Approximately 22,500 people lose their lives each day in India. This essentially means that 940 people die each hour. While Life and Death are a parcel of life, the loss of a loved one can leave a void which might never be filled. A life insurance policy helps fill certain aspects of this void, ensuring that the financial health of the insured’s family is taken care of.
Life Insurance in India has yet to become popular among the masses, with the total insurance penetration in India being just 3.44%, with life insurance accounting for 2.72%. Non-life insurance accounts for 0.72%. Given these numbers it is easy to understand that a majority of our population is not covered, leaving millions of Indians unprotected.
Life Insurance, in simple terms, is a contract which is signed between an individual and an insurance provider, wherein the insurance provider guarantees to pay a certain sum of money (sum assured) in case of the insured individual’s death. In order to avail this protection, the insured pays a certain amount as premium towards maintaining the policy.
It is nothing but a safety net which provides financial security/protection against loss of life. The primary purpose of a life insurance policy is to protect the financial interests of the insured’s family.
While one might think that this is a recent concept, studies have shown that it has been around for centuries, with different variations of insurance dating back to 1750 BC.
There are 3 basic aspects related to life insurance, namely:
Insurance in India is monitored by the Insurance Regulatory and Development Authority of India (IRDAI). As of March 2016, the country had 54 insurers, with 24 of these offering life insurance products. These insurers offer a diverse range of products, which can be categorised into six broad types, namely:
These are plans which provide life cover for a fixed period of time. They can be either long-term or short-term plans, with the term ranging from a minimum of 5 years to a maximum of 60 years (or more) in certain cases. The insured individual is protected during this term, with the insurance company paying his/her nominee the sum assured on his/her death during the policy term. No protection is provided if the insured dies after the term.
These can be considered as the simplest insurance plans available. While they are affordable, they might not be the ideal option, for there is no protection after the said period of time. These plans do not provide a maturity benefit in almost all cases. One should consider these plans if he/she foresees their demise within a specific period (though it would be close to impossible to predict the accuracy). This could be viewed as ‘temporary insurance’, and is also referred to as pure life plans by certain insurers.
Individuals looking for protection plus returns can consider unit linked insurance plans. These policies are ‘linked’ to market products like mutual funds, bonds, stocks, etc. There is a certain amount of risk associated with ULIPs, with this risk falling on the policyholder.
Most insurers invest a certain portion of the premium into market units, keeping the remaining portion aside for the base sum assured. It is important to keep an eye on the performance of the funds, for the returns could be negligible if there is a market crash. As such, the choice of insurance company is critical. ULIPs can be a smart option for the savvy investor who wishes to invest in a life insurance policy. Insurance companies have dedicated fund managers who oversee the investment.
An endowment plan serves a dual purpose, offering not just life cover, but also doubling as a savings instrument to cater to any future needs. Under these plans, the policyholder is rest assured of an amount, even on maturity of the policy.
Individuals who are looking to protect themselves financially during the future can opt for such plans. These are ideal for people who might encounter expenses after a specified period of time. These plans attract a higher premium when compared to regular term plans. The premium is split into two major portions, with one of it going towards the basic sum assured and the other portion utilised as an investment tool to offer returns on maturity.
While it is possible to have unit linked endowment policies, most insurers in India offer non-linked endowment plans.
A whole life policy, as the name implies, offers protection for the entire lifetime of an individual. Certain insurers can have an upper age limit for maturity of policy. These can be in the form of insurance plus investment plans, wherein a death benefit is provided to the nominee on demise of the policyholder. If there is a maturity benefit associated with the plan, a maturity amount will be paid when the policyholder attains the upper age limit associated with the scheme.
While one might consider a whole life plan to be similar to a term plan, there are a few subtle differences. The premium for a whole life plan is typically higher, but these plans also offer a maturity benefit, which is not assured in case of a term plan.
Retiring from work can often be hard, given the fact that money might become a constraint. Retirement plans, also known as annuity/pension plans can be used by individuals looking to financially secure their retired life. These are mostly single premium policies, wherein a lump sum amount is paid to the insurer.
One can choose the frequency of payouts they wish to receive, with the insurer paying them an amount after they retire. This amount is paid throughout their lifetime, guaranteeing financial security even when one doesn’t work. Certain annuity plans are unit linked, offering market based returns to policyholders.
Money back policies are a subset of endowment plans which provide a survival benefit to the policyholder. These take multiple contingencies into account. While a death benefit is payable on the demise on the policyholder, the survival benefit will be paid if he/she survives for a certain period of time.
Insurers pay a certain percentage of the sum assured at regular intervals, with this plan offering an additional source of income to policyholders. These plans are ideal for individuals who want a regular source of income, but are not keen to take risks associated with market instruments. The survival benefit is paid until maturity of the policy. These plans are known for the liquidity they offer, making them a popular option in the country.
A life insurance policy isn’t a one size fit all. These policies should meet individual requirements, and given the various options available it is possible to get confused. The table below showcases the basic differences between the six insurance policy types.
|Insurance type||Premium||Cover duration||Maturity Benefit||Death Benefit||Ideal for|
|Term Insurance||Cheapest||Entire term chosen||Not applicable||Paid if death occurs during policy term||Individuals looking for protection for specified period of time only|
|ULIPs||Amount varies based on sum assured – More expensive than Term Insurance||Equivalent to policy term||Payable (depends on policy chosen)||Paid if death occurs during policy term||Individuals looking to get a return on their investment. Serves as investment plus insurance|
|Endowment||High||Equivalent to policy term||Paid on completion of policy term||Paid if death occurs during policy term||Individuals looking to get a lump sum amount at a future date. Serves as insurance plus savings|
|Whole Life||The premium is higher than other plans||Entire lifetime of individual/specified period||Payable||Paid when death occurs||Individuals looking to protect the well-being of their loved ones|
|Annuity/Pension||Single premium||Till demise of policyholder||NA||Payable on death||Individuals looking for a regular source of income after retirement|
|Money Back||Varies based on sum assured||Policy period||Regular amount is paid until maturity||Payable on death||Individuals looking for liquidity|
A number of us are overwhelmed by the terms associated with insurance. Failing to understand these terms can dilute the value of a policy, often leading to confusion during crucial moments. While we might not think of them as important, getting acquainted with commonly used terms can help us enjoy all the benefits provided by a policy. Additionally, one can also be rest assured that they will not be taken for a ride by the insurance provider.
Life insurance, in its current avatar is based on a number of principles. These are modified and adapted to the market, ensuring that insurance companies make a profit, while offering security to insured individuals.
One can say that there are four major principles applied in India, with these being:
For example, Mr. Jay decides to purchase a policy for his mother. The life assured in this case is his mother, while the policyholder is Jay. In case Jay decided to purchase a policy for his neighbour’s mother the insurance company would deny it as there is no insurable interest in this case.
