Dear readers,
Every insurance company needs to work under IRDA(Insurance Regulatory and Development Authority) guide lines, including LIC (life insurance corporation of India), There is a news about some LIC agents misleading the investors about some unit linked insurance plans, following is the news in IRDA web page about this( news 2nd March, 2007) so please be care full about this kind of people.
It has come to the notice of the Authority that some of the Development Officers and Agents of Life Insurance Corporation of India are promoting their Unit linked Insurance Product ‘Money Plus’ claiming to offer astronomical returns and guaranteed benefits at the end of specific periods. Some of the leaflets assure a maturity value of Rs 3.38 crores at the end of 20 years on an annual investment of Rs 1 lakh over a period of three years. projecting a growth of 25% per annum.
Similar claims have also been made by agents of a few other insurers.
The authority would like to clarify that such projections are misleading, inflated and also do not have the approval of the IRDA. As per the guidelines of the Life Insurance Council, the Insurers are required to project their returns at a rate ranging between 6% and 10% only. The insurers are also expected to state that even these returns are not guaranteed. It may also be noted that the returns under the Unit Linked Products are dependent on the performance of the chosen fund, which is in turn affected by the performance of the stock markets.
While the Authority has already taken up the matter with the concerned insurers, it cautions members of the public not to get carried away by such unapproved sales presentations being circulated in the market. They may take an informed decision while purchasing a policy, on the basis of proper disclosures by the licensed representatives of the Insurer.
For more details please contact:
Sriram.
Email Id: sriram.adviser@gmail.com
Monday, April 14, 2008
Friday, April 11, 2008
Know about Life Insurance
Dear Readers,
Greetings from Ram Financial Consultancy, As a part of our vision of greater financial future of every individual we planed for education about the insurance and all other financial products. In this article we want to bring into your attention about the Life Insurance.
Life insurance plays an important role in any individuals financial planning process. For it is life insurance that helps secure the financial future of the nominees/Family members. However, many individuals do not know how to go about while considering life insurance products. We have identified five points to remember before zeroing in on a life insurance product.
1. Identify your needs
Before considering life insurance, it becomes imperative that individuals first identify their needs. An individual should understand whether buying life insurance is necessary to begin with. For example, if an individual is single and earning but has no financial dependants, then he may not really need life insurance. This stems from the fact that nobody is going to be 'financially hurt' in the absence of the insured (i.e. the individual in question).
On the other hand, we can consider a married individual who has family members dependent on him ( in case of unmarried individuals also there may be dependent family members). He also happens to be the sole earning member in the family. Such an individual obviously needs life insurance. This stems from the fact that his entire family is dependant on him for financial support and in his absence, their lifestyle would be severely impaired. Such individuals should have adequate life cover as early as possible. People with financial dependents how is having debt also recommended to take life insurance.
2. How much insurance do you need?
After having identified the need to buy insurance, the next step is to ascertain the amount of cover needed. The concept of human life value (HLV) can help in deciding how much life cover an individual should opt for. The HLV takes factors like the individuals annual income and expenses along with the inflation rate into consideration while calculating the value.
1. Identify your needs
Before considering life insurance, it becomes imperative that individuals first identify their needs. An individual should understand whether buying life insurance is necessary to begin with. For example, if an individual is single and earning but has no financial dependants, then he may not really need life insurance. This stems from the fact that nobody is going to be 'financially hurt' in the absence of the insured (i.e. the individual in question).
On the other hand, we can consider a married individual who has family members dependent on him ( in case of unmarried individuals also there may be dependent family members). He also happens to be the sole earning member in the family. Such an individual obviously needs life insurance. This stems from the fact that his entire family is dependant on him for financial support and in his absence, their lifestyle would be severely impaired. Such individuals should have adequate life cover as early as possible. People with financial dependents how is having debt also recommended to take life insurance.
2. How much insurance do you need?
After having identified the need to buy insurance, the next step is to ascertain the amount of cover needed. The concept of human life value (HLV) can help in deciding how much life cover an individual should opt for. The HLV takes factors like the individuals annual income and expenses along with the inflation rate into consideration while calculating the value.
3. Which product should you consider?
After having quantified the need for insurance, the next step is to finalise a plan that will fulfil the individuals need. There are two kinds of insurance plans - term plans and savings-based plans(Endowment Plan and Unit Linked Insurance Plans). A term plan insures the individual for a high sum at a low cost. A term plan makes for a good fit in all individuals' portfolios, irrespective of their profile.
