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submitted by Amit Kumar (28 m) on 16 Nov 2010 12:35:16 IST
Take into account current and future family expenses, inflation, investments and sum assured of existing policies. How much insurance is good enough is a question most people don’t ask themselves. Many don’t even realise that insurance is a security net, and not an investment vehicle. Most argue that they are paying tens of thousands as insurance premium and are reluctant to discuss additional insurance requirements. Compounding this, people are not even aware that they require further insurance, over what they already have. Also, the most important benefit of having insurance, which is protection, is not fully appreciated. WRONG ATT
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With the growing uncertainty of life, getting an insurance policy has become a must for almost every individual. When you take an insurance policy, you also tend to add 'riders' to the policy. Riders are the additional benefits that you may buy and add to your policy. Riders can be mixed and matched based on one's preferences for a small additional cost. One size does not fit all A one size fits all approach does not apply to insurance policies. Therefore, the kind and number of riders added to an individual's insurance policy depends on many factors such as individual's health, future plans, purpose of the insurance, etc.&n
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submitted by Amit Kumar (28 m) on 7 Nov 2010 00:48:06 IST
Unit-linked insurance plans (Ulips), as a product category, is higher up the complication scale than, say, a fixed deposit or even a stock or a mutual fund. The reason is it is an investment and a protection product kneaded into one. To complicate matters further are guarantees, additional payouts, differential loading of costs, exit loads and other features. So, it is near impossible for the average investor to figure how his money will flow through the plumbing and how much will come out of the other end. Over the years, the Insurance Regulatory and Development Authority (IRDA) has tried to set rules that make Ulips comparatively simpler and, ther
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submitted by Amit Kumar (28 m) on 1 Nov 2010 01:10:01 IST
If you have a car, chances are you have car insurance for it. But how much do you understand about what kind of policy you have and what policy is best for you, given the risks that you want to protect against? Here we share with you basics that you must know if you want to make smart decisions about your car insurance policy.Why do you need car insurance?You need car insurance because its mandatory - its the law. For any vehicle to drive on Indian roads, it must have a valid insurance policy, that at a minimum covers the cost of damage that you might cause to other people or vehicles. Rather than have to pay from your own pocket, if you have a valid car
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submitted by Amit Kumar (28 m) on 28 Oct 2010 04:26:25 IST
Most people think that buying an insurance policy or investing in a mutual fund unit is as easy as signing on the dotted line. Most blindly trust intermediaries. Instead of carefully reading the fine print, they happily sign away at the spots marked with crosses (X) without realising that such a nonchalant attitude could haunt them later. In fact, if quizzed, most policyholders would shrug off their ignorance, by saying that hardly anyone understands legalese. Probably, they have a point. Perhaps this is why J Hari Narayan, chairman of the Insurance Regulatory and Development Authority (Irda), recently emphasised the need to simplify policy document
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submitted by Amit Kumar (28 m) on 23 Oct 2010 15:22:40 IST
Young investors have varied objectives while choosing their investments, buying a home, purchasing a car, their child's education, early retirement plan etc are some of the goals individuals set for themselves early in life. Each of the goals may require a specific type of investment. Further, it is important to time your investments in such a manner that they pay returns at a time when you need the money. For example, if A wants to buy a car on loan and wants to repay his EMIs using the returns on his investments, then his investments should pay him returns equal to the amount of his monthly installments. So, if he invests in a FD, then the inte
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September 1, 2010 can truly be described as a watershed date for life insurance companies in India. It was on that day that the Insurance Regulatory and Development Authority’s (Irda) new rules regarding various aspects of unit-linked insurance plans (Ulips) came into effect. Quite expectedly, several insurance companies have adopted new strategies to align their business in line with the sweeping changes that have come into force. And ‘cost control’ and ‘rationalisation’ have become the new buzzwords in the life insurance industry today. Eyeing Singles: Some insurers have hit on single-premium plans as one o
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I start this article with the prayer to God for your long life.We all want to live long – happily & healthy. Who don't want to? After all, we love our life, our family members & friends and have lots of reason to live. We dream of fulfilling our responsibilities, e.g., dreaming of seeing your child as Doctor, marriage of your daughter, travelling in beautiful country with your spouse on retirement. Nice dream. But, HELLO , have you ever thought – what happens to your family members life, if you die today. After all, no one knows the longevity of life.No one can fill the emotional gap after your death. But you must ensure that your fam
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In the past few months, health insurance has been capturing headlines across news platforms. This was because of the removal of several hospitals from the cashless network by public sector insurance companies. The primary reason behind this, as we understand, is the failure to reach an agreement on rates to be charged between insurers and hospitals. The size of the hospital bill is related to the services provided. An insurer should not be concerned with that. Cost containment in a health insurance company is achieved through a combination of risk adequate pricing, sound underwriting and strong claims management. It is important to have controls in
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When 62-year-old Manju Bedi returned to India after a three-year stay in the UK, she realised that her old health plan had lapsed a few years ago. But this was the age she needed it the most. “I enjoy good health but who knows what the future brings? I do not want to compromise my independence at this stage,” says the Mumbai-based housewife. Till a few years ago, there was no solution for Bedi’s problem. Most health insurance plans expired at the age of 60 and no insurer was ready to issue a fresh policy to a retiree. Not anymore. Insurance companies have devised innovative plans for senior citizens and have extended the age limit
