Newcomers to life insurance trim costs to break even faster

New Delhi: Unlike existing life insurers, who have failed to break even even after being in business for eight years, new entrants say they are confident of making profits within seven years by trimming costs from the get-go. In 2008 alone, four life insurers started operations in India: IDBI Fortis Life Insurance Co. Ltd, Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd, Aegon Religare Life Insurance Co. Ltd and Future Generali India Life Insurance Co. Ltd. (LOWER COSTS QUICKER GAINS) A comparison of cost structure of these four firms shows a focus on lower allocation and distribution costs. In India, expenses for both a life insurer and the insured are front-loaded, with a big chunk of premium in the first year going as allocation charges towards writing off distribution costs such as an agent’s commission.

“Low premium allocation charges is the beginning of a new trend among new entrants. Even if their distribution commissions are low but services and products are good, low commissions can never be a hindrance to sell the product,” said Rajiv Deep Bajaj, chairman of Bajaj Capital Ltd, a New Delhi-based financial services provider. “We are looking forward to break even within seven years of our operation,” said Amish Tripathi, national head of marketing and product management, IDBI Fortis. “The allocation charges of our Wealthsurance plan, a unit-linked insurance plan, or Ulip, is kept as low as 3.5%. Low charges makes the policy more saleable and you don’t need to pay distributors such a high commission to sell the policy, and therefore control your cost too.” This differentiated approach spells benefits to policy holders too, who can invest more. Some of the existing policies have allocation charges as high as 60%. This means out of every Rs100, only Rs40 is invested, in the first year of the policy.

Aegon Religare also announced that all its branches will break even within three years of their operation so that soaring sales do not impact their profitability. “The company as a whole will break even within seven years of its operation but all our branches will break even within three years,” said Rajiv Jamkhedhar, CEO of Aegon Religare. To keep costs low, Future Generali started the concept of mall assurance, an initiative to sell insurance policies at malls, resulting in low distribution costs. Fresh business, or first-year premiums, in the sector as a whole grew by 23.31% to Rs92,989 crore in 2007-08 from a year ago. In the two preceding fiscals, business had grown even faster at 94.96% and 47.94%, respectively, according to a report by the Insurance Regulatory and Development Authority.

Other life insurers have not been able to break even yet, except SBI Life Insurance Co. Ltd and Shriram Life Insurance Co. Ltd, because of soaring policy sales. The high growth rate is forcing insurers to dig deeper into their pockets to boost capital so they can cover related costs and underwriting risk, delaying their payback period.

news source : http://www.livemint.com/

Birla Sun Life to pump in Rs 1,300 crore, looks to rank among top three by ’10

MUMBAI: Having regained its position as one of the top five life insurance companies, Birla Sun Life Insurance has lined up Rs 1,300 crore of investment into the company. The company has been the fastest growing life insurer in the current fiscal, with a 187% growth in new business during the first quarter.

Speaking to ET, Birla Sun Life Insurance president and CEO Vikram Mehmi said that the company would start publishing its valuation numbers from next year which would give an idea of how much the company is worth.

The company has set for itself a target of being among the top three by 2010, by which time it is also expected to break-even. “We are already among the top three if you see the premium in terms of individual business,” said Mr Mehmi.

The company’s assets under management stand at Rs 6,800 crore and is expected to cross Rs 10,000 crore by the end of the current fiscal. “Our current aim is to maintain our momentum and grow faster than the market and get to the top three slot as early as possible,” he said. The company has managed to grow because of a renewed thrust in distribution which resulted in an almost three-fold growth in branch network to 600 branches and a doubling of the agency force to close to two lakh agents.

“We are not worried about the equity market because we see this downtrend as a short-term thing. Also, there is so much under insurance and under penetration, there is a huge opportunity to grow,” said Mr Mehmi. According to data released by the insurance regulator, Birla Sun Life has seen its new business premium grow from Rs 174 crore in the first quarter last year to Rs 501 crore in the first quarter of the current fiscal.

