Current Indian politics explained in cricketing terms...
vinay mohanty
This Blog provides you UpToDate information on life & General insurance dealing mostly with LIC's New Plan Circulars, MillionDollarRoundTable tips on marketing,Financial analysis and INCOME TAX.
Bombay high court declines relief on plea against mediclaim order
MUMBAI: The Bombay high court on Thursday declined urgent interim relief on a petition by a body of nursing homes/hospitals challenging an Insurance Regulatory and Development Authority circular that excludes hospitals having less than 15 beds from medical insurance. The HC said it would first like to know IRDA's response. The new policy defining hospitals comes into effect from July 1.
A division bench of Justices S J Vazifdar and M S Sonak heard a petition by the Association of Medical Consultants, comprising 7,300 medical consultants in Mumbai, the suburbs and other townships who operate from government/private clinics and nursing homes. They challenged the February 20, 2013 circular, saying it has changed the definition of hospitals which existed before mediclaim was introduced in India in 1996. They also said that IRDA has not given any reason for the change.
AMC advocates Avinash Jalisatgi and Robin Fernandes told the court that with the change in definition, many hospitals will be out of the mediclaim's purview. They explained that the industry definition of hospitals would be either one that is registered under the Bombay Nursing Homes Registration Act or one that has 15 or more beds in a metro and 10 or more beds in a non-metro, along with certain other conditions.
"Earlier, all hospitals, irrespective of the number of beds, were eligible for mediclaim. Now, even registered nursing homes/hospitals with less than 15 beds in metros and less than 10 beds in non-metros will not fall under the new definition. They will be automatically disqualified from mediclaim,'' said Jalisatgi.
A division bench of Justices S J Vazifdar and M S Sonak heard a petition by the Association of Medical Consultants, comprising 7,300 medical consultants in Mumbai, the suburbs and other townships who operate from government/private clinics and nursing homes. They challenged the February 20, 2013 circular, saying it has changed the definition of hospitals which existed before mediclaim was introduced in India in 1996. They also said that IRDA has not given any reason for the change.
AMC advocates Avinash Jalisatgi and Robin Fernandes told the court that with the change in definition, many hospitals will be out of the mediclaim's purview. They explained that the industry definition of hospitals would be either one that is registered under the Bombay Nursing Homes Registration Act or one that has 15 or more beds in a metro and 10 or more beds in a non-metro, along with certain other conditions.
"Earlier, all hospitals, irrespective of the number of beds, were eligible for mediclaim. Now, even registered nursing homes/hospitals with less than 15 beds in metros and less than 10 beds in non-metros will not fall under the new definition. They will be automatically disqualified from mediclaim,'' said Jalisatgi.
Toxic ULIPs: Less than 2% return after 8 years
Insurance policy holders trapped in ULIPs are still paying the price for products approved by IRDA and then banned in September 2010. Should you continue with the policy based on long-term benefits propagated by the insurance company?
Insurance company spokespersons, their incentivised agents and financial planners have always been saying that while ULIPs (Unit Linked Insurance Plans) don’t offer great returns in the short run, staying with it long term will fetch you great returns. Millions of ULIP buyers are finding out that this is a blatant lie.
How will you feel if your investment gave less than 2% p.a. return on investment after staying with the policy for eight years? Suresh Kumar (name changed), father of the managing director of a Fortune 100 company for Asia-Pacific, approached the Moneylife Insurance Helpline regarding Birla Sun Life Classic Life II ULIP policy purchased in 2005 to cover his son for Rs1 crore. The funds were equally split between equity and debt investment.
He paid a premium of Rs1.82 lakh for five years and paid Rs30,000 for another three years. The account statement shows the total fund value to be Rs9.23 lakh. The total premium payment over the period of eight years was Rs9.98 lakh. Should Mr Kumar still believe in insurance propaganda to keep paying premiums long-term to get benefits? It seems that the insurer is getting benefitted and the insured is trapped in a loss-making proposition.
In the case of Mr Kumar, we have calculated the mortality charges for providing a cover of Rs1 crore and hence the return on the investment, which is different than the return on premium, will give less than 2% p.a. return. Mr Kumar is lucky that the product did not have any surrender charges after completing five years, but some toxic old ULIPs have surrender charges up to the end of policy term.
Many of the Moneylife Insurance Helpline queries are related to similar cases. The insured person is ensnared between the high front loaded charges of an old ULIP and steep surrender charges which prevent them an easy exit. The solace of the insurance product being long-term disciplined savings seems ludicrous with these policyholders who are ready to throw in the towel.
Moneylife’s message of keeping insurance and investment separate seems to resonate with these policyholders, but there is little that can be done for the existing policy unless the surrender charge has come down to zero, based on number of policy years completed.
Even though the Insurance Regulatory and Development Authority (IRDA) has banned old ULIPs since September 2010, what is the recourse for the policyholders who have been already trapped? It is time IRDA takes stock of the situation and offer relief to policyholders who are trapped in products it approved only to be banned later. It is especially true for old ULIPs which continue with atrocious premium allocation, policy administration and surrender charges even after completion of three policy years.
Insurance company spokespersons, their incentivised agents and financial planners have always been saying that while ULIPs (Unit Linked Insurance Plans) don’t offer great returns in the short run, staying with it long term will fetch you great returns. Millions of ULIP buyers are finding out that this is a blatant lie.
How will you feel if your investment gave less than 2% p.a. return on investment after staying with the policy for eight years? Suresh Kumar (name changed), father of the managing director of a Fortune 100 company for Asia-Pacific, approached the Moneylife Insurance Helpline regarding Birla Sun Life Classic Life II ULIP policy purchased in 2005 to cover his son for Rs1 crore. The funds were equally split between equity and debt investment.
He paid a premium of Rs1.82 lakh for five years and paid Rs30,000 for another three years. The account statement shows the total fund value to be Rs9.23 lakh. The total premium payment over the period of eight years was Rs9.98 lakh. Should Mr Kumar still believe in insurance propaganda to keep paying premiums long-term to get benefits? It seems that the insurer is getting benefitted and the insured is trapped in a loss-making proposition.
In the case of Mr Kumar, we have calculated the mortality charges for providing a cover of Rs1 crore and hence the return on the investment, which is different than the return on premium, will give less than 2% p.a. return. Mr Kumar is lucky that the product did not have any surrender charges after completing five years, but some toxic old ULIPs have surrender charges up to the end of policy term.
Many of the Moneylife Insurance Helpline queries are related to similar cases. The insured person is ensnared between the high front loaded charges of an old ULIP and steep surrender charges which prevent them an easy exit. The solace of the insurance product being long-term disciplined savings seems ludicrous with these policyholders who are ready to throw in the towel.
Moneylife’s message of keeping insurance and investment separate seems to resonate with these policyholders, but there is little that can be done for the existing policy unless the surrender charge has come down to zero, based on number of policy years completed.
Even though the Insurance Regulatory and Development Authority (IRDA) has banned old ULIPs since September 2010, what is the recourse for the policyholders who have been already trapped? It is time IRDA takes stock of the situation and offer relief to policyholders who are trapped in products it approved only to be banned later. It is especially true for old ULIPs which continue with atrocious premium allocation, policy administration and surrender charges even after completion of three policy years.
