Life Insurance

To begin with, 'nomination' is the process of identifying a person to receive the policy amount in the event of death of the policyholder. The nomination can be done at the start of the policy by providing details of the nominee in the proposal form. However, if the nomination is not given at the beginning, it can be done at a later date. This nomination has to be effected by giving notice in a prescribed form to LIC and getting it endorsed on the Policy Bond.

The policyholder can change the nomination at any time during the term of the policy and for end number of times. For this, the policyholder has to give a notice in a prescribed form to LIC. Further, nomination can be removed any time by the policyholder without giving prior notice to the nominee.

Under nomination, the nominee gets only the right to receive the policy amount in the event of the death of the policyholder; nomination does not pass on the property in the policy. If nominee dies when the policyholder is still surviving then the nomination would be ineffective. If nominee dies after the death of the policyholder but before receiving policy amount, then again the nomination becomes ineffective and only the legal heirs of the policyholder can claim money.

If premiums are paid for at least three consecutive years, the Policy acquires a Surrender Value. The Policy, which has acquired a Surrender Value, can be surrendered for payment in cash. Once the Policy is surrendered the contract is terminated. In the case of ICICI Pru Single Premium Bond the policy can be surrendered after the first year.

If your policy has lapsed on account of non-payment of premium within the specified due date, you can re-apply to reinstate it, if:

You apply within 5 years from the date of the first unpaid premium and before the maturity date

You pay all the required premiums and interest

You give us satisfactory evidence of health at your own expense The reinstatement will take effect only if we accept your application. We will notify our acceptance to you.

Section 39 of the Indian Insurance Act 1938 provides for nomination of a person who would receive the benefits of the claim on the death of the life assured. Nomination establishes a clear title to the policy. This prevents dispute and also prevents delay in settlement of a death claim. In the case where nomination has not been given at the time of proposal, nomination can be made at any time during the term of the policy. Nomination can also be changed, at any time during the tenure of the policy, by intimating respective insurance company
Yes. You can change your nomination at any time till the maturity date. All you need to do is to inform us about the change through a specified form.
You can call our customer service center or notify us through a letter about the change of address. We shall confirm the change to you.

We offer you a grace period for non-payment on due date. This grace period is 30 days from the due date in case premium payments are made on quarterly, half-yearly or yearly basis. It is 15 days from the due date for monthly payments. During this period the policy remains in full force and no interest is charged. If you fail to pay a premium even during the grace period, your policy automatically:

Lapses if there is no surrender value

Converts to a paid up policy if there is enough surrender value

The policy can be assigned. To assign the policy you have to notify us regarding the assignment.

You must send us the :

1. Completed claim form

2. Policy of Life assurance

3. Proof of age, if not submitted earlier

The death claim is paid to:

1. The nominee, as declared by you in the proposal form

2. The legal heirs, in case you have not specified the nominee

3. The appointee named by you, in cases where the nominee is a minor at the time of claim

The claimant (Nominee/Legal heirs) must send us:

1. An intimation of the death of the life assured

2. Death certificate

3. Completed claim forms and other forms as required by the company

4. Policy of Life assurance

5. Identification that the person is entitled to receive the payment

In addition to the requirements for a death claim, the claimant should submit all the reports (police, hospital etc) pertaining to the accident as required by the company.

You must send us within 6 months of the disability date

Written notification of your disability arising out of the accident

Proof of your disability

You will have to undergo one or more medical examinations conducted by medical practitioner/s appointed by us, if required.

A loan is given only if you have an ICICI Pru Save'n'Protect policy.

If your policy has a surrender value, you can apply for a policy loan upto 80% of the surrender value. This loan will carry an interest rate as decided by the company from time to time. The interest will be charged starting from the date of the loan. You can repay the interest and the loan at any time.

If the total outstanding amount owed to us under your policy exceeds the surrender value, your policy terminate immediately. The outstanding loan and interest will be deducted from the claim amount at the time of settlement.

When you make a nomination within your life insurance policy, as the policyholder you still continue to be the owner. However after your death, the nominee who did not have any right under the policy while you were alive becomes the rightful recipient who will receive the policy monies. He or she may not be the rightful heir in which case the legal heir can implement his rights and claim the monies from the nominee.

