InsureRelaxInfo: August 2011

Government panel likely to take a call on LIC Chairman in 10 days

NEW DELHI: The government is likely to take a call on appointment of full-time LIC chief within next 10 days.
The decision on the probable LIC Chairman is expected to be taken by next week by the selection panel, sources said.
The post is lying vacant following the completion of five-year term of T S Vijayan in May this year. As the interim arrangement, the government appointed Additional Secretary Rakesh Singh as Chairman and subsequently D K Mehrotra, incumbent managing director to head the country’s largest insurer.
A selection panel headed by Department of Economic Affairs Secretary R Gopalan had called four probable candidates for discussion in June. But the panel could not decide as two of the contenders did not had CVC clearance.
In absence of CVC clearance, the panel deferred the selection process.
According to sources, the shortlisted candidates for the chairman post include the current acting chairman of LIC D K Mehrotra, managing director of LIC Thomas Mathew and three executive directors, namely A K Sahoo, T T Mathew and K B Saha.
As per tradition, one of the managing directors of LIC is designated as chairman.
Mehrotra joined LIC as a Direct Recruit Officer in 1977. In his 34 years’ career, Mehrotra has occupied several pivotal positions spanning three zones and the corporate offices.
The government owns 100 per cent in the life insurance firm.

Long-term insurance products gaining over bank deposits

As opposite to popular belief, Bank deposits, in spite of their safety features are quickly losing their appeal among Indians. It is being seen that over the last three years, Indians are favouring to save in long-term insurance products and government-backed savings products.
The fiscal year 2010-11 saw a sharp drop in bank deposits accounted from 53% in 2008-2009 to 42% as per the data released by the RBI last week. Efficaciously, out of every Rs. 100 saved, Indians are setting aside Rs. 42 for bank deposits as compared to Rs. 53 3 years ago.
People are investing in life insurance policies and government-backed savings products like post-office savings and national savings certificates. These products offer approximately 8% return as compared to 4% in saving accounts.
Financial experts assign this changing savings pattern to aggressive marketing by insurers, increasing financial literacy and looking for of better investment yields.

Mass exodus of agents hits life insurance business hard

http://www.mydigitalfc.com/insurance/mass-exodus-agents-hits-life-insurance-business-hard-673

Jeevan astha new plan inthe pipeline

Volatile markets are giving way to products, which offer relief to investors and open new avenues to park their funds. Gauging market sentiments, Life Insurance Corporation of India (LIC) is all set to launch its best-selling product in the form of a single premium policy.

It’s been two and half years since the last single premium policy from LIC Jeevan Astha came into the market. Response to Jeevan Astha showed that investors prefer policies, which involve a one-time premium payment even though that premium payment is much higher.

Jeevan Astha in 2009 garnered around Rs. 10,235 crore in 45 days with around 1.8 million policies being sold.
Sources have told NDTV that LIC is waiting to get the final approval from Insurance regulator IRDA and intends to launch this product in the first week of September.

LIC is launching a single premium policy after a gap of two and a half years and sources say that the insurance giant is expected to offer a fixed return in the range of 7-8 per cent per annum with insurance cover added to the product.

The single premium policy, which offers tax exemption will also give the option of choosing a tenure of 5-10 year with LIC aiming to raise in excess of Rs. 10,000 crore from this scheme.

But despite its huge success, prominent financial planners are not in favour of single premium policies, despite a brand like LIC offering it.

Gaurav Mashruwala, Financial Planner, “Instead of that if I invest that money on FD and every year erode little bit of returns and capital, I would still be better off as maneuvering that product at later stage remains with me and I would have generated better returns also.”

At a time when the insurance sector’s premium collection for the quarter ended June is down by more than 25 per cent, LIC is trying to revive its premium collection through this product.

It is also ensuring enough liquidity to pump into the equity markets, especially into infrastructure companies with LIC being the largest institutional investor in the Indian equity markets.

LIC, which had set a target of pumping in Rs. 2 lakh crore investment with Rs. 60,000 crore for the equity markets hopes products like single premium policy will it achieve these stiff targets in the current market conditions.

AUM of life insurers cross Rs 15 lakh cr

http://www.financialexpress.com/news/aum-of-life-insurers-cross-rs-15-lakh-cr/835449/

SURRENDER OF POLICIES UNDER JEEVAN AKSHAY PLANS AND DEFERRED ANNUITIES

CRM Department, Central Office.

