India among top 10 world insurance markets

MUMBAI: The life insurance industry might have turned in a poor show in FY09 with almost flat growth, but with the rest of the world shrinking

during this period India has for the first time moved up the ranking to be among the top 10 life insurance markets worldwide.

According to the latest sigma report on world insurance markets, India recorded an inflation adjusted growth of 0.2% in USD terms while the world market shrunk 3.5% in `08 thanks to the global financial crisis. While `08-09 was an exception on account of the crisis, the average growth of the Indian life industry post liberalisation has been very impressive. India was at No 20 at the time of liberalization in 2000 but had moved up to No 17 two years back and was at number 11 position last year.

The economic Survey acknowledges this growth. The report for the year `08-09 states that insurance sector penetration, both in life and non-life segments, has improved since the time the sector has been opened for private participation.

But India’s performance is completely overshadowed by that of China which has overtaken Italy and South Korea to become the sixth largest life insurance market. The middle kingdom has also recorded the highest growth rate among reasonable sized markets.

Indian insurers feel that India can leapfrog to a position just behind China by growing faster than other Asian countries like Korea and Taiwan which are still ahead of India.

According to V vaidyanathan, MD, ICICI Prudential, 40% of the growth in life insurance will come from Asia. Within Asia India and China will contribute to 80% of the growth. "The Indian industry will grow by 12-13% as against 5-6% global growth. India’s ranking will have to go up" he said. He adds that industry growth in India is essential since no social security exists in India.

"Factors like a stable 8 per cent annual growth rate of the economy make India one of the most promising amongst the emerging markets, with the potential to go beyond Korea and Taiwan" said Rajesh Relan, MD, Metlife Insurance India. He adds that with nearly 80% of its 1.2 billion population without life insurance, even a marginal increase in penetration would result in a huge increase in volumes.

The expected hike in Foreign Direct Investment (FDI) cap to 49% is also expected to boost industry growth.

Source: ET

New Jeevan Sathi

Times are changing and so are the needs. LIC, as an insurer, has always been sensitive to the changing needs of the people and introduced products to suit these from time to time. While we have a wide array or products to suit every Indian, we keep on adding variety to take care of the emerging needs like Health, Pension, and Mortgage etc. The innovation and the restructuring of the product portfolio are done with a view to match people’s expectations. Our latest offering is Jeevan Saathi Plus which is the first of its kind in the industry. Unlike our earlier Joint Life plan Jeevan Saathi, which was on Conventional platform, this one is on ULIP platform and offers the insured the benefits of market-linked return.

Jeevan Saathi Plus is a plan wherein the couple can take the insurance cover on their lives under a single policy. The proposer under the plan shall be called Principal Life Assured (P.L.A.) and the other life (wife/husband) shall be called Spouse Life Assured (S.L.A.).

P.L.A. may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS) intervals over the term of the policy. The minimum annualized premium (other than monthly through ECS) will be Rs.10,000/- increasing thereafter in multiples of Rs.1,000/-. The minimum monthly (ECS) premium will be Rs. 1000/- increasing thereafter in multiples of Rs. 250/-. Alternatively, a Single premium can be paid subject to a minimum of Rs. 40,000/- . P.L.A. will also have an option to make additional investments under the policy through Top-up premiums.

The P.L.A. can choose the level of cover (Sum Assured) for both lives within the limits, which will depend on whether the policy is a Single premium or Regular premium contract, age and the amount of premium agreed to pay.

For regular premium policies, in case of death of the P.L.A. during the term of the policy, the all future premiums including outstanding premiums, if any, are waived and units equivalent to an amount equal to all future premiums, including outstanding premiums, if any, shall be credited to the policyholder’s fund provided life cover is in force. The policy, however, continues even thereafter and the risk cover on the life of S.L.A. remains intact.

In case of the death of either the P.L.A. or S.L.A. the surviving life shall have an option of not taking the death benefit but can transfer the same to the policyholder’s fund and same may be withdrawn anytime.

On both P.L.A and S.L.A. surviving or either of P.L.A or S.L.A. surviving the date of maturity an amount equal to the Policyholder’s Fund Value is payable. When the policy comes for maturity, the policyholder (i.e. P.L.A. or if P.L.A. is not alive, then S.L.A.) may exercise “Settlement Option” and may receive the policy money in instalments spread over a period of not more than five years from the date of maturity.

Q & A

Question:
How much discount I can expect from my LIC agent. I have come to know from one of my friend that he has bargained on his first premium for his first LIC premium. He had paid almost half of the actual premium. What do you offer.


