Life insurance companies are shying away from launching new pension plans following new norms, which mandate that all unit-linked pension plans will have to offer a guaranteed return of 4.5(%) per cent. Most life insurance companies have not launched any new unit-linked pension plans after the new ULIP guidelines came into effect from September 1. Life Insurance Corporation of India's Pension Plus is the only unit-linked pension plan now on offer in the market.
Companies said the guaranteed return regime would force them to move away from equities and increase debt exposure, which may affect profitability.
It was launched on September 2. Pension products constitute 20-25(%) per cent of the total premium collected by the industry. During the last financial year (2009-10) around Rs 65,000 crore came from sale of pension products --- representing a quarter of the total premium collection of Rs 2,61,025 crore.
Firms also said that to provide a guaranteed return of 4.5(%) per cent, companies would have to earn about 6.75(%) per cent to 7(%) per cent.
“This guaranteed (4.5 per cent) return is valid on maturity date for policies where all due premiums are paid. Mortality and, or health cover could be offered along with the pension/annuity products as riders, giving enough flexibility to policyholders to choose covers of their choice,” the IRDA guidelines said.
Insurance companies said an underdeveloped long-term debt market offers limited options for them to park their money that would ensure a steady risk-free return for tenures extending up to 30 years.
“For long term investments, the best returns can be earned through equity but with the guarantee, life insurance companies would have to invest in debt instruments and that pose some problems,” a Max New York Life spokesperson told Hindustan Times.
“We are evaluating the pension market in the light of the new regulation and seeing when we can launch a pension product,” Yateesh Srivastava, chief marketing officer, Aegon Religare Life Insurance however said.
An annualised return of 4.5(%) per cent does not compare well with other long-term savings instruments. A savings bank account offers 3.5 per cent, while the employees’ provident fund raised interest rates to 9.5 per cent for 2010-11. A PPF subscriber earns 8(%) per cent per annum.
“At 4.5 per cent guaranteed return (for unit-linked pension plans) even customers may not find it attractive,” a senior executive of a Mumbai-based life insurance company said, requesting anonymity
Tuesday, September 21, 2010
Monday, September 13, 2010
Pension Plus scheme with guaranteed return | LIC
Life Insurance Corporation (LIC) plans to launch a unit-linked pension scheme – LIC Pension Plus.
Unique Features:
• Minimum rate of interest of 4.5% is guaranteed, after maturity, one-third of the corpus can be withdrawn as a lumpsum amount.
• The remaining two-thirds would be paid in either monthly or half-yearly installments after maturity, as decided by the policy holders.
• The Pension Plus policy is in line with the Insurance Regulatory and Development Authority's latest ULIP guidelines.
The Pension Plus plan Options:
1. Debt fund and
2. Mixed fund.
Under the debt fund, not less than 60% of the corpus would be invested government securities, while the remaining 40% would go into money market instruments.
Under the mixed fund plan, the investment in government securities would not be less than 45%, while 40% would go into money market instruments and 15-35% into equities.
Eligibility:
• This insurance plan can be subscribed by any one between 18-75 years of age and,
• The minimum maturity period is 10 years.
Unique Features:
• Minimum rate of interest of 4.5% is guaranteed, after maturity, one-third of the corpus can be withdrawn as a lumpsum amount.
• The remaining two-thirds would be paid in either monthly or half-yearly installments after maturity, as decided by the policy holders.
• The Pension Plus policy is in line with the Insurance Regulatory and Development Authority's latest ULIP guidelines.
The Pension Plus plan Options:
1. Debt fund and
2. Mixed fund.
Under the debt fund, not less than 60% of the corpus would be invested government securities, while the remaining 40% would go into money market instruments.
Under the mixed fund plan, the investment in government securities would not be less than 45%, while 40% would go into money market instruments and 15-35% into equities.
Eligibility:
• This insurance plan can be subscribed by any one between 18-75 years of age and,
• The minimum maturity period is 10 years.
Monday, June 7, 2010
Reliance Life launches retirement plan with guaranteed income
Reliance Life Insurance Company (RLIC) on Monday announces the launch of Reliance Life Traditional Golden Years Plan, a non-linked pension plan joined with guaranteed returns.