Close to half the premium in the current fiscal has come in June 2008, which saw premium collections top Rs 241 crore. This has given the company an overall market share of 3.5% in the life insurance industry. Along with growing its agency force, the company is also taking measures to ensure that the productivity of this channel remains high. “Our most important parameter is how early the agent gets activated. We have a multi-pronged strategy for training agents, which includes tying up with schools and bringing in senior advisors to train new agents,” said Mr Mehmi. He added that the company’s premium income was sustainable considering that less than 1% of new business came from single-premium policies and group insurance was limited to 8-10% of total premium.

news source : http://economictimes.indiatimes.com/

Life insurance key part of plan

Most financial experts would argue that, for a typical Canadian family, a comprehensive financial plan should include some degree of life-insurance coverage, either through group plans at work or individual policies. But how much is appropriate for an individual, and how assured is the benefit? The Gazette addressed these and other questions to Frank Swedlove, president of the Canadian Life and Health InsuranceAssociation. Here are his responses.

Q: When should people consider life insurance?

A: It depends on an individual's circumstances. Obvious times to consider it are when you assume new financial obligations like a mortgage or need to provide income security for dependents such as a spouse or children.

In later life, it can be used to create a significant charitable gift, pay taxes on death or for more complex estate planning purposes. Any time you need to create, or preserve, financial value, life insurance can be a very cost-effective option. And like most financial arrangements that rely on investment growth, time can be on your side if you start early. You should also keep in mind that the price you will pay for life insurance reflects your medical history. Life insurers review that history when you apply for your policy, but can't ask for new medical evidence later on, unless you request certain changes to the policy. provide "guaranteed purchase" options, which will allow you to purchase additional coverage at specified intervals, without new medical evidence.

Q: What are the main types of life insurance and their distinctive features?

A: Most people think of three main types: term life, whole life and universal life.

Term insurance is intended to provide coverage for a period of temporary need. It is relatively inexpensive, so it is often the best way to maximize coverage for people on a tight budget. Premiums can be the same throughout the period you own the policy, or increase at five or 10-year intervals. It typically has no savings value, which means the premiums in later years can actually be higher than if you had originally bought whole life or universal life insurance.

Whole life is what your parents probably bought - permanent coverage with a level premium that includes a savings portion. This cash value can be paid out to you if you decide you no longer need coverage, although it may be partially taxable. "Participating" whole-life policies pay annual dividends that can be used to pay premiums, increase coverage, held on deposit earning interest, or paid out to you. You can also typically take a loan against the cash value and the value of any dividends held in the policy, or use the policy as collateral for a loan.

Universal life is more flexible, bridging the difference between whole life and term and separating the cost of coverage each year from the contributions to the investment portion of the policy. These policies typically have several investment options you can mix and match. Life-insurance companies also provide group-life insurance through employers, unions or even clubs or associations to which you may belong.

news source : http://www.canada.com/

Life insurance may cost more

SAGICOR POLICY HOLDERS may pay more for new life insurance coverage come next year due to the 2008 Budget imposition of a one per cent increase in insurance premium tax. The good news is the company is likely to absorb that cost in its general insurance line of business. In a statement to BARBADOS BUSINESS AUTHORITY last Friday evening, Sagicor Life Inc. chief financial officer Anthony Chandler said: "The recent Budget proposal for an increase in premium tax will result in an additional tax burden to life insurance companies writing premiums in Barbados.

"The premium tax increase is likely to result in an increase in insurance premiums to the consumer for new policies sold after the tax comes into effect." Prime Minister David Thompson has proposed an increase in insurance premium tax from January 1, 2009, that would raise $6.6 million for the year. Insurance companies would also pay a $20 000 yearly licence fee, up from $5 000, but Sagicor General Insurance Inc. chief executive officer David Deane said that "increased premium tax and increased licensed fees might not be punitive in themselves. . . . "I don't think that will cause companies to automatically say we will increase general insurance premiums."