India is home to a total of 54 insurance companies (as of March 2016), with 24 of them offering life insurance products. Both public sector and private sector companies have noticed the huge potential for insurance in the country. Among the 24 life insurance companies operating here, only 1 is in the public sector. The presence of international giants who have teamed up with local companies has resulted in improved quality of service and attractive products on offer.
The table below lists the top 10 insurance companies in India based on the premiums collected by them.
|Insurer name||Premium amount|
|Life Insurance Corporation of India||Rs.2,66,444.20 crore|
|ICICI Pru Life||Rs.19,164.39 crore|
|HDFC Standard Life||Rs.16,312.98 crore|
|SBI Life||Rs.15,825.36 crore|
|Max Life||Rs.9,216.16 crore|
|Bajaj Allianz||Rs.5,897.31 crore|
|Birla Sun Life||Rs.5,579.71 crore|
|Reliance Life||Rs.4,398.12 crore|
|Kotak Mahindra||Rs.3,971.68 crore|
|PNB MetLife||Rs.2,827.83 crore|
The data listed above is as per the report released by IRDA (2015-16).
LIC continues to be the dominant name in the Indian insurance industry, with private players lagging behind in terms of premiums collected and lives covered. This, however, is changing, with a number of individuals opting for private insurers on account of their improved services and cheaper products.
The table below highlights the various aspects related to life insurance companies in India during 2015-16.
|Insurer Name||Claim settlement ratio (%)||Percentage of grievances solved||Solvency ratio (as of 31/3/2016)||Assets under management (Funds) Rs. crore (as of 31/3/2016)|
|Aegon Life Insurance||95.31||98.39||2.20||1,784.94|
|Aviva Life Insurance||81.97||100||3.84||8,752.03|
|Bajaj Life Insurance||91.30||99.90||7.93||43,884.98|
|Bharti AXA Life Insurance||80.02||100||2.19||3,076.58|
|Birla Sun Life Insurance||88.45%||99.99||2.11||30,742.94|
|Canara HSBC Oriental Bank of Commerce Life Insurance||92.99||99.60||4.11||9,785.65|
|DHFL Pramerica Life Insurance||83.64||99.65||10.31||2,027.80|
|Edelweiss Tokio Life Insurance||85.11||99.09||2.64||1,397.55|
|Exide Life Insurance||89.36||99.59||2.65||9,445.99|
|Future Generali India Life Insurance||90.26||99.31||2.03||2,662.05|
|HDFC Standard Life Insurance||95.02||99.38||1.98||74,249.11|
|ICICI Prudential Life Insurance||96.20||99.87||3.20||1,01,790.47|
|IDBI Federal Life Insurance||84.79||100||4.06||4,738.47|
|IndiaFirst Life Insurance||71.87||98.82||2.17||8,897.05|
|Kotak Mahindra Life Insurance||89.09||93.11||3.11||16,776.68|
|Max Life Insurance||96.95||100||3.43||35,804.99|
|PNB Met Life Insurance||85.36||99.55||2.11||13,475.40|
|Reliance Nippon Life Insurance||93.82||98.84||3.04||15,935.74|
|Sahara India Life Insurance||90.30||97.14||8.04||1,142.48|
|SBI Life Insurance||93.39||99.97||2.12||79,455.72|
|Shriram Life Insurance||60.24||96.70||2.43||2,539.40|
|Star Union Dai-ichi Life Insurance||80.73||95.42||1.86||5,595.65|
|Tata AIA Life Insurance||96.80||100||3.48||18,987.69|
Claim settlement ratio (CSR) – This is the ratio of the number of claims settled by the insurer to the number of claims it receives in a particular year. It highlights what percentage of claims have been paid. A high claim settlement ratio indicates that the insurer is more likely to settle a legitimate claim.
CSR = No. of claims approved/No. of claims received
It is a smart option to choose an insurer with a high CSR. As per the data released by IRDA for 2015-16, LIC has the best claim settlement ratio in the country, followed by Max Life, Tata AIA, and ICICI Prudential Life respectively.
Choosing an insurer with a low CSR could jeopardise the chances of a claim being honoured, resulting in trauma for the family of the insured.
Grievances solved ratio (GSR) – This is the ratio of the number of grievances solved by an insurer to the number of grievances received by it in a particular year. This reflects the service provided by the company, with it offering a peek into the how efficient the insurer is when it comes to sorting any problems. A number of insurance companies have a 100% GSR, highlighting their attention to customer issues.
Solvency ratio – There have been instances in the past where insurance companies went bankrupt, leaving thousands of customers in a bind. Governments have had to bail out such insurers, resulting in losses to the tune of billions to the exchequer.
In a bid to ensure that this doesn’t repeat, insurance companies are monitored regularly, with the IRDA checking their solvency ratio. This is nothing but the ratio of the assets of an insurance company with respect to its liabilities. It highlights the ability of an insurer to pay long-term debt.
Insurers with a solvency ratio of under 1.50 are closely monitored, with a high solvency ratio preferred. DHFL Pramerica has the highest solvency ratio amongst Indian insurance companies during 2015-16, with LIC having the lowest.
The average life expectancy in India is around 68 years, but we all know people who passed away before they reached this age. The unpredictability of life can cause irreversible damage to our loved ones. A good life insurance policy can help minimise the financial burden associated with the loss of a dear one.
Given the stress associated with our daily life, we often come across cases of people meeting an untimely end, often leaving entire families shattered after their demise. Here are three main reasons why one must consider investing in a life insurance policy.
It isn’t hard to understand how life insurance works, with insurers aiming to simplify the entire process to generate more interest in this product. The steps below elucidate how exactly life insurance works.
The policy will cease to exist when the death benefit is paid. Note that certain policies provide an option of cover to the spouse of the insured, wherein the policy will cease after the death of the spouse.
Purchasing a life insurance policy comes with a range of benefits, with the primary ones highlighted here.
A life insurance policy can be a great asset if chosen wisely. With hundreds of options in the market today, it is possible for one to buy a policy which does not do justice to their needs. Keeping these simple points in mind before purchasing the policy can ensure that one gets the best out of it.
One should remember that a life insurance policy is not a ‘one size fit all’ product. It needs to be customised to meet personal requirements.
Another critical aspect which should be researched is the history of the insurer. Insurers with a bad track record should be avoided, for they could create issues when it comes to claim settlement. The IRDA provides statistics related to all the insurers operating in India, one should check these before making any decision.
This is a question most of us end up asking. The insurance cover one needs depends on a number of factors and the answer to this question might not be universal. However, there are a few basic aspects which should be taken into account while choosing the insured amount.
