September 21, 2010

Selecting the right broker?

Stock market is soaring high and breaking records every day.  Making huge bucks out of it, is a lucrative prospect.  All of my friends are having online demat account with almost all the leading brokerage houses in India. All of them are providing online trading facility along with many other facilities like online investment in IPO, commodities, mutual funds and currency, etc. All of them claim to be the best one and being awarded by some award. Infact top 10 among them are well known and huge groups. ICICI Direct, Reliance Money, Sharekhan, Motilal Oswal, Edelweiss, Geojit Bnpparibas,  Kotak Securities, HDFC securities, Angel Broking, Karvy and India Infoline, they all are well famous and renowned firms.

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September 7, 2010

Living a new life for life insurance

Things have changed; wind is blowing in an entire new direction. After a huge disagreement between SEBI and IRDA over the regulation of ULIPs, IRDA came up with new guidelines for ULIPs and these new guidelines have completely change the way  business of ULIPs is conducted in the country.  Insurance regulatory and development authority of India has redesigned Unit Linked Insurance Product as long term protection plans instead of it earlier position of investment products. It has reduced its cost and changed the commission structure.

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August 3, 2010

Is Honeymoon over?

Come September 1 and you will have different ULIPs and pension plan across life insurance companies. Insurance regulatory and development authority has recently issued new guidelines for Unit Linked Insurance Plans and pension plans. New ULIPs will come with a five year lock in period instead of three years. Commission payout will also be restructured and pension plans will look different than older ones. These all steps have been taken to curb mis selling. IRDA has been asking insurers to take necessary steps but it didn’t result in any significant drop in mis-selling. Generally, sales agents apply different tactics to sell life insurance policy which include telling customer that policy can be redeemed in three years and money will be doubled in that period. There are very few sales agents who sell life insurance as life insurance but most of them introduce life insurance products as some fund or saving plans.

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July 15, 2010

Faceoff between hospitals and Health Insurance companies

Recently many health insurance companies removed the name of many big hospitals from list of the Preferred Provider Network (PPN). They claim that hospitals have been inflating their bills for patients who have mediclaim policies offering cashless facility. Most of these hospitals are from metros like Mumbai and Delhi. Since the news broke,  it has caused paic among policy holders and they are running from hospitals to Third party administer (TPA) and from TPA to insurance company. This has led to the chaos among patients who holds these health insurance policies and they are not able to understand the logic behind this move. Due to overstating of bills by major healthcare providers, the industry ended up paying Rs 11,000 crore on the premium collection of Rs 8,000 crore.

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July 2, 2010

Changing the way life insurance operates in India

Insurance regulatory and development authority of India has recently introduced new ULIP guidelines. These guidelines will be affected from 1st of September 2010. In last few months, IRDA has taken several steps to streamline life insurance business and safeguard consumer interests. Mis-selling has been a huge problem troubling life insurance player in India. New guidelines are meant to check mis-selling and put life insurance products as insurance products rather than investment products. Life insurance players have been selling ULIPs as investment products rather life insurance. After this, it will be strenuous for life insurance companies to selling ULIPs as core investment products. New guidelines have increased the lock in period to 5 years, ask insurance companies to control cost and restructure the commission payments to distributers and agents.

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April 20, 2010

RBI increased CRR by 25 basis points and reviewed its policy

The RBI on Tuesday hiked short-term lending and borrowing rates and the portion of money banks deposit with it by 25 basis points each, in a move aimed at controlling the inflation,
The apex bank hiked its repo, reverse repo (overnight lending and borrowing rates) to 5.25 per cent and 3.75 per cent, respectively, while the Cash Reserve Ratio or the portion of deposits banks park with RBI, to 6 per cent in line with analysts’ expectations.

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February 18, 2010

Big Bang Budget

If you are planning to buy a new car, computer, home or any other thing, this is the time to speculate. Some will says prices are going to increase after budget and some will say, wait for budget, prices are going to come down.  This is the period of apprehensions, anticipations and speculations. Stock market has started showing signs of volatility.  This time, Union Budget is going to be a bit different. Probably because, economy is moving out of recession and mode is tackling recovery rather than slow down. Food prices are already soaring high and inflation is flying high.

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February 18, 2010

Shop intelligently for Insurance

Sale season is on in India. Discounts always attract customers, getting something in less than its actual price always does the trick. Life insurance should not be the exception but we hardly get any Life insurance sale. With the growing number of life insurers in the market, competition has increased and resulted in more number of options for investors. But cracking a better deal in life insurance is not always the prime factor while doing a purchase.

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February 15, 2010

Break the shackle

Foreign direct investment in India has gradually in increased last decades. India has emerged as one of the favorite destination for FDI’s. FDI has played a pivotal role in Indian success story. They have served the purpose of source of huge amount of money which has been used on various government initiated development activity. There are government norms and regulation FDI in various sectors. FDI is allowed by financial collaborations, private equity or preferential allotment. It is not allowed in all sectors like arms, railways etc.

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February 15, 2010

Risk management in Life insurance

Risk management is one of the most imperative things in financial industry. Recent global credit crisis has happened because of poor risk management practices followed by many global giants. Risk management is a science & an art, as well. It involves looking into the profile of an individual & determines the risk associated with it. Risk management is essential as it measures the paying capacity of a individual & net worth of the person. Risk management is important for all kind of financial institutions irrespective of the kind of products or services they offer.

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February 15, 2010

Unit Linked Insurance Products

Unit Linked Insurance Products or ULIP are the hottest selling insurance products. They contribute around 80 percent of the total new business premium collection of the insurance companies’ collection. Their biggest USP is that they provide insurance cover and investment benefits. These are market linked products where premium amount is investment in money market and other investment instruments based upon the fund allocation given by the investors. The investment amount is use to purchase units and unit is  represented by the value that it has achieved known as net asset value. The policy value is derived from the total nav of all units.

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February 15, 2010

Regulating Indian Insurance Industry

Recently IRDA announced caps on the charges a insurance company can charge on its products. Earlier also, IRDA has been taking steps to ensure monitored functioning of insurance companies in India like they have been thinking about altering minimum lock in period of a insurance policy. But is it helping the consumer at ground? By putting a cap on the mortality or other charges, it can definitely provide some relief to the customer but the large issue still remains the same and that is, how a insurance policy is sold in India? Double of investment value in three years and many more other success stories which a insurance agent narrates to the customer while convincing. By increasing the lock in period, IRDA can put a check on this but definitely can’t stop this soon.

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