"Life insurance policies sell long-term contracts; you contract for a premium which you expect to pay for a lifetime and the opportunity to change premiums does not really exist. "You have the ability to price new contracts appropriately and they can reflect the additional taxes," he said. Chandler emphasised that industry stakeholders needed full interpretation of legislation that would impose

news source : http://www.nationnews.com/

Hasa supports health insurance plans

The Hospital Association of SA on Thursday welcomed government's initiative to establish a National Health Insurance (NHI) system to provide health care cover for all South Africans. This proposal was put to Cabinet on Wednesday by Health Minister Manto Tshabalala-Msimang. "The private hospital sector fully supports the concept of a National Health Insurance," said HASA board member Biren Valodia in a statement.

"We believe that universal health cover for all South Africans, if properly designed and implemented, is one of the measures that can help increase affordability and access to health care in this country." Valodia attended the Board of Healthcare Funders (BHF) annual conference in Durban this week, where the NHI proposal was discussed and supported. He said the private hospital sector had a positive contribution to make, and looked forward to engaging the government and other health care stakeholders in this process.

However, Valodia reiterated the association's opposition to a draft legislation imposing a process of price regulation on the private health-care sector. He said HASA had not changed their view that the process set out in the draft National Health Amendment Bill amounted to price regulation and that the legislation be withdrawn. "The bill would result in the National Health Reference Price List, currently a recommended price guide, becoming the mandatory default price in the event that negotiations between hospitals and funders reach a stalemate. This is price regulation." The private hospital sector remained disappointed at the level of consultation and negotiation over the draft health legislation,

news source : http://www.int.iol.co.za/

Health insurance scheme launched

Dow University of Health Sciences (DUHS) launched the Health Insurance Scheme from July 15, 2008 for its faculty members and employees in agreement with the New Jubilee Insurance (NJI).

Addressing to the ceremony, Professor, Masood Hameed Khan, Vice Chancellor, DUHS, said that the University employees including their spouses and children are covered for treatment if they get hospitalised.

The employees will be issued a Health Insurance Card from NJI containing the employee’s name and family details. They would have to produce this card at the time of admission in the hospital, he added.

According to him, an employee who fails to fill the form will have to contact the concerned department at the DUHS.

The representative from NJI Company also addressed the faculty members and employees of DUHS. He explained the working details of the insurance policy to the audience.

The Vice Chancellor, along with Tahir Ahmed, Managing Director, NJI, distributed the health insurance cards to the departmental heads of 25 institutions working under the DUHS, Karachi.

news source : http://www.thenews.com.pk/

CATHAY LIFE INSURANCE OPENS IN VIETNAM

Cathay Life Insurance formally entered the local life insurance market yesterday with a total investment capital of US$60 million. Cathay Life, a subsidiary of the Cathay Financial Holdings Group (TAIEX:2882) of Taiwan, officially obtained its business licence in Vietnam in December 2007, and plans to maintain offices in both Hanoi and Ho Chi Minh City.

Cathay will provide insurance products for customers such as life, accident, annuity, health and risk-linked investments.

news source : http://www.tradingmarkets.com/

ING receives approval to start life insurance in Ukraine

ING announced today that is has received approval from the relevant authorities to start life insurance operations in the Ukraine. This will allow ING to enter the fast growing life insurance market in a country with over 46 million inhabitants and a rapidly growing middle class. ING considers Ukraine to be an attractive emerging market, with strong growth indicators and a huge potential.

Jacques de Vaucleroy, member of the Executive Board of ING Group, responsible for Insurance Europe said: "Starting this life insurance greenfield is in line with ING's sharpened strategic focus on banking, investments, life insurance and retirement services. Our aim is to build a leading position in the fast growing Ukrainian life insurance market. I am confident that by utilizing our experience in setting up successful operations in other countries in Central and Eastern Europe we will be able to make a swift and efficient start."