Many individuals also look at life insurance as a savings instrument. Here, apart from insuring the individuals life for a certain amount (i.e. the 'sum assured' in insurance parlance) savings-based life insurance plans also give returns on maturity. This is unlike term plans, which act as a pure risk cover and do not give any returns on maturity.
As can be seen from the table, it could become expensive for an individual to adequately cover himself for the necessary amount with a savings-based plan due to the higher premiums. Instead, individuals can look at covering themselves with a term plan for the necessary amount and invest their savings in various instruments at their disposal like the national savings certificate (NSC), public provident fund (PPF), bank deposits, corporate bonds and mutual funds.
4. Select an insurance agent/adviser
Having understood how much insurance is needed, an individual then needs to approach a life insurance agent or adviser there is a considerable amount of difference between agent and adviser, agent will promote one company product to which is working and adviser will recommend you the best plan suitable for your needs and arrange for agent. The adviser should have a good track record to show for in terms of offering objective advice in the client's favour and not his own. This will stand the individual in good stead over the long run since life insurance needs call for evaluation every few years and the insurance adviser will help the individual with the same over a period of time.
After having quantified the need for insurance, the next step is to finalise a plan that will fulfil the individuals need. There are two kinds of insurance plans - term plans and savings-based plans(Endowment Plan and Unit Linked Insurance Plans). A term plan insures the individual for a high sum at a low cost. A term plan makes for a good fit in all individuals' portfolios, irrespective of their profile.
Many individuals also look at life insurance as a savings instrument. Here, apart from insuring the individuals life for a certain amount (i.e. the 'sum assured' in insurance parlance) savings-based life insurance plans also give returns on maturity. This is unlike term plans, which act as a pure risk cover and do not give any returns on maturity.
As can be seen from the table, it could become expensive for an individual to adequately cover himself for the necessary amount with a savings-based plan due to the higher premiums. Instead, individuals can look at covering themselves with a term plan for the necessary amount and invest their savings in various instruments at their disposal like the national savings certificate (NSC), public provident fund (PPF), bank deposits, corporate bonds and mutual funds.
4. Select an insurance agent/adviser
Having understood how much insurance is needed, an individual then needs to approach a life insurance agent or adviser there is a considerable amount of difference between agent and adviser, agent will promote one company product to which is working and adviser will recommend you the best plan suitable for your needs and arrange for agent. The adviser should have a good track record to show for in terms of offering objective advice in the client's favour and not his own. This will stand the individual in good stead over the long run since life insurance needs call for evaluation every few years and the insurance adviser will help the individual with the same over a period of time.
5. Compare policies across companies
Before zeroing in on an insurance plan from any company, individuals should compare policies across insurance companies or ask your adviser to do this. This will help them in evaluating which insurance plan is best suited to their needs. One way of doing this is by contacting the insurance adviser and asking him for a comparative analysis of insurance plans. Another way is by visiting the websites of different companies and scouting for relevant information.
For example, an ideal term plan for a 25 year old can be the one that offers him the necessary cover at the cheapest cost. For a unit linked insurance plan however, different criteria like expenses, fund management and flexibility offered will come into the picture. The comparison will differ across various parameters depending on individual needs as well as the type of plan chosen.
please post your question in comments section
For more details please contact our consultant
e-mail id : sriram.adviser@gmail.com
phone no: +91-9741598945(India)
Tuesday, April 8, 2008
Types of Insurance Policies
You can find an insurance policy to cover almost anything imaginable but only a handful of policies are actually ones that you need to have. You work hard throughout your life to build wealth and live a happy and comfortable life, so some types of insurance can protect your possessions, income and even provide for a loved one when you are gone.
Health Insurance
One of the most important types of insurance to have is health insurance. Your good health is what allows you to work and earn money and otherwise enjoy life. If you were to come down with a sickness or have an accident without health insurance you may find yourself unable to receive treatment or even in debt to the hospital.
Thankfully, many employers provide health insurance benefits to full-time and even some part-time employees.
f you do not currently have health insurance coverage this is the first place to check as it will generally be the most affordable. If you are married, you may both be able to receive coverage under just one of the employer plans.
If your employer does not offer health insurance or you are self-employed you still need it. While it may not be cheap the fact remains; what do you have if you don’t have your health? Even a basic hospital bill without insurance can run into the thousands of dollars. It isn’t worth risking financial ruin to save a few bucks on a health insurance premium.