New India Assurance pays Rs34,313 for mediclaim initially rejected
New India Assurance has paid Rs34,313 towards a mediclaim that was earlier rejected by the TPA on flimsy grounds. The insured senior citizen has been a customer for 20 years, but that did not help to get the claim paid. Moneylife Foundation’s intervention helped
Sujit Banerjee (name changed), a retired senior citizen of 73 years, had approached the Moneylife Insurance Helpline of Moneylife Foundation seeking help with his rejected mediclaim on flimsy grounds by the TPA (third party administrator). The TPA alleged that the insured suffered from hypertension for 15 years without having any documentary support. The TPA even chose to ignore medical certificate of the illness from a doctor with super speciality degree in neurology. Inadequate medical expertise of the TPA staff has been reported by the media for a long time.
Taking the complaint to the grievance cell was the next step followed by the Moneylife Insurance Helpline in escalating the matter to the GM, grievance cell of New India Assurance. The claim was paid for Rs34,313, overturning the TPA’s debatable decision.
The case proves that TPAs should not be settling claims, which is included in the new health insurance guidelines from IRDA (Insurance Regulatory and Development Authority). Insurance companies have much more expertise on medical intricacies than a TPA. The regulations put the onus on the insurer to give specific grounds of settlement and denial of claim. In short, the insurance company cannot play the blame game that the TPA is making decisions on the claims.
Sujit Banerjee (name changed), a retired senior citizen of 73 years, had approached the Moneylife Insurance Helpline of Moneylife Foundation seeking help with his rejected mediclaim on flimsy grounds by the TPA (third party administrator). The TPA alleged that the insured suffered from hypertension for 15 years without having any documentary support. The TPA even chose to ignore medical certificate of the illness from a doctor with super speciality degree in neurology. Inadequate medical expertise of the TPA staff has been reported by the media for a long time.
Taking the complaint to the grievance cell was the next step followed by the Moneylife Insurance Helpline in escalating the matter to the GM, grievance cell of New India Assurance. The claim was paid for Rs34,313, overturning the TPA’s debatable decision.
The case proves that TPAs should not be settling claims, which is included in the new health insurance guidelines from IRDA (Insurance Regulatory and Development Authority). Insurance companies have much more expertise on medical intricacies than a TPA. The regulations put the onus on the insurer to give specific grounds of settlement and denial of claim. In short, the insurance company cannot play the blame game that the TPA is making decisions on the claims.
Entire Nation Pray to God to bless those Brave Hearts doing rescue work at Uttrakhand
JAI JAVAN, JAI BHARTMATHA , JAI HIND...JAI HIND..JAI HIND
vinay mohanty
RBI Cautions Banks Against MIS-Selling Of Insurance Products
The Reserve Bank of India (RBI) in its Financial Stability Report has raised concerns about the conduct of banks while distributing insurance products.RBI said in some cases it was observed that banks did not have clear segregation of duties of marketing personnel from other branch functions.
Bank employees were directly receiving incentives from third parties such as insurance companies, mutual funds and other entities for selling their products.According to current rules of the Insurance Regulatory and Development Authority (IRDA), a bank is permitted to sell insurance products of one life insurance company,.
One non-life insurance company and one standalone health insurance company. There have been some cases of insurance company’s directly incentivising bank staff to increase sales. But this is not an industry-wide phenomenon and wherever there have been some discrepancies, both RBI and IRDA have initiated appropriate action.
RBI said in some cases, direct incentives to the bank staff have created distortions in the sales structure.
Deploying insurance personnel to sell products at bank branches leads to a conflict of interest. Hence, IRDA prohibits this practice and encourages bank staff to sell policies, only in line with a customer’s need.
Since a significant portion of private life insurance companies use banks as corporate agents, there seems to be an urgent need to revisit the marketing and sales strategies adopted by banks in pushing such products, especially since insurance is among the more complex of financial products for common man to fully comprehend, said RBI.
Bank employees were directly receiving incentives from third parties such as insurance companies, mutual funds and other entities for selling their products.According to current rules of the Insurance Regulatory and Development Authority (IRDA), a bank is permitted to sell insurance products of one life insurance company,.
One non-life insurance company and one standalone health insurance company. There have been some cases of insurance company’s directly incentivising bank staff to increase sales. But this is not an industry-wide phenomenon and wherever there have been some discrepancies, both RBI and IRDA have initiated appropriate action.
RBI said in some cases, direct incentives to the bank staff have created distortions in the sales structure.
Deploying insurance personnel to sell products at bank branches leads to a conflict of interest. Hence, IRDA prohibits this practice and encourages bank staff to sell policies, only in line with a customer’s need.
Since a significant portion of private life insurance companies use banks as corporate agents, there seems to be an urgent need to revisit the marketing and sales strategies adopted by banks in pushing such products, especially since insurance is among the more complex of financial products for common man to fully comprehend, said RBI.
300 LIC mini offices to come up by month-end
The Life Insurance Corporation (LIC) of India will open 300 mini offices across the country by month-end, said Thomas Mathew T, the Chairman-in-charge, LIC, adding that the corporation was opening 10 mini offices a day.
Addressing the media at a seminar on Financial Inclusion 'Millions to Cover-Reaching the Unreached through Insurance' at the National Insurance Academy (NIA) in the city, Mathew said the offices will provide basic insurance services and would be manned by LIC employees. LIC has 2,067 offices and satellite centres across the country and will open 1,320 more, he added.
The decision comes in the wake of Finance Minister P Chidambaram's announcement in the 2013 budget speech, where he talked about opening insurance offices across the country.
To speed up the process of opening offices and cut the time lag, IRDA has allowed expansion in Tier II cities, said T S Vijayan, Chairman, IRDA.
Vijayan also expressed hope of delivering insurance policies across the country through the 1 lakh Common Service Centres soon. Insurance companies would be able to deliver e-policies through the centres in two-three months when the insurance repository begins, he said, adding, this would bring about a reduction in the service cost of policies.
"We are in the process of finalising the draft for new bancassurance (bank insurance model) regulations. Things will be clear within a month," said Vijayan.
He said there is a difference in opinion between insurance companies promoted by banks and other insurance companies. Vijayan said he was confident of building a consensus on how to utilise the network of banks to sell insurance.
India's insurance penetration is 4.1 per cent much lower than developed nations like UK with 12 per cent and Japan with 13 per cent penetration.
Similarly, the insurance density in India was at US$ 59 compared to US$ 4,000 to $ 5,000 in advanced countries.
Express news service : Pune, Sat Jun 15 2013, 01:12 hrs
Addressing the media at a seminar on Financial Inclusion 'Millions to Cover-Reaching the Unreached through Insurance' at the National Insurance Academy (NIA) in the city, Mathew said the offices will provide basic insurance services and would be manned by LIC employees. LIC has 2,067 offices and satellite centres across the country and will open 1,320 more, he added.
The decision comes in the wake of Finance Minister P Chidambaram's announcement in the 2013 budget speech, where he talked about opening insurance offices across the country.
To speed up the process of opening offices and cut the time lag, IRDA has allowed expansion in Tier II cities, said T S Vijayan, Chairman, IRDA.