ING expects to launch its activities in the first half of 2009. The head office of the new life insurance company will be located in Kiev and will be headed by Veronika Korolev as Chief Executive Officer. ING has been present in the Ukrainian market since 1994 and offers leasing and wholesale banking services. Last month ING started with the rollout of a retail banking network, aiming to become one of the top 5 retail banks in Ukraine by expanding to a nationwide distribution network of over 250 outlets.

news source : http://www.euronext.com/

Term life insurance is the low-cost best bet for most people

Q I'm a married homeowner in my late 20s, contemplating life insurance. We want to make sure that if something happens to one of us the other would have some time to figure things out instead of selling the house and moving back in with parents. What do you recommend -- the more expensive comprehensive lifeinsurance that we can take money out of later or term insurance?

MELISSA

A There's really only one reason to buy life insurance: To financially protect loved ones from an untimely death. Some insurance agents will try to sell you a policy as a way to save for retirement or for children's college education. Forget it. The financial world offers far better and cheaper ways to salt away long-term savings, such as a 401(k), a Roth IRA or a 529 college savings plan.

I'm a big fan of term life insurance for most people, especially in circumstances such as yours. Term is a pure death benefit. Premiums are cheap if you're in good health, although the cost of the policy increases as you get older. It's a simple product and it allows for comparison shopping. You'll want a low-cost, plain-vanilla policy from a blue chip, financially stronginsurance company.

Permanent or "cash value" insurance comes with a tax-sheltered savings component, as well as life insurance. The investment returns are difficult to analyze. Types of policies include whole life, universal life, variable life and variable-universal. In general, these policies are expensive, with steep fees and commissions. Cash value insurance makes sense for some people, but for most of us, term is the way to go.

news source : http://www.startribune.com/

Survey: Health insurance, fuel costs among top small biz burdens

The rising cost of health insurance, fuel and energy and inflation are the top worries among small business owners, according to a survey done every four years by the National Federation of Independent Business and Wells Fargo.

The new Small Business Problems and Priorities survey shows 42.3 percent of American small business owners rank the cost of natural gas, propane, gasoline, diesel and fuel oil as a "critical" concern. That's up from 26.1 percent on the previous survey conducted in 2004. Both surveys rank the cost of health insurance as the No. 1 issue facing small business owners.

Half of the top 10 problems worrying small business owners deal with costs, with the price of health insurance continuing its 20-year reign as the number one problem for small business owners. More than 56 percent say it is a "critical problem." Other cost issues in the top 10 include fuels and electricity, supplies, inventories and worker's compensation insurance.

The remaining top 10 problems relate to taxes -- federal taxes on business income, property tax (real, inventory or personal property), tax complexity and state taxes on business income. Tax complexity, a new problem on this year's survey, ranks fifth on the survey and is a "critical" problem for 23 percent of business owners.

"For four years, the economy provided a good, stable foundation for small business owners to do business, but as it started to take a negative turn over the last several months, they felt the effects of rising costs of doing business as reflected by these results," said Bruce D. Phillips, senior fellow at the NFIB Research Foundation and co-author of the report. "As the economic outcome remains uncertain, small business owners are searching for innovative ways to reduce expenses and increase sales."

The survey results are based on 3,530 small business owner responses to a mail survey circulated in the first three months of this year.

news source : http://www.bizjournals.com/

India could repeat the telecom success in insurance: Kidwai

Bangalore (PTI): India had the potential of repeating the success witnessed in the telecom sector in the insurance sector as well, Naina Lal Kidwai, Group General Manager and Country Head, India, HSBC, said on Monday. India had among the least insurance penetration in the world, especially in the rural sector, which indicated the vast potential that the country held in this field,she said on the sidelines of the launch of the Canara HSBC Oriental Bank of Commerce LifeInsurance Company.

The steps taken by the telecom industry helped in transforming the story in India, she said adding "we must see the success witnessed in the Telecom industry repeated in theinsurance sector", she said. Welcoming the entry of more players in the insurance sector, she said this would only enhance competition thereby improving quality of service."Both the customers and players would benefit from competition", she said. The entry of more players had helped to grow the market. There has been no shrinking scale", she said. "Everyone is growing", she observed.

