Friday’s Market Preview: Soft-to-flat opening likely

Global cues point out to a soft-to-flat opening for the Indian market today. The US market ended almost unchanged in overnight trade as investors treaded cautiously ahead of the Federal Reserve’s “quantitative  easing,” to be announced next week. Asian markets were also trading weak on poor economic data from across the region.

The Indian market opened on a firm note on Thursday taking cues from its Asian counterparts, which were trading with marginal gains in early deals. Nervousness on the expiry day of the October futures and options (F&O) contract led the market into the negative terrain for a short while after which the indices bounced back into the green on news that food inflation for the week ended 16th October had eased. The market stayed in a narrow range near the neutral line but got a boost in the noon session as the European markets opened higher. A sudden bout of selling in the last half-hour saw the indices tumbling into the red once again touching the day's lows. However, a marginal reversal resulted in the market settling off the day's low, but in the red for the third day in a row. The Sensex ended 64.33 points (0.32%) down at 19,941. The Nifty stood at 5,987, a decline of 24.95 points (0.41%) over its previous close.

The US markets closed almost unchanged on Thursday as investors remained jittery ahead of the Fed’s “quantitative easing,” due to be announced next week. The markets ended lower despite a sudden decline in initial jobless claims. Initial jobless claims fell by 21,000, to 434,000, last week, the Labor Department said.

The Dow shed 12.33 points (0.11%) to 11,114. The S&P 500 added 1.33 points (0.11%) to 1,183. The Nasdaq gained 4.11 points (0.16%) to 2,507.

Markets in Asia were weak in early trade on poor economic data from across the region. Chinese stocks fell for the fourth straight day, trimming the best monthly gain in more than a year, on speculations that the government will enhance measures to curb inflation and property prices. Japanese industrial output fell 1.9% in September from August and core consumer prices declined 1.1% from a year earlier after a 1% drop in August, government reports showed.

The Shanghai Composite was down 0.51%, The Hang Seng was down 0.59%, Nikkei 225 tumbled 1.70%, Jakarta Composite declined 0.12%, Seoul Composite tanked 0.97% and Taiwan Weighted lost 0.35%. On the other hand, KLSE Composite added 0.01% and Straits Times surged 0.05% in early trade.

The Reserve Bank of India (RBI) may go for another round of hiking short-term lending and borrowing rates by 25 basis points each, next week on concerns of high inflation, a Ficci survey said.

Most economists, however feel that given the tight liquidity situation, the central bank would refrain from raising cash reserve ratio (CRR), which is a portion of deposits that banks keep with RBI in cash

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SEBI asks Sun-Plant Agro not to collect money from investors under the pretext of ‘tree plantation’

Sun-Plant Agro, whose application was rejected by SEBI and was supposed to wind up its scheme in 2003, continued to raise funds under the guise of ‘sale of plants’, which was just a collective investment scheme

Market regulator Securities and Exchange Board of India (SEBI) has asked Kolkata-based Sun-Plant Agro Ltd not to collect any money from investors or to launch any scheme in the name of sale of plants.

In an order issued on Thursday, SEBI's whole time member Prashant Saran, asked Sun-Plant Agro not to dispose of any of the properties or alienate the assets of the scheme and not to divert any fund raised from the public at large kept in bank accounts and/or at the custody of the company.

Sun-Plant Agro was raising funds in the name of 'sale of plants'. It allegedly sold plants to purchasers, maintained the plants and thereafter provided returns on the amounts invested at the end of the scheme in the form of wood, even though no identity or marking of the particular plant which was sold, was provided to purchasers.

SEBI said that such activities of the company carry the features of a Collective Investment Scheme (CIS), specified under Section 11AA of the SEBI Act read with Regulation 3 of the SEBI (CIS) Regulations.

The company ought to have wound up the scheme in 2003 pursuant to rejection of the application for provisional registration by SEBI and the filing of the 'Winding Up and Repayment Report' by the company. However, the activities of Sun-Plant Agro and the details of amounts received by it against cost of trees during 2003 to 2010 prima facie indicate that even after submission of the Winding Up and Repayment Report in 2003, the company has been carrying out activities of a CIS without obtaining a Certificate of Registration from SEBI, the market regulator said.