Vijayan also expressed hope of delivering insurance policies across the country through the 1 lakh Common Service Centres soon. Insurance companies would be able to deliver e-policies through the centres in two-three months when the insurance repository begins, he said, adding, this would bring about a reduction in the service cost of policies.
"We are in the process of finalising the draft for new bancassurance (bank insurance model) regulations. Things will be clear within a month," said Vijayan.
He said there is a difference in opinion between insurance companies promoted by banks and other insurance companies. Vijayan said he was confident of building a consensus on how to utilise the network of banks to sell insurance.
India's insurance penetration is 4.1 per cent much lower than developed nations like UK with 12 per cent and Japan with 13 per cent penetration.
Similarly, the insurance density in India was at US$ 59 compared to US$ 4,000 to $ 5,000 in advanced countries.
Express news service : Pune, Sat Jun 15 2013, 01:12 hrs
Right time to support MrNaredra Modi to save BHARAT MATHA from world no 1 corrupted UPA government
ABHI NAHI TO KABHI NAHI, mere desvasio ME HATH JODKE VINATHI
KARTHA HON NIKALJAO MAIDAN KO AUR
SAMJHAO MODI JEE KE LIA LOGONKO, APNA DOSTONKO, BHAI BAHENKO
AUR SANTHI BANDHUONKO VOTE FOR KAMAL, NOW FIGHT BETWEEN
NDA and UPA
vinay mohanty
MIni LIC offices
To
All Zonal Managers
Re: Opening of Mini Offices- Upgradation of PremiumPoints.
It has been decided that LIC should have an office in all towns of India where
population is 10,000 or more. As per census data 2001, there are 3867 such towns.
Of these we already have offices in 2067 places in the form of Branch office/Satellite
office/SBA /ASBA Offices. Thus we have to open approximately 1800 offices by 31st
December 2013. We propose to do this, inter-alia, by upgrading the Premium Points
to the level of a Mini Office by entrusting some servicefunctions to them and by
posting/deputing of an official.
Competent authority to approve Mini Office:
The Sr.Divisional Manager will be the Competent Authority to approve establishment
of a Mini Office. If there is more than one Premium Point in the said town, the Sr.
Divisional Manager will identify the specific Premium Point which can be upgraded to
the Mini Office.
Eligible Towns:
All towns in India where, as per Census Report 2001, the total population is 10000
or more and there is no LIC office within the radius of 5 kms from the town. The term
“LIC Office” includes a Branch Office, a Satellite Office and SBA/ASBA Offices.
Set up and functions of the Mini Office:
The Mini Office will offer the following facilities:
a) Collection of premium,
b) Collection of proposal deposits
c) Entertain such Policy servicing requests as decided fromtime to time.
It is envisaged that the premium will be collected by Agent as is being done by him
now and the rest of the service functions will be attended by our representative
assigned there.
To set up the Mini Office, area admeasuring 150 sq.ft within the premises of the
Premium Point will be required. The premises should have good
visibility/approachability and should be preferably on the ground floor. A suitability
report of the proposed site is to be obtained by the Sr. Divisional Manager. The
Sr.Divisional Manager may depute an officer for obtaining the said report. It is
clarified here that if an agreement for hiring space for Premium Point is required, the
agent will execute it in his individual capacity only.
The following issues need to be addressed for upgradingthe Premium Points to Mini
Offices:
1) Legal:An agreement will be required to be entered with the agent. The draft
of agreement will be sent shortly.
2) Premises charges:The remuneration for the usage of infrastructure is tobe
decided based on the rentals prevailing in that area. The maximum amount
payable in Tier I and Tier II cities is restricted to Rs 8000/- p.m. and for Tier III
and Tier IV towns to Rs 5000/- p.m. Electricity charges are payable on actual
basis if a separate meter/sub meter is installed for the premises. In case there
is no separate meter a fixed amount, subject to a maxim um of Rs 1000/- p.m.
may be fixed.
3) Furniture:E & OS Department will issue instructions separately.
4) IT peripherals:A laptop, printer and internet connectivity through broadband
is to be provided. Detailed instructions on specifications of Hardware and
Software will be issued by IT/BPR Department.
5) Posting/deputation of an official for the Mini Office:The Sr. Divisional
Manager may post /depute an official of any cadre whois suitable for the job.
Wherever a person is available, the posting has to be done on regular basis.
In other cases, the Sr.Divisional Manager may depute one or more official on
alternate basis. In case of deputation, Deputation Allowance should be given
as per the rules of the Corporation.
6) Signage:The signage on the entrance of the premises is to be displayed
prominently so as to bring it to the notice of the general public. Format of the
signage will be provided by CC department.
7) Service requests:The following servicing functions can be provided in the
Mini Offices by the official deputed:
1. Change of address
2. Capturing NEFT details
3. Change of nomination.
4. RFM functions. (The exact instructions will be issued by CRM
Department separately.)
5. Status reports and quotations for various policy services like surrender,
loan.
6. Policy Payment enquiry option.
The documents containing any other service requests collectedshould be sent to
parent branches by post/courier for necessary action.
Please instruct all the Divisional Offices to start the process of selecting the sites of
Mini Offices. Inputs required to be issued by various departments of Central Office
will be sent shortly.
Executive Director (CP/NP)
LIC CHAIRMAN SK ROY
The government has decided to appoint S K Roy the new chairman of Life Insurance Corporation of India (LIC).
"We have decided on S K Roy as the new LIC Chairman," said financial services secretary Rajiv Takru to Business Standard.
Roy was appointed as the managing director of LIC on May 31. Thomas Mathew T was appointed interim chairman on May 31 after D K Mehrotra retired. It is not clear when Roy will take charge formally.
The government had interviewed five candidates for the post of the chairman, including managing director Sushobhan Sarkar, LIC Housing Finance MD & CEO V K Sharma, and three executive directors, S B Mainak, Roy and Usha Sangwan.
Roy joined LIC in 1981 as a direct recruit officer of the 11th Batch. He has served the Corporation in prominent positions like area manager, LIC HFL, secretary (legal), chief (SBU-estate), regional manager (P&IR) and executive director (marketing /bancassurance & alternate channels).
He was zonal manager of the north central zone from 2009 to 2011 and from 2011 to 2013, he was in charge of the Eastern Zone, one of the premier Zones of the Corporation. He had been recently posted as head of the international operations before taking over as managing director.
LIC is the country's largest life insurer with 83 per cent market share in terms of number of policies and 71 per cent in terms of premiums. LIC collected new business premiums of Rs 76,246 crore for the financial year 2012-13.
BUSINESS STANDERED
"We have decided on S K Roy as the new LIC Chairman," said financial services secretary Rajiv Takru to Business Standard.
Roy was appointed as the managing director of LIC on May 31. Thomas Mathew T was appointed interim chairman on May 31 after D K Mehrotra retired. It is not clear when Roy will take charge formally.
The government had interviewed five candidates for the post of the chairman, including managing director Sushobhan Sarkar, LIC Housing Finance MD & CEO V K Sharma, and three executive directors, S B Mainak, Roy and Usha Sangwan.
Roy joined LIC in 1981 as a direct recruit officer of the 11th Batch. He has served the Corporation in prominent positions like area manager, LIC HFL, secretary (legal), chief (SBU-estate), regional manager (P&IR) and executive director (marketing /bancassurance & alternate channels).
