As the IRDA & SEBI tussle over ULIPs gets into a prolonged battle- it seems to have started claiming its first victims.
In a bid to make Life Insurance sales come closer to the transparency levels in Mutual Funds, IRDA has mandated all Life Insurers to clearly spell out the commission structure on their policies.

This means that any customer would henceforth know how much of his/her first year premium is being pocketed by the sales guy. This could give a lot of bargaining power in the hands of the consumers. As it is, the market is known to have numerous instances of agents passing back a part of their commission to customers to close sales. With this - one can only expect such dubious sales processes to increase.

Not surprisingly, most insurers are unhappy with the move & they feel that such disclosures on margin structures are not really required.

Secure Dreams plan from Max NewYork Life is designed to
- Protect the money invested through safe investments, but also looking at some growth in the portfolio
- No medical tests involved- this has been pitched as convinience
- Let the policy continue even if the insured passes away- done through premium funding.
- flexibility to choose the period of coverage
Secure Dream Eligibility

Death Benefit
- Incase the life insured dies MNYL will immediately pay the sum assured equal to 10 times of the annual premium.

Today's Economic Times had a nice article by Sarabjeet Singh (a partner at BMR Advisors) about how AML guidelines can be and need to be implemented in the Life

The Travel Insurance is an insurance against unforseen events which may occur during your journey to a foreign land. The Insurance Companies will cover you against medical contigencies, accidents, loss of passport, delay or loss of baggage, missed flights, trip delay or cancellation & other financial emergencies, it has now come up with insurannce covering hijacking.

Coverage of Medical Insurance abroad
When taking a Travel Policy, one should know that there is a special policy called International Medical Insurance which covers the insured against emergency & non-emergency medical coverage.

Types of trips:
Single Trip: One should opt for Single Trip Travel insurance when the traveler tarvels once in a year.

22nd Sep 2008 - Internet channels come with an inherent advantage- the data capture and analysis is something that can be done effectively and continuously.


We at BimaDeals.com, recently asked ourselves this question "What is it that our customers want?". Well, they all were looking for either information on insurance or were keen on buying some insurance products.


But we wanted to dig deeper and find out,
- What product types are being sought?
- What is the end-use of the Insurance product i.e. who or what life stage does the product address?

The Health insurance is not only restricted to general insurance players in the industry; the Life Insurers have also started launching plans related to Health Insurance. The latter have come up with stand alone health insurance policies & also with combined plans of Health Insurance & investments.

The basic question which arises now is that how do these two set of Health schemes differ.

Coverage amount:
The Non-Life Insurance Health schemes will compensate you for the actual amount incurred during hospitalization while the Life insurance Health schemes give you the lump sum amount specified in the policy irrespective of your actual spend

Term:

Just read an article in the latest issue of Outlook titled "The Vanishing Middle"- which went on to talk about how intermediaries are being threatened with shrinking margins and new technology.
It covered three basic sectors:
- DSAs in banking sector
- TPAs in General Insurance
- Travel Agents

With around 5000 people, TPAs are probably the smallest of the lot (the article puts the DSA number at 35,000 and travel agents at 150,000). But interestingly all these 5000 are employed by 23 odd TPAs who currently have the IRDA license.

The various arguments in favor of a possible demise of this category of players were:

Life Insurance Policies are of various types and a good understanding of their features is a must before you can figure out which product makes most sense for your specific need.

One way of classifying Life Insurance policies is based on how the premium is invested and (sum assured) returned back:

- Term Insurance
Term Insurance is a simple insurance plan that covers the life for a specific "term". Death benefit is paid only if the person dies within this covered period. Since its a no-frills product, it is also the cheapest amongst the Life Insurance Products.

- Unit linked Policy

No Claim Bonus refers to the discount given by an Insurance Company, in the renewal premium amount, because of no-claims by the car-owner in the previous year. Simply put, if you do not seek any insurance claims on your car, the insurance provider assumes you to be a safer profile and is willing to give you a discount in the following year.

The No-claim-bonus keeps on increasing with each consecutive year of no-claims. It is this aspect of NCB that has been effectively leveraged by Insurance Companies in discouraging small & frequent claims. Many consumers do not put in a claim for expenses related to minor damage(s), because the discount one enjoys is probably much more than the claim amount.

Please note that:

As per India Insurance Research- Only 11% of the working population in India has any form of social security for old age. Although India's population is young, in the last three decades life expectancy upon reaching age 60 has risen by 15% and fertility rates have halved. The ratio of elderly to working-age people is expected to double in the next 30 years.