Answer:
Discounts or Sharing of Commission from Agent is illegal in India under Section 41 of Insurance Act 1938 . This is quoted on each life insurance proposal form available in India.

No doubt everyone wants to save money and this is our right, but commission is the only insensitive to the agent for his services & hard work so when you are asking rebates they will always suggest you a plan in which they are getting higher commissions. And then this is very much possible, that he/she will not suggest you a plan that will be of your requirements.

Now a days there are so many other things you should demand from an agent.
That is

1. how much is he educated,
   
2. is he/she able to understand your actual needs,
3. does he/she have full knowledge of product
4. is he/she able to help you for premium deposits and other services

At last I would like to ask a simple question from the investor still willing to take discount on premium.

Let say I have paid to x% on your premium and I have not earned any thing from you now.
Will you give me back x% of your returns from LIC on maturity or death?
if your answer is no. WHY?

If you are asking discounts on premiums from insurance advisers, you are generating black money in the market.

Jeevan sathi Plus From LIC

LIC is launching Jeevan sathi Plus plan no 197 with effect from 29th june 2009.

Features

1. This is a Unit linked plan wherein Husband and wife can take insurance cover on their lives under a single Policy.
   
2. Age range to take this policy is 18 to 55 years and the Policy term choice is for 10 and 20 years.
   
3. Principal Life assured (PLA) and spouse life assured (SLA) can opt for seperate amount of risk cover.
   
4. Principal life assured can decrease risk cover of self and spouse anytime once duirng the policy year.
   
5. The policy can be surrrendered after three years. The policy fund will be paid as the surrender value and There is NO Surrender charge
   
6. Partial withdrawl permitted after 3 years . But 10% in case of single premium and 2 annual premiums in case of regual premium to be maintained in the fund.
   
7. Reinvestment of claim amount available (on Death of Principal life assured) with partial withdrawl facility without any restriction.
   
8. Option to continue risk cover without paying premiums after three years.
   
9. Four funds that are available with equity
   
   exposure. One fund is to be chosen while taking the policy.
   
10. Switching from one fund to another is permitted. Four switches in a year are FREE and additional switches done in a year carry a charge of Rs100 per switch.
    
11. Top up premiums can be paid in multiples of Rs 1000 and carry an allocation charge of 1.25% . The maximum total top up premium which can be paid is 25% of total premiums paid.
    
12. Lapsed Policy can be revived in a span of 2 years from date of last unpaid premium.

Maturity Benefit
The fund value of the policy will be paid to the PLA or SLA as the case is.
There is an option to recieve the maturity proceed in a settlement option.

Death Benefits

Death of P.L.A while S.L.A is alive	Sum assured is paide to S.L.A. and Future premiums to be paid are waived and is also credited to the policy fund as units and policy continues.
Death of S.L.A while P.L.A is alive	Sum assured is paid to P.L.A and policy continues
Death of P.L.A after S.L.A 's death.	sum assured of PLA + all future premiums to be paid + fund value of the policy is paid to the nominee or legal heir.
Death of S.L.A after P.L.A's death	sum assured of SLA + fund value of the policy is paid to the nominee or legal heir.
Simultaneous death of S.L.A and P.L.A	Both the sum assured's of SLA and PLA + All future premiums to be paid + fund value of the policy is paid to the nominee or legal heir.

Premium
Premiums can be paid in ECS-monthly, quarterly, halfyearly, yearly and in single mode.
Regular premium minimum 10,000 and multiples of 1000 annual for ECS minimum 1.000 and thereafter multiples of 250 No maximum limit for premium
Single premium minimum 40000 and multiples of 1000

Sum assured
Regular premium 5 times of annual premium is minimum and Maximum of 30 times for age below 40 and 20 times for age above 40 in multiples of 5000
Single premium 1.5 times of premium is minimum and maximum of 5 times for age below 40 and 20 times for age above 40 in multiples of 5000

Types of Fund
Bond fund - Secured fund - Balanced fund - Growth fund

Allocation Charges
single premium upto 15 lakhs - 4.25%
single premium above 15lakhs - 4.00%

Regular premium

Premium	First year	2 & 3 year	Thereafter
10,000 to 1,50,000	29%	5%	2.5%
1,50,0001 to 2,50,000	28%	5%	2.5%
Above 2,50,001	27.5%	5%	2.5%

Top up premium allocation charge is 1.25%

Mortality Charges
Life cover charges for Principal life assured and spouse life assured
Premium waiver benefit charge (for regular premium policy only)

Policy administration charge
First year Rs.60 per month.
Second and third year Rs 20 per month
Thereafter Rs 20 per month escalating at 3% Per Year.