Life Insurance Companies India: Market share

Market Share of all Life Insurance Companies in India at the end of March-2012 / FY 2012

Kotak Assured Income Plan :the best policy for all ages with best features in the industry

Have you hear about an insurance policy which is like

1.       Child plan / child education plan

2.       Retirement / Pension Plan

3.       Money back plan with guaranteed returns

Then the following is the best policy for all ages with best features in the industry

Kotak Assured Income Plan   Overview

The little luxuries that we indulge in with our family form our most pleasant memories. Imagine if you could enjoy these moments without worrying about the associated costs. An additional guaranteed stream of income could make a difference here. A smart investment decision today can go a long way in ensuring that the life, you want for your family and yourself, would indeed become a reality

Why is it an ideal plan?

Kotak Assured Income Plan guarantees you an additional income every year, for 20 years provided the policy is in force. In addition, on maturity you receive 110% to 104% of Basic Sum Assured. You also enjoy life cover for the entire policy term thereby protecting your family should something happen to you.

Advantages

Enjoy Assured Annual Income for 20 years Receive lump sum on maturity Provide protection to your family for 30 years Avail of policy loan to meet sudden expenses Boost your protective cover through optional rider benefits

Key Features

Enjoy Assured Annual Income for 20 years

Kotak Assured Income Plan guarantees you an Assured Annual Income every year for a period of 20 years, provided the policy is in force. It will be paid starting from the end of 10th policy year as a percentage of your Basic Sum Assured as mentioned below:

Premium Bands Assured Annual Income Up to Rs. 24,999 9.10% Rs. 25,000 to Rs. 74,999 9.60% Rs. 75,000 and above 10.10%

Maturity Benefit - Receive lump sum on maturity

In addition to guaranteeing you a regular stream of income for 20 years, this plan provides you a lump sum equal to 110% to 104% of Basic Sum Assured on maturity. Now the family vacation you had long delayed, the second home you wanted to own or the car you always loved might just become a reality.

Death Benefit - Provide protection to your family for 30 years

In case of your unfortunate demise during the policy term of 30 years, the Basic Sum Assured is paid to the beneficiary ensuring your family’s well being under all eventualities.

Avail of policy loan to meet sudden expenses

To help you tide over financial emergencies this plan offers you policy loan after completion of three policy years.

Boost your protective cover through optional rider benefits

The plan offers following rider benefits to help you customize your protective cover. The riders offered in this plan are:

Kotak Accidental Death Benefit (ADB) Kotak Permanent Disability Benefit (PDB) Kotak Life Guardian Benefit (LGB) Kotak Accidental Disability Guardian Benefit (ADGB)

Tax Benefits

You can avail of tax benefits under Section 80C and Section 10 (10D) of Income Tax Act, 1961. Tax benefits are subject to change in the tax laws.  Call on 7795499307 for details

Mis-selling of LIC policies continues

Agents are painting a rosy picture and promising guaranteed returns to clueless investors

Even as insurance behemoth Life Insurance Corporation of India (LIC) is busy bailing out initial public offerings of public sector units (PSUs), LIC agents are finding new ways to trick investors.

Meanwhile, the insurance regulator is busy issuing advertisements selling and explaining products such as unit-linked insurance plans (ULIPs) instead of cracking down on dubious selling tricks.

A source told Moneylife,”Two years back, a client was sold an LIC policy for which she made one-time premium payment of Rs1 lakh for 10 years. After the vesting period, she was promised a monthly pension of Rs5,000 (Rs60,000 annually) for the rest of her life. This sounded too good to be true. At this rate, the client’s entire notional corpus is likely to get eroded. From where will LIC fund this kind of money? It is hard to believe that the insurer would sell such a product. When we did the calculation, we found that the return being promised by the policy worked out to be 25% compounded annually. A debt-oriented product cannot offer a return of more than 6%-7%. Even equity-linked products can manage 15% returns at the most.”

Often, agents show a performance chart to the investor which is invented by themselves and not LIC. The performance chart shows impressive compounded annual growth rate (CAGR) returns of 20%-25% over a period of one year.

According to sources, agents don’t give the product literature to the investor during the 15 days of the ‘cooling-off period’ under some pretext. In this case too, the agent said that she was “busy with the financial year end” and would submit her product literature later. By the time the agent produces the documents, the investor has no option but to continue with the policy.

