Why do people buy Life Insurance

Get A Term Plan

Protecting the living standards of your family and helping to achieve your unfinished goals in your absence is best met through pure term plans.

The advantage. The premium that pure term plans charge is the lowest among life cover policies as they provide life insurance for only a specified number of years. Term plans don’t offer any returns as they focus only on providing cover and have no savings element. If you outlive the policy, you will not get anything, but if you die during the term of the plan, your nominees will get the sum assured. So, if your aim is not to use insurance as an investment avenue, but to protect your dependents from a financial crisis in case you die prematurely, a pure term will suit you best.

What to look for. As term plans don’t have any surrender or maturity value, purchase decisions are often based on premiums. However, your choice should be guided by other factors too. Choose plans that provide maximum terms. It does not make sense, for instance, if a 30-year-old person buys a term plan for just 25 years.

Also, try choosing plans that cover you for the maximum age. If you expect to have financial dependents till late in your life, look for term plans that have a high maturity age. Most term plans provide coverage till age 60 or 65 years, or even as high as 70 years.

Some plans allow hikes in cover at regular intervals without any financial or medical underwriting. Higher incremental premiums may be required as age advances, but they may still prove helpful in circumventing age-related health problems.

Why buy early? The right time to buy term cover is when one finds someone financially dependent on oneself. It’s better to buy early as, apart from low premium at low ages, there are other reasons: the health status of the person goes a long way in deciding the premium, and even whether the policy would be issued to him at all. There are stringent medical tests, but they are worth it.

Only income from pure life insurance policies will be exempt from tax

The Change:

Only income from pure life insurance policies will be exempt from tax

For the income to be tax-free, the cover should be 20 times the annual premium.

Very few people in India buy life insurance for covering risk. Most look at it as a tax-saving tool and a way to accumulate wealth. This is why Ulips, which are essentially investment products with a nominal cover, are the hottest selling insurance plans. The DTC will make income from life insurance policies tax-free only if they offer a risk cover, which is at least 20 times the annual premium.

The Impact:

This might push people into buying life insurance for its real purpose-cover risk of death with a big sum.

The exempt-exempt-exempt (EEE) tax model makes the insurance policies attractive as an investment. After DTC changes the rules, insurance companies may have to alter the structure of their policies to make the products EEE-compliant. Here is what it means for different types of insurance plans.

Ulips: These may offer a small insurance cover, but their mortality charges are low. It is a fraction of the premium. Raising the minimum cover means the insurance company will deduct a higher mortality charge from the premium.

Traditional plans: Endowment policies and moneyback plans will have to be taken for very long terms if the income is to be exempt. Short-term plans of 8-10 years will not be EEE-compliant.

Term plans: These are pure insurance plans and already comply with the DTC requirement of a high risk cover. Term insurance plans don’t have a maturity value.

Existing policies will not be affected: There is no reason to worry if your existing policy does not meet the DTC requirements. The government has clarified that investments made till 31 March 2011 will be governed by the current tax regime till their full duration. This comes as a relief for millions of policyholders, who were fearing that the proceeds from their policies would be taxed on maturity. We consider the impact of the likely changes on your earnings and investments after the Direct Taxes Code (DTC) comes into effect from 1 April 2011 Only income from pure life insurance policies will be exempt from tax.

Source : Media

Come into my parlour...

The insurance agent as he traps uninformed investors into buying unsuitable policies. Here are the lures you should avoid

RETURNS CAN BE AS HIGH AS 30%. According to insurance regulator, Irda, the benefit of investing in Ulips should be illustrated through returns of 6% and 10%. However, agents usually show fancy illustrations, depicting 16%, 24%, even 30%, returns. If confronted, they explain that it is to give the customer a 'realistic picture' of what they can earn if the returns are high. It's not just agents who indulge in this practice. Many banks also project impossibly high returns to lure customers. Lesson: If returns seem too good to be true, they probably are.

SURRENDER OLD ULIPS, BUY NEW ONES. Agents get higher commissions when investors buy new Ulips. So they urge customers to surrender an existing Ulip and invest in another one. Insurance products have a front-loaded charge structure. Customers pay the charges all over again and agents get their commissions. Lesson: Check if you really need to cancel the policy.

RETURNS ARE FANTASTIC; INSURANCE IS A BONUS. Ulips have given good returns over longer tenures, but so have equity mutual fund schemes. Insurance agents hype the product and position insurance as a freebie. The fact is that you will have to pay for insurance and the agents don't include these charges in the returns from a Ulip. If the charges are factored in, the returns will be far less alluring, especially in the initial years. Lesson: Don't get carried away by returns alone. Factor in the charges before investing in a Ulip.

THE FIRST TWO (MONTHLY) PREMIUMS ARE PAID. These are the magical words agents use to soften clients. The lure of a free option is hard to resist and people sign up after a token resistance. The tax-saving bait is also used to pull in clients. Lesson: Look the gift horse in the mouth; examine the product thoroughly. After all, you will have to pay the remaining premiums.

THIS PRODUCT IS BEING DISCONTINUED. Agents feed this farce to customers at regular intervals. In June, they were urging people to invest in pension plans before insurance became mandatory. Now, they are insisting that the clients buy a policy before 1 September as a five-year lock-in period will come into force after this date. What they fail to tell investors is that the charges will be much lower for the new products and surrendering a policy will be possible even after a year at 12.5-15% (these charges will go down subsequently). Lesson: Find out the details before putting in your money.

To boost sales, agents often fill up forms for customers and mention that the client is in perfect health-even he is not. In case of medical problem that does not find mention in the form, claiming reimbursement can prove to be a nightmare. Lesson: Fill in the form yourself. YOU JUST SIGN, WE'LL DO THE REST.

TAKE THIS FOR YOUR CHILD/SPOUSE. If agents find that the earning member cannot be insured, they suggest that a policy be taken for the spouse /child. They justify this by dangling the lower premium bait. Insurance is essential only for the breadwinner as it is the loss of his/her income that will affect the family's financial condition. Insuring a non-working spouse or child serves no useful purpose because they do not have an income to replace. Lesson: If you want to protect your family, don't succumb to this sales pitch.