An Annuity is an investment you make, either in a single lump sum or through installments paid over a certain number of years, in return for which you receive a specific sum every year, or every month either for life or a fixed number of years. Upon the death of the annuitant, or at the expiry of the period fixed for annuity payments, the invested annuity fund is refunded usually along with a small bonus.

Annuities differ from all other forms of life insurance in one fundamental way - They do not provide any insurance cover but offer a guaranteed income for a certain period or for life. Typically annuities are bought to generate income during one's retired life, which is why they are also called Pension Plans.

Annuities are an investment that offers you an income that you cannot outlive and provides a solution to the biggest financial insecurity of old age that you will outlive your income.

The Unit Trust of India (UTI) operates a Unit-Linked Insurance Plan (ULIP) in collaboration with LIC and the General Insurance Corporation (GIC) of India.

ULIP is a contractual savings-cum-insurance plan that offers the following features:
High returns, Maturity bonus, Life insurance cover, Free accident cover, Safety of capital, Tax rebate

It is open to any resident of India who is above 18 years of age. Individuals less than 55 years and 6 months of age can join the plan for 10 years and those less than 50 years and 6 months for 15 years contributing 1/10th and 1/15th of the target amount every year, respectively.

There are several benefits of buying insurance. Other than the risk cover the most important you receive Income Tax Relief under Section 88 of the Income Tax Act, which means premiums paid by you, reduces your tax liability. Such exemptions are also available for premiums paid on health covers.

Besides it helps you build up compulsory savings.

Also through a valid assignment the beneficiaries of the policy are protected from claims of creditors. Life insurance policies can also be a great source of help as a security while availing of loans. One could also surrender his policy in case of emergencies.

For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries.

General Insurance

No policy can be issued for a period of more than one year ordinarily. However, for motor cycles and scooters only, the Act Policy in Form A, which is the minimum compulsory insurance required by law, may be issued on a long term basis. Such policies once issued remain valid up to the cancellation of the registration of the vehicle by the Regional Transport Authority (R T A).

This insurance is particularly useful for owners of comparatively older vehicles, for whom the Comprehensive Cover becomes a little too expensive considering the age and market value of the vehicle. The premium for such insurance is charged in accordance with the Long Term Act Policy Premium Schedule.

Private Cars, motor cycles, scooters and commercial vehicles can be insured against Fire & Theft Risks only, provided they are laid up in the garage and not in active use. The insurance company under such cover shall only be liable to indemnify the insured against loss or damage by:

Fire, Explosion, Self-Ignition or Lightning, Burglary, Housebreaking or Theft and Riot, Strike, Malicious and Terrorism Damage

In case of vehicles that are in use, Fire & Theft Risks only can be covered with the Act Liability Risks.

The Bonus/Malus concept is applicable only to the Own Damage Section of the Comprehensive Policy.

The discount or loading is accordingly allowed or charged on the Own Damage portion of the premium. The Act Liability or Third Party premium is absolute. There is no scope for adjustment. As such, an accident giving rise to a Third Party claim, whatever the amount, does not affect the application of Bonus/Malus at the time of renewal of the policy.

Accessories are generally those parts which are directly supplied by the manufacturer along with the vehicle. But they are not essential for the running of the vehicle. The engine of a vehicle is essential for its running and obviously not an accessory. A spare tyre, is however an accessory. Loss or damage to accessories are covered only if they are on the vehicle.

In case the accessories are detached from the vehicle and kept in a garage and are destroyed by fire, they are not covered. Radios, tape recorders, air conditioners and other electrical or electronic items are fitted by vehicle-owners. These cannot be considered as accessories. These items qualify as extra fittings and the owner has to specifically describe and mention separate values towards them at the time of insurance.

Only on payment of the requisite additional premium, can they be covered. However, if such items are built-in and supplied by the manufacturer, will be treated as accessories and need not be separately insured.

This situation is one of Double Insurance. In such cases, one of the policies is cancelled, provided there are no claims reported in either of the policies.

Refund is granted on a pro rata basis for the period both the policies are in force concurrently. If one policy is applicable during the period 1.1.2000 to 31.12.2000, while the other is from 1.3.2000 to 28.2.2001. In case the first policy is cancelled on 1.4.2000, refund is made on pro rata basis for the period 2.4.2000 to 31.12.2000. In case the second policy is cancelled on 1.4.2000, then the refund is made for the period 2.4.2000 to 28.2.2001.

