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Insurance

Reinsurance in India- a detailed study

Reinsurance in India- A Detailed Study

Reinsurance in India has been under the monopoly of the General Insurance Corporation of India for a long time. It is the only indigenous reinsurance company. Although there have been reforms made to open the market for international companies in recent years, strict measures have been imposed on foreign vendors in order to support local companies.

Let’s have a look at the growth and development of the Reinsurance market in India:

Reinsurance Companies In India

  • GIC is the only Indian reinsurance company operating in the country. The General Insurance Corporation of India was established as the supervisor of property and casualty insurance, as a result of the nationalization of the non-life market. It regulated the working of the four major national insurance entities: new India, Oriental, National, and United. It then started operating as a reinsurer and the shareholder of these four non-life insurance companies.
  • GIC gained its individual identity as a reinsurer after the establishment of the Insurance regulatory and development authority. After the IRDA came into the picture the GIC underwent a solid reorganization. It withdrew itself from the four subsidiaries and became a national reinsurer under the name of GIC Re.
  • It not just operates in India but also is highly active in other parts of Asia, the Middle East, and Africa. The United Kingdom, Russia, United Arab Emirates, Malaysia, and South Africa, and Brazil are some of the places where the GIC has numerous subsidiaries.
  • It is quite interesting to know that the GIC contributes immensely to the international income of the country. Its portfolio currently includes 30% of international business. It has been ranked as the 12th most prestigious reinsurance company worldwide and the 3rd in Asia.
  • The other Indian reinsurance company ITI, received a green signal in December 2016. It would have been the first Indian reinsurer in the private sector if its license would not have been withdrawn in May 2019. Its license was ceased because the company failed to start its business within the given deadlines.

Foreign Reinsurance companies in India

With the opening of the market for foreign players, the growth of reinsurance in India has been remarkable. Currently, 10 foreign reinsurance subsidiaries are operating in India namely, Swiss Re, Munich Re, Hannover Re, Axe Via, XL Cat, Allianz Global, Gen Re, Lloyd’s, and RGA. These foreign competitors hold a share of 19% percent in the reinsurance market of India with the major share still remaining with GIC Re.

Growth of Reinsurance In India

The reinsurance market in India has shown immense growth in the past few years. The recent amendments and opening of the market for foreign companies are accountable for the unstoppable growth of the industry.

Although with 80.09% of share that is with a turnover of 510.3 billion INR (6.78 billion USD) GIC still dominates the market, the foreign reinsurers marked a turnover of 126.82 billion INR (1.68 billion USD) constituting 19.19% of market share. This is the data as per the financial report of the year 2020-2021.

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Life Insurance

Principles of Life Insurance

Principles of life insurance

Be it for an individual or an organization, principles form the base of conducting fair practices and constantly acts as a reminder to be just. The absence of principles eventually results in the downfall of a company. Therefore, every industry has its own set of principles to follow. There are various principles prevalent in the insurance industry too. In this article, we’re going to focus on the principles of life insurance.

Life Insurance is basically a contract between an individual and a company. When the insured person passes away or the policy is matured, the insurer pays a certain sum of the amount promised in exchange for a premium. Such an agreement is of great significance for both parties and therefore certain principles are followed to ensure just and smooth functioning.

Principles of life insurance

Life insurance is based on several principles that are customized as per the market conditions. It also makes sure that the insurance company receives profit and the insurer gets unfiltered security policies.

In India, there are five major principles of life insurance that are applied, they are as follows:

1. Good Faith

Life Insurance is a contract and this contract is supposed to be done in good faith by being transparent of all the necessary details. If an individual falsifies/withholds any important information from the company, this may result in serious consequences like termination of the policy. In addition, the insurer is also required to explain all the relevant policy aspects to the applicant. It is the responsibility of the insurer to educate the applicant about the terms and conditions and make sure nothing is hidden from them.

2. Insurable Interest

One of the most profound principles of life insurance, insurable interest is related to the interest level a beneficiary other than the insured person, is expected to have. The beneficiary can be anyone as mentioned in the contract. In simple words, it is the coverage that the beneficiary expects after the loss of the insured or the insured’s financial capacity.

3. Risk and Minimal Loss

Everyone is aware of the risk associated with insurance. The companies, keeping the risk in mind, have to function, offer policies and gain profits accordingly. The principle of risk and minimal loss states that the insured individual should take essential action to protect him/herself from any risks. This involves adhering to a healthy lifestyle, getting regular check-ups done and more.