THE SCHEME IS BACKED BY GOVERNMENT. LIC agents tend to pitch their products by brandishing the company's lineage and the government's support. However, the fact that it has survived 50 years does not imply that it will do so for the next 50. Also, being a government-owned company may not be an advantage; customers of the erstwhile UTI lost a lot of money when the company unravelled. Besides, insurance companies come up with fancy names for their schemes, which are often old wine in a new bottle. Lesson: Don't be dazzled by big or exotic names. It's the substance that matters.

Source : Media

Do you need cover?

With the right policy, life insurance is an excellent tool to ensure your family's financial security in case of your untimely demise. While there is a definite case for being insured (as our cover story emphasises), not everyone needs a cover. Hence, it's important that before buying a policy, you analyse why you need to be insured and who, if any, will be affected financially by your death. If a situation or a lifestage doesn't call for a cover, you should not be forced into buying one. Here are the specific circumstances that don't necessitate a life insurance policy:

If you have no dependants: A life insurance policy is essentially meant to replace the income of the policyholder when he is no more. This implies that if a person does not have financial dependants, he probably does not need a life cover.

• As a young professional without dependants, you have no reason to spend on life insurance. At least, not immediately. However, while your family may not be dependent on your income, ensure that liabilities, such as a big-ticket home loan, do not affect them.
• If you are retired or your children have left home and are financially independent, there is little need for an insurance policy.
• If you do not have heirs and have assets that can be liquidated in old age, you don't require a cover.

If you have saved for dependants: If you have salted away enough to support your dependants, say, a spouse, after your death, why pay the premium for a life insurance policy? This does not mean that you should discontinue an existing policy, just that you shouldn't be talked into buying a new one by an overzealous agent.

If you just want to save tax: While insurance policies offer tax benefits, it is not reason enough to subscribe to a scheme. People habitually buy life insurance as part of their income-tax planning, whereas there are more lucrative investment options for saving tax than an insurance policy that gives low returns.

If you want to cover spouse/kids: People tend to buy life insurance for their unemployed spouse or children just because such policies exist. Neither a homemaker nor a child has an income to protect and there is no benefit in buying such a policy for them.

Cost vs benefit evaluation: The cost of life insurance is based on actuaries, which is the calculation of risk based on age- and health-related parameters. The risk for an insurance company increases as a person ages. This is why the premium for a healthy 21-year-old nonsmoker is low, while a man who is in his 50s and smokes will pay a small fortune to buy the same coverage. So, if you are in the high-risk category, you should evaluate whether the high premium is worth it, depending, of course, on the value of your assets. The bottom line? Don't buy a life cover if you don't need it.

You don't need insurance if:

• You are single and nobody depends on your income.
• You don't have any liabilities, such as a home loan, that might affect your family's finances.
• Your dependants (read, children) have moved out and your savings can sustain your spouse.
• You have retired and don't have an income.
• You don't have heirs and have assets that can be gradually liquidated.

Source: Media

Removal of ELSS from 80 (c) Unfortunate

For many retail investors, ELSS funds are the first step in starting to invest in mutual funds. Unfortunately, the new Direct Tax Code has closed off this gateway to equities.

For savers and investors, who were living in dread of new Direct Tax Code (DTC) completely transforming their tax-planning approach, the new law must come as a relief. There are two main reasons for this. One, generally, the basic structure and the approach to taxation is very much the same. And two, specifically, long-term capital gains on equity and equity-backed mutual funds remain untaxed.

The retention of the zero-tax rate on long-term equity gains is probably the fundamental difference between the DTC as it was proposed originally and the shape it has finally taken. However, on a relative basis, long-term capital gains are now more attractive by a smaller margin than earlier. Since short-term gains are now taxed effectively at half the rate of the income tax slab the investor is in, they can be no more than 15 per cent and potentially as low as 5 per cent. The basic bias of the tax laws for shorter-term gains remains intact.

For mutual fund investors, there are two big changes. One, the tax saving funds — the so-called equity-linked savings schemes (ELLS) — funds will be history after the act comes into force. What used to be the section 80C deductions are now applicable to much smaller range of investments. This is unfortunate — ELSS funds were important in being tax-saving investment, which brings the benefits of equity returns. ELSS funds also have another benefit. For many retail investors, they tend to be gateway products in which the investor gets the first taste of equity investing and mutual funds. The tax-savings attract people to these funds and the three year lock-in generally ensures that investors get good returns. This experience converts many of these investors to investing in equity mutual funds. Under the DTC, 80C-type benefits are limited only to term insurance, Provident Fund (PF), Public Provident Fund (PPF) and the New Pension System (NPS). Of these, only th e NPS offers some equity exposur -- only up to 50 per cent and with a lock-in to retirement age.

The other change is the imposition of tax on dividends distributed by mutual funds. In theory, this has been imposed on unit-linked insurance plans (ULIPs) as well but that’s just a characteristically fake attempt to show that the government is treating mutual funds and ULIPs similarly. In reality, ULIPs don’t actually pay dividends so this measure hits only mutual fund investors. Worse, this tax will be a disproportionately harder hit on older investors, who rely on mutual funds to provide regular income. Amongst fund companies, I would expect it to be a disproportionately harder hit on someone like UTI Mutual Fund, which has historically been stronger among this class of investors. For investors who understand the mechanics of fund dividend, it would be a better strategy now to derive regular income from redemptions rather than dividends. As long as they avoid short-term capital gains tax by not redeeming within one year of investing, they will find it better to simply redeem a regular income. Fund companies already offer a facility for this called systematic withdrawal plan (SWP).