Interestingly, the company, which calls itself 'ISO:9001:2008 certified eco-friendly organisation', has partnered with the West Bengal Wasteland Development Corporation (WBWDC). Sun-Plant Agro, with WBWDC, plans to plant the jatropha crop over about 30,000 acres in the arid districts of Bankura, Birbhum, West Midnapore and Purulia over the next 15 years.

User

COMMENTS

PRASANTA

3 years ago

This SunPlant and group of companies are totally a great fraud company. They made rules and regulations for themselves. I was a field worker of this Company. Every time they break the government rules and regulations, after getting order from SEBI they continued selling tree sale scheme in the name of environment and carbon Credit, and mislead it's consumers and shareholders. After getting tight instructions from SEBI they launch a new company named as SUN PLANT BIO ENERGY LTD and sale the same scheme on basis of an advertisement of Rakesh Sinha (Indian Forest Service official)of Kolkata. From 2006 the company mislead us in the name of bio fuel from jatropha and alge. They collect crores of money from public in the name of these scheme and don't return maturity to the customers. Some Directors and senior officials protect Sunplant whenever we asking them about govt rules and regulation, and they are now not with this company. I have heard a rule of SEBI that when a company sale debentures to public (more than 49 person) that have to register with SEBI but without a registration they sale its debentures to more than 1000 of customers. They always take illegal collections through manual basis. This company push youths to a darkness in the name of bright career. Most of branch offices are closed and they don't return customer's money. This company don't know how to do business, they only know to collect money like a clever thief.

Maloy Bhattacharjee

6 years ago

Congratulation Mr. Roy & Mr. S.M.Ghosh ! I’m totally agreed with you. When a huge no. of company exploited public money in front of all, no one restrict them until they collect a lot of amount from poor and illiterate people. Arrest some one doesn’t indicate the public interest ( maturity ) but way to escape from the repayment liability.

Such a position the movement of SEBI doesn’t indicate adequate public interest. When with out any public ( customer ) complain a company who has been submitted every year’s audited balance sheet to SEBI ( 2003-4 to 2009-10 ) it’s painful that SEBI restrict the company to commit it’s business after a long period of 7 years.

We know that the primary work of SEBI is looking after the security market ( Primary & secondary Market ). There are so many companies, collected money from primary market and after that enlisted BSE,NSE and other stock market, abolished totally after collecting a huge public money. Is there any rule to SEBI to prevent that type of incident ? What is the way to repay share holder’s money from de-listed companies ? If basic terms & conditions are applicable on it, what is the basic role of SEBI on public interest?


