IDBI Federal Retiresurance Milestone Pension Plan is a single-premium pension ULIP. Only Life Insurance Corporation of
One of the investment options of the product is 0%-10% exposure to equities and equity-linked instruments, but it also means that the company will take a conservative approach to be able to offer guaranteed returns. IDBI Federal recently launched a traditional pension plan called Retiresurance Guaranteed Pension Plan which may give better returns than the pension ULIP. If a customer chooses a 25-year term, the current rate for 25-year government securities (8.6%) will be guaranteed for the company’s traditional pension plan. IRDA will come up with changes to pension ULIP regulations soon. This is because pension ULIPs are not selling. The customer will be better off waiting for the future regulatory changes.
Thursday, June 30, 2011
IDBI Federal Retiresurance pension ULIP target unclear
IDBI Federal Life's Term Plan for senior citizens
The fundamental objective of life insurance is to replace the policyholder's income and provide financially for dependents in the event of his/her death. Therefore, life insurance is recommended for individuals with income and dependents. Typically, policies have tenure of up to 35 years; if the insured buys the policy at the age of 25, it will offer a cover till he/she retires, post which there would be no income to be replaced.
Now, IDBI Federal Life Insurance has launched a term plan, the Seniors Insurance Plan, catering only to those aged over 50. The maximum age at entry set by the insurer is 85. The company promises to extend the cover without making the proposer go through any medical tests.
Policy term: The maximum tenure under the plan can extend up to the policyholder's death; the premium paying term is till the insured turns 90. The policy can be surrendered after three policy years.
Sum assured : The maximum cover offered under the policy is Rs 5 lakh. It kicks in after two years from the date of commencement. In case of the insured's demise within two years of buying the policy, 125% of the total premium paid will be disbursed to the dependents.
Premium: For a 50-year-old male seeking a cover of Rs 5 lakh, the annual premium would be just over Rs 20,000. If you buy the plan at 85, the premium amount will go up to Rs 2, 13,890 for the same sum assured.
Suitability: The insurer is promoting the product as one that will take care of the insured's spouse upon his death. Some financial planners point out that most individuals fulfill their financial responsibilities before retirement (by the time they turn 60) and, hence, there is no income to be replaced by the cover post this period. Even if the retirement age were to be stretched to 70, they can look at a term policy with a 10-to 15-year tenure. A 50-year-old insurance seeker can obtain a Rs 10-lakh cover with a 15-year tenure under a simple term plan at a cost (premium) of about Rs 6,000.
Why go for it: Earning individuals who have never purchased life insurance but have dependents can look at this policy.
Why you should not: Instead of policies with whole-of-life terms, one can look at regular term policies with a 10- to 15-year tenure as they would charge lower premiums.
Wednesday, June 29, 2011
Max New York Life Insurance hopes to wipe off accumulated losses
Max New York Life Insurance (MNYL) which registered a net profit of Rs 283 crore for 2010-11, hopes to wipe off its entire accumulated losses in the next couple of years.
"It is our second year of profit and we will need a couple of years to wipe off our entire accumulated losses and break even. The total accumulated losses is about Rs 860 crore," chief and executive officer and managing director, Rajesh Sud told ET. During 2009-10, the company registered its first ever net profit at Rs 24 crore on its ninth year of operation.
"Total premium income during 2010-11 was Rs 5,813 crore which was a 20% growth over the previous fiscal, first year premium recorded a growth of 11 % over previous year to Rs. 2,061 crore and its total sum assured stood at Rs 1.54 lakh crore – a 26% year-on-year growth," said Sud.
Renewal premium income grew by 25% over previous year to Rs. 3,751 crore in 2010 11. Assets under management rose to Rs. 13,836 crores, a growth of 37% over last year. The cost to premium ratio improved 400 basis points to 38%. IIT Kanpur
With the company starting to make profits, capital infusion requirement by the promoters are likely to come down in the next couple of years. "The current capital base of MNYL is Rs 1976 crore. Our solvency ratio is 365% and we will not require additional capital this year," said Sud.
Since September 2010, after the implementation of new ULIP guidelines, Max New York Life performed significantly better than the industry average reflecting the inherent strengths of the company's business model.
Tuesday, June 28, 2011
Health policies by life insurance companies will not be portable
Your plan to switch your existing health insurance policy from a non-life insurer to a life insurance company may not be possible, at least for now. The insurance regulator is likely to confine the portability of health insurance policies to non-life insurance companies.
“To start with, only mediclaim policies offered by general insurance companies will be portable. Health insurance policies offered by life insurance companies, which are much more complex in nature, will not come under it,” said a senior official of the Insurance Regulatory and Development Authority (Irda).
One of the primary reasons for not extending the facility is that the term of the policies offered by general insurance companies is one year. However, for life insurance companies, it is long-term, raging between three and 15 years. Portability allows a policyholder to shift the policy offered by one insurer to the other, while keeping the terms and conditions of the cover unchanged.
“Most health plans offered by life insures are indemnity policies or benefit policies, which are associated with lump sum benefits at the end of the term, subject to certain pre-specified conditions. Hence, it is very difficult to port credits, since these policies require completely different underwriting techniques,” said a life insurance company official.