Incidentally, the new tax code has added art and paintings to the list of assets which qualify as investments. These will now be available for a reduction of capital gains tax by becoming eligible for indexation of acquisition cost. Given the impossibility of nailing down an unambiguous valuation for all but a handful of art, I fully expect this to become a handy loophole for creating capital losses and gains by the art-owning classes. One can also look forward to a recurrence of the plague of art funds that were floated 2006 and 2007.

Source : Media

यूनिवर्सल लाइफ पॉलिसी

जल्द ही भारत में यूनिवर्सल लाइफ पॉलिसी (यूएलपी) आने वाली है। बीमा नियामक एवं विकास प्राधिकरण (इरडा) ने भारती एक्सा लाइफ इंश्योरेंस और मैक्स न्यूयॉर्क लाइफ की यूनिवर्सल योजनाओं के लिए अनुमति दे दी है।

यूएलपी के तहत ग्राहकों को प्रीमियम भुगतान, सम एश्योर्ड और योजना की अवधि के मामले में अधिक लचीलापन मिलेगा। सबसे महत्वपूर्ण बात यह है कि प्रीमियम का भुगतान ग्राहक द्वारा नहीं किए जाने के बाद भी पॉलिसी रद्द नहीं होगी।

खास बात यह है कि पॉलिसी यह सुनिश्चित करेगा कि खास तारीख तक दिया गया प्रीमियम नियत अवधि तक पॉलिसी की जरूरतों के लिए पर्याप्त है। इससे पहले नियामक यूनिवर्सल लाइफ पॉलिसी के लिए अलग से दिशानिर्देश तैयार कर रहा था।

इरडा के एक वरिष्ठ अधिकारी ने कहा, 'योजनाओं के लिए अनुमति देने के साथ ही हमने बीमा कंपनियों को कुछ सुझाव दिया है। सबसे पहले हम परिस्थितियों की जांच करेंगे फिर, अगर जरूरत पड़ी तो, दिशानिर्देश लेकर आएंगे।'

भारती एक्सा के ग्राहक पॉलिसी के लचीलेपन का लाभ 500 रुपये का न्यूनतम प्रीमियम देकर उठा सकते हैं जबकि मैक्स न्यूयॉर्क लाइफ के ग्राहकों को 15,000 रुपये से दो लाख रुपये तक का प्रीमियम देना होगा। यूनिट संबध्द बीमा योजनाओं (यूलिप) की भांति यूएलपी के पॉलिसीधारकों को निवेश के विकल्प चुनने की स्वतंत्रता नहीं रहेगी।

निवेश संबंधी निर्णय बीमा कंपनी लेगी। इसके अतिरिक्त जैसा कि पारंपरिक बीमा पॉलिसियों में होता है यूएलपी के ग्राहकों को यूलिप जैसी पारदर्शिता नहीं मिल पाएगी। उदाहरण के लिए, ग्राहक अपने परिसंपत्ति मूल्य नहीं जान पाएंगे क्योंकि यह इक्विटी निवेश नहीं है और इसके शुध्द परिसंपत्ति मूल्य की घोषणा नहीं की जाएगी।

बीमा कंपनियों के अधिकारियों ने कहा कि यूएलपी में पॉलिसी समाप्त होने का प्रावधान नहीं होने के बावजूद पॉलिसीधारक की मृत्यु के बाद उधार की रकम काट कर परिपक्वता राशि का भुगतान किया जाएगा। हालांकि, कंपनियां यह योजना अभी लॉन्च करने वाली हैं और इसकी विस्तृत जानकारी उपलब्ध नहीं है लेकिन उनका कहना है कि प्रीमियम का भुगतान ग्राहक द्वारा नहीं किए जाने के बाद भी यूएलपी के तहत पॉलिसी समाप्त नहीं होगी।

भारती एक्सा लाइफ इंश्योरेंस के नियुक्त एक्चुअरी जी एल एन शर्मा ने कहा, 'भारतीय परिप्रेक्ष्य में यूलिप में सीमित लचीलापन है। लेकिन यूएलपी में कोई ऐसी शर्त नहीं है इसलिए यूएलपी ज्यादा लचीला है।' छह सदस्यीय एक समिति यूएलपी के दिशानिर्देशों पर काम कर रही है।

बीमित व्यक्ति यूएलपी के प्रीमियम का भुगतान एकमुश्त या फिर नियमित अंतराल पर कर सकता है। हालांकि, बीमित व्यक्ति प्रीमियम की राशि में कोई बदलाव नहीं कर सकता। दूसरे शब्दों में कहें तो निर्धारित सीमा से कम या ज्यादा प्रीमियम का भुगतान वह नहीं कर सकता।

Are child insurance plans really good?

You have welcomed your new bundle of joy in this world with a lot of enthusiasm. You intend to give it the best of everything. In order to help you achieve this objective, you start investing in various instruments on your child's behalf.

To capitalise on the parents' intentions about giving the best to 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 all about.

What are children's plans?

Children's plans are insurance-cum-investment plans offered by insurance companies are similar to ULIPs (unit-linked insurance plans). However, the difference between a ULIP and a children's plan is that the parent starts investing in the children's plan right from the time the child is born and can withdraw the savings once the child reaches adulthood.

Of course, some plans do allow intermediate withdrawals, at certain intervals.

How much insurance do I get?

These plans do come with inbuilt insurance component in order ensure the sum payable to the child is insured against the premature death of the earning parent. The least life cover you have to select in these plans is: Sum Assured = Term * Annual premium / 2.

But in most instances this sum assured is woefully inadequate. Experts recommend that it is necessary to buy a life cover of minimum of 7-10 times the annual income of the earning parents.

This is to ensure that in case if the earning parent meets untimely death; his/her spouse and the child are adequately provided for. So if you are relying only on the life cover provided by these plans, then remember you will always remain under insured.

What about the investment?

When you pay the premium for this plan, part of the premium amount goes towards paying for the life cover. Remaining part of the premium is invested in various instruments either debt or equities.

However, this portion is quite small, as the insurance companies tend to deduct premium allocation charges upfront. These charges are meant to pay the distributor commissions. As a result, very small part of the premium gets invested during the initial years.