Jeevan Bima Marg, P.O.Box No.19953,

Mumbai – 400 021.

Tel : 66598353, Fax : 22825829

E-mail

th Floor (Link), “Yogakshema”,co_crm@licindia.com

-------------------------------------------------------------------------------------------

Ref: CO/CRM/838/23 July 28, 2011

To,

All Zonal Managers,

All Regional Managers (CRM)

All Sr/Divisional Managers,

M.D.C., Audit & Inspection

RE: SURRENDER OF POLICIES UNDER JEEVAN AKSHAY PLANS AND DEFERRED ANNUITIES

PLANS AFTER VESTING OF ANNUITY

Strictly speaking, there is no provision for surrender of policies under immediate annuity

plans or deferred annuities plans after vesting of annuity. However, Actuarial Dept, Central

office has allowed the surrender value under immediate annuity plans and deferred annuity

plans after vesting

expenses incurred or to be incurred on his/her medical treatment or for the medical

treatment of his/ her spouse, provided the annuity option is under “annuity for life with

return of purchase price on death”. The surrender factors were revised on 7

As per letter dt 13/1/2007 ref: Actuarial /PS, the Regional Managers( Actuarial) are

authorised to sanction such surrender payments. Subsequently, as per our circular dt.

21/4/2009 Ref: CO/CRM/741/23, the powers to sanction the surrender payment under

eligible cases was delegated to Divisional Office standing committee upto net surrender

value of Rs. 1 lakh.

It has been observed that many requests are now being received to allow surrender

payment under vested annuity policies for reasons other than medical emergencies and

sometimes even within one year of purchasing the policy. It appears that annuity plans are

being sold by highlighting that these plans offer easy liquidity and can be surrendered

whenever required. Due to this reason, the number of surrender requests is also increasing.

The matter has been reviewed by the competent authority and it has been decided as

follows:-

on merit of the case like money is required by annuitant for theth May 2010.

•

annuity option of ‘ Annuity for life with return of purchase price on death’ shall be

allowed only in

close family members

policies should not be allowed.

surrender of immediate annuity plans and Deferred annuity plans after vesting withcase of medical emergency like treatment of self, spouse, and /or. Under any other circumstances, surrender of vested annuity

•

with his/her consent on surrender value quotation generated through FEAP module.

The policyholder’s written request to surrender the policy should be obtained along

•

expenses from annuitant.

The Office should also ask for documentary proof in support of illness and related

•

surrender duly signed by annuitant and documentary proof with self contained note

to respective office i.e Divisional office or Regional Manager( Actuarial) depending

upon the amount of surrender value payable.

After receipt of this, office should forward the request of annuitant , quotation for

•

higher office but should be kept by Branch office only.

Original policy document and surrender discharge form should not be forwarded to

•

should be collected from the annuitant and to be forwarded to IPP cell of Zonal

office.

The annuity cheques already issued and falling due after the date of surrender value

•

their record after receipt of sanction from Divisional Office standing committee or

Regional Manager (Actuarial). After taking action of surrender by IPP cell in annuity

master, branch should process the surrender payment thorough loan/ surrender

module of FEAP. Under no circumstances, manual voucher should be prepared.

It should be ensured that IPP cell of the Zonal office takes the surrender action in

•

policy, all annuity instalments upto date of surrender have been settled.

Kindly, bring the provisions of this circular to the notice of the offices under your

jurisdiction and ensure that instructions are adhered to in its spirit.

IPP cell should also ensure that before processing the surrender request under theEXECUTIVE DIRECTOR (CRM)

Insurance cover for very senior citizens

If your parents are above 80 years it is impossible for them to buy a fresh health insurance cover. This may change if a new plan filed by a health insurance company and currently being examined by the Insurance Regulatory & Development Authority (Irda) is cleared. The policy from Apollo Munich Health Insurance is aimed at senior citizens and places no limit on the age at which it can be bought.

"We have recently filed a health insurance policy with the Irda that will have no upper age for entry. Anyone can buy the cover at any age, be it 70 years or 91 years. We hope that the policy will be cleared by the insurance regulator by end of August and we may be able to start selling it by beginning of September," says Antony Jacob, chief executive officer of Apollo Munich Health Insurance.

The new plan signifies a major shift in the way senior citizens are covered by medical insurance. Most health plans cover a person till 75-80 years. Some policies offer lifelong renewal, but this is possible only if the cover is bought early. The Varishtha Bima Yojana from public sector insurer National Insurance can be bought by anyone between 60 and 80 years of age and renewals can be done up to the age of 90.

