BackAsk Mint | Get a ‘financial health check’ done once in six months
Ask Mint | Get a ‘financial health check’ done once in six months
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The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I am 30, and am working as a professional in a multinational company. I am looking for a pension plan that will support my lifestyle after retirement. I would like to compare the various options available on the basis of charges and fund performance. Please suggest a neutral resource for this comparison.
It is advisable that you visit an independent financial planning adviser and then cross-check the information given by him on the company websites/product brochures, as there is no one particular resource where comparison of various products is available.
All financial magazines and publications do a regular comparison between products of various companies; you could take a look at these.
Also, there are some independent websites on retirement planning where one can seek advice on the subject, such as www.six-steps.in.
With the entry of so many private insurance players, how safe is my money in their hands?
Most of the foreign partners in Indian market are well-established global insurance players with a proven track record in the business. Some of them have been in the business for more than 200 years. This amply demonstrates their credibility and stability in the business.
All insurance firms in India are regulated by the Insurance Regulatory and Development Authority (Irda), which has laid down very clear criteria defining the manner in which insurance companies can invest your funds. In fact, every insurance company needs to have a minimum paid-up capital of Rs100 crore, which acts as a safety net.
Further, the insurance companies are also required to maintain their solvency margins depending on their volume of business. The minimum solvency margin required to be maintained by any insurer is Rs50 crore.
How often should I update my life insurance?
It is advisable to periodically review your insurance portfolio—especially after a major event in life—to ensure it continues to provide the protection you need. Over a period of time, your investment needs also undergo a change. We at Aviva advise our customers to take a “financial health check" (FHC) once in six months. Depending on your life stage and earnings, FHC assesses and recommends the right insurance product for you. I would advise you to go through an FHC before deciding on your investments.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Bert Paterson, managing director and CEO, Aviva India.
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