For example, an individual who earns Rs.10 lakh per year has annual expenses to the tune of Rs.5 lakh. These include the car loan EMI, home loan repayment, school fees, etc. The cover in this case should ideally be around Rs.75 lakh.
In case there are other investments/savings, one can choose a lower sum assured. If there is no other investment, the cover taken should be on the higher side.
Individuals who are unsure of the cover they require can approach agents/use online calculators to determine an amount which might be sufficient for them.
The answer to this question goes beyond a yes or no, for there is no set age bracket which is considered the best period to invest in life insurance. However, there are a few key parameters which can help one determine the right time to buy it.
We can take the example of Jay to understand how this works. Jay, currently aged 30 years checks the cost of an insurance policy for Rs.10 lakh. The premium works up to around Rs.27,000 per year. He chooses to forego this purchase, deciding to wait instead. At age 50, he considers the same policy. The premium at this age is more than double the premium he was expected to pay when he was 30 years old.
Insurers charge a higher amount with increasing age. A smart option is to buy the policy at a young age. This enables one to enjoy the benefits of the policy without having to pay an exorbitant amount.
Given these points, it is safe to say that the best time to purchase a life insurance policy is NOW. Delaying a purchase provides no added benefits. Irrespective of the position one is in currently, investing in a good policy can offer security and stability, in addition to savings.
With it close to impossible to predict life, it would be a smart option to consider the option of a life insurance policy immediately.
Understanding the life cycle of life insurance is not complicated, for it is visible around us. One can essentially break this cycle into four different stages, corresponding to different stages in an individual’s life.
We could take the example of Rakesh to understand the life cycle of life insurance. Born into a middle-class family, Rakesh had a good upbringing. At age 21, he completes his formal education and begins work. Until now he had no life insurance policy. Given the fact that he is independent, he chooses not to buy a policy immediately.
At age 25, he decides to get married. At age 27, he takes a home loan to buy a house. His responsibilities have now increased and he chooses to invest in a term insurance plan with a tenure of 25 years. Within the next few years he becomes a father, with added financial obligations. He increases the cover under his plan to meet them.
At age 52, his children are grown up and are on the verge of completing their education. His home loan is cleared and his financial obligations have reduced. The term plan is about to expire but he still feels the need to provide for his wife. He now chooses to invest in a whole life policy, ensuring that he is protected for as long as he lives.
Insurance providers require a few basic documents in order to process an application. These include:
Note that an insurer could ask for other documents in order to process an application. These could be related to the nominee/beneficiary.
Yes, it is extremely important to compare the different life insurance policies offered before one decides to buy them online. Comparison becomes even more important when everything is being done online, for one might not have the help of experts.
Traditionally, insurance agents would explain a plan before the purchase was completed. The virtual world, however, might not always come with assistance.
With hundreds of plans available it is imperative that one searches and compares the different features of each plan, ensuring that the selected plan suits the personal requirements of the individual. There have been instances of people purchasing a policy without comparing them which have resulted in problems during the claims process.
Almost all insurers have a presence online, with it easy to find details about their products. Not only does this help save time and effort (when compared to offline comparison), it can also help one get a better deal on the premium amount.
Reviews of products and services by people who have invested in them can be an added bonus, offering an insight into what one could expect.
While one can go ahead and purchase a policy without comparing it, a smarter option would be to check all other alternatives, enabling one to get the best product in the market.
A basic life insurance policy might not be perfectly suited to the requirements of an individual. Some of us might be looking for additions to the policy in order for it to match our needs and expectations. Insurers offer an option to do the same, providing riders which can be added to a base policy to enhance the protection.
The riders available in India can be broadly categorised under 8 subheadings, with these being:
Different insurers offer different versions of this rider, which can be purchased at an additional cost. Some of the popular critical illness riders available in India include the BSLI Critical Illness Rider, Exide Life Critical Illness Rider, HDFC Life Critical Illness Plus Rider, and the LIC New Critical Illness Benefit Rider.
Almost all life insurers provide this rider as an add-on, with the popular ones being the BSLI Accidental Death and Disability Rider, the Max Life Accidental Death and Dismemberment Rider, and the ICICI Pru Unit Linked Accidental Death Rider.
Popular options include the BSLI Waiver of Premium Rider, LIC Waiver of Premium Rider, Tata AIA Life Insurance Waiver of Premium Plus Rider, etc.
The death benefit will be paid if demise occurs during the extended term. Popular options include the Term Rider by PNB MetLife, the Term Assurance Rider by LIC, the Exide Life Term Rider, etc.
Popular Family Income Riders include the ones offered by Shriram Life, Reliance Life, Star Union Dai-ichi Life, and Bajaj Allianz Life.
Note that different insurers might offer variations of these riders. There could be cases where riders are not offered for certain life insurance policies.
Insurance companies charge a certain amount as premium to provide cover under a policy. This premium is computed after taking a number of factors into consideration. Probability plays a big role in determining the premium amount, with insurers looking at the lifestyle, medical history, and age of the applicant before deciding the premium.
While insurance companies hire expert statisticians to look into the process and come up with the premium, a regular individual can check the premium amount by using different online tools.
Most insurers have a premium calculator which showcases the premium amount for different permutations and combinations. Alternately, one can also use third-party website tools to compute the premium. One will have to enter details like their age, the term of the plan, the sum assured they wish to avail, the premium payment frequency, add-ons, etc. Once they enter these values into the premium calculator they will be provided the premium amount for the chosen variables.
Higher the chances of a claim being made higher is the premium amount.
Yes, it is possible to cancel a life insurance policy, subject to certain restrictions. As per IRDA regulations, an individual who has purchased a policy can return it within the free-look period if he/she does not agree with the specified terms and conditions of the policy. This period typically ranges between 15-30 days, depending on the mode of purchase.
This can be done by providing reasons for the same. The insurance company is bound to return the premium after deducting the expenses incurred by them while providing the policy. These could include costs associated with the stamp duty, medical check-up, etc.
Once this period has passed, there are other possibilities when it comes to policy cancellation. In certain cases the policy lapses if premiums are not paid. Alternately, a policyholder can choose to surrender the policy or turn it into a paid-up policy. These options are available only if the policy in question has been in force for a specified minimum period of time.
If one opts for conversion of the policy into a paid-up policy, the policy will remain, albeit with a reduced sum assured. Such policies are not entitled to earn any bonuses.
In case of surrender of policy, the insurer will pay a surrender amount to the individual (if the policy has acquired a surrender value). The policy will cease to exist once this amount is paid.
It is important to consider all possibilities before one decides to cancel a policy, for doing so lifts the protection provided by the plan.