“More than 90 per cent of the health insurance business is confined to the general insurance industry. Policies offered by general insurers are fixed-benefit plans and are renewed annually. This is different from plans offered by the life insurance companies. So, portability between health products offered by life and non-life insurance companies is not feasible,” said a senior official at a state-owned general insurance company.
In short, for mediclaim policies, there are no survival benefits or life covers. So, general insurance companies would not be able to service these kinds of health insurance plans, he the official said.
Another aspect is the pricing of the policies. “One of the important issues is how to price the benefits. Different companies offer different benefits to add exclusivity to their products. For instance, in the case of portability, one has to forgo some benefits. Thus, the policyholder might claim some discount, which the insurer might not allow,” said an actuary in a life insurance company. Top Engineering Colleges
Last week, the insurance regulator decided to postpone the execution of portability of health insurance policies by three months to October 1, as industry officials sought more clarifications from the regulator.
In a bid to facilitate data sharing among insurance companies, Irda had embarked upon providing a web-based facility for insurers to feed in all relevant details on health insurance policies issued by them. This data would be accessible by the company to which a policyholder wishes to port his policy. “Such a system would enable the new insurer to obtain efficiently data on history of health insurance of the policyholder wishing to port. It is necessary to enable the smooth running of the system,” Irda had said.
Not a standalone policy
Jeevan Arogya is the first defined health insurance product to be introduced by
The product is a Hospital Cash Benefit Plan (HCB) that offers daily hospital cash benefit for a fixed number of days that one is hospitalised. Besides that, it will cover 140 surgeries with the maximum amount one can avail for surgeries being 100 times the daily limit.
The product also offers a lump sum amount that is twice the daily cash limit per hospitalisation day, even for surgeries not listed. This feature is similar to the HCB plan offered by Aegon Religare Life Insurance. Life insurer Tata AIG’s Wellsurance Family Classic offers a standard daily cash plan without any surgery benefits.
LIC Jeevan Arogya has a number of features that should take care of rising health care costs.
For instance, it increases the limits on the initial daily benefits every year. So, one’s daily cash limits will rise to a maximum of five per cent or up to 1.5 times of the initial amount each year. This would be in addition to the five per cent added to one’s daily cash limit as part of one’s cumulative or no-claim bonus. Together, this could lead to a 10 per cent rise in one’s daily cash benefit.
No doubt, even other health insurers (both life and general) offer a nearly five per cent rise in the sum assured as part of one’s cumulative bonus. However, Jeevan Arogya customers are assured of getting a five per cent rise, even if they are not eligible for no-claim benefits.
Besides, since all other benefits are linked to the person’s daily limits, a rise in the daily limit translates into higher day care and major surgery benefits.
Another feature allows automatic waiver of the subsequent year’s annual premium for customers who make a claim for major surgical benefits.
However, Jeevan Arogya is a complicated product with both yearly and lifetime limits on how many times a claim can be made. So, one is allowed only three day care claims and only one major surgery claim in a year.
In terms of costs, it is much cheaper than the Aegon Religare product. If you opt for a daily cash limit of Rs 2,000, you would be paying an annual premium of Rs 4,000 for Jeevan Arogya. For the same limit, Aegon Religare’s premium would be Rs 13,800.
However, health products from life insurers are more restrictive in nature. While HCBs pay a lump sum, the hospital cash offered by general insurers covers the actual expenses falling within the amount sum insured.
Also, HCBs only cover illnesses mentioned in their policy document. They also permanently exclude pre-existing ailments. In comparison, four years of continuous cover with a general insurer will get you a cover for a pre-existing disease. Except hospitalisation due to accidents, life insurers’ policies usually have longer cooling periods of 90 days from the effective date of the policy.
Insurance experts caution consumers against opting for such HCBs as a standalone health insurance product. Instead, they advise customers to buy health products from a life insurer as an add-on to a basic health policy that will cover actual expenses.
Friday, June 24, 2011
Domestic workers now covered under health insurance scheme
There is good news for 47.50 lakh domestic workers in the country: they will now be entitled to health insurance cover under the Rashtriya Swasthya Bima Yojana (RSBY).
The extension of the medical insurance scheme, approved by the Union Cabinet here on Thursday, envisages smart card-based cashless health insurance cover of up to Rs. 30,000 under any empanelled hospital anywhere in the country.
The RSBY would be extended to registered domestic workers in the 18-59 age group, Union Information and Broadcasting Minister Ambika Soni told reporters after the Cabinet meeting. The majority of them were women.
Earlier this month, the Cabinet had approved extension of the scheme to 55 lakh beedi workers by 2013-14.
The funds for the scheme would be allocated from the National Social Security Fund for Unorganised Workers. The premium will be shared by the Central and State governments in the ratio on 75:25. In case of North East Region and J&K, the ratio will be 90:10.
The estimated expenditure to be borne by the Centre will be Rs. 29.70 crore in 2011-12, Rs. 74.25 crore in 2012-13, Rs. 148.50 crore in 2012-14 and Rs. 297 crore in 2014-15.