The launch was announced by Malay Ghosh, executive director and president, Reliance Life Insurance, in Mumbai on Monday.
“The Reliance Life Traditional Golden Years Plan is the first traditional retirement plan that offer advance guaranteed returns on investments, time-on-time, as a key differentiator in the pension market. It helps policyholders keep systematically and make the much-needed corpus to make a worry-free retirement life,” said Mr.Ghosh, adding, “This is the only traditional pension plan in the market which caters to the require for guaranteed returns at retirement. With Reliance Life Traditional Golden Years Plan, we are providing an easy yet successful gateway for customers to make their retirement fund for a financially-secured retired life.”
Reliance Life Traditional Golden Years Plan is a regular premium Retirement plan that provides guaranteed return, which is confirmed at the commencement of every financial year during the product term. The buildup rate for financial year 2010-11 is 7.75(%) per cent per annum. “The minimum guaranteed growth rate will not be less than the savings bank deposit interest rate, as confirmed by the Reserve Bank of India,” he said.
The Reliance Life Traditional Golden Years Plan is one of the little pension products, which offers a separate account - Accumulation Account - for each policyholder to keep their guaranteed investment returns for every year and release all charges made by the insurer. “The rationale behind maintaining the separate account is to show intelligibility,’’ said Mr Ghosh.
The new retirement plan is available for people across different age groups starting from 18 years till 75 years with all payment options available -- monthly, quarterly, half-yearly and yearly. However, the vesting age varies between 45 and 85 years.
Apart from the maturity and tax benefits, Reliance Life Traditional Golden Years Plan also offers tax-free commutation up to one third of fund value at the vesting age and the customer can purchase an annuity with the balance amount from RLIC or any service contributor.
Now you can calculate your retirement corpus Click Here
Retirement Calculator
The launch was announced by Malay Ghosh, executive director and president, Reliance Life Insurance, in Mumbai on Monday.
“The Reliance Life Traditional Golden Years Plan is the first traditional retirement plan that offer advance guaranteed returns on investments, time-on-time, as a key differentiator in the pension market. It helps policyholders keep systematically and make the much-needed corpus to make a worry-free retirement life,” said Mr.Ghosh, adding, “This is the only traditional pension plan in the market which caters to the require for guaranteed returns at retirement. With Reliance Life Traditional Golden Years Plan, we are providing an easy yet successful gateway for customers to make their retirement fund for a financially-secured retired life.”
Reliance Life Traditional Golden Years Plan is a regular premium Retirement plan that provides guaranteed return, which is confirmed at the commencement of every financial year during the product term. The buildup rate for financial year 2010-11 is 7.75(%) per cent per annum. “The minimum guaranteed growth rate will not be less than the savings bank deposit interest rate, as confirmed by the Reserve Bank of India,” he said.
The Reliance Life Traditional Golden Years Plan is one of the little pension products, which offers a separate account - Accumulation Account - for each policyholder to keep their guaranteed investment returns for every year and release all charges made by the insurer. “The rationale behind maintaining the separate account is to show intelligibility,’’ said Mr Ghosh.
The new retirement plan is available for people across different age groups starting from 18 years till 75 years with all payment options available -- monthly, quarterly, half-yearly and yearly. However, the vesting age varies between 45 and 85 years.
Apart from the maturity and tax benefits, Reliance Life Traditional Golden Years Plan also offers tax-free commutation up to one third of fund value at the vesting age and the customer can purchase an annuity with the balance amount from RLIC or any service contributor.
Now you can calculate your retirement corpus Click Here
Retirement Calculator
Thursday, June 3, 2010
Insurers drive pension products this month...
Anticipating a drop in sales of pension products after new guidelines boot in from July, life insurance companies are creation a strong ground to sell these this month.
For the country’s biggest insurer, Life Insurance Corporation (LIC), Market Plus, a unit linked pension plan, contributed 42(%) per cent to the new business premium income in 2009-10. It garnered Rs 18,155 crore for the corporation.
We have asked our agents to sell Market Plus during the after that one month. It is one of our best-selling products. It will lose its magic after the new guideline comes into force and the product is simplified,” said LIC Managing Director D K Mehrotra.
