Your vehicle insurance premium set to rise Because the premium for the compulsory personal accident (CPA)

Owners of private vehicles, two- and four-wheelers, will have to shell out more for their motor insurance premium while renewing their existing policy or buying a new vehicle. This is because the premium for the compulsory personal accident (CPA) cover component of motor insurance will increase to Rs 750 per annum, with immediate effect. This premium is currently Rs 50 for two-wheelers and Rs 100 for four-wheelers.

The rise in premium is following the increase in the amount of the CPA cover from Rs 1 lakh for two-wheelers and Rs 2 lakh for four-wheelers to Rs 15 lakh for both. The Insurance Regulatory and Development Authority of India (Irdai) issued a circular on September 20 to this effect.

Insurers can start issuing the revised policies with immediate effect and will have to file for these covers under File and Use Guidelines on or before October 25, as per Irdai's circular.


"A minimum Capital Sum Insured (CSI) of Rs 15,00,000 shall be provided under CPA cover for owner-driver under liability only, under Section III of package policies to all classes of vehicles and bundled covers wherever applicable at the premium rate of Rs 750 per annum for the annual policy. This rate will be valid until further notice," said Irdai.

What is compulsory accident cover?
"The provision of compulsory personal accident cover for owner-drivers was introduced in 2002, when motor tariffs were extensively revised. This was charged compulsory for vehicles registered in the name of an individual. This cover has now been revised to Rs 15 lakh, which is a good amount considering the risk exposure of people driving bikes and cars,'' Puneet Sahni, head-product development of SBI General Insurance, said.

This premium is collected as part of the Third Party premium, which is compulsory. The other component of motor insurance is Own Damage, which is optional. A comprehensive motor insurance will have all three components, Own Damage, Third Party and CPA cover.

The regulator also said that companies could also offer a higher sum assured under CPA for higher premium, in multiples of Rs 1 lakh or Rs 5 lakh. Some insurance companies already offer this option to customers, through add-on covers, SBI being one of them.

"Prior to this circular we were offering enhanced personal accident cover as an add-on cover from Rs 2 lakh to Rs 50 lakh. Now it would be beyond Rs 15 lakh and up to Rs 50 lakh. Quite a few people used to take it. Generally people used to take it till Rs 10 lakh,'' Sahni said.

The additional premium charge was 0.05% of the sum assured, which is the same as fixed by the Irdai, he said. (Rs 750 is 0.05% of Rs 15 lakh)

Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance said: "This move is a step in the right direction. "It is vital to have an appropriate personal accident cover since it provides much needed financial support to the policyholder and their family members if she/he is disabled or succumbs to injury due to an accident. This will address the issue of under insurance to some extent."

In case of an accident, the policy covers the owner-driver, even if the owner is not the one driving and is sitting in the passenger seat.

According to Tarun Mathur, chief business officer-general insurance, Policybazaar.com, normally when customers buy car insurance, their typical focus is towards the car. "And if you buy only third party insurance, the CPA cover is available with it mandatorily. The sum assured will be paid out in case of disability or death,'' he said.

Is this enough?
"The CPA cover bundled in the motor cover is a restrictive cover, in the sense that it is only operative whilst you are alighting on to the vehicle, or off the vehicle or whilst in the vehicle. It is not a 24-hour cover. So a separate personal accident cover is definitely required,'' Sahni said.

Mathur agreed that instead of buying additional CPA cover, customers should opt for a separate term life and personal accident cover that would cover hospitalisation because the usage of this policy is limited.

"You would want to be covered for all kinds of accidents and not just car accident,'' he said.

Will the cost will go up?
Customers will now have to buy the CPA cover for a longer term, three years for four-wheelers and five years for two-wheelers, along with the mandatory long-term third-party cover. This will push up the overall cost.

Agreeing to this, Sahni said, "It is true that overall cost will go up, but look at the benefits. The policy secures the customer in case of an unfortunate accident in the long term. Customers are not aware that accidents can be a big risk."

In fact, accoriding to Sahni, premium rates could be lower than Rs 750 as mandated by Irdai.

"The pricing is whatever the company may set. It could be decreased if companies pass on the cost to customers. I am insuring a customer for three years, so I am saving administrative costs and I may pass on the savings to the customer,'' he said.

Mathur said, "Now with premium rising to Rs 750 it will make a difference. Because it is compulsory and for three or five years, depending on whether it is two- or four-wheelers. The average ticket-size we see is Rs 9,000 on our website. Even if we say it is Rs 7,500, when you are increasing the premium by 8-10% for someone, that is a high cost. Plus, your new car insurance has moved to three years. You club this and it is a 4X effect on the total amount of premium. This will start affecting the affordability of the car itself. Now insurance will become something you have to think about or get it financed. It will impact the customer."

BIGGER UMBRELLA
Rs 15 lakh Revised compulsory personal accident for two and four wheelers

Rs 750 Revised premium for the compulsory personal accident cover

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EPFO nod likely soon for minimum Rs 2,000 EPS pension

The Employees’ Provident Fund Organisation (EPFO) is expected to soon give its go-ahead to the proposal of doubling monthly pension for EPS subscribers to Rs 2,000.

This would benefit at least 40 lakh subscribers and cost the Centre a minimum Rs 3,000 crore per annum.

The issue, though not listed on the agenda for the upcoming central board of trustees’ meeting of EPFO on June 26, is likely to be tabled after permission from the labour minister, who is the chairman of the board ..


EPFO had started investing in ETFs in August 2015. In 2015-16, it invested 5% of its investible deposits, which were subsequently increased to 10% in 2016-17 and 15% in 2017-18. It has invested Rs 41,967.51crore in ETFs with return of 17.23% as on February 2018. The body had sold ETFs worth Rs 2,500 crore in March this year for the first time to liquidate its investments in stock market.

