Tagged: LIC

NTH :: LIC likely to invest Rs 3.5-lakh cr in FY15

Of this, it is expected that Rs 40,000-50,000 cr will be put into the equities market
M Saraswathy | Mumbai June 14, 2014 Last Updated at 00:36 IST | Business Standard


Life Insurance Corporation of India is reportedly looking to invest up to Rs 3.5 lakh crore in FY15 in debt and equities. Of this, it is expected that Rs 40,000-50,000 crore will be put into the equities market.

The government-owned giant had booked profits of Rs 21,000 crore in the stock market during 2013-14.

Sources said a plan of investing Rs 3.2-3.5 lakh crore in 2014-15 will be discussed by the board of directors in a few days. In FY14, it had invested Rs 2.25 lakh crore, including about Rs 40,000 crore in the equity market.

Apart from the regular investment activity, LIC participated in the government divestment of Bharat Heavy Electricals Ltd, the Specified Undertaking of UTI stake sale in Axis Bank and the Central Public Sector Enterprises’ exchange-traded fund.

In 2013-14, LIC collected Rs 41,441 crore of individual premiums and Rs 48,682 crore of group premiums, totalling to Rs 90,124 crore.

With the new product guidelines for traditional products taking effect from January, several of LIC’s popular products had to be withdrawn, to make way for newer ones. Officials said there a resulting slide in premium collection for January to March, due to less products for customers, down to about 20 at present, from 54 earlier.

LIC sources say there is not enough incentive from the market to launch unit-linked insurance products (Ulips).

They might look into doing so if the Sensex hits 28,000.

Source : http://goo.gl/raj1eE

NTH :: LIC may invest Rs. 250,000 cr in Indian markets in 2013

PTI New Delhi, July 07, 2013| Hindustan Times


Unfazed by volatile stock markets, insurance behemoth Life Insurance Corp (LIC) plans to to invest Rs. 250,000 crore in both equity and bonds this year.

We made an aggregate investment of Rs. 2.25 lakh crore last year. This year it would increase by 10%,” said SK Roy, chairman, LIC.

India’s largest insurer is expected to pump in Rs. 250,000 crore in shares and bonds.

Increase in exposure to equity market, secondary or primary, would depend on the market condition, he said, adding, LIC has been investing in stock markets in the past few weeks as there are opportunities.

On its earnings, LIC expects to achieve a 15% growth in first-year premium income in the current fiscal year against a contraction last fiscal.

During 2012-13, LIC registered a 6.5% fall in new premium collection to Rs. 76,200 crore against Rs. 81,500 crore in the previous fiscal.

Apart from urban areas, the company intends to focus on rural areas and smaller towns as it sees a lot of business opportunities in these pockets.

In order to increase its presence, LIC recently opened 300 mini offices across various smaller cities in the country.

The opening of these offices is part of a plan to set up 1,700 such offices in locations with population of 10,000 and above by December.

Source : http://goo.gl/fIL0P

ATM :: Can private insurance firms be trusted?

Deepti Bhaskaran
First Published: Wed, Feb 23 2011. 12 30 AM IST, LIVE MINT

Updated: Thu, Feb 24 2011. 09 05 AM IST


Among the many questions put forth to Mint Money, the two most persistent are: Will the private sector insurance company pay my claim? Will they be around and what is their payment history? It is fairly easy to answer the first question: the regulatory rules make it difficult for any insurance company to run away with people’s money. The second question, however, has no black and white answer and there are nuances that you will have to understand. To give you a cogent reply, we looked at the claims record (for the year 2009-10) of all 23 insurers and examined them on three parameters: claims settled, claims repudiated and claims pending. The final takeaway is this: a poor ratio does not imply a company with poor customer service standards. Read carefully to understand how these three ratios are to be used to evaluate your insurer.

