Buying life insurance policy? Here’s why you should wait till December 1

The new Irdai life insurance product guidelines will come into force from 1 December. Due to this, agents are pushing policyholders to buy policies before 30 November. Take these sales pitches with a pinch of salt; evaluate your needs before buying.

The prime festive season may have just ended, but ‘Hurry! Offer only till stocks last’ sales pitches of a different kind have started. Life insurance distributors are pushing prospective policyholders to buy policies before 30 November.

The new Insurance Regulatory and Development Authority of India (Irdai) life insurance product guidelines will come into force from 1 December. This means insurers will withdraw non-compliant products before that.

‘New plans will come with increase in premiums’, ‘Guaranteed returns will be lower’ are some of the reasons distributors are putting forth. Take their advice with a pinch of salt. “There could be an increase in premiums but it would not be too substantial. Moreover, more premium would mean better features for the customer,” says Karthik Raman, CMO and Head, Products, IDBI Federal Life Insurance.

  • Bonanza for pension plans

For those looking to buy pension plans, the new regime will be worth the wait. “Pension plans will be more customer friendly, thanks to additional flexibilities in withdrawal at maturity, premature withdrawal and investment options they will offer,” says Mrin Agarwal, Founder, Finsafe India. For new pension plans sold after 1 December, the maximum commutation —lump sum withdrawal—allowed at maturity will be 60%, up from 33% currently. Even if newer plans offer lower returns as agents warn, benefits like these will offset likely hikes. However, the proceeds beyond the one-third withdrawn as lump sum will continue to be taxable, unlike NPS.

The pension Ulip segment lost its lustre after the regulator made it mandatory for insurers to offer guarantees on maturity proceeds. This meant that insurers had to invest in debt instruments, bringing down return potential. Now, this is optional.

The new rules allow freedom to policyholders to decide whether they want the guarantee or not. If you are young and have a long-term investment horizon, you can choose to invest higher proportion in equities to create a larger retirement corpus. Policyholders were also not given a choice to purchase annuities from other insurers at maturity as per the existing rules. Post 1 December, you will not be completely tied to the insurer from whom you purchased the plan. You can use up to 50% of your corpus (balance after lump sum withdrawal) at vesting to purchase annuities from the insurer who offers higher returns.

orth the wait
Newer features warrant postponing purchase decision


  • Flexibility for Ulip buyers

From 1 December, the minimum life cover under Ulips will be scaled down from 10 times the annual premium to seven times even for those under 45. Since life cover entails mortality charges, lower cover will mean more of the premium will be available for investment, thus boosting returns.

However, clarity is yet to emerge on tax benefits under Section 80C and 10(10D). To maximise benefits under these sections, a life policy has to offer a minimum cover of 10 times the premium. If you need the tax breaks, insist on a life cover that is 10 times the annual premium.

  • Wait and watch

The newer products set to be introduced will be relatively more customer-friendly. For one, endowment policies with tenures over 10 years will acquire surrender value if two years’ premiums are paid, instead of three earlier. Surrender value is the amount you stand to get in case you make a premature exit.

For older policies, this was limited to 30% of premiums paid (minus any survival benefits paid out by the company). This will go up marginally to 35% after 1 December. While penalties for early exit continue to be steep, newer policies would still be a step ahead of the older ones. In addition, for policies with tenures greater than seven years, Irdai has said surrender values should increase progressively and converge to at least 90% as the policy moves closer to maturity.

Do not, however, pick endowment plans merely to avail these benefits. Choose them only if your prime objective is safety rather than growth and you are convinced about their utility value. “When you have committed to paying premiums over the entire tenure of 15-20 years, it does not make sense to base your decision on rules for premature exit,” says Mohit Garg, Head, Products, PNB Metlife Insurance.

  • Other benefits that matter

There’s more to the new avatar besides better surrender benefits. Inability to service recurring premiums over the long term is one of the key reasons for policy lapsations. This could be due to regular premium policies mis-sold as single premium ones or genuine financial crunch in the interim. The new regime offers some relief for the latter category. Such policyholders can reduce premiums by 50% after five years and keep the policy in force. Irdai has provided more leeway for policyholders who wish to renew their policies after discontinuing premium payment in the interim. The revival period for traditional plans has been extended to five years instead of two so far.