Apollo Munich itself has a policy that covers an individual for a lifetime, but the policy should be bought before 65. Other PSU insurers also offer health covers to senior citizens, but there are a host of restrictive conditions and all have an upper age of entry.

No Bar for Very Senior Citizens

Apollo Munich's new plan promises to break this ceiling, allowing even very senior citizens (above 80) and nonagenarians to buy the cover. The cover, however, will have a fat price tag. A Rs3-lakh cover for a 70-year-old will come at Rs19,000 a year. At 80, it will costRs32,000 a year and at 90, Rs57,000. Add the 10.3% service tax and the total yearly cost is more than 20% of the cover. "These are tentative figures submitted to the regulator; the final figures may change marginally when the product is finally cleared," says Jacob. The conditions don't end there.

There's a waiting period of one year before the plan covers all diseases, and a long four-year wait for covering pre-existing diseases. Also, senior citizens won't get all the facilities of a normal cover. "There will be a co-payment clause as well as sub-limits in the policy," Jacob clarifies.

The co-payment clause requires the buyer to shell out a percentage of the claim (normally 20%). Under the sublimit clause, there are limits on expenses incurred under various heads, such as room rent, doctor's fee, nursing charges and cost of medicines. However, this applies to all patients irrespective of age.

"There are limited options from four public sector insurers for buying health covers for seniors, but there are no policies that allow entry at any age or lifelong renewal. No doubt this policy will come at a premium," says Rahul Agarwal, managing director, Optima Insurance Broking. For Apollo Munich's existing policy that allows lifelong renewal, one has to pay Rs16,797 a year for covering an individual between 61 and 65 years for Rs3 lakh. The premium rises to Rs21,615 for 66-70 years and to Rs24,039 for over 70 years.

Source : ET

Government suspends New India Assurance CMD M Ramadoss

The government has suspended the New India Assurance Company's Chairman and Managing Director M Ramadoss for alleged irregularities in granting credit insurance cover to Paramount Airways. Following his suspension, United India Insurance chief G Srinivasan has taken up the additional charge of CMD of the New India Assurance from today, official sources said. Ramadoss has been suspended for alleged irregularities in the grant of credit insurance cover to the private airline company during his tenure as the head of the Delhi-based Oriental Insurance Company.

The CBI has alleged that Ramadoss entered into criminal conspiracy with Paramount officials for providing credit insurance cover to the airline, which was in violation of the existing rules and regulations of the Insurance Regulatory and Development Authority (IRDA). Credit insurance is provided to a corporate by an insurer to guarantee payment of dues in case of default. Oriental Insurance has provided credit insurance amounting to Rs 14-25 crore to Paramount Airways in 2008-09 toward multiple bank guarantees for covering fuel purchases.

Paramount Airways had taken a loan of about Rs 400 crore from five major banks to make payments for fuel to oil companies. However, it reportedly defaulted in repaying the amount. The five banks had subsequently sent claims to Oriental Insurance, which had issued the credit insurance to the airline. The allegations against Ramadoss are being investigated by the Central Bureau of Investigation (CBI), official sources said, adding a case is also pending against Ramadoss with anti-corruption watchdog, the Central Vigilance Commission.

Last month, CBI had raided the residence of Ramadoss in connection with alleged irregularities in the credit insurance cover given to Paramount Airways by Oriental Insurance. Ramadoss is the second chief of a state-owned insurer to face action this year. In May 2011, the government removed Life Insurance Corporation (LIC) Chairman T S Vijayan following alleged irregularities in investment decisions taken by the insurer during his tenure and subsequently CBI enquiry was initiated. The planes of Paramount Airways, which was promoted by M Thiagarajan, were de-registered in 2010, following which they could not operate their flights.

Source : ET

Insurers get stricter on parental claims in group health cover

For insurers providing group health insurance coverage, parents of employees are becoming more expensive to handle than the employees themselves. Most health insurers are now putting restrictions on claims arising out of parents of employees, who are covered under group health insurance, provided by their employers.

Of the total claims from group health insurance policies, at least 60 per cent are from parents of employees, according to most health insurers. "Since the claims from parents are becoming high and unsustainable, many insurance companies are asking parents to be covered separately within the group insurance scheme or we ask employees to share a part of the claim costs," says Segar Sampath, deputy general manager, New India Assurance.