4. Subrogation

It is the legal right that the insured gives to the insurance company. Under this, the insurance company gets the power to persuade the third-party that might be responsible for the losses caused to the insured or his belongings.

5. Contribution

This principle is implemented when multiple insurance policies have been purchased related to a particular subject matter. It states that the insured cannot claim the loss of one subject matter through different companies or policies.


If you have opted or are planning to opt for life insurance, take note and adhere to the principles of life insurance mentioned above for an easy and hassle-free insurance policy experience.

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Life Insurance Corporation

LIC vs Mutual Funds- Understanding the Difference

LIC vs Mutual Funds- Understanding the Difference

There are numerous options given to an individual when it comes to investing. But choosing the best is an extremely confusing task. However, where a person wants to invest is a matter of personal choice and depends upon the goals of the investor, the amount of money he wishes to invest and the risks he might want to take.

LIC and Mutual funds are the most popular and trusted methods of investment in India and people often find it difficult to choose between the two. So here’s a detailed study regarding LIC VS Mutual Funds to help you choose the best for yourself.

LIC VS Mutual Funds

LIC

MUTUAL FUNDS

Meaning

 

LIC offers life insurance which is a protection scheme that helps you to secure your family’s future in your absence.

Meaning

 

 A Mutual fund is an investment scheme that helps in increasing your wealth through market-linked investments.

Goal

 

The main objective of choosing a LIC policy is to safeguard your dependent’s future. It could be anyone, the insured’s parents, spouse, or children. It is a financial asset for the insured and his family.

Goal

 

The main objective of investing in mutual funds is to meet your financial goals. They are highly rewarding and help you to fulfill long-term goals like paying for your education, purchasing a property, starting your own business, etc.

Benefits

 

Life insurance provides death benefits, which means a secured future for the insured’s family.

Benefits

 

Mutual funds do not offer any coverage in case of mishaps. However, it is the best way to manage your funds.

Risk Involved

 

There is very little or no risk involved in a LIC policy as the sum insured is paid to the insured at the time of maturity even if the insured is alive.

Risk Involved

 

Mutual funds are a matter of high risk as their prices keep fluctuating but at the same time, they are very rewarding.

Returns

 

Life insurance is a good choice for safeguarding one’s family’s future. However, the returns offered by the policy are comparatively low.

Returns

 

Mutual funds offering the option to diversify your funds, help you to maximize your returns without being dependent on a single source. Thus they are an excellent choice to make investments and offer high returns in the long term.

To choose the best way to invest your money from amongst the two or any other financial products, you must first decide your goal. It is imperative to get a detailed understanding of what each of them has to offer in terms of return, risk, and security.

You also need to understand the benefits the product would offer in your desired time period. All of this together will help you make well-informed decisions.

Be very careful while investing as it is your hard-earned money that you’re risking. Note down your requirements after comparing the different financial products, and then wisely choose the one that matches your goals, requirements, and expectations.

Great returns and fulfillment of your financial goals- enjoy the best of both worlds by making a smart choice!

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Life Insurance Corporation

LIC Vaya Vandana Yojana- Features and benefits

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LIC Vaya Vandana Yojana- Features and Benefits

Steady and regular income is one of the biggest concerns for senior citizens. Post-retirement, financial independence becomes difficult. Pension plans are an escape from issues like this. Also known as retirement plans, pension plans require you to invest a certain part of your savings for a fixed period of time and then help you to avail steady income after retirement.

LIC Vaya Vandana Yojana is one such government-launched pension scheme designed exclusively for senior citizens. 

Read further to understand what is LIC Vaya Vandana Yojana and how it is beneficial for senior citizens.

What is LIC Vaya Vandana Yojana?

Under this scheme, senior citizens are offered a guaranteed interest on the principal amount invested by them. The interest rate starts from 8% and can go up to 8.3%. The interest is given for a period of 10 years, and is payable monthly.

Note: The rate of interest is revised to 7.4% from FY2022-23.

The scheme has also been exempted from the Goods and services tax or the GST. The sole right to operate the Vaya Vandana Yojana has been given only to the LIC by the government. LIC has been offering this scheme from its launch date, 4th May 21017.

