LIC Samridhi Plus

LIC Samridhi Plus is a ULIP Plan. LIC Samridhi Plus (Plan No.804) is a close ended plan which would be open for sale for a maximum period of 3 months.

LIC Samridhi Plus Plan at Glance:

• Guaranteed Highest NAV of the first 100 months at Maturity
• Policy Term 10 years
• Lock in period 5 years
• Limited Premium Payment (5 years or single premium)
• Unlimited investment under Single Premium
• Insurance Protection
• Easy liquidity through Partial Withdrawals
• Entry age 8 to 65 years

LIC Samridhi Plus with a policy term of 10 years that offers payment of Fund Value at the end of the policy term based on the highest Net Asset Value (NAV) over the first 100 months of the policy or the NAV as applicable at the end of the policy term, whichever is higher. The premium payment under this plan is limited to single or 5 years. The policyholder can choose the level of cover within the limits, depending on his/her age.

Benefits payable on death:
The nominee will get Sum Assured or Policyholder’s Fund Value whichever is higher

Maturity Benefit:
Highest NAV Fund Value or Maturity Fund Value Whichever is higher.

Guaranteed NAV:
In this plan there is a guarantee of the highest NAV recorded on a daily basis, in the first 100 months of the policy, subject to a minimum of Rs. 10/-. The guarantee will be applicable only for units available in the policyholder’s fund at the end of the policy term. The period to be counted for guarantee of NAV shall be 100 months from the date of commencement of policy.

Eligibility condition and restrictions for LIC Samridhi Plus

a) Minimum Basic Sum Assured:
5 year Premium paying term policies:
For age at entry below 45 years: 10 times the annualized premium
For age at entry 45 years and above: 7 times the annualized premium

Single Premium:
For age at entry below 45 years: 1.25 times the single premium
For age at entry 45 years and above: 1.10 times the single premium

b) Maximum Basic Sum Assured:
5 years Premium paying term policies:
For age at entry below 45 years: 20 times the annualized premium
For age at entry 45 years and above: 10 times the annualized premium

Single Premium Policies:
5 times the Single premium, if age at entry is up to 55 years.
1.25 times the Single premium, if age at entry is 56 to 65 years

Top-up: No Top-up shall be allowed under the plan.

Entry age: 8-65 years
Maturity age: 18-75 years
Policy Term 10 yrs
Premium paying term: 5yrs or single premium

Minimum Premium:
Yearly Premium: Rs.15000/-
Half Yearly: Rs.8,000/-
Quarterly: Rs.4,000/-
ECS Monthly Rs.1500/-

Min. Single Premium: Rs.30, 000/-

Maximum premium:
Single Premium: No Limit
Regular Premium: 1 lac p.a.

Benefit illustration (Assuming Gross Interest Rate of 10% P.a.)

Age: 30 years
Sum Assured: Rs.200000/-
Policy Term: 10 years
Premium: Rs.20000/- p.a.
Premium Paying Term: 5 years
Maturity Amount: Rs.1,73,355/-

Accident Benefit:

Accident Benefit is available at extra Rs.0.50 per thousand Sum Assured

Premium Allocation Charge:
For Single premium policies: 3.3%

For Regular premium policies:

Premium	Allocation Charge
First year	6%
2nd-5th year	4.50%

Other Charges:
Policy Administration charge: Rs. 30/- per month during the first policy year and Rs 30/- per month escalating at 3% p.a. thereafter, throughout the term of the policy.
Fund Management Charges (FMC): 0.90% p.a
Guarantee Charge: 0.40% p.a

Know more about LIC

Take benefit of investment avenues with variable life insurance plan

A variable life insurance plan (VLIP) combines investment and insurance, just like a unit-linked insurance plan (ULIP). Variable life insurance schemes offer flexibility in the ratio of mortality and savings components.

These plans also offer more clearness, simplicity, quick liquidity, guaranteed minimum returns, transparent charges and ample risk cover. This type of life insurance allows you to contribute in several investment options simultaneously targeting your premiums to separate accounts.

Generally, the optional investment funds include stocks, bonds, money market funds, equity funds, or a mixture of them all. Variable Life Insurance allows you to switch from one sub-account to another.

You can also apply the interest earned on these investments toward the premium, reducing the amount you pay. In a going away from the ULIPs, the returns are declared by insurance companies annually and are not linked to the stock market.

