Fewer insurance claims will be turned down from now on, after the insurance industry signed up to new rules.
Trade body the Association of British Insurers (ABI) said people would benefit from a new industry commitment to pay out on protection policies even where medical information has not been disclosed, unless the claimant deliberately withheld it.
Thousands of claims on critical illness, income protection and life insurance policies are rejected every year because holders have failed to give relevant medical information.
The ABI said, from now on, in cases where such information has inadvertently not been provided, insurers would pay out a "fair sum, reflecting risk and premiums paid".
In a small number of exceptional cases, premiums will be refunded if the insurer decides it would not have taken on the policy had it known the full facts.
Stephen Haddrill, the ABI's director-general, said: "Customers want to know that their insurance claim will always be assessed fairly and paid without fuss.
"The industry wants customers to be able to take out insurance with confidence.
"Today, insurers have signed up to ensuring both of these happen; the number of protection claims that are turned down will fall."
The new rules follow improvements in application forms and communications with customers, designed to cut the number of claims rejected due to "non-disclosure".
source:http://uk.reuters.com/article/personalFinanceNews/idUKHIL96088820080110
Thursday, January 10, 2008
Sunday, January 6, 2008
Which insurance product should you buy?
The life insurance industry has come a long way since 2000, when private companies were allowed in. Today, there are over 500 products (over 3,000 with customisation options), and 16 companies to choose from. So how do you pick the one that suits you best?
Typically, your needs would be any or all of protection, wealth accumulation, wealth maintenance and retirement. A few basic products meet these needs.
Pure Term Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. This is the most basic and cheapest life insurance.
Endowment Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. If the insured survives the policy term, an amount is also paid to him.
Whole Life Insurance. This is similar to endowment, except that the term is whole life.
Riders. These are options that can be taken along with the product you buy and provide protection against additional contingencies such as disability or dreaded diseases for a nominal extra charge.
So, how can these products help you plan for your needs?
Protection needs include protection against death, disability, and dreaded diseases. Products that are suitable for this need are term or whole life insurance with riders like critical illness, waiver of premium (WOP) or accidental death benefit (ADB). Wealth accumulation needs include saving for children's education, marriage and/or getting them settled. It also includes saving for one's retirement. Suitable products in this category are endowment, money back and whole-life plans.
Wealth maintenance need arises when you have accumulated some money and want to protect and grow it in a tax-favoured manner. Short-pay endowments, pensions, single premium policies or dump-ins cater to such a need.
Retirement need arises when an individual reaches a stage in life when he does not anticipate future inflows, but has to provide for a regular inflow out of the funds he has accumulated, without any worry. You could consider single pay/short pay pensions or immediate annuities for this. A flexible unit-linked endowment, structured with regular partial withdrawals could also be suitable.
Once you understand your need and the suitable products on offer, you have to decide whether to buy a unit-linked or a traditional policy. Traditional plans would generally have guarantees over the long term and, hence, are unique among financial products. Instead of working with projections or illustrations, you would have assured cash flows in your financial plan. Unit-linked plans are also an effective mechanism to plan for your financial freedom as they give you the option to decide where you want to invest your moneyequity or debt. However, they usually do not have any significant guarantee.
So, once you have decided on the need, the product and the mechanism, ensure the following before you sign on the dotted line:
1. Understand clearly how the suggested product fits your need.
2. Understand which part of the amount is guaranteed and which is not. This is required to be illustrated as per the regulator.
3. Do not accept illustrations based on historical returns of a fund; they do not guarantee future returns. The regulator has prescribed that the illustrations be shown at 6 per cent and 10 per cent annual rate of return and though, in reality, the return could be much more than this, it is best to use these figures as guides for your financial plan.
A.R. Rahman is one of my favourite composers because he knows when to use Daler Mehndi and when to use Yesudas. He goes by the need of the song and hence the melody has longevity. So, don't buy a cover because your neighbour, whose needs are different from yours, has bought it. Buy only according to your own need.
Source:http://inhome.rediff.com/money/2008/jan/03insure.htm
Typically, your needs would be any or all of protection, wealth accumulation, wealth maintenance and retirement. A few basic products meet these needs.
Pure Term Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. This is the most basic and cheapest life insurance.
Endowment Insurance. In this, an amount is paid out in the event of the death of the insured within a specific term, say 20 years. If the insured survives the policy term, an amount is also paid to him.
Whole Life Insurance. This is similar to endowment, except that the term is whole life.
Riders. These are options that can be taken along with the product you buy and provide protection against additional contingencies such as disability or dreaded diseases for a nominal extra charge.