Also, if you opt for any features provided by the insurer like waiver of premium, switching option, et cetera, the charges for the same are deducted from the amount invested. So the returns from these plans tend to be very low in the initial years and if you stop the plan without completing the entire tenure, you might end up suffering loss.

Disadvantage of the children's plans

These plans do rate poorly, both, in terms of life cover and investment option. You can buy plain term insurance at lower premium that provides you with very high life cover.

For investments, equity mutual funds are the best. You can invest the highest possible amount in these funds at very low fees. Also, if the fund tends to perform poorly, you can stop your investment and switch over to another fund, without paying any penalty. This is not possible in case of children's plans as there are heavy surrender charges applicable.

Are they right for me?

One needs to evaluate if they are an ideal option. More often no they are not. While they do provide you with tax benefits, you can get the same tax benefits with a combination of term insurance and mutual funds.

Also, the term-insurance-plus-mutual-fund combination beats the children's plans on the fronts of costs and returns. So it is better to give these plans a miss and instead go for term plan and mutual fund.

चाइल्ड इंश्योरेंस : बारीकियां जानें

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'बचपन में हमेशा एक पल ऐसा आता है, जब दरवाजा खुलता है और भविष्य भीतर दाखिल होता है'

आध्यात्मिक गुरु दीपक चोपड़ा के इन विचारों से हर माता-पिता सहमत होंगे। ऐसे में अभिभावकों के लिए बच्चे की वित्तीय जरूरतों के लिए एडवांस में योजना बनाना जरूरी हो जाता है। ज्यादातर जीवन बीमा कंपनियां अपने उत्पादों के गुलदस्ते में चिल्ड्रन प्लान भी रखती हैं। इस सप्ताह हम आपको बाजार में उपलब्ध चिल्ड्रन प्लान की जानकारी दे रहे हैं। हमने ऐसी रणनीति भी तैयार की है, जो बच्चे के भविष्य से समझौता किए बगैर ज्यादा रिटर्न मुहैया कराती है।

इस दौड़ में आगे रहने के लिए आपको बच्चे की भावी शिक्षा पर पर्याप्त खर्च करना होता है, जो हमारे वक्त की तुलना में काफी ज्यादा महंगी होगी। इसके अलावा जिन मौकों पर जेब से मोटी रकम खर्च हो सकती है, उसमें बच्चों के बड़े होने पर उनकी शादी-ब्याह और उद्यमिता से जुड़े उपक्रम शामिल हैं।

इसका ख्याल रखने के लिए बच्चे की उम्र कम होने के वक्त से ही निवेश की शुरुआत जरूरी हो जाती है। चाइल्ड इंश्योरेंस प्लान के मामले में अभिभावक पॉलिसी लेने वाले होते हैं और उसका बेनेफिट बच्चे को मिलता है। अगर टर्म के दौरान माता-पिता की मृत्यु हो जाती है तो बीमा राशि बच्चे को मिल जाती है। यह अवधि 10 से 25 साल के बीच हो सकती है। अगर ऐसा नहीं होता तो ये प्लान बीमित राशि समेत एकमुश्त रकम देते हैं और नियमित अंतराल पर बोनस भी मिल सकता है।

प्रीमियम और रिटर्न का आकलन करते वक्त हमने कुछ अनुमान लगाए हैं। पहला, बीमा पॉलिसी खरीदने वाला व्यक्ति 30 साल का है, जबकि उसका बच्चा एक साल का। बीमित राशि 10 लाख रुपए है। हमने बोनस की दर 5 फीसदी मानी है, जो विभिन्न स्कीमों में दी जाने वाली 3-4 फीसदी की तुलना में ज्यादा है। यह निवेश बाजार में उठापटक के दौरान बोनस की दर में अचानक आने वाले बदलाव का ख्याल रखेगा।

हमने वैकल्पिक बीमा-निवेश रणनीति भी तैयार की। इसके लिए 30 साल के पिता 10 लाख रुपए की बीमित राशि के लिए 25 साल का साधारण टर्म बीमा लेगा, जिसके लिए वह सालाना प्रीमियम के तौर पर 3,821 रुपए की अदायगी करेगा। इससे किसी भी आकस्मिक घटना से बच्चे का भविष्य बचाया जा सकेगा। इसके बाद बच्चे के नाम पर ही पिता एक प्रॉविडेंट फंड खोलेगा और 20 साल के लिए 68,000 रुपए निवेश करना शुरू करेगा। जब बच्चा 21 साल का होगा, उसके पास पीपीएफ खाते से 34.3 लाख रुपए होंगे। टर्म इंश्योरेंस चार और साल तक जारी रहेगा, जब तक वह कमाने नहीं लगता।

बच्चे की बीमा का बुनियादी लक्ष्य पूरा करने के अलावा वैकल्पिक रणनीति बीमा के खर्च को शामिल करने के बाद 7.5 फीसदी रिटर्न कमाने से जुड़ी है। हर माता-पिता चाहते हैं कि बच्चे की प्रगति के लिए जरूरी तमाम संसाधन मुहैया कराएं जाएं। हालांकि, सही निवेश-बीमा रणनीति तैयार करना काफी जरूरी हो जाता है, केवल तभी कम कीमत पर आप बच्चों को मोटी आर्थिक मदद मुहैया करा सकते हैं। हममें से आलसी लोग बीमा कंपनियों की ओर से मुहैया कराने जाने वाली रेडीमेड सॉल्यूशन अपना सकते हैं, वहीं चतुर अभिभावक बाजार में उपलब्ध दूसरे विकल्पों का फायदा उठाते हैं।

