History of insurance in India

Ref: IRDA/GEN/06/2007 Date: 12-07-2007

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya
(Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-
distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to
modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries,
England in particular.

1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance
Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting
life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the
last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897)
were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did
good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and
the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life
Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian
Insurance Companies Act was enacted to enable the Government to collect statistical information about both life
and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In
1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and
amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of
insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of
insurance companies and the level of competition was high. There were also allegations of unfair trade practices.
The Government of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance
Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75
provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the
Insurance sector was reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and the consequent
growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British
occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the
year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first
company to transact all classes of general insurance business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance Associaton of India. The General
Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff
Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business
was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four
companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India
was incorporated as a company in 1971 and it commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process
of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened
up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former
Governor of RBI, to propose recommendations for reforms in the insurance sector.The objective was to
complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein ,
among other things, it recommended that the private sector be permitted to enter the insurance industry. They
stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with
Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and
Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance
industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include
promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower
premiums, while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign
companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section
114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of
companies for carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as
independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a
bill de-linking the four subsidiaries from GIC in July, 2002.

Today there are 28 general insurance companies including the ECGC and Agriculture Insurance Corporation
of India and 24 life insurance companies operating in the country.

The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking
services, insurance services add about 7% to the countrys GDP. A well-developed and evolved insurance sector is
a boon for economic development as it provides long- term funds for infrastructure development at the same time
strengthening the risk taking ability of the country.
Insurance in india
The Confederation of Indian Industry states that the insurance sector of the country has
been witnessing a consistent growth rate of late and its present worth is 41 billion US
dollars.

The industry has of late achieved a yearly growth rate within 32 and 34 percent and this
makes it the 5th best among emerging economies around the world. The various entities
of the industry are also bringing out newer products on a regular basis to attract their
customers.

As per rules, the upper limit of foreign direct investment permitted in this sector is 26
percent. However, this has to be done through the automatic route and the investor
needs a license from Insurance Regulatory and Development Authority (IRDA).

At present there are 22 life insurers in India. The IRDA has recently taken away the
tariffs of the interest rates and this has provided insurers greater independence when it
comes to deciding the price of their insurance policies. The insurance industry has also
become more competitive as a result.

Yet another important factor affecting this sector has been the recent financial
meltdown.

India insurance industry growth in last few years

The life insurance companies have performed the best when it comes to growth with an
increase of almost 70% in new premium that has been collected in the initial 5 months
of 2012.

As per IRDA data, in April-August 2010 the insurance companies earned $11.73 billion in
new premium - in the corresponding period in the previous year the amount stood at 6.9
billion dollars.

LIC, a state held insurer, had been the biggest profit maker at that time with an addition
of 88% to their existing business. The privately owned insurers together had seen a leap
of 34% to their policy sales.

ICICI Prudential earned 576.60 million dollars at that time. During April-August 2009 SBI
Life had earned $379.20 million in sales of new policies and that figure went up to
$531.87 million in the corresponding period in 2010 making it an increase of 40%. HDFC
Standard Life also experienced a good growth of 54% in new sales.

IRDA data shows that between April and October 2010 the general insurance industry
experienced a year-on-year growth of 22.76% with regards to underwritten gross
premium.
The total value of that premium was 5.29 billion dollars while the same figure stood at
$4.31 billion in April-October 2009. For the public sector companies the year-on-year
growth rate was 21.09 percent between April-October 2010 and April-October 2009.

In the same period the privately held insurers saw an increase of 25.19 percent in terms
of premium collected. Among the publicly owned entities, New India Insurance was one
of the better performers with a premium income of 916.77 million dollars in April-
October 2010.

At the same period in 2009 they had earned 770.25 million dollars which implies a
growth rate of 19.04%. The IRDA Summary Report of Motor Data of Public and Private
Sector Insurers 2009-10 states that in the same period almost 28.4 million policies were
sold and the aggregate worth of premium collected was $2.31 billion.

The health insurance sector, according to the RNCOS' research report named "Booming
Health Insurance in India" posted unprecedented growth rates in 2008-09 and 2009-10.
The report also estimates that between the 2009-10 and 2013-14 the sector would see
a compound annual growth rate (CAGR) of at least 25%.

India insurance industry - market share of leading companies

The following table shows the market share of top insurers in India in the period till April
2011:
- See more at: http://business.mapsofindia.com/insurance/#sthash.WLe7n15r.dpuf

Insurance latest news and updates

'Centralised database of life insurers soon'

July 04, 2015 05:54 PM

Life insurance companies in the country will come up with a centralised database of
clients by this year end, an industry official said here on Saturday. "We are in the
process of shortlisting a vendor, who will collate the database aimed to provide a fraud
monitoring framework", secretary general of Life Insurance Council, V. Manickam told
mediapersons on the sidelines of an event organised by the Indian Chamber of
Commerce in Kolkata. The database is aimed to detect fraud or duplication of claims in
the life insurance space. He said the association will be holding an internal meeting
among its members next week and will narrow down on selecting a vendor. Source:
IANS
Insurers/TPAs should tell hospitals to reflect discounts in bills: IRDA
June 19, 2015 01:18 PM

In a policyholder friendly measure, the Indian insurance regulator has proposed that
insurers and health insurance claims processing agencies should mandate hospitals to
reflect the negotiated discounts on the bills so that the policyholders are aware of the
actual rates. The Insurance Regulatory and Development Authority of India (IRDAI) has
also proposed a minimum start up capital of Rs.5 crore for third party administrators
(TPA-health insurance claims processing agency) and a minimum working capital limit of
Rs.1 crore. Coming out with an exposure draft on the regulations to govern TPAs as the
current one is around 14 years old, the sector watchdog said according to the draft
regulations, either the insurers or the TPAs may be obtaining discounts from various
hospitals during the course of the settlement of claims under health insurance policies.
Source: IANS
Bennett Coleman to buy out Religare's stake in life insurance JV
May 13, 2015 02:10 PM

Religare Enterprises Ltd (Religare) on Tuesday said that it has decided to sell its 44
percent stake in Aegon Religare Life Insurance Company Ltd to Bennett Coleman and
Company Ltd (BCCL), one of the joint venture partners. In a regulatory filing in the BSE,
Religare said that it has reached a definitive agreement with BCCL which will acquire its
stake in the life insurance joint venture. Aegon Religare Life Insurance is a three way
joint venture between Religare (44 percent), BCCL (30 percent stake) and Aegon (26
percent). According to Religare, Aegon would increase its stakes in the life insurer from
26 percent to 49 percent. Source: IANS
'Jan Suraksha schemes to help eliminate Jan Dhan's zero balance
accounts'
May 09, 2015 01:51 PM

The Jan Suraksha Yojana under which two insurance and a pension schemes would be
launched countrywide on Saturday would help in reducing the number of zero balance
bank accounts created under the Jan Dhan Yojna, a senior government official said in
Kolkata Friday. The "Pradhan Mantri Suraksha Bima Yojana" (accident insurance), the
"Pradhan Mantri Jeevan Jyoti Yojana" (life insurance) and the "Atal Pension Yojana" under
the Jan Suraksha Yojna, would be launched by Prime Minister Narendra Modi on
Saturday in Kolkata during his two-day visit to West Bengal. Source: IAN
- See more at: http://business.mapsofindia.com/insurance/#sthash.WLe7n15r.dpuf
 India insurance industry - some key findings
Following are some important findings from World Bank regarding the condition of
insurance industry in India:

Between 2005 and 2010 the yearly GDP growth was approximately 8.56%
At the same time, the ratio of gross savings to GDP was 33%
Middle class saw the quickest growth
The life expectancy rate of people went up and urban development happened at
almost 54%.
In 2010 rate of premium growth came down to 4.2% and compared to global
standards the premium share was pretty low
Major operational issues for insurers were expenditure control, claims settlement
procedures, improving investment yields, and capital requirements
In the 2010-11 fiscal the life insurance industry grew by 4.20% while the general
insurance industry increased by 8.10%.
During that time the paid-up capital (private total) for the life insurance sector
was INR 236.57 billion while the paid-up capital (industry total) was INR 236.63 billion.
In 2010-11 the paid-up capital (private total) for the general insurance sector was
INR 39.56 billion while the paid-up capital (industry total) was INR 67.06 billion.
In 2010-11 the operating costs of privately owned life insurers was INR 159.62
billion while the total life insurance industry expense was INR 329.42 billion.
In the same time the privately owned general insurers spent INR 39.32 billion
from an industry total of INR 106.20 billion.
In 2010-11 the privately held life insurers paid benefits and claims worth INR
312.51 billion while the industry aggregate was INR 1425.24 billion.
At the same time the private general insurers paid benefits and claims worth INR
99.37 billion while the industry total was INR 295.36 billion.
- See more at: http://business.mapsofindia.com/insurance/#sthash.WLe7n15r.dpuf

Why are more people taking insurance policies?

One of the major reasons for an increasing number of people availing insurance policies
in India is the growing level of awareness. People nowadays value their lives, their
health, and their families even more than before given the tough economic
circumstances and so want to make sure that everything is fine even if they are not
there.

Yet another reason for the growing popularity of insurance policies is the benefit of tax
exemption that is provided to family oriented and individual plans. Majority of the
private insurers also provide lucrative returns and are now being availed by a section of
the Indian society with greater disposable earnings.
There is an aspect of psychological comfort attached to the insurance policies as well -
whenever an insurance is availed the policyholder can be more or less assured of a safe
future for that particular part of his or her life.
- See more at: http://business.mapsofindia.com/insurance/#sthash.WLe7n15r.dpuf

Top Insurance Policies in India

About Insurance Policy

In insurance industry terminology, an insurance policy is an agreement, which is
more often than not a standard form of contract, between the insured and the insurer.
The insurance policy is used to decide the claims that a policyholder is legally entitled to
and the insurer is supposed to pay as per the terms agreed to in the contract.

The insurer pays the damages to an insured for any situation that is covered in the
policy - the payment is done according to the premium that is paid by the insured.
Insurance policies have various types of features and conditions that vary according to
the type of policy taken and the requirements that the plan is supposed to satisfy.

As the insurance policies are standardized contracts they feature a similar sort of
language in spite of differences in kind.

How to buy insurance policies?

The basic function in purchasing an insurance policy is to do comprehensive research on

the internet or in the insurance market and find out which companies are the best in the
type of insurance that one is looking for.

Interested proposers can also look up policy aggregator sites that provide comparative
information on particular types of policies so that they can get a fair idea of how much a
policy costs and how much it is providing. These websites also provide one a good idea
of the various terms and conditions applicable for the proposers.

Following are some important factors that need to be kept in mind

 while buying insurance policies:

How much is the premium

The proposer needs to carefully factor in whether he or she would be able to pay the
premium throughout the policy term period. If they are unable to pay at any time they
might incur penalties or the policies might be cancelled.

Is the insurance plan serving the purpose

One should not avail an insurance policy just because it is being provided by a top
insurer or because the sum insured is very rewarding. They should carefully look at what
the policy covers and what procedures have to be followed to recover claims - this is
especially applicable for health policies that cover critical illnesses and accident plans.

Claims procedures
The proposers should have a proper idea of how quickly their claims will be settled and
they should discuss this with the agent or the company, depending on the entity that
has provided them the policy in the first place.

They should also have a clear idea of which documents will be required to file the claims
and what process of hospitalization needs to be followed in order to make a claim.

Certain policies require the third party administrators to be informed within a specified
period of time of hospitalization in order to make the claim. So these things have to be
kept in mind as well.

Terms and conditions

The proposers should know every term and condition mentioned in the policy properly
so that they are not caught unawares in a critical situation. This includes important
areas like how much of the sum insured will be paid in various conditions or what tests
will have to be taken in order to avail a policy, and also when the payments would be
made.

Coverage
This factor needs to be covered while deciding on the riders associated with various
policies. Like someone who is not very healthy can look for a critical illness rider or
someone who is facing financial problems with his or her treatment can look at various
cash benefits provided by the insurers. Proposers who are married with children and
stay with their parents can look family cover riders.

When to buy insurance policies

Just like a loan, the ideal time to buy an insurance policy is best taken when the
proposed is young and earning on a regular basis. This has two major benefits - firstly
due to the young age and presumably lesser physical complications the premiums are
lesser and secondly due to the regular income it is easy to pay the premiums.

In case someone decides to avail insurance during old age then the premiums are
 normally double than their younger counterparts. Then they often need to undergo
several pre-acceptance tests on which the chances of getting the policy depend.
Moreover, since the senior citizens are most likely to make claims, it can make them
less attractive propositions for the insurers.

Types of Insurance Policies

Following are the various types of insurance policies:

Health Insurance
Accidental death and dismemberment insurance
Long term care insurance
Dental insurance
National health insurance
Disability insurance (Total permanent disability insurance)
Payment protection insurance
Income protection insurance
Vision insurance
Life Insurance
Mortgage life insurance
Universal life insurance
Permanent life insurance
Variable universal life insurance
Term life insurance
Whole life insurance
Business Insurance
Bond insurance
Protection and indemnity insurance
Directors and officers liability insurance
Trade credit insurance
Fidelity bond
Umbrella insurance
Professional liability insurance
Residential Insurance
Contents insurance
Lenders mortgage insurance
Earthquake insurance
Mortgage insurance
Flood insurance
Property insurance
Home insurance
Title insurance
Landlords insurance
Transport/communication Insurance
 Aviation insurance
Satellite insurance
Computer insurance
Travel insurance
Public auto insurance
Vehicle insurance
Marine insuranc
- See more at:
http://business.mapsofindia.com/insurance/policies/#sthash.TOns1AmN.dpuf

Insurance Companies in India

Aviva Life Insurance
Bajaj Allianz Life Insurance
Birla Sun Life Insurance
HDFC Standard Life Insurance
ING Vysya Life Insurance
Life Insurance Corporation of India
Max Life Insurance Company
MetLife India Insurance
Reliance Life Insurance
Sahara India Life Insurance
SBI Life Insurance
Tata AIG Insurance Company Ltd
Om Kotak Mahindra Insurance Company
Agriculture Insurance Company of India Ltd
Amsure Insurance
ANZ Insurance
Cholamandalam General Insurance
Employee's State Insurance Corporation
ICICI Lombard General Insurance
IFFCO-Tokio General Insurance
National Insurance Company Ltd
Oriental Insurance Company Ltd
Peerless Smart Financial Solutions
Royal Sundaram Alliance Insurance India
Tata AIG Insurance Company Ltd
Export Credit Guarantee Corporation of India Ltd
The four major entities of the general insurance industry of India are the ones owned by
the Indian government - National Insurance, New India Assurance, Oriental Insurance,
and United India Insurance. From 1973 to 2002 these four insurers were part of the
nationalized General Insurance Corporation of India. However, with the introduction of
26% FDI in the sector and the private companies the scenario has changed somewhat
 with companies like Bajaj Allianz and Reliance coming to the fore.