Most companies these days, provide health insurance coverage for employees and up to three of their dependents through group health insurance schemes. With larger number of claims coming from dependent parents than employees due to age-related ailments, insurance companies have been finding it difficult to service the claim.

Unlike regular health insurance schemes, where there is a pre-existing ailments clause and waiting period for coverage to begin, in group health insurance schemes, ailments and treatments of dependents are covered from day one of an employee joining an organisation, leading to higher number of claims.

"We see in many cases that parents get admitted, that too, in high-end hospitals even for the smallest of ailments only because it can be covered through the group health scheme provided by the office. It becomes unsustainable for companies," says KG Krishnamurthy Rao, managing director and chief executive officer, Future Generali India Insurance.

Many health insurers are now reworking the terms of insurance coverage with the employers whenever group policies come up for renewal. Insurers are taking measures, such as fixing a limited sum insured, asking the employees to share the bill, having a cap on procedures, excluding hospitalisation coverage for non-critical conditions or allowing only a one-time claim per dependent.

While insurers blame employees for high claims coming from parents, several industry members blame themselves for the mess. "When insurers make a quote for group health insurance, they know that it is a mixed basket. With age, ailments and costs also go up naturally. Insurers should factor in all these aspects, fix the proper actuarial costs for young employees, older parents and then make a quote. But competition in the industry is forcing insurers to undercut costs and everyone suffers in the end," says V Jagannathan, managing director, Star Health and Allied Insurance.

Source : www.mydigitalfc.com

Term insurance business in top gear

http://www.businessstandard.com/india/news/rising-needs-more-cover/445768/

Gujarati woman now top US insurance agent

CHICAGO: An Indian American woman who grew up in a small Gujarat town and taught herself English and marketing skills only after arriving here is now one of the top agents for New York Life in the US.

Before joining New York Life, her only selling experience was in a video store on Chicago's Devon Avenue, Jayshree Patel, 32, told IANS.

Nevertheless, within months of joining New York life as an agent in 1997, she made it to the company's executive council, an acknowledgement of her marketing skills.

Less than seven years later, Patel has sold policies with a total face value of $300 million. She has done business worth $60 million this year itself, putting her among the top New York Life agents nationwide and in the fourth rank in the company's West Central region that includes the Midwest.

Patel, whose family hails from Sokhda town in Gujarat, credits her success to an unwavering ambition. She said even as the fourth of five sisters, who had lost their father when very young, she had the urge to "achieve something in life".

In 2000, she made it to the New York Life Chairman's Cabinet, an honour given to the top 50 agents. It is a distinction she has won every year since then.

Patel, a mother of three, keeps a hectic travel schedule, flying across the US 15 days a month. She holds licenses in 30 states and has clients across the country.

"But I do not have any clients in Chicago," she said. This is a calculated move. "That way I can devote time to my family, which, for me, comes first."

Patel said she takes her family obligations seriously. "My husband is the only child of his parents, and I am the only daughter-in-law. I want to spend quality time with them."

Husband Nilam Patel is the one who egged her to join the company. "He is my biggest motivation," she said, "he reminds me constantly of my goals."

Despite her success, Jayshree Patel does not believe in hard sell.

"I explain the benefits of life insurance to my potential clients. The example they most relate to is that life insurance is like the safety net over which acrobats perform. Death disturbs most Indian Americans. But it is a reality they cannot run away from. I tell them now is the time to think about income replacement for your family when you are not around.

"I never push them to buy insurance from me," she added, "If they say 'we will think about it' I leave them alone."

"Most Indian Americans do not have retirement planning. If you are the breadwinner of the family, it makes sense to insure yourself. Even a million dollar policy can be very competitive if you are healthy. A policy makes sense because today even a good funeral costs over $10,000."

Most of her clients remain Indian Americans. "We share the same culture and sometimes the same language. It is easy to relate to them."

"The biggest factor in her success is that she enjoys a challenge, and has a very strong desire to make it to the top," said husband Nilam Patel, who as a partner in New York Life, recruits, trains and manages personnel.

"Jayshree thoroughly enjoys what she does. My advice to her has always been 'never take no for an answer, and never take a no personally'."