Claim settlement ratio

On the face of it, a lower claims settlement ratio (30% would mean that three out of 10 claims are settled and the rest are refused) would point to a company that does not pay its customers when claims are made. While Life Insurance Corp. of India (LIC) has a claim settlement ratio (CSR) of 97%, more than half of the companies in India have a CSR of more than 78% with that of six insurers being above 88%. Most insurers that didn’t settle even half the claims, started operation in 2007-2008 with Shriram Life Insurance Co. Ltd being the sole exception. Shriram Life launched operation in the year 2005 yet its claim settlement for the year 2009-10 has been only 40%. We expanded the net wider and one of the first private companies to set shop in India came under the net of top 10 companies that have poor claim settlement performance. Max New York Life Insurance Co. Ltd, launched in 2000, has settled only 66% of the claims. “(The) 2010 fiscal was an aberration for us since we decided to change our claims management processes,” said a company official. “We got a lot of claims in the previous year that prompted us to analyse our underwriting and claims settlement processes.”

What it means: Older insurance firms will have a better CSR than the new ones. Kamalji Sahay, managing director and chief executive officer, Star Union Dai-ichi Life Insurance Co. Ltd explains: “Young insurers have claims which are typically in the initial stage of the policy tenure. Early claims need extra investigation and hence usually they take more time in settlement. However, other indicators like claims repudiation and claims pending records will shed light on claims settlement practice of companies.” Sahay refers to a provision of the life insurance industry where insurers can rigorously investigate claims that are made within three years of buying a policy and the process can take as long as six months. Policies older than three years must be settled in a month’s time. And since insurers who set shop in 2007 or later will have all their claims that are made within three years of buying the policy, they have a poor CSR.

How to use this: If you see a company set up before 2007 with a CSR of below 78%, consider it a red flag.

Claim repudiation ratio

A claim repudiation ratio (CRR) of 40% means that four out of 10 claims made get rejected by the insurance company. Aegon Religare Life Insurance Co. Ltd, which incidentally was also the first insurer to launch term plans online, has the highest percentage of claim repudiation. Of a total claim of 50, Aegon Religare rejected 22 claims: a 44% claims repudiation record. LIC has the lowest percentage of claims repudiation at 1%, however, even that one percentage point means 8,227 policies in the case of LIC.

What it means for you: The CRR is as much a reflection on the underwriting standards of the insurer as a reflection on the policyholder who gives incorrect or shoddy information at the time of buying the policy. Says Samir Bali, leader-insurance, Ernst and Young: “A high percentage of claims repudiation may mean that the company has poor standards of underwriting. Lack of medical check ups, wrong information in the proposal form may lead to claims repudiation.” A high CRR also reflects poor training of agents who encourage their customers to fill up wrong information so that the policies are accepted by the insurer.
There is a third factor that influences the CRR—the products sold will also lead to low or high CRR numbers. Says Chirag Jain, chief operating officer, Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd: “The percentage of claims repudiation will also depend on the portfolio of the insurer. So a insurer having a large chunk in pension plans will have a favourable percentage of claims repudiation while an insurer dealing largely with term plans will have a relatively adverse percentage of claims repudiation.” This means that a company with a higher term insurance portfolio will have a worse CRR than a company focused mainly on money-back or endowment plans since in the latter the fund value builds up to make the payment at claim, while in a term policy it is a pure risk cover.

How to use this data: A company older than four years and with a high claims rejection ratio typically means poor underwriting standards.

Claims pending ratio

A claims pending ratio (CPR) of 50% means five out of 10 claims registered were pending at the end of 2010 fiscal. While most insurers have their claims pending for less than three months, insurers also have policies for more than a year pending with them. Says Yateesh Srivastava, chief marketing officer, Aegon Religare Life Insurance Co. Ltd: “Sometimes the beneficiary doesn’t give sufficient documents or just sits on the claims. We can’t settle the claim unless we get all the required information and hence the delay.”