Domestic work form one of the largest sectors of female employment in the urban areas. Domestic workers are unorganised and the sector remains unregulated and unprotected by labour laws. These workers come from vulnerable communities and backward areas and most of them are illiterate, unskilled and do not understand the urban labour market.
The beneficiaries would have to get identification certificates from any two of the four institutions -- the employer, resident welfare associations, registered trade unions or the police, Labour and Employment Minister Mallikarjun Kharge said.
The upper limit of the annual contribution would be Rs. 750 per beneficiary — of which the Centre would bear Rs. 565 — and another Rs. 60 for the smart card, she said. A maximum of five members per family would be covered.
The Rashtriya Swasthya Bima Yojana provides for smart card based cashless health insurance cover of Rs. 30,000 annually to below poverty line (BPL) workers (a unit of five) in the unorganised sector and is being presently implemented in 25 States and
Asked whether a law would be brought to protect the rights of domestic helps as suggested by National Advisory Committee Chairperson Sonia Gandhi, Mr. Kharge said, "the issue [of making a law] came up recently. As of today, we are extending the benefits of an existing programme to domestic workers".
Mr. Kharge said a task force, constituted in December 2009, had recommended among other things the extension of RSBY to domestic workers.
The extension of the scheme would not only provide them insurance benefits, but also help in preventing their exploitation, Ms. Soni said. It would also lead to registration of workers and placement agencies.
General insurance IPO norms on way
The insurance regulator will come out with a separate set of guidelines for general insurance (non-life) companies that are looking to tap the capital market with initial public offerings. The regulator is waiting for Sebi’s recommendations on the disclosure requirements.
According to R.K. Nair, member (finance and investment) of the IRDA, the disclosure requirement for non-life insurance companies will be different from those of life insurance firms given the nature of cash flows and risks underwritten by them.
“We are awaiting the recommendations of SCODA (Sebi Committee on Disclosures and Accounting Standards) which is still working on the disclosure requirements for non-life insurance companies. Once we get these recommendations, we’ll come out with the IPO guidelines,” Nair said on the sidelines of an insurance summit of the Indian Chamber of Commerce here today.
He declined to give any time frame for releasing the guidelines.
Early this week, the Insurance Regulatory and Development Authority (IRDA) unveiled draft IPO guidelines for life insurance companies. In the draft, the requirement that an IPO applicant should be profit-making has been replaced by the condition that the embedded value of a life insurer must be twice the paid-up equity capital of the company. The embedded value is the value of all in-force policies plus the net worth of a life insurance company.
Thursday, June 23, 2011
At this time, buy term insurance even at 85
For the first time in
IDBI Federal Life Insurance-the three-way joint venture between public sector IDBI Bank, Federal Bank and European insurers Aegis- has floated a whole-life policy which allows individuals as old as 85 to buy insurance cover. While whole-life policies are not new to the Indian market, most providers, including Life Insurance Corporation, restrict maximum age at entry at 60 years. "To our knowledge, we are the first company to offer this cover to those as old as 85," said G Nageswara Rao, MD, IDBI Federal General Insurance.
Typically, life insurance is bought with the objective of providing income protection to dependents and since most people retire in their sixties the target market for life insurers is the working population. "We have found that there is a large section among senior citizens who want to buy insurance because they would like to bequeath an inheritance for their relatives," said Rao. He said that another of the impediments was the medical checks which are required from all senior citizens. IDBI Federal's policy requires no checks. However, the policy does restrict maximum sum insured to Rs 5 lakh and limits the benefit to 125% of the sum insured if there is death in the first two years.
IDBI Federal is the second company to target late entrants. Earlier, Max New York Life introduced a fast-track policy which allows those who missed out on buying insurance earlier an opportunity to build up a retirement corpus within a short time.
According to Rao, the limits on death benefits in the first two years of the policy would take care of any adverse selection by people suffering from serious ailments. The cost of cover also increases along with age. While the person who buys insurance at 50 will end up paying only Rs 3,300 an 85-year-old will pay 10 times that much. "While the premium may be high you have to bear in mind the average life expectancy for those entering at the maximum age," said Rao. According to the World Health Organization, life expectancy at birth for Indian males is 63 while for females is 66. Insurers, however, don't go by general life expectancy but at the longevity of the insured population, which tends to be better than the rate for the general population.
IDBI Federal plans to bring down the cost of the product by selling it directly to customers. "Initially, we will offer the product to customers of IDBI Bank and Federal Bank. But in the near future we will start marketing this product to everybody," said Rao. In the west whole-life plans are popular way of estate planning because it enables the inheritors escape estate tax. However, inIndia this is not a driver since inheritances are tax-free.
Wednesday, June 22, 2011
Norms for common TPA may be ready in 3 months
The proposed regulations for common Third Party Administrator (TPA) to check excess mediclaim bills by private hospitals is expected to be ready in the next three months. Accordingly, a common TPA is expected to help insurance companies control both health insurance premiums and claims.
