Prospects of Insurance Sector in India

Insurance sector in India has become one of the most favoured investment destinations both for Indians and NRIs. India is the fifth largest insurance market among the globally emerging insurance economies. Growing interest towards insurance among people, innovative products and distribution channels are sustaining the growth of the insurance sector.

The various liberalization policies in the sector have opened the door for various private sector insurance companies. This increase in number of players has resulted in new products, better packaging, improved customer service, greater employment opportunities, etc.

Market Structure

There are 49 insurance companies operating in India as of September 2011. Out of which, 24 are in life insurance business, 24 in general insurance business, and remaining ones in re-insurance business. General Insurance Corporation of India (GIC) is the sole national re-insurer.

Growth Predictions

The Indian insurance sector is expected to grow at a rapid pace to reach around US$ 400 billion in premium income by 2020, according to a report released by an industry body and the Boston Consulting Group (BCG). As per the report, this would make India one of the top three life insurance and top 15 non-life insurance markets by 2020.

Career Prospects

There are number of career opportunities available in Indian insurance sector. Insurance companies have job openings in various fields such as marketing, distribution, actuarial, underwriting, operations and investing departments.

A graduate in the area of finance, marketing, or sales can easily get the job in the insurance companies. They can earn anything between Rs. 8000 - 20,000 per month in the starting months. Most of the companies offer a very good remuneration and heavy incentives to retain the qualified candidates.

Candidates can also take help of various recruitment agencies operating in India for searching the right job. These job consultancies work on the behalf of companies having job requirements. The job agencies offer decent job opportunities in various sectors with top most companies and a good salary package according to candidate’s profile.

Recent Initiatives
The Finance Minister has approved a proposal to raise foreign direct investment (FDI) in insurance and pension sectors to 49 percent from the existing 26 percent to encourage more investment in the sector.

Road Ahead
the Indian insurance industry is booming, with several national and international players competing and increasing operations in the country. The Mckinsey report on the outlook for insurance sector in 2012 predicts an exponential growth for the insurance industry in 2012 due to contributing factors such as increasing household incomes, higher premiums, growing technology, liberal policies, etc. This will result in more
career opportunities in the coming years.

India is also expected to become the third largest life insurance market by 2015, after China and Japan. The life insurance sector in India may see a major jump of 13-14 per cent from fiscal year 2010 to 2015 to reach USD 110 billion by 2015, according to a report by McKinsey.

[Source: http://blogs.siliconindia.com/abcconsultants/Career/Prospects-of-Insurance-Sector-in-India-bid-z2yMlIn949934343.html]

Why do working women need life insurance?

Women today are more empowered socially and are working hand in hand with their husbands to provide for their needs and build a better future for their children. More than two thirds of women in India are breadwinners or co-breadwinners in the family. But when it comes to their financial planning they are happy to let the men in the family take over.

Unfortunately, the attitude towards money is still pretty much the same as it used to be decades back as far as the ladies of the house are concerned. Working women must realize that if they are sharing every other responsibility in the family, they must get to some smart financial planning as well that can help them secure their lives against uncertainties that may affect their financial status. Life insurance plans are the vehicle that can be used for savings as well as investments. If you are not convinced yet as to why to need life insurance cover that is separate from that of your husband, here is a lowdown on the things life insurance can achieve for you:

Protection: 
Since you share the responsibilities of your families with your spouse, you must share the responsibility of protecting your family, dependent children and elderly parents. You do not want to be morbid, but getting life insurance cover for yourself gives you the mental peace of having protected the future of your family, in case something happens to you.

Helping with household expenses:
Women are usually the ones controlling the finances of the family. It is therefore likely that you need to think about expenses such as putting your children through school, putting them for other vocational classes or things like putting money aside for a wedding in the family. Planning in advance and getting the right kind of insurance plans will help you put your money aside for such kind of expenses.

Creating wealth over the long term
if you have specific goals in mind such as buying property or beginning a small business in the future you can invest in life insurance policies that will mature around the time horizon with such goals in mind. Investment oriented life insurance policies can offer you the benefits of protection, savings and even give you tax benefits. 

Retirement goals

If you are feeling secure because your spouse has invested in a retirement policy, we urge you to wake up and smell the coffee! Depending on one person's retirement savings will be difficult considering the fact that you will have to make the transition from a double income lifestyle to a single income one. Your needs may be reduced, but do bear in mind that old age comes with mounting medical expenses too that does not come cheap.

Thus as you can see, life insurance is a must for you as a woman and it is has nothing to do with feminism! It’s as plain as taking care of your individual financial needs and continuing to be independent. So instead of buying the next range of gadgets, clothes, shoes or cookware, go ahead and do some online shopping, this time for insurance plans!

[Source:  http://economictimes.indiatimes.com/why-do-working-women-need-life-insurance/articleshow/47367582.cms]

There is a Minimum Sum Assured in Life Insurance Policies

When you buy a life insurance policy, the most important aspect is choosing the sum assured. Sum assured is the amount that your beneficiary will get if you die during the policy term. Therefore, choosing a sum assured is very important because through insurance you create a financial cushion for your family. 

According to one thumb rule, quoted by many financial planners, this sum assured should be at least 12-15 times your annual expenses or 8-10 times your annual income. If you have a debt, such as a home loan, factor in that too when calculating your cover.

While it is easy and cheapest to choose a sum assured when buying a term plan—the cover is several multiples of the premium paid—other insurance products that also double up as investment products give you fixed sum assured or a range within which you can choose.

Insurance Regulatory and Development Authority (Irda) has mandated a minimum level of insurance in these products so that they don’t end up being pure investment products. The minimum cover depends upon your policy term and age.

POLICY TERM OF 10 YEARS+

The minimum sum assured or the death benefit on a life insurance policy shall not be less than 10 times the annual premium for individuals below 45 years of age. And for individuals above 45 years of age, minimum sum assured is 7 times the annual premium. But rules mandate that death benefit given to the beneficiary at any time during the policy term should not be less than 105% of the premiums paid. 

This means if a policyholder was paying a premium of Rs.10,000 for a sum assured of Rs.1 lakh, and dies, say, in the 15th policy year (policy term being 20 years), the insurer will pay Rs.1.58 lakh and not Rs.1 lakh (105% of Rs.1.5 lakh paid as premiums so far).

POLICY TERM OF LESS THAN 10 YEARS

For policies with a term of less than 10 years, the minimum sum assured is five times the annual premium for all individuals. Again, the sum assured or the death benefit at any given point in time would not be less than 105% of all the premiums paid. This means if a policyholder pays a premiums ofRs.10,000 for a sum assured of Rs.50,000, and dies, say, in the sixth policy year, the insurer will pay Rs.63,000 (105% of Rs.60,000 paid as premiums so far).

Irda relaxed the limit for regular insurance policies with a shorter tenor because insurers expressed difficulty in designing policies with shorter tenors with a minimum sum assured limit of 10 times the annual premium since it meant more costs and affected returns.

TAX IMPLICATIONS

If you bring home a sum assured of less than 10 times the annual premium, you will not be entitled to tax benefits. Tax deduction benefits have increased to Rs.1.5 lakh under section 80C. Under section 10(10D), maturity proceeds would be tax-free if the premium is not more than 10% of the sum assured or the sum assured is at least 10 times the premium.

[Source: http://www.livemint.com/Money/Pio57s15nRYI8tb0Yb9HaM/There-is-a-minimum-sum-assured-in-life-insurance-policies.html ]