बेहतर रिटर्न की उम्मीद : यूलिप

घरेलू शेयर बाजार में लौटी मजबूती से उत्साहित होकर ग्राहकों ने यूलिप (यूनिट लिंक्ड इंश्योरेंस प्लांस) का साथ बरकरार रखा है। निवेशकों को उम्मीद है कि जैसे-जैसे भारतीय अर्थव्यवस्था में सुधार आएगा, उन्हें शेयर बाजार से बेहतर रिटर्न मिलेगा। यूलिप में निवेशकों का भरोसा बढ़ने से पिछले साल की इसी अवधि की तुलना में चालू वित्त वर्ष के पहले तीन महीनों में यूलिप के रीन्यूअल से हासिल प्रीमियम में 44 फीसदी की बढ़त दर्ज की गई है।

भारत में जीवन बीमा कंपनियों का प्रतिनिधित्व करने वाली औद्योगिक संस्था लाइफ इंश्योरेंस काउंसिल के मुताबिक इस वित्त वर्ष की अप्रैल-जून तिमाही के दौरान इंडस्ट्री को यूलिप के रीन्युअल से 12,698 करोड़ रुपए का प्रीमियम हासिल हुआ है। पिछले साल की इसी अवधि के दौरान यूलिप के रीन्यूअल से हासिल प्रीमियम की रकम सिर्फ 8,793 करोड़ रुपए थी।

यूलिप एक दीर्घकालीन निवेश का उत्पाद है, जो ग्राहक को बीमा कवर भी देता है। यूलिप के प्रीमियम से हासिल रकम का निवेश शेयर बाजार में किया जाता है। बाजार में कंपनियों के शेयरों की कीमतों में उतार-चढ़ाव के साथ निवेश की गई रकम भी घटती-बढ़ती रहती है। निजी बीमा कंपनी बजाज आलियांज में पेंशन बिजनेस के हेड और नॉर्थ जोन के मैनेजर संजय कुमार झा का कहना है, 'पिछले वित्त वर्ष के दौरान बाजार के उतार-चढ़ाव का निवेशकों पर असर नहीं पड़ा है। यूलिप से निवेशकों की कई तरह की जरूरतें पूरी होती हैं। यूलिप प्लान लचीले और पारदर्शी होते हैं। दीर्घकालीन निवेश को ध्यान में रखकर ग्राहक अब भी यूलिप में निवेश कर रहे हैं।'




यूलिप के रीन्यूअल प्रीमियम में दर्ज की गई तेजी काफी अहम है क्योंकि फिलहाल बीमा इंडस्ट्री में नए प्रीमियम कलेक्शन का आंकड़ा काफी कम रहा है। हालांकि, इस अवधि के दौरान नए यूलिप उत्पादों की बिक्री में लगभग 10 फीसदी की कमी दर्ज की गई है। इससे यह पता चलता है कि नए ग्राहकों के मन में अब भी बाजार के उतार-चढ़ाव को लेकर आशंका है और वे यूलिप में निवेश करने से डर रहे हैं। हालांकि, यूलिप के पुराने ग्राहकों का भरोसा बरकरार है।

लाइफ इंश्योरेंस काउंसिल के सेक्रेटरी जनरल एस बी माथुर का कहना है, 'दीर्घकालीन निवेश के उद्देश्य से यूलिप काफी बेहतर है, लेकिन इससे छोटी अवधि में मुनाफा नहीं कमाया जा सकता है। यह सराहनीय है कि यूलिप का रीन्यूअल प्रीमियम ऐसे समय में बढ़ा है जब बीमा सेक्टर में नए प्रीमियम आय में गिरावट दर्ज की गई है।' निजी बीमा कंपनियों के लिए यूलिप सबसे बड़ा उत्पाद हैं। नई यूलिप योजनाओं की बिक्री से निजी कंपनियों को 70-80 फीसदी प्रीमियम हासिल होता है। देश की सबसे बड़ी बीमा कंपनी एलआईसी के कुल नए प्रीमियम में आधा से ज्यादा हिस्सा यूलिप प्लान का ही है।

बीमा पॉलिसी चुनें जरूरतों और जोखिम को देखकर

लंबे अरसे से लोग वित्तीय नुकसान का जोखिम कम करने के लिए ही बीमा पॉलिसी खरीदा करते थे। जीवन बीमा में मृत्यु और गैर-जीवन बीमा में स्वास्थ्य और प्रॉपर्टी से जुड़े जोखिमों के लिए सुरक्षा मिलती है। समय के साथ ही बीमा का कॉनसेप्ट भी बदला है। अब बीमा को केवल जोखिम से सुरक्षा के लिए ही नहीं, बल्कि लंबी अवधि की वित्तीय जरूरतें पूरी करने के लिए निवेश के विकल्प के तौर पर भी देखा जाता है। बीमा सेगमेंट में इस समय बहुत से ऐसे प्रोडक्ट मौजूद हैं जो बचत से लेकर रिटायरमेंट के बाद तक की वित्तीय जरूरतें पूरी करने तक के लिए उपयोगी हैं।
टर्म इंश्योरेंस

यह व्यक्ति के जीवन के जोखिम को लेकर निश्चित अवधि के लिए बीमा सुरक्षा देती है। इसमें पॉलिसी की अवधि के दौरान बीमाधारक की मृत्यु होने पर उसके आश्रितों को बीमा की रकम का भुगतान किया जाता है। अगर पॉलिसी धारक पूरी अवधि तक जीवित रहता तो उसे कोई भुगतान नहीं मिलता। टर्म पॉलिसी का उद्देश्य केवल जोखिम से सुरक्षा देना होता है और इसी वजह से इसका प्रीमियम भी अन्य बीमा योजनाओं की तुलना में कम होता है। टर्म इंश्यारेंस के जरिए आप कम कीमत पर अधिक सुरक्षा ले सकते हैं।

एंडॉमेंट पॉलिसी

यह टर्म इंश्योरेंस की तरह की ही बीमा योजना है, लेकिन इसमें पॉलिसीधारक को अवधि पूरी होने पर सर्वाइवल बेनेफिट का भुगतान किया जाता है। यह निश्चित अवधि के लिए होती है और इसके समाप्त होने पर व्यक्ति को सम एश्योर्ड के साथ पॉलिसी पर जमा बोनस भी मिलता है। अगर पॉलिसी की मैच्योरिटी से पहले व्यक्ति की मृत्यु हो जाती है तो उसके नामांकित को बीमा की रकम अदा की जाती है।