Consumer forum told Max New York Life to pay for unfair trade practice

http://www.ahmedabadmirror.com/article/2/2011081220110812023530934e6a0280d/Poor-widow-battles-Insurance-Company-secures-kids%E2%80%99-future.html

Court offers shield to life insurance agents

http://www.deccanherald.com/content/163581/court-offers-shield-life-insurance.html

Be your own money manager

Managing your money is always a tricky prospect. There are too many variables — domestic and sometimes, international as well —which impact the finances. But for a regular investor, certain ground rules remain, and no matter how volatile or stable an economy is at a given time, these should be followed.

The options, in terms of instruments, are many. “In a developing country such as India, mutual funds and equity are the more popular investment avenues. However, globally, there are plenty of opportunities available in the form of products, such as gold and silver exchange traded funds, oil bonds and commodities,” says Shiv Gupta, a Mumbai-based financial consultant. He believes if an investor starts young, and knows his math and the kind of instruments he wants to play with, he can go ahead and plan his financial life.

Understand your money

Money is not just currency and coins. According to dictionary.com, money is ‘any article or substance used as a medium of exchange, measure of wealth, or means of payment’. At the start of your own money management course, you need to ascertain your financial standing at that particular point in time, and then make decisions. An evaluation of one’s income, expenditure and saving sources will give afair idea of the kind of ‘money’ you are dealing with. Accordingly, make an investment decision. For instance, many people continue investing in their monthly systematic investment plans, even by borrowing, because there expenditure is high. It is a sure way of getting into a debt trap.

Say no to ‘plastic’ money

At over 40 per cent rate of interest, it is a sure way of getting into deep trouble. Those who manage their money smartly seldom need to resort to ‘plastic’ money to meet their requirements. Credit cards, or ‘plastic’ money, are considered abane, because people tend to get absorbed by the convenience factor. Although companies sell credit cards aggressively, by claiming the card attracts no fee or charge for life, they do not disclose the underlying conditions that come attached with these. Every credit card attracts a service charge, irrespective of whether or not one uses it. Besides, once enticed by the ‘easy’ working of a card, an individual gets more involved with the relationship, which could turn ‘toxic’ if not kept within limits. While a credit card is a helpful tool during exigencies, when used casually and carelessly, it can have a potentially damaging effect on one’s financial health.

Make financial allies

When investing, a basic rule is risk embedded in the nature of a particular investment tool. By principle, it means higher the risk, greater the return, and vice versa. A midcap or smallcap stock may be a multi-bagger, but it could also lose you money, real fast. Diversifying one’s portfolio, or making different financial allies, will only help one capitalise on all the investment opportunities that come your way.

Long-term relationship

Stay invested is an oft-abused term. But it works. Money invested and managed well will positively yield handsome returns, but only over time. One needs to be consistent and responsible for one’s money and spending habits. Taking money for granted can prove to be detrimental not only in the immediate future, but also in the long term. “Financial planning, if done with systematic precision, makes money work harder for an individual,” advises Ayush Tibrewal, an advanced wealth manager at HSBC.

With inputs from BS

Industry now focusing on protection-based plans

Ten months after Insurance Regulatory and Development Authority (Irda) came up with game-changing regulations for unit-linked insurance plans (Ulips), the life insurance industry is still struggling to keep pace. Rajesh Sud, chief executive officer, Max New York Life Insurance, spoke with Shruti Verma Khare and Sagar Sen on the industry and the company . Excerpts:

After the regulatory changes in Ulip norms, how has the market behaved?

Insurance, especially life insurance, should be seen as a long-term financial tool. The new Ulip norms have made that clear. The stakeholders, insurers, distributors and customers are now focusing more on protection-based products rather than on investment products. It is good for the industry. We as a company have done well, better than the industry, because our product mix was not heavily tilted towards Ulips.

What is the product mix right now?

After the regulatory changes, old Ulips became redundant. We have recently launched new Ulips. We would like to have a more balanced portfolio of 65 per cent new sales coming from traditional plans and rest from Ulips.

How has your profitability been impacted due to these changes in norms?

At a time when the industry is struggling with regulatory changes, we have done very well. But, certainly, there will be an impact on margins. Even though we have done better than the industry, we expect margins to fall from 19 per cent last year to 13 per cent this year.

A committee by the Irda on bancassurance has recommended that banks be allowed to sell more than one insurance company's products. What are your views on the issue?

Over the past few years, banks have emerged as a dominant distribution channel, mainly because of the vast client database and branch network. However, in order to sell insurance products, a certain level of product understanding is necessary, which needs insurers taking initiative to provide training to bank employees who will sell insurance products. With Irda allowing banks to sell more than one insurance company's product, there might be some problem in product understanding and unbiased selling practices.

