Purchasing a policy in India is cheaper

Students going overseas for studies need to have an insurance cover. And the good information is that purchasing the cover in India, if the country or the university allows you to do so, is a cheaper option.
In countries like Canada and New Zealand, universities themselves offer cover to their students. In fact, the cover is integrated in the tuition fees. These universities do not accept insurance purchased by a student in his\her home country. But one can buy an additional cover from India, too.
“The university may not permission that insurance purchased by a student provide coverage in these areas. But, such additional coverage is helpful. For instance, coverage for medical expenses connected to mental disorders may be useful if a student suffers from depression or stress and needs medical aid,” says T A Ramalingam, head-underwriting, Bajaj Allianz General Insurance.
Universities in the US and the UK are more elastic and allow students to buy insurance from their home country, provided it satisfies the requirements of the university. Rasika Iyer, set to travel to the UK this September for her higher education, seems converted by the logic. As she puts it, “After expenses a huge amount for my studies in the UK, a little extra expense to cover medical emergencies seems worth it.”
The policies offered by Indian companies like Tata AIG, Bajaj Allianz and ICICI Lombard are received by most universities in the US. Even if purchasing university insurance is required, students usually prefer to take an additional policy from India.
It makes sense to do so, say financial planners. “A major segment of the insurance offered for students covers medical costs. This is a big benefit if you think how expensive medical treatment is outside India,” says Suresh Sadagopan, a certified financial planner.
“The waiting period at public hospitals can be very long from time to time. When the student cannot afford any delay in treatment, he can use his Indian insurance policy at a private hospital,” says Vinayak Kamath, director, G B Education.
If you have an option to choose between Indian and university policies, purchasing a student insurance policy in India will show to be more cost-effective. It will cost you approximately one-third the amount you will have to pay for the university insurance.
For a sum assured of $100,000 and upwards, a 2-year insurance cover from the university costs Rs 27,000-36,000 ($600-800 per year), at the rate of $1=Rs 45. Indian insurance policies will charge anywhere Rs 7,000-19,000 (between $ 150 and $425) for a related policy.
The university insurance mostly covers only medical expenses, and in certain cases, dental expenses. However, student insurance policies available in India offer certain benefits over and above the medical coverage like:
Study interruption
Say, you meet with an accident and cannot follow your studies further because of medical reasons. In this case, the insurance company will repay the tuition fee paid for that semester.
Sponsor protection
If your parent or guardian who is financing your education expires, the insurance cover will ensure your studies are not broken up. You will be entitled to tuition fees payable up to a certain limit, specified in the policy.
Compassionate visit
In case you get hospitalised for more than 7 consecutive days, the insurance company pays for the return air fare for one of the parents to visit you. Similarly, if either of your parents gets hospitalised in India, your return air fare is enclosed.
Repatriation of remains
If a student dies while studying overseas, expenses incurred for repatriating his leftovers to India will be taken care of by the insurance company.
So, go ahead and choose an insurance product that best suits your needs. It will go a long way in ensuring that you have a smooth sailing during your education years overseas.

Foreign firms can have to cut venture in insurance JVs

Foreign partners may have to reduce their stake in insurance joint ventures (JVs) on listing to abide by the government command that all listed companies must have 25(%) per cent public shareholding.
“We want Indian promoters to have a minimum 51(%) per cent stake in insurance companies. It is for the government to choose on disinvestment and take a call on raising the foreign direct investment (FDI) limit to 49(%) per cent. Foreign partners will have to reduce their stake if the government sticks to the 25(%) per cent public shareholding standard,” said a senior official with the Insurance Regulatory and Development Authority (Irda).
The government had last week implicit that it was open to a review of the 25(%) per cent public shareholding norm, but as of now, the rules stay in force.
Indian partners own 74(%) per cent in insurance JVs, while foreign partners own the relax. FDI would be raised to 49(%) per cent after the Insurance Amendment Bill, cleared by a parliamentary Standing Committee and pending before the Parliament, comes into force.
According to the Insurance Act, companies can valve the public market after they complete 10 years of operations. The insurance regulator is working out the modalities of the first public offer (IPO). The regulator has optional to the standing committee that both partners reduce stake proportionally after they go public.
As life insurance is a capital thorough business, insurers have been trying to beat the public market. The government had earlier thought of bringing down the minimum term for listing from 10 years to 5 years. However, it later decided to delete that section from the Act and allow insurers to go public at any stage. This is also a part of the Insurance Amendment Bill.
HDFC Standard Life and ICICI Prudential will complete their 10 year of operations in the next few months. Irda is waiting for amendment to the Act before it comes out with the IPO norms. There is an inter-regulatory subcommittee about this, including members of the market regulator, Securities and Exchange Board of India (Sebi), and Irda.
Reliance Life Insurance was the first insurance company to explain interest in listing to raise resource. The company is totally owned by Anil Dhirubhai Ambani Group.
Industry experts said some companies such as Tata AIG Life Insurance, Reliance Life, Shriram Life and ING Vysya Life Insurance would greeting the government’s move on 25(%) per cent public shareholding, as their foreign partners were either looking to dilute stakes in their Indian joint ventures or they were 100(%) per cent owned by an Indian advertiser.
Most foreign partners had expressed their motivation to increase their shareholding in their joint ventures as and when the regulations allowed. Insurers like Bajaj Allianz had even fixed the price at which it would increase its stake.