Features of the LIC Vaya Vandana Yojana

Here are a few key features of the policy:

  • INR 1,50,000 to INR 15,00,000 is the lump sum investment you need to make to purchase the policy for a monthly income.
  • There is no maximum age specified for purchasing the policy.
  • The policy has been made available for purchase in both online and offline mode.
  • The policy is exempted from GST.
  • The interval of payment can be chosen by the policyholder i.e., annually, quarterly, monthly, or semi-annually.
  • Payment for the policy is made through NEFT or AEPS i.e., Adhaar Card enabled payment system.

Benefits of the policy

LIC Vaya Vandana Yojana is one of the government’s flagship policy offering numerous benefits, some of them are:

1. Steady regular income

The most significant benefit of the policy is a steady and fixed income for the senior citizens in the form of a pension. This ensures the financial independence of the policyholder till the end of the policy tenure, 10 years.

2. Guaranteed returns

Returns at a fixed assured rate are guaranteed to the insured for a period of ten years. These rates are age-independent but they might vary for different policyholders depending upon the mode of payment chosen by them.

3. Facility of Loan

After the completion of three years of the payment tenure, the loan facility can be availed. A loan of up to 75% of the amount invested can be taken, the interest recovery of which is made from the interest paid to the policyholder. The recovery of the final loan amount is however made from the final claim of the policy.

4. Independence to choose the pension payment period

The policyholder has the independence to choose the pension payment interval as per his needs. He may choose to receive his pension monthly, quarterly, half-yearly, or yearly.

Pension planning is a way to ensure a healthy and independent life post-retirement. Starting off with it at an early age can be highly beneficial in the long run and help you have a backup plan for maintaining your financial stability.

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Life Insurance Corporation

Features and Benefits of LIC Varishtha Pension Bima Yojana

Features and Benefits of LIC Varishtha Pension Bima Yojana

LIC Varishtha Pension Bima Yojana, as the name suggests is a pension scheme primarily for senior citizens. It is one of the most popular schemes introduced by the government and incorporated by the LIC. This scheme was made available only to people above 60 years of age. Under this policy, the policyholder needs to pay a single premium to enjoy the benefits.

Let’s learn a little more about the policy. Here’s the purchase plan which the policy offers

Minimum Purchase Price

Maximum Purchase Price

Pension Frequency

Rs 63,960

Rs 6,39,610

Monthly

Rs 65,430

Rs 6,54,275

Quarterly

Rs 66,170

Rs 6,61,690

Half-Yearly

Rs 66,665

Rs 6,66,665

Yearly

The features and the benefits the policy has to offer are the reason for its extreme popularity, let’s have a look at them.

Key features of the LIC Varishtha Pension Bima Yojana

Here are the features of the LIC Varishtha Pension Bima Yojana:

  • No medical check-ups are required to avail of this policy.
  • LIC Varishtha Pension Bima Yojana provides for early availability of surrender value in case the policyholder is diagnosed with any critical issues or illness.
  • 15 years of lock-in period is allotted for the policy although the policyholder can withdraw the required amount of money by paying a fee known as the exit load.
  • Only 2% as exit load is charged if the policyholder decides to withdraw the amount before maturity. That means, 98% of the total amount will still be received by the policyholder.
  • A choice is given to the policyholder if he wants to receive the payment monthly, yearly, quarterly, or half-yearly.
  • Payments are made through ECS or NEFT ensuring that the policyholder receives the money without going through the trouble of encashing a cheque or demand draft.
  • The policyholder can surrender the policy after the completion of the tenure and receive the entire amount of premium paid to purchase the policy.
  • A loan can be availed on the policy after the completion of 3 years. A loan of up to 75% of the premium paid can be granted based on the interest rate decided by the LIC.
  • In case the age of the policyholder is proved to be incorrect, it can simply be changed. The policy is not canceled and nor is the policyholder fined.

Benefits of the LIC Varishtha Pension Bima Yojana

The policy offers numerous benefits that immensely attracts its target age group. A brief description of the benefits has been provided here:

  • A regular assured income is paid to the policyholder. This amount is directly transferred to the bank account of the policyholder.
  • The beneficiaries on the death of the policyholder receive the entire amount paid by the pensioner as a premium to purchase the policy.
  • Tax benefits are also offered to the policyholder on the premium paid by him.
  • As the policy is initiated by the government, its reliability is undoubted just like the other government pension policies.
  • The policy can be easily combined with other sources of pension such as the provident fund to obtain a good amount of sum.