However if there is a claim on 1.4.2000, clearly both the policies will cover it. In such cases, the Contribution Condition of the policy is invoked, which states that each of the policies will bear its rateable proportion of the claim.

The most common form of disputes that arise between the insured and the insurer is with regard to either admission of liability or the quantum of the claim.

In case of disputes regarding quantum of the claim, where the liability under the policy is admitted by the insurers, it is a condition of the policy that such disputes be referred to an arbitrator, as per provisions of the Indian Arbitration Act,1940.

In case the decision of the arbitrator is disputed by any party, then that party can approach the proper forum of either the Consumer Forum or the Civil Court. Disputes regarding admission of liability is always referred to the Consumer Forum or the Civil Court.

Mutual Funds

If the fund plans to sell a scheme to another fund the asset management company has to take the permission of 75 percent of unit holders or allow them to redeem without any exit load. This does not mean that the investor has nothing to worry about.

You need to find out whether the scheme is going to be managed by a different mutual fund and whether it suits your objective. Also find out the past performance of similar schemes. Note that such a change may have a bearing on the future financial performance of that fund. In case you are not comfortable with the various changes associated with the fund ship out.

In such a case the trustees have to send a notice to the Securities Exchange Board of India (Sebi) explaining the reason for winding up. The notice also has to be published in two national dailies and a vernacular newspaper belonging to the region where the fund is formed.

A popular investment style whereby fund managers identify companies showing promise of above-average earnings through capital appreciation. Stocks are held primarily for price appreciation as opposed to dividend income. Thus the fund managers of the growth stocks are willing to pay a premium to acquire a stock if they feel it has the further growth prospects. Growth investing is an alternative to value investing.

This is the investment style espoused by index fund managers who simply invest by benchmarking their portfolio to a common stock market index like the BSE-30 or the SP CNX-50. The fund manager only invests in stocks in the index stocks in exactly the same weightage. The attempt is to simply replicate the benchmark index, as closely as possible and therefore it is called passive investing.

Gilt schemes invest in government bonds, money market securities or some combination of these. They have medium to long-term maturities, typically of over one year and have moderate returns. Since the issuer is the central or state Governments, these funds have reduced risk of default and hence offer better protection of principal.

According to the central government’s Equity Linked Saving Schemes (ELSS) guideline, 1992 and the amendment in 1998, these schemes offer tax rebates to the investor under section 88 of the Income tax act, 1961. Under Section 88 of the I.T. Act, 1961, one gets a tax rebate of upto 20% of the amount contributed to ELSS schemes subject to a maximum investment of Rs. 10000/- within the allowable limit under section 88. Also these schemes generally diversify the equity risk by investing in a wider array of stocks across sectors.

Net assets is the total value of a fund's cash and securities less its liabilities or obligations. A portfolio could be a mixture of stocks, bonds, money market instruments and cash.

Depending on how many years the investor stays with the fund, some funds may charge different amount of loads to the investors- the longer the investor stays with the fund, lesser the amount of exit load charged to him. This is called the contingent deferred sales charge (CDSC) and contingent deferred sales load (CDSL).


The following can invest in RBI Bonds:

1. An individual in his or her name or on behalf of a minor, or jointly with one or more individuals.

2. A Hindu Undivided Family.

3. A Non-Resident Indian (without the right of repatriation of principal).

4. Government Promissory Notes can also be issued on anyone or survivor basis.

5. Bonds can be held by a minor with one or more major individual/s (including a minor).

There is no maximum limit for investment in the bonds. Application must be in multiples of Rs.1000/- subject to a minimum of Rs.1000/-.

The date of issue of the bonds in the form of Promissory Note/Bond Ledger Account will be the date of receipt of subscription in cash or the date of tender of draft or the date of realisation of the cheque as the case may be.

The period of holding of bonds is five years from the date of issue. The bonds shall be repayable on the expiration of 5 years from the date of their issue.

Premature encashment of the Bonds is not allowed. The Bonds will earn interest upto the date of redemption, if not redeemed on due date. Proceeds can be reinvested. The matured bonds in the form of Promissory Note/existing Stock Certificate will be tendered for reinvestment at Public Debt Offices of Reserve Bank of India only.

Income Tax : Interest on the bonds will be exempt from income tax under the Income Tax Act, 1961.

Wealth Tax : The bonds will be exempt from Wealth Tax under the Wealth Tax Act.