V Gurunathan, CEO, TVS Insurance Broking said, 700 new Point of Sale (POS) would be added this fiscal targeting the retail segment. “We are already strong in the retail and commercial segments. Our focus is on enhancing the retail individual customers for which increasing the number of POS from the current 300 is essential,” he said. Underwriting 50,000 policies in FY23, it is aiming to raise the numbers of policies to 65,000 this year. “The business is expected from the cyber, CV and group life and mediclaim of corporates. We would be continuing our ratio of 60:40, wherein the majority will be the retail segment,” he added.

Headquartered in Chennai, the company has operations in ten cities including Bengaluru, Thiruvananthapuram and Bhopal. Catering for 600 SMEs, more than 100 corporates are its clients from different industries such as construction, BPOs and KPOs. “The corporates are keen on increasing the insurance cap of their employees under the group insurance scheme and SMEs wanted to offer medical insurance to their workers after Covid. This has given a huge opportunity for us to grow in the corporate and SME vertical,” Gurunathan said.

The new guidelines came into effect from April 1. “Currently, our expenses of management stands at around 33.5% of gross written premium. Irdai has given us three years time to bring down the EoM to 30%. So, definitely we will bring it down to the required level,” Aggarwal told FE in an interview. EoM of an insurance company includes its operating expenses, commission to the insurance agents and intermediaries, and commission & expenses on reinsurance inward, which are charged to the revenue account.”Whoever is exceeding the 30% limit, the regulator has given them the breathing time of three years. There should be a board approved plan on how they should bring down the EoM. It is for the industry as a whole,” Aggarwal informed.

Imposing an overall cap on expenses of management at the company level, Irdai has given flexibility to all insurers to pay commissions to agents and intermediaries in different lines of business. Shriram General Insurance has been strengthening its agency channel to grow business. After recruiting 14,000 new agents last fiscal, the current strength now is around 57,000. For retail segment, agency channel contributes around 70-75% of the company’s total underwritten premium. “Our aim is to create a strength of two lakh agents over a period of four years. Also, the company’s focus is towards recruitment of employees. Last fiscal, we recruited more than 500 employees. Total strength of our employees as on March 31 stood at 3700. This fiscal, we want to recruit 700 more employees,” he said.

The Jaipur-based insurer has 435 branches across India.In FY23, the company’s gross written premium stood at `2,265.78 crore, registering over 29% year-on-year growth, according to data released by the General Insurance Council. At the end of the last fiscal, its market share in the country’s non-life insurance sector stood at 0.88%. “We are not into the race of market share. We are always looking after bottomline,” Aggarwal said. The company’s net profit for FY22 stood at `663 crore as against `592 crore for FY21.

As per applicable Irdai regulations, if a policyholder fails to pay renewal premium before the end of grace period, the policy shall lapse and the policyholder will not be able to avail any of the benefits under the policy. However, the policyholder can revive the policy during revival period. You must contact the insurance company to determine if the policy is within the revival period.

Insurance companies generally provide a revival period of 2-5 years, during which policyholders can reinstate their lapsed policies by paying the due premiums and fulfilling any additional requirements. The duration of the revival period depends on the insurance product, terms, and conditions of the policy. You must ensure that the premiums are paid on time to avoid lapses and termination of the policy.

I have a family history of hypertension. Do I need to do a medical check-up before purchasing a term plan?

Insurance is based on trust and transparency, and it is advisable that all information is shared by customers towards their life insurance policy. This enables a smooth claim process, which would be the most critical stage in a life insurance journey.

Term plans usually offer a higher sum assured for a nominal premium amount, and involve a higher risk for an insurer. Hence, most of these policies are medically underwritten. In your case, to assess the potential risk, you may be required to do a medical check-up subject to the underwriting policy of the life insurer.

I started an National Pension Scheme (NPS) account for my 55-year old mother three years ago. We now plan to withdraw the sum invested before its maturity. Are there any penalties for withdrawing funds from NPS before retirement age?

As per the regulations of NPS, a subscriber can voluntarily exit from the scheme before attaining the age of 60 years, provided he/she has subscribed to NPS for at least a minimum period of five years.

If the accumulated pension wealth is equal to or less than ₹2.5 lakh, you can withdraw the entire amount. However, if the corpus is higher, you must use at least 80% of the accumulated pension wealth to purchase an annuity plan that provides for a monthly pension. The remaining 20% can be withdrawn as a lump sum.

A subscriber can withdraw funds from the scheme before retirement age only in specific circumstances, such as treatment of specified illness or death of the subscriber. If a subscriber withdraws funds from NPS before the age of 60, except in the aforementioned circumstances, they will have to bear a penalty of 1% of the total accumulated pension wealth, subject to a minimum penalty of ₹1,000. This penalty is in addition to the tax implications that may arise from premature withdrawals.

It is important to note that premature withdrawal of NPS corpus can result in a lower retirement corpus, as you will miss the benefits of compounding and long-term growth of investments.

Sameer Joshi is chief agency officer, Bajaj Allianz Life Insurance.

An organisation's reputation is closely linked to the behaviour of its employees, the IRDAI said, adding, "Social media should be used in a way that adds value to the organisation's business."

The Information and Cyber Security Guidelines, issued by the IRDAI to all insurers, have a specific section on 'Acceptable usage of social media' — which states that the employees should be refrained from disseminating any unverified and confidential information on "any Blogs/Chat forums/Discussion forums/Messenger sites/Social networking sites".

"Any information received, accessed or obtained by an employee, either in his/her official mail/personal mail/Media Forums or in any other manner, if proposed to be disseminated or shared in any Media Forum, should be forwarded to the Organisation's Compliance team and corporate communication team for prior approval," it said.

Media forums should not be used to report a service fault or to make a complaint, it added.

Notably, the net profit for 2022–23 was despite a deferred tax liability of Rs 208 crore, compared with a deferred tax credit of Rs 357 crore in the previous year. The pre-tax profit for last year was ₹826 crore, compared with a pre-tax loss of ₹1,396 crore in the previous year.

Further, the company turned in its highest ever underwriting profit of ₹204 crore in 2022-23, compared with an underwriting loss of Rs 2,061 crore in 2021–22, a pandemic-hit year.

The Chennai-based health insurer registered a gross written premium (GWP) of ₹12,952 crore in FY23, which is 13 per cent higher than the GWP during the same period a year ago.

Star Health registered a retail health premium of ₹11,948 crore in FY23, a growth of 18 per cent over FY22 figures. It has a retail health market share of 34 per cent in the Indian general insurance industry as of March 31, 2023.

The company today announced that its CEO and Managing Director, V Jagannathan, would step down from his post, but would continue as the Non-Executive Chairman.

The Board of Directors also appointed Anand Roy as its Chief Executive Officer and Managing Director, who has been associated with Star Health since its inception in 2006. He held several leadership positions in the organisation, including MD, Executive Director, and Chief Marketing Officer. The board also appointed V Jagannathan as the non-executive chairman.

For the quarter ended March 2023, the company posted a PAT of ₹102 crore, against a net loss of ₹82 crore during the same quarter of FY22.

Shares of Star Health and Allied Insurance touched an intraday high of ₹609 apiece on NSE on Friday before closing at ₹591.4 per share, 4 per cent higher from Thursday’s closing price.

The department of financial services, along with insurance sector associations and insurance companies, are working on the roadmap for organizing this conference that is slated to be the world’s biggest, the official cited above said on condition of anonymity.

The event will bring together leaders and top executives from top insurers, reinsurers, broking firms, actuarial organizations and regulators on one platform.

The event would coincide with India’s ongoing G-20 presidency, and leverage the global focus on India. It may be organized closer to the heads of government meeting under G-20 some time in September, though the exact time and venue are still being worked out.

“We hope to bring in close to a dozen global heads on companies involved in insurance operations. Efforts are also on to bring regulators from the developed world too along with government representatives and key policymakers," the official cited above said.

A query sent to the finance ministry remained unanswered till press time.

Though Indian industry associations do organize similar events, this would be the first with participation from various governments and policy makers.

The insurance sector, with its large investment portfolio and universal coverage of personal and business risks, ensures financial stability, trade and commerce, contributing to economic growth.

In India, the sector has seen rapid transformation over the last couple of years. The pandemic has accelerated the pace of digitalization of the sector, even as insurance penetration has picked up with rising demand for health and life insurance policies.

The insurance regulator recently launched an ‘Insurance for all by 2047’ mission, and unveiled several measures to boost growth in the sector. The regulator expects the Indian insurance market to reach $200 billion by 2027.

Though the industry has seen rapid developments in recent past, the Indian insurance market is also facing certain inherent challenges in the form of insufficient penetration brought about by lack of financial awareness, trust in insurance, fragmented ecosystem and high distribution cost.

India’s insurance penetration was pegged at 4.2% in FY21, with life insurance penetration at 3.2% and non-life insurance penetration at 1.0%. To address the issue of cost, the Insurance Regulatory and Development Authority of India (Irdai) had introduced online platform Bima Sugam, where insurance products could be bought and sold directly to customers reducing costs and altering the distribution process.

The disclosure came on a day the Narendra Modi government marked a week of silence since Malik gave an interview to journalist Karan Thapar that raised several grave questions about the Pulwama terror attack and the Prime Minister's purported response on the same evening.

CBI sources said Malik had been summoned for questioning as a witness in the case.

Malik tweeted in Hindi: "I have exposed the sins of some people by speaking the truth. Maybe that's why the call has come. I am the son of a farmer; I will not panic. I stand by the truth."

Malik had earlier told PTI that the CBI had sought his presence at the agency’s Akbar Road guesthouse for “certain clarifications”.

“They want certain clarifications for which they want my presence. I am going to Rajasthan, so I have given them dates from April 27 to 29 when I am available,” PTI quoted Malik as saying.

In the interview with The Wire news portal on April 14, Malik had said that when he had, as the then Jammu and Kashmir governor, blamed the 2019 Pulwama massacre on the Centre’s own lapses, Prime Minister Modi had told him “tum abhi chup raho”.

Sources in the CBI said on Friday that Malik had earlier (November 2021) alleged that he had been offered a bribe of Rs 300 crore to clear two files when he was Jammu and Kashmir governor. He had named an RSS leader.

“Malik has been issued summons to appear before the agency and give clarification in connection with his claim that he was offered a Rs 300-crore bribe to clear two files during his stint as governor in JandK between August 23, 2018, and October 30, 2019,” a CBI official said.

“In April last year, we registered two FIRs over corruption allegations levelled by Malik. In the first FIR, we booked Anil Ambani’s Reliance General Insurance Company Ltd and Trinity Reinsurance Brokers Limited over the alleged scam in the awarding of contracts for a group medical insurance scheme for government employees,” the CBI official said.

Malik had cancelled the deal in October 2018, the official said, adding that the agency had registered another FIR on corruption allegations in civil projects worth Rs 2,200 crore related to the Kiru Hydel Power Project in Jammu and Kashmir.

The Congress on Friday linked the CBI summons to Malik for his comments on Modi.

“At last, PM Modi could not help it. Satya Pal Malik ji exposed him in front of the country. Now the CBI has called Malik ji. This had to happen,” the Congress said in a tweet.

Neither the PMO nor any other government wing has responded to Malik's claims in the interview till now.

The rejection considered smoking as an addictive condition and the cardiac issue as its consequence. However, this exclusion is meant to exclude treatment to cure the addiction or a direct outcome of abuse such as overdose. Circumstantial or indirect linkages of a habit to an illness, can at best, be a guess. Such adjudication has no medical basis except self-righteousness. Unfortunately, such activism is not uncommon. Sometime ago, a claim for liver cirrhosis was rejected because the patient used to occasionally consume alcohol. It is common knowledge that excessive alcohol can damage the liver. But, teetotalers also do suffer liver damage.

As a respite in both cases, the initial decisions were overturned when the matter got escalated. However, this was not before the patients suffered significant agony. Consider that the cardiac treatment was undertaken in a network hospital, so the patient was eligible for cashless claim settlement. The decision to reject the claim came several hours after the patient was discharged by the doctor. However, the patient was held up at the hospital until the bill was settled. The patient could not afford to pay the claim in cash. So, he had to stay overnight in the hospital. The final approval came only the next day. While the final decision was positive, it left a poor impression on the patient and his family. It is natural for the policyholder to now mistrust insurers. But, who pays for the agony? Where can policyholders go for such grievances?