What it means for you: A high CPR need not mean a bad company. For example, the 50% CPR of DLF Pramerica Life Insurance Co. Ltd looks bad, but only till we see that it is five out of 10 companies we are looking at. Again younger companies will tend to have more pending claims since they take more time to investigate and cases of fraudulent practices are highest during early claims. “Typically we find that policyholders who make early claims take a policy with the knowledge that they would be invoking the policy soon,” said Jain. “Hence we find that medical information is not accurate which leads to further investigation. Hence early claims call for investigation and hence claims are usually pending in case of young insurers.” In other cases, claims could also be pending because of lack of documentary evidences. The regulator mandates the insurer to settle the claim within 30 days of receiving all required documents. However, the claims remain pending till such time insurers receive all the documents.

How to use this data: For a company that’s more than four years old, a high pending claims ratio means poor claims settlement standards.

What you should do
These numbers don’t give any conclusive results if just the numbers are looked at. A pure number analysis tilts the balance in favour of older investment product portfolio heavy companies rather than newer firms with a larger pure play insurance cover portfolio. Despite this handicap, the ratios offer an insight into the hygiene standards in companies. You can do two things to use these ratios to your advantage. One, if the claim happens early in the life of the policy there will be a much more rigorous investigation than a 10- or 15-year-old policy. So ensure that the data input is correct, no medical truths been twisted and the papers are in a location that your beneficiary can get them without you being around to point out the second drawer under the dining room cabinet. Two, fill up the insurance proposal form as if your life depends on it. Well, not only yours, but the future life of your dependants does actually depend on the due diligence done by you when you filled that life cover form. And as for the one question, yes your insurer will settle your claim but only if you have been meticulous in giving all the information accurately. And if you still run into a problem, you have the Insurance Regulatory and Development Authority and subsequently the insurance ombudsman to seek recourse in.

Source : http://goo.gl/RHMmB

POW :: ‘Golden Money Back Package’ or so its called


Here’s an innovative money-back package (created by agents) that’s gaining popularity among the middle class. A combination of four LIC products enlisted below team up to make a great combination of benefits to the policyholder. However the policy holder must note that maturity benefit will depend on the loyalty additions declared by LIC as all of these products are ‘with Profit’ (estimate provided on the 20th & 21st year are realistic).

  1. Table-Term 14-21, SA: Rs.50000/- , The Endowment Assurance Policy
  2. Table-Term 75-20, SA: Rs.50000/- , The Money Back Policy
  3. Table-Term 103-20, SA: Rs.50000/- , Jeevan Chhaya Policy
  4. Table-Term 179-20, SA: Rs.100000/- , New Bima Gold Policy

The features of the combined package:

Age: Min 18 – Max 45yrs

Premium : Payable Yearly, Half-yearly & Quarterly Click Here

Total Sum Assured: Rs.2,50,000/-

Additional Risk Cover for next 10 years after expiry of 20 years term : Rs.50000/-

Accidental Risk Cover : Rs.5,00,000/-

Guaranteed Money Back / Return :

Guaranteed Money Back/ Return
1 You will receive after 4th year 10000
2 You will receive after 5th year 10000
3 You will receive after 8th year 10000
4 You will receive after 10th year 10000
5 You will receive after 12th year 10000
6 You will receive after 15th year 10000
7 You will receive after 16th year 10000
8 You will receive after 17th year 12500
9 You will receive after 18th year 12500
10 You will receive after 19th year 12500
11 You will receive after 20th year ~200000
12 You will receive after 21st year ~140000
Call +919322286765 to INVEST
* INtegra FinServe does not guarantee assured returns on any investments recommended by it. All investments are subject to market risks and are made at the sole discretion of the investor. Our advice is not meant to be a substitute for other inquiry or investigation or caution that one should undertake or exercise in connection with any decision relating to investments or financial plan. To the fullest extent permitted by law, INtegra FinServe owes no duty to the recipient of advice, whether in contract or in tort or under any statute or otherwise (including in gross negligence) and will not be liable for any direct/indirect damages or losses suffered or costs incurred by the recipient with respect to or in connection with the advisory services.

POW :: LIC Bima Bachat – An ideal investment for 80C exemption?