One part of the premium is allocated to buy life insurance. The balance is invested in bonds or equities. The premium amount cannot be changed in the course of the policy, but the death benefit and savings element can be reviewed and altered as the policyholder's circumstances change.

You can increase your insurance protection and decrease the investment component, or vice versa. Another feature of this plan is that it does not get automatically cancelled if the policyholder fails to pay the premiums as long as the premiums paid till date meet policy requirements. Under the plans, the premiums paid by the holder, after deduction of charges, will be credited to the account maintained separately for each policyholder.

If all due premiums are paid, the amount held in the policyholder's account will earn an annual interest which will be guaranteed for the entire policy term. In addition to this guaranteed return, if all due premiums are paid; the individual policyholder's account may earn an additional return depending upon the experience under the plan.

There is an option to pay additional (top-up) premiums without any increase in risk cover to the extent of total basic premiums paid under the policy. The premiums can be paid regularly at yearly, half-yearly, quarterly or monthly (through ECS mode only) intervals over the term of the policy. The sum assured ranges from 10 to 30 times the annualized premium, depending on age of entry.

There are two types of variable life insurance plans - participating and non-participating. Participating plans offer a guaranteed return, while nonparticipating plans offer an annual bonus at the end of each financial year in addition to guaranteed returns.

The minimum sum assured is Rs 50,000 or 10 times the annualized premium, whichever is higher for entry at the age below 45 years. After that age, the maximum is Rs 50,000 or 7 times the annualized premium.

Top-up premium is allowed throughout the term. In case the insured decides to increase his contribution through a onetime top-up, a maximum of up to 3 percent charges may be deducted from the top-up. The product also provides for loans up to 60(%) percent of the balance at a specific rate of interest.

New ULIP Plan Lunched by LIC

Life Insurance Corporation of India launched 'Samridhi Plus' under its unit linked portfolio offering insurance protection, safety and growth.

Samridhi Plus safeguards policyholders' investment from market fluctuations, LIC said in a statement here.

Accident benefit option is also available under this plan that will be equivalent to the life cover up to a maximum of Rs 50 lakh, subject to positive conditions.

The policy term for the plan is fixed for 10 years, it said.

The minimum age at entry level for Samridhi Plus is 8 years while the maximum age is 65 years.

The minimum premium ranges from Rs 1500 (monthly - ECS) to Rs 30,000 (single premium) depending on the mode of payment while the maximum is Rs 1 lakh per annum under any mode for the 5 year premium paying term.

Cashless mediclaim facility at 4 more hospitals

Fortis group of hospitals and Cumballa Hill Hospital in Kemps Corner have agreed to be part of the Preferred Provider Network (PPN) programme of public sector insurance companies for cashless mediclaim facility.

An official said, "Fortis group has 3 hospitals in the Mumbai Metropolitan Region at Mulund, Kalyan and Vashi. All the 3 will join the PPN network." - Manthan K Mehta

Vijay Shetty, director of Cumballa Hill Hospital, said, "The cashless facility to mediclaim policy holders will be comprehensive to patients within week."

Till now, Jaslok was the only major hospital in the island city to have joined this association.

General Insurance Public Sector Association (GIPSA) a group comprising 4 public sector insurance companies - New India Assurance Company Ltd, United India Insurance Company Ltd, Oriental Insurance Company Ltd and National Insurance Company Ltd, had decided restrict the cashless medical facility to hospitals approving to join the PPN to curb the mounting losses to fraudulent or inflated claims from July 1, 2010 onwards.

Apart from Fortis, the other major hospital in the network Jaslok Hospital, Jupiter Hospital Thane, MGM Vashi, Sterling Wockhardt, Vashi, Kohinoor Hospital, Kurla, Seven Hills, Andheri (E).

Need, importance and benefits of switching Health Insurance

Need: If you are not satisfied with the services of your health insurer, what should you do? Earlier nothing, but now from 1^st of July thanks to Health Insurance Portability, you will be able to switch to another health insurer without losing any of the benefits that your current health insurer provides.

Importance: If you want to shift from one place to another, that is, relocating, there is a chance that due to lack of insurers’ office providing necessary policy service at the new location. Secondly, if you are shifting from one organization to another organization many times you lose health insurance cover due to lack of portability of the health insurance policies especially loss of Pre Existing Diseases (PED).