Last year, the four general insurers namely National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance had decided to set up a common TPA as a joint venture to manage health insurance claims. Concerned about over-billing, the insurers had even barred about 150 private hospitals from the list of preferred provider network (PPN) offering cashless medical facility. But, later the services were resumed by some providers after a dialogue between the hospital administrators and the insurance regulator, Insurance Regulatory and Development Authority (Irda).
‘‘With the formation of a common TPA, the health insurance business will come together and we will be able to negotiate better with service providers. We hope that it should be ready in the next three months,’’ G Srinivasan, CMD, United India Insurance Ltd, said. He was in the city here for signing an MoU with State Bank of Hyderabad (SBH) to provide free personal accident insurance to provide ‘‘group Janata personal accident insurance coverage’’ to all individual operative savings bank account holders of the bank.
Typically, TPAs are companies to which insurers outsource servicing of health insurance claims. They are approved and regulated by Irda and undertake a majority of the back office work including networking with healthcare providers after the insurance company issues a policy. They charge about 5% of the premium as fee to process a policy. Over 27 TPAs are so far registered with Irda....
Gyan Kosh from Tata AIG Life Insurance
Tata AIG Life Insurance Company has launched Gyan Kosh, a nonparticipating unit-linked endowment insurance plan. The plan has been designed to provide financial protection for children's education, marriage, providing funds for setting up a business and so on.
A parent has two protection options: Security Net, with inbuilt waiver of premium, and Family Income Benefit and Safety Net, with inbuilt waiver of premium benefit. Both the options provide dual benefits, ie, pay death benefit to the nominee in the case of death of the insured and policy benefits will continue. The company will waive all future regular premiums in the case of death or total permanent disability of the insured.
Besides, the Security Net option provides your family with a readjustment income of 1% of the basic sum assured for 100 months or till the end of the policy term, whichever is earlier, on death or total permanent disability. Choose & Compare Best Child Plan
The investor (parent) has a choice of seven funds options. Under waiver of premium option, the policy holder can choose to receive either 100% of future premium in the policy, or 50% of the premium in the policy, with the remaining 50% to be paid to the nominee.
CHARGE STRUCTURE: Premium allocation charges: The premium allocation charges in the first three years vary from 2% to 3% depending on the size of the premium. From the fourth to the 10th year, the charge will be 2%, while from the 11th to the 15th, it will come down to 1%. There is no premium allocation charge from the 16th year to the 20th year.
POLICY ADMIN CHARGES: The charges are kept comparatively high. It is Rs 70 per month for premiums between.`20,000 and Rs 29,999; Rs 100 per month for premiums between Rs 30,000 and Rs 49,999; and Rs 150 per month for premiums of Rs 50,000 and above. The charges will increase by 5% compounded every year. For instance, if a policy holder buys a term of 20 years and chooses to pay an annual premium of Rs 50,000 in the first year of the policy, he will pay Rs 1,000 (2% of Rs 50,000) towards premium allocation and Rs 1,800 (Rs 150 x 12) towards policy admin charges. The total, Rs 2,800, is 5.6% of the annual premium.
There will be no premium allocation charge in the 20th year of the policy, but the policy admin charges will come to Rs 4,776, which is 9.55% of the annual premium of Rs 50,000. All the features and choices of funds available in the plan are good, but the policy admin charges are comparatively high. The management charge will be at least 0.65% and can go up to 1.20%. FMC is the highest in the equity fund option and lowest in case of liquid fund.
WHY YOU SHOULD BUY: There is a good spread of fund options covering investors with different risk appetites.
WHY YOU SHOULD NOT: The cost structure is comparatively high.
Monday, June 20, 2011
LIC Jeevan Arogya – In Good Health medical cover for your parents
Escalating medical expenses are a cause for concern not only for the elderly, but also for those in their middle age. As health awareness increases not just regular insurance companies, but life insurance companies too are coming up with new health policies.
LIC has recently launched Jeevan Arogya, a non-linked health insurance plan that provides health insurance cover against specified health risks, with benefits such as daily hospital cash benefits, major surgical benefits and day care procedure to meet medical emergencies. In the event of any major illness suffered by the insured, the plan allows waiver of premium for the subsequent one year.
WHAT'S ON OFFER
* Guaranteed coverage for the policyholder up to the age of 80 and his family including parents and parents-in-law against medical expenses incurred due to hospitalisation.
* Financial protection in case of hospitalisation and surgery
* Automatic increases in cash benefits every year at 5 per cent
* Fixed benefits to the individual irrespective of the cost incurred
* No-claim benefit of five per cent, for three claim-free years
* Flexible premium payment options with rebates and discounts for higher premium
* Sum insured increases by 5 per cent a year, to the maximum limit of 1.5 times of the initial sum insured.
* Fixed premium for first three years, irrespective of the claims. Age at entry is the base for all future premiums till the policy is in force.
* Riders such as term insurance and accident benefit. The overall cover under the plan inclusive of the two riders is Rs 10 lakh.
* Tax benefits under section 80D available for all health insurance.
