Videocon to exit insurance biz, sell entire stake to Diamond Dealtrade & Enam

Videocon Industries, which is one out of 28 companies that the Reserve Bank of India directed banks to refer to bankruptcy court, is exiting the insurance business by selling its 51.32% stake in Liberty Videocon General Insurance to Diamond Dealtrade- a DP Jindal Group Company and Enam Securities.

Videocon has submitted its proposal to Insurance Regulatory and Development Authority to sell it’s stake in the company. Diamond Dealtrade will buy 26% while and Enam Securities remaining 25.32%.

Liberty Videocon General Insurance had got approval from Irda to commence operations in April 2013. Initially, Videocon Industries held 74% of the share capital in the insurance firm, and the rest is owned by Liberty Citystate Holdings. After the increase in foreign direct investment limit, Liberty Mutual increased its stake in the company to 49%,leaving Videocon with a 51% share.

After Liberty Mutual’s capital investment, the paid up capital of company went up to Rs 1,084 crores. As of Dec 2017, Liberty Videocon had a market share of 0.54% and growth rate of 38.68%. It operates through 58 branches.

Source: Economic Times

Date: 19th March 2018

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Why take a personal accident cover when you already have term insurance?

Insurance is a very important financial planning tool for an individual who has dependent family members. Hence, it is crucial to buy insurance judiciously with a good amount of research. When looking to buy life insurance, many people do not understand the basic differences between the various types of policies available in the market. Besides this confusion, they are also unsure if they need to amplify the coverage by investing in multiple policies.

In this article, we take a look at the main differences between a term insurance plan and a personal accident cover and how you can work out an optimum financial strategy that utilises both these plans in the best possible manner.

What is term insurance?
term insurance policy is a pure protection plan that is offered by almost all life insurance companies in India. It provides insurance coverage to an individual for a specific period of time.

A term plan can be taken for a duration of 5, 10, 20, or 30 years. If the life assured passes away during the policy tenure, his/her family will be offered compensation, i.e., the death benefit under the plan. This way, the life assured is able to secure the family’s financial stability even when he/she is no more. The policy benefits are paid out to the nominee under the policy in the form of a lump sum amount or as regular payments periodically. However, it is very important that the policyholder informs the family about the insurance, so that they do not miss out on the benefits in case of his/her unexpected demise.

Term insurance is the most basic form of life insurance coverage and it offers extensive protection for the lowest premiums. There is no savings component or maturity benefit provided by the policy. So, if you are disciplined enough to make investments independently, it is best to refrain from buying a life insurance planwith a savings component. Instead, buy a term insurance policy for enhanced life insurance protection.

What is a personal accident cover?

Even if an individual acquires an appropriate life insurance cover and a health insurance policy, he/she may not opt for a personal accident cover. You should know that health insurance companies offer the personal accident cover as a rider, and it is very profitable to club this add-on coverage with the base plan. You save considerably on premium and get extended coverage in the bargain.

Personal accident cover, as the name suggests, protects the life assured from accidental injuries and death. It safeguards the individual from financial loss due to his/her inability to work after the accident. This plan is provided as add-on coverage under motor insurance, life insurance, and health insurance plans.

●  Motor insurance – A car insurance plan that offers comprehensive coverage has an in-built personal accident cover. This protects the owner/driver of the insured car from accidental disabilities and death. However, the passengers in the vehicle are not offered protection under this cover. The policyholder can opt for a separate add-on cover that safeguards the named passengers in the vehicle from accidents. Personal accident cover can be purchased along with the insurance of a two-wheeler as well.
●  Life insurance – In life insurance, this coverage is offered as the accidental death and disability rider that can be opted for at the time of purchase of a policy. The maximum sum assured under this rider can go up to Rs.50 lakh, subject to a maximum of 100% of the sum assured under the base policy. This rider offers tax benefits under Section 80C and 10(10D) of the Income Tax Act.
●  Health insurance – In health insurance, the personal accident cover can be extended to the family members of the policyholder as well. Some general insurance companies offer personal accident cover with a sum insured of up to Rs.25 lakh. The policy usually covers all types of accidents, i.e., mishaps such as rail accidents, road accidents, accidents due to terrorist acts or natural calamities, etc. Worldwide coverage is another significant feature of the rider.

Difference between term insurance and personal accident cover
Now that you have a basic understanding of both types of insurance, here is a rundown of the main differences between the two:

●  Policy benefits – In case the life assured under a term plan dies during the policy tenure, his/her nominee will be compensated. The benefits are paid out irrespective of whether he/she passes away in an accident or naturally. On the other hand, the personal accident cover will pay out the benefits only when there is death or disability arising out of an accident. In the event of death due to natural causes, the personal accident cover will not pay the benefits.
●  Premium – In the case of term insurance, younger customers are offered lower premiums. The cost of insurance increases as the individual grows older. However, in a personal accident cover, the premium for insurance depends on the profession of the insured apart from the age. If you work in a mine or as a technician installing high-tension wires, you are in a high-risk profession as far as insurance companies are concerned. You will then be required to pay a higher premium amount for personal accident cover.