Health insurance products was one of the potential areas that could be developed. Nearly 60 percent of household savings in India go to meet health related issues. The new company currently would offer standard products, but the market for health products would be examined, she added. She said unlike other countries, India did not have a social welfare scheme in place to care of the aged. Hence the importance of healthinsurance could not be undermined.

news source : http://www.hindu.com/

Insurance - Homeowners begin to opt out for life insurance as the credit crunch hits

According to broker, My Mortgage Direct, borrowers are trying to hold onto their cash by abandoning their life insurance cover. Concerns arise as only 20% of new borrowers are taking out a life insurance policy to protect their mortgage while others sacrifice the insurance cover as a means to save more. As the credit crunch continues, people will need to reduce their outgoings cutting back on luxuries and non-essential goods. Research conducted by Prudential reveals that one in ten people would give up their life insurance policy due to personal budgets. My Mortgage Direct believes that life insurance cover is regarded as non-essentials by borrowers as it acts as an easy target.

Cath Hearnden of Mortgage Direct highlights the importance of life insurance and warns that passing up life insurance cover is a false economy. She said, “Considering the huge financial commitment of a mortgage and what it represents to borrowers lives, trying to save a few pounds by going without life cover is a big mistake.” Although it may be difficult to make ends meet in the current financial status, Hearnden added that it will be significantly harder for one to manage mortgage repayments should their partner die. She assured that premiums have in fact been revised and life insurance is not an expensive commitment. My Mortgage Direct encourages people to take out life insurance instead of opting out and insists that cover can now cost less than what borrowers may think.

news source : http://www.onlyfinance.com/

Cathay Life Insurance to Raise NT$15 B. in 2008

Taipei, June 10, 2008 (CENS)--Cathay Life Insurance Co., Taiwan`s largest life insurer, said that it will issue NT$2 billion (US$66.22 at US$1:NT$30.2) in new shares at NT$75 (US$2.48) per share this year, enabling the firm to raise NT$15 billion (US$496.68 million) in new capital. The capital-increase project will be the largest of ever launched by Cathay Life in its 46-year history. The Cathay Life`s move to increase capital has jolted domestic life-insurance sector as the company already has the strongest financial structure in the domestic life sector, with an insider expecting such capital raising to put increasing pressure on other life insurers to do the same. Domestic life insurers are pressured to increase capital due impact from the U.S. subprime mortgage crisis, loss from currency exchange, and revision to the risk-based capital (RBC) regulation for the insurance industry.

Taking into account suggestions from domestic life insurers, the Cabinet-level Financial Supervisory Commission will review the revision of the RBC regulations as necessary. Cathay Life`s parent Cathay Financial Holding Co. holds NT$20 billion (US$662.25 million) in cash, enough to meet the capital-increase project without resorting to more fund raising. Two other two large-sized life insurers, including Shin Kong Life Insurance Co. and Taiwan Life Insurance Co., have also decided to follow in Cathay`s footsteps. Cathay Life will, after capital increase is complete, see its capitalization rise to NT$52.6 billion (US$1.74 billion) from present NT$50.6 billion (US$1.67 billion).

news source : http://news.cens.com/

Take a SIP of Reliance life plan

RELIANCE CAPITAL ASSET Management Ltd, the investment manager of Reliance Mutual Fund, will offer life insurance cover to its investors. Investors opting for systematic investment plan (SIP) in any of the fund’s 11 equity-linked schemes will be offered a Life Insurance cover of up to Rs 10 lakh. Upon the premature death of an investor opting for an SIP between three and 15 years, Reliance Mutual Fund will pay the outstanding unpaid SIP installments. The scheme came into effect on May 12. An SIP allows an investor to invest a fixed sum of money every month in a fund on a pre-determined date. This regular investment in a particular plan helps an investor in averaging out highs and lows of the markets.