Earlier pension planning was just restricted to limited sources such as PF but with the advancements in the banking and insurance sector, numerous ways are available to secure one’s post-retirement life. Utmost advantage should be taken of these advancements in order to live a healthier and independent retired life.

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Life Insurance Corporation

LIC Jeevan Umang Plan- The Dual Benefit Policy

LIC Jeevan Umang Plan- The Dual Benefit Policy

The benefit of Income and protection of the family are two main concerns for any individual, isn’t it? It is often very confusing and difficult when one has to choose between the two. LIC’s Jeevan Umang plan is here for your rescue. It combines both benefits of income and protection of the insured’s family under one policy.

Let’s learn a little more about this policy.

What is LIC Jeevan Umang Plan?

LIC Jeevan Umang is a life insurance plan which offers the dual benefits of Income and family protection under one policy. On the 1st of February 2020, this policy was launched by the LIC. The policy provides the annual survival benefits from the completion of the premium payment tenure till the time of maturity. Along with this, the insured is also paid a lump sum on maturity or the death of the insured, whichever is earlier. The policy offers great returns which can help the policyholder enjoy financial independence after a fixed period of time i.e., after the premium payment tenure.

Let’s Understand The returns of this policy with an example.

Let’s assume that the policy has been bought by Mr. Dixit who is 29 years old.  He has chosen the premium payment tenure to be 20 years, this means he’ll start receiving the pension every year after he turns 49. His sum assured is 6 lakhs.

He will receive the pension until the policy matures. Let’s see the premium he pays.

Premium Payment Frequency

1st year

After 1st year

Monthly

2,856

2,794

Quarterly

8,567

8,382

Half-yearly

16,961

16,596

Yearly

33,581

32,858

This is the premium value including GST

After the payment period is over, he will receive Rs 48,000 every year. On maturity he will receive Rs 6 Lakhs, the sum assured.

Adding up all the premiums and sum assured, he receives Rs 15,16,200 in total which is almost 3 times the sum he paid.

Benefits of the LIC Jeevan Umang Plan

Prime benefits offered by the LIC Jeevan Umang Plan are as follows:

1. Death benefits

On the demise of the insured during the policy’s tenure, the death benefit is availed to the beneficiary as:

  • On death before commencement of risk: The beneficiary receives the sum total of all the premiums paid till date without any deductions or applicable interests.
  • On death after commencement of risk: The sum assured is paid to the beneficiary along with a reversionary bonus and final bonus if any.

2. Survival Benefits

If the insured survives at the end of the premium paying tenure, 8% of the basic sum assured is paid to the insured on its completion. Thereafter, the policyholder is paid the same amount after every year till he is alive and before the maturity of the policy.

3. Maturity benefits

If the policyholder survives the entire tenure of the policy i.e., 100 years, he or she is paid the sum insured. Applicable bonuses, simple reversionary bonus, and final bonus if any are added to the sum insured.

4. Loans

Policyholders can even avail of the loan facility under the LIC Jeevan Umang Plan. After the completion of 3 years of the policy, the policyholder can take a loan of up to 90% of the surrender value. But it is required that the premium is paid thoroughly and is up to date.

This policy is a huge relief for the earning member of the family. It not only provides a source of regular income but also relaxes the policyholder regarding the protection of his family in his absence.

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Insurance

Know the Types of Marine Insurance

Know the Types of Marine Insurance

As you already know hundreds of ships travel to and from the Indian ports to different parts of the world carrying goods of extremely high worth. These goods are subjected to high risk as the behavior of the water bodies is highly unpredictable. Doesn’t this make insuring both- the people and the goods necessary? Therefore, marine insurance was introduced to ensure financial safety to the goods and men on board.

Let’s know a little more about marine insurance, its incorporation, and the types of marine insurance.

Marine insurance definition

In India, marine insurance is regulated by the Marine Insurance Act 1963. It is defined as the insurance that covers the loss or damage that might be caused to the ship, cargo, terminal, and the transport by which the goods are moved from the point of origin to the final destination.

It is a measure to secure the wealth of the shipping companies as well as the businessmen using the shipping services. It provides assurance and motivates them to undertake the risk involved in the transportation of goods through water bodies.

Despite taking all the necessary precautions and being fully equipped with the most advanced of the tools, nobody has control over natural happenings. Therefore, marine insurance is necessary.

Marine Insurance in India is available in various types. You must know the marine insurance features for each type to choose the best one suiting your needs. Let’s dive in.

