Why do Indians prefer insurance to mutual funds?
2 years, 5 months ago

Why do Indians prefer insurance to mutual funds?

Live Mint  

The Reserve Bank of India published household financial savings data based on select indicators last month. In 2020-21, the new business premium that came in from selling term insurance policies stood at just 0.33% of LIC’s new business premium during the year. Given that LIC sold nearly three-fourths of all new individual policies sold in India in 2020-21, what’s true for LIC is also true for insurance companies on the whole. So, for someone looking to invest indirectly in stocks, it makes more sense to invest in an equity mutual fund and buy a term insurance policy separately instead of investing in a Ulip. Data from the red herring prospectus filed by LIC before its initial public offering tells us that in 2020-21, the median commission paid by the top five insurance companies stood at 4.4%, with the median commission on the new business premium standing at 9.2%.

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History of this topic

Life insurance sector: One industry, diverse fortunes
1 month ago

Life insurance sector: One industry, diverse fortunes

Live Mint  

India’s insurance sector is the tenth largest in the world, and is expected to reach $170 billion by 2027. The largest players in the Indian life insurance sector today include LIC, SBI Life, HDFC Life, ICICI Prudential Life, and Max Financial Services. Regulations have hit different players differently Be it disincentivizing insurance policies via tax changes which has reduced the …

100% FDI in insurance a positive for the sector but not for its stocks
1 month, 3 weeks ago

100% FDI in insurance a positive for the sector but not for its stocks

Live Mint  

The government in its Union Budget for 2025-26 proposed raising the foreign direct investment limit for India’s insurance sector to 100% from 74%—meeting a long-awaited industry demand. The simple reason for that being that well-established life insurance companies in India don’t need the expertise of foreign players through strategic stake sale any longer. Standard Life, New York Life Insurance Co., …

Is LIC policy a good investment? Kirtan Shah’s LinkedIn post sparks debate on insurance vs investment
2 months, 3 weeks ago

Is LIC policy a good investment? Kirtan Shah’s LinkedIn post sparks debate on insurance vs investment

Live Mint  

Life insurance provides financial security to a family in the event of the unfortunate death of the policyholder. Kirtan Shah, Co-founder and CEO of FPA Edutech, an accounting and finance ed-tech company, has shared the consequences of opting for life insurance as an investment tool. Shah's LinkedIn Post In a post on LinkedIn, Shah explained the returns on a LIC …

A Guide for New-age Investors to Master Stock Market Strategies
11 months, 3 weeks ago

A Guide for New-age Investors to Master Stock Market Strategies

The Quint  

ULIPs vs Direct Stock Market Investments ULIPs offer a unique combination of life insurance coverage and investment opportunities. On the other hand, direct stock market investments mean buying shares of a company straight from the stock market, making you a part-owner of the company. While direct stock market investments provide greater control and potential for higher returns, they carry higher …

Can a high sum-assured Ulip offer better cover, returns?
1 year, 2 months ago

Can a high sum-assured Ulip offer better cover, returns?

Live Mint  

Most insurance policies that mix life insurance and investment offer neither adequate life cover nor good investment returns. The sum assured multiple in TULIPs could be 100-200 times of the annual premium, depending on the combination of the policyholder’s age, policy term and premium payment term). Data from Kotak Life Insurance shows that a 35-year-old paying a premium of ₹1 …

Which investment options are available other than mutual funds to fund your children’s higher education?
1 year, 7 months ago

Which investment options are available other than mutual funds to fund your children’s higher education?

Live Mint  

The tagline “Mutual Funds Sahi Hai” has seemed to catch the fancy of many investors with many of them even planning their children’s education around mutual fund investments. Start with buying life insurance Parents planning their funds to pay for their children’s future education must first consider buying a life insurance policy. Guaranteed funds : A life insurance policy ensures …

Investing In A Life Insurance Policy Is The Need Of The Hour
2 years, 11 months ago

Investing In A Life Insurance Policy Is The Need Of The Hour

The Quint  

In a world full of uncertainties, all of us want something safe, secure, and tangible to hold on to, especially in adverse conditions when the going can get tough. Recently, the Life Insurance Council surveyed over 12,000 people across 40 cities to understand the India’s perception towards life insurance. 64% of the respondents surveyed across cities in South India believed …

LIC IPO: Why is India’s largest insurer being listed?
3 years, 1 month ago

LIC IPO: Why is India’s largest insurer being listed?

Live Mint  

India is embarking on the blockbuster listing of the country's largest insurer as part of a wider privatisation drive to bolster public coffers drained by the coronavirus pandemic and fund new infrastructure. While the pricing has not yet been set, analysts expect the IPO of the Life Insurance Corporation of India to be India's largest to date, potentially earning the …

Covering risk while earning money
5 years ago

Covering risk while earning money

The Hindu  

There are a variety of life insurance policies. While term policies cover only death risk and for a given period, whole life policies offer longer coverage periods with options like return of premium and other add-ons. This return, or bonus, is a share of the returns that the life insurance company realises when it invests your premium and is usually …

Budget 2020: LIC to be disinvested, listed on stock exchange. Read details
5 years, 1 month ago

Budget 2020: LIC to be disinvested, listed on stock exchange. Read details

Op India  

Finance Minister Nirmala Sitharaman in her Budget 2020 speech on Saturday announced that the government has proposed to sell a part of its holdings in state-owned Insurance company Life Insurance Corporation of India. “The government proposes to sell a part of its stake in LIC through IPO,” said Finance Minister in her Budget 2020 speech. Life Insurance Corporation of India …

Should India’s Insurance Behemoth Be Welcomed Into Banking?
6 years, 8 months ago

Should India’s Insurance Behemoth Be Welcomed Into Banking?

The Quint  

Since nationalisation in 1956, LIC has been fully owned by the government. LIC’s annual report for 2016-17, the latest available, shows that it had a 71 percent share in total first year premium. The money that it collects from policyholders gets invested across a variety of instruments governed by rules laid down by the Insurance Regulatory and Development Authority of …

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