Some of these issues are not limited to faults on front-line level execution, but are conscious policy actions of insurers. Consider the case of a stand-alone health insurer who suddenly decided to stop paying claims for treatment taken in non-network hospitals. Hundreds of claims were denied. The insurer cited a condition hidden, literally, between the lines of a completely unrelated clause and not in the spirit of current regulations on exclusions. The insurer itself kept the clause in abeyance for several years and had an established practice of paying all non-network claims. The insurer’s stand would not stand up to regulatory or legal scrutiny. Policyholders have limited recourse in such cases. The administrative burden to file a case with the ombudsman is significant and often outweighs the benefit of recovering a claim or an unfair deduction. Ombudsman decisions can take time, in some cases more than a year. Most claimants will just overlook small claims rejections then in the interest of moving on.

The regulator has put a solid framework of rules. For example, standardization of exclusions is a hallmark regulation to usher transparency. However, insurers are finding ways around it by taking liberal interpretations. Consider the case of another stand-alone health insurer who proclaimed that claims for oral chemotherapy are inadmissible unless the person is hospitalized.

Traditional chemotherapy is administered intravenously. This does not require overnight hospitalization, still most insurers pay such claims regularly. With advancement of medicine, some types of chemotherapy can now be administered via oral pills. To clarify admissibility, the regulator had specifically mentioned oral chemotherapy as a modern treatment method which should not be excluded from health insurance policies. For an insurer to admit the treatment but mandate hospitalization is contradictory to the progress made in medicine. It is wordplay with regulations.

A policyholder’s interests need to be forcefully protected. Without the deterrence of probable regulatory action, some may continue to experiment with liberal interpretations of regulations, at the cost of the policyholder. Currently, there is little incentive for an insurer to give the benefit of doubt to a policyholder, better train their claim executives, and keep the policyholder’s interest first.

(I am told that the decision on the cardiac claim was revisited only after the claims executive was informed that his skip-supervisor was a smoker too. He didn’t want to preach to the master.)

The general insurance company’s net loss stood at Rs 1,679 crore in FY22 against a net loss of Rs 565 crore in FY21. During the financial year 2018-19, the company had incurred a net loss of `1,696 crore.

“The company has plans to clock underwriting breakeven in next three years,” Paul said.

During FY22, the company’s combined ratio, a measure of underwriting profitability of a non-life insurance company, stood at 134% as against 121% during FY22. “We want to progressively reduce our combined ratio to 100-105% in next three years time, driven by technology adoption,” the general manager said.

During FY23, every state-run general insurer lost the market share in terms of gross direct premium underwritten amid intense competition from private sector peers, data from the General Insurance Council showed.

As the insurers continue to lose market share, it reflects weakness in their solvency positions and underwriting performances, constraining their overall profitability.

“We are focusing on retail business. Our retail growth last year was in single digit. We are looking at growing our retail book by double digits with the tweaking in commission,” Paul said.

Notifying the payment of commission regulations for the insurance industry, came into effect from April 1, insurance regulator Irdai replaced the earlier caps on commission payments in different lines of business with an overall cap on expenses of management at the company level. Now, all insurers have the flexibility to pay commissions to agents and insurance intermediaries.

NIC’s board is likely draw the company’s new commission policy within the next three months.

However, the IPO went into limbo after markets regulator Securities and Exchange Board of India (Sebi) returned the offer documents on 30 January with some observations. The company rectified the issues pointed out by Sebi and refiled the offer document on 6 April.

One of the new provisions in the 6 December IRDAI circular pertains to applicability of lock-in period. New rules say, whenever there is a major change in the capital structure of an insurance company, the existing investors would be subject to what is called ‘staggered lock-in’. However, the old rules didn’t have any such lock-in requirement.

Go Digit is learnt to be taking a view since it received IRDAI nod before the new rules were notified, the lock-in criteria shouldn’t apply to its investors if the IPO happens. In the absence of any relief from IRDAI, the existing shareholders of Go Digit would be subject to up to two-year of the lock-in period.

“In light of the restrictions under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, we are not permitted to share any information that is extraneous to the DRHP," said Go Digit in response to an email query.

“It is not just specific to Go Digit but at least two or three other insurance companies who had planned capital market offerings last year are facing similar challenges," said a person with direct knowledge of the matter.

People cited above said the company is yet to receive any intimation from IRDAI regarding their query.

“The industry hopes that the regulator will clarify on the matter soon."

As per the new rules, if a promoter or an investor purchases shares during the grant of a registration certificate named R3 by IRDAI, a lock-in period of five years applies. If the investment change is happening up to 5 years from the time of grant of R3 certificate then the lock-in would be 5 years from the time of capital offering or 8 years from the time of grant of R3 certificate, whichever is earlier.

If the same investment change happens 10 years after the grant of R3 certificate then promoter’s stake would be subject to 2-year lock in while existing investor shares will be locked-in for one year, the IRDAI circular said.

Normally, when a regulator or a government department issues new rules, it generally provides for what is called ‘grandfathering’. This basically exempts the existing and old transactions from being subject to the new law. However, in this case the insurance regulator has not provided any grandfathering leaving the ongoing transactions in limbo. “Last one year has been very busy in terms of capital market activities undertaken by insurance companies and hence the companies are generally concerned if the new rules will apply to them or not," said a leading capital market lawyer.

IRDAI had introduced the lock-in period under new rules as a safeguard for a relaxation. In old rules, any entity buying more than 10% stake in an insurance company needed to categorise itself as a promoter. However, under the new rules, the threshold has been increased to 25%. To balance this relaxation and curtail misuse of it, IRDAI introduced the lock-in requirement.

He also said the company grew marginally higher than the industry, which clipped a tad lower at 16.4 per cent for the full fiscal.

Given the massive volatility in the equity markets in February and March, the company's investment gains almost halved to Rs 453 crore for the full year from Rs 738 crore in FY22, and the same for the reporting quarter declined to Rs 159 crore from Rs 136 crore.

The key profitability metric, the combined ratio, stood at 104.5 in FY23 against 108.8 per cent in FY22. In the March quarter, it was 104.2 against 103.2 a year ago.

The combined ratio is the net of incurred claims/net earned premium plus management expenses after deducting the commission on reinsurance/net written premium.

Management expenses is the commission paid directly and on inward reinsurance along with operating expenses related to the insurance business. The regulator Irdai has capped the management at 30 per cent from this fiscal.

The board has proposed a final dividend of Rs 5.50 per share for the full year, taking the overall payout in the year to Rs 10 per share.

The company's solvency ratio stood at 2.51x as against 2.45x in December 2022, while the regulatory minimum is 1.50x. The solvency ratio was 2.46x as of March 2022.

The company has issued over 32.7 million policies and settled 3.6 million claims on a gross written premium of Rs 21,772 crore for the year.

The combined ratio at 104.2 per cent was stable quarter-on-quarter (QoQ), despite a rising 74.2 per cent claims ratio (up from 70.3 per cent in Q3FY23). The higher claims were due to an increase in claims in the motor segment, but offset by lower commission and expenses. Investment yield, at 7.5 per cent, was stable QoQ.

The expense ratio (expenses incureed in underwriting premiums as a ratio of net ptrmiums). though , rose by a marginal 20 bps.

The insurer reported improvement in the claims ratio in the motor own damage (OD) segment -- to 69.4 percent from 73-74 percent in the last three quarters . On the other hand , the clamis ratio in the motor third party business increased to 86 percent , from 62-74 percent , in the last three quarters . ICICI Lombard lost market share in motor OD to 13.1 percent in January/February 2023 , from 15.1 percent in Q4FY22.

The Company sold off a large pool of motor loanss (about ₹280 crore) in February 2023. Expenses include investments for the future in distribution channels, and the company is displaying prudent underwriting practices, as it tries to rationalise cost, and launch new products. The regulatory landscape is still fluid , and there a hypercompectitive market in motor insurance and reinsurance rates are high The regulatory requirement for 18 percent stake sale by the promoter (ICICI Bank) is a cause of concern. Clarity on the sale could be a positive trigger and it would give a clearer picture on the valuation front.

Most analysts have "buy" or "add" recommendations with target prices and valuations over ₹1,400 . However, the stock saw heavy selling after the results , pulling the price down 4.8 percent to ₹1,075.There could be a significant upside.

Globally, the renewal of reinsurance contracts between primary insurers and reinsurers takes place in January. Reports had suggested that reinsurance rates touched multi-year highs this renewal season in the wake of adverse weather events, the war in Eastern Europe, and macroeconomic shocks. It was widely expected that the Indian market would also see some hardening of rates, but the quantum of the hike was anybody’s guess.

Experts had estimated that since India did not suffer any major natural catastrophe, the extent of the rise in reinsurance rates in the Indian market would not be as severe as seen in some international markets. That was not the case.

“Reinsurance renewals this time have been one of the toughest. The rates moved up in the range of 30-50 per cent, in spite of the Indian market performing decently. Plus, the attachments have been increased. If this trend continues, the underwriting risk will have to undergo change because it is not possible to pass on a 30–40 per cent hike to consumers. We have to build capacity that is more India-centric,” said a chief executive officer (CEO) of a private-sector general insurer.

“Globally, rates in some markets have gone up 50-60 per cent. In our market, it has also gone up 45–60 per cent for most players. That’s an input cost to us,” said Bhargav Dasgupta, managing director and CEO, ICICI Lombard General Insurance, in an analyst call.

“The impact of global hardening of reinsurance terms, especially on natural catastrophe protection, was experienced by insurers in April 1 renewals. We believe that although this will create short-term disruption, in the long run, it is expected to be positive and will bring in underwriting discipline. At the same time, for players like us, who have capital, brand, and presence across multiple lines of business at scale, we should benefit from this,” he added.

The industry was expecting a 10-15 per cent hike in reinsurance rates in the April renewal season. Like India, Japan, too, did not see any major natural catastrophe losses, but saw a hardening of reinsurance rates in a similar range.

Reinsurance is a practice whereby insurers transfer portions of their risk portfolios to other parties through some kind of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. The party that diversifies its insurance portfolio is known as the ceding party. The party that accepts a portion of the potential obligation in exchange for a share of the insurance premium is known as the reinsurer.

The hardening of rates was mostly in the property segment, while speciality rentals were flat, said a source aware of the development.

There is near-unanimity that the slide will continue due to policy flip flops. For example, in his Budget speech in 2018-19, former finance minister Arun Jaitley announced that the three companies – United India Insurance Company Ltd, Oriental Insurance Company Ltd and National Insurance Company Ltd – would be merged into a single insurance entity. Several years have passed since the announcement, and the merger did not occur, but the resulting confusion sent the wrong feelers in the industry.

This wasn’t an exception. Finance minister Nirmala Sitharaman in her Budget for 2021-22 had announced a big-ticket privatisation agenda, which included two public sector banks and one general insurance company. There is now total silence on the issue.

There’s more. Budget 2018-19 had not provided for any capital infusion for the state-run insurance companies, though it gave Rs 2,500 crore, Rs 9,950 crore and Rs 5,000-crore capital to the three loss-making insurers during FY20, FY21 and FY22, respectively.

But the central government decided not to pump in fresh capital in the PSU general insurance companies for 2022-23, even as every company witnessed a sharp deterioration in its solvency ratio since FY19.

FY21 and FY22 were Covid-impacted years, when the general insurance industry had recorded huge underwriting losses as the insurers had to settle massive health insurance claims. Notably, total net losses for Oriental Insurance, United India and National Insurance Company stood at Rs 3,074.66 crore in FY21. For FY22, the total net losses saw a 125% rise to Rs 6929.52 crore.

Net profit of New India Assurance, which leads the non-life insurance space, fell 89% year-on-year to Rs 177.92 crore in FY22 from Rs 1,627.76 crore in FY21

The solvency ratios for these three companies remained dangerously below the level mandated by insurance regulator Irdai. As per Irdai’s mandate, the minimum solvency ratio an insurer must maintain is 1.5 to lower risks. In terms of solvency margin, the required value is 150%.

Industry analysts say poor solvency ratios of state-run general insurers are a reflection of slow business growth and inadequate capital infusions from the government against a huge number of Covid treatment related claims. This prevented them from underwriting new business as being loss-making companies, they generally don’t get support from the reinsurers.

A former director of a state-run general insurer said the companies are also hamstrung by their inability to make the right kind of recruitment. In fact, they have witnessed reductions in employee strength in the past few years.