Benefits: It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies; thus IRDA has allowed health insurance to be portable from 1^st July.

· The portability will ensure that the policyholder is not tied to one single insurer throughout his life for fear of losing the cover of PED.

· Policyholders who have chronic illnesses like cataract, hysterectomy etc can “carry forward” the credit gained for pre-existing conditions in terms of waiting period enjoyed with previous insurance company, as per the new portability guidelines. (For example if under a previous policy, the condition was excluded from coverage for two years and under a new plan with a different insurer the exclusion period for the same condition is three years, the new health insurance policy can only exclude the condition from coverage for one extra year).

New Money Back Plan – Cash Rich Launched by Bajaj Allianz

Bajaj Allianz Life Insurance has launched a traditional money-back plan – Bajaj Allianz Cash Rich, which gives guaranteed cash back of 5(%) per cent of the sum assured after the achievement of the premium payment term.

It is a limited premium payment, participating plan that provides cash benefits at 3 stages of the policy life cycle. This can be a good option for your personal finance planning.

“By paying a small amount for a few years, you can get returns year on year. The cash back at various stages of the policy term makes the plan idea for all customer age groups – youngsters, salaried people, married couples or senior citizens nearing retirement – and help them meet various financial objectives with the extra annual income. The low annual premium of Rs. 8000 makes it reasonable to a larger section of the population,” said Akshay Mehrotra, head of marketing at Bajaj Allianz Life Insurance.

The cash benefits are given at the stage of completion of premium payment term (an accumulated compound reversionary bonus is payable) and then cash back benefit of 5(%) per cent of the sum assured plus cash bonus (if any declared) is payable every year throughout the cash back period after the premium payment term is completed up to the maturity date. And then, on the maturity of the policy, the sum assured is paid along with the terminal bonus.

The plan offers the flexibility to select the policy term from 10 years to 65 years depending on your financial need. One can also select a limited premium payment term (PPT) from 5 years to 30 years, in multiple of 5 years. The plan offers a discount for premiums paid in advance, which is declared by the company every year. The rate of discount for FY 10-11 is 7(%) per cent per annum compounding annually.

Among other features, the policy will stay in force for the full sum assured for two years, even if the subscriber misses payment of premiums on due dates, provided s/he has paid at least three year’s premium in full.

One can also transfer the policy to a single premium term cover with return of premium policy; if you miss the payment of premium on due dates provided s/he has paid at least five years’ premiums in full. The subscriber also has the option of enhancing protection by using various riders available with the product.

Ulips to be a third of our products

With a focus on long-term savings plan and protection, Max New York Life Insurance has planned its traditional and Ulip products to suit the changing market dynamics. In an interview with FE’s Debojyoti Ghosh, the company's chief executive and managing director, Rajesh Sud, says the insurance company is looking at a healthy 33:67 mix of Ulip versus traditional over the next few years.

In the current market what kind of business do you foresee?

The year 2011 will be a year of change and adaptation for the life insurance industry. Life insurance industry will need to focus on and be sold as long term contractual savings and protection tool. It will also need to focus on providing consumers with a much more balanced product portfolio. The true value of a professional dedicated agent advisor will become truly visible since the product changes and disclosure requirements will ensure a higher seller and customer engagement at the time of the sale. Some select customer segments may also use the internet for simple products such as term plans.

Distribution trends may also under go changes. Much of the growth in life insurance is expected from increased agents' productivity.

Are you looking at a change in product mix and cost rationalisation?

A sustainable profitable growth is only possible through customer centricity. We will drive profitability in the business by reducing acquisition expenses and increasing persistency. We will enhance our focus on renewal income which obviously comes at a lower cost. For the period January to August, our product mix has been 30:70 (traditional: lips) and 85:15 for September to December. This significant skew toward traditional products has been mainly due to the limited Ulip offerings. We currently do not have pension and growth Ulips in our range which contributed 40(%) per cent in the first 8 months of 2010. We are looking at a healthy 33:67 mix of Ulip versus traditional over the next few years.

Is there any change in your investment scheme?

There has been no change in our investment philosophy. We follow a prudent investment philosophy to minimise risk.

The investments made by the company are in safe instruments – top 5 debt investments are AAA rated and majority of equity investment are in large cap, which are safe and provide good returns in the long run....