What are your views on the present caps on commissions and expenses? Should Irda cap charges on traditional plans too?

After the regulatory changes last year, Irda had implemented certain caps on charges and commission, which made the products less costly and easier to understand. However, just putting caps is not sufficient for customer interest, efforts must be made to train distribution channels and remuneration should be in line with the efforts of selling insurance products.

In comparison with developed countries, India is still lagging behind in insurance penetration. What are your views on this?

There are three methods of capturing insurance penetration in a country. The one, which we follow in India, is insurance premium as a proportion of GDP. Second, is simply knowing the number of lives covered. However, the data that actually gives a true picture of insurance penetration is the sum insured as a proportion of GDP. India is still far behind the developed countries and in order to grow, insurers need to expand in smaller towns and cities, understand the problem of customers being underinsured and increase awareness of products.

Source : www.mydigitalfc.com

Whole life plan helps create wealth, meet financial goals

A 'whole of life' (WoL) insurance plan provides insurance cover for the entire lifespan of a policyholder. This feature distinguishes it from other life insurance products that have fixed term of coverage. Since, in WoL plans, the policyholder pays the premium for a longer tenure, insurance companies add 'endowment' or 'savings' element to the risk cover to ensure there is a cash value attached to the premiums paid.

The 'endowment' or the 'savings' element can be incorporated either on a traditional or a unit-linked platform. In India, WoL plans on a traditional 'with-profits' platform are more common. This means premiums are payable throughout the lifetime of the policyholder and the policy benefits are given to the nominee on the death of the policyholder.

The premium remains constant during the entire term and the policyholder gets life-long cover. The policy benefits are defined in guaranteed terms, like the sum assured and the vested bonuses the company declares based on its performance. The bonuses are expressed as a percentage of the sum assured and declared at the end of each financial year. So, the investment risk is not transferred to the client and the insurer bears the risk of guarantees. In short, a WoL plan on a traditional platform gives policyholders an insurance cover for the entire life (usually 100 years) and, on their death, cash value to the nominees.

WoL plans on a unit-linked platform work in a similar fashion except the fund value is given as the cash value. WoL is a large and mature segment in developed insurance markets. This has led to several innovations that provide ease and flexibility to a policyholder.

Indian insurance companies have adapted these features while designing WoL plans. They include incorporating an endowment platform on WoL; flexibility in paying premiums at different frequencies; option of paying premium for a limited term; additional riders, etc. Endowment plans are also designed with extended risk cover till death beyond the maturity of the policy.

In other words, WoL plans offer a combination of both living (endowment) and death benefits. For example, if a 30-year-old male opts for a limited premium paying WoL plan for a 30-year term and sum assured of Rs 20 lakh, he would stop paying premium when he turns 60 but he would have the life cover up to 100 years. WoL plans are often compared with pure term plans. Pure term plan provides risk cover to a policyholder for a fixed tenure and there isn't a 'savings' element.

There are scenarios where WoL might be more suitable for a customer than term plan. Term plans are cheap and provide substantial cover early in life. However, let's take the case of a 25-year-old who has bought a term plan for 20 years.

Core and satellite portfolio management a popular investment method

The Sensex has not been in the pink of health for a week now. The steep fall in the global indices and teetering economies have been weighing on the Indian equity market, which, in turn, has dented the value of equity portfolios. It's in times like these that the benefits of the core and satellite strategy towards investing becomes obvious.

How it works

The core and satellite portfolio management is a popular form of investment strategy with money managers and their clients. The core component of your financial portfolio, which is the larger portion of your portfolio, comprises investments that are in line with you long-term financial goals. The goals could include retirement savings, child's education, marriage, etc.

The satellite part, or the smaller portion, is invested in risky assets to boost the overall returns of your portfolio. If the economy encounters a rough weather, the core portfolio acts like an anchor to your portfolio. And when the good times start kicking in again, the satellite portion adds zing to your overall portfolio.

Asset allocation

Asset-allocation in the core portfolio depends upon various factors like the investor's risk appetite, age, financial goals, time horizon for each goal and liquidity needs. But, broadly-speaking, here's how it works. If you are a low-risk investor, you can look at a debt-equity ratio of 80:20.