He was zonal manager of the north central zone from 2009 to 2011 and from 2011 to 2013, he was in charge of the Eastern Zone, one of the premier Zones of the Corporation. He had been recently posted as head of the international operations before taking over as managing director.
LIC is the country's largest life insurer with 83 per cent market share in terms of number of policies and 71 per cent in terms of premiums. LIC collected new business premiums of Rs 76,246 crore for the financial year 2012-13.
BUSINESS STANDERED
lic chairman SK ROY
The government has appointed S K Roy as the Chairman of Life Insurance Corporation of Ind
S k Roy, who at present a Managing Director in the organization would be succeeding D K Mehrotra, whose term as LIC chief ended on May 31, 2013.
Roy would be at the helm of the insurance behemoth for a period of five years. He will assume charge on first July 2013.
The other candidates who were in fray for this top job were Managing Director, Sushobhan Sarkar and Executive Director S B Mainak.
Roy joined LIC in 1981. On May 31, 2013, he assumed charge as Managing Director of LIC along with Thomas Mathew and Sushobhan Sarkar.
Prior to his elevation, he was head of the International Operations Division. He was also zonal manager of North Central zone and Eastern zone of the LIC.
If your car is stolen, there’s no time bar to claim insurance
MUMBAI: A consumer forum has held that the condition with regard to the time limit in intimating an insurance claim is not mandatory but directory. The forum directedOriental Insurance Company to pay Rs 1.54 lakh compensation along with the insured amount of Rs 4.86 lakh to a Mulund-based man whose vehicle was stolen. The company had repudiated his claim on the ground that he had not intimated them about the claim within the mandatory 48-hour period.
The forum cited a state commission order which said, "This clause is meant for the interest of the insured, in order to facilitate the scrutiny of the claim. This clause therefore, cannot be used in determent to the interest of the insurer."
The vehicle owner Chetan Kohli said that he purchased the Bolero Sport 7 star vehicle for Rs 4.86 lakh on December 18, 2009. He alleged that on the morning of January 8, 2010, he could not find his vehicle at the space in which it was parked and eventually realised that it was stolen.
Kohli immediately informed the police and an FIR was lodged. He also informed the insurance company about the theft and told them that he wanted to file the claim. The company, however, asked Kohli to visit its office along with all the documents of the vehicle. He in turn informed them that since the vehicle was new he did not have the papers and had to collect them from the RTO Office.
The company advised Kohli to first collect the vehicle papers and RTO registration papers and then file the claim form. However, when he finally managed to procure the documents and submit the claim in March 2010, his claim was rejected on the ground that it was not intimated within the mandatory period of 48 hours.
Aggrieved, Kohli filed a complaint on August 18, 2010 in the South Mumbai District Consumer Disputes Redressal Forum. He alleged that the insurance company never informed him that there was a mandatory submission time. Kohli said that he was wrongly advised to get the papers first and then contact the insurance company. In the forum, the insurance company iterated its stand.
The forum said that Kohli had specifically informed the company that he did not have the documents, immediately after the theft of his vehicle occurred. It held that under such facts and circumstances the repudiation was not justifiable. "We therefore, hold that the opposite party (insurance company) cannot repudiate the genuine claim of the insured simply on the ground that there was no communication within the stipulated point of time," the forum said.
vinay mohanty
The forum cited a state commission order which said, "This clause is meant for the interest of the insured, in order to facilitate the scrutiny of the claim. This clause therefore, cannot be used in determent to the interest of the insurer."
The vehicle owner Chetan Kohli said that he purchased the Bolero Sport 7 star vehicle for Rs 4.86 lakh on December 18, 2009. He alleged that on the morning of January 8, 2010, he could not find his vehicle at the space in which it was parked and eventually realised that it was stolen.
Kohli immediately informed the police and an FIR was lodged. He also informed the insurance company about the theft and told them that he wanted to file the claim. The company, however, asked Kohli to visit its office along with all the documents of the vehicle. He in turn informed them that since the vehicle was new he did not have the papers and had to collect them from the RTO Office.
The company advised Kohli to first collect the vehicle papers and RTO registration papers and then file the claim form. However, when he finally managed to procure the documents and submit the claim in March 2010, his claim was rejected on the ground that it was not intimated within the mandatory period of 48 hours.
Aggrieved, Kohli filed a complaint on August 18, 2010 in the South Mumbai District Consumer Disputes Redressal Forum. He alleged that the insurance company never informed him that there was a mandatory submission time. Kohli said that he was wrongly advised to get the papers first and then contact the insurance company. In the forum, the insurance company iterated its stand.
The forum said that Kohli had specifically informed the company that he did not have the documents, immediately after the theft of his vehicle occurred. It held that under such facts and circumstances the repudiation was not justifiable. "We therefore, hold that the opposite party (insurance company) cannot repudiate the genuine claim of the insured simply on the ground that there was no communication within the stipulated point of time," the forum said.
vinay mohanty
How to Reduce Dollar rate and support to Indian Economy
How to Reduce Dollar rate and support to Indian Economy
1. Increase consumption of Domestic Products
2. Export More Agriculture Product and Indian Manufacturing Products.
3. Stop Using Softdrinks and other Food Products of International Brand
4. Less Import of Gold and other Luxurias Product of International Brand
5. Opportunity Create for Employment to Generate more of Dollar like Out source for International Brand.
6. Use of Cycle for Short Distance for Health and Reducing Cost of Petrol.
7. Focus on Investment of NRIs into India.
8. India is Big Market for International Seller, Lets make Indian Products for the World.
Share these with every Indian maximum to your Reach and Create Awareness.
vinay mohanty
1. Increase consumption of Domestic Products
2. Export More Agriculture Product and Indian Manufacturing Products.
3. Stop Using Softdrinks and other Food Products of International Brand
4. Less Import of Gold and other Luxurias Product of International Brand
5. Opportunity Create for Employment to Generate more of Dollar like Out source for International Brand.
6. Use of Cycle for Short Distance for Health and Reducing Cost of Petrol.
7. Focus on Investment of NRIs into India.
8. India is Big Market for International Seller, Lets make Indian Products for the World.
Share these with every Indian maximum to your Reach and Create Awareness.
vinay mohanty
new products filed for approval would be cleared in a week’s time.IRDA
The Insurance Regulatory and Development Authority (IRDA) has ensured that product compliant with the new guidelines and filed for approval would be cleared in a week’s time.
Till now, IRDA has cleared 50 products under the new regulatory regime for traditional products.
In February this year, the IRDA had notified changes in the traditional product guidelines. This includes changes in the surrender charges, product structures and commissions paid to the agents.
According to these norms, products that do not conform to these norms will have to be re-filed. The deadline for re-filing group insurance products is first July 2013 and for individual products first October 2013.
The IRDA has said that it has put out all details on its website. If a product meets all guidelines, they will be cleared very fast, If not, it will be sent to be revised and hence will take a longer time.
The IRDA will employ additional people to fast-clear the continuous flow of product re-filing.
IRDA’s norms meant that after first October 2013, existing products of life insurers cannot be sold to customers if they are not in tandem with regulatory changes. Hence, life insurers are now re-filing products to ensure that they get the approvals on time and have a complete product portfolio by October.