Irda wants life insurers to face 10% stake sale restriction

Life insurance companies will not be allowed to dilute more than 10 per cent stake through initial public offers (IPOs).

The Insurance Regulatory & Development Authority (Irda) is set to cap the stake dilution by life insurers in the first three years of listing. The market regulator, the Securities & Exchange Board of India (Sebi), mandates that 25 per cent shares of a listed company should be detained by the public. Irda is in talks with Sebi to waive this rule.

Private life insurers such as Reliance Life, ICICI Prudential, HDFC Life and SBI Life have expressed interest in tapping the capital markets. The massive valuations of life insurance companies are said to be the main reason for the move, according to a source with direct knowledge of the matter.

“At present, the market value of all life insurance companies if they dilute 25 per cent stake is estimated around Rs 60,000 crore. It will be very hard for the market to absorb such a huge amount. So, there must be a cap on the extent of stake dilution,” said the source.

However, details regarding the extent of the dilution by joint project partners could be left to the companies. “There are a lot of issues involved with shareholding agreements in joint ventures. Ideally, regulators would like to stay away from them. It is still being debated, but will vary on a case-to-case basis,” an Irda official told Business Standard on condition of anonymity. He added the regulator would, however, prefer domestic companies to hold the majority stake.

At present, most of the 22 private life insurers have foreign partners. The Insurance Act caps foreign direct investment at 26 per cent.

Irda is likely to release the IPO guidelines within the next 30-45 days.
According to Irda data, during the first nine months of the financial year, the new business premium income of life insurance companies stood at Rs 86,699 crore. The private life insurers accounted for around 29 per cent of this.
Irda may also allow companies operational for seven years to tap the capital market. The present norms mandate at least 10 years of operations.

Irda may also allow companies which have not registered profit for the past three consecutive years to float a public issue. “According to the disclosure norms, it will be mandatory for insurance companies to declare the profitability of individual products in balance sheets. This apart, they have to disclose their balance sheets, premiums, commission expenses, operating expenses, on annual, half-yearly and quarterly basis. This will help investors take informed decisions,” said the Irda official.

Royal Sundaram, Reliance division to re-apply for merger

Move necessitated by Irda’s draft rule for non-life M&As.

In light of the proposed merger and acquisition (M&A) guidelines for non-life insurance firms, general insurers Royal Sundaram and Reliance General, which had applied for a merger in July 2010 and were awaiting the regulator’s permission, will have to file their application afresh.

Last week, the Insurance Regulatory and Development Authority (Irda) laid down the draft guidelines for M&As among non-life insurance companies. It has invited comments by February 22, after which it will come up with the final guidelines. When the two companies applied, there were no guidelines for general insurers. As a result, they had to follow the norms applicable to life insurance companies.

“There were no merger-exact norms in the non-life space when the two companies applied. Since they have not got an approval from the regulator, they will have to re-file the application,” said a senior Irda official.

Apart from issues of taxation and valuation and the projected revenue of the merged entity, the draft guidelines put up by the regulator look into reinsurance strategies, protection and maintenance of reinsurance assets and key contracts and policyholders’ interests.

Both companies submitted the proposal for merger in July last year.

Royal Sundaram Alliance Managing Director Ajay Bimbhet said the company’s policy did not allow him to comment on the matter. Reliance General could not be reached for comment.

Reliance General has been scaling down business for some time. Even as the industry posted 24(%) per cent growth, Reliance General registered a loss of 22(%) per cent in gross written premium income during the nine months ended December.

According to the proposal, the UK-based RSA group was expected to have a 26(%) per cent stake in Reliance General, the fourth-largest private general insurer. As of now, Reliance Capital owns 100(%) per cent stake in the company. South-based Sundaram group, which holds 74(%) per cent in Royal Sundaram General Insurance, was likely to exit through this merger.

As of now, the deal has hit a roadblock. Sources close to the development say the companies have not reached an agreement regarding the valuation.

Difference between Term Life Insurance and Permanent Life Insurance

Permanent life insurance as the name suggests is a form of life insurance which will last for the entire life of the person insured. Typically term life insurance is purchased for a fixed term, be it for a year or five, or even as long as 30 years.

In term life insurance, the consumer pays a premium and the payout is paid in the event that the insured passes away during that term. Whereas, a permanent life insurance policy lasts for the insured person’s entire life, so a payout is guaranteed.

