Investment & Insurance Consultancy

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LIC clocks Rs 11,000 crore profit through equity investments in FY16

No Takers for PSBs? LIC's Buying Chunks

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Life insurance industry reports 5.65% growth in April

Max Life saw 13% decline in individual APE. Insurance sales fall during the beginning of the year, as it is considered to be a lean period.MUMBAI: Life Insurance industry reported 5.65% growth in individual annual premium equivalent from selling new policies in April, mainly due to robust show by SBI Life, Life Insurance Corporation and Birla Sun Life.

Reliance Life reported 30% decline in individual APE during the month. Insurance companies which are not lead by banks struggle to grow retail insurance sales.

Why and how of buying life insurance under the Married Women Property Act

the assets of women from the claims of creditors, income tax demands and court attachments.The Married Women Property (MWP) Act is a legislation that aims to protect the assets of women from the claims of creditors. The act allows a cover to married women from income tax demands and court attachments if their husband goes bankrupt or passes away. The act also protects all policies life insuranceissued under it from such claims or attachments.

Who can buy a policy under the MWP Act?

Only a married man can buy a policy under the MWP Act for the benefit of his wife and children. A divorcee or a widower can also buy a policy under the act for the benefit of his children.

Form In order to take the policy under the act, the proposer must fill up an MWP addendum along with the life insurance proposal form. The MWP addendum form is available with the insurance agent or can be downloaded from the insurance company's website.

Information

Information like the proposal form number, and names and dates of birth of the beneficiaries needs to be filled into the form. Beneficiaries who can be included in such a policy are the proposer's wife and children. The addendum needs to be duly signed by the proposer in the presence of a witness.

Appointing a trustee

The MWP addendum form provides the option of appointing a trustee, who can receive the policy proceeds upon the proposer' death and use them to the advantage of the beneficiaries. If the trus tee is a bank or a trustee company, the form needs to be signed and stamped by the authorised signatory of the institution.

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Death of the policyholder

In the event of the policyholder's death, the policy proceeds are given only to the beneficiaries mentioned in the policy. The policy cannot be attached for the policyholder's debts, as it no longer belongs to him.

Points to note

The MWP addendum can be made only at the time of the issue of the policy. Beneficiaries stated in the MWP addendum cannot be changed later.

LIC clocks Rs 11,000 crore profit through equity investments in FY16

MUMBAI: Life insurance giant LIC has made a profit of Rs 11,000 crore through its equity investments in the recently concluded 2015-16, a senior official said today.

"We saw some profit booking opportunities during the fiscal and have made a profit of Rs 11,000 crore through our equity investments in the recently concluded FY16," its executive director for investment operations, Pravin Kutumbe told reporters on the sidelines of an event here.

LIC introduces third gender option in its proposal form; move cleared by IRDA

The Life Insurance Corporation of India (LIC), which controls close to 70% of the life insurance market, has introduced the third gender as an option in its proposal forms in line with Supreme Court 2014 verdict recognising it. Till now, policy buyers could choose between 'male' and 'female' as gender options. Now transgender applicants can opt for the 'third gender' category.

Soon Health Insurance Premiums can be paid in Monthly, Half-yearly and other modes

The general insurance industry which includes standalone health insurance has received a go-ahead from the

insurance regulator to collect health insurance premiums in other modes too. Currently health insurance

premiums have to paid annually.

Given the premium �cket size, life insurance industry has always enjoyed various modes of premium payment,

namely, Yearly, Half-yearly, Quarterly and Monthly. However, health insurance premiums had to be always paid in

Yearly mode only. It was not a concern when the average premium used to be around Rs.5,000/-. But in the last

few years, the industry has seen both sum insured and premium go up.

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Star Health to cover children with autism

Star Health and Allied Health Insurance Company Limited announced the launch of a policy for children with autism spectrum disorder (ASD). The company will provide insurance coverage to children suffering from ASD up to Rs. 1 lakh.

This policy will not only cover general medical and surgical therapies but will also cover inpatient disease associated with autism like seizures, soft tissues and bone injuries, medical and surgical procedures for spasm of muscles and all infectious diseases. The company will cover children under this policy for the period April 01, 2016 to March 31, 2017.

In India Parents would rather invest their money in PPF, fixed deposits, mutual funds and other instruments. Although there is surety of returns in investments, the interest rates are not very alluring.