HOW IT WORKS
Individuals can choose the amount of daily hospital cash benefit (HCB) as per their estimated requirements. The plan allows a minimum of Rs 1,000 per day and maximum of Rs 4,000 per day to cover the daily cost of hospitalisation. For instance, for a family of six with parents above 70 and principal insured at 40 for a sum insured of Rs 2 lakh each the premium will works out to a maximum of Rs 31,502(before any rebate).
Daily hospital cash benefit: If the principal insured or any of the persons covered under the policy are hospitalised due to accident or sickness and stay in hospital for more than 24 hours in non-ICU ward an amount equal to HCB will be paid for 30 days in the first year and 90 days from the second year. In the event they stay in an ICU an amount equal to twice the HCB will be paid for 15 days in the first year and 45 days from the second year. This will be within the overall limit for each year.
Major Surgical Benefits (MSB): 100 times of the HCB or applicable daily benefit with an increase by five per cent from the second year onwards. For instance, if the HCB is Rs 2,000 in the first year, it will increase by five per cent to Rs 2,100 (daily cash benefit) from the second year onwards. MSB benefit will be available for minors also. The total number of surgeries covered under the plan is 140. The sum insured is payable based on the categorisation of surgery and it varies from 40-100 per cent.
Day Care Procedure (DCP): In the event of the insured undergoing for any of the 140 day care procedures LIC has specified, the amount paid will be equal to five times of the daily benefit and it will be allowed three times a year and 24 times for whole of the policy.
Other surgical procedures: In the event of the insured undergoing surgery not listed under the above options, and is hospitalised for more than 24 hours then two times the daily cash benefit will be paid for 15 days in the first year and 45 days in the subsequent years.
Quick cash facility: An advance of 50 per cent of the major surgical amount will be paid to the insured for the specified surgeries. To avail the benefit insured has to inform the LIC or the facilitator for the claims. After the latter processes the request LIC credits the eligible amount to the policyholder's bank accounts.
OUR TAKE
With health insurance plans netting large losses for general insurance companies, they have imposed many restrictions on insuring older family members. Hikes in premia too have been steep. Individuals finding it difficult to include their parents/parents in-law in their existing policies may find this plan suitable to their needs. However, LIC Jeevan Arogya has a cap on entry age at 75.
You should also note that a health policy offered by life insurance companies can only supplement health policies offered by general insurers. The health policies are an indemnity plan - the hospital expenses are reimbursed up to a maximum sum insured without any limitation. The health cover offered by life insurers are benefit plans and the cover is restricted by various conditions.
The advantage under the Jeevan Arogya is that pre-existing diseases are covered after two years, against the usual four-year waiting period . However, the premia during the initial years are higher compared to the top-up plans offered by the general insurer. But an individual signing up for this plan at an early age has the potential to save on premium later .
This plan is ideal for self-employed professionals, people with a family history of critical illness and for those above 65 who do not have a medical cover.
Health insurance scheme for beedi workers a poll device
The general secretary of Gondia CPI and district president of AITUC Hauslal Rahangdale flayed State government's health insurance scheme for beedi workers in the district as a gimmick in view of the coming municipal elections in Gondia and Tiroda.
The government had in a recent notification included Gondia in a list of 21 districts which have been selected for the health insurance scheme for beedi workers. The insurance cover is of Rs 30,000 on payment of a principal amount of Rs 30 per year. The criterion for the scheme is that the workers should come under the BPL category and also the insurance will cover only five members of the family. Government has asked the district administration to issue smart cards for this purpose. The work for which is going on war footing according to the staff of the hospitals earmarked for the scheme. Approximately 50 thousand such cards are to be readied by June 30.
Houslal Rahangdale said that when National Health Insurance Scheme for those under BPL category already exists in the state since 2008, the propriety of a new scheme only for beedi workers is totally unnecessary and the motive behind the move is questionable.
He said that according to a government circular dated August 27, 2010 the information about such workers is supposed to be collected by the insurance company appointed by the Nodal Officer. So the move to deploy the staff of the government beedi workers hospitals for this work is a mystery. As per information the Nodal Officer had appointed Tata AIG Insurance Company for this propose but according to local labour officer one MD India Insurance Company is doing this work on behalf of Tata and it appears to have passed this work on to the medical officers due to political pressure, Rahangdale said.
After studying all these aspects Rahangdale asked, why the government did not come out with a simple package of Rs 30 thousand for a family which becomes member of this insurance scheme or work towards providing additional facilities to the existing hospitals for the beedi workers from the funds which will be collected from the beedi workers. Rahangdale pointed out that the whole scheme is eyewash and demanded enquiry into this scheme.
Thursday, June 16, 2011
Tata AIG Life to launches unit-linked child plan, Gyan Kosh
Private insurer Tata AIG Life Insurance Company today announced the launch of its unit-linked child plan - Tata AIG Life Insurance Gyan Kosh- with in-built benefits to ensure financial protection.
"Tata AIG Life Insurance Gyan Kosh with its two protection options and inbuilt benefits is designed to help parents not only assemble their desired savings but also protect it in case of any exigencies," Tata AIG Life Insurance Company Managing Director and CEO, Suresh Mahalingam, said in a statement here.