“We would like pension to account for at least 10(%) per cent of our total business in this financial year. Last year, 50(%) per cent of our new business premium came from pension. Since the products will be efficient, we are pushing sales now. Also, the first two months have been lean. We want to realize the target in June,” said K Sahay, CEO, Star Union Daiichi Life Insurance.
The chief executive of a large insurance company said now it would be hard to write pension plans for senior citizens. “We have policies for people up to 65 years. It will not be sustainable to offer pension to these people if life cover is bundled with pension. We have asked agents to raise sales in June in the senior citizen category,” he said.
The regulator is contemplating creation either a life cover, a health cover or a minimum guarantee compulsory with pension plans. This will be helpful for senior citizens as insurers hesitate to write health or life cover for them. The products will also become costly.
In its latest circular, Irda mandated life cover with unit-linked pension products. It also banned partial withdrawals during the policy term. Moreover, policyholders have to compulsorily buy annuity at the time of maturity or surrender, with two-third of the fund accumulated. The rest can be withdrawn.
Insurers like Aviva Life Insurance say the changes will make the product more gorgeous. “Our target segment for pension is not 50-55 years but 20-30 years. This will lead to medical underwriting, which will be helpful for both longevity and annuity risk,” said Aviva Life MD and CEO T R Ramachandran.
For the country’s biggest insurer, Life Insurance Corporation (LIC), Market Plus, a unit linked pension plan, contributed 42(%) per cent to the new business premium income in 2009-10. It garnered Rs 18,155 crore for the corporation.
We have asked our agents to sell Market Plus during the after that one month. It is one of our best-selling products. It will lose its magic after the new guideline comes into force and the product is simplified,” said LIC Managing Director D K Mehrotra.
“We would like pension to account for at least 10(%) per cent of our total business in this financial year. Last year, 50(%) per cent of our new business premium came from pension. Since the products will be efficient, we are pushing sales now. Also, the first two months have been lean. We want to realize the target in June,” said K Sahay, CEO, Star Union Daiichi Life Insurance.
The chief executive of a large insurance company said now it would be hard to write pension plans for senior citizens. “We have policies for people up to 65 years. It will not be sustainable to offer pension to these people if life cover is bundled with pension. We have asked agents to raise sales in June in the senior citizen category,” he said.
The regulator is contemplating creation either a life cover, a health cover or a minimum guarantee compulsory with pension plans. This will be helpful for senior citizens as insurers hesitate to write health or life cover for them. The products will also become costly.
In its latest circular, Irda mandated life cover with unit-linked pension products. It also banned partial withdrawals during the policy term. Moreover, policyholders have to compulsorily buy annuity at the time of maturity or surrender, with two-third of the fund accumulated. The rest can be withdrawn.
Insurers like Aviva Life Insurance say the changes will make the product more gorgeous. “Our target segment for pension is not 50-55 years but 20-30 years. This will lead to medical underwriting, which will be helpful for both longevity and annuity risk,” said Aviva Life MD and CEO T R Ramachandran.
Wednesday, May 26, 2010
Reliance Life launch investment plan among guaranteed return
ADAG group company Reliance Life Insurance on Tuesday launched a traditional investment plan that provides life protection and regular savings with yearly guaranteed investment returns.
"The Reliance Life Traditional Investment Insurance Plan combines life protection and regular savings with full intelligibility and flexibility features and advance guaranteed returns," Reliance Life Insurance President Malay Ghosh said in a statement.
He said, it is in row with the company's strategy to continue a robust portfolio of traditional plans and to offer best-in-class products to its customers.
The new scheme is a regular premium plan contribution guaranteed investment returns, which are confirmed at the beginning of every financial year during the product term, he said, adding up that the accumulation rate for the 2010-11 financial year is 7.75(%) percent.
He added, the minimum guaranteed growth rate will not be less than the savings bank deposit interest rate as declared by the Reserve Bank.
The plan is available to children aged less than 30 days and senior citizens aged up to 70 years, with monthly, quarterly, half-yearly and yearly payment option available.