The only profit making state-run general insurer, New India Assurance, witnessed its number of employees shrink by 22% to 13,929 as on March 31, 2022 from 17,880 as on March 31, 2018, according to data on public sector insurance companies revealed by the government in the Rajya Sabha in December last year. Oriental Insurance’s employee strength has fallen sharply by 31% to 9,440 as on March 31, 2022 from 13,667 as on March 31, 2018.

During FY23, every state-run general insurer lost market share in terms of gross direct premium underwritten, amid intense competition from private sector peers, data from the General Insurance Council showed.

Also read: Which bank has highest Fixed Deposit interest rate in April for senior citizens and others? Full list

“Lately, the government has been encouraging the PSU insurance companies to compete with their private sector peers in an environment where there are enough opportunities to grow on their own and take decisions which will enhance their competitiveness at the market place,” says Bejon Misra, member of advisory committee to Irdai on insurance ombudsman.

Misra says all insurers now have the flexibility to pay commissions to agents as per the new regulations on commission and expenses of management for the insurance industry. Notifying the new payment of commission regulations for the insurance industry, which came into effect from April 1, Irdai has replaced the earlier caps on commission payments in different lines of business with an overall cap on expenses of management at the company level.

"There is a view within the players that the government should ideally take responsibility for the welfare of specially abled persons, as in foreign countries, and if insurers in India are being asked to bring out such special covers, then the industry should be given a tax exemption or subsidy," said the executives.

The issue was discussed in a meeting of general insurers last month, where most insurers voiced concern about making such products mandatory.

"The IRDAI request came after some of the recent decisions passed by the court. We as an industry will explore all aspects and come out with suitable recommendations," said the executive

In February, IRDAI issued a circular to the effect that every general and standalone health insurer should mandatorily launch and offer their respective products for specially abled people immediately. It said the health insurance policy should cover mental illness, HIV, AIDS and disabilities.

The regulator also asked the insurance companies to develop a model policy that outlines the minimal requirements and specifications for product design.

"One view is that such a cover could be a restrictive one and not a full-fledged one," another executive said, stressing on the need to look at how to manage the risk pool without burdening the insurers.

In December 2022, a Delhi High Court judgement said the right to life includes right to health and directed the IRDAI to call a meeting of all insurers to design schemes for people with disabilities and introduce them preferably within two months.

PM-JAY was luanched in september 2018 and the scheme covers 107 million poor and vulnerable families covering the bottom 40 percent population of the country . These families were identified based on select deprivation and occupational criteria in rural and urban areas respectively as per the socio-economic caste census (SECC) 2011.

Within an object of making quality generic medicines avaible at affordable prices to all, the revamped PM Bhartiya Janaushadhi Pariyojana (PMBJP) was launched by the goverment of India in 2015 . As on Januray 31 the number of Jan Aushadi Kendra stroes has increased to 9082.

Modi said the poor and middle class are saving Rs 13,000 crore every year due to the reduction in the coast of stents and knee implants, while the facility of free dialysis has helped poor kidney patients seve Rs 500 crores.

The Prime Minister aalso noted that the campaign to hand over about 10 million Ayushman Bharat Cards has also begun in Asssam which will further help them save more money.

Given that the vast middle class of India is the backbone of its economy, the goverment wants to take care of their health expenditure concerns through the PM-JAY sustain the long-term economic growth prospects of the country .

Under PM-JAY a total of 1,949 procedures are availabe for beneficiaries to get cashless treatment which includes all the costs related to treatment,medicines,supplies,diagnostic services,physican's fees , room charges,surgeon charges, OT and ICU charges,etc.

“Currently, the insurance scheme does not even cover 1% of the cattle population,” an official with the department of animal husbandry and dairying told FE.

At present, out of the 540 million livestock population in the country, cattle account for around 190 million.

The officials said that the lack of interest shown by the livestock farmers in the insurance scheme has led to rethinking on the part of the government to revamp it completely. The objective is to ensure that the Centre and states share a major portion of subsidy burden in line with the Pradhan Mantri Fasal Bima Yojana.

Under the livestock insurance scheme, the Centre had fixed 4.5% of the sum insured as the maximum annual premium to be charged by states with the exception of north-eastern and hilly states. The subsidy on premium is restricted to five animals per beneficiary per household.

As per the existing norms, livestock farmers belonging to below poverty line (BPL), schedule caste (SC) and schedule tribe categories in all the states with the exception of north-eastern and hilly states pay 30% of the premium while all other farmers pay half the premium. Rest of the premium is shared between the Centre and state.

Recently, the department of animal husbandry and dairying held a stakeholders’ meeting with the insurance companies and state governments for feedback on steps to be taken to expand the scheme with the livestock farmers.

The official said that there are reports of death of 0.18 million cattle population due to the lumpy skin disease (LSD) reported last year across 13 states and the insurance scheme would insulate farmers against such diseases.

A recent report by the standing committee on agriculture, animal husbandry and food processing has stated that not even a single livestock has been insured during 2022-23 under the livestock insurance scheme. In FY22, only 0.017 million animals were insured.

The panel has recommended the department of animal husbandry to take effective steps so that the process of insurance of livestock is made easy and like the department to explore the possibility of developing an app-based livestock insurance facility for the owners.

The industry is jointly trying to address the challenges in insurance, and technology is being equipped as the key means for mitigating these challenges. Technology in insurance has witnessed a surge after the pandemic, which has been a blessing in disguise. Both insurance players and consumers have realised the value of contactless and paperless insurance and the reach that digital channels have.

New products, digital channels, distribution processes, and newer ways of risk evaluation have been introduced in the industry to make insurance seamless. These have reduced the turnaround time substantially and increased outreach to consumers in smaller towns and cities. More and more players are now using the man-machine collaboration, ensuring more value to consumers and other stakeholders.

Consumer behaviour is another key factor pushing the fast growth in InsurTech. Especially after the pandemic, consumers have realised the value of insurance, and therefore, there has been a huge demand for life, motor, and health insurance products. The industry is jointly catering to consumer expectations and, most importantly, making insurance reach India 2 and India 3 that live in smaller cities and remote districts. Consumer affluence is also undergoing a major shift, especially in Tier 2 cities and beyond, which will further push InsurTech to come up with more innovations.

In the past two years, India has witnessed growth in InsurTech landscape with the emergence of new consumer segments ( in Tier 2/3 cities and beyond, growth in women consumers, corporate insurance growth across SMEs); data and analytics emerging as core capabilities, creating data around consumer behaviour and experience; driving operational efficiencies; and the emergence of National Health Stack (creating a data bank for health insurance in the country).

InsurTech companies that were established with the concept of paperless/ contactless processes using technology, made optimum use of their models during and after the pandemic. For example, InsurTech company RenewBuy increased its consumer outreach by two times, increased their workforce by almost 40%, expanded their footprint from 500 to 800+ districts, towns, and cities, and doubled the insurance advisor network in the last 2-3 years. The company used technology as its core, from guiding consumers to providing the most suitable insurance policy, insurance servicing, and claim settlements. Almost 75-80% of the company’s business originates from the country’s semi-urban and smaller towns and districts.

Chishty Sufi Langar Foods Cuisine and Incredible Use of Millets across Indian Sub-Continent

As per the India Fintech Report 2022, artificial Intelligence (AI), machine learning (ML), internet of things (IoT), automated claims, e-commerce insurance marketplaces, web aggregations, and software/white label/application programming interfaces (APIs) are growing at fast pace in the country. Embedded insurance using technology will drive significant consumer growth in the coming times. Companies like Digit Insurance, Artivatic. AI, Mantra Labs, to name a few, are making optimum use of these technologies. To give another example, Artivatic.AI, a deep tech (InsurTech) company, offers ML and AI-based algorithms to both insurers and consumers. It has been providing risk-based personalised automated solutions which cater to underwriting claims, risk and fraud intelligence, embedded distribution, and sales intelligence across the insurance value chain.

In terms of funding, India has shown a very strong momentum as funding doubled in the last two years in the InsurTech space. Unicorns were built post-pandemic. Funding in InsurTech, has grown at a CAGR of 34% from FY 20.

Almost $800 million was raised in equity funding in 2021, which is more than the funding amounts, combined in 2019 and 2020. Though the funding market is globally impacted due to global economic and geo-political disturbances, the funding in the Indian InsurTech space is expected to pick up impetus in the coming months.

To survive the InsurTech game, incumbents must keep adapting their business models to newer technologies. Applied AI, well-connected digital infrastructure, next-level automation, and trust architecture need to be on the move to connect insurance companies with consumers. Cybersecurity also needs to be taken care of by the industry to ensure end-to-end data protection. Indian insurance is clearly in the limelight. Compared to the Global InsurTech market, the industry is poised to grow faster in the coming years.

Before this change, insurance companies were bound by a cap on commissions, with a limit of 35 percent and another 35 percent on the OverRide Commission (ORC). This had led to many queries revolving around ORCs and compliance with goods and Services Tax (GST) norms.

"With the recent regulatory change ORCs are now legal, and companies that were run by banks and compliant with GST norms are expected to see an increase in commissions," an insurance executive said.

The replacement of regulator dictated commission caps with a board approved commission policy, which came into force on April 1, 2023, has abolished the separate cap on commission across life, general,and health insurers. Instead , it has prescribed an overall Expense of Management (EoM) cap of 30 percent for general insurance and 35 percent for health insurance while allowing companies to have a board approved commission payment policy. By changing the rules the insurance regulator wants move away from micromanaging and provide flexibilty.

While some insurance companies have been known to pay significantly infalated commissions to banks and agencies by several means like supplying them with office staff to sell insurance policies or pay for advertising , the new rules will make payouts simple.

"Insurers were pursuing rapid growth and willing to offer high commissions. With this change , the regulator has shifted the responsibility to manage commission structures to the insurance companies,, insted of micromanaging them," a source said.

General insurance companies plan to revamp their commission structure for motor orginal equipment manufacturers (OEMs) and retail health intermediaries, the soures said . Previously, they were paying a commission of 19.5 percent for motor own damage and a total of 42 percent after adding ORCs,said the sources. To secure third-party motor insurance business,insurers were paying as high as 35 percent in commission including ORCs, exceeding the prescribed limit of 2.5 percent for instance , commisssions for school buses were reaching as high as 60-65 percent far beyond the allowed limit, the sources said.

Similarly, for the retail health business , another rapidly growing and profitable segment, insurers wre paying commissions ranging from 40-45 percent , surpassing the prescribed limit of 195 percent .

While the removal of explicit commission caps , IRDAI aims to bring transparency to payout to distributors, and larger institutional distribution channels such as banks,NBFCs and brokers who are likely to see increased payouts.

With the board of most insurance companies likely to meet over the next few weeks to design the new commission payment structure, it will be known whether insurers alter payouts significantly or stick to profitability.

According to officials, the government is preparing an insurance road map for farmers whose farmlands are of 2 hectares or less.

This will cost the exchequer Rs 25-30 crore.

Agriculture Minister Kamal Patel said: “There are a large number of farmers whose cultivation area is very small and they cannot afford insurance. The department is preparing a road map to help them. Talks have been held with Chief Minister Shivraj Singh Chouhan in this regard. The government is planning to pay their premium.”

Bharatiya Kisan Union State President Anil Yadav is not taken in by these promises.

“We do not take the government on trust . The old insurance has not been paid to farmers till now. The question is, why is the government being so kind to insurance companies? Instead of paying the premium of small farmers, why doesn’t it directly provide financial help to them,” he asked.

Madhya Pradesh has more than 10 million farmers, including small and marginal farmers. Small farmers, whose holding size is 1-2 acres, comprise 27.15 per cent of the total and 48.3 per cent are marginal farmers, who have a maximum of 1 hectare.

Govt provides capital to 3 general insurance companies

National Insurance Company Limited was given the highest Rs 3,700 crore, followed by Oriental Insurance Company Limited Rs 1,200 crore, and United India Insurance Company Rs 100 crore. According to the sources, these companies have been asked to improve their solvency ratio and meet the regulatory requirement of 150 percent.

The solvency ratio is a measure of capital adequacy. A higher ratio reflects better financial health and the ability of the company to pay claims and meet future contingencies and business growth plans. Barring the solvency ratio of New India Assurance, this key indicator of the three public sector general insurance companies stood below the regulatory requirement of 150 percent in 2021-22.

The solvency margin is the extra capital the companies must hold over and above the claim amounts they are likely to incur. It acts as a financial backup in extreme situations, enabling the company to settle all claims.Each of these companies has been asked to pursue a profitable growth path, the sources said, adding further capital infusion would depend on their performance indicators being met.