Your permanent life insurance premiums are invested, so the policy accrues cash value. Term policies on the other hand, accrue no value and pay nothing unless the insured person passes away during the policy’s fixed term.

Premiums for the two forms of policy are different. A permanent policy charges higher premium than for a term policy.

But a point to note; the premiums for that term policy rises with the age of the insured person. But it is reverse for a permanent life insurance; in fact the initial premium gets invested and grows.

That growth is tax-deferred if the policy is cashed in during the insured person’s lifetime. Proceeds are usually tax-free to the beneficiary upon the insured person’s death.

So, which insurance is right for you?

Well it all depends on your needs. Like how long you plan to keep it for? If you only need a certain amount of coverage for a short amount of time, then chances are that a term policy will best suit your needs. If, on the other hand, there are expenses you will leave behind, then a permanent policy could be the right choice.

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.

Plan a wonderful cover for your wedding day

Its plain unpromising. The mere thought is irreverent. Most people do not expect anything even remotely unpleasant to occur on the big day of their lives. After all, nothing can possibly go wrong when it comes to your very own band, baaja and baarat!

But we all know that disaster strikes without warning and that is the reason why you need to be sure that in case of any unexpected situation, at least the investments made in weddings are secure. According to estimates, the size of the wedding industry is approximately between Rs 1, 90,000 crore and Rs 2, 25,000 crore. Says Anita Singh, a wedding planner, “Nowadays, weddings can cost anywhere between `10 lakh to right up to even a crore.” And, if you are spending a major part of your life savings on this one event, you would definitely welcome security. And, wedding insurance is one such product that can help you insulate the losses, if the need arises.

WHAT DOES IT OFFER?

Most of the companies sell wedding insurance as a part of event insurance. The policy broadly covers personal accident, postponement or cancellation of the wedding and the damage of the property at the wedding venue. However, these policies can be customised according to your needs. So, if you are little wary of the kind of food that you have been eating before the wedding and you see it as a risk, then you can add food poison in the cover.

Also, if any of the close relatives of the bride or the bridegroom are unwell and there is a possibility that the event could get cancelled or postponed because of their accidental death, then you can buy a cover for that as well. You can also ask for a cover against burglary of jewellery, or the event getting cancelled as either the bride or the bridegroom is unable to reach the venue on time. If the wedding gets postponed/cancelled due to damage to marriage halls, then fret not, as that can also be insured. Even a terror attack is another risk that is now covered.

WHAT’S NOT COVERED

Any wedding that is cancelled due to a dispute between the marriage parties will not be covered. However, some policies do cover cancellations if the groom does not turn up due to unpaid dowry. Also, if you have any last-minute doubts and get cold feet on your big day, then don’t expect the insurer to pick up the bill. Insurance companies also do not cover willful negligence and criminal misconduct. Most importantly, you need to read the fine print very carefully as the terms and conditions vary depending on the insurance provider.

THE MONEY TANGLE

Bajaj Allianz offers four fixed options for the sum insured — Rs 20 lakh, Rs 35 lakh, Rs 58 lakh and Rs 73 lakh. The premiums for these are Rs 2,252, Rs 4,004, Rs 6,232 and Rs 8,273 (including service tax), respectively. However, the other companies generally provide a customised cover, so “premium rates broadly vary from 0.75% -1.5% of the total sum insured, depending upon various risk parameters like safety and security arrangements at the venue, geographical area, risk management or contingency plan etc.

Is it possible to switch my health insurance provider

Yes. Health insurance portability facilitates one to switch your service provider if you are not happy with their services without compromising on policy terms. This will increase competition thus help you well-priced and more quality services. In fact it is going to be possible from the 1^st of July 2011, just 4 months away!

Sanjay Datta, the head of health at ICICI Lombard General Insurance said, "It is more like mobile number portability. Waiting period of customers will be removed".

This is going to bring immense relief to unsatisfied health insurance customers. And, portability is going to make the health insurers very competitive thus making them serve their customers better.

Bharti AXA General Insurance CEO and Managing Director Amarnath Ananthanarayanan said, "There will be increased competition in the sector and better quality of service. Overcharging and variation in rates of premium would be reduced".

The Insurance Regulatory and Development Authority or IRDA – the sectoral regulator has issued guidelines has made it compulsory that pre-existing diseases (PED), which are covered by the existing insurers, would also be covered by the new insurer. Also the insurance companies will have to provide all records and claims history of the customer to the new insurance company.
To quote IRDA - "It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies".

