It’s an innovative, transparent product that allows entry till the age of 85 years without medical tests and covers for whole life. But be careful as the higher age groups may end up paying more premium than the sum assured within a few years
IDBI Federal Senior Termsurance plan is a whole-life plan, which has a minimum entry age of 50 years and a maximum entry age of 85 years for a minimum sum assured of Rs2,338 and maximum sum of Rs5 lakh. The minimum yearly premium is Rs1,000 and the maximum premium is Rs2,13,890 (for individuals of 85 years for a sum assured of Rs5 lakh). The premium is obviously expensive if anyone wants to enter at old age.
The plan offers guaranteed acceptance with no medical tests. In the unforeseen event of the demise of the person insured within the first two years of the policy, 125% of the total premium paid shall be returned. After two years, the policyholder is insured for the sum assured for life. The amount of premium and cover remain the same throughout the life of the policy, except after the age of 90. At the age of 90, premiums will stop, but the life insurance cover will continue.
The premium rate for a person aged 50 years subscribing to the Senior Termsurance plan will be Rs18,195. In comparison, the premium rate for a person aged 50 for Aegon Religare Level Term Plan is Rs6,050, while that for ING Vysya Life - Term Plan is Rs7,555. So, the IDBI Federal new offering may seem steep when compared to other insurers, but it has to be remembered that this is a whole life product, whereas the maximum maturity is 75 years for existing term plans. Moreover, the premium rates for this product are fixed for specific age entry level irrespective of the medical condition, while the term plan premiums can be loaded at the time of underwriting, based on the medical condition of the person.
The true benefit of term life insurance is risk protection during working life. It is expected that the person would have saved enough by the time of retirement that can see him through even if the term life insurance expires. Currently, the maximum entry age is 65 years and maximum maturity is 75 years for term life insurance plans.
An innovative plan that allows entry up to the age of 85 years without medical tests and offering coverage for the whole life will come at a price. If the person has not saved enough during his working years, he may not have enough money to pay the steep premium during his old age and hence the plan is self-defeating. Nevertheless, IDBI Federal has something new to offer to customers. The new product is also transparent, as was the Retiresurance guaranteed traditional pension plan. (Read, "IDBI Federal Retiresurance - Aims to revive dwindling pension market".)
A new class of investors called Qualified Foreign Investors, but not FIIs, can invest money into domestic mutual funds through Unit Confirmation Receipts or Depository Participant route, joint secretary (capital markets) in the finance ministry, Thomas Mathew informed the media
New Delhi: The government today said that foreign investors, other than foreign institutional investors (FIIs), would be allowed to invest up to $10 billion in domestic mutual funds (MFs), a move that will help in moderating volatility in the capital market, reports PTI.
This class of investors called Qualified Foreign Investors (QFIs), but not FIIs, can invest money into domestic mutual funds through Unit Confirmation Receipts (DPs) or Depository Participant route, joint secretary (capital markets) in the finance ministry, Thomas Mathew, said.
QFIs could be individuals and bodies, including pension funds, and cumulatively they can invest up to $10 billion (about Rs45,000 crore).
At present, only FIIs, sub-accounts registered with the market regulator Securities and Exchange Board of India (SEBI) and non-resident Indians (NRIs) are allowed to invest in mutual fund schemes in the country.
To begin with, $10 billion is the total ceiling on QFI investment in India but it is subject to review depending on response, he said.
“SEBI will be the regulator for all investments for both routes,” he said, adding the SEBI will issue necessary notification and framework by 1st August.
Only KYC (know-your-customer) compliant retail foreign investors would be allowed to invest and the DPs will ensure proper KYC of QFIs as per the norms prescribed by SEBI, he said.
Besides, mutual funds would also undertake KYC of QFIs, he added.
He further said that one QFI can open one account in one of the qualified DPs and only QFIs from jurisdictions which are FATF (Financial Action Task Force) compliant would be eligible to invest in the MFs under the scheme.
The move follows the announcement of finance minister Pranab Mukherjee on the issue in the last Budget.
“Currently, only FIIs and the sub-account registered with the SEBI and NRIs are allowed to invest in the mutual fund schemes. To liberalise the portfolio investment route it has been decided to permit SEBI registered mutual funds to accept subscriptions from foreign investors who meet the KYC requirements for equity schemes,” Mr Mukherjee had said in the Budget speech.
“This would enable Indian mutual funds to have direct access to foreign investors and widen the class of foreign investors in India equity market,” the finance minister had said.
The average assets managed by the MF industry, consisting of 40 players, stood at Rs7,00,538 crore as of 31 March 2011.
Since it is going to be retail investment, it would be more stable than the FII money, Mr Mathew said.
The total gross premium of 23 players in the non-life insurance market rose by 27%, from Rs3,151.41 crore in May 2010, according to IRDA data
New Delhi: The premium income of general insurance industry, comprising four public sector entities, grew by 27% in May to Rs4,004 crore, reports PTI.
The total gross premium of 23 players in the non-life insurance market rose by 27%, from Rs3,151.41 crore in May 2010, according to data available with the Insurance Regulatory and Development Authority (IRDA).
The four PSU entities—National Insurance, New India Assurance, Oriental Insurance and United India Insurance—saw their gross premium collection rise by 23% year-on-year to Rs2,358.60 crore in May. At the end of May, the four entities accounted for about 59% of the total general insurance industry.
Amongst the private sector players, ICICI Lombard saw its premium income rise by 37% to Rs329.26 crore. The premium income of HDFC Ergo grew by 50% to Rs113.31 crore and that of Reliance General Insurance by 13.33% to Rs156.59 crore in April.
Amongst the life insurance companies, Life Insurance Corporation of India’s (LIC) premium income fell by 8.03% to Rs9,273.08 crore during the first two months of the current fiscal (April-May) compared to Rs10,082.85 crore in April-May 2010.
Also, the 22 private life insurance companies saw their premium income decline by 23.26% to Rs2,980.36 crore. These firms had an income of Rs3,883.76 crore in April-May 2010.