Life insurance: More sops for long-term savings

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Life Insurance In India
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Life insurance More sops for long-term savings
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India's Life Insurance industry is one of the
fastest growing sectors with 23 licensed players
operating in the sector. The Life Insurance
Corporation of India (LIC), the sole public
sector player accounts for more than 70 of the
business, while the 22 private players occupies
the rest of the business.
In 1999 the Insurance Regulatory and Development
Authority Act was passed leading to privatization
and growth of the industry. Until then, LIC was
the sole player in the Indian life insurance
sector. The entry of private players,
de-tariffing and recently the cap on commissions
has increased the competition and proliferation
of products. Compounded Annual Growth Rate (CAGR)
of the life insurance industry for the period
2000-01 to 2007-08 has been rapid at 26.
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The performance of the insurance sector in
financial year 2008-09 was largely influenced by
the sub-prime crisis. Life Insurance in India
industry recorded a 10.15 growth in total
premium income to Rs 221791.26 crore during
2008-09 as against 29.0 growth posted at
Rs.201351.41 crore in 2007-08. The total
issuance of new policies rose marginally by 0.1
to 5.09 crore in 2008-09, compared to 10.23
growth recorded in last fiscal The cumulative
new premium collection surged 29.2 to Rs
67557.61 crore during April-December 2009,
compared with the collection of Rs 52298.86 crore
in corresponding previous years period.
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he actual growth in new business premium
collection during April-December 2009 has been
substantially higher than Life Insurance
Council's projection of 15 growth for
2009-10. Insurance penetration in the country is
growing but still very low. Tax benefits have
been a significant driver of insurance sales over
the years with almost 40 of the business in a
particular year coming in the last quarter of the
fiscal year (with almost 20 of annual sales
happening in March). Source
http//www.rediff.com/money/report/budget-2010-sec
tor-life-insurance-more-sops-for-long-term-savings
/20100223.htm
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