LIC launches Unit Linked Health Insurance plan

Posted on February 4, 2008. Filed under: Insurance |

In the morning when I started reading the day’s newspaper one advertisement which caught my attention was and advertised of “Unit Linked Health Insurance” Plan from Life Insurance Corporation of India.

LIC is today lauching nationally the Unit Linked Health Insurance plan. I think it is the first time a health insurance plan is launched as a unit linked policy. The policy provides for Hospitalisation Cash benefit and Surgery Benefit. The administration and other charges are little high.

  • LIC is planning to invest between 10% to 50% of the insurance premium in equity market.
  • 30% of the first year premium would be taken as adminstration and other charges.
  • 6% of the premium would be taken from the second year as administration charges.

The details available at this moment are very sketchy.

Came across this blog with some information on this policy. Click here to view further details.

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Who is going to be the biggest investor in the Indian Stock Markets?

Posted on January 11, 2008. Filed under: Insurance |

We all immediately come up with the answer saying, it is FII (Foreign Institutional Investors). It is neither FII’s or the Domestic Mutual Funds. The answer is: Indian Insurance companies are going to be the biggest investors in the Indian equity markets. It is hard to believe but true. Look at the facts below:

The major Indian Insurance companies like LIC, ICICI Prudential and Bajaj Allianz have sizeable investments in the Indian equity markets. Business Standard reported yesterday that LIC of India has plan to invest close to Rs100,000 crore (USD25 Billion) in 2008. ICICI Prudential manages investments close to Rs28,000 crores (USD7 Billion) and Bajaj Allianz has equity exposure close to Rs7000 crores (USD1.75 Billion). Compare this to the total FII inflows of USD18 Billion in 2007. Insurance companies get bulk of their inflows during the first 3 calendar months in India because tax payers rush to invest in tax saving insurance products. This year they expect to continue in the same way.

It is for real that domestic money is entering the Indian Equity markets in a big way. As more and more people start buying insurance products linked to equities (like ULIP’s), the Insurance companies would continue to be the biggest investor in the Indian equities market. Insurance companies typically buy when there are huge falls and this has helped the Indian equity markets to recover from all the lows consistently during the last couple of years. With the Government allowing Trusts and Provident Fund to invest in equity markets, more and more domestic money is entering the Indian Equity markets.

What does it signify for ordinary investors like me?
1. Continued bull run – Till such time the Indian insurance companies are allowed to invest in equities outside India, they would be focussing only on the Indian markets which may lead to continued bull run on the bourses. Sooner than expected, Government may allow Insurance companies to invest in equities outside India to offset the bulging Foreign Exchange reserves, I guess.
2. More FII inflows – With the huge domestic money chasing stocks, more FII’s would get attracted to the Indian market and it will accentuate the bull run with further inflows from outside the country.
3. Quality Mid-cap and Small-cap stocks would continue to be in demand.

I think the bull run in the Indian Equity markets would continue for few more years unless there are major issues derailing the Indian economy.

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Current issue of Outlook Money

Posted on December 6, 2007. Filed under: Insurance |

Current issue of the fortnightly magazine “Outlook Money” is a special issue focussing on Insurance Covers. It has detailed analysis of how each and every insurance plan works, which is the cheapest insurance available in respect of term life cover, retirement plans, ULIPs, Children Plan etc., It gives a good idea about insurance and it is a collectors copy. In India, it costs Rs20. I think the current fortnight’s copy would be available on the web free after Dec 15.

Click here to access Outlookmoney web edition after Dec 15 or any of the earlier editions. Read and enjoy!!!

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