REPLY

s m ghosh

In Reply to Maloy Bhattacharjee 6 years ago

SEBI CAN ALERT ~ CAN'T PROTECT
VERY CONFUSING ~COMPLICATED

arindam choudhury

In Reply to s m ghosh 6 years ago

i am fully agree with Mr. Ghosh

netai chandra Roy

6 years ago

An order of honorable Mr. Prashant Saran -the whole time member of SEBI notified on dt. 21/10/2010 not to collect money from public and it was published in Annandabazar Patrika before issued the PR from SEBI (which issued on 28/10/2010). It is seem to me mysterious, because Sun Plant does not collect investment from public it sale its extra stock of trees and it was also supported by SEBI (SEBI inspection team inspected scrutinized project and accounts letter on 2002) Where SEBI said clearly “this company made its day to day Expenditure Maturity, Prematurity by selling their extra stock of trees” so following questions are arise here :
1. How tree sale becomes a CI scheme?
2. Company does not inviting investment for Cultivating plant. They approach the people to sell their growing trees in various project in various state. Whether a Producer/Farmar have a right to sell or not his own cultivated product?
3. For the interest of customer Company made an agreement as MOU because it have expertise for tree maintaining which purchaser have not. Company insured every plant against natural calamities on behalf of customer/purchaser without MOU it is not possible. Till maturity of the sold tree served customer/purchaser interest is wrong?
4. Company indicating projects area i.e. state/district/mouja/project no./tree no. of sold tree/trees bearing to its customer/purchaser through a sale and maintenance agreement. So what is the problems to identify the tree/trees?
5. In our country AMC is allowed on sold goods/products. So company made a MOU as AMC for 7 years. What is the problem?
6. Is there any incident of deprive customer ?
The above questions are arising because last 7 years I have been observing the company and its thousands of customers and worker from very closer and saw they feel proud for the company because the company is fighting against global worming /day to day increasing unemployment/ to increase national asset development/ earn carbon credit/ make India green and clean .
In the question of reduce GHG and produce new trees Govt./non Govt. organization / Semi Govt. institution are trying vigorously to combat day by day increasing GHG but in many areas they failed but by the way of tree sale it produce more than 10 lacks of trees in its age.
In the question of reduce unemployment company made opportunity of earning thousands of its field force as well as tree project worker and more then five hundred office worker.
In the question of Bio Fuel Company is on the way of produce ECO friendly fuel BIO-Diesel from Jetropha and Algel-Diesel through carbon sequestences.
Now West Bengal Westland Development Corporation made a agreement to produce bio-diesel from jatropha by using barren waste land in various area of W.B. through this process lacks of poor people get job and produce ECO friendly BIO-Diesel which can save foreign Currency utilized for oil import.
So, SEBI have to think twice Sun Plant Agro Ltd. Is doing CIS or Provide employments/jobs, Produce national assets which increasing national GDP, Produce Oxygen and reduce Carbon di-oxide and also its activity help in reducing GHG which is the burning problem now a days in the almost all the countries of the world.
Netai Chandra Roy
North 24 Parganas, West Bengal
In favor of Green India-Clean India
Which is the slogan of Sun-Plant Agro Ltd. also

s m ghosh

6 years ago

If the plantation/trees under insurance coverage or under contract of insurance to which insurance act applies will not come under CIS.

A Collective Management company should be in-corporated under provisons of the companies act 1956 and registered with SEBI under the SEBI(CIS) Regulation 1999,whose object is to organise operate and manage a collective investment scheme.
Buyer - seller deal ie product/commodities selling and AMC Will come under consumer re-dressal forum.
SUNPLANT is neither NBFC nor a Registered CI Management Company, so I THINK SEBI'S HANDS ARE TIGHT & CAN'T CROSS THE LIMITATION.

s m ghosh

6 years ago

why SEBI was sleeping with one eye open ?
After 7 years they are passing the order to a company who is trading & maintaining tree as per ISO norms with valid 9001:2008 CERTIFICATE on quality management.
Recently the company has entered in a Joint Venture project with WBWDC under Forest Department Govt Of WB for waste land development through Bio energy crop & medicinal plant cultivation where large number of farmers are involved.This is under GREEN INDIA MISSION providing employment to the needy rural masses. Any action at this juncture may hamper the JV project badly.
I feel suitable directives to be given considering the future of rural masses.

Environmentalist

R Balakrishnan

6 years ago

A normal affair. RBI is sleeping. Our laws do not prescibe any deterrent penalty for violations. There are perhaps at least half a dozen collective schemes in every small town. Only when people lose money, the regulators clamp down.
Here, praise to SEBI for acting before a complaint of money loss, which is sure to happen. Surely the money raised so far, has gone out of the company's books.

REPLY

Jim

In Reply to R Balakrishnan 6 years ago

I agree with you sir. Recently Sahara has launched an MLM plan and it is being promoted vigorously in small towns in states like Gujarat and Uttar Pradesh. One of agents who visited me was harping on the brand name of Sahara and the main marketing pitch was that since it is the beginning stage of the MLM scheme "we" can make money before the scheme becomes redundant and widespread like Amway and many others.