The central board of trustees of EPFO is the highest decision making body. It comprises representatives of trade unions, employers as well as central and state governments and all decisions related to the retirement fund body are taken by the CBT. 

There are around 60 lakh pensioners under the EPF-95, of which around 40 lakh are getting less than Rs 1,500 per month. Of these, 18 lakh are the existing beneficiaries under the minimum pension of Rs 1,000. The government has about Rs 3 lakh  .. 

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Ayushman Bharat (Modicare) benefits likely for lakhs for EPF subscribers

EPFO alert: Lakhs of EPF subscribers can soon enjoy the benefits of PM Narendra Modi-led Union government's ambitious Ayushman Bharat (or Modicare) scheme. Zee Business TV reports that the Union Ministry of Labour is currently holding talks with the Health department for providing benefits of Ayushman Bharat scheme to eligible EPFO subscribers. 

Mediclaim facility for EPFO subscribers has been a longstanding demand. The report says that which EPFO subscriber will get the benefit of Ayushman Bharat or not may depend on the legal structure of the scheme. However, the Central Board of Trustees (CBT) of EPFO has not yet formally approved any such proposal. Currently, this is being seen as an option as to whether eligible EPFO subscribers can get medical benefits under Ayushman Bharat. According to CBT, this will depend on the category of the pension holder.

Ayushman Bharat benefit will come as a huge relief for as many as 70-80 per cent EPF pensioners, who get less than Rs 1500/month as pension. 

In the next CBT meeting, a formal talk on the matter is expected to take place. Optionally, it is also being discussed whether Employee Deposit-linked Insurance Service, in which employer deposits for the employee, can be used for extending Ayushman Bharat benefits by increasing the premium from pensioners, the report said.  

Data released by EPFO in April this year had shown that during September, 2017 to February, 2018, 31.10 lakh new subscribers were added across all age groups in the payroll. "Given that the data for recent months are provisional due to continuous updation of employee records, this could be called a conservative estimate. The actual figures may well be more than this," a PIB release had said.

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India Post Payments Bank offers zero-balance savings account, 4% interest rate

New Delhi: Launched last week by Prime Minister Narendra Modi, India Post Payments Bank (IPPB) offers three types of savings accounts—regular, digital and basic. As the name suggests, a digital savings account can be opened through the IPPB mobile app while the remaining two have to be done either through the post office or the postman. Besides the ease of making payments, the best part of these three savings accounts is that they come without any liability of maintaining a minimum balance. IPPB savings accounts are therefore zero-balance accounts.


Minimum/maximum balance rules:

Since these are zero-balance accounts there are no minimum balance rules. However, you need to take care of the maximum balance. The Reserve Bank of India (RBI) has restricted all payments bank account holders to hold more than Rs 1 lakh in any account at a given point of time. So the moment your IPPB account crosses the Rs 1 lakh limit the transaction will be rejected automatically.

To escape the hassle, IPPB has a simple solution. Open a post office savings account and link it with your IPPB account. Any balance in excess of Rs 1 lakh will be transferred to your post office account, which is a regular savings bank account.



Interest rate on IPPB account:

All IPPB accounts attract an interest rate of 4% per annum. Calculated on your daily closing balance, the interest rate is paid quarterly.

Deposit/withdrawal rules:

In regular and digital savings accounts, you can also withdraw or deposit as many times as you want. In case of a basic savings account, there is a restriction of 4 cash withdrawals monthly. For cash deposits and withdrawals, you need to go to the nearest post office where the IPPB service is available. You can also call the postman or Grameen Dak Sevaks (GDS) home and make both digital and cash transactions using the QR card you get with your IPPB account. However, doorstep banking isn’t free. You have to pay Rs 25 for every cash-based transaction at your home and Rs 15 for a digital transaction at home.

In case you are using the IPPB app to make payments then there no charges.

Since the IPPB accounts do not come with an ATM card you can’t withdraw cash from ATMs.



Digital savings account rules:

Like other payments bank, IPPB also allows opening of digital savings accounts so that you can open them at home without hassles. However, it is valid only till 12 months. Within a year you have to convert it into a regular savings account by providing your biometric data to the postman. If you fail to do so, the digital savings account will be closed.

Source- LIVEMINT

TAGS- INDIA POST PAYMENTS BANK INDIA POST PAYMENTS BANK SAVINGS ACCOUNT INDIA POST PAYMENTS BANK APP INDIA POST PAYMENTS BANK INTEREST RATE IPPB

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India's GDP growth over 8.2 percent For First Quarter

India's economy grew at an impressive 8.2 per cent in the first quarter of 2018-19 financial year ending June 30 on the back of a strong core performance and a healthy base . 

This jump ahead of national elections next year would help bolster the government amid a debate over its economic record versus that of its predecessor following the release of back-series data recently. This will also be factored in by the monetary policy committee at its next review scheduled for October 3-5. 

The Indian government changed the base year for GDP calculation from 2004-05 to 2011-12, by changing the goods and services in the basket to make it more current, in 2015. 

Key Highlights 
This is the highest growth in two years and strongest since the first quarter of 2016.

Sectors which registerd growth of over 7 per cent include ‘manufacturing, ‘electricity, gas, water supply & other utility services’ ‘construction’ and ‘public administration, defence and other services’.

The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘Trade, hotels, transport, .. 

The official figures are much better than the expectations of economists who have predicted about 7.5-7.6 per cent Q1 growth. 

The world’s second largest economy, China, reported a 6.7 per cent growth for June quarter compared with 6.8 per cent in March quarter. India's $2.6 trillion economy surpassed France's in 2017 to be the world's sixth largest, and it was not far before the United Kingdom, according to World Bank data. 

However despite the strong Q1 numbers, there is appre .. 

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