Besides the maturity and tax benefits, the plan also offers a health-related cover, which will pay a lump sum to the customer for as many as 33 particular surgeries.
Know more about investment plan. Click here
Unit linked Pension Plan
LIC Pension Plan
ICICI Pension Plan
"The Reliance Life Traditional Investment Insurance Plan combines life protection and regular savings with full intelligibility and flexibility features and advance guaranteed returns," Reliance Life Insurance President Malay Ghosh said in a statement.
He said, it is in row with the company's strategy to continue a robust portfolio of traditional plans and to offer best-in-class products to its customers.
The new scheme is a regular premium plan contribution guaranteed investment returns, which are confirmed at the beginning of every financial year during the product term, he said, adding up that the accumulation rate for the 2010-11 financial year is 7.75(%) percent.
He added, the minimum guaranteed growth rate will not be less than the savings bank deposit interest rate as declared by the Reserve Bank.
The plan is available to children aged less than 30 days and senior citizens aged up to 70 years, with monthly, quarterly, half-yearly and yearly payment option available.
Besides the maturity and tax benefits, the plan also offers a health-related cover, which will pay a lump sum to the customer for as many as 33 particular surgeries.
Know more about investment plan. Click here
Unit linked Pension Plan
LIC Pension Plan
ICICI Pension Plan
Monday, May 24, 2010
Plan for retirement as early as doable
It is very important to think about and pension plan for life after retirement. Individuals should start planning for their retirement fund as early as possible. Investing early gives time to your investments to produce by way of compounding. Also, one can invest in instruments with a higher risk-return percentage.
Considering factors such as increase in average natural life, financial commitments, higher cost of living, higher cost of medicine, opposition, nuclear families etc, it becomes yet more important to start early so that you become totally independent in your golden years.
Although it is important that one should start retirement planning as early as possible, there is no hard and fast rule on when one should start. The point is that you should not delay it without cause. Those who have not yet thought about retirement planning can start from these days.
Some feel that retirement planning is important after the middle age, say around 40 years. In fact, pension planning at a later age becomes difficult as there won't be much time to construct and develop a good corpus to sustain a high standard of retired life. But, it's better to plan now even if you could not start early sufficient.
More Information about retirement plan. Click here
LIC pension Plan
ICICI Pension Plan
Considering factors such as increase in average natural life, financial commitments, higher cost of living, higher cost of medicine, opposition, nuclear families etc, it becomes yet more important to start early so that you become totally independent in your golden years.
Although it is important that one should start retirement planning as early as possible, there is no hard and fast rule on when one should start. The point is that you should not delay it without cause. Those who have not yet thought about retirement planning can start from these days.
Some feel that retirement planning is important after the middle age, say around 40 years. In fact, pension planning at a later age becomes difficult as there won't be much time to construct and develop a good corpus to sustain a high standard of retired life. But, it's better to plan now even if you could not start early sufficient.
More Information about retirement plan. Click here
LIC pension Plan
ICICI Pension Plan
Friday, May 21, 2010
HC directs LIC to improve pension
Rajasthan High Court today directed the Life Insurance Corporation (LIC) of India to execute a decision by its board to revise the pension and DA payable to its retired employees in peace with successive revisons of the payscales of its in-service staff since 1986.
A single judge bench of Justice Munishwar Nath Bhandari of the high court asked the LIC to take instant steps for accomplishment of a 2001 resolution of its board by which it had decided to revise the pension and DA of its retired employees equivalent to the revisions of the payscales of its in-service staff hat took place in 1986, 1993, 1997 and 2002.
The court's order came on the petition of Krishan Murari Lal Asthan, the General Secretary of the Retired Employees Federation Association of LIC.
For More Information about Insurance Policy
LIC Pension Plan
A single judge bench of Justice Munishwar Nath Bhandari of the high court asked the LIC to take instant steps for accomplishment of a 2001 resolution of its board by which it had decided to revise the pension and DA of its retired employees equivalent to the revisions of the payscales of its in-service staff hat took place in 1986, 1993, 1997 and 2002.
The court's order came on the petition of Krishan Murari Lal Asthan, the General Secretary of the Retired Employees Federation Association of LIC.