IRDA yet to disclose claims repudiation ratio for 2009-10

IRDA has not disclosed details of repudiation of claims for 2009-10 for reasons best known to it. Private life insurers have come out pretty badly vis-à-vis LIC in this regard
 

Claims experience has to be one of the most important factors to consider before finalising life insurers, because every insurer will love to collect premiums, but few insurers will feel the same about claim payments.
 

Unfortunately, this crucial data is not available for 2009-10. LIC comes out better than private insurers in this regard. It too does not disclose its repudiation number for 2009-10, but hinted that it was slightly higher than 1.33% which was the figure in 2008-09. Looking at the atrocious claims repudiations percentage of private insurers, they may be the ones having something to hide. Can the Insurance Regulatory and Development Authority (IRDA) publish the numbers soon?
 

Based on 2008-09 data, the most incredible statistic is that of Aegon Religare with no claims settled, 71.43% claims repudiated and 28.57% claims pending. Please see: www.docstoc.com/docs/58633842/IRDA-claims-settlement-08-09.

It could be that for 2008-09 there were lesser claims being generated because of new business, and unfortunately, the claims that came in had to be genuinely repudiated. We have to give the benefit of the doubt if that is the reason. When a life insurance company gets a claim within three years of policy start there is always investigation and possibility of claim repudiation.
 

Bharti Axa Life has recently unveiled its new brand positioning - "Jeevan Suraksha Ka Naya Nazariya." It has a service guarantee of "Release of Fund Value within 48 hours" of receiving claim intimation. It is even advertised on TV. In 2008-09, Bharti AXA Life had 53.20% claims settled, 44.83% claims repudiated and 1.97% pending. Low claims pending shows that Bharti Axa certainly is making quick decisions on claims, but high claims repudiation means that one out of two claimants will never get claims paid, forget about the 48-hour claims settlement.  We will again give the benefit of the doubt to this insurer if the 2008-09 data is indeed skewed due to new business.
 

The reason for repudiation can be due to incorrect/hidden details in policy forms filled by a policyholder with or without abetment from an agent. It is imperative that the policyholder fills up the policy form completely and in good faith without the agent filling any policyholder personal data. An ethical agent who is properly trained by the insurer will not mislead the potential customer just for getting commission. The policyholder will be at a loss because the policy form will be scrutinised only at the time of claim.
 

The other reason can be policyholders themselves indulging in fraud. As far as fraudulent claims are concerned, the insurer has every right to repudiate the claim.
 

According to Vipin Anand, chief-corporate communications, LIC, "Repudiation of claims also has investigation cost and possibly litigation cost in cases of a policyholder filing a grievance. In some cases, these costs can be greater than the claims cost. LIC can repudiate claims on technicalities and policy wording, but it does not do so unless there is a fraudulent claim. Moreover, LIC is in a strong financial position and does not worry about the bottom-line when genuine claims have to be paid. We pay on (an) average 77,000 claims in a day. "
 

Private insurers are struggling to break even and will surely be scrutinising claims to a greater extent. It will be hard for them to keep up with the giant called LIC. When will private players measure up to the insurance behemoth?

User

COMMENTS

K B Patil

6 years ago

I was not looking at insurance companies closely. The data (claims repudiation) is horrifying. Are these guys fly by night operators or what? In India, service is still a dream for most people. The agent is there only till the policy is purchased and then fades into the background. Likewise, in case of doctors and lawyers, they treat their clients like the priests in all the big temples in India. You stand before them as supplicants, not as one who is paying money and is on a equal footing in a commercial relationship.

REPLY

Amalaraj Marian

In Reply to K B Patil 6 years ago

Mr. Patil Your fear is what i was talking about lom at my other feedbacks

Manu

6 years ago

Till date there is no subtitute of LICI.
LIC of India know Indian better.Peoples of india love Lici and the agents of Lici.
Plz.Indians LOVE LOVE Lic of India.