Investing in a life insurance policy results in a partnership between the insurer and the insured. Doing justice to both can be hard, but keeping these do’s and don’ts in mind can help one enjoy all benefits to the max.
|While buying the policy||
|After buying the policy||
|In case of loss of policy||
|In case of a claim||
The Goods and Services Tax has changed the way India does business. Effective from the first of July 2017, it has had an impact on the price of multiple products and services. The insurance industry also falls under the ambit of GST, with several changes implemented by insurers across the country. Purchasing and maintaining an insurance policy has now become costlier, with the table below highlighting the changes post GST implementation.
|Product/Service||Old service tax rate||New rate post GST implementation|
|Premium for Annuity Plans (single premium)||1.50%||1.80%|
In addition to the aforementioned changes, insurers will also charge GST on the interest which is typically charged when premiums are delayed.
Service tax exemptions which were previously accorded to certain plans/schemes will continue to be effective even after GST, with these provided in the case of the following plans:
A study done by the Environmental Protection Agency in the USA estimated the value of each life to be around $9.1 million, or just around Rs.57 crore. This, however, might not be the actual amount each individual is worth, for there are a number of factors which can change this value.
Similar studies done in the United States have estimated the cost of a life insurance policy for a healthy 30 year old male to be around $150 for a cover of $250,000, with the policy period being 20 years.
This amount, however, is not universal, for an insurance policy is designed to cater to an individual, with personal traits and habits influencing the premium.
In India, insurance companies determine the premium for a particular policy based on four main criteria:
We can understand how these parameters work by using the example of Mr. Jay.
Jay, who is currently aged 35 years invests in a term life insurance plan. He chooses a 30 year term and opts for a sum assured of Rs.50 lakh. As a smoker his premium amount comes up to around Rs.14,000 per year. If he were a non-smoker he would have to pay an annual premium of around Rs.8,600 for the same term and sum assured.
Now, if he had chosen to purchase the same policy when he was 25 years old, the annual premium amount would be around Rs.7,500 (if he was a smoker at that age). If he refrained from smoking the premium would be just around Rs.5,000 per year.
From this, we can see how the lifestyle and age can impact the premium amount.
Similarly, if he opted for a sum assured of Rs.1 crore the premium would increase.
The table below highlights how the premium amount varies under different conditions:
|Age||Smoker (Y/N)||Sum Assured||Annual Premium|
|25 years||Yes||Rs.50 lakh||Rs.7,500 for male Rs.6,900 for female|
|25 years||No||Rs.50 lakh||Rs.5,000 for male Rs.4,800 for female|
|40 years||Yes||Rs.50 lakh||Rs.20,500 for male Rs.17,500 for female|
|40 years||No||Rs.50 lakh||Rs.13,000 for male Rs.11,000 for female|
The gender of the individual also has a bearing on the sum assured, with females paying a lower amount compared to males.
Note: The premium amounts mentioned in the example are indicative. Different insurers could charge a different amount.
Insurers compute the premium for a life insurance policy by analysing the probability of a payout on death. The higher the probability of a payout, the higher the premium amount will be. It is for this reason that individuals with an unhealthy lifestyle are charged a higher premium compared to those who look after their health.
In addition to the factors which are used to determine the premium, insurance companies also charge money under the following categories:
Note that the charges mentioned above could vary based on the type of policy chosen by an individual. It is advisable to check these charges before purchasing the policy.
A life insurance policy can be an expensive proposition, especially when one opts for it at a later stage in life. Paying a sum regularly can be draining on one’s finances. While there are no alternatives when it comes to paying the amount, insurers do offer discounts in certain cases.
Note: The rebate offered can vary and is at the discretion of the insurer.
Paying the premium for a life insurance policy is no longer a hassle, for insurers provide an option to pay this amount online. Almost all insurance companies in India are equipped to handle online payments, with a few even providing incentives to pay the sum virtually.
Doing this is advantageous not only to the insurer, but also helps the policyholder save time and effort. Typically, this is a five-step process, which takes no more than a few minutes.
Yes, there are a few key differences between life insurance and general insurance. Before we highlight these, it is important to understand what general insurance exactly means. General insurance is typically defined as any contract which does not cover the life of the individual. It is a non-life policy which can be used to protect any material belonging of an individual. Health insurance also falls under general insurance.
The table below highlights the major differences between Life Insurance and General Insurance:
|Parameter||Life Insurance||General Insurance|
|Definition||A contract under which the life of the person is covered/protected||A contract which does not cover the life of the person. Eg: Fire insurance, car insurance, home insurance, etc.|
|Duration||Typically long-term (there is an option for short-term cover as well)||Short-term in almost all cases|
|Premium||Typically paid over the premium payment term –spread over the years||Typically paid as a single amount at the start of the policy|
|Purpose||Serves as an investment cum savings option||Serves as protection against loss/damage|
|Insurable interest criteria||The insured individual should be present (alive) while the contract is being drafted.||The person/object being insured needs to be present when the contract is being drafted as well as when the loss occurs.|
|Savings component||Present||No scope for savings|
|Insured amount||An individual can choose the amount he/she wishes to be insured for||The insured amount is determined based on the actual value of the loss/liability|
While both these products might have differences, it is a smart option to purchase a good insurance policy. Staying covered can offset liabilities and help one get the most out of their belongings.
A policyholder can choose a beneficiary who will receive the assured amount in case of his/her death. This individual is termed the primary beneficiary. However, there could be certain cases where the primary beneficiary passes away along with the insured individual. This is where the need for a contingent beneficiary arises.
A contingent beneficiary is an individual who will receive the sum assured if the primary beneficiary passes away. He/she is the second-in-line with respect to the amount. A policyholder can choose a contingent beneficiary at the time of purchasing the policy.
It is possible to choose more than 1 contingent beneficiary, dividing the amount proportionally between all said beneficiaries.
A contingent beneficiary needn’t be a person, for one can choose a trust/charity/organisation as the beneficiary.
Filing a life insurance claim is a simple process. The need for a claim can arise in two circumstances, namely on death of insured or on maturity of the policy.
An insurer can ask for additional details in certain cases. These could include a request for the certificate from the hospital, a medical certificate, a letter from the employer, etc.
The insurer will pay the amount to the policyholder once the policy matures. In cases where the policy is assigned to a third person or an organisation, the amount will be paid directly to said assignee.
A. Choosing the right insurance policy boils down to a few simple points. The first step involves determining your individual needs. Ask yourself how much cover you need, the duration you wish to be protected for, the returns on an investment, etc. Once these questions are answered you can choose the type of plan which suits your needs. If you are looking for income post retirement choose a pension plan, if you wish to protect yourself against all odds choose a whole life plan.