As parents our prime concern is our children's wellbeing and future. This includes giving them all the financial support they need especially during major events and milestones of their lives.

Meeting education expenses, marriage expenses, health expenses, etc., are only some of them. Investing in a good child insurance plan, serves a dual purpose of investment and insurance for your child.

Unlike other insurance plans, child insurance plans do not terminate on death of the parent. Most insurance companies in this case pay the insurance premium till it reaches its term.

With a good child insurance plan you not only save enough to meet all your child's expense, but also ensure that they are well provided for long after your death.

Parents do not trust investing in child insurance plans and would rather save through mutual funds or term plans.Although, investing as a whole is a good habit, the fact is that child insurance plans score over mutual funds and term plans.

One such factor with child insurance plans is the availability to choose riders. Riders to your child insurance plan could be anything like accidental benefits, disability rider, etc.

In such situations the child's needs are taken care of in case the family member is disabled or no longer lives. Riders like the family income benefit also help the child in case the family member who is a policyholder dies, before the insurance plan reaches term.

Here are some ways you can secure your child's future with specific child plan.

1. Competing with inflation is a daunting task, especially if there is a continuous annual growth rate. Lifestyle changes and increasing expenses all call for you as parents to be prepared for the future. Education and marriage expenses that are affordable now, could sky-rocket in the next few years. Shielding your family and your child with an insurance plan will ensure that the cost of marriage and education is taken care off. For e.g what you get for Rs.1,000 today may cost you Rs.40,000 a few years later.

2. Child plan provide financially for any sort of medical emergency or hospital expense. Taking an insurance plan early on in life will ensure that you receive the required financial support if at all your child faces a medical emergency. As the parent of the child you are allowed to make a lump sum withdrawal from the policy that is still in term to pay for any medical expense. If in case the parent expires before maturity of the plan then the child gets the sum assured that is more than the maturity amount.

Importance to Purchase Child Insurance Plans

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3. An insurance policy forces you to pay your premium, thus building a good saving habit. Moreover in most child insurance policies, there is a lock in period where the child or the parent cannot withdraw the money. During this period one cannot surrender the policy and instead has to continue with paying the premium. This is in accordance of tax rebate U/s 80C and 10(10(D)).

4. When you buy an insurance policy for your child you receive tax benefits as well. Once the policy matures, the returns received is again tax deductible. Hence investing in child insurance plans proves to be a good tax saving investments.

5. If you have a daughter there are insurance plans initiated by the Government especially designed for her. The Sukanya Samridhi Account is one such plan that is being promoted for the welfare of the girl child. This is a money-back guarantee plan, where the investments are minimal. In case you default in the payments you can revive the policy by paying a penalty amount which is minimal. Death benefit riders however are not associated with this government initiative.

6. If you stick with the plan and continue paying your premiums on time, there are loyalty benefits or loyalty additions that you can receive. By offering benefits the insurance company encourages you to make your premium payment on time. By giving you loyalty benefits you are partaking of a percentage of the company's profits. These benefits are paid on either death of the insured or on maturity of the policy.

Parenting is an uphill task, it is always about making the right decision for your children. By investing in your child's future you ensure that your child gets the best even if you are not around.

1Send your answers( pls. men�on your proper name and postal address) at insurancetreasure@gmail.com . Five lucky winners will be awarded prizes. Last date to

threceive entries : 15 August 2016

Q1. Which company has acquired the appliances division of GE for over 5 Billion $ ?

Q2. Where does Reliance Defence propose to set up its Naval shipyard ?

Q3. Name the celebrity behind the garment and jewellery collec�on brand ” EK” ?

Q 4. According to Morgan Stanley's Ruchir Sharma BRIC is out , FANG is in. Expand FANG.

Q5. Under what brand name has the Tata group re entered the cosme�cs business a�er 18 years ?

Q 6. Where has Tinder set up its first overseas office outside of US ?

Q7. Why is “Ringing Bells Pvt Ltd ” currently in the news ?

Q8. As per the newly released Na�onal Ins�tu�onal Ranking Framework by Ministry of HRD which Business school has been rated #1 ?

Q9. Who is the NRI businessman behind Liberty House that has expressed desire to acquire one of the Tata Steel units in UK ?

