010
Monday, May 31, 2010
Riders, add-ons to develop basic policies
Quite rightly named, insurance riders are tag-along policies that ride along with the essential life insurance. Riders are offered by mainly insurance companies, and add a few benefits to your life policy. Riders are planned to simply supplement your basic life insurance policy. Riders are, of course, optional, and just a way to improve benefits beyond those offered by your regular policy.
Note the key points about riders. One, they come with their own premiums in count to the premium you pay on your base life policy. Rider premiums are based on a fixed sum per thousand of the sum assured.
For example, in Reliance Life Insurance New Critical Conditions Rider, a 35-year-old male will have to pay Rs 5.06 per thousand of sum assured for a 10-year rider period.
Two, riders cannot be bought on their own, and have to be close to a regular life policy. However, riders and premiums may have differing periods of insurance and do not have to be the same as the life policy you have selected.
Three, once the benefit of the rider is availed of, they cease to be prepared, and you will not have to pay out the premiums.
For example, considering the afore-mentioned Critical Conditions rider, you can claim repayment for multiple surgeries and even in the same year, but only to the extent of the benefit stated in the rider terms.
Even if the rider is ended, your actual life plan remains unchanged, and will continue as it is.
Riders are available on life insurance policies, ULIPs or else. With child benefit plans, retirement plans, and pension plans, some providers do offer riders where others do not. For example, ICICI Prudential offers riders on its life insurance policies, but not on most of its retirement policies.
While the finer points of riders differ with providers, most primarily offer benefits on accidental deaths, disability (or a combination of the two), critical illnesses and surgeries and waiver of premiums.
Some providers offer all of these, but accidental death and disabilities benefits are consistently offered.
Accidental death rider simply provides additional cover in the case of death only due to an accident. There are a good many circumstances on what exactly
constitutes an accidental death, so be sure to take a careful look. Similarly, disability covers partial and permanent disability.
As far as critical illnesses go, the insurance providers specify those that they will cover. Within the specific illnesses as well, there are further terms and conditions that have to be satisfy, such as stage of the disease and soon.
Major surgeries are also provided for under some riders.
The third common rider is waiving of premium. This is an offshoot of disability, under which, should you be permanently disabled and thus be unable to meet premium payments, this rider will clear you of having to pay the premiums on your actual policy.
Note the key points about riders. One, they come with their own premiums in count to the premium you pay on your base life policy. Rider premiums are based on a fixed sum per thousand of the sum assured.
For example, in Reliance Life Insurance New Critical Conditions Rider, a 35-year-old male will have to pay Rs 5.06 per thousand of sum assured for a 10-year rider period.
Two, riders cannot be bought on their own, and have to be close to a regular life policy. However, riders and premiums may have differing periods of insurance and do not have to be the same as the life policy you have selected.
Three, once the benefit of the rider is availed of, they cease to be prepared, and you will not have to pay out the premiums.
For example, considering the afore-mentioned Critical Conditions rider, you can claim repayment for multiple surgeries and even in the same year, but only to the extent of the benefit stated in the rider terms.
Even if the rider is ended, your actual life plan remains unchanged, and will continue as it is.
Riders are available on life insurance policies, ULIPs or else. With child benefit plans, retirement plans, and pension plans, some providers do offer riders where others do not. For example, ICICI Prudential offers riders on its life insurance policies, but not on most of its retirement policies.
While the finer points of riders differ with providers, most primarily offer benefits on accidental deaths, disability (or a combination of the two), critical illnesses and surgeries and waiver of premiums.
Some providers offer all of these, but accidental death and disabilities benefits are consistently offered.
Accidental death rider simply provides additional cover in the case of death only due to an accident. There are a good many circumstances on what exactly
constitutes an accidental death, so be sure to take a careful look. Similarly, disability covers partial and permanent disability.
As far as critical illnesses go, the insurance providers specify those that they will cover. Within the specific illnesses as well, there are further terms and conditions that have to be satisfy, such as stage of the disease and soon.
Major surgeries are also provided for under some riders.
The third common rider is waiving of premium. This is an offshoot of disability, under which, should you be permanently disabled and thus be unable to meet premium payments, this rider will clear you of having to pay the premiums on your actual policy.
Friday, April 16, 2010
Tata-AIG Life Insurance unveils 'NAV guaranteed' pension plan
Tata AIG Life Insurance has announced the launch of Apex Pension Plans — 4 unit-linked pension plans that come with the ‘Guaranteed Maturity Unit Price’ (GMUP) characteristic, which enables the policyholders to earn income based on the highest NAV per unit achieved on the reorganize dates.
The policyholder’s premium is allocated in the individual ‘Investment Fund’ from where the money is transitioned to the relevant Return Lock-in Fund on the instant next reset date. According to the official release, while the investment fund’s objective is to provide capital defense through investment in quality short-term debt, the latter aims to invest in a diversified equity portfolio of large-cap companies to generate capital approval, and use debt instruments to lock in the same.
The NAV per unit of this fund will be noted at every reset date for calculating the GMUP. The policyholders can, depending upon their age,retirement plan age and financial requirement, choose from 4 plans — Apex Pen-sion, Apex Pension 10, Apex Pension 15 and Apex Pension 20. For all these variants, the minimum annualized premium is Rs 48,000.
The policyholder’s premium is allocated in the individual ‘Investment Fund’ from where the money is transitioned to the relevant Return Lock-in Fund on the instant next reset date. According to the official release, while the investment fund’s objective is to provide capital defense through investment in quality short-term debt, the latter aims to invest in a diversified equity portfolio of large-cap companies to generate capital approval, and use debt instruments to lock in the same.
The NAV per unit of this fund will be noted at every reset date for calculating the GMUP. The policyholders can, depending upon their age,retirement plan age and financial requirement, choose from 4 plans — Apex Pen-sion, Apex Pension 10, Apex Pension 15 and Apex Pension 20. For all these variants, the minimum annualized premium is Rs 48,000.
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