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submitted by Sonia Nehwal on 8 Sep 2010 14:36:52 IST
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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submitted by Sonia Nehwal on 23 Aug 2010 13:09:43 IST
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 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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submitted by Sonia Nehwal on 1 Aug 2010 16:29:03 IST
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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submitted by Sonia Nehwal on 19 Jul 2010 13:22:09 IST
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 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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submitted by Sonia Nehwal on 29 Jun 2010 12:07:06 IST
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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submitted by Sonia Nehwal on 21 Jun 2010 13:14:57 IST
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 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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submitted by Sonia Nehwal on 5 Jun 2010 14:34:07 IST
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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submitted by Aslam shaikh on 3 Jun 2010 13:44:22 IST
Insurance etymologically and historically has been a byword for risk sharing and management with people assailed by and facing the same risk contributing a premium that is a minuscule fraction of the potential loss arising out of the risk to the insurance company.The premium is fixed in such a way that the insurer made some profit at the end of the day after meeting claims which itself is in the realm of probability based on past experience and aggravating risk factors.In a way, therefore, insurance and mutual fund investments have at least one thing in common — sharing and spreading of risks — although on different sides of the income statement with mut
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submitted by Sonia Nehwal on 2 Jun 2010 14:19:28 IST
The proposal to cap surrender charges may ensure buyers get back some — just some — of their investment.Last week, the Insurance Regulatory and Development Authority (Irda) put up draft proposals fixing surrender charges for unit-linked insurance plans (Ulips) and the revival period for lapsed polices on its website.Irda proposed that surrender charges be capped. For policies of less than 10 years, the charges might be capped at 2.5-12.5 per cent of the fund value in the first five years. For policies with tenures of more than 10 years, the charges could be fixed at 2.5-15 per cent of the fund value for the first six years. After the fifth (for policies
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submitted by administrator on 24 May 2010 13:55:34 IST
Private life insurers in the country are lucky that the recent Sebi ban on unit-linked insurance plans (ULIPs) was cancelled. They would have lost almost half their businesses if the market regulator’s ban on 14 insurers from raising funds through the investment-cum-insurance product.That is because Ulips constitute 46% of the total business in the life insurance space. “Ulip has taken a prominent place in the global insurance market and India is not far behind. It has become the growth engine over the years in the Indian insurance market,” said Rajesh Relan, MD of Metlife India.Of Rs 2,00,000 crore-plus life insurance premium collected in the firs
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submitted by Sonia Nehwal on 17 May 2010 14:04:08 IST
Insurance companies have traditionally offered guarantees on their products through bonuses or loyalty additions. But the market correction of 2008 has opened the gateway for “guaranteed NAV” products under unit-linked insurance plans. These plans typically guarantee the investor the highest NAV (the guarantee is not on returns) on the fund in the initial seven to eight years and manage to deliver this through a hybrid structure that uses debt and equity investments.LIC's Wealth Plus is the latest entrant to this genre. It guarantees the highest NAV over the first seven years or the NAV at maturity, whichever is higher. The policy term is eight years
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submitted by Sonia Nehwal on 6 May 2010 14:21:08 IST
One reason why individuals are reluctant to buy pure-term insurance cover is the thought of shelling out premium and not earning any return on the ‘investment’ . Then there are investors who are keen on building a retirement corpus, but do not have the resources to buy an endowment plan.Such policyholders could possibly look at convertible term plans that can act as the middle ground between pure protection and investment objectives. Such policies necessitate premiums that could fall somewhere between that of pure protection plans and endowment policies.Convertible term plansUnder such plans, a policyholder who has signed up for a simple term insurance c
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submitted by Anju Shukla on 4 May 2010 14:52:20 IST
Taking extra caution, insurance regulator, Insurance Regulatory & Development Authority (Irda) based upon the insurance related data as of year ending March 31,2010 and related discussions, has issued clarifications on guidelines on unit linked products (Ulips).All life insurers are advised that only the Ulips which conform to these revised guidelines shall be permitted to offer sale from July 1, said circular issued all CEOs of the life insurance companies on Monday.Irda has reiterated that in case of individual products, the minimum policy term shall be five years and group products will continue to be on annually renewable basis. All linked products inclu
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submitted by Sonia Nehwal on 27 Apr 2010 14:19:23 IST
You have welcomed your new bundle of joy in this world with a lot of enthusiasm. You intend to give them the best of everything. In order to help you achieve this objective, you start investing in various instruments on your child's behalf. To capitalize on the parents' intentions about giving the best for their children, many insurance companies have introduced children's plans. These plans have enticed many parents to invest on behalf of their children, under the impression that their child's future is secure. But is it true? Are they worth investing? Is this the best investment option for your child? Let's take a look at what these plans are a
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submitted by Amit Kumar on 23 Apr 2010 14:42:38 IST
The recent regulatory spat over Unit-Linked Insurance Plans (ULIPs) has projected insurance companies and their sales force as the villains of the piece. However, financial experts say there is another central character in the plot who is equally to blame for: The average insurance buyer in India who always wants "something" from the insurance policy on maturity.They say this rigid mindset of earning some return from an insurance plan is the main reason why insurance products with investment component continue to sell the most in the country. Irrespective of the outcome of the ULIP controversy, this mindset is unlikely to change quickly, experts add."
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submitted by Anju Shukla on 21 Apr 2010 12:34:58 IST
The dispute between regulators over unit linked insurance plans (ULIPs) marketed by insurance companies has left many investors confused. Here's an FAQ to address some of the doubts that investors may have:What is the status of my existing ULIP after the SEBI ban? Should I continue to pay my renewal premium? Will it be accepted?With both the regulators agreeing to jointly seek a binding legal mandate from a Court in this matter, there is as of now no change in the status of your ULIP.If you have taken the ULIP to meet any of your financial goals, you should not stop paying the annual premium. The insurance companies will continue to accept the renewal premium.SE
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submitted by administrator on 14 Apr 2010 13:36:16 IST
Insurance and investment are two different needs. Then, there are Ulip pension plans with no sum assured. No wonder, there is confusion.For three action-packed days, the Securities and Exchange Board of India (Sebi) and Insurance Regulatory and Development Authority (Irda) have been engaged in a tussle on unit-linked insurance plans (Ulips). And the battle rages on with the Sebi issuing a statement today that new launches post-April, 9 will need its nod.Sebi’s main grouse: Since Ulips are investment products as well, they should follow its guidelines. But Irda Chairman J Hari Narayan says there is no case for dual regulation of Ulips.Between the two regulators
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