In 2005, the fund house had offered a personal accident cover with its equity-linked saving scheme. The personal accident death cover was for a maximum sum of Rs 5 lakh and was linked to the investment made by an individual and not with the capital appreciation of the investment. For an investment of Rs 10,000 or less, the level of cover was Rs 50,000. For an investment of Rs 10,001-25,000, the insurance cover was Rs 2 lakh and for investments between Rs 25,001 and Rs 50,000, the cover was Rs 3,00,000. The fund house had capped the level of cover at Rs 5 lakh for an investment amount greater than Rs 50,001. The life insurance scheme being offered now will serve as an incentive for investors to go for the systematic investment plan.

The fund house, however, has not elaborated on whether the life cover will be free of cost or investors will have to pay a premium for theinsurance. However, even if investors have to pay a premium, it won’t be much considering that it would be a group life cover. Investors will find it beneficial to go for a long-term SIP, say for more than five years. Over the long term, it is seen that equity investments give higher return than any other assets with a comparatively lower risk.

news source : http://www.telegraphindia.com/

IDBI Fortis Life Insurance to use Mastek's Elixir System

Mastek Ltd, a leading IT solutions player with global operations in providing new technology and IP-led enterprise solutions to insurance, government and financial service organizations worldwide, and IDBI Fortis Life Insurance Co Ltd, a joint venture between three leading financial conglomerates - IDBI, Federal Bank and Fortis, each of which enjoys a significant status in their respective business segments, have jointly announced the launch of theirInsurance business in India on Mastek's Elixir Policy administration system.

After the successful launch, both companies which are headquartered in Mumbai also announced the signing of the contract for the second phase, which would enhance the scope of Mastek to provide additional modules of Elixir covering Channel Management, Claims, Re-Insurance etc. in addition to basic policy administration.

Mastek's Elixir, is a component-based solution for policy administration specifically targeted to insurance companies that want to launch hybrid products and improve the efficiency of their distribution networks. This single solution is designed to support all product lines including traditional life, health, unit linked, annuities and pension products. It is an end-to-end policy administration platform that integrates the front and back office.

Commenting on the contract, Mr. Sudhakar Ram, Chairman, Group CEO & Managing Director, Mastek, said: "At Mastek, it has been our constant endeavor to provide our customers with high value propositions. We are proud to partner with IDBI Fortis and create value for their customers.

Mastek has consistently demonstrated its capability to address and comprehend insurance sector requirements across the world. Having implemented similar projects successfully across geographies we are confident that through our capabilities and experience we will be able to support the aggressive growth plans of IDBI Fortis and help them service their customers better."

He added, "India is a strategic market for Mastek in terms of growth in the insurance vertical and with a strong track record and a unique set of proprietary frameworks and competencies, such as Elixir, which is an end-to-end solutions platform for theinsurance industry we see tremendous growth coming from this region.

news source : http://www.equitybulls.com/

Family has trouble finding life insurance policy

The death of a relative is a traumatic event for any family. Throw in not being able to collect on that loved one's life insurance policy, and it becomes a financially frustrating experience too. That's exactly the problem a Rogers County family was facing. Since, Brenda Hagebush's mother died in February, she has spent of much of her time on the phone trying to collect on her mother's policy. It's a one thousand dollar policy so old, the insurance company, Reliable insurance, says it had trouble finding it. "Very frustrating," said Brenda. "Like I said I just felt like I had come up against a wall."

A wall Brenda, her sister Sandy, and their father Fred were anxious to tear down.
Fred needed the insurance money to help pay for his wife's funeral costs. "He paid for this insurance policy in good faith thinking it was giong to be here for him when the time came that they needed 'em and then we come up against this brick wall," said Sandy. That's when they called the 2News Problem Solvers. We discovered that Reliable was not the original company that issued the policy, but once we spoke to the president he agreed to look into the issue immediately. He couldn't give us specifics due to privacy issues, but told us the family should contact him right away, and within weeks the family received the check. Brenda and Sandy also decided to cash in their 500-dollar life insurance policies to help their dad, further. All the checks are in the bank now totalling more than $2,000.

news source : http://www.kjrh.com/

Banks to reap profit of cover

This year, banks will end up making profits of over 1,500 crore through the mundane job of selling life insurance. With commissions going over 35% of the first-year premium, perhaps no other business generates as high a margin as selling life insurance. Banks have come a long way since 2002 when they were first allowed to sell insurance products. Over the years, stakes have got very big in insurance distribution. With the law of diminishing returns kicking in as far as insurance agents are concerned, insurance companies are simultaneously looking at alternate channels — particularly bancassurance.