Datta said, "Customers can now choose to shift their insurers in a hassle free way as there would be lot of choice of them and would also ensure better quality of service from the insurance companies by increasing competition".

Max Bupa Health Insurance CFO Neeraj Basur said, "This will bring in more transparency and will also allow insurers to assess the risk and provide underwriting at the point of sales".

Insurers say that though group insurance policies would be easily portable, individual policies could take some time; as, group policies offered by different insurers are mostly similar in nature but individual policies work out differently according to individual customers. Also, it will take time to ensure satisfaction after portability of individual health insurance due to dissimilar benefits and features of individual plans. The long and short of it is at least there is a chance to change your health insurer and get better service.

Third-party agents | Irda tightens norms

Move to contain industry growth, say insurers.

The Insurance Regulatory and Development Authority (Irda) on Wednesday announced firm guidelines on agents servicing third-party policies. It has linked the norms to their past presentation and the number of years of experience.

The regulator on Wednesday said the total amount collected by agents for a given financial year should not exceed 3 times the renewal commission earned in the previous financial year. Also, agents for third-party services should have been in survival for at least two years.

A senior Irda official said there had been complaints of agents procuring business on behalf of other agents. He referred to an incident where an agent in Kerala had disappeared with the money of policyholders.

Irda said, “The insurer should assign this action to agents and corporate agents by allocating only a specified list of the policies, where the services of the agents that procured the business are no longer available to the insurer,”

Insurers outsource cheque pick-up work and premium collection to individual agents and corporate agents. Irda has defined such collection and pick-up by agents who have not procured such business as outsourcing. It asked insurers to look at the credentials of individual agents and corporate agents while outsourcing these.

Insurance companies’ executives said the move would restrict the industry.

P Nandagopal, chief executive officer of India First Life Insurance, says Irda should not get into micro management. “Risk management systems should be put in place and the regulator should not look into micro management. This is restrictive.”

Another executive of a large insurance company said the move was absolutely restrictive and would only bring down the premium collection.

Life Insurance Corporation of India (LIC) would be the most affected.

“This decision has been taken after consulting all parties,” an Irda official added. He said an insurer should remain accountable to the receipts issued by authorized agents or intermediaries. “Where an insurer permits its agent to collect premiums on its behalf, it shall be noted that in such instances, the agent is acting on behalf of the insurer,” said Irda.

It has put up a list of core and non-core activities. Those such as underwriting, product design and all actuarial functions, bank reconciliation and market conduct issues are core. Call centre and outbound calling for registering complaints or answering enquiries, claim processing for overseas medical insurance contracts and tele-marketing is non-core.

Insurers are asked to terminate all existing outsourcing contracts entered into in breaking of these guidelines before June 31, 2011. Irda said it might relax the limit by three more months, on a case to case basis, in respect of the existing contracts.

Rules to handle more than one health policy

Recent statistic shows that due to shooting healthcare costs and increasing awareness people are buying health insurance policies. Many buy a separate plan despite being covered by their employers under group medical health policies as this ensures coverage in case of job loss or while switching jobs.

Tips to manage multiple policies

It is indeed a wise decision to invest in an individual cover. You need to keep in mind a few details while making a claim when you have more than one health cover. This is due to the contribution clause in your policy which states that if you have purchased insurance policies from more than one insurance company, all the insurers will share the payout in the ratio of the sum assured.

Firstly it is important to be open while buying a health cover which is usually not the case. As Anthony Jacob, CEO, Apollo Munich Health Insurance says, “While signing up for an insurance policy, the individual is under an obligation to declare if s/he is already covered under any other health policy. If s/he acquires another policy during the course of the first one, s/he is required to intimate the latter”. Even Sanjiv Bajaj, managing director, Bajaj Capital agrees that “No attempt should be made to withhold the information as it could go against you during processing of the claim. It is best to be transparent”.

Applicability of this clause depends on a variety of factors; this is why this clause is not always clear.

Following is a list of scenarios a policyholder with multiple policies may encounter at the time of making a claim:

Group & individual cover combo

You have to inform both the companies when you make the claim unless the terms and conditions of the two policies vary hugely. For instance, pre-existing illnesses is covered under one policy while for some plans this cover is extended only after 3-4 policy years. So, if a claim is regarding pre-existing illnesses which is made before completion of the waiting period, issuer of the individual claim will not share the payout.