‘Taxing’ season of the year has begun… so whats on offer in the market! We will try and understand the LIC product in the limelight – LIC’s Bima Bachat.
LIC’s Bima Bachat is a money back policy which claims to offer financial security and assurance to the policy holder and his family. It requires the policy holder to pay only one premium. The amount paid depends on the duration of the policy taken and life insurance is available till the date of maturity. To understand it better you must first know the definition of Money-back Policy. And here it is!
Money Back Policy
Unlike endowment plans, in money back policies, the policy holder gets periodic “survivance payments” during the term of the policy and a lumpsum amount on surviving its term. In the event of death during the term of the policy, the beneficiary gets the full sum assured, without any deductions for the amounts paid till date, and no further premiums are required to be paid.These type of policies are very popular, since they can be tailored to get large amounts at specific periods as per the needs of the policy holder. (Source: http://www.licindia.in/glossary.htm)
Min & Max Eligible Age: 15 to 66 years
Age at Maturity: 75 years
For 9 year term: Policy holder will receive 15% of Sum Assured (SA) at the end of every 3rd & 6th policy year.
For 12 year term: Policy holder will receive 15% of Sum Assured (SA) at the end of every 3rd, 6th & 9th policy year.
For 15 year term: Policy holder will receive 15% of Sum Assured (SA) at the end of every 3rd, 6th, 9th & 12th policy year.
Death Benefit: Irrespective of the amounts already paid the full Sum Assured is paid to the nominee.
Maturity Benefit: At the time of maturity, a single premium payment (excluding extra premium) is made along with loyalty additions, if any. There may be non-guaranteed benefits based on Projected Investment Rate of Return that LIC will be able to earn throughout the term of the policy generally illustrated at 6% or 10% p.a.
Loyalty Additions
The loyalty addition is given upon the maturity of the policy, and not before. It’s a small percentage of the sum assured. Broadly speaking, loyalty addition is the difference between the performance, of the insurance company and the guaranteed additions. LICs may share its surplus after valuation with the policy holders, as LIC is a non-profit organization. (Source: http://www.licindia.in/glossary.htm)
Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D):
Under the provisions of section 10(10D) of the Income-tax Act, 1961, Maturity/Death claims proceeds of life insurance policy, including the sum allocated by way of bonus on such policy, is exempted from income- tax.
Liquidity: Bima Bachat is the only money-back policy that offers a loan facility from the 1st year itself. The rate of interest for this will be determined from time to time by the corporation. Presently the rate of interest is 9% p.a. payable half-yearly.
Summary: Don’t fool yourself and buy LIC Bima Bachat if you want it for the life insurance. However considering the guaranteed nature of the product, tax saving features, liquidity and one-time investment perspective, Bima Bachat gets a stamp of approval from INtegra FinServe!
Play with this tool:

ATM :: LIC’s claims record better than pvt insurers, says IRDA


Business Line (THE HINDU) | PTI | NEW DELHI | DEC 24:

Life Insurance Corporation (LIC) has a better record of paying death claims than that of private life insurers, said regulator IRDA in its latest report.

“The claim settlement ratio of LIC appeared to be better than that of the private life insurers”, said Insurance Regulatory and Development Authority (IRDA) in its annual report 2011-12.

While LIC is the only state-run life insurance company, there are about two dozen companies in the private sector which provide life cover.

According to the report, LIC has settled 97.42 per cent cases relating to death claims during 2011-12 compared to 89.34 per cent by private sector companies. The industry average worked out to be 96.26 per cent.

“Settlement ratio of LIC increased to 97.42 per cent during the year 2011-12 when compared to 97.03 per cent during the previous year,” it said, adding that private insurers repudiated higher number of claims as compared to LIC.

On the positive side, settlement ratio of private insurers improved during the year to 89.34 per cent from 86.04 per cent in the previous year.

As far as industry is concerned, the settlement ratio increased marginally to 96.26 per cent in 2011-12 from 95.58 per cent a year ago.

LIC had 70 per cent market share in 2011-12 in the life insurance industry, while the rest is with 23 private sector players.