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Trichy, Tamil Nadu, India
Working as an Assistant in LIC of India, Rockfort BO, Trichy, TN. Having a strong belief that LIC's welfare is our welfare and always trying to work towards that. Also functioning as an office bearer of AIIEA Thanjavur Division.

Thursday, February 18, 2010

LIC looks to mop up Rs 18,000 cr from new Ulip plan

The country’s largest life insurer, Life Insurance Corporation of India (LIC), is aiming to collect Rs 18,000 crore through its new close-ended unit linkedinsurance plan (Ulip) — its highest target since it launched the Jeevan Astha scheme in December 2008.
Hoping to cash in on the demand for tax-saving options ahead of the close of the financial year, LIC has launched Wealth Plus, a Ulip guaranteeing returns equal to the highest net asset value (NAV) during seven years, while the policy term is eight years. It is available in two premium payment options — a term of three years and single premium.
“This product is available for a limited period and we will close it after the target is met,” said LIC Managing Director DK Mehrotra.
The life insurer had set itself an ambitious target of Rs 25,000 crore for its close-ended scheme Jeevan Astha launched last year. However, collections fell short of expectations, as LIC only managed to collect Rs 10,000 crore.
Insurance companies do around 40 per cent of their total annual business in the last three months of a financial year. “We were waiting for the stock market to correct. Keeping in view the volatility in the market, we have launched this product which guarantees the highest NAV of seven years,” added Mehrotra.
Life insurance companies have revised their existing product structures and lowered charges from January 1, as mandated by the insurance regulator. They have also come up with NAV-guaranteed products in the current financial year.
“With LIC coming up with such a product, many insurance companies will see a decline in the estimated new business,” said a senior executive of a life insurance company.
Wealth Plus is a close-ended product with minimum age of entry being 10 years and the maximum 65 years. While the policy term is eight years, the premium paying term of the policy is three years. While the minimum premium is Rs 20,000, there is no cap on the maximum premium. Premium allocation charge for single premium up to Rs 4 lakh is 5 per cent, and above Rs 4 lakh, it is 4.5 per cent. For regular premium, allocation charges are 12 per cent for premium from Rs 20,000 to Rs 2 lakh, and thereafter it is 2.5 per cent. The fund management charge is 1 per cent, which is capped at 1.25 per cent by the regulator.
Courtesy: ET,14.2.2010

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