General Insurance Companies in India

Bajaj Allianz General Insurance

Bajaj Allianz General Insurance is a joint venture of Allianz SE and Bajaj Finserv, which
has recently established its separate identity from Bajaj Auto Limited. Both Allianz SE
and Bajaj Finserv are reputed to be expert, stable, and strong entities in their respective
domains.

The Insurance Regulatory and Development Authority (IRDA) provided Bajaj Allianz
General Insurance its Certificate of Registration on May 2, 2001, which enabled to start
its operations in India. At present its paid up and authorized capital is equal to INR 180
crores.

Allianz SE owns 26 percent of the organization's shares and the remaining 74% are
owned by Bajaj Finserv. The insurer has been a leading name in the insurance sector by
achieving a regular level of growth along with substantial profits.

At present the insurer is operating across 200 towns across India and has been
employing the very best in technology to make sure it can respond and communicate in
the shortest possible time with its customers and interested parties. Its headquarters
are at Pune.

ICICI Lombard

ICICI Lombard is a collaboration of Fairfax Financial Holdings Limited from Canada and
ICICI Bank Limited. ICICI Bank is the second biggest bank of India and as of March 31,
2012 owns consolidated assets worth more than 91 billion US dollars. It is a diversified
financial services provider engaged in several sectors such as general insurance,
management of investment claims, reinsurance, and investment management.

The insurer offers instant policy renewal and issuance facilities from its official website.
This facility is available for the following forms of retail insurance such as:

Car insurance
Two wheeler insurance
Health insurance
Home insurance
Travel insurance
It also offers several payment options such as internet banking, debit cards, credit
cards, and cash cards.
 National Insurance

National Insurance was set up in 1906 and had its corporate headquarters at Kolkata.
After the General Insurance Business Nationalization Act was passed in 1972, 11 Indian
insurers and 21 international insurers were included in its fold. At that point of time
National Insurance operated as a subsidiary of the General Insurance Corporation of
India that was wholly owned by the Indian Government.

Once the General Insurance Business (Nationalization) Act was passed on August 7,
2002 the insurer started to operate as an independent entity and is presently held by
the Union Government. It is one of the top non life insurers of India in the public sector.

It has approximately 1000 offices and in excess of 16 thousand officials in far flung rural
areas, metros, and townships. Its international operations are executed from its Nepal
based offices. It has 14 million policyholders and offers at least 200 different products
that take care of their different requirements.

It has a paid up share capital of INR 100 crores. In addition to usual general insurance
plans it offers fire, miscellaneous, and marine insurance. National Insurance also
provides various risk protection services and caters to the following sectors of the
national economy:

Banking
Space research
Plantations
Telecom
Foreign trade
Aviation
Shipping
Healthcare
Information technology
Tea
Power
Automobile
Oil and energy
Education
Agronomy
Environment
National Insurance is the second largest among non life insurers in India and majority of
its operations are based in eastern and northern India.

New India Assurance

New India Assurance was established during 1919 by Sir Dorab Tata and is the first
insurer to be completely owned by an Indian. It is a groundbreaker when it comes to
Indian insurers - in 1946 it had insured the first Indian airlines and in 1980 it started
 issuing satellite insurance.

It offers a diverse array of plans and is presently one of the biggest names in the non
life sector in India as well as Afro-Asia.

Oriental Insurance

Oriental Insurance was established on September 12, 1947 in Mumbai and was a totally
owned subsidiary of the Oriental Government Security Life Assurance Company Ltd. its
main purpose on inception was to execute the general insurance operations of its
parent company.

From 1956 to 1973 it served as a LIC subsidiary before the general insurance business
was also taken over by the government. In 2003 its shares were transferred to the Union
Government from the General Insurance Corporation.

The organization is a leader when it comes to creating fluent and structured business
operations. Its main area of strength is its work force that is highly motivated and well
trained with the capability of covering several areas of the insurance business
proficiently.

Its major area of strength is creating specialized cover plans for major projects such as
power plants, steel, petrochemical, and chemical plants. Till now it has come up with
products that are suited to the distinct requirements of both rural and urban population.
The company also provides a high level of customer service through its team of
experienced and technologically educated employees. Its headquarters are at New Delhi
- it also has more than 900 offices in various cities across India as well as 30 regional
offices. Its international operations are performed from its offices at Nepal, Dubai, and
Kuwait. It has at least 15 thousand professionals.

Reliance General Insurance

Reliance General Insurance is one of the leading general insurers of India in the private
sector. It provides a wide range of customized insurance products in the following
segments:

Motor
Travel
Health
Student travel
It caters to corporate, individual, and small medium enterprises. It is among the first
companies to have started the home and health insurance plans that are provided on an
 over-the-counter basis. It has 152 offices in 119 cities spread around 24 states. It also
provides customers with the following facilities:

24X7 call center

Channel partner
Transaction based website
Brokers
Tie-ups with banks
Following are the other general insurers operating in India:

IFFCO TOKIO
L&T General Insurance
Royal Sundaram Alliance Insurance
Star Health and Allied Insurance
Tata AIG General Insurance
Apollo Munich Health Insurance
United India Insurance
Future Generali India Insurance
Cholamandalam MS General Insurance
Universal Sompo General Insurance
HDFC ERGO General Insurance
Shriram General Insurance
Export Credit Guarantee Corporation of India
Bharti AXA General Insurance
Agricultural Insurance Co of India
Max Bupa Health Insurance
- See more at: http://business.mapsofindia.com/insurance/general-insurance-
companies.html#sthash.Cgj7R7lB.dpuf

What is Term Insurance

Term insurance is essentially a form of life insurance and is also referred to as term life
insurance, and term assurance. It provides coverage at a specified rate and the facility
is available only for a certain amount of time or the term period of the said plan.

Once the period comes to an end there is no guarantee that coverage will be provided
at the rate when the policy was on. To ensure that this does not happen the policyholder
can relinquish the plan or renew it with various conditions and payment terms. If the
insured passes away during the plan the death benefit is paid to the beneficiary.

Term insurance is said to be the most inexpensive method to buy a good amount of
death benefit on any coverage amount. However, this can be said only for a certain
period of time.

Difference with other forms of life insurance

 Term life insurance is different from other forms of permanent life insurance like the
whole life plans, variable universal life plans, and universal life plans. These plans
normally provide an assured sum of coverage and charge a definite amount of
premiums for as long as the insurer lives.

Term assurance is not used normally for areas like charitable donation plans or estate
planning requirements but only for satisfying income replacing requirements. The
similarity between term insurance and other forms of insurance is that in term
insurance too the claims are satisfied if premium payment is properly done and if the
contract tenure is yet to expire.