एंडॉमेंट पॉलिसी के प्रीमियम का निवेश बीमा कंपनियां सरकारी सिक्योरिटीज जैसे कम जोखिम वाले उत्पादों में करती हैं।


होल लाइफ पॉलिसी

जैसा कि नाम से ही जाहिर होता है यह पॉलिसी बीमाधारक को पूरे जीवन काल के लिए सुरक्षा देती है और उसकी मृत्यु पर उसके आश्रितों को लाभ का भुगतान किया जाता है। पॉलिसीधारक को इसमें जीवित रहने के दौरान कोई लाभ नहीं मिलता।


मनी बैक पॉलिसी

यह बीमा योजना उन लोगों के लिए उपयुक्त है जो जोखिम से सुरक्षा के साथ ही निश्चित अंतराल पर भुगतान भी चाहते हैं। यह पॉलिसी निश्चित अवधि के लिए जारी की जाती है और बीमाधारक को सम एश्योर्ड का भुगतान पॉलिसी की अवधि के दौरान किया जाता है। अगर व्यक्ति की मृत्यु पॉलिसी की अवधि के दौरान होती है तो उसके आश्रितों को पूरी बीमा राशि और जमा बोनस का भुगतान किया जाता है।


यूनिट लिंक्ड इंश्योरेंस प्लान (यूलिप)

इसमें बीमा सुरक्षा के साथ म्यूचुअल फंड जैसे निवेश का लाभ भी मिलता है। इसमें आप अपनी जोखिम उठाने की क्षमता के अनुसार निवेश का उपयुक्त विकल्प चुन सकते हैं। इसमें निवेश के बहुत से विकल्प मौजूद होते हैं।

इसमें प्रीमियम का एक हिस्सा मॉरटैलिटी चार्ज और अन्य शुल्कों में जाता है और बाकी का निवेशक द्वारा चुने गए फंड में निवेश किया जाता है। यूलिप के साथ एक नुकसान इसकी लागत अधिक होना है। बीमा नियामक इरडा ने हाल ही में यूलिप में शुल्कों की अधिकतम सीमा तय की है। इसके बाद इस प्रोडक्ट की लोकप्रियता काफी बढ़ सकती है।

Reasons For Getting Term Life Insurance

There are various reasons for acquiring term life insurance. Here are the most common reasons why people are interested in getting this type of temporary insurance.

Protection Of Dependents

The protection of the children and spouse of the insured is one of the reasons why people get this type of insurance. In the event of an untimely death, within the chosen time frame of coverage, the children and spouse will receive an amount agreed upon, which is stipulated in the terms of the coverage. In other words, this type of insurance assures the family of the policy holder financial security and stability even after he/she dies unexpectedly.

College Education Of Children

Aside from the financial aid received by the policy holder's family, in the event of his or her untimely demise, his/her children are assured the cost of their college education will be completely covered. In case of the policy holder's untimely death, his/her children will still be able to afford a college education; assuring them a promising future.

Funeral Costs

In case of an untimely death, the holder's funeral cost will also be covered. The term life insurance, assures the policy holder's family will not incur additional costs, when it comes to his or her funeral.

Free Of Debt

In the case of an untimely death, the insured is assured his or her family will not inherit his or her debts. His or her debts will be included in the coverage.

Continuous Mortgage Payments

In case of the plan holder's untimely death, the mortgage payments left by the plan holder will be covered by the temporary insurance policy, assuring a roof over the plan holder's family's heads.

These are the reasons why more and more people choose to purchase term life insurance, to ensure their family's security and stability.

Why You need to consider to buy term life insurance? Because it is for you and your family. Also term life insurance is easier to get it and much cheaper than other types of life insurance.

Agents can't leave policies orphaned

In A bid to ensure that fewer policies get lapsed, the Insurance Regulatory and Development Authority of India (Irda) has made it tougher for agents to shift loyalties . The new agency guidelines ensure that all agents—individuals , corporate as well as banks—continue to sell policies of the same insurance company for at least three years.

life insurance companies received setback by the onerous responsibilities placed on them for granting a “no objection certificate” which enables their agent to move to another company. In the life insurance industry those policies where the agent quits the insurer are termed as ‘orphan’ policies as there is no intermediary to service them. Historically, lapse ratio has been higher among orphan policies when compared with policies that are serviced by an agent. To ensure that an agent shifting loyalties does not leave behind orphan policies, the insurance regulator has put in a number of preconditions that the agent has to fulfil before he can obtain a no-objection certificate from his principal. Firstly, the agent has to submit details of all his policyholders including their contact details. The insurance company in turn has to ensure an alternative service arrangement for all these policyholders. Companies have also been asked to withhold renewal commissions of those agents who quit before completing five years of services.

Insurance companies say many of the guidelines are extremely demanding and insurance companies would simply refuse to grant no-objection certificates to agents who want to join another company rather than follow the difficult procedure. “The guidelines are clearly aimed at reducing lapse of life insurance policies,” said Rahul Aggarwal, CEO, Optima Insurance Brokers . He added that it was very likely that the regulator would come out with similar guidelines asking insurers to make arrangements for agents who drop out of the profession altogether.

To take care of the policies orphaned by agents, Irda said, life insurers should ensure alternate arrangement, and these measures should go beyond a call centre facility, which is also an essential requirement . Insurance companies have been asked to intimate each policyholder that their agent has quit and there are alternate arrangements being made to service them.

“At present agents have to wait for 60 days before joining another company. It would appear that the new guidelines override the existing arrangement,” said the CEO of a life insurance company. He added that individual agents might try to work around the new regulations by appearing for the qualifying examination once again to get a duplicate licence. At the same time, many corporate agents function almost like brokers by creating new entities for new partnerships. “It is the banks which will find it difficult to shift loyalties,” he said.