Once the kind of plan is selected it is important to compare the different options available in the market. Select an insurance company with a good track record. The IRDA provides information pertaining to how all insurers in the country have performed. Check the claim settlement ratio, the assets under management, the grievances solved ratio, the network a particular insurer offers, etc. Select an insurer who you think will be the right partner.
Choosing the best insurance policy takes time and research. In case of doubts it is always a good idea to consult experts who can guide you.
A. Insurance policies can be customised according to the need of an individual. As such, it is possible to choose a high cover under any plan option. The major difference lies with respect to the premium. While it is possible to opt for a high sum assured under other plans as well, the premium for such sum assured is much higher than the premium for the same sum assured under a term insurance plan.
The main reason for this is the fact that a term insurance policy does not offer additional features which other plans come equipped with. For example, most such policies do not provide a loan option. Similarly, these plans do not meet any financial needs while the insured is alive. Most plans do not even offer a maturity benefit if the policyholder survives until the end of the term.
Given these facts, insurers have to price term insurance policies lower in order to generate interest and increase sales.
A. Yes, it is absolutely safe to purchase an insurance policy online. However, one should always double check the website from where the policy is being purchased. There are no risks involved when the plan is purchased from the official website of the insurer. There are a few websites which have been given permission by the IRDA to sell insurance policies. In case one is using such websites it is mandatory to check the IRDAI web aggregator licence before deciding to pay for it online.
Never purchase a policy from websites which are not authorised to sell insurance policies.
A. The cover under a life insurance policy begins from the Effective Date. This is typically mentioned in the policy document. The effective date can vary from insurer to insurer, with the cover beginning after the premium has been paid in most instances. In certain cases the cover begins only after the policyholder accepts the policy .
A. Yes, life insurance policies not only provide financial assistance in case of any unfortunate event, they also help one save money on tax. Under Section 80C of the Income Tax Act, one can avail a deduction on the premium amount paid by them towards maintaining a life insurance policy. This benefit is also applicable if an individual pays the premium for his/her spouse or child. Both individuals and Hindu Undivided Families are eligible to enjoy tax benefits under this section.
The maximum permitted deduction under Section 80C is Rs.1.5 lakh. This amount is decided by the government and can change yearly.
Similarly Section 10 (10)D of the same act provides a provision for tax benefits on the amount received at death of the policyholder, or maturity/surrender of the policy. The amount received does not attract tax, subject to certain conditions. The Income Tax Department will levy a tax if the premium amount exceeds the limits specified by them.
It is a smart option to consult a tax expert to utilise all the tax benefits provided by a life insurance policy.
A. The tenure and sum assured should be chosen after looking at your current life stage and link this to future expectations. Individuals who might encounter expenses in the future should opt for a high sum assured, ensuring that inflation is accounted for. Similarly, those who have opted for pension plans should ensure that the amount chosen is sufficient to help them continue with their existing lifestyle.
There is no ‘one size fits all’ rule under life insurance. It is imperative to assess future requirements while choosing the sum assured. Similarly, the term should be long enough to cover any eventuality. There is no harm in choosing a longer term. On the other hand, if a short term is chosen, the benefits received might not match the expectations, especially in case of a term plan.
While selecting the term and sum assured it is suggested that you visualise the future and base the decision on this.
A. The premium is the amount each policyholder is expected to pay in order to enjoy the benefits provided by the policy. One can view it as the investment amount. The sum assured is determined on the basis of the premium, with it possible to increase this sum by increasing the premium amount.
A. The premium payment depends on the type of policy one buys. While certain policies like annuity plans require the premium to be paid as a single amount up front, other plans offer flexibility in terms of premium payment.
One can choose to pay the premium either annually, semi-annually, quarterly, or monthly, if the plan provides this option. Certain plans permit only annual payment of premium whereas others provide different alternatives, offering more flexibility to the policyholder.
In cases where one chooses to pay the premium at regular intervals, the entire premium amount is split into the number of terms for which it is expected to be paid. One should check all the premium payment options before deciding to purchase the policy.
A. Certain life insurance policies mention the term ‘bonus’ in their brochures. A bonus is nothing but an additional amount which the insurer pays over and above the sum assured. This is similar to bonuses in other products.
The bonus is the profit made by the insurer, with this profit shared among policyholders. The bonus amount is determined by the insurance company and might vary from year to year. Insurance companies are not obligated to offer a bonus, with this decision depending on the Board of Directors.
A. Not all life insurance policies are eligible for a bonus. One can check whether their policy qualifies to partake in the profit by going through the product brochure. Policies which fall under the ‘with-profit/participating’ category are entitled to receive a bonus if the company makes a profit. On the other hand, policies which fall under ‘non-participatory/without-profit’ are not eligible for bonuses.
One should check whether their policy qualifies for a bonus before they purchase the policy.
A. There are three major categories of bonuses offered by insurance companies, with these being Terminal Bonuses, Interim Bonuses, and Reversionary Bonuses. Reversionary bonuses are further classified into simple reversionary bonuses and compound reversionary bonuses.
A. A terminal bonus is provided only when the policy terminates, i.e., either on maturity of the policy or on the death of the insured. This is a one-time bonus.
A reversionary bonus is a bonus component which is added at regular intervals. This can be yearly or after completion of a few years.
An interim bonus is provided if the policy terminates before the completion of a financial year. Other bonuses are declared keeping the financial year into account, but this one provides a solution in cases where the financial year is not completed.
A. The primary difference between a participating and nonparticipating policy is that a participating policy partakes in the profits of the insurer whereas a non-participating policy does not partake in any of the profits. In simple words, a participating policy can qualify for bonuses whereas a non-participating policy will not earn any additional bonus.
A. The sum assured is used to determine the bonus a policy is eligible for. Most insurers offer a bonus per Rs.1,000 sum assured (or any other fixed value). The bonus is a fixed amount per the selected unit.
For example, if the company decides to give a bonus of Rs.30 per Rs.1,000 sum assured, the total bonus for a sum assured equivalent to Rs.10 lakh becomes Rs.30,000. If the period is 10 years, the overall bonus amount becomes Rs.3 lakh, subject to the same bonus being offered each year.
A. A basic life insurance policy might not be sufficient to meet all the requirements of an individual. Instead of purchasing a new policy, one can purchase a rider instead. A rider is nothing but an add-on which offers certain additional features and benefits, thereby enhancing the policy.
You can purchase a rider by contacting the insurance provider and paying the amount for the rider. There is also an option to purchase a rider at the time of buying the policy.
A. There are numerous instances of individuals purchasing a policy and then realising that it doesn’t meet their requirements. Returning such policies is an option provided by IRDAI. This return is possible only within a specified period of time, termed the free-look period. A policyholder can return the policy to the insurer within this timeframe, subject to certain terms and conditions. The insurer will refund the premium after deducting their administration charges.