"The plan ensures that in the unfortunate event of the death or disability of insured, the journey of their loved ones towards success and happiness is not hampered by any financial constraints," he added. Choose & Compare Best Child Plan
Gyan Kosh is the company's first ULIP child plan after the September guidelines.
This plan is a non-participating ULIP endowment insurance plan with in-built benefits to ensure financial protection and financial goals for children like education, marriage and funds for setting up a business, among others.
"We expect this product to be popular and contribute 10 per cent to the total overall portfolio monthly from July onwards," Tata AIG Life Insurance Company Senior Vice President - Marketing, Product Development, Agency Sales Training and Corporate Communications - Vijay Sinha, told PTI.
The private insurer has three traditional children plan, Assured Carrier Builder, Assure Educare and Star Kid and a multi-purpose product, which includes child benefit called MahaLife Gold.
MahaLife Gold is a very popular product, he said adding that it contributes about 35 per cent to the over portfolio of the company.
Saturday, June 11, 2011
Bharti sells entire stake in insurance JVs with AXA to RIL
After nearly five years of its association, the Bharti group on Friday exited from its financial services joint ventures with French firm AXA and sold its entire 74 per cent stake in general and life insurance businesses to Mukesh Ambani-led RIL for an undisclosed amount.
“The decision is in line with the Bharti's strategy of focussing its energies and financial resources in businesses where it is making a deeper impact in
The company had entered into these joint ventures with the AXA group in 2006 and held 74 per cent stake in these ventures — Bharti AXA Life Insurance and Bharti AXA General Insurance.
“It (Bharti) intends to use the proceeds from selling its interests in these joint ventures towards other group businesses in
Bharti, a leading telecom player, has operations in 19 countries including 16 nations in
In a separate statement RIL also said the company had reached an understanding with Bharti on acquiring its entire stake in the joint venture with AXA.
“This sale is subject to necessary approvals from the Insurance Regulatory and Development Authority, the Competition Commission of India and any other relevant/applicable authorities,” Bharti said.
Bharti also said that it was in the process of offloading its stake in its joint venture with AXA for asset management.
According to the Reliance statement, RIL and its subsidiary Reliance Industrial Infrastructure (RIIL) would effectively own 57 per cent and 17 per cent, respectively, in both the insurance companies and would become AXA's joint venture partners in
AXA would retain its current 26 per cent shareholding and would continue to manage the day-to-day operations of both joint ventures.
According to the existing regulations, the foreign partner in the insurance sector is allowed to have a maximum stake up to 26 per cent in the joint venture.
Reliance said the proposed agreement contemplates an option by which AXA would acquire from RIL and RIIL up to 24 per cent shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI regulations permit such a holding by AXA. “Upon exercise of such an option, RIL will effectively own 45 per cent, RIIL will effectively own 5 per cent and AXA the balance 50 per cent in both the insurance companies,” the Reliance statement said. None of the three parties —Bharti, RIL and AXA — was to speak about the valuation of the 74 per cent stake held by Bharti. Sources in the industry have pegged the valuation between Rs.3,000 crore and Rs.5,000 crore. This, however, could not be confirmed. The AXA group is a worldwide leader in insurance and asset management, with 214,000 employees serving 95 million clients.
Friday, June 10, 2011
ICICI Lombard associates with Air India Express
ICICI Lombard is collaborating with Air India Express to provide travel insurance solutions to overseas and domestic travellers. This would enable customers to take advantage of Group Travel Insurance (Overseas) for a period as short as 15 days or their return to
The policy covers customers travelling abroad against possible risks and situations such as medical expenses caused by hospitalisation arising out of accidents, loss from trip delay, loss or delay of checked-in baggage, loss of passport, etc. Talking about the tie up, Neelesh Garg, executive director, ICICI Lombard General Insurance said, “Our partnership with Air India Express brings together a comprehensive, cost effective travel insurance cover at the time of ticket purchase along with the ease of instant online policy issuance. The product coverage has been carefully designed to meet the needs of Air India Express’ guests and has a convenient claims settlement process.“ The company has also tied up with Europ Assistance, a leading global assistance provider to provide hassle free claim settlement.
Tata AIG General Insurance wins awards at Indian Insurance Awards
At an awards ceremony organized by India Insurance Review, Tata AIG General Insurance bagged 2 prestigious awards, 1 each in the health and general insurance category.
India Insurance Review and Celent presented the India Insurance Awards 2011 - the awards were presented to the Indian insurance industry in a glittering ceremony held at the Intercontinental Hotel in Mumbai this evening.
The jury consisted of Mr S B Mathur, Secretary General, Life Insurance Council; Mr S L Mohan, Secretary General, General Insurance Council; and Mr Vepa Kamesam, Managing Director, Institute of Insurance and Risk Management (jointly promoted by IRDA and AP Government).
Tata AIG General Insurance Company (TAGIC) was awarded the Company of the Year Award 2011 for Health Insurance and Best Product Innovation Award 2011 in the general insurance category for the year 2010 – 2011.
TAGIC was awarded the Company of the Year Award 2011 for Health Insurance segment during the Indian Insurance Awards. This award was to recognize the company that stood out amongst its peers in terms of Revenue growth, Profitability, Innovation & Customer service.