Insurance agents may have to disclose commission they earn on various policies

Insurance agents Will soon have to disclose the commission they earn on various policies to clients before selling a product, if a high-level panel of financial regulators has its way.

The panel, set up to suggest ways to increase transparency in the way investment advisors function, hopes this will ensure brokers do not woo people away from customer-friendly products to those yielding more commission, one of its members said.

The panel, comprising officials from RBI, finance ministry as well as the regulators of insurance, provident funds and capital markets, will submit its proposals in September.

Insurers offer up to 40% of the first year's premium of a policyholder as commission to the agent, the panel member said, requesting anonymity.

Agents get their commissions mostly without the knowledge of policyholders.

According to Sashwat Sharma, director-insurance of consultancy firm KPMG, most insurers offer 20-60% of the first year's premium as commission on life endowment and unit-linked policies.

Many financial advisors are luring potential mutual fund customers into insurance policies to pocket high commissions, after the capital market regulator lifted the entry load on mutual funds, government officials said.

Recently, SEBI replaced the commission system in the mutual fund industry with a fee negotiated between the broker and the customer.

This may lead to mutual funds and the New Pension System (NPS) losing investments to insurance products in the short term as, except in metros, a lot of people depend on intermediaries for investment advice, Mr Sharma said. This will change in about 10 years, he added.

NPS, which was opened to all citizens on May 1, has fixed a commission of Rs 40 for initial costs and Rs 20 for subsequent transactions and, therefore, may be discouraged by brokers.

Brokers can be checked to an extent by making it mandatory to reveal their commission for each product to customers upfront, a finance ministry official said.

But experts feel that it may be difficult to monitor if brokers are playing by the rule, particularly in small towns. A better solution, they say, will be to remove or fix commission on insurance policies. "It is difficult to remove the commission on insurance products completely as it is provided in the insurance law itself," said the finance ministry official.

He, however, said the merits of mutual funds will attract customers. "If the equity market does well, investments will invariably come to mutual funds. If the market doesn't, then there will be less interest in mutual funds anyway. If mutual funds do well, there will be pressure on other segments of the market to reduce commission."

Requirement of PAN for Insurance Products

Circular No:. 021/IRDA/LIFE/PAN/Jul-2009

To

All Insurers,

Re:Requirement of PAN for Insurance Products

It has been decided to mandate the requirement of PAN on all high value insurance products.

All Insurers are therefore advised to collect PAN from all persons purchasing insurance products where the contracted annual premium payable on the insurance policies, per policy basis, exceeds Rs. 1.00 lakh.

This circular comes into force with immediate effect. All Insurers are advised to comply with the directions issued in this circular under confirmation to the Authority not later than 01.08.2009.



(J. Harinarayan)
Chairman

LIC of India : The Endowment Assurance Policy-Limited Payment (Table No.: 48)

Features :

Just as in the case of limited payment whole life polices, here, too, the payment of premium can be limited either to a single payment or to a term shorter than the policy. The endowment is, however, payable only at the end of the policy term, or on death of the policy holder if it takes place earlier.

If payment of the premiums ceases after at least three years' premiums have been paid, a free paid-up Policy for an amount bearing the same proportion to the sum assured as the number of premiums actually paid bears to the number stipulated for in the policy, will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less than Rs.250.

Such reduced paid-up Policy will not be entitled to participate in the profits declared thereafter, but such Bonus as has already been declared on the Policy will remain attached hereto.

Benefits :

This is the most popular form of life assurance since it not only makes provision for the family of the Life Assured in the event of his early death, but also assures a lump sum at any desired age. The amount assured, if not paid by reason of his earlier death, becomes payable at the end of the endowment term when it may be invested to provide an annuity during the remainder of his life or in any other way he may think most suitable at the time.

Plan Parameters :

	Minimum	Maximum
Entry Age	12 nearer birthday	65
Sum Assured (Rs.)	50000(except for single premium)	NO LIMIT

Mode Of Payment	Maximum Premium Paying Period	Policy Loan Available
Yearly, Half-yearly,Quarterly, Monthly, Salary Saving Scheme	75 Years	No loan under policies issued on minors until vesting

Premium Amount Per 1000.00

#Ins. Period	20	25	25		Ins. Preiod	20	25	25
*Pay. Period	15	15	20		Pay. Period	15	15	20
Age	Amount	Amount	Amount		Age	Amount	Amount	Amount
15	59.40	51.75	43.90		41	64.40	58.35	50.40
16	59.40	51.75	43.95		42	65.00	59.10	51.15
17	59.45	51.80	43.95		43	65.70	59.95	52
18	59.45	51.80	44.00		44	66.45	60.85	52.9
19	59.45	51.85	44.05		45	67.25	61.85	53.9
20	59.50	51.90	44.10		46	68.10	62.95	54.95
21	59.50	51.95	44.15		47	69.10	64.10	56.15
22	59.55	52.05	44.20		48	70.15	65.35	57.4
23	59.60	52.10	44.30		49	71.30	66.75	58.8
24	59.70	52.20	44.40		50	72.55	68.20	60.25
25	59.75	52.30	44.50		51	73.90	-	-
26	59.85	52.45	44.65		52	75.35	-	-
27	59.95	52.60	44.80		53	76.90	-	-
28	60.10	52.80	44.95		54	78.70	-	-
29	60.25	53.00	45.20		55	80.60	-	-
30	60.40	53.25	45.40		-	-	-	-
31	60.60	53.50	45.65		-	-	-	-
32	60.85	53.80	45.95		-	-	-	-
33	61.10	54.15	46.30		-	-	-	-
34	61.35	54.50	46.65		-	-	-	-
35	61.70	54.90	47.05		-	-	-	-
36	62.05	55.35	47.45		-	-	-	-
37	62.40	55.85	47.95		-	-	-	-
38	62.85	56.40	48.50		-	-	-	-
39	63.30	57.00	49.05		-	-	-	-
40	63.80	57.65	49.70		-	-	-	-

# Ins. Period : Insurance Period
* Pay. Premium : Payment Premium

LIC of India : Blma Bachat ( Plan 175 )

It has been decided to introduce LIC's Bima Bachat (plan no.175) with effect from 14th November, 2005.