States drag their feet

The PMFBY was introduced from kharif 2016 season. It is a voluntary scheme for States as well as farmers. States can participate in the scheme keeping in view their risk perception and financial considerations. Since the inception of the scheme, 27 States/Union Territories have implemented the PMFBY in one or more seasons.

From the inception of the scheme till 2020-21, cumulatively 2,938.7 lakh farmers, with a sum insured of ₹10,49,342 crore, have been enrolled under the scheme.

The premium under the scheme is determined through biding. However, farmers have to pay a maximum 2 per cent for kharif, 1.5 per cent for rabi food and oilseed crops and 5 per cent for commercial/horticultural crops. The balance of actuarial/bidded premium is shared by the union and States on 50: 50 basis ( except the North Eastern States). The premium rate of crops depends on the risk associated with them and the total liability of the State depends on the actuarial/bidded premium rate, sum insured of crops, area insured, and the number of crops notified by the States.

Pendency across States

“Some States have not released their share of premium subsidies for certain seasons, and any specific reasons for such default have not been communicated,” the Ministry told the Lok Sabha in November last year.

The data available with the Ministry ( November 2021) shows that States have not paid subsidy of ₹321. 51 crore for the 2018-19 season, ₹1,558.28 crore for the 2019-20 season and ₹2, 863.79 crore for the 2020-21 season.

Some States, including Andhra Pradesh, Bihar, Gujarat, Jharkhand, and West Bengal,started implementing their own crop insurance schemes.

Timely claim settlement needed

“Farmers have to agitate to claim an insurance amount and many don’t get it even after two seasons. The States are interested in popular politics, but not paying their share in the PM Fasal scheme. If a farmer fails to get the insurance claim on time there is no point in participating in the scheme” says Raghunath Dhepe, a farmer. He added that farmers are losing interest in the scheme because of pending claims.

My son is 8-years-old and has had nephrotic syndrome for 2.5 years. Will he get health insurance?

It is possible to get health insurance for your son. While the presence of a major health condition reduces the chance of issuance of a health policy, it does not deny you one.

In such a case, an insurer could choose to underwrite the policy in several ways. First, the insurer may specify ‘nephrotic syndrome’ as a pre-existing ailment and exclude it for the specific waiting period, between 2 and 4 years.

Second, the insurer may want to issue the policy with a certain loading on standard premium, and exclude the ailment as a pre-existing disease, and cover after 2 to 4 years. Third, the insurer could permanently exclude some illnesses, and then issue the policy. This would allow you to claim for all other ailments except the specific named exclusion.

Irdai (Insurance Regulatory and Development Authority of India) allows only certain diseases to be permanently excluded. Chronic kidney disease is one such exclusion. The chances of getting a policy issued is higher if you apply with one of the larger insurers. Given their size, their ability to accommodate deviations from standard risk is more.

“It’s a very positive thing because rather than forcing people to do (business) based on obligation, it should be left to individual companies’ appetite. So, for us as a large company and the fact that our obligatory cession was profitable, we will stand to benefit, though it’s a marginal benefit because 5 per cent obligation has been reduced to 4 per cent,” said Bhargav Dasgupta, managing director and chief executive officer, ICICI Lombard General Insurance.

“This decision may hit GIC Re marginally, but for the primary insurers the impact of this will depend on whether they are able to get more reinsurance capacity for the extra risk. Insurers started looking for reinsurance capacity at 95 per cent because 5 per cent was automatic cession to GIC Re. Now, it will start at 96 per cent. On an average around 5-70 per cent of the risk is re-insured, depending on the various lines of business,” a private sector insurer said.

Irdai has been reducing the obligatory cession over time — from as much as 20 per cent, to 15 per cent, and then to 5 per cent, and 4 per cent now. Slowly the regulator is making sure that more re-insurers get into the market to develop India as a hub, he added.

Furthermore, the regulator has also fixed the percentage of commission on obligatory cession for each class of business. In the motor third party, oil and energy businesses, there will be a minimum 5 per cent of commission, while it is 10 per cent in group health business, and 7.5 per cent in the crop insurance business. All other classes of insurance business will attract a minimum 15 per cent commission.

“Commission over and above, can be as mutually agreed between Indian re-insurer(s) and the ceding insurer,” Irdai said.

According to regulations, the reinsurer, in this case GIC Re, has to share the profit commission on a 50:50 basis with the ceding insurer based on the performance and surplus of the total obligatory portfolio of the ceding insurer. However, no profit commission is payable if the loss ratio exceeds 78 per cent and profit commission shall not exceed 14 per cent, the regulator said.

This season, there has been a 172% rise in crop insurance among farmers of Hingoli district in the state while the response has been poor from farmers of Marathwada, Amravati and Pune divisions,” Awate said.The main crops of the rabi season include wheat, maize, gram, sesame, mustard, peas, oats, jowar and bajra.Significantly, grapes and mango have suffered in the last few days because of massive rains and hailstorms.

Tur has been damaged in almost all parts of the State due to massive rains a couple of weeks ago. Districts in Vidarbha and Marathwada have huge tracts under tur cultivation and farmers are expecting better returns this season. However, rains have damaged tur, wheat and orange in Nagpur, Amravati, and Wardha according to the reports.Unseasonal rains in September and October this year affected tur production in Latur and other districts of Marathwada by at least 20%.

Crop damage has been reported in 5,276 hectares in the state as of January 11, as a result of recent heavy rains, as per data released by the agriculture ministry. Of the total targeted area of 51.20 lakh hectares, Rabi sowing has been completed on 52.47 lakh hectares as of January 10 accounting for 102.59%, according to the state agriculture department report.

In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said it has been observed that the insurance intermediaries maintain multiple current accounts with banks at different operational levels (branch offices, and corporate offices, among others), for regulatory and other purposes.

"...it is clarified that the respective insurance intermediaries including entities sponsored by them may maintain current accounts in appropriate number of banks for the purpose of meeting regulatory requirements, reinsurance business, etc that are in line with conditions given in regulations, guidelines, circulars issued by the Authority," Irdai said.

The regulator had received representations from the intermediaries in regards to maintaining current accounts with banks. The ciruclar has been issued to avoid hardships, if any, faced by the insurance intermediaries.

Irdai, however, asked the insurance intermediaries to review annually the need for having multiple current accounts and rationalisation. PTI NKD HRS hrs

“Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition, which was disclosed by the insured in the proposal form and which condition has led to a particular risk in respect of which the claim has been made by the insured,” said the bench in a recent judgment.

The verdict came during an appeal filed by one Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC) rejecting his plea seeking a claim for medical expenses incurred in the US.

Nanda had bought an overseas mediclaim business and holiday policy from the United India Insurance Company as he intended to travel to the US.

Upon reaching the San Francisco airport, he suffered a heart attack and was admitted to a hospital.

Subsequently, an angioplasty was performed on him and three stents were inserted to remove the blockage from heart vessels.

In his petition, he said his claims for treatment expenses were repudiated by the insurer stating that the appellant had a history of hyperlipidaemia (high cholesterol) and diabetes, which was not disclosed while buying the insurance policy.

The NCDRC had ruled that since the complainant had been under statin medication, which was not disclosed while buying the mediclaim policy, he failed to comply with his duty to fully disclose his health conditions.

The SC, however, said the repudiation of the claim by United India Insurance Company was not in accordance with law.

It said the object of buying a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness that is not expected or imminent and that may occur overseas.

Demand in Tier2+ cities
Deshpande expects the health insurance segment to continue growing faster than other lines of business for non-life insurers.

"Earlier, the demand for health insurance was driven by major towns and cities but even people in Tier 2, 3 and 4 cities are buying such covers now," he said, but stressed that the penetration of health insurance in the country still has a long way to go.

Instead of Covid specific covers, people are looking at comprehensive policies, and the average sum insured has increased to anywhere between ₹3 lakh and ₹5 lakh.

Lower threshold
Anup Rau, Managing Director and CEO, Future Generali India Insurance, also said the demand for health insurance has not gone down despite the ebbing of the second wave of the pandemic.

"One of the things we discovered is that the effort required to advise the customer to buy a health insurance policy is far lower. I think people have an appreciation for health insurance," he said.

A recent report by CareEdge noted that the outlook for the health insurance in India remains bright. It is expected to grow at 26 to 29 per cent in the current fiscal and between 16 and 18 per cent CAGR for the following five years.

A ten-member committee under scientist KR Manjunath of Indian Space Research Organisation (ISRO) will explore the feasibility of adoption of various technology-based approaches developed through pilot projects by ISRO and its arm National Remote Sensing Centre (NRSC) as well as Mahalanobis National Crop Forecast Centre (MNCFC) of the Union Agriculture Ministry, the official said.

Using drones
According to NRSC, satellite data at regular temporal interval enables monitoring of the natural resources for their effective management. However, the government has also been considering to utilise drones to capture yield data as satellite images are also considered not effective in case of fog or cloud.

The other sub-committee, headed by Saurabh Mishra, joint secretary in Ministry of Finance, will conduct cost benefit analysis of all "accepted models - agriculture insurance pool, cup and cap 80-110 per cent and co-insurance 20-80 per cent" as well as any profit-loss sharing model.

Magma HDI is a joint venture between Magma Fincorp and Germany's HDI Global SE. In February this year, Adar Poonawalla controlled Rising Sun Holdings Pvt Ltd an arm of Poonawalla Finance acquired 60% in Magma Fincorp.

Subsequently, Magma Fincorp has been renamed Poonawalla Fincorp.

In a penalty order issued early this month, the ED imposed a monetary penalty of ₹60 crore on Magma HDI and ₹10 crore each on its former promoters - Sanjay Chamria and Mayank Poddar - under the Foreign Exchange Management Act (FEMA).

In an email response to ET, Poonawalla Fincorp said that the company and Magma HDI stand completely "indemnified" and hence there is no financial implication for the company or the new promoters on account of the ED order

The ED order said Magma HDI had shown subdued investment by the foreign investor even though the said overseas firm's ₹210 crore investment was a significant part of the entire capital of the joint venture company. It stated that Germany's HDI had purchased shares of Magma HDI at a premium of 42.35 crore by inves ting 133.5 crore for a stake of 25.5%. However, the promoter companies -Magma Fincorp, Jaguar Advisory, Celica Developers had acquired the balance 75.4% stake at a face va lue of 10 per share."By purchasing the shares at high premium, the foreign investor mis-declared the fact that their in vestment was within FDI limit of 26%. But in reality, they have excee ded the permissible limit," ED said in its order.It further pointed out that the sha res were issued at a huge premium to the foreign inves tors i.e. HDI, while at the face value to the promoter companies.

Health-conscious

Bulk of the demand is coming from the younger age group "which typically never used to think about health insurance," he said.

"If you talk to me three years down the line, I believe we'll be able to improve upon our market leadership and we will be highly profitable because we have a network of more than 12,000 hospitals, many of whom have a network rate negotiated with us," Roy added.

Investor concerns about profitability saw a subdued listing last week for the company on Indian bourses, with the firm paring its offer size to $848 million from the $975 million it sought. Shares are down nearly 9% from its issue price, with the stock trading at ₹809 as of 12:30 p.m. on Thursday, compared with its listing price of ₹900.

Jhunjhunwala and his wife Rekha own around 17.3 per cent in the company, according to the IPO filings.

Star Health was the first major listing after Paytm's listing debut, which was also bogged down by valuation and profitability concerns among investors as caution started creeping in after a string of blockbuster IPOs of start-ups in 2021.

Analysts said the issue was expensively valued, which may weigh on the listing performance.

"It was an expensively priced issue which coincided with the emerging threat of Omicron. Both these things will weigh on the listing and we expect it to list at a discount," said Geetanjali Kedia, senior analyst at SPTulsian.com

Star Health ties up with Federal Bank

THE COUNTRY'S FIRST standalone health insurer, Star Health & Allied Insurance has entered into a corporate agency tie-up with Federal Bank to sell its products to the bank's 8.90 million customers. The bank's customers can avail of benefits of Star Health's retail products and group affinity products through the bank's various distribution channels.

Different options are available and being studied by the insurer, whose decision to raise capital, for the first time since inception, comes amid COVID claims in 2020-21 pushing up total claims by about 35%. "This [financial] year has been much worse... our claim experience has been twice the normal because the peak in second wave [of pandemic] was sharper," he said.

He said the IRDAI approval had come in October and the company has six months to raise the debt.