The IRDA is also considering the request of life insurers to approve priority products. Though companies might re-file two to three products at a time, the approval will be given first to those on top priority for the life insurance company concerned.
On an average, IRDA approves 20 products every month for life insurance companies. However, with almost 70-85% of existing traditional products coming for re-filing, it is estimated that almost 40-50 products could be approved in a month.
vinay mohanty
Till now, IRDA has cleared 50 products under the new regulatory regime for traditional products.
In February this year, the IRDA had notified changes in the traditional product guidelines. This includes changes in the surrender charges, product structures and commissions paid to the agents.
According to these norms, products that do not conform to these norms will have to be re-filed. The deadline for re-filing group insurance products is first July 2013 and for individual products first October 2013.
The IRDA has said that it has put out all details on its website. If a product meets all guidelines, they will be cleared very fast, If not, it will be sent to be revised and hence will take a longer time.
The IRDA will employ additional people to fast-clear the continuous flow of product re-filing.
IRDA’s norms meant that after first October 2013, existing products of life insurers cannot be sold to customers if they are not in tandem with regulatory changes. Hence, life insurers are now re-filing products to ensure that they get the approvals on time and have a complete product portfolio by October.
The IRDA is also considering the request of life insurers to approve priority products. Though companies might re-file two to three products at a time, the approval will be given first to those on top priority for the life insurance company concerned.
On an average, IRDA approves 20 products every month for life insurance companies. However, with almost 70-85% of existing traditional products coming for re-filing, it is estimated that almost 40-50 products could be approved in a month.
vinay mohanty
IRDA has asked all life insurers to re-file products
The Insurance Regulatory and Development Authority (IRDA) has asked all life insurers to re-file products for individual segments that didn’t conform to new norms on traditional products before first October 2013. That means insurers wouldn’t be able to sell existing policies after the deadline.
Life Insurance Corporation of India (LIC), India’s largest insurer, has started developing new products. The company’s actuary and product development departments are developing products with new features. These could be filed with IRDA.
Life insurers have started securing approval for revised products. For instance, HDFC Life has launched a product, ‘HDFC Life ClassicAssure Plus’ (a protection-cum-investment plan) with a limited premium payment term. This is compliant with the revised IRDA norms.
Private life insurers are also focusing on customer initiatives to push renewals. For instance, Reliance Life said apart from its focus on agent productivity, its customer contactability initiatives such as Reliance Life Plus, Life Plaza and Face-to-Face would help it significantly improve renewals.
Insurers say that industry might lose a few customers due to the fact that the first few quarters wouldn’t see new products. However, in the long run, most of the regulatory changes would pave the way for sustainable growth for the sector.
Insurance companies are also prioritizing products. For instance, IDBI Federal Life said after identifying the features in a product that had to be modified, the company focused on re-filing products that saw high sales.
vinay mohanty
Life Insurance Corporation of India (LIC), India’s largest insurer, has started developing new products. The company’s actuary and product development departments are developing products with new features. These could be filed with IRDA.
Life insurers have started securing approval for revised products. For instance, HDFC Life has launched a product, ‘HDFC Life ClassicAssure Plus’ (a protection-cum-investment plan) with a limited premium payment term. This is compliant with the revised IRDA norms.
Private life insurers are also focusing on customer initiatives to push renewals. For instance, Reliance Life said apart from its focus on agent productivity, its customer contactability initiatives such as Reliance Life Plus, Life Plaza and Face-to-Face would help it significantly improve renewals.
Insurers say that industry might lose a few customers due to the fact that the first few quarters wouldn’t see new products. However, in the long run, most of the regulatory changes would pave the way for sustainable growth for the sector.
Insurance companies are also prioritizing products. For instance, IDBI Federal Life said after identifying the features in a product that had to be modified, the company focused on re-filing products that saw high sales.
vinay mohanty
Over 10 Lakh Life Insurance Agents Exited The Industry Over The Past 4 Years
Life insurance companies has terminated over 36 lakh agents and hired around 26 lakh agents over the past four years. This marks a net decline of 10 lakh agents for the industry.
Agency is the main channel for distribution in the life insurance industry. The fall in the total number of agents is a big challenge to the industry.
The life insurance industry has seen a decline in new business premium collection for the past three years, particularly in the Unit-Linked Insurance Plan (ULIP) segment.
After rampant mis-selling in 2010, the Insurance Regulatory and Development Authority (IRDA) revamped ULIP norms by increasing the lock-in period and cutting commissions on their sale for agents from average of 15% of the premium collected to 5-6%. This led to a massive dip in ULIP sales and a shift in focus to traditional insurance products.
In 2011, the IRDA introduced a new, tougher syllabus and examination pattern for those seeking to get an agency license. This resulted in big drop in the number of agents clearing the exam.
The IRDA identified the cut-off percentage of 50% as one of the major reasons for the fall in the number of agents. Subsequently, 35% was made the minimum pass mark.
Earlier only 40% of the agents appearing were able to clear the exam but after the reduction in the minimum pass percentage, over 80% have been able to pass.
vinay mohanty
Eyes, nose or ears — drop the habit
Using over-the-counter drops for minor irritations without asking a doctor could have disastrous consequences.
At the age of 27, Aabha has developed cataract in both her eyes.This isn’t the result of a mysterious medical condition. It is the consequence of using a steroid-based eye drop every night before going to bed for the past year.
“My mother used these drops, so I bought them from the chemist too. The attendant said the medicine had no side-effects. I just used them to clean my eyes so I could prevent vision loss,” said Aabha (name changed), who will now have to undergo a surgery for the condition, in which the inside of the lens gets cloudy, affecting the patient’s vision. “I can’t blame the chemist. A drug that cost just Rs. 10 has damaged my eyes. I regret self-medicating,” she said.
Medicinal drops that promise quick relief from eye or ear infections and nasal decongestion can harm you if used for too long, say doctors. Patients cause major damage to their sense organs by using medicines to treat minor irritation without visiting a physician.
“To get relief from eye irritation, the best thing to do is to relax the eyes and reduce computer and television usage. I advise patients to clean their eyes with warm water, which helps kill microorganisms,” said Dr Darshan Chudgar, an ophthalmologist at Kohinoor hospital, Kurla.
Apart from purchasing drops by consulting attendants at chemist shops, patients often share medicines with other members of the family — a serious hazard as infections differ from patient to patient.
Dr Chudgar, for instance, recalled a case where a patient used the eye drops prescribed by the doctor for another relative. Over time, she started losing her vision.
The most common side-effect of overusing steroid eye drops is cataract and glaucoma, but they could also cause ulceration (ulcer-like formations) in the corneas.
Ophthalmologists say people who use contact lenses are the most vulnerable as they often suffer from mild irritations in the eye and treat themselves with eye drops.
Take the case of Saumeet Bhandare (name changed) who suffered an eye infection after wearing lenses for long hours while travelling by air. Instead of visiting a doctor, he picked up eye drops from a local chemist.
“He ended up with a pseudomonas infection (a severe eye infection that damages vision),” said Dr Himanshu Mehta, ophthalmologist, Lilavati hospital, Bandra. Bhandare fortunately regained vision after treatment.
“If there was any more delay in reaching the hospital, he would have gone completely blind in one eye,” said Dr Mehta.