Benefits of term life insurance

Term insurance is basically a form of death benefit it is basically used to cover the
financial duties of the insured or the nominated beneficiaries. Some of the areas where
these policies can be beneficial may be mentioned as below:
Consumer debt
Funeral expenses
Dependent care
Mortgages
Education of dependents especially in the higher stages
Term life insurance is normally preferred compared to other life insurance plans as, over
a definite period of time, it is considered to be a less expensive option. Leading financial
experts have also stated its use as an alternate savings medium till the insured can use
their own savings in banks for example.

Financial planners feel that the term plans are the best as they provide a high level of
coverage for lesser prices. The premiums of these policies are almost negligible
compared to endowment plans, ULIPs, or money back policies.

One of the major reasons behind the high returns is the fact that these do not have any
investment components. The whole premium is used to cover the risks.

Types of term assurance plans

Term assurance can be classified broadly into two categories annual renewable term
policies, and the level term plans.
Annual renewable term policies
The annual renewable plans are regarded the most uncomplicated form in this type of
life insurance. These policies are basically valid for a one year period. In these policies
the death benefit is paid if the insured passes away within the specified term period.

However, there is zero benefit in case the insured passes away a day or more after the
policy has lapsed. The premium to be paid is decided on the basis of the assumed
probability of the insured within the one year period.

Normally it is assumed that the chances of a person dying within a years span are less.
So the insurers normally provide such policies. However, these policies are not availed
on a regular basis.
 One of the major challenges when it comes to insuring these policies is for the insured
to prove that they can be insured again. For example the insured might have contracted
a terminal ailment when the policy on but has survived even after the policy has
lapsed.

However, the insurer will still regard the concerned person unfit for a policy renewal as a
result of the illness. There are a few policies that offer assured reinsurability as an
added feature.
Level term plans
The level term life insurance plans are more common than the annual renewable term
plans. These plans are basically supposed to be the same throughout the policy period.
Normally plans with 10, 20, 15, and 30 year term periods are available.

The cost of these plans is decided on the basis of summed cost of the annual renewable
term rates of each year. The insurers also use other factors in this computation like the
time value of money. This implies that the premium is directly proportional to the term
period of the plan as the older, and thus costlier, periods are taken into view.

Majority of these plans offer renewal features at a maximum assured rate provided the
insured wants to extend the policy term period. However, these policies do not always
guarantee renewal and it is up to the insured to check if there is a clause of showing
proof of renewability in their policy contracts.

This clause comes into play whenever the insured suffers a major ailment during the
policy term period and this reduces their reinsurability as far as the insurers are
concerned.

Popularity of term insurance plans

The popularity of term insurance plans has gone up of late. The CEO and Managing
Director of HDFC Life, Amitabh Chaudhry, has stated that the premium rates are lesser
now and the companies are also much more proactive when it comes to marketing the
term life plans.

Buying insurance through internet has become much simpler and all these factors,
according to him, have contributed to the present scenario. The insurer has recently
launched its Click2Protect plan earlier in 2012.

Aviva Life Insurance, which came out with the i-Life plan during May 2011, has already
sold at least 18 thousand plans since then. Aegon Religare Life Insurance has also been
able to issue almost 25 thousand iTerm policies.

How to choose a term life insurance plan?

The first factor to be considered while buying a term plan is the cover amount needed.
Ideally it should cover the following:
Basic expenses of the family
Liabilities such as loans
Major expenditure such as marriage of wards
The insured should also decide the time period till when he requires coverage. Ideally
this should be the time when he or she wants to keep working. The chief actuary of
Kotak Life Insurance, Andrew Cartwright, says that nowadays people are looking to be
employed even after 60.

People are also getting married late and are then having children. All this means that
their duties often stretch after they are 60. As per experts coverage is necessary till one
is 65 years but the decision may vary as per circumstances.

Experts normally advise against taking short term policies of 15-20 years which come to
an end when the insured are 40 years old. The premiums in these policies are fairly low
as they are insured when the risk factor is less.

When someone tries to take a new policy at 40 years of age the premiums go up at an
alarming rate proposers might also be denied their desired cover if their health has
not been good enough.

It is better to go for a plan where there is flexibility in choosing the term period. It is
always advisable to go for customizable plans that can be tailored to suit the proposers
requirements.

Experts also feel that is better to go for plans that factor in inflation in their coverage
policies ones where the coverage can be increased if the inflation rate goes up.

Who should go for term insurance?

A term life plan should ideally, according to investment experts, be taken when the
proposer is young, preferably in his late twenties and starting out on a job. The younger
the insured the lesser the premium is. People interested in buying a term plan should
also look at longer term periods so that they can be covered for a longer period of time.
- See more at: http://business.mapsofindia.com/insurance/term-
insurance.html#sthash.z2PJh7zf.dpuf

Tax benefits from pension plans, life

insurance
Traditionally, buying life insurance has always formed an integral part of an
individual's annual tax planning exercise. While it is important for individuals to have
life cover, it is equally important that they buy insurance keeping both their long-term
financial goals and their tax planning in mind.
This note explains the role of life insurance in an individual's tax planning exercise while
also evaluating the various options available at one's disposal.

Term plans

A term plan is the most basic type of life insurance plan. In this plan, only the mortality
charges and the sales and administration expenses are covered. There is no savings
element; hence the individual does not receive any maturity benefits.

Small savings: Big on tax benefits!

The 2006 Guide to Tax Planning

A term plan should form a part of every individual's portfolio. An illustration will help in
understanding term plans better.

Let us suppose an individual aged 25 years, wants to buy a term plan for a tenure of 20
years and a sum assured of Rs 1,000,000. As the table shows, a term plan is offered by
insurance companies at a very affordable rate. In case of an eventuality during the policy
tenure, the individual's nominees stand to receive the sum assured of Rs 1,000,000.

Individuals should also note that the term plan offering differs across life insurance
companies. It becomes important therefore to evaluate all the options at their disposal
before finalising a plan from any one company. For example, some insurance companies
offer a term plan with a maximum tenure of 25 years while other companies do so for 30
years. A certain insurance company also has an upper limit of Rs 1,000,000 for its sum
assured.

Unit linked insurance plans (ULIPs)

Unit linked plans have been a rage of late. With the advent of the private insurance
companies and increased competition, a lot has happened in terms of product
innovation and aggressive marketing of the same. ULIPs basically work like a mutual
fund with a life cover thrown in. They invest the premium in market-linked instruments
like stocks, corporate bonds and government securities (G-secs).

The basic difference between ULIPs and traditional insurance plans is that while
traditional plans invest mostly in bonds and Gsecs, ULIPs' mandate is to invest a major
portion of their corpus in stocks. Individuals need to understand and digest this fact well
before they decide to buy a ULIP.

Having said that, we believe that equities are best equipped to give better returns from a
long term perspective as compared to other investment avenues like gold, property or
bonds. This holds true especially in light of the fact that assured return life insurance
schemes have now become a thing of the past. Today, policy returns really depend on
how well the company is able to manage its finances.

However, investments in ULIPs should be in tune with the individual's risk appetite.
Individuals who have a propensity to take risks could consider buying ULIPs with a
higher equity component. Also, ULIP investments should fit into an individual's
financial portfolio.

If, for example, the individual has already invested in tax saving funds while conducting
his tax planning exercise, and his financial portfolio or his risk appetite doesn't 'permit'
him to invest in ULIPs, then what he may need is a term plan and not unit linked
insurance.