Raising capital has become imperative in the context of reinsurance supply drying up, Mr. Tahilyani said, pointing out that it translated into higher retention limits for the insurer and could result in increase in premium for the insured.

Negotiations with reinsurers, who are seeking higher rates, are underway.

Life insurers are urging the reinsurers to separate the COVID experience from normal experience and instead, take a long-term view.

It fixed a price band of *870-900 per share. But it failed to get full subscrip- tion. It received bids only for 79 per cent of the issue, for- cing promoters to reduce the issue size.The IPO opened for sub- scription November 30 and concluded on December 2.

The offer for sale from selling shareholders and promoters has been reduced from *5,250 crore to ₹4,000 crore (to about 4.89 crore shares from the original 5.83 crore shares), according to a document filed with ROC and SEBI.

However, the merchant bankers fixed the IPO price as 900 a share, at the upper end of the price band of 870-900 a share.

Sellers Promoter
Safecrop Invest ments India LLP has reduced its size to 2.98 crore shares from the original proposal of 3.06 crore shares.Similarly, selling share holders Apis Growth 6 cut their size to 43.48 lakh shares (earlier 76.80 lakh shares), University of Norte Dame DU LAC 56.29 lakh shares (74.38 lakh shares), MIO IV Star 33.83 lakh shares (41.10 lakh shares), MIO Star 24.87 lakh shares (41.10 lakh shares) and ROC Capital to 14.03 lakh shares (25.09 lakh shares).

Experts believe that internal combustion engine vehicles are vital contributors to environmental pollution, leading to the growing need and demand for EVs.

"Electric vehicles have come as a clean energy initiative, as they offer low or zero emissions and have become a vital part of OEM (original equipment manufacturer) business strategies. Along with the growth in the EV segment in the country, there will be a huge demand for motor insurance for electric vehicles," said Indraneel Chatterjee, co-founder, RenewBuy, an online insurance aggregator.

In March 2020, the Insurance Regulatory and Development Authority of India (Irdai) announced that insurers would offer a 15% discount on third-party motor premiums for electric vehicles to incentivize their use.

"The government of India is also charging GST at 5% for electric cars, which is way lower than the internal combustion-powered vehicles. The impetus for the manufacture of electric vehicles has begun, and the government is moving towards a promising future," said Chatterjee.

Authorities have also provided ₹l.5 lakh tax benefit under Section 80 EEB for interest paid under EV car loan.

Ankit Agrawal.chief executive officer and co-founder, InsuranceDekho.com,said, "These e-vehicles may be slightly expensive compared to other motor vehicles, but they have their own set of advantages. These include low operational cost, cause minimal pollution to the environment, and most importantly, save on petrol and diesel."

However, with the higher price of the vehicle, it becomes crucial to keep it insured to stay financially protected in case of an unfortunate event.

To help you make the best decision for buying an EV insurance policy, here are some factors that you must consider.

Coverage:
The most important thing to consider when buying EV insurance is to check the coverage features offered under it. As the parts of an electric vehicle are comparatively expensive, you must purchase adequate insurance cover for them. If you buy a comprehensive insurance policy, it will typically protect you against third-party liabilities and other own damages (OD) cover. OD coverage can help you avoid expensive repair bills in case of accidents, natural calamities, riots, fire, as well as losses due to theft, etc.

Also, with a personal accident cover, you can be financially secured in case of any misfortune. It includes bodily injuries, partial or total disabilities due to accidents and uncertainties such as accidental death.

Insured declared value:
IDV is the amount that you will be eligible to receive from the insurance company in case of a total loss of the electric vehicle. A lower IDV means a lower premium and vice versa. It is an essential factor to consider when buying EV insurance so that you are not offered a lesser amount in case a claim for total loss arises in the future. Also, since an electric vehicle costs a lot, this factor becomes more significant to consider.

Premium:
The other most important thing to consider when buying EV insurance is premium. This is the amount that you will be required to pay to the insurance company in order to avail of coverage benefits under an insurance policy offered by them. As the premium is to be paid periodically, you must choose a policy that comes at an affordable premium. However, you should not compromise the coverage benefits in order to save on insurance premiums.

Claim settlement ratio:
CSR of an insurance company is an important factor to consider as it talks about the performance and how good an insurer is in handling claims. It is recommended to choose an insurance company that offers a smooth claim settlement process so that you are able to make the most of your policy in case of a claim.

Add-ons:
These are additional benefits that can be added at the time of EV insurance policy purchase by paying an extra premium to enhance coverage. You can include the add-on covers as per your budget and requirements under a comprehensive insurance policy.

You can include zero depreciation cover to your electric vehicle insurance policy with which the claim amount made due to depreciation is waived off and the complete amount of damage is paid. The premium for these add-ons may differ from one insurer to another.

"It is suggested that consumers take add-on covers for e-vehicles as battery costs and specialized components can be costly for these vehicles. Risks of battery charging damage, battery leakage, damage to charging connectors, vehicle towing and providing on-site help, should be examined as add-on covers," said Chatterjee.

While electric vehicles are at a nascent stage in the Indian market, they are fast emerging and will soon capture a good pie of the private vehicle market share. It is one segment that will equally benefit consumers as well as the environment.

"We are regulating one portion of the health care segment the insurers. We try to indirectly regulate hospitals by asking them to come forward for cashless claims. But only a few hospitals have cashless agreement with insurers. The hospitals can keep raising their tariffs and we as an insurance regulator want to protect the public against continuous increase in premiums," said Alamelu.

She said the insurance regulator is keeping an eye on hikes in premiums. The regulator has also tried to make health insurance simple for the common man. But there are service providers where there is no regulator - they have a free hand (when it comes to price), she added.

The medical inflation in the premium doesn't country is 15-20% per year and the correct for three years at least

Having a regulator would repose public faith in the system and may result in more people getting themselves insured. Insurers have time and again complained that in the absence of a health regulator, the average claim size has been increasing and ultimately, they will have no option but to increase premiums once the loss ratios cross their threshold.

The medical inflation in India is around 15-20 per cent per year and the premium doesn't correct for three years at least. Given that medical inflation is higher than general inflation, there needs to be a correction cycle from a pricing standpoint, said insurers. The non-life insurers received around 3 million health claims; 2.75 million have been settled for around ₹25,000 crore. Life insurers have settled over ₹14,000 crore in Covid-related death claims since the pandemic struck.

Funds raised via IPOs
In a written response, Finance Minister Nirmala Sitharaman said that a total of 61 companies raised over ₹52,700 crore during April-October period of the current fiscal. For full fiscal 2020-21, 56 companies hit the market and raised over ₹31,000 crore.

"During the financial year 2020-21, 56 entities came out with IPOs, of which 27 entities are small and medium enterprises (SME). During the financial year 2021-22, 61 entities have already come out with IPOs till October 2021, of which 34 entities are small and medium enterprises (SME)," she said.

She also mentioned that the IPOs are spread across the economic sectors including automobiles, cement, electronics equipment, food processing, textiles etc. During the current fiscal, 10 healthcare companies entered the market till date, while seven companies from the cement and construction sectors also hit the market.

"A large number of manufacturing and services sector companies are coming up for listing.The growth of manufacturing sector in the country aids and promotes the employment generation not only in manufacturing but also in other sectors and vice-versa," the Minister said.

GST Compensation
In response to another question, the Minister of State for Finance, Pankaj Chaudhary said that over ₹37,000 crore of GST compensation is yet to be paid to States and three Union Territories (with legislature) for FY21.

He said GST compensation for financial years 2017-18, 2018-19 and 2019-20 has already been paid to all the States. However, the economic impact of the pandemic has led to higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess, he said.

Health Insurance
In response to a question on premium of health insurance, the Ministry said in a written reply that pricing of health insurance products offered by insurers is based on the age of the insured and other relevant risk factors, such as claims experience and the principles of pricing. Further, it mentioned that the GST levied on health insurance premium is 18 per cent.

At present, "no recommendation to reduce the GST rate on health insurance premium is under consideration of the GST Council," the Ministry said.

if the climate change predictions hold true, the risk should manifest with an even more increasing frequency in coming generations. General insurers faced ₹4,800 crore claims, mainly from motor and home insurance, from 2015 floods in Tamil Nadu.

The claims from recent floods in late-2021 are yet to surface. Similarly, Uttarakhand faced a similar wrath in 2013 and again in 2021. Home insurance may become a necessary purchase for most, in this scenario.

Inclusions and exclusions
Home insurance broadly covers three different assets - building, content and a combination of the two, which appeals to either home-owners or tenants. Content generally refers to furniture and other immovables like television, ACs and even desktop computers. It is important to note that portable electronics and valuables do not automatically fall in the purview of content. Building or structure refers to the physical units and accounts for the largest part of the sum insured. Cover for content is either a percentage of the building cover or provided on disclosure of contents.

Most home-insurance policies offer protection from risks which can be grouped into, natural and man-made. Natural risks arising from earthquakes, fire, floods-storms & inundation, and landslides are covered for both building and contents. Manmade disasters, including riots and malicious damage and terrorist activities as stated under india penal code are covered. The general exclusions, across policies cover the obvious conditions of self-damage, unmaintained properties, pre-existing damages, loss due to wear and tear and damages to property on order from government authority or court. The not so-obvious exclusions that one has to take note of include seepage losses (from water seepage), breakdown of electrical items, war, rodent damage and equipment related to home business. Cash stored at home is also excluded. Jewellery and portables are covered as an add-on or as a nominal cover.

Bharat Griha Raksha a standardized home insurance was introduced by IRDAI in April-2021 which all general insurers should offer. The policy differs from other customized products in two main aspects. The cover for content is provided for up to 20 per cent of the sum insured without the need for disclosure, under a comprehensive cover (building and content). The policy also disallows proportional claim servicing. wherein claims disbursed claimed to amount will be in the same ratio as sum insured to property value. Cover for jewellery and other valuables and also content cover in excess of 20 per cent is available on disclosure of the asset as well as its value. This cover will come for an additional premium.

Product pricing
For a building insurance cover of ₹1 crore and content cover of ₹5 lakh (which excludes jewellery and portable electronics) annual premiums would range from ₹4,000-5,000 per annum (for pincode in Chennai) compared to Bharat Griha Raksha's price range of ₹2,000-₹5,000. Iffco-Tokio's comprehensive plan for the same parameters would charge ₹4,062 per annum. Here, jewellery up to ₹50,000 is only covered, for a nominal additional cost while portable electronics up to ₹50,000 would add ₹330 to the annual premium. HDFC Ergo's comprehensive cover has a premium of ₹4,883 per annum but also includes alternative accommodation and other emergency related benefits. The terms include a deduction of ₹5,000 for every registered claim. Electronics cover, limited to ₹1.5 lakh costs ₹2,250 extra and a ₹1 lakh jewellery cover costs ₹800 additionally per year. Go Digit General insurance offers Jewellery cover of up to 20 per cent of content cover or ₹5 lakh whichever is lower, for an annual premium of ₹4,119 (for the same building cover of ₹1 crore and with content cover predetermined at ₹10 lakh).

Pricing in Bharat Griha Raksha (see table) varies on differences in services,pricing ability, claims processing and settlement ability even as the basic structure is common across companies.

Other factors
In case of burglary, claims have to registered as soon as possible for most policies (7 days for Bharat Griha Raksha). Jewelry insurance may be best served by a specific insurance as Home insurance may be inadequate to cover valuables above ₹2 lakh, stored at home. Premiums are highly dependent on pincodes, so even across the same city premium rates can vary significantly Some policies also reject insurance for homes which have faced a flood in the last five years. The premiums will also be lower if security features like closed circuit cameras and 24/7 security personnel are available.

"The retail and institutional part was fully subscribed but that wasn't the case for HNIs (high net-worth individuals). We saw a tepid response from HNIs and there has been about a $100 million short fall. So as a result, the offer for sale size will be reduced to the extent of the undersubscribe portion," said a source.

Star Health did not immediately respond to a request from Reuters for comment.

Several analysts pointed to worries over the Omicron coronavirus variant and a possible surge in cases and what that could mean for the company.

"Covid-19 has dented their profitability to a great extent as (their) combined ratio has risen," said Madhukar Ladha, equity research analyst at Elara Capital.

The combined ratio, a key profitability metric for an insurance firm's underwriting business, measures the incurred losses and expenses in relation to total premiums collected.

"(Star) suffered losses in the past too because of the impact of claims related to Covid-19 (and) this could have also dampened response for its IPO," Amarjeet Maurya,associate vice president of mid-caps at brokerage Angel One, told Reuters late on Thursday.