  • No impact on term plans

If you are looking for a pure risk term insurance policy, where policyholder’s dependents get the sum assured in case of his or her death, do not put off your decision. “If life cover is what you seek, it is wise to secure protection for yourself and your family as soon as you can,” says Garg. Exigencies can come unannounced and it is best to be prepared at all times and start as soon as you can.

Source: Economic Times

Date: 25th November 2019


Amazon, Flipkart lead in B-school hiring

Amazon, Flipkart lead in B-school hiring

E-commerce giants are eyeing Indian campuses while hiring talent for technological and management expertise.

Amazon has emerged as the top recruiter among e-commerce and technology companies for hiring talent across different campuses in India. Walmart-owned Flipkart is coming close to the second place after Amazon in terms of campus recruitment from leading B-Schools.

Amazon is leading at the National Institutes of Technology (NITs), as final placements are also in process. Additionally, when it comes to the summer placement offers at the Indian Institutes of Management (IIMs), Amazon continues to be ahead with a rise in the number of offers at IIM Ahmedabad for the last three years.

Flipkart is also looking to hire interns from top 22 B-schools and continues to hire across business and product job roles via campus recruitment.

“We expect that the demand for talent by top ecommerce companies would only go up as they are penetrating more small towns and cities,” said Amit Karna, Chairperson of Placement Committee at IIM Ahmedabad.

Flipkart is hiring for roles such as management trainees, product management, and supply chain design and operations roles from IIMs while Amazon has been hiring software development engineers from NITs.



Indian startups have potential to create over 12 lakh direct jobs by 2025: Report

India’s startup ecosystem has the potential to create up to 12.5 lakh direct jobs by 2025, as compared to the 3.9-4.3 lakh direct jobs in 2019, according to a new report from industry body National Association of Software and Services Companies (Nasscom).


The report titled “India’s Tech Startup Ecosystem” states that the number of indirect jobs created by the startup ecosystem in India can jump to 39-44 lakhs by 2025 from 14-16 lakhs jobs this year.


The report added, “India’s talent base is expanding beyond large cities as fresh graduates are choosing to stay back in non-metropolitan cities. These individuals have an almost similar exposure to technologies via the Internet. This enables the founders to recruit quality talent at a relatively lesser cost – allowing better runway and also a base for growth.”

As per the analysis, the Indian startup ecosystem is expected to grow about four times by 2025.


The research brought out in collaboration with global management and strategy consulting firm Zinnov further found that 18 percent of all startups are now leveraging deep-tech and fintech, enterprise, and retail tech which are the most mature sectors with strong metrics across dimensions. It also added that there is increased activity in edtech, retail & retail tech, HR, and health tech technology startups with significant improvement in sectors like agritech, aerospace, defence, and space.


There is no doubt that India boasts of one of the biggest startup ecosystems in the world. The investments in the startup ecosystem are also a testimony to their huge potential. In 2019, the investment in the startup ecosystem has increased 6 percent year-on-year during the January to August period, validating the fact that investors are also equally gung-ho about the potential of startups to add value and create jobs.




Infosys, Capgemini axe jobs

Days after Cognizant announced job cuts targeting mid- and senior-level employees, rival Infosys has followed suit. Sources told Times of India the company was laying off 10% of its workforce, or 2,200 people, in the senior manager band and 4,000-10,000 staffers at the associate and middle levels. Up to 50 senior executives will also get the sack. Infosys called the action “normal course of business”, but Livemint cited a source as saying that the company was not laying off thousands of employees. French IT major Capgemini has also cut nearly 500 jobs after customers scaled back on projects.

Flipkart’s HR Chief Smriti Singh Quits

Smriti Singh, senior vice president and chief HR officer at Flipkart, has quit after a nearly one-year stint, according to an email sent by CEO Kalyan Krishnamurthy to a select few executives.

Singh was overall responsible for people, talent, rewards, and learning and development at the Walmart-owned ecommerce company. She reported to Krishnamurthy. Singh joined Flipkart at a time when Walmart acquired the ecommerce giant for $16 billion.

“She had the responsibility of keeping the firm’s culture and transition smooth” said a source aware of Singh’s departure.

This is one of the first senior leadership exits after the departure of Ananth Narayanan, the CEO of Myntra and Jabong in January. “She has helped set the right direction for people and culture initiatives that will serve us well in the future… We thank her for the commitment and dedication,” Krishnamurthy said in the email.

Source:- The Economic Times-Mumbai

Date:- 5th November,2019- Tuesday