Life Insurance
This type of policy is more important if you are married and/or have children. Your life is valuable because it is what allows you to work and earn an income to provide for your family. When you are gone you create an income gap which could put your spouse or children in financial trouble.
Death is hard enough; don’t make it even harder by putting your loved ones in a financial jam if the unfortunate does happen. Funerals alone can be expensive and it creates even more stress on the family. At the very least you should have enough to cover basic funeral expenses and provide a cushion for your family, and at most it should provide a stream of income for your family that can replace what is now gone.
If you do not currently have life insurance your best bet is to check with your employer first. Many employers offer a basic life insurance as a benefit and some even allow you to purchase additional coverage at a very affordable rate. Outside of employer plans there are hundreds of insurance companies that can provide the right coverage for you.
Property Insurance
One type of policy that for most people that is actually mandatory to have is homeowners insurance when you have a mortgage. If you borrow money from the bank to purchase a home they will require the asset to be insured. For many people this insurance premium is built into the mortgage payment. For many people their home is their greatest asset so it is vital to adequately protect it.
If you rent instead of own, a renters insurance policy is just as important. Your belongings inside the dwelling can add up to a significant amount of money. In the event of a burglary, fire or disaster you should be able to at least have a policy that can cover most of the replacement costs.
Auto Insurance
Another type of policy that is often required is auto insurance. Most states require by law that you have basic auto insurance. While it may be a law, too many people still drive around without it.
The most common reason to have auto insurance is to cover the replacement of an expensive asset. Like a home, automobiles can be quite expensive and if it gets damaged you want to be able to repair or replace it. But there is more to auto insurance than just covering the car itself.
Most automotive insurance policies cover bodily injury or death of another person in an incident that you are legally responsible. While it generally pays for medical expenses related to the incident it can also cover legal defense costs. You will also generally find medical payment coverage that pays for medical treatment for you and your passengers during an accident regardless of who was at fault.
Health Insurance
One of the most important types of insurance to have is health insurance. Your good health is what allows you to work and earn money and otherwise enjoy life. If you were to come down with a sickness or have an accident without health insurance you may find yourself unable to receive treatment or even in debt to the hospital.
Thankfully, many employers provide health insurance benefits to full-time and even some part-time employees.
f you do not currently have health insurance coverage this is the first place to check as it will generally be the most affordable. If you are married, you may both be able to receive coverage under just one of the employer plans.
If your employer does not offer health insurance or you are self-employed you still need it. While it may not be cheap the fact remains; what do you have if you don’t have your health? Even a basic hospital bill without insurance can run into the thousands of dollars. It isn’t worth risking financial ruin to save a few bucks on a health insurance premium.
Life Insurance
This type of policy is more important if you are married and/or have children. Your life is valuable because it is what allows you to work and earn an income to provide for your family. When you are gone you create an income gap which could put your spouse or children in financial trouble.
Death is hard enough; don’t make it even harder by putting your loved ones in a financial jam if the unfortunate does happen. Funerals alone can be expensive and it creates even more stress on the family. At the very least you should have enough to cover basic funeral expenses and provide a cushion for your family, and at most it should provide a stream of income for your family that can replace what is now gone.
If you do not currently have life insurance your best bet is to check with your employer first. Many employers offer a basic life insurance as a benefit and some even allow you to purchase additional coverage at a very affordable rate. Outside of employer plans there are hundreds of insurance companies that can provide the right coverage for you.
Property Insurance
One type of policy that for most people that is actually mandatory to have is homeowners insurance when you have a mortgage. If you borrow money from the bank to purchase a home they will require the asset to be insured. For many people this insurance premium is built into the mortgage payment. For many people their home is their greatest asset so it is vital to adequately protect it.
If you rent instead of own, a renters insurance policy is just as important. Your belongings inside the dwelling can add up to a significant amount of money. In the event of a burglary, fire or disaster you should be able to at least have a policy that can cover most of the replacement costs.
Auto Insurance
Another type of policy that is often required is auto insurance. Most states require by law that you have basic auto insurance. While it may be a law, too many people still drive around without it.
The most common reason to have auto insurance is to cover the replacement of an expensive asset. Like a home, automobiles can be quite expensive and if it gets damaged you want to be able to repair or replace it. But there is more to auto insurance than just covering the car itself.
Most automotive insurance policies cover bodily injury or death of another person in an incident that you are legally responsible. While it generally pays for medical expenses related to the incident it can also cover legal defense costs. You will also generally find medical payment coverage that pays for medical treatment for you and your passengers during an accident regardless of who was at fault.
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