For other claims, like in case of cashless claim though one company has to be contacted and provided details of the second policy. From thereon, the two companies will coordinate and settle the claim so both the companies need to be informed.

Two reimbursement policies

Excluding critical illness covers, most general insurers offer only reimbursement policies – the ones which undertake to pick up the expenses you may have incurred during hospitalization.

Life insurers also offer reimbursement covers as well as fixed benefit policies. If you have bought two reimbursement covers, the contribution clause will come into effect as the operating principles of the two policies are the same.

Reimbursement & fixed benefit policy combo

Fixed benefit covers offered by life insurers hands out a predefined sum upon hospitalization. In this combination, both the companies will settle the claim you are eligible for so you can make the claim under both policies separately.

This is a good combination, as the claim amount from the reimbursement cover will pay for hospitalization expenses while the fixed benefit dole can be used to fund post-hospitalization recovery costs.

Two policies from one insurer

This will be similar to buying an individual policy from the same insurer that provides your group cover.

You need to find out first about the accounting procedures, as the insurer could insist on dividing the disbursal between two policies, even if both are issued by it.

Two polices serviced by common TPA

If the claim servicing of your health insurance policies is handled by the same TPA (third party administrator), the time taken reduces significantly as time needed to transfer the documents from one TPA to another is saved.

Different TPAs, means more paperwork as well as you may need to ask for a certificate from the TPA in possession of your original bills, stating that the documents have been retained for verification of the claim made. This, along with photocopies of the relevant documents, has to be submitted to the other TPA for processing at its end.

Double protection

o In case of similar principle health policies, the claim payout will be shared between the two. The disbursal will take place in proportion of the sum assured under the two policies.

o However, in case one policy covers pre-existing illnesses while the other doesn’t, and the claim relates to such an ailment, the former will pick up the entire amount.

o If one policy is reimbursement-based and the other is a fixed benefit one, you can claim the entire eligible amount under both policies. You will be better off informing both the insurers while making a claim.

o It also makes sense to retain copies of all the bills. The insurers or the TPAs will then co-ordinate with one another and pay out their respective share.

Conclusion: Even if it is little extra work or few complexities involved, you should opt for an additional individual cover; mainly because, group cover stop with your employment. Besides, if you were to buy an individual mediclaim when you are working, you would have also crossed the milestone of four policy years, which is the waiting period for covering pre-existing illnesses.

Irda to carry new pension norms in April

After unit-linked pension products disappeared from the market following an imposition of guaranteed returns of 4.5(%) per cent, the Insurance Regulatory and Development Authority (Irda) has decided to revise the pension norms in April.

“Since companies are busy this season, we have decided to come out with new guidelines in the next financial year. We will issue the draft guidelines in April,” said a senior Irda official. In the new guidelines too, the regulator will ensure the capital of policyholders was protected.

He said the existing guidelines were not liberal and the revised ones would give some flexibility to the insurers. It would look at protecting premium along with adding some returns.

“Guarantee at this level is unachievable and is the main reason for drop in sales,” the official added.

New product offerings have declined following the introduction of new rules in September. While only the Life Insurance Corporation (LIC) of India launched a regular unit-linked pension product, others like ICICI Prudential Life Insurance launched unit-linked pension plans on a single-premium stage.

Most insurers say offering 4.5 (%) per cent on one-time premiums is possible compared to long term. Also, a single-premium pension product does not provide long-term protection.

Returns on pension products have been linked to the reverse repo rate and insurers have to offer an additional 50 basis points over the same.

Given the recent rise in reverse repo rate, the returns on unit-linked pension plan are likely to be 5.5-6(%) per cent for 2010-11.

“We have not launched any pension product as we do not believe in offering a guarantee of 4.5(%) per cent. Capital guarantee would be a welcome option and would give us some flexibility,” said a senior executive of a life insurance company.

Last year, pension products constituted 20-25(%) per cent of the total premium collected by the industry. Around Rs 65,000 crore came from the sale of pension products. Total premium rose 18(%) per cent to Rs 2, 61,025 crore.

With only a few players selling the product, it has fallen appreciably.