REPLY

Yogesh

In Reply to Manu 6 years ago

Manu , You are right.Indians LOVE BONUS,They prefer less life cover,they don't want transparency,liquidity,flexibility.They like to revive policies if they forget to pay premiums,Indians don't want choice of different funds in their investments,They like to to take loan of their own investments and pay interest thereof,They like terminal bonus,
They want JEEVAN with ANAND.
WHY GO ANYWHERE ELSE ? WHEN THERE IS LIC.
PEOPLE GET WHAT THEY DESERVE.

Amalaraj Marian

In Reply to Yogesh 6 years ago

Kudos Mr Yogesh you said it all.
If you mis-sell in crores the %age which one is talking of will look small on any data analysis. But the actual number will run to several thousands. The gaint is doling out choclates icecreams and golas to connect to the small minded masses probably they understand that. but the big boys make money else where and that is surely not any of the life insurance companies. these companies are here to swindle people. The industry is consolidating times will come when the entire skeletons will fall out of the cupboards.

balaji

In Reply to Amalaraj Marian 6 years ago

What else want the people to do put their mony in the stoct market and related things and get heart attack when ever the market goes down.The amout of knowledge our people have atlest the endowment will give some peace of mind and not hear attack.

Yogesh

In Reply to Amalaraj Marian 6 years ago

You are right skeletons have started falling in LIC.The secretary of investments dept. of LIC[equivalent to CIO of asset management company] has been arrested for fraud .Media has concentrated on only on LIC Hsg. Finance.LIC is the only organization where there is no TRANSPARENCY with regards to investments and this according to me is only tip of the iceberg.There are many Niira Radias at work for LIC so nobody will question LIC about its investments etc..In media questioning LIC is like act of TREASON.
TRUST THY NAME IS LIC.

sanjay shah

6 years ago

I THINK IRDA HAS NOT PERFORM THEIR DUTIES WELL, BECAUSE AT THE TIME OF APPROVAL OF ULIP PLANS OF PVT.LIFE COS. HOW THEY HAVE ALLOWED ALLOCATION CHARGES FROM 40% TO 80%. IN CASE OF HDFC STD LIFE GUARANTEED HIGEST NAV PLAN FOR 1LAC PREMIUM TOTAL CHGS IS APPROX.10000/- & AGENT COMM.IS 12000/- HOW CO IS ADJUSTING SUCH EXP.? IRDA MUST PUBLISH IN ALL LEADING NEWS PAPERS CLAIM O/S & DENIED FIG. SO THE MASS CAN KNOW WHICH CO.THEY SHOULD SELECT FOR THIER PRECIOUS LIFE.

arvind

6 years ago

lic is big daddy ,jai ho.......

REPLY

amalaraj marian

In Reply to arvind 6 years ago

Even Priemier (doshis) and Hindustan Motors(birllas) were living in such a fools world till maruti came and changed the ball game. the bigger they are the harder they fall..........watch out

Deepak R Khemani

In Reply to amalaraj marian 6 years ago

Mr Amalaraj probably has something against LIC due to his unfortunate experience in dealing with certain officials and staff of LIC. For him to compare LIC with Hind Motors and Premier seems foolish. For his information LIC's market share in the last quarter has increased tremendously and is going to do so in the future also as the new ULIP guidelines have hit the Private insurance companies hard where they have had to close down a number of branches and lay off Staff to save on costs.
LIC JAI HO

Amalaraj Marian

In Reply to Deepak R Khemani 6 years ago

What more evidences do you need mr khemeni you also seem to be the part of the whole bunch of leaches who thrive on the aam asdmi money. and use the money for growing big. If this is not the case you will not defend it tooth and nail. LIC has used peoples money to dole out the goodies to the officers and the agents of the corporation. while the poor policy holders were paid peanuts. You all used peoples money at trival interest rates to by the goodies like cars while the same corporation loans to the policy holders at rates far above the bonus rates if you want more of this i can come out with a lot more but just like what the great wisidom says when you walk on the road you dont throw stones at every dog that barks you might as well carry some biscuts samje

Madhusudan Thakkar

6 years ago

The claim repudiation will increase in the months and years ahead especially because we now have policies sold "online only".It is very difficult for insurance company to determine life assured health,habits, income etc... correctly.In the policies sold through distribution network there is at least a moral hazard report to be filled by different persons depending on sum assured after verifying above details. One more reason of repudiation is "Sales force" are not properly trained by Insurance companies on this vital aspect.