Numerous misleading advertisements of LIC are being circulated in regional languages carrying a logo of LIC, in smaller towns. These ads promise astronomical returns.

Apparently LIC is not responsible for publishing such misleading claims but it is the agent who takes investors for a ride. Usually the product literature is not on the letterhead of LIC.

“There are umpteen instances where clients are promised exaggerated returns. One of them was promised a return of 35%. This example is just the tip of the iceberg,” adds the source.

Earlier, LIC’s Money Plus—launched in 2007—was also rampantly mis-sold by distributing pamphlets promising unrealistic returns.


The reason for this mis-selling is the high commissions doled out to agents.


Courtesy  : Money life  March 25, 2010 04:49 PM   Ravi Samalad

Life Insurance: True Numbers-LIC’s leads decline; private players still in growth mode

LIC’s leads decline; private players in growth mode. 

A decline in growth of new-business premiums(NBP) for Jan ’10 stemmed from LIC’s high base last year. 
NBPs fell 40.3% yoy (up 15.3% ytd), primarily led by LIC (down 53.5%yoy, up 23% ytd). 


Private insurers recorded another month of positive NBP growth in FY10 (up 11.6% yoy, 3.3% ytd)

SBI Life, HDFC and Kotak show high yoy NBP growth 

 SBI grew 45.4% yoy, (21.1% ytd)

HDFC grew 41.6% (11.7% ytd) 

Kotak grew 25.1% (-13.6% ytd). 

ICICI (17bp) to5.8%, 

Bajaj Allianz (11bp) to 3.8% 


Reliance, Birla and ICICI show yoy NBP decline 
Of the other large insurers, 

Reliance fell 22.4% yoy, (7.8% ytd), 

Birla 24.8% yoy (up 10.1% ytd) and ICICI 9% yoy (-17% ytd). Birla lost
the most market share (10bp) to 2.9%.
 LIC fell a sizeable 53.5%,and lost market share (33bp) to 65.1%, on account of a high base
last year. In Jan ’09, LIC mobilized individual single premiums of
Rs82bn, compared to Rs16bn in Jan’ 10, and higher than FY09’s
monthly average of Rs13bn.
 
 FUTURE of Life Insurance:
The revival in NBP growth of private insurers has beenled by equity markets looking up, and a favourable “base-effect”.So far, the monthly trend is encouraging, with strong NBP growth in the last three months. We expect the industry’s APE to grow ~8% in FY10.
 


Courtesy:Anand Rathi 

Regulator acts like an industry association; IRDA promotes ULIPs!

The insurance regulator has launched an unprecedented advertising campaign, hard-selling ULIPs. Not only is this a bizarre action for a regulator, but the ad is also misleading as it fails to provide any concrete evidence of ULIPs’ superior performance
Can you imagine the Reserve Bank of India (RBI) hard-selling recurring deposit schemes of banks or the Securities and Exchange Board of India (SEBI) bombarding investors with ads asking them to buy infrastructure funds? That is exactly what the Insurance Regulatory and Development Authority (IRDA) is doing.

IRDA recently launched an advertising campaign promoting unit-linked insurance plans (ULIPs) for pensions. The ads seek to educate investors of the benefits of ULIPs in providing for regular income or pension during retired life. However, in its attempt to hard-sell ULIPs, IRDA has brought out an ambiguous and misleading ad.

A ULIP is a life insurance policy, which provides a combination of risk cover and investment. It is the most common ‘insurance’ plan sold by life insurers and is quite popular among investors, thanks to massive promotions and incentives. The ad basically tries to impress upon the reader that a ULIP is a sound investment option if one is looking out for regular income during retired life. However, there are several issues with the claims made in the ad.

First, it has failed to substantiate this argument with any comparative indicators as to the returns that the product is likely to generate over a period of time. The ad provides no factual basis for making claims that ULIPs are the right product to ensure that you are well-provided for in your retirement. There is no comparative data of the returns of other long-term investment products, to underline ULIPs’ superiority.

The fact is that IRDA or anybody cannot provide this comparative information. This is simply because ULIPs have no track record. Who can say how ULIPs would do over, say, 30 years? Even products with established records do not perform as per their promise. What if ULIPs turn out to be the worst option between bank recurring deposit schemes, balanced funds, New Pension Scheme and even diversified equity funds? There is no guarantee that a ULIP will provide the holder with a safe kitty once he reaches retirement. If so, is the regulator pushing the investors into a wrong product?