Pension/retirement plans

Planning for retirement is an important exercise for any individual. A retirement plan
from a life insurance company helps an individual insure his life for a specific sum
assured. At the same time, it helps him in accumulating a corpus, which he receives at
the time of retirement.

Premiums paid for pension plans from life insurance companies enjoy tax benefits up to
Rs 10,000 under Section 80CCC. Individuals while conducting their tax planning
exercise could consider investing a portion of their insurance money in such plans.

Unit linked pension plans are also available with most insurance companies. As already
mentioned earlier, such investments should be in tune with their risk appetites.
However, individuals could contemplate investing in pension ULIPs since retirement
planning is a long term activity.

Traditional endowment/endowment type plans

Individuals with a low risk appetite, who want an insurance cover, which will also give
them returns on maturity could consider buying traditional endowment plans.
Such plans invest most of their monies in corporate bonds, G-secs and the money
market. The return that an individual can expect on such plans should be in the 4%-7%
range as given in the illustration below.

Looking 'traditional'

Age Sum Premiu Tenur Maturity Actu

(Yrs Assure m (Rs) e Amount al
) d (Rs) (Yrs) (Rs)* rate
of
retur
n (%)

30 1,000,00 65,070 15 1,684,00

Company A 0 0 6.55

30 1,000,00 1,766,55
Company B 0 65202 15 9 7.09

The maturity amounts shown above are at the rate of 10% as per company illustrations.
Returns calculated by the company are on the premium amount net of expenses.

Taxes as applicable may be levied on some premium quotes given above.

Individuals are advised to contact the insurance companies for further details.

A variant of endowment plans are child plans and money back plans. While they may be
presented differently, they still remain endowment plans in essence. Such plans purport
to give the individual either a certain sum at regular intervals (in case of money back
plans) or as a lumpsum on maturity. They fit into an individual's tax planning exercise
provided that there exists a need for such plans.

Tax benefits*

Premiums paid on life insurance plans enjoy tax benefits under Section 80C subject to
an upper limit of Rs 100,000. The tax benefit on pension plans is subject to an upper
limit of Rs 10,000 as per Section 80CCC (this falls within the overall Rs 100,000 Section
80C limit).

The maturity amount is currently treated as tax free in the hands of the individual on
maturity under Section 10 (10D).
To reiterate, individuals should evaluate their needs first and then build a life insurance
portfolio. In the tax planning exercise, the long-term financial goals should not be lost.
Tax planning and financial planning should go hand in hand and help individuals face
the good times as well as the adverse circumstances with lan.
7 Greatest Sins Of LIC With Most Faithful Insurance Policyholders
January 19, 2016 by Chandrakant Mishra 3 Comments

LIC is the most reputed insurance company of India. LIC commands

more than 70% market of life insurance business. LIC agents are
selling 10 times more policies than its private counterparts. LICs
claim settlement ratio is highest (97%) among all the insurance
companies. This is all true. Despite these accolades LIC has done
great disservice to its own sector, the insurance business. It
is a public sector entity, but it has done more harm to the Public.
Same Public have enormous faith on LIC.

1- LIC Primarily Sold Investment Product Instead

Of Insurance
Life Insurance Corporation was formed with the primary objective of
life insurance. Life insurance is necessary for the families of India as
there is no government social security scheme. The government
gives tax deduction to promote life insurance. Even to push the
insurance, hefty commission for agents is also allowed.

Now, look what the pioneer of insurance the great LIC did. It sold
schemes which have been primarily investments. Since its
incorporation in 1956, LIC promoted investment oriented schemes
only. Its agent always talked about the investment features of the
product. Still today, LIC agents only talk about the return on
investment. I have faced many LIC agents (most of them are
relative), who started their talk with investment and return.
Yes,They also told about the insurance, but it was like an added
feature.

LIC is government-owned entity which enjoys many privileges. It

accumulated large amount of public saving. But it never promoted
insurance. Rather, it sold investment scheme like any other
multilevel marketing schemes. No wonder, many of us fear LIC
agents.

2- Avoided Term Insurance

Term insurance is the original insurance cover. It gives you financial

protection if any untoward incident happens. It gives you the peace
of mind at very low cost. It is as simple as you take an auto
insurance for your car.

But, did you hear about the term insurance before the private
insurance companies started operation in India. LIC conveniently did
not sell term insurance policy for a long time. If it had promoted
term insurance, today the LIC may have lower corpus. But it might
benefit the policyholders a lot.

Private companies were the one who introduced and promoted term
insurance in India. LIC also started two term insurance schemes
reluctantly. These are Amulya Jeevan and Anmol Jeevan. But, neither
LIC nor its agents want to lose the rewarding endowment policy,
hence they always discouraged term plans. The premium of a LIC
term plan is too high. You can get ICICI Pru icare plan at 33% less
premium. While HDFC Click to protect can be bought at the half of
the LIC price.
3- Never Educated About The Real Insurance

Insurance offsets sudden financial loss. The loss may be

because of a thing or a human being. If there is any sudden
loss you gets compensated. If there is no loss you gets
nothing. This is the principle of Insurance. General insurance
schemes follow the same principle. But LIC never told this principle
to the public and even to its insurance agents. Till some years ago,
the majority of the insurance agents were not aware about the pure
term insurance.

It is easy to teach about the term insurance. People must have

accepted the importance of the term insurance as they are
accepting the importance ofauto insurance.

But LIC did the opposite. It has misinformed about the insurance.
There are many people who cant consider insurance without the
cheapest and original.

4- Low Return In LIC Schemes

LIC collected money from lower and middle-income group. It

collected money with the promise of a better future. But, in reality it
gave peanuts to its policyholders. In the long history of LIC it could
not even beat inflation. The return of the LIC endowment policieswas
less than the bank fixed deposits. Most of the LIC policies gave
paltry 4-6% aggregate return. People would have been better off if
they invested in gold, property or bonds.
5- Complicated Schemes

LIC invested endowment money in government bonds. If you

discount the little insurance part, LIC collected money like recurring
deposit of post office or bank. The investment nature of LIC
endowment policies and bank deposit and post offices are the same.
Still, it is very difficult to understand the LIC policies. There
are be big numbers, promise of money back. Money getting double
or triple. The full sum assured return in case of sudden demise.
Strict rules and above all the tax rebate. But, to understand the
returns of LIC policies, you have to be a chartered
accountant. LIC used these complicated schemes for its benefit.
People did not understand that behind the big numbers there is
hidden low return. People could not understand that today
seemingly handsome amount would be paltry after 20 years.

6- LIC Is The Main Culprit Of Underinsurance

LIC neither trained agents nor bothered about the need analysis of
its policyholders. Rather, it used to be concerned only about the
sale. This resulted in underinsurance of many. I have met
people who have 10-20 policies of LIC but still they are
lakhs. Despite LIC policies families have little cover, But LIC
never cared for them.

7- LIC Misused Its Monopoly And Government

Backing
LIC is the dominant player in the insurance industry. The only reason
is its monopoly for 45 years. Since it is a government entity people
have great faith upon it.

Because of the less regulated financial environment, there have

been many financial frauds. But Government entity LIC
never defaulted in its payment. The claim settlement ratio is also
very good, Hence people rely on LIC. But instead of respecting
persons faith LIC used its dominant position to push least earning
policies. It designed all the policy, only to entice people. In
participating policy also, LIC could not give good return because its
investment decisions were not always research driven.