Bhuse asked them to deposit the insurance claim amount in the bank accounts of farmers within the next eight days and warned that cases will be filed against those companies which fail to follow the order.

According to State govern ment information, 1.7 crore farmers participated in the insurance scheme for Kharif 2020 season. Estimated crop loss evaluated is ₹1,068 crore of which ₹844 crore has been given to farmers.

"The pending insurance claim of ₹223.35 crore should be deposited in the bank ac counts of farmers within the next 8 days," Bhuse told com pany representatives in a re cent meeting in Mumbai.

Bhuse added that farmers whose claims were rejected must be given another chance to get their losses eval uated.

As Star Health didn't meet the profitability criteria, its IPO required a mandatory 75 per cent subscription from qualified institutional buyers (QIB). The retail investor quota in the IPO was 10 per cent as against 35 per cent for other IPOS.

The QIB portion just about managed to reach the full-subscription mark. Institutional investors placed bids worth ₹3,200 crore in the IPO and another ₹3,217 crore in the anchor book. Mutual funds didn't place even a single bid in the IPO. Nearly 90 per cent of th the bids in the institutional quota came Dids Came from foreign investors, while domestic institutions, mainly insurance com panies, applied for only ₹206 crore worth of shares. Sources said insurance aggregator Policybazaar, which was listed last month, also applied in the IPO, helping the company reach a crit- ical subscription mark.

The retail portion of the IPO was subscribed a over one with bids worth 784 crore. The high net- worth individual (HNI) portion and employee quota remained undersub- scribed at 19 per cent and 10 per cent, respectively.

The response to the Star Health's offering was the coldest for an IPO of more than 5,000 crore, shows data provided by Prime Database, a pri- mary market tracker. Since 2000, there have been 19 instances of IPOs getting extended due to poor demand and two cancellations, according to Prime.

In 2019, the IPO of Shapoorji Pallonji group company Sterling & Wilson Solar had met a similar fate. The issue garnered only 86 per cent subscription, prompting the promoters to sell fewer shares than they had originally intended. In 2018, ICICI Bank had settle for lower dilution during the IPO of its investment banking and broking arm ICICI Securities due to weak demand.

Star Health's IPO comprised ₹2,000 crore of fresh fundraise and ₹5,250 crore of OFS by 11 entities, including Safecrop Investments India, Apis Growth. University of Notre Dame, and Mio Star. Sources said the OFS portion will now be reduced to around ₹4,400 crore.

Ace investor Rakesh Jhunjhunwala is a promoter of Star Health, which is India's first and largest standalone health insurance company.

Jhunjhunwala, whose average acquisition cost is just ₹155.3 per share, didn't divest any shares in the IPO. His stake in the company is valued at around ₹7,500, making it his second most valuable stock in his portfolio after Titan.

The price band for Star Health IPO was set at ₹870-900 per share. At the top end, the company is valued at ₹51,806 crore. The insurer's price-to book (P/B) multiple worked out to around 10 times. According to analysts, its rival ICICI Lombard trades at a P/B of 8.25 times.

Typically, investors expect a new company to price its shares at a discount to existing listed players.

The market capitalization of the recently-listed PB Fintech, owner of India's largest digital insurance market place Policybazaar, is Rs 59,824 crore. The IPO of Rakesh Jhunjhunwala-backed Star Health comprises a fresh issue of Rs 2,000 crore and an offer for sale of up to Rs 5,500 crore by existing shareholders, including promoters. The net proceeds are proposed to be deployed towards augmentation of the company's capital base.

The sellers in the offer for sale include the three promoters, Safecrop Investments, Konark Trust, and MMPL Trust. Among non-promoters, Apis Growth, University of Notre Dame and MIO Star, among others too will cut their stakes.

Currently, promoters own 62.80% of the company, while public shareholders own the rest.

Safecrop Investments India LLP holds 45.32% in the company, while billionaire investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala together own a 17.26% stake. Among the public shareholders, Apis Growth and University of Notre Dame DU LAC hold 7.7% and 7.4%, respectively.

"There is no such tax on banking services or mutual fund services. These are also financial services, there is no reason why insurance services should be taxed and that too, so heavily. Even the premium for purchase of annuity attracts GST," said Sathe. He said the government's "clear apathy" towards the sector was evident when state-owned insurance companies were not immediately capitalised when their solvency ratio (which must always remain above 150 per cent) fell below the threshold a few times.

The government is also not filling up vacancies in the insurance regulator fast enough.

"Irdai has been headless for the last five to six months. Members' positions are vacant Institutions are weakened if not manned in time," said Sathe, adding the development of the sector not the sole responsibility of insurance companies alone.

These companies have other challenges, too. Given the high solvency ratio, promoters must always infuse capital before such a company wishes to grow exponentially. They cannot invest as they like. The Irdai stipulation that insurance firms must invest at least half of their investible fund in government and other approved securities brings down the yields or internal rate of return for Investors. This is because the yields on such securities have been declining steadily.

"Insurance companies undertake long-term liabilities, but the market has no matching asset instruments, resulting in an asset-liability mismatch, said Sathe.

As the economy grows, so will disposable income and domestic savings. As incomes rise, insurance penetration increases, added Sathe.

India's "highly favourable demographics, where around 40 percent of the population is currently aged between 20 and 49 years, low social security cover, coupled with increasing life expectancy, will also fuel the need for insurance. However, around 40 percent of the population remains uninsured and the thumb rule of having 6x the annual income as Insurance is not adhered to.

"As the level of education increases, the general awareness of insurance and its benefits will also increase, providing a further fillip to demand," said Sathe.

Technology has been a game changer, and there hasn't been a data breach or security scare. even as employees worked from home. Insurance companies, despite incurring losses in some cases, settled over 50,000 crore worth of claims last year.

Sathe said insurance companies must share the data among themselves, and must have a common database, particularly about frauds, rejection, and suspicious claims.

Why should we not seek subsidy: Panelists

Say customer engagement has been one of the pain points for Insurers, historically

BHARGAV DASGUPTA

MD & CEO
ICICI LOMBARD GENERAL INSURANCE

"Fact of the matter is that health insurance or any insurance is a pooling of small amounts of pramiums used to pay a few large claims. Conceptualty a pandemic is uninsurabig"

RAKESH JAIN

CEO
REUANCE GENERAL INSURANCE

Insurers have stood by people in tough times and have taken heavy penalties. Monoling firms had ton scramble to raise capital. General insurers could shows some resilience bacause-1 their business is diversified"

ANAND ROY

MD
STAR HEALTH AND ALLIED INSURANCE

"The non-life Insurance Industry has paid roughly 130,000 crore worth of Covid-related health dalms over the last 18 months... There were doubts whether Covid is an act of God, but we came together"

TAPAN SINGHEL

MD & CEO
BAJAJ ALLIANZ GENERAL INSURANCE

The Centre trust reduce 65 En premlumns The premium are moving up because of the daims we are seeing. If the Penact on the end consumer has to be lourered, the GST on premlumns have to be looked into

The non-life Insurance industry has paid around ₹30,000 crore in Covid-related health claims without any support from the government and the cost of such claims are borne by the industry, said the panelists at the Business Standard BFSI Insight Summit on Monday.

They said this could lead to an Increase in premium unless the government steps in to minimise the burden on the end-consumer, such as through a reduction in goods and services tax (GST) on premiums or address the issue of high health care inflation.

The panelists were part of a discussion on the topic Generul Insurers-Insuring the Insurers.

health insurance or any insurance is pooling of small premiums that is used to pay a few large claims. And conceptually a pandemic is uninsurable. But we, as an industry, stood tall and said we would support society," Bhargav Dasgupta, managing director (MD) and chief executive officer (CEO), ICICI Lombard, said at the summit.

"If the pool becomes unviable because of high claims, then the pool has to be replenished by an increase in premiums. But we also have to focus on the cost side of the equation.... we have to address the core issue of health care inflation." be added.

Supplementing what Bhargav said, Tapan Singhel, MD and CEO, Bajaj Allianz Gencral Insurance, said,
"The government should reduce GST on premiums. The premiums are moving up because of the claims we are seeing. If the effect on the end-consumer has to be lowered, the GST on premiums has to be looked into. Why should 18 per cent be changed when we are talking about consumer interest?"

He also questioned why the industry should not ask the government for a subsidy. "Why should the insurance industry not ask for a subsidy for something which is a national cause?" he asked.

Non-life insurers have seen a huge spike in claim size since the pandemic's outbreak and much of it. they say, is because health care providers are charging exorbitant sums for treatment. Without a regulator, it is practically impossible for insurers to push for standardised treatment rates.

Anand Roy, MD, Star Health and Allied Insurance Co., said, "We are struggling with a party-the healthcare operators-which does not have a regulator. This is an area where all the players have to come together in the larger interest of the public, Some degree of discipline has to be brought in the health care ecosystem.

"Insurers have stood by people in tough times and have taken heavy penalties, with shareholders funding those. Monoline companies had to scramble to raise capital. General Insurers could show some resilience because their business is more diversified," said Rakesh Jain, CEO, Reliance General Insurance.

He said the goal is to give people quality health care and this should be done through insurance companies.
"Hence, premium increases should be linked with goals and not looked at in Isolation," he added.

Speaking on competition from new-age digital companies and insurtechs, Singhel said he didn't feel such firms were doing anything drastically new.

"We were forced to digitise even before the pandemic and the digital players came into the picture because we are a low-margin and low-ticket sized industry," said Dasgupta.

"The role of insurers is changing from a risk transfer company to a risk prevention and management one. In order to do this, we have to partner others because we may not have all the capabilities, he added, explaining how insurtechs and legacy companies can collaborate.

"Insurance was always a push product. It was not even a secondary. but a tertiary product. With digitisation, insurance is becoming a primary product and many of these start-ups have realised that insurance creates a great pull for their business model For insurance companies, insurtechs become an extended way of creating a conceptual promotion of your product," said Jain.

Customer engagement has been one of the pain points for Insurers, historically. "This is where technology will play a critical role and collaboration is the right way and probably on the services side, we will see a lot of engagements and developments," he added.

"Insurers are already doing their bit as they are losing money in health insurance. The government and hospitals also need to do their bit," said Singhel. "We have to learn from the government health schemes. I believe that, like the state of Jammu and Kashmir, the state government schemes providing Rs 5-lakh health insurance should be made open to all citizens of the state. This would result in market behaviour improving the affordability of health insurance," he said.

Bajaj Allianz has a reputation for being the most profitable non-life insurer with a razor sharp focus on its combined ratio (ratio of claims plus mana gement costs to premium). In the first half of FY22, Bajaj Allianz managed to be in the top two-both in terms of top line and bottom line. The company's gross written premium rose 16.8% in the first half to Rs 7,529 crore, while its net profit grew 8% to Rs 788 crore. "We have managed to retail our position because we never lost our head for acquiring business," said Singhel.

"As Covid claims have come down, the frequency of non Covid health claims has gone up. Some of the other infectious dis eases have spiked this year such as malaria, chikungunya and dengue. Also, there was some amount of backlog of the elect ive surgeries that have now caught up in this quarter," he said in an interview with Busi nessLine, adding that the ticket size of claims has gone up for similar ailments.

"We'll have to see if it's a tem porary increase or permanent in nature. This could perhaps be be cause of additional RT-PCR tests that hospitals have do or some more procedures that they're fol lowing, but hopefully that will stabilise," he said, adding that if healthcare costs continue to in crease at the level they are going up it could start impacting the premium for customers.

Dasgupta said that the insurer increased pricing on its corpor ate health portfolio, but is on the wait-and-watch mode on retail health insurance.

"On the retail side, we have to go back to the IRDAI and seek price increase. As of now, we've not done that. This is just one quarter data; we want to wait for this fiscal and see the data and then decide. We are not using the Covid spike to ask for a price in crease because that would not be fair on customers," he stressed.

Between April and September 2021, the insurer received 72,059 Covid-related health claims and 2,38,409 claims for non-Covid cases.

Dasgupta, however, continues to be confident about growth prospects, and said there is a structural increase in the de mand for health insurance.

 Source Link 

Steep fall in crop insurance claims

There has been a more than 60 per cent decline in the crop insurance claims of farmers at Rs 9,570 crore under the Pradhan Mantri Fasal Bima Yojana (PMFBY) for the 2020-21 crop year from the previ- ous year, as there were no major crop losses, accord- ing to official data.

