http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/ICICI_Lombard_to_expand_Nirmaya_scheme/articleshow/3468650.cms

Nirmaya, the new health insurance plans for the mentally disabled launched by ICICI Lombard, sounds like very unique product. This scheme will not need a medical test for anyone who is looking to buy the policy. The annual premium charged is also quite low which covers routine medical check up, therapy to corrective surgery, and transportation.

The policy is specially designed for the welfare of people suffering from autism, mental retardation, cerebral palsy, as well as multiple disabilities. Family members of the mentally disabled person can reduce their financial load by buying such policies.
In all the policy looks very good and may be a major hit among people who are looking out for these kinds of policies for any of their family members or friends. Many NGOs will also make use of this policy for people who are mentally disabled. It is a great step taken by ICICI Lombard to benefit a part of society that is criminally overlooked when it comes to such matters.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/Insurers_set_to_park_funds_in_VC_firms/articleshow/3429548.cms

Insurance Regulatory and Development Authority of India (IRDA) gave the green signal to insurance companies to invest in venture capital funds (VCs). Investing in VCs will expose the insurance companies to a huge amount of risk as VCs are high-risk high-return. The insurance companies will have to work out which VC they should invest and how much. The objective of the VC in which they would be investing should be very clear as it would be the deciding factor on the investment returns. The things to be checked are solvency ratio, percentage share in the venture capital, exit clause, and the management track record.

With the world economy facing a recession and economic giant USA adopting the fetal position, the VC concept that has been the driving force of the dotcom boom, has burst. Result: Nightmare for VCs.

Insurance companies will have a large corpus to invest in VCs. In which case, they should have decision-making rights in the VC. This is important to protect the insurer’s insurance customers.

http://economictimes.indiatimes.com/articleshow/3418711.cms

The Insurance Regulatory and Development Authority (IRDA) has given permission to insurance companies to invest in mortgage-backed securities (MBS). LIC however, is more comfortable lending directly to housing finance companies (HFCs).

LIC will earn about 11.50% from bank deposits and short-term papers.

If LIC is successful in doing this, it could help banks reduce their prime lending rate (PLR). In addition, the funds lent out will be securitized by the property of customers taking home loans.

LIC has many policies in which policy holders participates in the company’s profit. More importantly, the above mentioned initiative could mean that LIC passes these profits to their customers in the form of bonuses. This will lead to an increased benefit along with the sum insured to policy holders.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/Cabinet_to_decide_soon_on_raising_FDI_cap_in_insurance/articleshow/3433117.cms

The move to hike the FDI cap in the insurance sector to 49% comes at a time when the government is trying various policy measures to infuse liquidity in the financial system by easing norms for foreign investment in India.

A hike in the sectoral FDI cap to 49 per cent would further grow the insurance sector and bring in much needed FDI to the country.

This move will ultimately help in increasing coverage to the rural and other social sectors, thereby increasing insurance penetration in the country.

As far as the increase in the FDI cap, for insurers to penetrate into the rural and other remote areas, they will require funds to build offices, IT, better transportation facilities, and many more things required to be functional in those areas. This in turn will increase employment, develop tertiary sectors such as IT/ITeS and provide long-term investment for developing infrastructure.

On the flip side, this move could have an adverse effect on LIC. The increased FDI inflow into the other insurance players could hit the marketing force of LIC as well as the management of incentive structure.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/Now_get_a_life_cover_for_40_less/articleshow/3418926.cms

The Insurance Regulatory and Development Authority (IRDA) has reduced the capital requirement for selling term plans. This has reduced the cost of premium by 40% on the term insurance.

Term insurance only has administrative and mortality charges, no investment component like ULIPs. Hence they are not exposed to market risk. It follows that the capital adequacy requirement for both these products cannot be same; the risk levels are totally different.

Fortunately the regulator realized this, came up with the regulation that should have come earlier. Better late than never…

Many private players have already started passing this benefit to their customers.

Most of the Indians do not have life insurance cover and those who have are mostly under-insured. The regulator’s step of decreasing the premium of term insurance will increase insurance penetration and enhance the growth opportunities of the insurance sector.

Another very important result: The reduction in the premiums will leave the investors with a surplus for investments.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/IRDA_to_make_ULIPS_more_affordable/articleshow/3510476.cms

ULIPs were sold like hot cakes in the Indian markets till the downturn in the equities markets recently. The insurance companies are allowed to pay a maximum commission of 40 per cent of the first year premium, 7.5 per cent in the second year and 5 per cent thereafter. But after the fall in equity market since the beginning of this year, ULIP sales have gone down drastically. Looking at this scenario, the Insurance Regulatory & Development Authority (IRDA) has finally decided to reduce the commission rates to make the product more affordable and more attractive.

The step taken is very much in interest of the investors, but IRDA realized the same after the sales declined hugely. If the markets were not that choppy, would the IRDA have thought of the interest of the investors? Highly unlikely.

Does the regulator think about investors only when there is a crisis?

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/IRDA_message_reposes_faith_in_local_insurance_cos/articleshow/3538435.cms
AIG is on the brink of filing bankruptcy. It has shaken the Indian insurance markets to a very great extent. AIG is a major share holder in Tata AIG general and Tata AIG Life insurance. The question being asked by people is safety of the money invested by them in Tata AIG, and policies they bought from the same company.

Insurance in India is a highly regulated industry. Any company that wants to set up an insurance business has to follow very stringent norms given by the Insurance Regulatory & Development Authority (IRDA).