Government Is Also Culprit

Do you know why most of you bought insurance schemes. No, it is

not to protect your families. Even not to meet any financial goal. You
buy an insurance policy to save tax. There are many other ways of
tax saving. But you prefer insurance because this way comes to
your home. In the tax saving season insurance agents come to you.
They hand you over any insurance scheme. They sell you the
insurance policy by hook or by crook. You fall in trap because you
have to save tax instantly.

There has been noise on this misselling. The initial Direct tax draft
had such proposed, but government retracted before the pressure of
the insurance lobby. Insurance companies were going to lose big
business.

Government must have worried about its ATM balance. End of tax
rebate on insurance would have meant less business for LIC. LIC
would have less corpus. How could government use this money for
divestment of PSUs.
Please do share your experience with LIC and its agents.
Also, dont forget to like this post on Twitter and Facebook.

finance Member Directory(Anmol

Jeevan Plan)
[Chennai, India]

Integrated Enterpries in India

We Manufacturer and Services of Investment Avenues, Mutual Funds, Corporate
Services, Demat services, Insurance, Secondary Market, Franchisee, Share News,
e-TDS, BPO services, Depository Registry, Demat Account, Financial Happiness
Report. 1)Investment Avenues :- Fixed Deposits, Bonds, Post office Schemes. -Post
office Schemes :-Public Provident Fund (PPF), Post Office Monthly Income Plan,
Nat.....

Insurance India Mart.com

[Faridabad, India]
Lic Policies Bima Bachat Plan LIC Jeevan Surabhi Moneyback With Profit LIC Anmol
Jeevan LIC Amulya Jeevan Temporary Term Assurance Jeevan Saral LIC New Bima
Gold Bima Nivesh 2005 Jeevan Madhur Endowment Plans Jeevan Anand LIC Jeevan
Mitra Jeevan Mitra Triple Cover Jeevan Amrit LIC Child Plans LIC Jeevan Ankur LIC
Komal Jeevan Child Career Pl.....

ING Vysya Life Insurance Company Pvt Ltd

[Bangalore, India]
Provide services for policies, premiums. Our products are: Protection - Conquering
Life. Saving - Reassuring Life (Cash Bonus), Reassuring Life (Reversionary Bonus),
Creating Life, Maximising Life, Safal Jeevan. Investment - Rewarding Life, Powering
Life, Fulfilling Life, Best Years, Freedom Plan, Future Perfect. Riders - Term Rider,
Waiver of Premium Rider, Accidental Death Rider, Ac.....

ING Vysya Life Insurance Co. Pvt.

[Banglore, India]
We provide services of Life insurance, Rewarding Life Whole of Life Plan, The
Powering Life Limited Payment Endowment Plan, The Fulfilling Life Anticipated
Whole of Life Plan, Freedom plan , one life, New fulfilling life plan , Platinam life,
Reassuring Life (Cash Bonus), Reassuring Life (Reversionary Bonus), Reassuring
Life (Cash Bonus), Reassuring Life (Reversionary Bonus), Safal Jeevan Money
Back.....

THE ROYAL FREEDOM

[MUMBAI, India]
Life Insurance Policy From Reliance Life Insurance or Birla Sun Life Insurance (Saral
Jeevan Plan)for this Policy you have to pay Rs. 30000/- + Rs. 555/-. To Join our
Marketing Plan, you can pay Rs. 15, 000/- + Rs. 555/- (15, 000/-) as part payment
of above said policy, by doing this you become associate & you will enjoy all the
benefits of both marketing plan . Whenver yu pay the remaining .....
Bangalore TrueValue marketing (P) Ltd NOW AN ISO 9001:2000
CERTIFIED COMPANY

[Bangalore, India]
LICs Special Plans are not plan s but opportunities that knock on your door
once in a are lifetime. These plan s are perfect blend of insurance, investment and
a lifetime of happiness!Income Tax Provisions for the Financial Year ending 31st
March 2009 and Tax Benefits from Life Insurance. Tax Benefits available for various
Life Insurance plan s. The aggregate amount of deduction und.....

INDIAN BANK

[Ahmedabad, India]
The following are the Banking products and Services offered -
Products - Fixed Deposits, Facility Deposit, Reinvestment Plan, Cash Certificates,
Recurring Deposit, Variable Recurring Deposit, Special Recurring Deposit, Indstar
Deposit, Vidhya Nidhi Deposit, Health Plus Savings, Advantage Account, Power
Account.
Services - ATM Services, DD Shoppe, Speed Collection, Expressway, .....

CITI BANK

[Bangalore, India]
We provide various Banking Services. The following are the list of services Offered
-
NRI Services - Ruppee Checking Account, Investments, Foreign Currency deposits,
Ruppee deposits, Loans and Overdrafts.
Investments - Treasury Service, Fixed Income, Structured Products, Mutual Funds,
Brokerage Services.
Insurance - InvestPlus Children's Education Plan, InvestPlus Lif.....

ICICI BANK
[Ernakulam(Kochi), India]
We provide the following Banking Services -
Banking - Savings A/c, Fixed Deposit, Easy FD, Recurring Deposit, Private Banking,
Roaming Current A/c, Young Stars, Bank@campus, Salary A/c, Womens A/c, EEFC
A/c, RFC A/c.
Loans - Home Loan, Personal Loan, Car Loan, Two Wheeler Loan, Commercial
Vehicle Loan, Loans against Securities, Farm Equipment Loans,Construction
Equipment Loan,.....

MRS. JAYASHREE DHEKANE

[Pune, India]
EXCELLENT INVESTMENT OPPORTUNITY FOR NRI's / BUSINESSMAN

Salient Features :-

Plan your Taxes Efficiently while building a retirement kitty for yourself.

Protect yourself & your family from various liabilities arising from unforeseen
condition of business.

Cover yourself adequetly while getting good returns.

Keyman Insurance is essential as it.....

Sun Life Assurance

[Edmonton, Canada]
We offer a variety of services and products, including life insurance, annuities,
critical illness insurance, and group life, health and disability insurance. Our
Financial products are - Insurance, Investments, Group Benefits, Group Benefits -
SunAdvantage Small Business, Group Retirement Services, Association & Affinity
Business, Reinsurance. Insurance : Life Insurance - Universal Life, Per.....
LEM Insurance Services

[Texas, United States]

We provide services of following area:- Life Insurance, Retirement Planning,
Mortgage Protection, Section 125 Cafeteria Plan, Executive Bonus, Short Term
Medical Disability Insurance, Health Insurance, Annuities, Group Health, Group
Life, Travel Insurance Dental Insurance, IRA/Rollover, Roth, 401(k), 403(b), Group
LTD, Deferred Compensation, Vision Care......

ATULKUMAR S SHAH INSURANCE AGENT

[Mumbai, India]
Services OFFERED : 1.LIFE INSURANCE 1.BUSINESS CONTINUITY INSURANCE
2.PENSION PLAN 3.HEALTH INSURANCE 4.CHILD INSURANCE 5.NEWLY MARRIED
COUPLE INSURANCE 2.GENERAL INSURANCE 1.PERSONAL ACCIDENT INSURANCE
2.VEHICLE INSURANCE 3.JEWELLERS BLOCK POLICY 4.FIRE INSURANCE 3.MUTUAL
FUNDS : 1.LIFE INSURANCE CORPNS MUTUAL FUND 2.UNIT TRUST OF INDIA .....