A. If you choose to cancel your policy within the free-look period the insurance company will refund the premium amount paid by you. They will deduct all expenses borne by them to complete the formalities associated with issuing the policy and then cancelling it.
A. If one fails to pay the premium amount within the grace period the policy either lapses or turns into a paid-up policy. The benefits and protection accorded by the policy automatically change in such circumstances.
The policy will continue to be active during the grace period. It is therefore important to pay all dues before the grace period ends.
A. There could be instances where a policyholder does not wish to continue with the policy. He/she can choose to surrender it under favourable circumstances. If the policy has been active for a specified period of time it is eligible to receive the surrender value.
This is nothing but the amount paid by the insurer to the policyholder if he/she terminates (surrenders) the policy before its maturity date.
A. Companies compute the surrender value after taking the original term of the policy, the premium amount, and the period for which the premium was paid into account. Typically, premiums for a minimum of three years should be paid in order for a policy to be eligible for a surrender value.
There are two types of surrender values, the guaranteed surrender value and the special surrender value.
The guaranteed surrender value (GSV) is a certain percentage of the premium amount paid during the term of the policy. The premium for the first year is excluded while computing this sum. A certain percentage of the premium amount is paid to the policyholder as the guaranteed surrender value. For example, an insurer provides GSV of 30% of the premium. An individual who pays Rs.50,000 per year for a period of three years would be entitled to a GSV of:
(1,50,000 – 50,000) x 30/100 =Rs.30,000
The special surrender value (SSV) is computed by taking the surrender value factor into account. This factor is a certain percentage of the paid-up value acquired by the policy. This factor increases with each active policy year.
In essence, the longer the policy was active the higher the surrender value will be.
A. Assignment refers to the process of transferring the ownership of a life insurance policy to someone else. All rights associated with the policy would move on to the new owner. The assignor is the individual who chooses to transfer all rights, with the assignee being the individual to whom such rights are transferred.
For example, an individual who avails a loan against a policy could be expected to assign the policy to the bank/lender. If the assignor were to pass away during the policy term the sum assured would be paid to the bank/lender.
A. Purchasing a life insurance policy isn’t like other regular purchases we make. It can be extremely useful in the future, having the power to financially support our loved ones. As such, it is imperative to thoroughly assess one’s needs, research for the right product, determine the cover amount, calculate the effect of the regular premium payment on our budget and then take a step.
Also, one must ensure that they don’t over-insure themselves, for an exorbitant cover essentially boils down to a high premium, which could strain the finances of the person. It is better to choose a sum assured which is affordable rather than choosing a high sum assured and miss payments, for this could result in the policy getting lapsed, thereby making the policy pretty much useless.
A. A medical report is required only in certain instances. In this case you will be expected to undergo tests specified by the insurer. A full medical test might include a physical exam which checks the height, weight, pulse, and blood pressure of the applicant. In addition to this other tests might be conducted to check the cholesterol, sugar levels, blood count, etc. A urine sample might also be taken.
Insurers do these tests to check the functioning of vital organs, which can help them analyse the individual’s health.
In certain cases one might also be asked to undergo a HIV Test to rule out the possibility of HIV. Additionally, one will have to provide all past medical reports, history of family illnesses, etc.
A. Yes, it is possible to avail a loan through a life insurance policy. However, not all policy types come with the feature of a loan. For instance, a loan cannot be availed against a term insurance policy.
The policy brochure typically indicates whether the policy comes with a provision for loan.
A. The IRDAI has made it mandatory for all insurance agents to be registered. Check whether the agent has a licence issued by IRDAI. The licence should state that the said individual is eligible to sell a life insurance policy. There are different licences granted for different insurance products, with a separate licence given to general insurance agents. In certain cases a composite licence is given to an agent, enabling him/her to sell both life insurance and general insurance.
Using references from friends/family members who have purchased a life insurance policy through agents can help alleviate any fear of a fake agent. Always question the agent and check his/her knowledge about the product before committing to a policy.
A. Not all agents are authorised to collect premiums on behalf of the insurer. Before paying the sum to the agent, first verify his/her credentials. He/she must be authorised by the insurer to collect premiums. Ask for such authorisation. If all checks out you can pay the premium but make sure to collect a signed receipt for the same.
A. Gone are the days when one depended on an insurance agent to buy the policy. Today, it is possible to purchase a policy online, avoiding all middlemen. Choosing to purchase a life insurance policy online is quicker and transparent, giving one the flexibility to complete the task at one’s own speed.
Additionally, online purchases are safe even if the policy is purchased through an intermediary. There are no risks of the insurance agent absconding in case of online purchases.
People used to rely on insurance agents to give them an overview of the product, but it is now possible to connect and chat with online representatives who can provide the same information.
Additionally, one can also get a better rate on the premium if the policy is purchased online.
Given these features it is a better option to purchase a life insurance policy online.
A. Insurance companies use an algorithm which predicts the chance of a payout for each policy they sell. The higher this percentage, the higher the premiums are going to be. The risk is computed by taking factors like the applicant’s age, medical history, current lifestyle, work environment, etc. into consideration. They might also take factors like the average lifespan in a particular region, health issues faced by residents of a particular city, chances of infections leading to death, etc. into account.
A. This depends on the type of policy chosen. Certain policies require only a single premium to be paid at the start. Others give an option to pay the premium at regular intervals. The premium amount should be paid for the complete duration of the premium payment term. This term might or might not be equal to the policy term. Most insurers provide an option to pay the premium at regular frequencies, which can be chosen by the policyholder. The available options include paying either yearly, every six months, every three months, or every month.
A. Yes, it is possible to make a few changes to your insurance policies. These rights are laid down by the IRDAI. The changes which are permitted include:
A. Changing the premium payment mode
B. Changing the policy term
C. Changing the sum assured (only an increase in this amount is possible)
D. Switching between funds
E. Redirecting the premium
Any other change requests can be denied by the insurer. It is important to read the terms and conditions of the policy to comprehend the changes which are permissible under it.
A. Premium redirection is a concept which is primarily used in ULIPs. This is the process of redirecting/realigning the premium wherein one can tell the insurer to invest future premiums in specific funds. The current funds are not modified in this case.
This can be understood through the example of Mr. Jay who has invested in a ULIP wherein his premium is split between equity and debt funds in a 50:50 ratio. Now, Mr. Jay senses a new investment opportunity wherein he feels that cash funds will offer better returns. As such he asks his insurer to redirect the future premium into cash funds. This ensures that all future premiums are invested into cash funds, with no changes made to the existing investments.