REPLY

Deepak R Khemani

In Reply to Madhusudan Thakkar 6 years ago

Agree 100% with what you have said.
All those who fall for low premium Policies available online only(without the services of a trusted advisor, prompted by what they read in financial journals and watch on business channels), their families/dependents may have to repent later because in case of repudiation of claim, the whole purpose of having a policy whose monies would be payable to your dependents in your absence would be defeated and since there is no agent/ advisor involved do they expect the company officials to come to their house to settle claims? This repudiation ratio is bound to increase. ALWAYS BUY YOUR POLICY FROM A TRUSTED FRIEND/ASSOCIATE/FAMILY ADVISOR WHO IS PROPERLY TRAINED AND HAS A FEW YEARS EXPERIENCE IN THE FIELD OF INSURANCE SELLING

Amalaraj Marian

6 years ago

I personally feel people seem to jump the gun on this issue. The fact is that unless all the facts are laid clear on the table it is too early to say anything.If the case is so then the IRDA is more responsible to see that the ratio is maintained well within the required percentage. The important fact is that if there are early claims only in that case the company may go into investigation or else the company will have to go and pay the claim. The role of the agency force is very important here and they need to know that the commission amount is very small compared to the loss the policy holder has to face. with the numbers at play now the chances are that a lot of things are not comming out very clear, or else the track of LIC is also very much doubtfull. I can say this because there is a clear case of undue delay in settling claims. The agency force is least interested in helping the claimant. I have a genuine case where the agent just didnt bother to service the death claim and he just dropped the forms at the claimants place and went away saying you fill the forms and submit them to the office i have spoken with the concerned people there. Then the office took more than 9 Months to settle the claim at also the claimant was called to the office to collect the cheque. The cheque was not ready and there were three people from the clerk to the accountand and the divisional manager preasurising the lady to buy a new policy saying that what was not going to come to you why should you not put the same in some other policy? Sic!!!!! all this for the punch line Jindigi ke saath bhi aur jindigi ke baad bhi........
Lets come out and talk about what is the right of the policy holder then telling whose clothes are the whitest.

REPLY

Deepak R Khemani

In Reply to Amalaraj Marian 6 years ago

IRDA has nothing to do as far claim repudiation ratio is concerned except to publish the figures. IRDA cannot get the companies to pass the claims favorably.
Those who say that the track record of LIC is doubtful should first check the claims ratio of LIC before making such a statement.
The case of the agent mentioned by you should be brought to the notice of LIC as well as others in your family and friends circle so that he does not get any business from your friends and family. LIC has a dedicated CUSTOMER RELATIONS CELL where any delay beyond a reasonable time should be reported immediately to get the claim settled as soon as possible.
If all your papers are in order then there is no reason that the claim will be delayed.
The case mentioned by you makes it all the more clear that you should buy your LIC Policy from a trusted friend/ associate/ family advisor who can help you in times of claims where followup with LIC is required.

Amalaraj Marian

In Reply to Deepak R Khemani 6 years ago

Mr Khemani you have not read the write up clearly i suppose there are three LIC officials i mentioned. this includes the Divisional Manager who was so arrogent and hell bent to sell one more policy to the widow of the policy holder sic!!!! you call this service? this is leaching on to the aam aadmi and suck away the blood this man was not aware of the rights of a policy holder. Gross violation on his behalf so according to you such a person should not be given business that is what your note mentions. Similarly the LIC agents are there after you only till the policy is sold after that they just vanish. There are the big names also in this. I will quote an agents words "Aaj Policy beech do premium tu client ko Ghxxx marke bharega. And all this guys who come promissing great things dont come with the caption written on their forehead that he is going to ditch you when you will need you the most. The LIC employees are themselves so arrogant when one has to visit the offices for small activities which should have been done by the agent. it is just unbareable there should be a provision of answerability for such erring agents and officials.