Canadian Bank Note Company, Limited.

[Ottawa, Canada]
We are committed to providing our customers with the highest levels of security in
their documents and systems consistent with the need to frustrate counterfeiters
and forgers. 1)Lottery System Product :- Lottery software and hardware, terminal
software and hardware, communications software and hardware, point-of-sale
terminals. -Lottery Tickets :- Canadian Bank note's unique printing tech nol.....

G. William Miller, LLC

[Washington, United States]

We Provide services of Financial Integrity Services. Anti-Money Laundering &
Combating Financing of Terrorism. The Resources :- In addition to its eight
principals, GWM Financial Integrity Services has a team of more than thirty-five
(35) professionals with broad experience in financial institutions, law enforcement
and AML/CFT matters in particular and is complimented by SAIC (Science
Applica.....

ASHOK SINGH

[Mumbai, India]
Life insurance advisor, Protect your family. Save income tax, Complete Insurance
services (Life & Non-Life), You Plan for your Family's Security, Your Children's
Education and your Personal Retirement, Endowment, Unit Linked Young and
Children plan ......

Jagdish Bhatia

[New Delhi, India]

Life Insurance Agent. Our services: Plan Benefits, Savings Plans, Endowment
Assurance Plan Life Insurance with Savings, Unit Linked Endowment Plan Life
Insurance & Savings with choice of investment funds, Children?s Plan Financial
Security for your child, Money Back Plan Life Insurance with Savings, Investment
Plans, Single Premium Whole Of Life Plan Investment with Life Insurance,
Protection P.....

Travel Insurance India.com

[British Columbia, Canada]

Offers travel insurance online to citizens of India and travelers to India. Purchase
travel medical and evacuation coverage online via secure server with confirmation
via email. Provides global health insurance. Our services: IMG Visitors Care Plan,
IMG Patriot Travel Medical Insurance for Citizens of Around the world, IMG Patriot
Travel Medical & Evacuation Insurance for Indian Nationals ret.....

The Peerless General Finance & Investment Co. Ltd.

[Kolkata, India]
Our wide range of products and services include : Smart Saving Bond, Quick
Return Bond, Encash Bond, Multi Protector, Life Saving Bond, Future Smart Plan,
Flexi Life Savings Plan, Recuring Fixed Deposit, Daily Deposit, Smart Money Back,
Growing interest. Our latest products are : Peerless Smart Savings Bond, Peerless
Life Savings Bond, Flexi Life Savings Plan......

LIC 2014 New Plans List : Features, Review & Snapshot of all the Plans
Year 2014 saw lot of changes in the Indian Insurance industry. IRDA (Insurance

Regulatory & Development Authority) had implemented a slew of changes with respect

to insurance regulations. These changes were applicable to both traditional

(endowment/moneyback) and Unit Linked life insurance plans.

Some of the changes were related to minimum death benefits, guaranteed surrender

value, use of new mortality table (for fixing premiums) etc., All Insurance companies had

to abide to these new regulations with effective from 01-Jan-2014.

LIC (Life Insurance Corporation of India) had hence withdrawn all its popular plans by

the end of 2013 and had to launch all new traditional plans throughout 2014. I tried to

compile LIC 2014 new plans list in this article. I have provided the basic features of all

new LIC policies that were launched in 2014. I have also given my recommendation on

all these plans.

LIC had launched 14 new plans in 2014-2015. Five LIC Endowment

plans, Four LIC Moneyback plans, Four LIC Term Insurance Plans

and One Pension oriented plan.

( Endowment plan is a combination of insurance and investment. The insured will get a

lump sum along with bonuses (if any) on policy maturity or on death event.

Money-back policies provides life coverage during the term of the policy and the

maturity benefits are paid in installments by way of survival benefits.

In Term Plan which is a pure insurance there is no maturity benefit. It means if a person

dies during the term of policy then only his beneficiaries will get some money otherwise

at maturity, at the end of the term there is no benefit)

Below is the list of latest LIC policies that were launched during 2014 to 2015 :
How Agents and Brokers
Make Money
Like most small businesses, you probably purchase your insurance policies through an
insurance agent or broker. Agents and brokers perform very similar functions. Both act
as intermediaries between you, the insurance buyer, and insurers. Both have a legal
duty to help you obtain the coverage you need at a reasonable price. Both an agent and
a broker must have the proper license to sell insurance. He or she must also adhere to
the regulations enforced by your state insurance department.

Yet, the functions of insurance agents and brokers are not identical. This article will
explain how they differ. It will also explain how agents and brokers make money from the
premiums you pay your insurers. Except where noted, the following discussion applies
to agents and brokers selling property/casualty coverages.

Agent Versus Broker

The differences between a broker and an agent may vary somewhat from one state to
another. Generally, an agent represents one or more insurance companies.

He or she acts as an extension of the insurance company. A broker, on the other hand,
represents the insurance buyer.

An insurance agency cannot sell insurance products on behalf of a specific insurer

unless the agency has been appointed by that insurer. An appointment is a contractual
agreement that specifies what products the agency may sell and what commissions the
insurer will pay for each product. The contract usually spells out the agency's binding
authority, meaning its authority to initiate a policy on the insurers behalf. The agent may
have permission to bind some types of coverage but not others.

Agents are either captive or independent. A captive agent represents a single insurer.
For example, agents that represent Allstate or State Farm are captive agents.
An independent agentrepresents multiple insurers.

Brokers are not appointed by insurers. They submit insurance applications to insurers
on behalf of their clients, but they do not have the authority to bind coverage. To initiate
a policy, a broker must obtain a binder from the insurer. A binder is a legal document
that serves as a temporary insurance policy. It usually applies for a short period, such
as 30 or 60 days, and must be signed by a representative of the insurer. A binder is
replaced by a policy.

Brokers may be either retail or wholesale. A retail broker interacts directly with
policyholders. If you have purchased commercial policies through a broker, your broker
is a retail broker. If your agent or broker is unable to obtain a particular coverage you
need, he or she may contact a wholesale broker. Wholesale brokers handle specialized
coverages that are not readily available to retail brokers and agents. Examples
are product liability insurance for a motorcycle manufacturer and auto liability coverage
for a long-haul trucker.

Some insurers sell policies directly to insurance buyers without using agents or brokers
as intermediaries. Such insurers are called direct writers. Direct writers tend to focus on
personal coverages like homeowners and personal auto policies. However, some also
offer commercial coverages to small businesses.

Commission

Some captive agents are salaried. However, most brokers and agents rely on
commissions for income. Commissions are paid out of premiums charged to
policyholders by insurers. These may include base commissions and contingent
commissions.

Base commission is the normal commission earned on insurance policies. Base

commission is expressed in terms of a percentage of premium and varies by type of
coverage. For instance, an agent might earn say, a 10% commission on workers
compensation policies and 15% on general liability policies. Suppose that you
purchase a liability policy from the Elite Insurance Company through the Jones Agency,
an independent agent. Jones earns a 15% commission on general liability policies. If
your annual liability premium is $2000, Jones collects $2000 from you and retains $300
in commission. Jones sends the remaining $1700 to the insurer.