From mild ear infection to hearing loss
Bhayandar resident Neelam Chenvankar’s mild fungal ear infection turned severe with hearing loss when she self-medicated with drops that she bought from her chemist.
“Even after regularly putting the drops, the pain increased instead of subsiding,” said Chenvankar, 45, who works in a private company.
Chenvankar's doctor informed her that she was using the wrong drops for her ear infection, which only aggravated it.
“She used the drops for many days without consulting the doctors. We see many such patients who self-medicate with drops and come with severe side-effects,” said Dr Sanjay Helale, ENT surgeon, Kohinoor hospital, Kurla.
“This patient had been using two to three different types of drops, which were actually made to remove wax.”
vinay mohanty
At the age of 27, Aabha has developed cataract in both her eyes.This isn’t the result of a mysterious medical condition. It is the consequence of using a steroid-based eye drop every night before going to bed for the past year.
“My mother used these drops, so I bought them from the chemist too. The attendant said the medicine had no side-effects. I just used them to clean my eyes so I could prevent vision loss,” said Aabha (name changed), who will now have to undergo a surgery for the condition, in which the inside of the lens gets cloudy, affecting the patient’s vision. “I can’t blame the chemist. A drug that cost just Rs. 10 has damaged my eyes. I regret self-medicating,” she said.
Medicinal drops that promise quick relief from eye or ear infections and nasal decongestion can harm you if used for too long, say doctors. Patients cause major damage to their sense organs by using medicines to treat minor irritation without visiting a physician.
“To get relief from eye irritation, the best thing to do is to relax the eyes and reduce computer and television usage. I advise patients to clean their eyes with warm water, which helps kill microorganisms,” said Dr Darshan Chudgar, an ophthalmologist at Kohinoor hospital, Kurla.
Apart from purchasing drops by consulting attendants at chemist shops, patients often share medicines with other members of the family — a serious hazard as infections differ from patient to patient.
Dr Chudgar, for instance, recalled a case where a patient used the eye drops prescribed by the doctor for another relative. Over time, she started losing her vision.
The most common side-effect of overusing steroid eye drops is cataract and glaucoma, but they could also cause ulceration (ulcer-like formations) in the corneas.
Ophthalmologists say people who use contact lenses are the most vulnerable as they often suffer from mild irritations in the eye and treat themselves with eye drops.
Take the case of Saumeet Bhandare (name changed) who suffered an eye infection after wearing lenses for long hours while travelling by air. Instead of visiting a doctor, he picked up eye drops from a local chemist.
“He ended up with a pseudomonas infection (a severe eye infection that damages vision),” said Dr Himanshu Mehta, ophthalmologist, Lilavati hospital, Bandra. Bhandare fortunately regained vision after treatment.
“If there was any more delay in reaching the hospital, he would have gone completely blind in one eye,” said Dr Mehta.
From mild ear infection to hearing loss
Bhayandar resident Neelam Chenvankar’s mild fungal ear infection turned severe with hearing loss when she self-medicated with drops that she bought from her chemist.
“Even after regularly putting the drops, the pain increased instead of subsiding,” said Chenvankar, 45, who works in a private company.
Chenvankar's doctor informed her that she was using the wrong drops for her ear infection, which only aggravated it.
“She used the drops for many days without consulting the doctors. We see many such patients who self-medicate with drops and come with severe side-effects,” said Dr Sanjay Helale, ENT surgeon, Kohinoor hospital, Kurla.
“This patient had been using two to three different types of drops, which were actually made to remove wax.”
vinay mohanty
take care of your home when you are for away
Real estate is possibly the most popular investment vehicle if you are a non-resident Indian (NRI). But since it is just that, an investment, the property needs looking after as you, the owner, are far away in your country of residence.
You may visit once a year but you find that this brief visit is simply not enough to deal with real estate issues such as maintenance, renting, utility
bills and property taxes. You must have wished that the professional property management firms you see working so well in the developed countries could set up shop in India as well. Your wishes seem to be coming true if recent trends are any indication.
There are a host of property management firms that have set up shop in the country and offer a variety of services. Here’s a look at who they are, what are the services that they provide and what are the costs involved.
Services available and providers
There are property management companies that have set up shops and provide a variety of services. These companies provide services such as supervising repair works, housekeeping, visiting property for inspections and also coordinating property tax payments, updating legal documents and so on. Along with this they will send you pictures of your property on periodic basis.
Take the case of Bangalore-based Homewell Developers Pvt. Ltd. You’ll need to pay an annual membership of Rs.30,000 per flat, no matter how big, to Homewell. This Rs.30,000 gets you services for a year including housekeeping, paying of bills, pest control, painting, and plumbing and so on. Along with this, you will have to pay the vendors for the costs that they incur, such as employee costs and costs of equipment.
The property management firms have tied up with vendors (those that will do work such as cleaning, plumbing and so on) who provide these various services. So you can either pay this amount to the property management company (via cheques) or even pay it directly to vendors.
Chennai Property Management, another firm offering the service, charges a minimum yearly fee (for a 2 bedroom-hall-kitchen apartment with monthly housekeeping and paying of monthly utility bills and taxes) of Rs.17,000. Along with this, you will have to pay the vendors that carry out the services. For instance, you will have to shell out Rs.700 for a cleaning session (Rs.600 which is the fee for the worker who can be a cleaner and Rs.100 for food and the travel of that person).
Aukeva Inc., a San Francisco- and Delhi-based property management firm will charge you a yearly fee of between Rs.10,000 and Rs.2 lakh along with the actuals. The charge will depend on the size, location and the services that you avail. The charges will also depend on the location, size of the property and the bouquet of services that the customer will choose.
The second entity that can help you is your own developer. However, not all developers have an in-house property management firm. What they do is point you in the direction of a fee-for service provider not linked to the builder or can take over the task of the service. “We provide help in getting residents in touch with such firms and for this we do not charge anything,” says R. Karthik, chief marketing officer, Lodha Group. Godrej Properties Ltd, though, do not offer property management services, they can guide to the firms that offer these services.
Others such as the Kerala-based developer Abad Properties has a separate property management division. A spokesperson for the company said that they offer these services especially for NRIs. These services are not just available for their clients, but those who own properties with other developers as well as those with independent villas. They offer housekeeping services and you can choose to get it done weekly, monthly or even just right before you come for your visit.
For instance, if you want monthly housekeeping service for your three bedroom-hall-kitchen set, Abad will charge you a fee of Rs.1,000 a month. And for a villa, they will charge you Rs.2,000. For services such as repair work or cleaning of swimming pools, you will have to pay Abad the employee cost along with the cost of equipment and an additional 10-15% of this total amount. Another developer that offers property management is Prestige Estate Projects Ltd.
The paperwork
When you enlist for these services, you’ll need an identity proof that shows that you own the property (it could be a sales deed). “You will then have to sign a service agreement with the property management firm. You will also have to give us a set of keys of the property,” says Radhika Bahadur, founder, Aukeva Inc.
You needn’t have to meet the property management firm in person or even send a power of attorney. The agreement can be signed via email as well, says Bahadur. Since property management companies help you in paying property taxes, the property tax papers is something that they will require. You will also have to introduce the property managers to your society’s association president.