Earlier this week, Aviva Life Insurance made an offer to HDFC Bank to get the second-largest private bank to sell its insurance policies. According to sources, Aviva promised HDFC Bank a better deal than what it is earning. The bank, however, turned down the offer as it expected to make similar money from selling insurance for its group company HDFC Standard Life. While no deal took place, the offer itself was seen by the industry as an indication of the kind of big money that is to be made out of selling life insurance. In the game of distribution so far, there has been no relationship between the size of the distribution network and success in selling. State-owned banks, which account for over 90% of bank branches in the country, generate less than 10% of the bancassurance premium.

The most successful distributors of insurance have been private and foreign banks that already have built an expertise in selling third-party products such as bonds and mutual funds. Most successful sellers of insurance are — ICICI Bank, HDFC Bank, Citibank, Standard Chartered, and ABN Amro. Among state-owned banks, State Bank of India is gradually picking up sales of its insurance arm SBI Life. Union Bank too has had a focused approach to selling life insurance and is one of the largest insurance sellers among nationalised banks.

news source : http://economictimes.indiatimes.com/

Options if health insurance is lost

Losing your paycheck isn't the only problem when you're laid off. You probably need to decide what to do about health insurance if your employer has been providing your coverage. The temptation might be to go without it to save money, hoping nothing befalls you before you find a new job with insurance. That would be a mistake. Even the young and healthy can suffer broken bones playing sports or through a car accident and rack up steep medical bills. So what other choices are there? When you lose a job, you have certain insurance rights under federal and state laws. A rundown on state-by-state laws can be found at www.health insuranceinfo.net.

Here are some options:

•Spouse's benefits: Do you have a spouse who has insurance at work? If so, you can under federal law enroll in your spouse's plan even if it's not open enrollment time. You have up to 30 days to enroll if you left your job voluntarily, up to six months in Maryland if you were laid off. This might be your best option. Employer plans tend to offer more generous benefits than individual policies and the employer usually picks up a big part of the tab. Plus, there's no medical underwriting in group plans, so any health problems you might have won't prevent you from joining, says Brenda Wilson, chief of health insurance and managed care at the Maryland Insurance Administration.

•COBRA: This is the federal law (Consolidated Omnibus Budget Reconciliation Act) that says you must be allowed to continue coverage under your former employer's plan for up to 18 months after leaving the job. It applies to companies with 20 or more workers. You won't qualify, though, if you were fired for "gross misconduct." COBRA is the easiest option and one that most people choose. If you can't join a spouse's plan, COBRA also is your best bet if you have health problems that might make it difficult or impossible for you to buy a policy on your own. But coverage under COBRA isn't cheap. You will pay the full cost of premiums and may be charged an administrative fee.

•Mini-COBRA: States also require coverage for some who fall through the federal law cracks. These state protections are sometimes called mini-COBRA. Maryland, for instance, lets former workers stay on an employer's plan up to 18 months even if there are fewer than 20 workers. In this case, too, you shoulder the entire cost. There are exceptions. This law applies only to insurance contracts written in Maryland. So, you wouldn't be able to continue under the plan if you worked for a Maryland subsidiary of, say, an Ohio company that bought insurance issued in Ohio for workers. Also, the law doesn't apply to plans where the employer pays the claims itself. Check with your employer to find out what kind of plan you have.

•Individual conversion policy: In some states, including Maryland, you are entitled to buy a policy from the insurer providing your former employer's plan regardless of your health. Benefits under these conversion policies are typically stingier than what you had before and the premiums are higher, Wilson says. "It really wouldn't be a good option if you have other options," she says.