Types of marine insurance:

Although all the insurances cover common losses like natural calamities, fire explosions, sinking, etc. There are differences between various kinds of marine insurances, want to know? Have a look:

1. Hull and machinery insurance

Both of these insurances are mostly issued together. Hull is the supporting body of the vessel, thus ensuring the hull helps shipowners in any mishap to the ship.

Machinery insurance covers the machinery of the ship. Both of these insurances cover any operational and mechanical losses that might occur to the ships.

2. Marine Cargo insurance

The voyage of the ship at the terminal is the most crucial part for the cargo owners. The shipments are subject to great risks of misplacement, damage, or other such losses. To prevent the losses of the cargo owners which may arise in such situations, marine cargo insurances are issued. It also consists of third-party liability insurance, that covers any losses that might be caused to the port because of your cargo. It also covers the goods throughout the voyage and while the goods are in transit.

3. Liability Insurance

The cargo is subject to a high risk of crashes, piracy attacks, and collisions. Along with the cargo, the life of the men working on the ship is also very high-risk. To avoid being responsible for any such losses, the shipowners opt for the right liability insurance suiting their needs.


In India, there are a plethora of companies that offer various types of marine insurance policies. The best way to purchase one for yourself is to compare, analyze the coverage and then decide.

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Keyman Insurance Policy and its Advantages

The Keyman Insurance Policy and its Advantages

Employees are the most crucial asset to a company. Be it a small-scale or a large-scale industry, skilled employees are valuable to all. It is impossible for any kind of organization to work efficiently and grow without proficient labor. This necessitates the need for an organization to insure itself against any loss that might occur in case of the loss of such employees. This is where the Keyman Insurance policy comes to play.

What is the Keyman Insurance policy?

Keyman policy is the policy wherein the employer is the proposer as well as the premium payer. The life insured under this policy is that of the employee but the compensation in case of the loss of the insured is paid to the employer.
Wondering what kind of losses can the death of an employee cause to the company? Here’s the answer:

  • The death of an efficient employee might lead to profit reduction for the company.
  • The company will have to spend money on the replacement of the keyman.

If the company has the keyman insured, the sum insured is paid to the company on the death of the employee. The sum received by the company is quite large and sufficient for the company to easily and smoothly overcome any losses and also employ new executives as a replacement. In case the insured survives the tenure of insurance the company is not liable to receive any kind of compensation or sum insured.

Who can be considered a keyman?

A keyman can be any employee of the company with special skills and important responsibilities of the company. The employee to be insured under this policy should contribute significantly to the profits of the company and whose loss might cause a financial strain to the organization. For example, Directors of the company, key project managers, etc. can be considered as keymen.

How can the Keyman Insurance policy be used?

The sum insured received against the policy can not only be used to hire and train new personnel but also for various other purposes too. It can be used to settle loans, offer salary continuation to the spouse of the lost, and also fund executive compensation plans.

Advantages of the Keyman insurance policy

Here are a few advantages of the policy:

  • The company receives compensation against the loss of the employee which helps it to carry out the business operations unhindered without much difficulty.
  • Helps the company to avail tax benefits as the premium paid by the company is subject to satisfaction for the assessing officer. Under Section 37(1) of the Income-tax act 1961, the premium for keyman insurance is considered a business expense.
  • It becomes easy to recruit and train new employees, handle debt and liquidation of the company, and even successfully sell the company when a business is covered by keyman insurance.
    Keyman insurance makes many difficult decisions simple. It is of utmost help in the case of a family business that is dependent on a few individuals. It assists a company to gain a little more resistance against financial strains and helps them to sustain in a better way.

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IRDA

The Integrated Grievance Management System of IRDA

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The Integrated Grievance Management System of IRDA (IGMS)

An excellent grievance management system is something desired by all customers, isn’t it? All of us as consumers want our issues to be resolved quickly and without any hassle, and this is expected from all the industries, even insurance. So, to fulfill this expectation of its customers The IRDA as the regulator of the industry launched the Integrated grievance Management System.

Let’s Get a better insight into the Integrated grievance management system of the IRDA

What is IRDA IGMS?

It is an online customer grievance or complaint registration system launched by the IRDA in 2010. It is like a portal for the customers to connect with the insurers and get their issues resolved.