New Plan by Max New York Life Insurance

In line with the recent wave of insurance plan launches, Max New York Life has introduced a new Ulip (unit-linked insurance plan) – Flexi Fortune – in the market.

Premium Paying Term:

The limited pay plan offers three choices in terms of premium paying tenure – one can opt for either a 5-pay-10-year term, 10-pay-15-year-term or 15-pay-20-year term. In easy words, what this means is that you can choose to pay premiums for 5 years while the policy continues till 10 years (in the first option).

Protection Cover:

The sum assured (or the protection cover) will, depending on your option and age, range from 10 to 30 times your annual premium. There is also a provision to increase the sum assured by 10(%) per cent every year, but additional mortality charges as applicable will be levied.

Systematic Transfer Plan:

Under this option, which is available only to those who choose the annual payment mode, your annual premium will, after deduction of premium allocation charges, be initially directed to the Secure plus Fund. Subsequently, on each monthly anniversary, 1/12th of the initial units purchased (in the Secure Fund) will be switched to the Growth Super Fund. However, this shifting will not be considered as a switch.

Charges:

The premium allocation charge works out to 5(%) per cent in the 1^st year and 4(%) per cent in the subsequent years. Policy administration charges in the first amount to Rs 960 for a 10-year policy and Rs 600 for policies with tenures of 15 and 20 years. Second year onwards, this charge will go up by 5(%) per cent per annum, compounded.

Other Features:

The policy also offers two riders, namely personal accident and dreaded disease benefits. Minimum age of entry for the policyholder under this Ulip is 7 years, while the maximum is 50 years. Under the 5-pay-10-yearterm option, the minimum premium payable is Rs 50,000. In case of the 10-pay and 15-pay variants, the minimum premium under the annual mode is Rs 24,000. The policy places an upper limit of Rs 1 lakh for all premium payment modes.

Upside:

The feature where the sum assured goes up every year and systematic transfer plan that ensures restricted investing while reducing the risks by spreading the investment over a period of year.

Downside:

High policy administration charges - Rs 600-960 in the first year, depending on the premium paying term. More importantly, this fee will increase at the rate of 5(%) per cent every year.

Protect your Vijaya bank running loan with Bajaj Allianz Insurance cover

Vijaya Bank has signed an MOU with Bajaj Allianz Life Insurance to cover its borrowers under a group life insurance plan.

As part of its ongoing strategy to provide to the diverse needs of its increasing clientele, the bank has been launching products and services tailor-made for different segments.

Through the present understanding with Bajaj Allianz Life Insurance, the bank is offering a product which enables the borrower, in an economical way, to protect his/her family from the load of repayment of the loan in the event of death.

Through this partnership, Bajaj Allianz aims to cover up to 4 lakh borrowers of Vijaya Bank across the country. The product will cover housing loans, education loans, vehicle loans, personal loans as well as other loans.

"This is a key that will provide financial protection from the load of loan repayment in the ill-timed event of borrower's death. Over 4 lakh borrowers in 1,185 networked branches of the bank spread across 28 states and 4 Union territories can avail the facility," Vijaya Bank chairman and managing director Albert Tauro said.

"This insurance plan will cover all customers of Vijaya Bank who have taken a loan for various purposes, irrespective of the amount of loan sanctioned. This coverage under a single product makes it easier for the bank and their customers to administer. Our partnership is another step in our association with such a big public sector bank, like Vijaya Bank," Bajaj Allianz Life Insurance chief distribution officer AS Narayanan said.

IndiaFirst to introduce health insurance, pension products next financial

IndiaFirst Life Insurance, jointly promoted by Bank of Baroda, Andhra Bank and Legal & General, is planning to introduce health and pension products before March. The JV is also proposing to enter the micro insurance business in the 1st quarter of next financial.

The life insurance company expects Rs 800 crore premium collection throughout the 1^st year of operation. So far, it has collected Rs 500 crore and by March end, could mobilise another Rs 300 crore, P Nandagopal, managing director and chief executive officer, IndiaFirst, told media persons on Monday.

“BoB and Andhra Bank both have around 4,800 branches across the country. Of this, about 3,500 branches are active and we are currently selling insurance policies through these branches,” he said.

IndiaFirst has 12 branches in the country and during the next financial year plans to open another 18. “We are looking for more business by increasing the alternate channel of distribution to sell our products and would appoint about 3,000 insurance advisers shortly,” he said.