•Individual insurance policy: If coverage through COBRA is too rich for you, don't assume you can't afford insurance and must go without it. You might find cheaper coverage by buying an individual policy for yourself and family. Insurers will ask questions about your health to determine whether to sell you a policy, at what cost and what coverage might be excluded. Once you qualify for a policy, it can't be canceled unless you drop coverage or reach the policy's lifetime benefit cap, which often runs $3 million to $5 million, says Sam Gibbs, senior vice president of eHealth, which owns online broker eHealthInsurance. Gibbs says the price difference between COBRA and an individual policy can be significant. Last year, the average policy cost $148 a month for a single person, compared with $227 under COBRA in Maryland. A policy for a family averaged $344 a month, compared with $656 under COBRA.

COBRA premiums tend to be higher because employer plans have rich benefits, Gibbs says. To keep costs down, "only buy the coverage you need," he advises. A healthy 22-year-old male, for instance, can go without maternity benefits or prescription drug coverage, he says.

news source : http://www.baltimoresun.com/

Legislators oppose health insurance fee hike

Lawmakers opposed an item in a draft bill that could force Vietnamese to pay higher mandatory health insurance fees at the National Assembly’s most recent two-day debate. Most legislators said the proposed increase on compulsory health insurance fees would prevent residents from obtaining proper health care. In Vietnam, workers are put under the compulsory health insurance program, which requires a monthly fee of 3 percent of the employee’s salary. This amount is jointly paid by the employee and his or her company.

According to a government report presented by Minister of Health Nguyen Quoc Trieu, the proposed increase to 6 percent of the employee’s salary was meant to balance the national insurance fund, which runs an annual deficit estimated at VND2 trillion (around US$123 million). A report prepared by the National Assembly Committee on Social Affairs suggested capping the fee at 5 percent of the employee’s salary. The report said two percent should be paid by the worker and three percent by the employer. “I agree with the committee’s report, considering that the salaries of state employees aren’t very competitive,” said Deputy Nguyen Thi Sang, who represents Tien Giang Province.

Instead of doubling the fees to balance the national insurance fund, Deputy Nguyen Thanh Tam of Tay Ninh Province asked government agencies to make companies pay their employees’ full insurance fees. According to the Ministry of Health, only 50 percent of workers actually pay their insurance fees. Deputy Luu Thi Chi Lan of Vinh Phuc Province suggested the government increase the fees at a slower rate. According to deputy Rcom Sa Duyen from Gia Lai Province, the Ministry of Health should provide a guideline of all costs paid for by insurance so that patients do not run up bills on unnecessary treatments. The draft bill also suggests putting students on a mandatory health insurance starting in 2010 while covering farmers, fishermen and family businesses on the compulsory program by 2014.

Health insurance for these groups is currently voluntary. Most legislators supported the government’s goal of insuring 100 percent of its citizens, but said the government must increase its funding for those under the poverty line and others who cannot, by any means, pay insurance fees. Assembly members also asked that patients be allowed to use their health insurance card at all hospitals nationwide instead of only the one specified on their cards. “No one wants to pay hundreds of thousands of dong traveling to the required hospital just to receive some tablets for their cold,” deputy Tran Hong Viet said. According to the government report, about 42 percent of the country’s population is covered by health insurance.

news source : http://www.thanhniennews.com/

Aviva USA granted patent for fixed indexed life insurance

Aviva USA has been granted US patent for 'maximization of a hedged investment budget for an index-linked insurance product' by the US Patent and Trademark Office.The patent involves Aviva's risk management processes related to the minimum guarantees on its indexed universal life insurance products.Thomas Godlasky, CEO of Aviva North America, said: "The granting of this patent underscores Aviva's commitment to innovation in the area of product development.

"It is truly a testament to the outstanding work being done by Aviva's product development team. As a company, our primary focus is on providing the best products and services to our customers, and the innovation behind this patent exemplifies that commitment."

news source : http://www.insurance-business-review.com/