It is important to choose the right level of insurance coverage to protect your family’s financial future. So, you can consider buying a term insurance policy with a personal accident rider to avail extensive coverage. Remember to compare plans between insurance providers to find the most suitable one for your needs.

Source- Forbes India

Date- 7th March 2018

 

Irdai proposes to lower third-party insurance premium on small cars

New Delhi, March 7 (PTI) Insurance regulator Irdai today proposed reduction in premium on insuring small private cars and certain types of two-wheelers, but plans to raise the same for several categories of goods vehicles.

The Insurance Regulatory and Development Authority of India (Irdai) has released exposure draft on premium rates for motor third-party (TP) insurance covers for 2018-19 fiscal and has invited stakeholders comments till March 22.

The draft proposes to increase the premium on e-rickshaw from the existing Rs 1,440 to Rs 1,685 in the next financial year starting April 1.

The regulator has proposed to lower the premium for third-party insurance, which is mandatory, on cars with engine capacity of less than 1,000 cc to Rs 1,850 from the existing Rs 2,055.

The draft does not propose any change in the existing rate for cars with engine capacity higher than 1,000 cc.

If the draft is approved, the premium on two-wheelers with less than 75 cc engine will fall to Rs 427 from the current Rs 569. No change has been proposed for entry level bikes (75 to 150 cc).

The Irdai proposes to more than double the premium on super-bikes (exceeding 350 cc) to Rs 2,323. Also, an increase has been proposed in the case of performance category bikes (150-350 cc).

The regulator has proposed to either increase or maintain status quo in premium rates in most of the categories of commercial vehicles. The proposed premium on goods carrying vehicles (exceeding 40,000 kg) is Rs 39,299 from the current Rs 33,024.

The exposure draft said that in case of vintage cars, a discount of 50 per cent would be allowed for private cars certified as vintage cars by Vintage and Classic Car Club of India.

There is a proposal to reduce the third-party premium on in certain category of vehicles (four wheeled) used for carrying passengers.

There is also a proposal to increase the premium in case of agricultural tractors up to 6 HP from Rs 653 to Rs 816.

The data provided by the Insurance Information Bureau of India (IIBI) has been used for arriving at the Motor TP premium rates proposed for 2018-19 financial year, the Irdai said.

Motor third-party insurance is mandatory for vehicles. PTI NKD CS ANZ SBT

Source- Indiatoday

Date- 7th March 2018

How to choose a health insurance policy wisely

With medical expenses going through the roof, hospitalisation can be a nightmare for the middle class. Health insurance can be a good tool that can help surmount the difficulties arising out of increasing healthcare costs. While having a health insurance has almost become a necessity today, one needs to be mindful of a handful of factors before taking up a policy. According to experts, choosing a policy is akin to investing in mutual funds or stock markets.

 

All these require proper a n a lysis and care f u l planning. In fact, in the case of health insurance policies a lot more careneeds to taken as the terms and conditions are replete with jargons which only mavens can decipher. Some of the things one needs to look at while choosing the policy are: ensure that claims process is easy; have access to a large network of hospitals, etc. “Before buying a health insurance policy, one needs to assess one’s lifestyle and health status.

The best option would be to cover all family members,” says Adhil Shetty, CEO of BankBazaar.com, adding that the sum insured should be finalised after taking inflation into account. “Health insurance is for lifetime. While one may feel that one could always buy another insurance policy a few years down the line, premiums become more expensive with age of the insured.

Therefore, it is better to buy health insurance for lifetime,” he adds. Several policies come with a cap on the room rent, ICU charges and doctor’s fees. “This is one key factor one should consider while deciding an insurer, as this factor could depreciate the value of health insurance with inflation. Assume that the room rent for a privateroom today is Rs 4,000. In 10 years, at an inflation of 7.5 percent, the room rent would be more than Rs 8,000. If one has a cap of Rs 5,000, one would be paying close to 40 per cent of the room rent from his pocket. In 20 years, the same room would cost approximately Rs 18,000.

So, less than 25 per cent of the room rent would be borne by the insurer, while the remaining has to be paid by policy holder,” says Shetty. Ideally, one should opt for a policy with private room eligibility.Most policies come with clauses on sub-limits and copay. The former puts a limit on particular expenses, usually as a fraction of the sum assured. For example, a particular surgery may be capped at 50 per cent of the sum assured. On the other hand, in case of co-pay, a part of the total expense would have to beborne by the insured, even if the total amount is well within the sum assured of the policy.

“There are several trade-offs here, and people optingfor health insurance should make sure that they understand what all these mean and compare different policies on these factors before taking a decision,” says Shetty. Experts aver that understanding the policy iscritical as it involves financial implications. If you haven’t understood properly, seek expert advice.

“Another important factor to check is if the policy pays for medicines or not, as these expenses make up a major portion of overall bill. Also, focus on the network of hospitals covered by the insurance company. Insurance holders should compare the hospital network covered by the insurance provider and see if the areas and hospitals they and their family members likely to be hospitalised come under this,” says Subba Rao Anupindi, senior chartered accountant from Hyderabad.

Source- The Indian Express

Date-05-03-2018