If the size of your core portfolio is less than Rs 10 lakh, then the equity component of your core portfolio can comprise equity-linked debentures. For a moderate-risk investor, the equity component can be increased to 60% and the balance 40% can be put in debt. In the debt component, you can look at PPF, debt mutual funds, arbitrage funds and monthly income plans (MIPs).

If the size of your core portfolio is around Rs 30-40 lakh, you can look at a small property, which can be lease to earn some money from the rentals. Real estate could be coupled with debtequity split of 40:60. If the size of your portfolio is around Rs 80 lakh to a crore, you can even look at leasing out a commercial property over and above the routine debt-equity exposure, say experts.

The satellite portion can accommodate small-cap/mid-cap funds, sectoral funds or global funds, which are highly risky in nature. Hence, you should not hold onto these investments beyond a year. The idea is to earn impressive returns and exit with profits.

Insurance cover for very senior citizens; IRDA examines proposal by Apollo Munich

No Bar for Very Senior Citizens

How to compute your home loan eligibility

The eligibility of a housing loan is determined on the basis of borrower’s repayment capacity, which, in turn, depends upon his income and other factors such as age, qualifications, number of dependents, stability and continuity of the income.

Besides the proposed owners in respect of which he is seeking financial assistance will have to be co-applicants.
However, all co-applicants need not be co-owners. Income of the spouse can also be clubbed if he/she has been made the co-applicant. The housing finance company can consider all the income accruing to the applicant on a monthly basis, i.e. all the recurrent credits (basic salary, hra, other allowances but not the lta and medical), any rental income that he is getting and the savings in rent payment which might accrue to him on account of his moving from a rented dwelling to self-occupied property.
In short, the calculation will be as per the applicant’s net cash inflows, less expenses and commission for the salaried class, and as per his profit-and-loss account for the self-employed or a private company (net profit + 2/3rd depreciation+ directors’ remuneration).
An example: an individual has a salary of rs 3,00,000 p.a. taking all factors into consideration, an hfc decides that the individual has an annual repayment capacity of 1/3 of his income, meaning rs 1,00,000. this would work out to emi capacity of about rs 8300 per month.
Once the emi capacity of the person has been estimated and the tenure of loan repayment is known, the hfc decides on the amount of the loan it can provide to a person. this is done with the help of an emi table. In this case let’s take the repayment schedule as a period of 10 years. going by his emi capacity of rs 8300, this individual can go for a loan of about rs.5 lakh for a period of 10 years. Here the emi works out to rs 8145 per month at 14.5 per cent compound interest rate on the annual, rest on a loan of rs 5 lakh. Some hfcs have plain vanilla deals for professionals such as cas, doctors, mbas and architects: it is 1-2 times the gross receipts.
It also depends on the purpose for which the house loan has been taken. It can be for purchase, construction, extension or renovation of the house property. It is also dependent on the tenure that the person requires the loan for.
Source: Economic Times

Jeevan Arogya sales showing significant growth

(LIC) is showing significant growth in its sales of health insurance policies as it has already sold about 1.02 lakh policies in the current fiscal and it is expecting to sale 3.6 lakh policies in the current fiscal as compared to 68,000 in the last fiscal; as company has entered health insurance business in 2008 since than it has sold 3.6 lakh policies till 31 March 2011.
Company is expecting this growth in its sales as it has launched two more health policies and it has also started focusing on improving service and to achieve it company has taken steps such as they are chasing TPAs and hospitals for speedy settlement of claims and LIC is also training agents to improve service.
According to LIC growth in sales is mainly attributed to the second health insurance benefit plan by the name Jeevan Arogya which was launched in June 2011 this is comprehensive hospitalization benefits for whole family including in-laws; the plan has benefit component and under this policy dependent parents and in-laws upto 75 years of age are covered; LIC has already sold around 96,000 policies of Jeevan Arogya.
LIC has also set a special drive in June to consider rejected claims which were rejected on account of lack of details and documents; this drive LIC has already settled 158 cases out of 917 cases and about 400 cases are in various stages of processing.