The IGMS has the online complaint management system of all the insurance companies linked to it. The customers can not just register their complaints but also track the progress of their complaint resolution. The Integrated Grievance Management system or the IGMS to the insurance policyholders also provides the facility to register their problems through a gateway in case they are not able to directly connect to their insurance company for some reason.

The IGMS also serves the purpose of being a tool to monitor the grievance redressal policies, methods, and duration of different insurance companies. The IRDA keeps a real-time and close watch of the complaints and their progress through the IGMS.

When should you contact The IRDA?

Every complaint or issue that an insurer has must be first registered with the insurance company and only if needed one should escalate it to the IRDA’s consumer affairs department. You must use the IGMS if your issue or issues are not solved by your insurer after 15 days of registering it.

If a policyholder registers a complaint with the IGMS, it is updated on the insurer’s system as well which is mirrored on the IGMS.

The link or contact of your insurer’s complaint redressal mechanism is mentioned on your policy papers.

What are the steps involved in the process of registering a complaint on IGMS?

There are three simple steps involved for registering and tracking your complaint:

  1. Register yourself by entering your details.
  2. Register your complaint.
  3. After registering your complaint, view the status to track its progress.

The IGMS is a comprehensive tool. It not only keeps a track of the complaints but also can classify them based on the pre-defined rules which are fed into it. It assigns, stores, and tracks unique complaint IDs. It is also programmed to define the “Target Turnaround Time (TATs) on all complaints and also keeps a record of it. It sets and sends alerts to the insurance companies regarding the pending tasks or if a complaint is about to exceed its assigned TAT.

It also has the ability to automatically trigger actions based on the rules of workflow programmed into it. The IGMS is a way for the IRDA to know the needs and expectations of the policyholders in a better way. And as responsible consumers, it is our responsibility to make the best use of the IGMS by providing the right information about our complaints and co-operating with the Insurance companies and the IRDA.

Author Bio

This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.

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Insurance

What is Insurance on Bank Deposits?

What is Insurance on Bank Deposits?

Ever wondered what if your bank runs out of funds? Who would lend you money and how? In such cases, there’s a little help that the RBI offers in the form of insurance on Bank Deposits. Let’s look into it in a little detail.

The Insurance on Bank Deposits is a protection cover against the losses that might occur if the bank fails or loses its financial ability to pay back to its depositors.

This is an extremely helpful policy as it prevents individuals and especially private business firms from losing their savings or capital. It also prevents the situation of panic and helplessness among the depositors in case a bank declares its solvency.

Although your money is insured, this does not mean that it gives you the freedom to take higher risks. You still need to be very careful before handing over your life’s earnings to any bank, as we all know a little precaution is essential at every step.

 

Here are a few things you need to keep in mind about insurance on bank deposits:

 

  1. This insurance policy is offered by Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary wholly owned by the Reserve Bank Of India (RBI). The DICGC insures all the savings, fixed deposits, current deposits, recurring deposits, and various other bank deposits exceeding Rs. Five lakhs. For all the deposits above this amount, the bearer will only be able to attain Rs Five Lakhs, inclusive of the principal and the amount of interest.
  2. Under this policy, the Deposit Insurance and Credit Guarantee Corporation covers all the commercial, rural, local, co-operative and International banks operating in India required that the bank buys the cover from RBI. Rush to your bank today to ensure that your bank is insured by checking it with your branch official.
  3. The deposits made in the same bank under a similar kind of ownership are regarded as one and clubbed together while calculating or providing the claim. On the other hand, funds deposited by the same person in different banks are regarded as separate and further processing takes place accordingly. So now, you know a trick for smart banking.
  4. Although this cover cannot be withdrawn by the bank, there are certain cases under which the corporation can cancel a bank’s cover. In any such cases, the depositors are to be informed through newspapers.


Thinking why you never got to know about this policy by looking at your bank statements?

Well, this is because the insurance premium for this cover is borne entirely by the bank and is part of their responsibility to ensure a safe banking experience for their customers. Even after the bank gets liquidated, it is its responsibility to make sure each and every depositor gets the compensation on time. In no case, there is direct contact between the depositors and the RBI.

The liquidated bank prepares a claim list and submits it to the DICGC. Only after two months from the date of receipt, the depositor is liable to receive the claim which is reimbursed by the liquidated bank.

Now you can take a sigh of relief as you know that your bank has a backup! But always remember your money is your responsibility and it is you who decides its fate, Happy Banking!

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