Crop insurance claims stood at Rs 27,398 crore in the 2019-20 crop year (July-June).

The PMFBY was launched in 2016-17 with many improvements over the erstwhile crop insur- ance schemes.

The operational guidelines of the scheme were revised with effect from rabi 2018 and kharif 2020, respectively.

According to the data, about 445 lakh hectares of farm land was insured by 612 lakh farmers under the PMFBY with a total sum insured of Rs 1,93,767 crore during 2020-21.

However, total claims reported were of Rs 9,570 crore for 2020-21. Out of which, claims reported from the kharif season were Rs 6,779 crore and the rabi season Rs 2,792 crore.

Maximum crop insur ance claims were reported from Rajasthan at Rs 3,602 crore, Maharashtra at Rs 1,232 crore and Haryana at Rs 1,112.8 crore during 2020-21.

For you to understand if it is worth purchasing a term insurance plan, it is important to know how term insurance premiums are calculated? It takes into account various factors such as age, health, lifestyle, occupation, and more. Understanding these factors and how they affect your premium can help you make an informed decision about your insurance policy and ensure that you get the best value for your money.

In this article, we'll take a closer look at how term insurance premiums are calculated, and why it's important to know this. We'll also explore how you can still purchase term insurance even if you don't have a large sum of money at your disposal. So let's dive in and discover how you can secure your financial future with term insurance.

Importance of understanding how premiums are calculated

Term insurance is a type of life insurance policy that provides coverage for a specific term, usually ranging from 5 to 30 years. It provides coverage for a specified period, typically ranging from one to thirty years.

Understanding how term insurance premiums are calculated is crucial to ensure that you get the best value for your money. It helps you make an informed decision while choosing a policy and can help you choose a policy that suits your budget and offers adequate coverage.

Factors that Influence Term Insurance Premiums

Several factors influence the premium amount of term insurance policies. These factors determine the risk associated with the insured and affect the premium amount accordingly. Some of the key factors are:

• Age and health of the insured:

  The age and health of the insured are crucial factors that determine the premium amount. Generally, younger and healthier individuals are considered to be at lower risk of death so there are less chances for the insurer to pay the whole cover soon, and hence their premium amount is lower Similarly, As an individual gets older, the risk of death increases increasing the chances of paying the cover, and hence the premium amount also increases.

For example, if our applicant had high blood pressure or diabetes, his premium would likely be higher. Based on his age and health, his premium might be INR 8,000 - 10,000 per year.

• Gender:

  Gender is another factor that affects the premium amount of term insurance policies. Women have high life expectancy as compared to men, and hence their premium amount is lower because the insurer is less liable to pay the whole cover.

• Smoking habits:

  Smoking is a significant risk factor for several life-threatening diseases such as cancer, heart diseases, stroke, lung diseases etc. Thus, Individuals who smoke are charged a higher premium than non-smokers.

For example: A smoker’s premium could be as much as 50% higher than a non-smoker's premium.

• Occupation and hobbies:

  The occupation and hobbies of the insured are also taken into consideration while calculating the premium amount. Individuals working in high-risk occupations such as mining or construction are more exposed to risks of mishap and are charged a higher premium.

Similarly, individuals who engage in risky hobbies such as skydiving or bungee jumping are also charged a higher premium because it increases the chances for insurer to pay the cover.

• Coverage amount and duration of the policy:

  Coverage amount refers to the amount of money that will be paid out to your beneficiaries in the event of any accident. Generally, the higher the coverage amount, the higher the premium will be. Also, the longer the term length, the higher the premium will be. This is because a higher coverage amount and term length means that the insurance company is taking on a greater risk of having to pay out a death benefit.

Coverage amount + term length and premium paid are directly proportional to each other. A higher coverage amount and longer term length may require the insurance company to conduct a more thorough underwriting process, which further increases the cost of the policy. So,

• Higher coverage + Shorter term length = Lower premium

• Lower coverage + Longer term length = Lower premium

For example: Assuming a coverage amount of INR 1 crore and a term length of 20 years, the applicant's premium might be in the range of INR 8,000 - 10,000 per year.

The Role of Underwriting in Premium Calculation

Underwriting is an essential part of the premium calculation process in insurance. It involves the assessment of the risks associated with the policyholder and the insurance coverage being offered. The underwriting process helps the insurance company determine the premium rates that will be charged for the policy.

The underwriting process typically involves the following steps:

• Risk Assessment:

  The insurance company assesses the risk associated with the policyholder and the coverage being offered. Factors like age, occupation, health condition, and lifestyle habits are taken into consideration. The riskier the policyholder and the coverage, the higher the premium rates.

• Medical Exams and Health Questionnaires:

  The policyholder may be required to undergo medical exams or fill out health questionnaires to provide additional information about their health condition. This information is used to assess the risk associated with the policyholder and the coverage.

• Rating Class:

  Based on the risk assessment, the policyholder is assigned a rating class, which determines the premium rates. The rating class takes into account factors like age, health condition, and lifestyle habits.

• Underwriter's Decision:

  The underwriter makes the final decision on the premium rates based on the risk assessment, medical exams, health questionnaires, and other relevant factors.

The role of underwriting is crucial in premium calculation because it helps insurance companies determine the appropriate premium rates for a policy. By assessing the risk associated with the policyholder and the coverage being offered, underwriters can ensure that the premium rates are fair and reflective of the risks involved. Underwriting also helps insurance companies minimize the risk of policyholder claims, which ultimately benefits both the insurer and the policyholder.

Understanding Premium Payment Options

There are two types of premium payment options in term insurance policies: single premium and regular premium.

• Single premium policies:

In single premium policies, the insured pays the entire premium amount upfront. These policies are suitable for individuals who have a lump sum amount available and want to secure their financial future.

• Regular premium policies:

In regular premium policies, the premium is paid at regular intervals and it can be paid on a monthly, quarterly, semi-annual, or annual basis.

Tips for reducing term insurance premiums

While it's important to understand the factors that influence term insurance premiums, there are steps you can take to reduce them. Here are some tips to keep in mind:

• Maintaining a healthy lifestyle

  Insurance companies typically charge higher premiums to individuals who engage in risky behaviors such as smoking, excessive drinking, or participating in dangerous hobbies. By making lifestyle changes, you can lower your risk level and potentially qualify for lower premiums.

• Choosing the right coverage amount and term length

  When you apply for a term insurance policy, you'll need to select the coverage amount and term length that's right for you. While it may be tempting to opt for a higher coverage amount, this will also result in a higher premium. Similarly, a longer term length will also increase your premium. Work with your insurance agent to determine the right balance between coverage amount and term length that fits your needs and budget.

• Comparison shopping for policies

  Just like any other purchase, it's important to shop around and compare different policies and providers. Premiums can vary significantly between different insurance companies such as HDFC Life, ICICI Prudential, LIC etc. so take the time to research and compare quotes from multiple providers before making a decision. The following parameters should be used to compare the policies :

• Financial Stability: Check the financial strength and stability of the insurance company. Look for ratings provided by independent rating agencies such as Standard & Poor's, Moody's, or A.M. Best. A financially stable company is more likely to honor claims and provide reliable coverage.
• Reputation and Customer Service: Research the company's reputation in the market. Read customer reviews and testimonials to get an idea of their customer service quality. A reputable company with excellent customer service will provide support and guidance throughout the policy term.
• Claim Settlement Ratio: The claim settlement ratio indicates the percentage of claims settled by the insurance company. A higher claim settlement ratio signifies a higher likelihood of your beneficiaries receiving the death benefit smoothly. Look for insurers with a consistent track record of prompt and fair claim settlements.

Conclusion

In conclusion, understanding how term insurance premiums are calculated is crucial to making informed decisions about your insurance coverage. By considering factors such as age, health, gender, and lifestyle, insurance companies can accurately assess the risk level of each applicant and determine appropriate premiums. The underwriting process plays a crucial role in this assessment, and the premium amount may vary based on the results of medical exams and health questionnaires. By following the tips outlined above, you can potentially reduce your premiums and ensure that you're getting the right coverage at a price you can afford.

Purchasing term insurance is an important step in protecting your family's financial future.

This is where term insurance plans come into play. A term insurance policy from one of the best term insurers coupled with an appropriate critical illness rider - that’s the perfect combination of financial security that offers coverage across the critical ailment and death aspects. However, now the question is what exactly is a critical illness rider in term insurance? Is this rider at all effective? And which term insurance provider would offer you the best critical illness rider with your term insurance plan? Let’s find out all about it!

What is Critical Illness Rider in Term Life Insurance Plans?

Critical Illness Riders, the valiant companions to term insurance policies, provide an added layer of comprehensive coverage against major health adversities. They are designed to offer financial support and protection in the face of critical illnesses that could potentially shake our lives to the core. For example -

1. Kidney failure
2. Stroke
3. Bone marrow/ major organ transplant
4. Major burns
5. Loss of limbs, etc.

(Please note that the list of critical ailments differs from one term insurer to another. So it’s always best to go through the policy documents before you avail of a plan.)

By adding this rider to your term insurance policy, you fortify your armour, ensuring that you are armed and ready to battle any formidable health challenges that may arise, across the financial aspect.

How do critical illness riders complement term insurance policies?

While term insurance policies shield loved ones in the event of untimely demise, critical illness riders extend their wings of protection even during the lifetime of a policyholder. They provide a living benefit, granting a lump sum payout upon the diagnosis of a covered critical illness. This infusion of funds can help you seek the best medical treatments, cover expenses, and ensure a stable financial foundation while you focus on your recovery.

Benefits of Critical Illness Riders in Term Plan

• Financial protection against major illnesses

  Critical illness riders act as a financial shield, protecting you and your loved ones from the potentially devastating economic consequences of a severe health setback. The lump sum payout provides a safety net, covering medical expenses and allowing you to focus on your recovery without worrying about the financial burden.

• Coverage for medical treatments and related expenses

  With the rising costs of healthcare, critical illness riders offer a lifeline by providing coverage for medical treatments, surgeries, therapies, and associated expenses. This coverage ensures that you can access the best possible medical care, regardless of the financial implications, enabling you to prioritize your well-being.

• Supplementing income during illness and recovery

  A critical illness diagnosis often brings about a disruption in income due to the inability to work. The payout from a critical illness rider can serve as a much-needed replacement for lost income, enabling you to maintain your financial obligations, support your family, and focus on your recovery with peace of mind.

• Peace of mind and reduced financial burden

  Knowing that you are shielded against the financial upheaval of critical illnesses brings a profound sense of peace. Critical illness riders alleviate the worry and anxiety associated with medical emergencies, allowing you to focus on your health and well-being without the added stress of financial concerns.

Limitations and Considerations for Critical Illness Rider in Term Plan

• Specific illnesses covered by the rider

  Each critical illness rider has a defined list of covered illnesses, and it's essential to carefully review this list. Understand the specific diseases included and excluded to ensure that the rider aligns with your health concerns and provides the desired protection.

• Pre-existing conditions and waiting periods

  Pre-existing conditions may not be covered by critical illness riders, or there is usually a waiting period from the policy inception before your claim can be settled. It's crucial to understand these factors and their implications to set realistic expectations and plan accordingly.

• Claim process and documentation requirements

  Familiarize yourself with the claim process and documentation requirements for critical illness riders. Ensure that you understand the steps involved and the necessary paperwork to expedite the claim settlement process during a challenging time.

• Policy renewal and termination conditions

  Be aware of the renewal and termination conditions of the critical illness rider. Understand the terms, premium adjustments, and potential policy modifications upon renewal to ensure continuous coverage and uninterrupted protection.

Comparison with Standalone Critical Illness Policies

• Critical illness riders offer the advantage of being bundled with term insurance policies, providing a comprehensive coverage solution.
• Standalone critical illness policies, on the other hand, offer more flexibility and can be tailored to specific requirements. Consider the pros and cons of each option to determine which best suits your needs.

Critical illness riders are often more cost-effective compared to standalone policies, as they leverage the existing term insurance framework. Additionally, the convenience of managing a single policy and premium payment simplifies the administrative aspects, saving time and effort.

The choice between a critical illness rider and a standalone policy depends on your individual needs and circumstances. Assess factors such as budget, desired coverage, and long-term financial goals to make an informed decision that aligns with your specific situation.

Tips for Choosing and Utilizing Critical Illness Riders

• Assessing personal health risks and family medical history

  Evaluate your health risks and consider your family medical history when selecting critical illness riders. This assessment will help you choose the most relevant and impactful coverage options.