Second, what is the rationale behind the insurance regulator recommending an investment product? The main purpose of insurance is to provide protection to the policy-holder and is not meant for generating investment returns.

Third, the ad also appears vague in advising the reader on the tenure of investment. It says, “If the term is too short, the policy accumulation would be insufficient for a pension corpus. If you stretch the term too long, you may end up being required to pay premium when you would actually like to receive pension payouts.” The obvious question that arises here is what term or period is ideal for a ULIP? The ad leaves this bit of information hanging in thin air.

Fourth, as we mentioned in the beginning, it is bizarre that IRDA as a regulatory authority should be expounding the benefits of a single product type. The fact that it is touting the benefits of ULIPs while ignoring other products is surprising. If instead it were to launch a public awareness campaign highlighting the benefits of insurance, it would make more sense.

Interestingly, IRDA’s advertising blitz comes at a time when it is waging a war with SEBI over the regulatory purview of ULIPs. Moneylife tried contacting some industry experts on their views on this matter, but no one appeared to be willing to speak on this strange ad.

Moneylife : Regulator acts like an industry association; IRDA promotes ULIPs!

Moneylife : Regulator acts like an industry association; IRDA promotes ULIPs!

Can Promises of Highest NAV Guarantee Deliver?

Can Promises of Highest NAV Guarantee Deliver?
 
Insurance companies have launched a spate of funds promising investors a guarantee of the highest NAV achieved. Can these schemes deliver what they are promising?Over the last few months, one after another, a number of insurance companies have launched ULIPs which promise to repay the investor on the basis of the highest NAV that the fund has achieved. The pitch is that these funds' NAV effectively does not drop. Once a level is achieved, then the investor is assured of getting at least as much, no matter what happens to the market. It's certainly a very attractive idea. From the way insurance companies are stampeding into launching such products, I'm sure investors must be putting down their money in good numbers-in just a couple of months, six insurance companies have launched such products. Any investor who is told of this concept will immediately start salivating at the thought. Imagine how rich you could have been had you been invested over the last ten years and had been able to lock your investments at the magical value that the markets achieved on the day when the Sensex touched 20,873!

Any investor thinking about this product would say, "What a wonderful idea!" Why don't all investment schemes-whether mutual funds or ULIPs or even portfolio management schemes offer this kind of a protection on all their products anyway. The answer to this obvious question is simple. There is no free lunch. These products don't actually offer what you think they are offering. That is, they do not offer equity returns that never fall. Instead, they offer an investment system with a very long lock-in (seven to ten years) in which protection is achieved by progressively putting your gains in a fixed income assets which will give returns far more slowly than a pure equity option. The lock-in and the non-equity assets make this a very different kind of investment than the equity-gains-without-losses dream that these funds' advertising seems to imply.

However, even that's not the real reason that these funds are useless. The real reason is that if you are willing to lock-in for seven to ten years, then practically any equity mutual fund would deliver this dream of equity-gains-without-losses. Seven years is a very long time. Over such a period practically any equity portfolio into which any kind of thought has gone would capture substantial gains. This is not mere conjecture. Since at least 1997 the minimum total return that the Sensex has generated over its worst seven is 12 per cent, which was over the seven year period from 6th July 1997 to 5th July 2004. The truth is that in a growing economy like India's it's extremely hard to lose money over a long period like seven years. If you are willing to lock in your money for seven years, then for all practical purposes, you have a guarantee of making a profit.

Of course, this is not a guarantee that is signed in a contract and legally enforceable, but it's the kind of guarantee that any thoughtful investor would be willing to believe in. Mind you, this is also not a guarantee that you will get the highest NAV achieved but again, that's the kind of thing that can't be attained if you want the gains of pure equity anyway.

The most instructive thing in this whole business of guaranteed highest NAV products is the contrast between the illusions spun by those peddling complex financial products and the reality of simple, straightforward investing. It just reinforces one's belief that financial products are being designed whose goal is nothing more than to create a marketing hype which can manipulate the psychology of the ordinary saver.

-- Dhirendra Kumar

Courtesy:   Value Research