However, keep in mind to avail services of a trusted property management firm as there are many smaller firms that provide these services.
Do your groundwork before enlisting their services. Ask these firms if they can give you contact details of their existing clients to get a feedback of the quality of services.
vinay mohanty
You may visit once a year but you find that this brief visit is simply not enough to deal with real estate issues such as maintenance, renting, utility
bills and property taxes. You must have wished that the professional property management firms you see working so well in the developed countries could set up shop in India as well. Your wishes seem to be coming true if recent trends are any indication.
There are a host of property management firms that have set up shop in the country and offer a variety of services. Here’s a look at who they are, what are the services that they provide and what are the costs involved.
Services available and providers
There are property management companies that have set up shops and provide a variety of services. These companies provide services such as supervising repair works, housekeeping, visiting property for inspections and also coordinating property tax payments, updating legal documents and so on. Along with this they will send you pictures of your property on periodic basis.
Take the case of Bangalore-based Homewell Developers Pvt. Ltd. You’ll need to pay an annual membership of Rs.30,000 per flat, no matter how big, to Homewell. This Rs.30,000 gets you services for a year including housekeeping, paying of bills, pest control, painting, and plumbing and so on. Along with this, you will have to pay the vendors for the costs that they incur, such as employee costs and costs of equipment.
The property management firms have tied up with vendors (those that will do work such as cleaning, plumbing and so on) who provide these various services. So you can either pay this amount to the property management company (via cheques) or even pay it directly to vendors.
Chennai Property Management, another firm offering the service, charges a minimum yearly fee (for a 2 bedroom-hall-kitchen apartment with monthly housekeeping and paying of monthly utility bills and taxes) of Rs.17,000. Along with this, you will have to pay the vendors that carry out the services. For instance, you will have to shell out Rs.700 for a cleaning session (Rs.600 which is the fee for the worker who can be a cleaner and Rs.100 for food and the travel of that person).
Aukeva Inc., a San Francisco- and Delhi-based property management firm will charge you a yearly fee of between Rs.10,000 and Rs.2 lakh along with the actuals. The charge will depend on the size, location and the services that you avail. The charges will also depend on the location, size of the property and the bouquet of services that the customer will choose.
The second entity that can help you is your own developer. However, not all developers have an in-house property management firm. What they do is point you in the direction of a fee-for service provider not linked to the builder or can take over the task of the service. “We provide help in getting residents in touch with such firms and for this we do not charge anything,” says R. Karthik, chief marketing officer, Lodha Group. Godrej Properties Ltd, though, do not offer property management services, they can guide to the firms that offer these services.
Others such as the Kerala-based developer Abad Properties has a separate property management division. A spokesperson for the company said that they offer these services especially for NRIs. These services are not just available for their clients, but those who own properties with other developers as well as those with independent villas. They offer housekeeping services and you can choose to get it done weekly, monthly or even just right before you come for your visit.
For instance, if you want monthly housekeeping service for your three bedroom-hall-kitchen set, Abad will charge you a fee of Rs.1,000 a month. And for a villa, they will charge you Rs.2,000. For services such as repair work or cleaning of swimming pools, you will have to pay Abad the employee cost along with the cost of equipment and an additional 10-15% of this total amount. Another developer that offers property management is Prestige Estate Projects Ltd.
The paperwork
When you enlist for these services, you’ll need an identity proof that shows that you own the property (it could be a sales deed). “You will then have to sign a service agreement with the property management firm. You will also have to give us a set of keys of the property,” says Radhika Bahadur, founder, Aukeva Inc.
You needn’t have to meet the property management firm in person or even send a power of attorney. The agreement can be signed via email as well, says Bahadur. Since property management companies help you in paying property taxes, the property tax papers is something that they will require. You will also have to introduce the property managers to your society’s association president.
However, keep in mind to avail services of a trusted property management firm as there are many smaller firms that provide these services.
Do your groundwork before enlisting their services. Ask these firms if they can give you contact details of their existing clients to get a feedback of the quality of services.
vinay mohanty
how much do you know your insurance bonus?
Your insurance policy is just not for saving tax. The bonus that accrues on your policy can also help you maximise your wealth.
Bonus is a very common term in insurance agreements. Even, an insurance seeker always has a tendency to find out a policy which offers more bonuses. A bonus is a reward or an extra amount which an individual gets over and above the sum invested (base amount) in the insurance
policy. In insurance industry, bonuses can only be associated with life insurance products.
A bonus is generally accrued by the insurance provider every year but it is only provided to the insured or the nominees of the insured in the event of maturity of the policy or in case of unfortunate death of the insured.
A bonus is not paid apart from these two situations under a life insurance policy contract.
Under life insurance policy contract, insurer provides protection and coverage from several risks for which insured has to pay insurance premium to the insurer. Insurance premium is dependent on many factors like the age of the person, coverage provided by the policy and tenure of the coverage.
In India, insurance products are just considered as an instrument to save tax but you must understand its importance as a wealth maximisation instrument as well.
A premium paid by policyholders to the insurance companies generates revenue for a policyholder acting as a source of bonuses as well.
The premiums paid by policyholders are pooled within life insurance company’s fund and then invested in order to pay out claims and bonuses. Bonuses are offered on traditional plans which are built into the plan structure. But as more and more innovative products are introduced in the market, people have started expecting to reap more benefits from life insurance products.
Unit linked insurance plan is one such insurance product which provides dual benefit of insurance and investment. Money parked in this form of life insurance not only protects from risks but also act as a source of wealth maximisation.
The insurance premium is pooled by the insurance company and invested into government securities including debt instruments and equity markets in order to generate revenues for the investor. Generally, the insurance companies invest funds as per predefined structures.
Here are few forms of bonuses offered by insurance companies:
Simple reversionary bonus (SRB)
This type of bonus is the basic form of bonus provided with every traditional plan. This type of bonus is only calculated on the sum assured. It is generally declared annually and is accrued to be paid out at a time of maturity or the claim.
Compound reversionary bonus (CRB)
As the name suggests, the main difference between simple bonus and compound bonus is the compounding factor.
Compound reversionary bonus is calculated as a percentage of sum assured and is calculated taking into account previously accrued bonuses. The bonus of each and every year is added to the sum assured and next subsequent bonuses are calculated on the added amount.
Terminal bonus
Terminal bonus is not a necessary form of bonus provided by the insurance company and is provided at sole discretion of the provider.
This form of bonus is provided at the time of maturity or death of the life insured. It may be given to the policyholder after staying in the policy for a specific amount of time.
Interim bonus
Interim bonus is paid by the insurance company for a period falling between two annual declaration dates. It is paid for the policies that mature or result in a death claim in between two bonus declaration dates.
Interim bonus is added on a pro-rata basis using interim rates declared by the company.
Cash bonus
Cash bonus is the only bonus paid on yearly basis to the policyholder. This form of bonus is generally given in cash and is paid at the end of the year.
Insurance companies lure perspective insurance seekers with lot of bonus promises but an individual must compare various policies so as to buy the policy meeting all your requirements.