So, how can these products help you plan for your needs?
Protection needs include protection against death, disability, and dreaded diseases. Products that are suitable for this need are term or whole life insurance with riders like critical illness, waiver of premium (WOP) or accidental death benefit (ADB). Wealth accumulation needs include saving for children's education, marriage and/or getting them settled. It also includes saving for one's retirement. Suitable products in this category are endowment, money back and whole-life plans.
Wealth maintenance need arises when you have accumulated some money and want to protect and grow it in a tax-favoured manner. Short-pay endowments, pensions, single premium policies or dump-ins cater to such a need.
Retirement need arises when an individual reaches a stage in life when he does not anticipate future inflows, but has to provide for a regular inflow out of the funds he has accumulated, without any worry. You could consider single pay/short pay pensions or immediate annuities for this. A flexible unit-linked endowment, structured with regular partial withdrawals could also be suitable.
Once you understand your need and the suitable products on offer, you have to decide whether to buy a unit-linked or a traditional policy. Traditional plans would generally have guarantees over the long term and, hence, are unique among financial products. Instead of working with projections or illustrations, you would have assured cash flows in your financial plan. Unit-linked plans are also an effective mechanism to plan for your financial freedom as they give you the option to decide where you want to invest your moneyequity or debt. However, they usually do not have any significant guarantee.
So, once you have decided on the need, the product and the mechanism, ensure the following before you sign on the dotted line:
1. Understand clearly how the suggested product fits your need.
2. Understand which part of the amount is guaranteed and which is not. This is required to be illustrated as per the regulator.
3. Do not accept illustrations based on historical returns of a fund; they do not guarantee future returns. The regulator has prescribed that the illustrations be shown at 6 per cent and 10 per cent annual rate of return and though, in reality, the return could be much more than this, it is best to use these figures as guides for your financial plan.
A.R. Rahman is one of my favourite composers because he knows when to use Daler Mehndi and when to use Yesudas. He goes by the need of the song and hence the melody has longevity. So, don't buy a cover because your neighbour, whose needs are different from yours, has bought it. Buy only according to your own need.
Source:http://inhome.rediff.com/money/2008/jan/03insure.htm
Life Insurance’s Split Annuities
Life insurance is not only a protection for your loved ones but also an investment. Annuities provide you with the possibility to obtain a source of income from a life insurance special contract by paying an insurance premium or premiums. That way within a single insurance policy the insurer protects himself by getting a possible source of funds in the event problems arise and his or her loved ones in case he or she dies.
A good example of a life insurance annuity contract uses would be: the taker pays a premium of $20,000 and in return at a certain date starts receiving $300 each month until he or she dies, $2000 for 15 years or death benefits if the insured dies prior the term of the annuity ends. Annuities have two well differenced time periods: the first period where the insured pays the premium or premiums and the second one when the insurance company pays out the agreed amounts.
What Is An Annuity?
An annuity is an agreement by means of which you receive cash payments from the insurance company or tax-deferred retirement income apart from the insurance payment in case of death that your loved ones will receive. There are different types of annuities each one with its particularities. These contracts can adapt to your personal situation thanks to the aforementioned differences.
For instance, if you are interested in investing you will be purchasing tax-deferred annuities that will mature with time. But if you are close to the time on your life when you are thinking about retirement you may be interested in obtaining a regular and secure income and thus opt for immediate annuities rather than tax-deferred annuities. As you can see, annuities are quite flexible and cover many different situations. There are also college annuities, charitable annuities, and the ones we are interested in: split annuities.
What Is a SPLIT Annuity
Split annuities combine immediate annuities with deferred annuities. This combination provides a bit of the benefits of both types and thus is useful for those who are interested in investing but still want to secure their future with a source of regular income at the time of retirement. Therefore with a split annuity you get an immediate and regular stream of cash for a period of time chosen by you which is the payment of principal plus interests of a portion of the premium paid. The rest of the money grows by accumulating the interests till it eventually reaches the original amount.
Example Of a SPLIT Annuity
Here is an example of what a split annuity can provide to you. Let’s say you contribute with $200,000 to a split annuity that is divided evenly: 50% to each portion of the annuity. The half that is deferred will accumulate interests that add up to the principal every year. The other half starts providing you an immediate income that consists on the principal plus an interest rate. Let’s say the immediate part period equals 10 years, you will receive almost $1420 a month (minus taxes). When the period ends, the other half will be close to reaching the original amount of the split annuity and you could start again.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=47895
A good example of a life insurance annuity contract uses would be: the taker pays a premium of $20,000 and in return at a certain date starts receiving $300 each month until he or she dies, $2000 for 15 years or death benefits if the insured dies prior the term of the annuity ends. Annuities have two well differenced time periods: the first period where the insured pays the premium or premiums and the second one when the insurance company pays out the agreed amounts.