Deepak R khemani

In Reply to Amalaraj Marian 6 years ago

Obviously dear Amalaraj sir you have not read my reply. I have clearly stated that you should not give business to the type of agents you have unfortunately dealt with.
I said Buy your policy from your TRUSTED FRIEND/ASSOCIATE/ FAMILY ADVISOR who will not only sell you the right policy after analysing your needs but will also be there when his services are required. Obviusly you have had a bad experience will certain LIC branches/ officials/staff. I have also mentioned in my reply that there is a grievance redressal cell/ customer relations cell which needs to be approached in case of any complaints or delays.
I hope you get the point of what I am trying to say.

vivek

In Reply to Amalaraj Marian 6 years ago

Marian, read the stuff and then reply... and stop writing crap.... looks like you dont have any work... are you a lawyer ???

S VIVEK

6 years ago

IRDA was always publishing things relevant for a customer late and does not advertise what data and where it is published.In many instances both agent and customer are at fault.

Madhusudan Thakkar

6 years ago

No one can dispute that in claim settlement ratio of LIC is best in the world.But I have one more point on this issue on ULIP claims.In these products when claim is repudiated nothing is paid to the nominee of policyholder.These products deduct mortality charge on the basis of life assured age and health plus there is an investment component If policy holder dies the nominee is paid either sum assured or fund value WHICH EVER IS HIGH.Now when claim is repudiated the nominee is NOT PAID ANYTHING.WHY FUND VALUE SHOULD NOT BE PAID TO THE NOMINEE IN CASE OF REPUDIATION OF CLAIM? In ULIP sold by UTI since 1971 fund value is PAID even in case of repudiation of claim.I strongly feel that media should pursue this matter and IRDA should ensure that even in case of repudiation nominees are not denied fund value.

REPLY

Deepak R Khemani

In Reply to Madhusudan Thakkar 6 years ago

There are 2 types of ULIPs involved over here. First is the one you mentioned where in case of death either the sum assured or unit value is payable whichever is higher. There is another type of ULIP in which Sum Assured PLUS unit value is payable in case of death.
UTI Ulip also now has a facility of constant life cover till the policy is in force wherein the sum assured plus unit value will be payable in case of death. The other option mentioned by you is also available

Madhusudan Thakkar

In Reply to Deepak R Khemani 6 years ago

Deepak Ji you are right that there are 2 types of ULIPs,But 90% of ULIPs have only one option i.e Sum assured or Fund value which ever is higher.My only contention is why "FUND VALUE" should not be paid even in case of repudiation of death claim? Especially because of transparent nature of these plans.Fund value is an investment portion at any given time during the tenure of policy and it has nothing to do with "risk cover". This feature of "ENTIRE REPUDIATION" of claim is totally arbitrary,inconsistent and irrational.

Deepak R Khemani

6 years ago

As far as Life Insurance is concerned it makes sense to stay with the Big Daddy LIC as can be seen from the claims ratio of 2008-2009.
The claims ratio of private companies is going to be no better for 2009-2010.
When you take an Insurance policy on your life, what is the point in taking a Policy with a lower premium but having chances of it being repudiated, After all you are taking the policy for your family who can get a lump sum in case of an unfortunate event, what if your family does not get the amount, Who will look after them ?
Will it be the Online portal which offered you a mouthwatering low premium or an agent of a private Insurance Company who may never turn up after he gets the first premium from you as he may have changed his association with a few life insurance companies in a few years time. I personally know quite a few agents who have been associated with different life Insurance companies in the few years of their life Insurance Agency, and with the new ULIP guidelines coming into force, a lot of Insurance agents(advisors) especially from the private Companies have been forced to look for other jobs.
Great Job Moneylife for publishing such an article. Keep up the good work.

R Balakrishnan

6 years ago

I would look for private insurers with high claim repudiation and bet on them in the IPO stage. In the long run of course, those companies will have to close down as people realise that the co does not settle. But it will be a long time. Please keep publishing these statistics.

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