1. INTRODUCTlON:
This is a single premium money back type plan where Single Premium paid under the policy shall be paid back to the policyholder along with Loyalty Additions, if any, on maturity. In addition, the survival benefit installments are payable on survival of the policyholder till the specified durations. The plan also provides for the payment of Sum Assured in case of death during the term of the policy irrespective of whether or not any survival benefits have been paid earlier. No rider benefits shall be available.

2. BENEFITS:
Death Benefit: On death of the Life Assured during the term of the policy, an amount equal to the Sum Assured ¬shall be payable.

Survival Benefit:
In case the life Assured is surviving to the end of the specified durations the following benefit shall be payable:
Policy term 9 years: 15% of the Sum Assured at the end of 3rd & 6th policy year
Policy term 12 years: 15% of the Sum Assured at the end of 3rd, 6th & 9th policy year.
Policy term 15 years: 15% of the Sum Assured at the end of 3rd, 6th, 9th & 12th policy year

Maturity Benefit:
Single Premium paid excluding extra premium along with Loyalty Additions, If any, shall be payable in case of Life Assured surviving to the end of the term.

3. LOYALTY ADDITIONS:
This is a participating plan and the policy shall participate In the proms of the Corporation’s with-profits assurance business. The policy shall, however not be eligible for reversionary bonuses and shall participate to a share of profits in the form of Loyally Addition (one time) only payable on maturity. On the Life Assured surviving, the stipulated date of maturity, the policy may be eligible for payment of Loyalty Addition, if any, depending upon the experience of the Corporation at such rate and on such terms as may be declared by the Corporation.

4. LOAN:
Loan facility is available under this plan. The rate of Interest to be charged for loan amount would be determined from time to time by the Corporation. Presently the rate of interest is 9% p.a. payable half-yearly.


5. REBATES / INCENTIVE FOR HIGH SUM ASSURED:
High Sum Assured Rebates (As Percentage of Basic Tabular Premium):
Less than Rs.50,000 : NIL
Rs.50,000 to less than Rs.1,00,000 : 5%
Rs.1,00,000 to less than Rs.2,00,000 : 7%
Rs.2,00,000 and above : 8%

6. ELIGIBILITY CONDITIONS AND RESTRICTIONS:
Minimum age at entry: 15 years (completed)
Maximum age at entry : 66 years nearer birthday
Maximum age at maturity: 75 years nearer birthday
Terms : 9, 12 or 15 years.
Minimum Sum Assured: Rs.20.000/-
Maximum Sum assured: No limit
Sum Assured will be in multiples of Rs.5,000I- only.

7. PREMIUM RATES:

http://www.licindia.com/premium_calculator.htm

8. SURRENDER VALUES (G8V,SSV):
The policy can be surrendered for cash after completion of at least one policy year. The Guaranteed Surrender Value is equal to 90 per cent of the Single Premium paid excluding extra premium paid and the survival benefits paid earlier.

For calculation of Special Surrender Value, the amount of Single Premium paid excluding any extra/optional premium shall be taken as paid-up value and Surrender Value Factors for quarterly elapsed durations are given In Annexure 3.

9. NORMAL REQUIREMENTS FOR CLAIM:
The normal documents which the claimant shall submit while lodging the claim in case of death of the policyholder shall be the claim forms, as prescribed by the Corporation, accompanied with the original policy document, proof of title, proof of death, proof of accident/disability, medical treatment prior to death, employer's certificate, whichever is applicable, to the satisfaction of the Corporation. If the age is not admitted under the policy, the proof of age of the Life Assured shall also be submitted.
Where the policy results into a maturity claim or in case of surrender of the policy, the Life Assured shall submit the discharge form along with the original policy document besides proof of age, If the age Is not admitted earlier.

10. COOLING-OFF PERIOD:
If a policy holder is not satisfied with the "Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days from the date of receipt of the policy.

11. BACK DATING INTEREST:
The policies can be dated back within the financial year, as usual. Back- dating interest will be charged al the rate of 9% p.a. for dating back in excess of one month. This rate is subject to revision. The Interest shall be charged even where the policy is beck dated to a lean month. .

12. POLICY STAMPING:
Policy stamping charges will be 20 paise per thousand Sum Assured.

13. REINSURANCE:
There will be no reinsurance under this plan.

14. ASSIGNMENT / NOMINATIONS:
Notice of assignment or change of nomination should be submitted for registration to the office of the Corporation, where this policy is serviced. In registering an assignment or nomination the Corporation does not accept any responsibility or express any opinion as to its validity or legal effect.

15. PROPOSAL FORM: Proposal Form No. 300 or 340 will be used for the plan.


Single Premium Amount / 1000.00,

AGE	9 Yr	AGE	9 Yr	AGE	9 Yr	AGE	9 Yr
15	716.40	31	718.80	47	738.65	63	802.70
16	716.60	32	719.25	48	741.20	64	809.40
17	716.80	33	719.75	49	743.85	65	816.25
18	716.95	34	720.40	50	746.60	66	823.15
19	717.05	35	721.05	51	749.45
20	717.20	36	721.80	52	752.40
21	717.30	37	722.65	53	755.60
22	717.35	38	723.60	54	759.00
23	717.40	39	724.65	55	762.65
24	717.50	40	725.80	56	766.65
25	717.55	41	727.15	57	770.85
26	717.65	42	728.60	58	775.10
27	717.75	43	730.25	59	779.75
28	717.95	44	732.10	60	784.80
29	718.15	45	734.10	61	790.50
30	718.45	46	736.30	62	796.45