Some insurers pay a higher commission for new policies than for renewals to encourage
agents to write new business. For instance, if the insurer pays 10% for a new workers
compensation policy, it might pay only 9% when the policy is renewed.
 Contingent or incentive commissions reward agents and brokers for achieving volume,
profitability, growth or retention goals established by the insurer. For example, Elite
Insurance promises to pay the Jones Agency an extra 3% commission if Jones writes
$10 million in new property policieswithin a certain time frame. If Jones renews 90% of
those policies when they expire, Elite will pay Jones an addition 2% commission.

Contingent commissions are controversial, particularly for brokers, who are supposed to
represent insurance buyers. In the past, some brokers collected these commissions
without the knowledge of their clients. Also, contingent commissions may give brokers
(and agents) an incentive to steer insurance buyers into policies that are particularly
lucrative for the broker. If agents and brokers accept contingent commissions, they
should disclose this fact to policyholders. Some brokers no longer accept such
commissions.

Your agent or broker should provide you with a compensation disclosure statement that
outlines the types of commissions the agency or brokerage receives from its insurers.
This document should state whether the agency or brokerage receives base
commissions only or if it also receives contingent commissions.

Life Insurance

Agents and brokers that sell life insurance also earn commissions. However, a life agent
earns most of the commission he or she makes on a policy in the policys first year. The
commission on may be 70 to 120% of the premium in the first year, but 4 to 6% of the
premium for a renewal.

General Information

A binder provides general information about your company, your insurer and your agent.
It typically includes:

Your agent's name, address and contact information

Your company's name and address

Name of your insurer

 Binder number

Binder effective dates

Policy number (see note)

Description of your operations, vehicles or property to be covered

The binder number applies to the binder only. It is not the same as the policy number
that will appear on your policy. Your binder will list a policy number only if the binder has
been issued to extend the term of a policy that has expired. For example, suppose that
your insurer has decided to cease writing workers compensation policies in your state.
Your insurer notified you 60 days before your policy expired. However, you need more
time to shop for coverage. Thus, your insurer issues a binder extending your policy for
60 days after its expiration date.

Coverage Information

A binder often contains separate sections for each coverage. Examples are Commercial
Property,General Liability and Workers Compensation. For each type of coverage you
have purchased the binder should list the limits and the coverage forms that will be
included in your policy. A binder may also list key endorsements.

Depending on the coverages you have purchased a binder may also indicate the
following:

Property Perils covered (all-risk or specified perils), deductible and coinsurance

percentage
General Liability Basis of coverage, whether claims-made or occurrence. If coverage is
claims-made, the retroactive date should be listed (if one applies).
Commercial Auto Types of autos covered. Examples are any auto, hired autos,
and non-owned autos.
Excess Liability Nature of coverage, whether an umbrella policy or other type of excess
policy.

If you are insuring a building or vehicle that is secured by a loan, your lender's name
should appear on the binder.

Conditions
A binder typically includes some conditions. For instance, it may state that the insurer
has agreed to bind the types of insurance described in the binder.

The binder may also contain cancellation provisions. An insurer may cancel a binder if it
determines that your business does not meet its underwriting standards. However,
binders are subject to the same laws that govern cancellation of policies. If your insurer
cancels a binder, it must give you notice within the time period required by law.
Cancellation requirements vary from state to state. Fortunately, binder cancellations are
relatively rare. Most binders are replaced byinsurance policies.

Business Insurance Agents

Versus Online Business
Insurance Purchases
Online insurance quotes and buying insurance online is no longer a novelty. Many
business insurers are online and, while buying insurance for a business on the internet
is not as prevalent as buying personal auto insurance online, growing numbers of small
business owners are going to online sources for their insurance. If one follows some
guidelines when using online quote sites to purchase insurance, business internet
insurance sites can offer premium savings.

What is missing is the insurance agent or broker. Insurance professionals will tell you
that they offer significant value to the insured. They will contend that the absence of an
insurance professional will cost a business in the long run. Contrary to that argument is
the claim that online sites offer insurance for less and can offer more quotes from more
sources. Let's look at the website versus the insurance professional.
 Service to the Insured

If you choose the right insurance agent or broker, having a real human being with an office and
staff in your community is undoubtedly the best choice in the category of service.

Price of Insurance Policies

Here the edge goes to the website. As auto insurers found out in the late 90's and early 00's,
insurance clients are driven by lower premiums. Offerings of business insurance online have not
reached the same availability as car insurance. But, specialty business and professional
insurers that focus primarily on online sales without a local presence are growing. The reason:
price. Online purchases can be cheaper because:

1. There is no agent/broker commission.

2. Overhead for the insurer is lower.

3. Automatic payment or withdrawal is very efficient.

4. The insurer can sell direct or through alliances with professional organizations.

Agent and broker commissions can be sizable. Our Guide to personal insurance has
a good example of the cost of a commission on a life insurance policy. And, just as
another example, a directors and officers policy, depending on the company can have a
6-15% commission for the selling agent or broker. In many cases, and for certain types
of insurance and depending on the size of the business, the owner will want a well-paid,
commissioned professional working for the business. However, the U.S. is driven by
small businesses and a 10-15% savings is significant.

Selection of Insurers

Here the decision is split. Independent insurance agents and insurance brokers have access to
many companies and work on the business's behalf to find insurance policies tailored to the
business. Insurance agents are often captive agents of one company and their selection of
policies will be limited to what is offered by that company.

Insurance quote sites offer the ability to get many different quotes from the same
entered information without the expertise of the insurance professional. Websites offer
more selection than an agent. Insurance brokers and independent agents can offer the
same selection with greater service.
 Safety, Security and Quality

Try an experiment. Open a new tab and Google "business insurance online." I come up with
over 62 million hits. Names like "insure2you" or "bestquote" are mixed in with the online
presence of insurance giants like Allstate or Hartford. The point is, there are many quality online
sites for insurance, including the insurers' websites, but it is becoming increasingly harder to
figure out what sites are legitimate.

Insurance professionals offer greater safety, security and quality because:

1. Insurance agents and brokers are licensed by the states and regulated.

2. Insurance professionals must meet the guidelines of the insurer and are accountable to
the insurer.

3. Insurance professionals are insured.

4. Insurance brokers will review financial stability and the rating of the insurer before
offering a policy.

5. Insurance professionals have educational and accreditation standards.

Online quotes and agent finders on the large insurers' websites are safer than any fly-
by-night quote site. Of course, the insurer's site is only going to offer that insurer's
product so the benefit of online selection convenience is lost.

Conclusion: Website or Insurance Professional?

Your Guide has an admission. My business purchased its primary insurance policies online or
substantially online. We work direct with a health insurer and professional liability insurer.

Why? Because we are a small specialized professional business. Online quotes and
online comparisons make sense for our firm in terms of cost savings. The website is an
excellent tool and an excellent way to secure insurance direct from insurers for small or
clearly defined businesses.

The insurance professional is the better choice for larger businesses, businesses with
employees, vehicles, or specialized needs such as higher than average liability. The
insurance professional is the better choice for businesses that do not want to spend time
comparing premiums, deductibles, ratings, and a number of other comparison factors.
Ultimately, neither is a clear winner. Used correctly, both the website and insurance
professional can be used by the business owner to secure the best trade off between
cost and risk management. Use the website as a shopping or educational tool to
determine what is available and to learn more about what your business needs. Then,
consider seeing a local agent or broker to intelligently discuss your insurance needs.
Make an assessment of whether the online savings is worth the loss of the agent or
broker's value to your business.