Q10. Which country has banned throwing of any food by the supermarkets ?

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Q & A S.S. Rathod MD Insurance Treasure

send your queries to insuransetreasure@gmail.com

Q. I am 36 and have two kids aged 9 and 7. I want to invest in SIP for 8-10 years at � 5000. Per month. Please

tell me what the best plan is.-Sanjay Mishra

A. You should go for diversify fund . 80% should be large cap and 20% should be mid cap for both kids. Even it is better to choose 2-3 mutual fund schemes to diversify your portfolio.

Q. I want to give cash gift to my son and daughter � 100000 each. Will it be taxed under IT Act at their hands. What is the exemption limit for cash gift from parents? Ritesh Agrawal

A. The gift given to son and daughter will not be taxable. There is no limit to the amount which you can gift to your son or daughter.

Q. I do not own a car since two years now. Before that , I had 50% NO claim bonus(NCB) car insurance. Now I am thinking of buying a new car. Will NCB continue, or do I need to pay full premium? Ali HasanA. If you have taken a NCB retention certificate after selling your old car two years back from the insurer, and if you buy a new car within three years of the effective date of the certificate, then you are eligible for the same percentage of NCB could continue and you may not have to pay the full premium.

Q. I am planning to buy a personal accident cover. I have a term plan that offers it as a rider. I also know of credit card companies that provide this policy. Are these plans different? Which one should I pick? –Sandeep, Mumbai

You can get a personal accident cover as an independent policy from a general insurer.A.A stand-alone cover from a general insurer and health insurance firms offer additional benefits along with the standard death benefit, such as benefits for permanent full or partial disability, temporary disability, medical expenses, etc. You can also choose the cover amount.

Accident covers offered as a rider to a life insurance policy usually only offer death cover with additional coverage for permanent full disability in some cases. However, the cover would be based on value of the life insurance plan. Coverage offered with a credit card is basically a group insurance plan for all members who avail the card. It would be available only as long as the card is active.

Q.I have 60000inmysavingbankaccountgetting4%interest.Thisamountisforemergency.CanIgethigherinterestfrombankordebtfund?Reena,Bokaro

A.YoucangetsuperiorrateofinterestfromDebtfundcomparedtoyoursavingbankaccount,withoutsacri�icingliquidity.Somebanksalsooffering6to7%rateofinterestonsavingaccountalsoyoureceivedebitcardwhichcanhelpforyouremergency.

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No Takers for PSBs? LIC's Buying Chunks (Source by Economics Times)

Insurer said to be betting NPAs won't worsen and economic recovery will benefit public banks

ET Intelligence Group: Life Insurance Corporation (LIC), India's insurance behemoth, is typically known for its bold contrarian calls on the equity market. No surprise then that it is now eyeing state owned banking stocks, which are available at significantly lower valuations, on hopes that the extent of their non-performing loans may not worsen further.

LIC has increased its stake in IDBI, OBC, Syndicate Bank, Bank of India, Bank of Baroda, Allahabad Bank, and Central Bank of India in the range of 1-7% in the March quarter against the preceding quarter. Based on the average share price of these stocks, LIC has invested nearly � 2,200 crore. LIC's asset under management (AUM) in the BSE 200 dropped to $61 billion (`4.07lakhcrore) in the March quarter as against $65 billion a year ago.

Owning to RBI's policy of Asset Quality Review (AQR), public sector banks' NPAs jumped sharply in the March quarter, and net slippage reached alarming level. This has led many investors to pare their expo- sure in PSU banks due to inability to judge the extent of asset write-down in the future. NPAs and restructured loans as a proportion of loans are hovering near double-digit.

Experts reckon that LIC's investment philosophy of spotting difference between the valuation and prevalent business cycle makes it capable to take bets against the trend. Also, banks will be among direct beneficiaries of improving economy. With several economic indicators such as fuel consumption, power generation and cement volume growth showing gradual recovery, analysts believe earnings of banks are bottomed out and provide an attractive opportunity for a long term investor to take fresh exposure to PSU banks stocks.

Knowledge Improver HISTORY OF MUTUAL FUND IN INDIA

MF History

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases

First Phase - 1964-1987Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004 crores.

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Third Phase - 1993-2003 (Entry of Private Sector Funds)With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.

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The graph indicates the growth of assets over the years.

(source amfi )

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