Mr.Gaurav Garg, MD of Tata AIG General Insurance Company said “The award reinforces our perception as a strong health insurance company as evidenced also by the HT MaRs Customer Satisfaction Survey (results published in March, 2011) which ranked us as No.1 in customer service satisfaction and No.2 in claims settlement satisfaction. This perception is likely to be buttressed by our imminent entry into the mediclaim space as we await IRDA’s approval for the Mediprime product. It is a testament to our wide and strong product range of benefit based secondary medical insurance products that have not only delivered a profitable business line but also awards from the industry and a high degree of customer satisfaction. Our dominating presence in the Overseas Travel Insurance which is perceived as an Overseas Mediclaim also contributes in no small bit to our position.”
Tata AIG’s current health insurance portfolio consists of the following products
Wellsurance (Executive, Family and Woman version) – A comprehensive, fixed benefit hospitalization, surgical and critical illness plan that offers guaranteed insurability at renewal for whole life.
Accident and Sickness Hospitalization Cash Plan – pays a fixed daily hospitalization cash benefit based on number of days of hospitalization
CritiCare – Pays a fixed lumpsum benefit in the event of diagnosis of any of the select critical illnesses.
TAGIC was also recognized with the Best Product Innovation award amongst General Insurance players in the Indian Insurance Awards. The recognition was for Private Client Group Home secure Policy that was launched in August 2009. It is a unique product catering exclusively to the High Net Worth client’s need of insuring their high value possessions such as paintings, valuables, work of art, jewelry, collectibles etc. It offers packaged cover for the entire home contents including above items with first in the market covers such as hole in one expenses, loss in value for fine art, pairs and sets, etc.
Additional services are offered along with the insurance cover e.g vulnerability assessments, transit supervision, conservation and storage assistance.
Tata AIG General Insurance Company provides insurance solutions to individuals and corporates. It offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines. Tata AIG believes in offering innovative and relevant insurance solutions in the retail and commercial space. Each product offering is backed by expertise and an unparalleled claims service.
Tata AIG’s products are available through various channels of distribution like agents, brokers, banks (through bancassurance tie ups) and direct channels like Tele Marketing, Digital Marketing, worksite management etc. Tata AIG has its operations in 59 cities.
Wednesday, June 8, 2011
Banks may get to sell products of 4 insurance companies
Banks may soon be allowed to sell products of four insurance companies. According to a report of the Committee on Bancassurance, banks may be allowed to tie up with any two sets of insurers - two in the life insurance sector , two in non-life, two in health, ECGC and AIC.
Bancassurance, a distribution model where insurance products are sold through bank branch network, will be allowed to operate on principles of tied agency, which is the current status of the bank. With a network of over 80,000 branches, bancassurance is said to be the most efficient way to achieve financial inclusion in the insurance sector. There are 17 banks with shareholding in insurance companies.
Insurance companies may not be able to sell equity stake to banks for distribution tie-ups at a discount. The committee has recommended that the discount in valuation of equity share given by insurers to bank distribution partners should be valued as per accounting standards and treated as advance commission and amortised in a period not extending beyond three years. Recently, Axis Bank had picked up 4% stake in Max New York Life at face value for a strategic tie-up for 10 years. The committee has, however, suggested that the tenure of the agreement between the banker and the insurer shall not be less than five years.
The committee has recommended that banks should not be eligible for any compensation other than the commission payable for distribution of insurance products. At present, banks are given compensation over and above the commission. The report has pointed out that the referral model is costlier than the corporate agency model. "Inequitable relationship between the banker and the insurer has resulted in higher premium on the policyholder. The referral system shall not be available to bancassurers," it said.
The premium collected through bancassurance has gone up to Rs 21,947 crore in 2009-10, which is 7.31% of the total premium income of life and non-life insurance sectors.
Tuesday, June 7, 2011
LIC has worries over demat policies
Life Insurance Corporation of India (LIC) is having reservations over dematerialization of policies as it fears this could lead to unhealthy market of trading if checks are not placed on policies assignment.
The Insurance Regulatory and Development Authority have proposed that instead of issuing certificates of life insurance, companies could maintain electronic records in a central repository similar to the National Securities Depository Ltd. The insurance repository guidelines state that an insurer on receipt of intimation of assignment from the policyholder shall register the same in its record and intimate the insurance repository. Assignment is the process whereby a policyholder can transfer all benefits, including maturity and death benefits under a policy, to a third-person. Although life insurance contracts are not tradable securities like stocks or bonds, it is possible to get an upfront payment from a third-party who is willing to pay a price for getting higher benefits in future through assignment of the policy.
According to IRDA guidelines on the repository, the assignee shall have all the rights of the policyholder. The Life Insurance Council - an association of life insurers - has set up a panel of life company CEOs to look into the various concerns of insurance companies relating to the creation of an insurance repository.