TODAY NAV

https://www.licindia.in/plannav/plan_navs_new.htm

meet worlds no 1 agent and highest income agent

Gideon du Plessis failed in the 10th standard and never went to college. He
is today the highest earning insurance agent in the world, with annual
commissions amounting to Rs 7 crore (Rs 70 million) plus. ( as on 2003 )
A record he has maintained over the last 12-14 years, selling 700 policies
yearly. Labelled by the Million Dollar Round Table -- an international
association of leading life insurance and financial services professionals
-- as "the most productive agent in the world",
Plessis' efforts means an average daily accretion of two risk covers for his
insurance company Old Mutual Plc.
So what is Plessis' secret of success?
He lives by 12 mantras that have taken him so far since he got into the
insurance selling profession 23 years back.
Based in Cape Town (South Africa Plessis starts his week Monday morning at
5:30. He flies 2,000 km to meet his clients in various parts of South Africa
works 17 hours at a stretch -- doing business across office desks and/or
over a cup of tea in the comfort of clients' homes, encounters at least six
to eight persons daily, and then relaxes over the weekends playing golf.
But ask Plessis as to how he sells insurance? And he'll tell you he does not
"People buy people, not policies," he told Business Standard in an
exclusive interview.
Insurance continues to be sold and not bought. So the idea is to ask
questions and more questions, collect all the information about the client
and then go back to him/her with a solution. You are not selling anything to
anybody ever, but rather providing a solution to meet his/her needs, said
Plessis.
"It is important to pay attention to detail. Flowers on your client's
birthday, condolences when the secretary's distant relative passes away. The
personal touch matters and goes a long way," he advised local agents, who
were more keen to learn if he sat on the chair or on the sofa when doing
business.
Since the age of 10, Plessis wanted to earn money with his mouth. Aiming to
be a teacher, but having failed in English, Plessis decided that
salesmanship was where his talent lies. Plessis started out as a postman,
then became a bank clerk visiting farms to sell products, before he was
picked up by Old Mutual to sell insurance policies. Since then, Plessis has
never looked back.
Plessis does not only target the high networth individual. Rather, 60 per
cent of his clients are from the middle class.
Plessis' mantras
See at least 6-8 people daily
Selling is not telling: ask a lot of questions & go back with a solution.
Attend to details
Go soft in life
Delegate staff
People buy people, not policies
Educate yourself properly
Time management
Wake up to achieve what you want
Elephants don't bite, mosquitoes do
Desire
Enthusiasm
thanku
My advance Independence day wishes to all

LIC market share rises to 77 percent in 2010-11

The market share of the government-run Life Insurance Corporation of India (LIC), in terms of number of policies in the country, rose to 76.92 percent in 2010-11 from 73.02 percent in the previous year.
When taking into consideration just the first year premium, LIC’s market share rose to 68.70 percent in 2010-11 from 64.86 percent in 2009-10, Minister of State for Finance Namo Narain Meena said Friday.
The public sector behemoth, which has government backing for all its policies, has registered growth in its market share for the second consecutive year despite increasing number of private players entering into the business.
“The market share of LIC has been increasing consistently during the last two years,” Meena said in a written reply to a question in the Lok Sabha, lower house of parliament

How to track your income tax refund

The Income Tax Department entertains queries for all assessees regarding the refunding of income tax through the Tax Information Network (TIN). The SBI has been appointed as the refund banker, which processes refunds and routes them to the assessees’ bank accounts. If the assessee does not choose direct credit, a cheque is sent. This facility also helps track the status of the parcel that has been despatched by speed post. All refunds are handled by the Central Processing Centre (CPC) at Bangalore. Visit http://tinyurl.com/cj768m for checking the status of your income tax refund. You can do so by indicating your PAN, relevant assessment year and then clicking on ‘submit’. Processing
If the processing of the refund has not been completed by your assessing officer, or if there is no refund payable to you for that year, you will get a message saying so.
Refund details
If there is a refund, you will get details showing your refund reference number, the date of credit to your bank account or the date of despatch of the cheque by speed post, and the speed post reference number, if applicable
Tracking
You can go to http://tinyurl.com/y8es wtm and enter the speed post reference number. On submitting it, you will get a link called ‘movement’, which will show the status of your parcel.
E-mail
You can submit your reference number and e-mail ID on the speed post tracker screen. You will receive an e-mail when your parcel has been received.
Points to note
Status check: You can check if your refund has been sent to the SBI, the refund banker, by logging into your e-filing account.

Payment mode: If you do not choose to receive the refund as an electronic credit, a cheque will be sent to the address provided in your income tax return.
Error notification: If there is an error in the refund or in case of any other query, the assessee can write to CPC Bangalore, quoting the refund reference number.
Source: Economic Times

http://www.financialexpress.com/news/block-your-atm-card-by-sms/826703/0