This is an interesting piece of statistics which has huge implications for the Insurance industry - with special relevance to Retirement plans.

In a country like India, where there is no social-security, the individuals have to plan their retirement sensibly. This means:

When BimaDeals was launched in mid 2007, the online sourcing market for Insurance was very nascent. Internet spends were restricted to campaigns on prominent portals and search engines . This was probably the only online model being leveraged by the Insurance Providers. And in those days, the market for online comparison was almost completely unheard of.

There were a few players who had just launched online comparison and shopping- riding on their broking background.But nothing that would assist Insurance Providers in their current model of sales through telecalling & FOS.

Due to the uncertainty in the capital markets, most Insurance companies are now coming up with different variants of both traditional policies and Unit Linked Insurance Plans (ULIPs). This is helping them in increasing their sales numbers-as Indian investors are looking for some safe bets(many have burnt their fingers in stock market.)

Generally the first six months of the financial year is seen as a dull period as far as Insurance sales is concerned .Sales pick up in second part of the year where people buy insurance to save tax.But this year in first two months of the year the numbers are up by 6% than last year same time as per Irda figures released on premium collections.

So, can we say the trend is changing in the way the Indian consumer is investing ?

if you stop paying premium or miss your premium payment by more than 90 days, it enters into what is called the "paid-up" status. The policy is cancelled by the insurance provider and all the benefits attached with the policy are also suspended.

In some cases this also means, the forfeiting of all the past premiums paid. This is because these policies do not have non-forfeiture benefit option for the policy holder. But some of the companies do offer this- so make sure you check this clause when buying any long term insurance policy.

The policy status can be changed from Paid-up to Paying any time by paying the premium amount.

So make sure you keep track of your premiums -esp on long term policies.

There was a time when Indian consumers didnt have much options to choose from- while buying Insurance products. The situation was particularly severe in case of Life Insurance as there was just one company- LIC.

With multiple Insurers now operating in both Life and Non-Life insurance sectors, the customers have a clear option to pick and choose not only the plan(s) but also the insurer.

One can obviously not compare (meaningfully) all plans from all companies- but you should remember to get alteast 3-4 quotes for your specific Insurance requirement.

Choose your company basis:
- Whether they have the specific insurance product you are looking at
- What is the reputation of the company in terms of claim settlement,servicing (reminders/alerts etc).

Read this interesting snippet in the latest edition of BusinessWorld- which had a special section on Insurance.

Myths in Insurance

- Insurance is an investment: Most of us look at Insurance as a means of saving tax or making handsome returns on the money back policies.

- Life Insurance Cover is sufficient: LICs deep penetration has ensured awareness about life cover, but very low focus is given to protecting life-time assets like home, jewellery etc

- Healthy People do not need insurance: It makes sense to look at a Health Insurance policy even if one is healthy coz:
Premium cover is lower for the young and healthy and even expenses for minor ailments are usually covered in the Health Insurance plans.

The Indian government, in order to encourage Insurance, gives tax breaks to certain Insurance premiums discussed in Section 80C of the Income Tax Act.

Up to a limit of Rs 1 lakh, the premium you pay for Insurance is deductible which means that you don't have to pay income tax on it. Thus if you are in the 30 per cent tax bracket and you invest the maximum allowed you save Rs 30,000 in taxes.

Now days all Insurance companies are advertising Child Insurance Plans.
But most of us dont undestand what they do for us.

Being a conventional insurance plan returns from this type of plan is not very attractive compare to Unit Linked Plans. In fact it is possible for the investor to select alternative investment route which will provide higher returns for similar risk taken to meet this objective in terms of investment.

They basically are in two broad catogeries.

Death benefit

Till the start of this year Unit Linked Plans (ULIPs) were the best selling Life insurance products.
But now when stock market has turned bearish, what will happen on this front is a big question?
Will people still invest in ULIPs?
With the negative returns , will insurance companies will be able to woo large investors?

In coming days people will buy conventional Life insurance plans rather than risky Unit linked insurance plans.

Health Insurance is required to ensure coverage for expenses incurred in possible medical treatment. Depending on the policy specifics this could cover- Consultation fees, Operating Charges, Medicine costs, Diagnostic Tests charges, Hospitalization charges etc

Given the increased cost of Medical Treatment, it becomes imperative that we have adequate Health Insurance cover.

Spend some time to understand the various products that are available and the specific features therein. This would help you identify the product best suited for your requirement.

Know the difference between health insurance from Life Insurers and General Insurers