ICICI Prudential may trade Tata AIG stake to Tatas

Prudential CEO Tidjane Thiam today indicated that the British company would sell its stake in Tata AIG Life to the Indian corporation. In March, Prudential had acquired AIG's Asia business for $35.5 billion, which included the 26(%) per cent stake in Tata AIG.
Prudential, which has a 26(%) per cent stake in ICICI Prudential Life Insurance, the country’s largest private sector life insurer, is barred from acquiring stake in another life insurance venture. As a result, it has no option but to sell the stake. Thiam said Tata has the first right of refusal on the shares.
A Reuters report said Tata and Prudential were in advanced stages of talks on the price at which the shares would be sold to the Indian conglomerate.
However, Tata AIG spokesperson could not be reached for comment. While announcing a $21 billion rights issue, the insurer said that it would sell assets to “enhance value for shareholders” and meet the requirements of regulators in China, India and Malaysia.
Thiam said, Prudential will sell a 50(%) per cent stake in AIA’s Chinese business, which has a rooted value of $1.2 billion, and a alternative stake in its Malaysian unit.
Over the last two months, the Tata group has offered no comments on the stake achievement in the life insurance venture. Market sources do not rule out the possibility of the Tatas roping in another partner later.
Earlier, a Tata group executive had told Business Standard that a partner may be inducted later.
Most Indian players, which ventured into the insurance arena, had roped in a foreign partner. While Sahara has so far not roped in a foreign partner, Anil Dhirubhai Ambani Group is looking at different options, including roping in an investor in Reliance Life.
The Prudential-AIG deal covered the life venture with the Tatas but the general insurance venture was outside the ambit of the transaction as the US insurer held the stake through a separate investment outfit.
Tata was among the initial set of players to foray into the insurance sector after the business was opened up to private companies in 2000. Two days after AIG announced its decision to sell the Asian life insurance venture, AIG India executives held detailed discussions with Insurance Regulatory and Development Authority officials.

All insurers debarred from issuing fresh ULIPs

Union Finance Ministry has stepped in the war between Securities and Exchange Board of India (SEBI) and Insurance Regulatory Development Authority (IRDA) over new unit linked insurance plans.
Insurance companies cannot issue any fresh ULIP products awaiting a court decision. The restriction is also relevant on the Life Corporation of India (LIC) and 8 others companies which be not named in the previous SEBI order that barred 14 insurers from issuing any new ULIP.
But all ULIPs issued before April 9 will carry on. The Finance Minister had already asked the insurance and market regulators to keep status quo on the SEBI order banning new unit linked plan or products by insurance companies.
The market regulator had on April 12 lifted its ban order forced on April 10 on selling of ULIPs by the 14 insurance companies after a meeting with IRDA and Finance Ministry officials in New Delhi.
The IRDA had rejected SEBI's resolution and asked the insurance companies to carry on with business as normal. The insurance regulator had invoked its powers under Section 34 (1) of the Insurance Act to take on SEBI.
SEBI wants all financial products to move to no entry load. ULIPs at present charge entry load.
The insurance companies against whom SEBI passed an order were SBI Life, ICICI Prudential, Tata AIG Life Insurance, Aegon Religare Life, Aviva Life, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life Insurance, Kotak Life Insurance, Max New York Life, Metlife India and Reliance Life Insurance.

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.