Some years back Life Insurance Corporation was dragged to court by Insurance Policy Plus Services - a firm that specialized in taking over policies that had lapsed - after the corporation refused to assign policies. IPPS used to buy out policies which were in a lapsed state because of the sellers' inability to buy premium. These policies were acquired by making a payment to the policyholder and getting the revived policies assigned. LIC's objection was that any firm that bought policies for profit was acting against the principles of insurance. The corporation had no objection to policies being assigned as a security for a loan or out of love and affection for the assignee.
Trading in terminal policies is a controversial practice that is prevalent in the West. Practitioners of this trend say that they help the terminally ill policyholder by providing him with funds when he needs it the most. But critics point out that this practice amounts to taking bets on other people's lives.
Monday, June 6, 2011
IRDA may allow banks to sell products of two insurers
The Insurance regulatory and Development Authority (IRDA) on Friday said it was considering a proposal to allow banks to sell products of two insurance firms each in life and non-life categories, a move that will help increase penetration. According to the current practice, a bank is allowed to sell Products of one each in a life insurance company, a general and a health insurance firm.
“The committee (set up by the regulator) has recommended that banks should be allowed to tie up with two insurers. We are in the process of examining the recommendation,” said J Hari Narayan, chairman, IRDA.
The insurance regulator had set up a 10-member committee in 2007, headed by former LIC chairman NM Govardhan, to suggest ways to increase insurance penetration.
The IRDA is looking to open up the distribution channel to help increase penetration of insurance products amidst long pending demand of insurers for relaxing bank distribution channels.
Distribution channels include agency, banc assurance, referrals, direct sales etc.
The new business premium (first year premium) of life insurance industry grew by 14.5% to Rs1, 25,800 crore in 2010-11. The total premium of the 23 player life insurance industry also increased by 8% compared to Rs2, 86,500 crore in 2009-10.
Friday, June 3, 2011
Indian insurance sector
Since opening up, the number of participants in the industry has gone up from six insurers (including Life Insurance Corporation of India, four public sector general insurers and General Insurance Corporation as the national reinsurer) in the year 2000 to 48 insurers operating in the life, non-life and reinsurance segments (including specialised insurers, viz., Export Credit Guarantee Corporation and Agriculture Insurance Company). Three of the non-life insurance companies, viz., Star Health and Alliance Insurance Company, Apollo Munich Health Insurance Company and Max Bupa Health Insurance Company function as standalone health insurance companies. Of the twenty two insurance companies which have set up operations in the life segment post opening up of the sector, twenty are in joint venture with foreign partners. Of the seventeen insurers (including health insurers) who have commenced operations in the non-life segment, sixteen are in collaboration with the foreign partners. The three standalone health insurance companies have been set up in collaboration with foreign joint venture partners. Thus, as on date, thirty six insurance companies in the private sector are operating in the country in collaboration with established foreign insurance companies across the globe.
The first year premium, which is a measure of new business secured, underwritten by the life insurers during 2009-10 was `1,09,894 crore as compared to `87,331 crore in 2008-09 registering a growth of 25.84 % against negative growth rate of 6.81 % during 2008-09. In terms of linked and non-linked business during the year 2009-10, 54.53 % of the first year premium was underwritten in the linked segment while 45.47 percent of the business was in non-linked segment (51.13 and 48.87 % respectively in 2008-09). The total premium underwritten by the life insurance sector in 2009-10 was `2,65,450 crore as against `2,21,785 crore in 2008-09 exhibiting a growth of 19.69 % (10.15 % in 2008-09).
The non-life insurers (excluding specialized institutions like ECGC and AIC and the standalone health insurance companies) underwrote premium of `35,816 crore in 2009-10, as against `31,428 crore in 2008-09 registering a growth of 13.44 %. The three health insurance companies underwrote premium of `1,072 crore in 2009-10, twice of their collective premium of `535 crore in 2008-09.
Source: [IRDA]
LIC south region sees 50 pc premium growths in FY11
The Life Insurance Corporation (LIC) of India's south zone, which covers Andhra Pradesh and Karnataka, has registered a total new premium income of Rs 13,000 crore in 2010-11, which represents a 50 per cent growth over the previous year.
According to AK Sahoo, zonal manager (south zone), LIC, around Rs 7,700 crore of this came from group schemes. It had settled 2.2 million claims in the year amounting to Rs 7,000 crore.
He told reporters that conventional policies were on the rise compared to unit-linked insurance policies (Ulips), with the ratio for LIC at 60:40. The recent regulations requiring a five-year lock-in period and a minimum guarantee of return had made ULIPs less popular, Sahoo said, adding that conventional policies were the flagship products of LIC.
Earlier, he launched the LIC Jeevan Arogya health plan, the public sector insurer's third health cover scheme in the conventional category. It offers hospitalisation benefits for parents-in-law of the insured person, in addition to his/her spouse, children and parents.
As a defined benefit policy, it would offer the benefits as a lumpsum irrespective of the cost of surgery and whether the insured is reimbursed under any other scheme.
It covers 140 major surgeries, and is available with an initial daily benefit of Rs 1,000, Rs 2,000, Rs 3,000 and Rs 4,000. The maximum surgical benefit would be 100 times the daily benefit. Premiums would depend on age, gender and the health cover option, among others.