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A decade ago, booking train tickets during vacations could have easily topped the list of most tedious yet necessary tasks, thanks to the never-ending queues at the booking counters. Though the queues have got even longer rather than disappear, the advent of the internet technologies has made the task much easier. With the internet, mundane and time-consuming tasks such as booking tickets have become merely a matter of a few clicks on the keyboard of your computer. With the introduction of online services in the mutual fund (MF) and insurance industry, investors can purchase MFs and policies through online. Most asset management companies and i
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Retail investors appear to be more worried about short-term market movements rather than long-term investment opportunities in the equity market. The barometer indices BSE Sensex and S&P CNX Nifty have recorded insignificant returns on a year-to-date basis, further affecting the sentiment of retail investors. ‘Is this the right time to invest?' seems to be the biggest question on most retail investors' minds. Besides, what strategy has to be adopted now — is it better to go through a lump-sum or systematic investment plan are other questions that often creep in. Here is an attempt to address these concerns. Time horizon&n
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submitted by Amit Kumar (28 m) on 10 Aug 2010 15:03:17 IST
Profitability of some non-life insurance companies got eroded, among other reasons, owing to higher claims on health portfolios in the quarter ended June 30. ICICI Lombard General Insurance Co, India’s biggest private sector non-life insurance company, reported a 13 per cent drop in its net profit to Rs 33 crore in the three months to June 30, compared with Rs 38 crore in the same period a year earlier. The claim ratio in ICICI Lombard’s health portfolio was around 100 per cent. This is despite an increase in premium income during the quarter by 27 per cent to Rs 1,118 crore from Rs 878 crore in the first quarter of the last financial yea
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Before commenting on the subject of this column, I would like to go into the genesis of the concerns which are embedded in the same. Health insurance became available to the retail customers by way of Mediclaim policy launched in 1986.From then till now there have been various developments including the cashless facility which was introduced in the year 2002.This facility has come as a boon to the common policy holder and has been possible because of the desire of the insurance companies to provide this facility to their customers when they need to be hospitalised. This is a very noble cause and it should have been the endeavor of all stake holders to make the same
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Saving money is one of those tasks that is easier said than done. How much money will you save, how will you do it, and how can you make sure it stays there? Here are five questions to ask yourself to help you get financially fit and achieve monetary success.What are your financial goals?Understanding why you want to save money is a fantastic way to start. With your vision in mind it will be easier to make those tradeoffs at the till. (Is that extra pair of shoes really worth it?) Create milestones to make the path look easier and track your progress regularly to know if you need to make any adjustments to get to your goal.Where's your money going?Many of us hav
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submitted by Amit Kumar (28 m) on 6 Jul 2010 13:33:03 IST
If you are looking to secure a regular income on retirement, pension plans offered by insurance companies possibly offer the widest menu of choices. Market-linked investment options, various choices on the annuity and a favourable tax structure for such policies are some of the reasons why investors should consider them. Here we tell you what options are available: An investor has to be clear about three things before buying a pension policy – the age at which he wishes to retire (vesting age), the retirement corpus, i.e. the money needed post-retirement, and the premium he can manage to pay to build that corpus. In a pension policy, the b
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Fresh norms introduce definitive changes in Ulips; more could have been done on cost.Investors in unit-linked insurance policies (Ulips) can look forward to some more transparency. But costs, though not front-loaded, will be spread over the lock-in period. More important, insurance agents will now have to sell the product as a long-term one, instead of touting it as a product that will give returns based on the stock market. Guaranteed, but low returns on pension plans: A pension/annuity plan will offer guaranteed annual returns of 4.5 per cent — just 1 per cent more than the savings deposit rate of 3.5 per cent. This rate could change at a la
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The Finance Minister has kept his word. A fortnight ago he had assured life insurance companies that the dispute between IRDA and SEBI over the regulation of unit linked insurance policies or ULIPs will be resolved soon.Now the Government has ended the row by promulgating an ordinance on Friday stating that unit linked insurance policies with investment component are insurance products which will come under the regulatory jurisdiction of IRDA and not SEBI.It amended four Acts to make it clear that ULIPs are not securities and they did not form part of collective investment schemes or mutual funds.These amendments nullify SEBI's April 9 ban on 14 insurance compan
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submitted by Amit Kumar (28 m) on 14 Jun 2010 14:06:34 IST
Selling insurance is considered to be a tough job by some industry insiders. Well not exactly by some hot shot MDRTs. In case you didn't know, MDRT stands for Million Dollar Round Table and this is the most coveted title in the insurance sales industry.And there's no prize for guessing why insurance policy advisors and agents of all hues sell you those high costing insurance products like the unit linked insurance plan, ULIP.Now becoming a MDRT does not mean that you have advised your clients in their best interests; it simply means that you have sold more policies and hit targets required to qualify for MDRT.But most of the agents tout MDRT as if this were
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In a move to curb mis-selling of unit-linked insurance plans (Ulips), regulator Irda has directed life firms to attach a `key-features’ document with every policy to help customers understand what they are buying. There will be a new provision in the `Regulations for Protection of Policyholders Interests’ to make this mandatory for insurance companies.Until now, the only explanatory document that a policyholder received in addition to the policy was a benefit illustration that showed the returns a policyholder could expect on maturity.The details in the proposed document will spell out the type of the policy, minimum surrender value, list of comp
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