What Is An Annuity?
An annuity is an agreement by means of which you receive cash payments from the insurance company or tax-deferred retirement income apart from the insurance payment in case of death that your loved ones will receive. There are different types of annuities each one with its particularities. These contracts can adapt to your personal situation thanks to the aforementioned differences.
For instance, if you are interested in investing you will be purchasing tax-deferred annuities that will mature with time. But if you are close to the time on your life when you are thinking about retirement you may be interested in obtaining a regular and secure income and thus opt for immediate annuities rather than tax-deferred annuities. As you can see, annuities are quite flexible and cover many different situations. There are also college annuities, charitable annuities, and the ones we are interested in: split annuities.
What Is a SPLIT Annuity
Split annuities combine immediate annuities with deferred annuities. This combination provides a bit of the benefits of both types and thus is useful for those who are interested in investing but still want to secure their future with a source of regular income at the time of retirement. Therefore with a split annuity you get an immediate and regular stream of cash for a period of time chosen by you which is the payment of principal plus interests of a portion of the premium paid. The rest of the money grows by accumulating the interests till it eventually reaches the original amount.
Example Of a SPLIT Annuity
Here is an example of what a split annuity can provide to you. Let’s say you contribute with $200,000 to a split annuity that is divided evenly: 50% to each portion of the annuity. The half that is deferred will accumulate interests that add up to the principal every year. The other half starts providing you an immediate income that consists on the principal plus an interest rate. Let’s say the immediate part period equals 10 years, you will receive almost $1420 a month (minus taxes). When the period ends, the other half will be close to reaching the original amount of the split annuity and you could start again.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=47895
Friday, January 4, 2008
The Best Way To Find Low Cost Insurance Is Online
Low cost insurance can be found with a specialist website and they can get you several quotes so you are able to take your time and look over them. There are many different types of insurance suitable for all occasions from insuring your life against death and giving your loved ones financial security to making sure you would be able to continue paying your mortgage if you were to lose your job with mortgage insurance.
Whichever type of insurance cover you want to take there will be terms and conditions and even exclusions in the policy which could mean additional costs or reasons which could stop you from making a claim on the insurance cover. You have to be very careful when it comes to payment protection as there are many exclusions in a policy so it is essential you do go over the policy with a fine tooth comb.
A specialist will be able to search the whole of the insurance marketplace for the lowest quotes for the type of cover you wish to take so that you can be assured you have got the best deal but they will need some information from you.
For example if you want home contents insurance you will have to carefully work out how much cover you wish to take as the repayments for the cover will reflect this.
However you do not want to be under insured, you should count everything in your home including clothing, electrical equipment and any other item of value you would need to replace.
The ranges of insurance cover policies are huge, you can take out an insurance policy to give your family financial security if you were to die, insure your pet or your income with payment protection. Whichever type of cover you are looking for you can get cheap insurance by going with a specialist website for your quotes.
source:http://www.bestsyndication.com/?q=010308_free_online_insurance_quote.htm
Whichever type of insurance cover you want to take there will be terms and conditions and even exclusions in the policy which could mean additional costs or reasons which could stop you from making a claim on the insurance cover. You have to be very careful when it comes to payment protection as there are many exclusions in a policy so it is essential you do go over the policy with a fine tooth comb.
A specialist will be able to search the whole of the insurance marketplace for the lowest quotes for the type of cover you wish to take so that you can be assured you have got the best deal but they will need some information from you.
For example if you want home contents insurance you will have to carefully work out how much cover you wish to take as the repayments for the cover will reflect this.
However you do not want to be under insured, you should count everything in your home including clothing, electrical equipment and any other item of value you would need to replace.
The ranges of insurance cover policies are huge, you can take out an insurance policy to give your family financial security if you were to die, insure your pet or your income with payment protection. Whichever type of cover you are looking for you can get cheap insurance by going with a specialist website for your quotes.
source:http://www.bestsyndication.com/?q=010308_free_online_insurance_quote.htm
SBI looking for JV partner for non-life insurance biz
State Bank (Q, N,C,F)* of India is planning to enter into a joint venture for its proposed foray into non-life insurance segment, reports Economic Times.
The bank has already invited expression of interest for this.
The joint venture partner is expected to bring in non-life insurance experience in developed and developing markets, relevant knowledge of product development, risk management and other systems, technology and underwriting best practices.