If anyone is tense about investments in any insurance companies like Tata AIG, rest assured, they need not worry about the same. IRDA has prescribed the norms of solvency margin of 150% for all insurance companies including private players. It also imposes that no insurance companies should be investing overseas and that their investment portfolio should be in sync with the norms laid down by the IRDA.

The regulator has taken into consideration policy holders’ interest and is committed to maintain financial stability in the insurance sector.

Human Life Value relates to a person’s worth. What is a person’s worth? What price for man? If your clone were up for sale what price would you be willing to pay for it? And why?

A person has several values: Emotional, Social, Religious, Spiritual, and Economic.

A person’s way of loving and caring for others as a friend, father, mother, brother, sister son, daughter, etc. can not be replaced. Neither can that person’s contributions to the growth and betterment of society by the way of special skills in the arts, profession, ability to generate employment… in short, all acts of making this world a better place to live in.

What can be replaced is a person’s income earning capacity, the amount he/she earns for family members that is used to provide for all their needs and to create wealth for them aas well as future generations.

So how do we measure a person’s economic value?

In simple layman’s terms, our insurance cover, to a great extent, determines our value. Let me explain. We insure our 2 wheeler say, for 70,000, our car, say, for Rs. 8 lakh, stocks for say, 20 lakh. Normally, we insure for a definite amount. Why? Because that’s what we feel it is worth. But we grossly under-estimate our life’s worth by insuring it for paltry sums. Though we create properties worth millions of rupees and know we could create a lot more in our earning life spans, the majority of us, (approximately 97%) insure ourselves for a paltry amount of say, between 2 and 10 lakh. Are we worth only that much?
If a goose laid golden eggs and we insured the eggs for say, Rs. one crore, how much should we insure the goose for? That’s the argument that should determine our HUMAN LIFE VALUE.

Here is another scenario:
Say, last night God came in your dream, and you had this conversation: God: My child, I need you. You are the best person to do my job. Will you work for my cause?
You: Anything for you, my Lord, whatever you say?
God: It’s not easy. Think again before you commit.
You: Anything my Lord. My life is yours. Whatever you say.
God: Very well, then from tomorrow morning, you have to stop working for money and put all the time that you spend on earning money for my cause. Can you do it? Think again.
You: I am ready, but what about the dreams that you showed me of a lavish house, my dream car & what about my responsibilities towards my children’s education and marriage expenses? What about my family’s day-to-day expenses and maintaining our standard till our death? How will that happen? Now, that you have chosen me, I am sure you must have thought about that too.
God: Good question, I am glad you brought it up right now before committing. I have thought about it. Tomorrow morning, go to my temple near your house and you will find a pot on your way back. This is a magical pot. Every month it will give you the amount that you would have normally earned based on your karma. That amount you can use for all your needs and dreams and for all your savings for your future needs. But there is one problem.
You: What is that?
God: Your only responsibility is to take care of that Magical Pot. Thieves could come to know about it and they would try to steal it.
You: So, how do I protect it, my Lord?
God: Do the best that you can to protect it from thieves. But then, on your Earth, I have also started something called Insurance. Insure it the moment you get it, so that just in case, it is stolen you get a lump-sum or a monthly amount that you were going to get as long as you would have been working. Are you ready now? Now, if you commit, you cannot go back. Think and answer.
You: Yes, my Lord, absolutely.

You wake up and tell the story to your family:
“Yeah, I am the chosen Instrument of God to work for Mankind. From today, no tension, I no longer have to work for money.”

But then you wonder,
“How much should I insure my Magical Pot when I get it today? Who knows, it may get stolen right away!

Well, whatever you decide to insure that magical pot for is your HUMAN LIFE VALUE.
You are the Magical Pot that God gave to your family and Father Time is the thief.

P.S. There IS a scientific way of calculating your human life value based on your present age and assumptions of your retirement age, your present income, rate of growth of your income, inflation rate, safe rate of return that your family can earn on investments, etc.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/UTI_may_stop_Ulip_sale_after_cos_agree_to_keep_MFs_out/articleshow/3495777.cms

Unit linked insurance plans (ULIPs) are today being sold both by life insurance companies as well as mutual funds. ULIPs offer insurance and investment in one product as compared to general products sold by mutual funds that offers only the investment avenue.

At mutual funds, these policies are being sold by agents who do not have the license to sell insurance. This leads to miss-selling as they lack in the product knowledge on insurance, as they haven’t passed the required IRDA exam. (Asset management company folk have to pass the AMFI exam, not the IRDA one). So, the Life Insurance Council has opposed mutual fund companies selling ULIPs. The group selling of ULIP and mutual funds is going against life insurance companies’ business.

The protest by the Life Insurance Council against this practice will protect customer interest and will help the life insurance companies in respect of product development.

Here is a story about Islamic organizations terming health insurance policies as illegal and issuing a fatwa asking Muslims to keep away from them.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Health_Insuarance_illegal_Islamic_body/articleshow/2930737.cms

This has raised a doubt in my mind as to how Islam cannot allow taking health insurance. I have a valid reason. At the time of Holy Prophet (s.aw.s) whenever there was any war, soldiers used to cover themselves with armor to protect them. In my opinion the Holy Prophet (s.a.w.s) has shown that one has the right to protect one self against any uncertain event. No matter that the ultimate protection lies in God’s hands.

In the same vein, whether your health cover will help you or not is ultimately in God’s hands; but it IS your responsibility to make sure that you are adequately protected.

The point I want to make is, please provide proper daleel (proof) why it has been declared illegal so that if I am wrong I may correct myself. If possible, quote Quranic ayat and tradition or precedent supporting it.