A. There could be instances where an individual wishes for a higher cover but is not in a position to afford the premiums. A graded life insurance policy can come handy during such situations. A graded policy is one where the premium amount increases at regular intervals, stopping at pre-set limit. This enables an individual to avail the benefit of a high cover without having to exhaust all resources initially.
It is a smart option for those who foresee an increase in their income, enabling them to afford a higher premium after a few years.
A. The cover provided by a life insurance policy can vary from case to case. Most of them cover death due to natural causes as well as accidents. Individuals can choose to add riders to a base policy in case it doesn’t cover death due to certain reasons.
A. Proposal forms are extremely important in life insurance policies, with insurance companies using them to gauge the eligibility of an individual. The proposal form is similar to KYC documents which banks and other establishments require. The applicant is expected to fill this form truthfully, providing all the information needed.
Typical information requirements relate to the name of the individual, his/her income, lifestyle habits (smoking, drinking, etc.), history of personal illnesses, history of family illnesses, current medical condition, fitness levels, age, height, weight, etc.
The information submitted here is used by underwriters to determine the premium amount. Any false information submitted in the proposal form could be grounds for rejecting a claim in the future. It is therefore critical to be honest and open while filling it.
Insurers also use the information provided to gauge the premium payment capacity of the applicant. The final decision on whether the applicant qualifies for an insurance policy is determined on the basis of what is mentioned in the proposal.
A. A maturity claim is easy to file. Most insurers inform the insured/policyholder before the maturity date of the policy. This intimation is typically provided a few weeks before the actual maturity date, with companies also informing them about the maturity amount they are entitled to. In addition to this, the insurer will also send a discharge voucher to the policyholder.
This discharge voucher needs to be signed and submitted to the insurer. Additionally, the original policy bond should also be sent over. On verification of the policy and the signature the insurance company will settle the amount on the date of maturity.
A few insurers also ask policyholders to choose how they wish to receive the maturity amount. One is expected to furnish this information so that the amount is transferred accordingly.
A. Insurance companies provide options when it comes to payment of the sum assured. These options can vary from policy to policy and insurer to insurer but can be typically categorised into five types:
A. Insurance companies are expected to file taxes based on their income and expenditure. As such they are also required to be transparent when it comes to their taxes. Most insurers send out a tax policy statement to policyholders after the completion of a financial year. This report contains everything associated with the taxes paid by them. This statement can be used by an individual to compute his/her own tax (in certain cases).
A. This is primary because the older one is the higher the chances of his/her death. This increases the chance of a payout from the insurer. While it might not be the case in all occasions, it is riskier to insure an older individual compared to a younger one. With insurance companies looking at the probability of a payout in each case, they are prone to charge a higher premium with an increase in this probability.
A. In case the policyholder passes away during the policy term, the nominee can submit a death claim by submitting the following documents:
An insurance company can ask for additional documents if required.
A. Yes, it is possible to find life insurance policies which pay money during the policy term. The money is paid as survival benefit, with the payment beginning after the premium payment term. A certain percentage of the maturity sum assured is paid at regular intervals until the policy matures.
A number of Money Back policies come with this option. Individuals looking for such benefits should discuss the same with the insurance provider/agent in order to find a policy which pays them money during the policy term.
A. Yes, it is a better option to purchase a life insurance policy at a young age. Premiums are cheaper when the policyholder is young. Insurance companies increase the premium amount with the age of the applicant. Additionally, they can also offer rebates on the premium amount in certain cases.
A young policyholder can enjoy a high cover at affordable rates. Opting for a high cover when one gets older results in premiums which are considerably higher.
A. Most companies provide insurance to their employees. The insurance is purchased in the form of group plans. Employees who wish to avail an individual policy could get in touch with the group insurance provider and purchase a new one.
Most group insurance policies provide limited cover and should not be the only source of insurance for an individual.
A. Yes, it is possible to purchase a life insurance policy for your parents. Choosing to insure your parents can be a good option, ensuring that they needn’t rely on anyone if one of them passes away. Insurance companies provide options wherein an individual can cover two people in a single policy, making these ideal to insure one’s parents.
A. Yes, it is possible for senior citizens to purchase life insurance policies in India. A number of insurance companies offer products designed for senior citizens. While it might be hard to purchase a term plan, one can choose to invest in an annuity/whole-life policy.
One major disadvantage of purchasing a policy at an old age is that the premiums are typically higher.
A. The amount received as payout under a life insurance policy is exempt from tax under Section 10(10D) of the Income Tax Act of 1961. While the death benefit is completely tax-free, there are certain exceptions when it comes to maturity benefit.
It is advisable to consult a tax expert to utilise all the provisions provided by the government.
A. The cash value is nothing but the money paid by the insurer if the policyholder cancels the policy. It is typically associated with whole life insurance policies. It normally takes anywhere between 12 to 20 years for the cash value to build up, depending on the premium amount paid and the policy type chosen.
A. The individual who makes a payment claim to the insurance company is called the claimant. With regards to a maturity claim the claimant is typically the insured/policyholder. In case of a death benefit claim the claimant can be the nominee/legal heir.
A. A modified death benefit is associated with Modified Benefit Life Insurance policies. These policies are not common in India, with them being more prevalent in western countries. Under the concept of modified death benefit, the sum assured is not payable in all cases. If the policyholder dies within two years of purchasing the policy the insurer will pay only the premiums plus an additional amount.
The complete death benefit will be paid only if the policyholder dies after a specified minimum period. This is typically three years after the policy is purchased.
A. Yes, insurers will pay the death benefit if the insured dies in an accident which was a result of him/her driving under the influence of alcohol. However, it is possible for insurance companies to contest such claims if the policyholder had not mentioned the fact that he/she used to drink while buying the policy.
Most life insurance policies have only one exclusion – suicide. If the policy mentions accidents caused due to drunk driving as an exclusion no benefit will be paid.
A. Yes, if the insured has specified a beneficiary in his/her policy. Probate is a possibility if no beneficiary was chosen/if the beneficiary passes away before the policyholder’s demise (with no other beneficiary selected by the policyholder).
HDFC Standard Life Insurance stocks rose over the 400 level within 2 sessions of its market debut, on the NSE and BSE. The insurer’s current market valuation stands at Rs.69,671.19 crore. The company’s IPO, which was open between the 7th and 9th of November, was subscribed 4.90 times. The shares reserved for QIBs (Qualified Institutional Buyers) was oversubscribed by 16.60 times, while shares allotted for non-institutional investors was oversubscribed 2.29 times. Shares for retail investors saw a 94% subscription.
The insurer fixed a price band between Rs.275 and Rs.290 apiece for the IPO. The offer comprised the sale of a combined 1,91,246,050 shares, with HDFC selling a 9.55% stake in the life insurance firm and Standard Life Mauritius selling a 5.42% stake. The insurance firms has a pan-India reach, with around 414 branches across the country and 16,544 employees.