For More Information about Insurance Policy
LIC Pension Plan
Monday, February 1, 2010
Think wisely about your Retirement
We all dream of a beautiful life after retirement but the question is - Are we properly planning for it? The answer is - ‘NO’.
To make our retired life self dependent and beautiful, we all have to start saving as early as we can. Retirement does not mean passing time at Haridwar or lazing around on a beach with nothing on your mind but to be able to sustain living with returns but without really working for it (as we have already planned, worked and saved). We have to even think about the uncertainty and unforeseen medical expenses which may arise in future.
Need For Pension Plan:
• People are living longer, thanks to health-care innovations and working life for them is decreased.
• Tight-knit extended families are no longer the social norm, so older folks can't count on being supported by their descendants.
• No adequate provision for pension savings from employers.
After understanding the retirement needs now we should look how much, when and where??
Retirement planning is a reverse calculation of what life style you expect after you retire and what is amount that you have to invest for reaching that value.
Suppose you are 25 rights know and your current annual expenses are Rs. 3 lacs. You are planning to retire at 55, so, value for this 3lac will be 17,23,000(approx) after 30 years at an average inflation rate of 6%. And to earn the same, as your regular source of income, you need to have rs. 21538000 (approx) in your bank considering pension rate to be 8 % p.a.
So, to have this amount in your a/c after 30 yrs., you need to invest at least rs.9900 monthly considering returns on investments to be 10% annually.
To calculate your retirement corups please Click this link - Retirement Calculator.
How much?
This was a simple illustration to make you understand that you need to keep current annual expenses, retirement age, rate of returns that you are expecting from your investments, while calculating the investment amount.
When?
As span decreases, the value you need to contribute, increases. Therefore, early you start your investments; sooner you reach your desired returns. Because its’ all game of compounding returns.
Where?
Retirement planning is always a long term investments, where you need to maintain diversification in your investments. You should choose an investment option where you get moderate returns up to at least average 10 % because your growth should always be higher than average inflation rate.
If you are choosing mutual fund or ULIPs, you should look flexibility and option to maintain your investments according to you risk taking capacity from time to time.
Long term investments, which provide you the flexibility in investments, are always a wise choice.
To make our retired life self dependent and beautiful, we all have to start saving as early as we can. Retirement does not mean passing time at Haridwar or lazing around on a beach with nothing on your mind but to be able to sustain living with returns but without really working for it (as we have already planned, worked and saved). We have to even think about the uncertainty and unforeseen medical expenses which may arise in future.
Need For Pension Plan:
• People are living longer, thanks to health-care innovations and working life for them is decreased.
• Tight-knit extended families are no longer the social norm, so older folks can't count on being supported by their descendants.
• No adequate provision for pension savings from employers.
After understanding the retirement needs now we should look how much, when and where??
Retirement planning is a reverse calculation of what life style you expect after you retire and what is amount that you have to invest for reaching that value.
Suppose you are 25 rights know and your current annual expenses are Rs. 3 lacs. You are planning to retire at 55, so, value for this 3lac will be 17,23,000(approx) after 30 years at an average inflation rate of 6%. And to earn the same, as your regular source of income, you need to have rs. 21538000 (approx) in your bank considering pension rate to be 8 % p.a.
So, to have this amount in your a/c after 30 yrs., you need to invest at least rs.9900 monthly considering returns on investments to be 10% annually.
To calculate your retirement corups please Click this link - Retirement Calculator.
How much?
This was a simple illustration to make you understand that you need to keep current annual expenses, retirement age, rate of returns that you are expecting from your investments, while calculating the investment amount.
When?
As span decreases, the value you need to contribute, increases. Therefore, early you start your investments; sooner you reach your desired returns. Because its’ all game of compounding returns.
Where?
Retirement planning is always a long term investments, where you need to maintain diversification in your investments. You should choose an investment option where you get moderate returns up to at least average 10 % because your growth should always be higher than average inflation rate.
If you are choosing mutual fund or ULIPs, you should look flexibility and option to maintain your investments according to you risk taking capacity from time to time.
Long term investments, which provide you the flexibility in investments, are always a wise choice.
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