Life insurance companies see latest selling premiums up 15%

Life insurance companies are pulling out all stops in the last combine of months before the close of the financial to cover the over 15% percent degrowth that it had to stand in the first 6 months.
Insurers are betting large on the February and March numbers for latest business premium to gather in an overall industry growth of around 15% percent in the current financial year.
While the first half of the year showed a separate degrowth, mostly among private insurance players, February growth statistics seem to show positive signs on the new business premium collected.
Data from the Insurance Regulatory & Development Authority (Irda) shows that the overall new business premiums grow by 16.5% percent between April and February.
While public-sector behemoth LIC grew by 24% percent, almost all private insurance companies registered good development in new business premium. SBI Life Insurance, Reliance Life Insurance, ICICI Prudential Life Insurance grew their new business premiums by 21.1% percent, 5% percent, 16.09% percent, respectively. HDFC Standard Life grew by 19.45% percent, Bajaj Allianz Life Insurance by 9.5% percent and Tata AIG Life Insurance grow 16.7% percent throughout April-February.
Amitabh Chaudhry, CEO, HDFC Standard Life, told DNA Money, “The economic recession took its toll and constant to have its result on the industry till the first few months of the current financial. Things are revolving around and February and March are the biggest months. A 15% percent growth for the industry can be expected.”
M N Rao, managing director and CEO, SBI Life, said, “We have posted a net profit of Rs 199 crore in the first 9 months and would positively improve it to at least Rs 225 crore. We are also looking at a 25% percent growth in the new business premium for the full year to around Rs 7,000 crore.”
Malay Ghosh, president, Reliance Life, said, “I expect the industry to grow at an average of around 10-12% percent and our increase rate should be around 15% percent for new business premium. We do be expecting a slight balancing of portfolios. For 2009-10, we expect an overall premium growth of 50% percent to around Rs 7,000 crore.”
Interestingly, however, the growth in weighted new received premium (WNRP), or real new business premium weighted for single and group premiums at 10% percent, equal to February 2010, over the previous equivalent period, is around 12.9%.
Alpesh Mehta and Parag Jariwala, analysts with Motilal Oswal, said in a recent report, “In February 2010, industry WNRP grew 4%....in January 2010, WNRP declined 25% month on month. On a year-to-date (YTD) basis, industry WNRP grew 13% due to a strong 25% growth posted by LIC. YTD, private players grew just by 4% (WNRP). Among big private players, only SBI Life reported a strong 35% year-on-year growth in WNRP, whereas for others it has been 10% to (-) 20%.

Pay insurance by way of Visa cards

Visa Debit and Credit card holders will now be able to pay their insurance premiums in a much easy way. As many as 20 insurance companies have tied up with Visa so as to allow premium payment for both life insurance and general insurance policies.
The companies participating in this tie up are Aegon Religare, Bajaj Allianz Life Insurance, Bajaj Allianz General, Bharti AXA Insurance, Birla Sunlife, Future Generali, HDFC Ergo, ICICI Lombard, ICICI Prudential Life Insurance, IDBI Fortis, ING Vysya, Kotak Life Insurance, Max New York Life, Metlife, Reliance General, Reliance Life, Royal Sundaram, SBI Life, Tata AIG General and Tata AIG Life Insurance.
Visa said. Customers having policies with these companies can now pay their premiums online using during the website www.visabillpay.in or the participating insurance company websites.
Previously the modes of premium payment available were check pick up, cash/ cheque etc.
Other than the internet there are other facilities too that are covered in the process. Customers can make payments over the phone through the call centers of their insurance companies or can teach their banks to make regular payment of their premiums through their Visa cards.
The insurance companies will be benefited as their operational good organization would increase due to timely receiving of insurance premiums. The other benefits that would be achieved by the insurance companies are reduced managing costs due to automated payment process. Thus the customer service would be increased and so would his observation.

Tata to buy AIG's venture in life insurance division

A day after Prudential bought out AIG’s Asia arm, AIA, top executives of both AIG and Tata AIG met the Insurance Regulatory & Development Authority (Irda) to keep the latter abreast of developments

Sources at Tata Sons told Business Standard they had decided to buy out AIG’s stake in the Life Insurance business. And, would consider inducting a partner at a later stage.
In another meeting, senior executives of Prudential and the ICICI group discussed the implications of the takeover on their Indian Insurance venture. According to people familiar with the matter, Prudential unbreakable its commitment to the group. Barry Stowe, chief executive officer of Prudential Corporation, Asia, was present in the meeting.
By Irda data, while ICICI Prudential had around 7 (%) per cent market share in total premiums at the end of January, Tata AIG Life had only 1.23(%) per cent share.
The whole work out started after Prudential bought AIG’s Asia arm yesterday for $35.5 billion. AIG had to sell stake to repay the US government who had bailed out the US insurer at the time of financial downturn.
Tata AIG Life Insurance is the ninth largest insurer in the Indian market. The company recorded 13.7(%) per cent increase in the total premium income between April 2009 and January 2010. The insurance regulator is still working on the merger and achievement guidelines.