The group is already present in life insurance in partnership with French firm Cardif SA.
SBI is having a total business of more than USD 178 billion and operates through around 14,000 branches. It also has subsidiaries in mutual fund and merchant banking in the country.
source:http://www.myiris.com/newsCentre/newsPopup.php?fileR=20080104155403148&dir=2008/01/04&secID=livenews
The bank has already invited expression of interest for this.
The joint venture partner is expected to bring in non-life insurance experience in developed and developing markets, relevant knowledge of product development, risk management and other systems, technology and underwriting best practices.
The group is already present in life insurance in partnership with French firm Cardif SA.
SBI is having a total business of more than USD 178 billion and operates through around 14,000 branches. It also has subsidiaries in mutual fund and merchant banking in the country.
source:http://www.myiris.com/newsCentre/newsPopup.php?fileR=20080104155403148&dir=2008/01/04&secID=livenews
Insurers prosper, but face New Year’s challenges
Giving back to the economy
According to the Vietnam Insurance Association, the insurance market grew very fast last year. The total non-life insurance premium in the January-September period increased 30% over the same period 2006 (VND8.35 trillion), the highest level in five years. The total life insurance premium in this period grew by 12% year on year (VND9.5 trillion), the highest in three years.
In 2007, insurers offered several new services, including high-quality health insurance, credit insurance, liability insurance for businesspeople, pension insurance, etc. Presently, there are 720 non-life and 130 life insurance products offered in Vietnam.
Local insurers also provide many more added value services to their clients, for example free-of-charge rescue service, free vehicle repair service, free treatment service at reputed hospitals, etc.
This year, many insurance companies increased their capital to expand operations into other fields of business, for example banking, securities and finance. They now have over VND15 trillion total. The Vietnam Insurance Group (Bao Viet) has the highest, VND6.8 trillion.
Firms have invested nearly VND40 trillion ($2.5 billion) into the economy, of which, nearly 90% was buying government bonds and depositing in banks.
International competition
Phung Dac Loc, General Secretary of the Vietnam Insurance Association, said local insurers will have favorable conditions to develop in 2008 but they will face their toughest challenge so far. As of January 1, 2008, under WTO commitments, foreign insurers are allowed to provide compulsory insurance services like liability insurance for vehicle owners, explosion and fire insurance, etc.
Another difficulty is they have to reassess management and business operations to meet new regulations. For example, non-life insurance companies must increase their legal capital to VND300 billion; VND600 billion for life-insurance firms. They also have to use managers who meet certain conditions in terms of experience, training, etc.
The opening of the insurance market to foreign firms will make competition fiercer, Loc emphasized.
He said local insurers have never paid much attention to training. Big companies have set up their own training centers to educate employees; they also periodically send their managers abroad for additional training. Moreover, they apply modern technologies and have fewer procedural necessities for compensation.
source:http://english.vietnamnet.vn/reports/2008/01/762566/
According to the Vietnam Insurance Association, the insurance market grew very fast last year. The total non-life insurance premium in the January-September period increased 30% over the same period 2006 (VND8.35 trillion), the highest level in five years. The total life insurance premium in this period grew by 12% year on year (VND9.5 trillion), the highest in three years.
In 2007, insurers offered several new services, including high-quality health insurance, credit insurance, liability insurance for businesspeople, pension insurance, etc. Presently, there are 720 non-life and 130 life insurance products offered in Vietnam.
Local insurers also provide many more added value services to their clients, for example free-of-charge rescue service, free vehicle repair service, free treatment service at reputed hospitals, etc.
This year, many insurance companies increased their capital to expand operations into other fields of business, for example banking, securities and finance. They now have over VND15 trillion total. The Vietnam Insurance Group (Bao Viet) has the highest, VND6.8 trillion.
Firms have invested nearly VND40 trillion ($2.5 billion) into the economy, of which, nearly 90% was buying government bonds and depositing in banks.
International competition
Phung Dac Loc, General Secretary of the Vietnam Insurance Association, said local insurers will have favorable conditions to develop in 2008 but they will face their toughest challenge so far. As of January 1, 2008, under WTO commitments, foreign insurers are allowed to provide compulsory insurance services like liability insurance for vehicle owners, explosion and fire insurance, etc.
Another difficulty is they have to reassess management and business operations to meet new regulations. For example, non-life insurance companies must increase their legal capital to VND300 billion; VND600 billion for life-insurance firms. They also have to use managers who meet certain conditions in terms of experience, training, etc.
The opening of the insurance market to foreign firms will make competition fiercer, Loc emphasized.