22nd November 2017
IndiaFirst Life Insurance is eyeing a growth of 43% in its net profit in the current fiscal. The company’s net profit during 2016-2017 was Rs.35 crore, and they are expecting to achieve a net profit if Rs.50 crore this year. The company is looking to retain their position as the fastest growing private-sector life insurance company by achieving this target.
The company which launched in the year 2009 attained its break-even in just the 6th year after its inception. The insurer currently offers a total of 35 insurance products, which include 21 individual plan, 8 group plans, 5 combi plans, and one rider. The latest offering from IndiaFirst is a child protection policy called Little Champ.
20th November 2017
HDFC Standard Life Insurance, the third-largest private sector life insurance firm in India, saw a strong market debut with shares trading as high as 27% due to good subscription and positive market conditions. The firm’s shares opened at Rs.313 against the issue price of Rs.290. The shares recorded an intra-day high of Rs.369 and an intra-day low of Rs.303.
The company’s Rs.8,695 crore IPO was oversubscribed 4.9 times by the last day of the bidding process, which began on 7 November 2017 and ended on 9 November 2017. The issue involved the sale of up to 19,12,46,050 shares by HDFC and 10,85,81,768 shares by Standard Life Mauritius. Currently, HDFC and Standard Life hold a 51.69% and 29.35% stake in the life insurance firm, respectively.
17th November 2017
India Post has made a big bet on its Postal Life Insurance (PLI) and Rural PLI businesses. The business turnover in Andhra Pradesh is expected to increase to 20% from the current 10-12%, by the end of this financial year. PLI was originally launched for the Posts and Telegraphs employees, but started to extend to cover Central and State government employees post India’s Independence. Rural PLI was launched in the 1990s in order to make insurance accessible to the rural sector. By way of PLI’s increasing demand, India Post is looking to bring certain sections of society like registered professionals, government school teachers, etc. under their reach.
16th November 2017
Life insurance firm Bajaj Allianz has launched a new digital platform called Life Assist, which will provide 24x7 instant life insurance solutions to prospective policy buyers. With the platform providing the experience of a virtual branch, customers can access all services that are available at regular company branches digitally, round-the-clock. With Life Assist, customers can edit their profiles and contact information, modify their KYC details, check their claim status, make top-up premium payments, opt for riders, switch funds, revive policies that are lapsed, etc.
The company also launched another online initiative called BOING, which is a 24x7 online chat assistant. BOING responds to user queries instantly and assists them with various services. Since its launch, chat assistant BOING has had around 27,000 visits from customers looking to issue account statements.
15th November 2017
HDFC Standard Life’s Rs.8,695 crore IPO was subscribed 4.89 times on the last day of the bidding process. The insurer’s IPO received 1,07,50,87,700 bids against an issue of 21,97,59,218 equity shares. The shares that were allotted for institutional buyers and non-institutional buyers were subscribed 16.60 times and 2.29 times, respectively. The shares reserved for retail investors was subscribed 91%.
Prior to their IPO that launched on 7 November, HDFC Standard Life raised a sum of Rs.2,322 crore from anchor investors. Key stakeholders HDFC Ltd. and Standard Life Mauritius will be selling a 9.55% and 5.42% stake in the life insurance firm, respectively. The promoters are expecting to raise around Rs.7,500 crore from the IPO. It is reported that the shares that were offered in the IPO will be listed on the NSE and the BSE.
14th November 2017
HDFC Standard Life Insurance’s Rs.8,695 crore IPO was oversubscribed by 17% on Day 2 of the company’s bidding process. The company received 25,73,36,050 bids against the issue of 21,97,59,219 equity shares. The shares reserved for institutional buyers saw the highest demand, with the shares reserved for employees next in line. The shares that were allotted for non-institutional investors had a 49% subscription. Equity shares that were reserved for retail investors and shareholders saw a subscription of 36% and 15%, respectively.
The bidding process which started on 7 November 2017 will close on 9 November 2017. The price band set by the insurer is Rs.275-Rs.290 apiece. By way of the IPO, joint venture partners HDFC and Standard Life will be selling a 9.52% and 5.4% stake in the life insurance firm, respectively. The minimum bid lot per person is fixed at 50 shares, and in multiples of 50 thereafter.
9th November 2017
Fund managers at ICICI Prudential Life Insurance are looking to invest in the Indian technology and pharmaceutical sectors after their very risky bet on the telecommunications sector paid off. It is reported that ICICI Prudential Life’s Chief Information Officer, Manish Kumar, in a very unorthodox fashion, kept purchasing shares in the telecommunications sector despite plunging profits and a price war which made other investors stop investing in the said sector.
During that period, ICICI’s Prudential Life’s assets under management (AUM) increased by about 16%, and currently amount to Rs.1.3 trillion or $20 billion. Around 54% of the company’s assets are under debt, as per the requirements of the Insurance Regulatory and Development Authority of India (IRDAI) and the preferences of the company’s unit-linked policyholders.
8 November 2017
HDFC Standard Life’s Rs.8,695 crore IPO was subscribed 46% on the very first day of bidding. The company is selling their equity shares at a price band of Rs.275-290. Investors are required to purchase a minimum of 50 shares, and in multiples of 50 thereafter. The issue which started on 7 November will close on 9 November. Earlier this week, the life insurance firm raised a sum of Rs.2,322 crore from anchor investors, at the upper end of the established price band.
HDFC Standard Life is a joint venture between insurance firm Standard Life and HDFC. Before the IPO, HDFC had a 61.53% stake in the insurance firm, while Standard Life had a 34.94% stake. The remaining shares are held by shareholders and the Azim Premji Trust. HDFC Life is currently the third-largest private-sector life insurance firm in the country.
8 November 2017
HDFC Standard Life Insurance will be the third life insurance firm to get listed on the bourses. It will also be the first IPO (initial public offering) from the HDFC umbrella after the HDFC bank's stock market launch in 1995. HDFC Standard Life Insurance will open its Rs.8,695 crore stock market launch on November 7 of this year for subscription with a price belt of Rs.275 to Rs.290 per stake. The equity shares will be listed on the NSE (National Stock Exchange) and the BSE (Bombay Stock Exchange).
The IPO is offering 29,98,27,818 equity shares of the firm and will close on November 9. The HDFC has offered to sell 19,12,46,050 of their shares while Standard Life has proposed to sell 10,85,81,768 of their shares.
The offer includes reserving up to 21,44,520 shares to be purchased by the HDFC Life’s employees, up to 8,05,000 shares have been reserved for HDFC employees who are eligible and up to 2,99,82,781 shares are reserved for HDFC stakeholders.
7 November 2017