One can compare life insurance policies with the help of insurance aggregators as they provide comparison tools and calculators to perform comparisons. Comparison of insurance policies not only help you buy insurance policies with higher bonus values but also help you buy policies within your budgets as well.
vinay mohanty
Bonus is a very common term in insurance agreements. Even, an insurance seeker always has a tendency to find out a policy which offers more bonuses. A bonus is a reward or an extra amount which an individual gets over and above the sum invested (base amount) in the insurance
policy. In insurance industry, bonuses can only be associated with life insurance products.
A bonus is generally accrued by the insurance provider every year but it is only provided to the insured or the nominees of the insured in the event of maturity of the policy or in case of unfortunate death of the insured.
A bonus is not paid apart from these two situations under a life insurance policy contract.
Under life insurance policy contract, insurer provides protection and coverage from several risks for which insured has to pay insurance premium to the insurer. Insurance premium is dependent on many factors like the age of the person, coverage provided by the policy and tenure of the coverage.
In India, insurance products are just considered as an instrument to save tax but you must understand its importance as a wealth maximisation instrument as well.
A premium paid by policyholders to the insurance companies generates revenue for a policyholder acting as a source of bonuses as well.
The premiums paid by policyholders are pooled within life insurance company’s fund and then invested in order to pay out claims and bonuses. Bonuses are offered on traditional plans which are built into the plan structure. But as more and more innovative products are introduced in the market, people have started expecting to reap more benefits from life insurance products.
Unit linked insurance plan is one such insurance product which provides dual benefit of insurance and investment. Money parked in this form of life insurance not only protects from risks but also act as a source of wealth maximisation.
The insurance premium is pooled by the insurance company and invested into government securities including debt instruments and equity markets in order to generate revenues for the investor. Generally, the insurance companies invest funds as per predefined structures.
Here are few forms of bonuses offered by insurance companies:
Simple reversionary bonus (SRB)
This type of bonus is the basic form of bonus provided with every traditional plan. This type of bonus is only calculated on the sum assured. It is generally declared annually and is accrued to be paid out at a time of maturity or the claim.
Compound reversionary bonus (CRB)
As the name suggests, the main difference between simple bonus and compound bonus is the compounding factor.
Compound reversionary bonus is calculated as a percentage of sum assured and is calculated taking into account previously accrued bonuses. The bonus of each and every year is added to the sum assured and next subsequent bonuses are calculated on the added amount.
Terminal bonus
Terminal bonus is not a necessary form of bonus provided by the insurance company and is provided at sole discretion of the provider.
This form of bonus is provided at the time of maturity or death of the life insured. It may be given to the policyholder after staying in the policy for a specific amount of time.
Interim bonus
Interim bonus is paid by the insurance company for a period falling between two annual declaration dates. It is paid for the policies that mature or result in a death claim in between two bonus declaration dates.
Interim bonus is added on a pro-rata basis using interim rates declared by the company.
Cash bonus
Cash bonus is the only bonus paid on yearly basis to the policyholder. This form of bonus is generally given in cash and is paid at the end of the year.
Insurance companies lure perspective insurance seekers with lot of bonus promises but an individual must compare various policies so as to buy the policy meeting all your requirements.
One can compare life insurance policies with the help of insurance aggregators as they provide comparison tools and calculators to perform comparisons. Comparison of insurance policies not only help you buy insurance policies with higher bonus values but also help you buy policies within your budgets as well.
vinay mohanty
.png)
(IRDA) has reduced the pass percentage to 35% with immediate effect from 50%
In a bid to increase the number of candidates qualifying as an insurance agents, the Insurance Regulatory and Development Authority (IRDA) has reduced the pass percentage to 35% with immediate effect. Earlier, a candidate had to score a minimum of 50 % marks for qualifying in the pre-recruitment agent’s examination.
The IRDA has been receiving representations from various stakeholders expressing the practical difficulties involved in the recruitment of insurance agents.
Among other reasons, the mandated higher benchmark of 50% marks is identified as major reason contributing to reduction in agency force in the country, said a circular from IRDA.
Therefore IRDA said that considering the fact that the agents are under direct supervision of marketing officials of insurers who train them on the job continuously, it has decided to reduce the pass percentage benchmark.
In 2011, IRDA conducted a thorough review of the existing life insurance agent licensing qualification and decided to use the expertise of Chartered Insurance Institute (CII), London, in enhancing the existing IC33 ‘License to practice’ – the qualification for pre-recruitment examination for life insurance agents conducted by the Insurance Institute of India (III).
The syllabus introduced was challenging in its scope and depth. It did not encourage agents to merely memorise facts and figures, but also tested their understanding of learning, and ability to apply it in a wide range of practical real-life situations.
As a result, very few candidates were able to clear agent’s examination leading to significant drop in the number of insurance agents in the industry.
According to IRDA annual report FY’12, the year 2011-12 witnessed 10.63% decrease in the number of individual agents. The number has gone down to 26.39 lakh as on 31 March 2011, to 23.59 lakh as on 31 March 2012. While total number of agents appointed by life insurers was 7.14 lakh, the number of agents terminated was as high as 9.95 lakh.
The scenario was worse for private life insurers compared to Life Insurance Corporation of India (LIC). While private insurers appointed 3.68 lakh agents, 5.89 lakh agents were terminated. On the other hand, in case of LIC, 4.04 lakh agents were terminated, while it appointed 3.45 lakh agents.
Insurers say that agent examination had become more caselet oriented with application of knowledge to ensure that only those who can apply their knowledge are able to clear the exams. Bringing down the minimum pass percentage will ensure that more number of students qualify as agents.
vinay mohanty
The IRDA has been receiving representations from various stakeholders expressing the practical difficulties involved in the recruitment of insurance agents.
Among other reasons, the mandated higher benchmark of 50% marks is identified as major reason contributing to reduction in agency force in the country, said a circular from IRDA.
Therefore IRDA said that considering the fact that the agents are under direct supervision of marketing officials of insurers who train them on the job continuously, it has decided to reduce the pass percentage benchmark.
In 2011, IRDA conducted a thorough review of the existing life insurance agent licensing qualification and decided to use the expertise of Chartered Insurance Institute (CII), London, in enhancing the existing IC33 ‘License to practice’ – the qualification for pre-recruitment examination for life insurance agents conducted by the Insurance Institute of India (III).
The syllabus introduced was challenging in its scope and depth. It did not encourage agents to merely memorise facts and figures, but also tested their understanding of learning, and ability to apply it in a wide range of practical real-life situations.
As a result, very few candidates were able to clear agent’s examination leading to significant drop in the number of insurance agents in the industry.
According to IRDA annual report FY’12, the year 2011-12 witnessed 10.63% decrease in the number of individual agents. The number has gone down to 26.39 lakh as on 31 March 2011, to 23.59 lakh as on 31 March 2012. While total number of agents appointed by life insurers was 7.14 lakh, the number of agents terminated was as high as 9.95 lakh.
The scenario was worse for private life insurers compared to Life Insurance Corporation of India (LIC). While private insurers appointed 3.68 lakh agents, 5.89 lakh agents were terminated. On the other hand, in case of LIC, 4.04 lakh agents were terminated, while it appointed 3.45 lakh agents.
Insurers say that agent examination had become more caselet oriented with application of knowledge to ensure that only those who can apply their knowledge are able to clear the exams. Bringing down the minimum pass percentage will ensure that more number of students qualify as agents.
vinay mohanty
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