He said local insurers have never paid much attention to training. Big companies have set up their own training centers to educate employees; they also periodically send their managers abroad for additional training. Moreover, they apply modern technologies and have fewer procedural necessities for compensation.
source:http://english.vietnamnet.vn/reports/2008/01/762566/
Why buy disability insurance?
New York - If you don't have dependents, you probably don't need life insurance. The other side of that coin, however, is that if you do have dependents, you do need life insurance to protect them in case anything happens to you. But almost as important, you need disability insurance if you become ill or injured.
According to the Insurance Information Institute, 43% of all people now aged 40 will suffer some long-term disability by age 65. Insuring yourself against such an event guarantees a future income of about 60% of your salary at the time you take out the policy if you use an employer-subsidised plan, or up to 80% if you buy a costlier private disability income policy.
Here, with research from the Motley Fool, are some of the advantages of going with the private policy:
Tax break
If you become disabled, the benefits you receive will be tax-free, as long as you paid the insurance premiums with after-tax money. (Benefits from employer-paid policies are subject to income tax.)
Not tied to your job
The policy won't be tied to your current job. This is key for people with entrepreneurial ambitions, since finding affordable disability insurance once you become self-employed can be very difficult.
Specialist protection
If you are a highly skilled, highly paid specialist - say a surgeon or a NASA scientist - you would be wise to seek disability insurance that locks in your income level. This more expensive class of policies is called own-occupation coverage as opposed to the more common and less expensive any-occupation option.
No cancelatoin of policy
Be sure the policy cannot be canceled. This guarantees that policy premiums cannot be altered as long as you pay them on time. Avoid "guaranteed renewable" and "return of premium" policies because they don't lock in premium costs.
No limited benefit term
Don't buy an accident-only policy or a policy with a limited benefit term (five or 10 years are common). Such policies are cheaper, but they do not cover the whole of your working life (that is, until age 65).
Protection from inflation
If you can afford it, a cost-of-living rider will protect your future benefits from the inflation. You might also want to increase your protected income level as your career advances.
Waiting period
The waiting period, before payments kick in, is akin to a car-insurance deductible. The more emergency savings you have, the longer you can wait for disability income and the lower your premiums will be.
Keep your eyes open
Watch for clauses that exclude pre-existing medical conditions or risky hobbies.
Go independent
And remember: buying long-term disability insurance has so many potential pitfalls that if you do decide to use a private policy, be safe and work with an independent insurance agent.
source:http://www.fin24.co.za/articles/default/display_article.aspx?ArticleId=1518-1786_2246374
According to the Insurance Information Institute, 43% of all people now aged 40 will suffer some long-term disability by age 65. Insuring yourself against such an event guarantees a future income of about 60% of your salary at the time you take out the policy if you use an employer-subsidised plan, or up to 80% if you buy a costlier private disability income policy.
Here, with research from the Motley Fool, are some of the advantages of going with the private policy:
Tax break
If you become disabled, the benefits you receive will be tax-free, as long as you paid the insurance premiums with after-tax money. (Benefits from employer-paid policies are subject to income tax.)
Not tied to your job
The policy won't be tied to your current job. This is key for people with entrepreneurial ambitions, since finding affordable disability insurance once you become self-employed can be very difficult.
Specialist protection
If you are a highly skilled, highly paid specialist - say a surgeon or a NASA scientist - you would be wise to seek disability insurance that locks in your income level. This more expensive class of policies is called own-occupation coverage as opposed to the more common and less expensive any-occupation option.
No cancelatoin of policy
Be sure the policy cannot be canceled. This guarantees that policy premiums cannot be altered as long as you pay them on time. Avoid "guaranteed renewable" and "return of premium" policies because they don't lock in premium costs.
No limited benefit term
Don't buy an accident-only policy or a policy with a limited benefit term (five or 10 years are common). Such policies are cheaper, but they do not cover the whole of your working life (that is, until age 65).
Protection from inflation
If you can afford it, a cost-of-living rider will protect your future benefits from the inflation. You might also want to increase your protected income level as your career advances.
Waiting period
The waiting period, before payments kick in, is akin to a car-insurance deductible. The more emergency savings you have, the longer you can wait for disability income and the lower your premiums will be.
Keep your eyes open
Watch for clauses that exclude pre-existing medical conditions or risky hobbies.
Go independent
And remember: buying long-term disability insurance has so many potential pitfalls that if you do decide to use a private policy, be safe and work with an independent insurance agent.
source:http://www.fin24.co.za/articles/default/display_article.aspx?ArticleId=1518-1786_2246374
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