• Evaluating coverage options and policy terms

  Carefully evaluate the coverage options and policy terms offered by different insurance providers. Compare the sum assured, covered illnesses, waiting periods, and claim settlement records to choose a reliable and comprehensive critical illness rider.

• Understanding claim procedures and requirements

  Familiarize yourself with the claim procedures and documentation requirements for critical illness riders. Understanding the process beforehand will facilitate a smoother and more efficient claim settlement experience during challenging times.

• Regular policy review and updates

  Regularly review your critical illness rider and overall insurance portfolio to ensure they align with your evolving needs. Life changes, such as marriage, the birth of a child, or changes in health, may require adjustments to your coverage levels or the addition of new riders.

Best Term Plans with Critical Illness rider

Some of the best-term plans for critical illness disorder in India:

• Max Life Smart Secure Plus
• HDFC Click 2 Protect Life
• IPru iProtect
• Tata AIA Sampoorna Raksha Supreme

These plans offer a variety of benefits, including:

1. High sum assured
2. Low premiums
3. Flexible payment options
4. Wide range of critical illnesses covered
5. The easy claim settlement process

It is important to compare different plans before choosing one that is right for you. You should consider your individual needs and circumstances, such as your age, health, and financial situation.

Conclusion

In the realm of term insurance policies, Critical Illness Riders emerge as the stalwart guardians, providing an added layer of protection against life's most formidable health challenges. By fortifying your financial armour with a critical illness rider, you can face the uncertainties of tomorrow with confidence and peace of mind. So, embrace this transformative power, enhance your term insurance policy, and stride forward knowing that you are prepared for whatever lies ahead. Together, we can conquer the unpredictable and safeguard our health, wealth, and dreams.

1. It’s bad for your health. Like really, really bad. The list of ailments you acquire over a smoking habit is immensely long and terribly scary.
2. Do you know how availing of health insurance plans is mandatory? And you know how people have this misconception that health insurance premiums eat away at your savings? Well, for smokers, this is actually true.

So, well, we obviously are advocating that in case you are a smoker, you STOP IT immediately. But then again, in that case, why are we talking about health insurance for smokers?

Here, take a look at why we chose this World No Tobacco Day to talk about health insurance plans for smokers, the best plans for them, their pros and cons, and how the premiums are affected when it comes to smokers.

Health Insurance Plans for Smokers in India

In 2022, India was looking at 267 million tobacco users in India, out of which a significant % are into smoking. While the statistics vary from one city to the other (you can find out about a city and its mysterious inclination towards smoking from our Instagram post - Smoking Problem, it’s true that India has one of the highest smoking populations across the globe.

Now, this is a FACT. One that we can strive to change but nothing immediately. Subsequently, this is a habit that breeds multiple fatal and near-fatal ailments. Considering that every and all individuals are strongly suggested to avail of health insurance plans, it is only obvious that smokers too fall into this crowd.

However, here is the problem - like in the case of any pre-existing diseases, smokers fetch a significant health risk that is a definite hurdle in the path of health insurance policies. Insurers are usually reluctant to offer any individual who is susceptible to such a queue of life-endangering ailments. So, the obvious question is are smokers at all eligible for health insurance plans? Let’s find out!

Are Smokers Eligible for a Health Insurance Policy?

To answer in a word, Yes. Smokers are eligible for health insurance policies. However, since their habit fetches a long list of near-fatal and fatal ailments, health insurers of course have financial terms and clauses associated with it.

Now, while these terms and conditions might mean a spike in your premiums to be paid towards the health insurance policy that you have, an extended waiting period, or some other repercussions, it also suggests that one gets a health insurance covearge despite having an ailment-domino effect inducing habit of smoking.

And honestly, while every individual be it a smoker or a non-smoker, requires a health insurance plan, when it comes to smokers, who are vulnerable to diseases like -

• Cardiac issues
• Oral cancer
• Lung cancer
• Respiratory troubles
• Complications in pregnancies
• Chronic Obstructive Pulmonary Disease (COPD)
• Cardiac issues
• Emphysema
• Stroke, etc.

-smokers need the sum insured to meet the expenses arising out of any medical requirements.

Hence, although health insurers might be boosting the premium on health insurance plans by adding a loading charge for high-risk smoking policyholders, the plans are worth the price. But, how much of a premium spike are we talking about? Here’s a quick look -

How Does Smoking Impact Your Health Insurance Premium?

Smokers are high-risk potential policyholders. Considering the high number of smokers in the country and the ailments that they are prone to, it was only a win-win situation for insurers and potentially insured individuals to craft and avail of a customised health insurance plan. But this does not come without a cost - health insurers pose a loading charge on the premium:

Things to know when availing of a Health Insurance Plan as a Smoker

In case you are a smoker and are planning to approach a health insurance provider, there are a few things that you have to keep in mind. Before we delve into the details of these pointers, do understand this - as smokers, you are a high-risk policyholder seeking a health insurance plan. Insurers look at you as an individual liable for multiple hospitalisations over health complications and critical ailments. Hence, you need to expect certain compromises across your health insurance policy.

• The transparency in your disclosure is pivotal

  When you are about to avail of a health insurance plan, your insurance advisor/insurer will list out a few queries regarding your existing health conditions, predisposition to any genetic health scares, and any habits that might influence your health.

If you plan to keep your smoking habit a secret and expect your health insurers never to find off, that would be a difficult move to pull off. One hospitalisation that requires you to raise a claim, the compulsory requirement to be honest with your doctor, and your secret would be out. The consequences can be devastating - claim rejection, policy cancellation, etc. So, make sure to be absolutely transparent and disclose your smoking habit.

• Expect a hike in premium

  As explained above, a smoker is a high-risk policyholder who is highly vulnerable to multiple ailments that may lead to hopsitalisation over health complications. This means higher risks of payout for the health insurance providers. Thus, health insurance providers put in a loading charge as a measure to financially safeguard themselves. So, expect a spiked premium on your plans from the best health insurance providers.

• Smokers vs Non-Smoker Premium Comparison

  Well, there’s nothing COOL about smoking. Plus, the financial risks when opting for any of the best health insurance plans are a growing concern. Just take a look at the premiums for the same plans, for the same sum insured, for smokers and non-smokers, and you’ll know what we are talking about.

You can also reach out to an insurance expert or to your potential insurer and you’ll know all about this.

• Smoker+ Pre-Existing Conditions

  If you are a smoker with certain pre-existing health conditions, you might be looking at -

• A complete rejection of the health insurance plan
• An extensive pile-on on the loading charges leads to a substantial premium.

So, make sure to approach multiple health insurers and compare the premiums of the plans before you finalise one plan.

Term Insurance Plans for Merchant Navy

• Navigating Challenges in Term Insurance for Merchant Navy Personnel

Securing term insurance for individuals in the Merchant Navy poses unique challenges due to the nature of their profession and the specific requirements of insurance providers. Here are some key hurdles that Merchant Navy personnel may encounter when seeking term insurance coverage:

1. The requirement to be on land during the application process:

   One major hurdle faced by Merchant Navy professionals is the need to be on land when applying for term insurance. This requirement stems from the necessity of undergoing a comprehensive medical checkup, which is a mandatory component of the application process. Given the high-risk nature of their job and the need for thorough medical evaluations, it becomes challenging for individuals to access these checkups while they are at sea, far away from medical facilities.

2. Reliance on present contract documentation:

   Insurance providers often base the issuance of term plans solely on the documentation of the applicant's present contract. This means that past employment history and experience in the Merchant Navy may not be considered when evaluating eligibility for term insurance. This can be a hurdle for those who have recently started their career in the Merchant Navy or have had gaps between their contracts.

3. Requirement of a guaranteed sustainable income:

   Term insurance providers typically require applicants to demonstrate a guaranteed sustainable income. This requirement may pose challenges for Merchant Navy personnel, as their income can be variable and dependent on contract durations and availability of assignments.

These hurdles highlight the unique considerations that Merchant Navy individuals face when navigating the term insurance landscape. Overcoming these challenges may require careful planning, seeking specialised insurance providers who understand the nature of their profession, and ensuring proper documentation and financial stability to meet the requirements of term insurance providers.

Demystifying Term Insurance for Merchant Navy Personnel: A Step-by-Step Handbook

Try to complete the first five steps before you get the current contract documentation proof so that you can save time and make sure the application process gets completed before you board the ship.

Before diving into the process of purchasing a term plan, it is crucial to assess your coverage needs. Consider factors such as your income, financial responsibilities, outstanding debts, and your family's future goals. Assessing these aspects will help you determine the ideal sum assured for your term plan, ensuring that your family is adequately protected.

Once you have a clear understanding of your coverage requirements, it's time to research and identify reliable insurance providers. Look for insurance companies with a strong track record, excellent customer service, and a range of offerings that cater specifically to personnel in the Merchant Navy.

With a list of potential insurance providers, compare the policy features and benefits they offer. Look for key aspects such as the tenure of the policy, flexibility in premium payments, claim settlement ratio, riders available (such as accidental death benefit or critical illness cover), and exclusions. Assessing these details will help you narrow down your options to the most suitable policy.

Before finalising your decision, carefully read through the policy documents of the shortlisted insurance plans. Pay attention to the terms and conditions, policy exclusions, and any limitations or restrictions that might apply to personnel serving in the Merchant Navy. Ensure that you have a clear understanding of what is covered and what is not.

Consider seeking expert advice from a financial planner or insurance advisor who specialises in catering to individuals in the Merchant Navy. They can provide you with personalised guidance based on your unique circumstances and help you make an informed decision. We here at Ditto are always up for guiding you, and we are just a phone call away.

Now after these five steps, wait to receive your current contract documentation, and as soon as you get them, resume your application process from step 6

Once you have chosen the most suitable term plan, initiate the application process. Fill out the necessary forms accurately and provide all required documents, such as proof of identity, address, income, and medical history. Be transparent and truthful in your disclosures to avoid any issues during the claim settlement process.

Term insurers send you a list of medical tests that need to be conducted. These tests are tailored to your age and job profile. Merchant navy personnel undergo comprehensive medical evaluations due to the high-risk nature of their job. Certain profiles, such as commercial divers or engineers in the merchant navy, require even more detailed and specific medical examinations. The medical checkup is a crucial step in the term plan application process before you embark on your journey.

After successfully completing the documentation and medical examination, pay the premium as specified by the insurance company. Ensure that you pay the premiums regularly and on time to keep your policy active.

Regularly review your term plan to ensure that it aligns with your changing needs and circumstances. Update your policy details, such as nominee information, as necessary.

Key Evaluation Factors for Term Life Insurance Applications in the Merchant Navy

• Risk evaluation as per your designation:

  Your position and responsibilities within the merchant navy are crucial factors considered by insurance providers. They evaluate the nature and level of risk associated with your specific role.

• Task Analysis

  The specific duties and tasks you perform onboard ships are examined. Companies assess the physical demands and potential hazards associated with your responsibilities.

• Sea Time Evaluation:

  The amount of time you spend at sea is a significant consideration. Insurance providers evaluate the duration of your voyages and the potential impact on your overall health and well-being.

• Considering Assignments to Conflict Areas:

  If you have been deployed to conflict-prone regions, insurance companies take this into account. They assess the associated risks and security concerns, which can impact the terms and coverage of your policy.

• Addressing Medical Considerations:

  Your overall health and any pre-existing medical conditions are also evaluated. Insurance providers consider the potential impact of your occupation on your health and may require additional medical examinations or disclosures.

Job Risk and Premium Calculation in Merchant Navy Term Insurance

The cost of your term plan coverage will primarily depend on the level of risk associated with your job in the Merchant Navy, as well as any additional risk factors like extreme sports, hobbies, or health issues. Given the high-risk nature of working in the Merchant Navy, there will be a specific premium loading applied to your term insurance. The amount of loading added to your premium will vary based on the specific job roles within the Merchant Navy.

For instance, positions like Engineer, Captain, and Commercial Diver entail higher risk compared to roles such as Medical Officer, Deckhand, and First Officer.

Advantages of buying a Term Plan early for the Merchant Navy

If you are applying for term insurance at a young rank or when you have recently joined a ship, typically between the ages of 21-22, you may be surprised to discover that your premium will be remarkably low. It may seem hard to believe, but there have been instances where insurance companies have requested a salary certificate to determine the coverage amount based on your earning potential.

Additionally, if you are a first-time cadet, you can obtain insurance once your stipend is paid out. During the initial months, you can ask your parents to cover the premium. They will likely feel compelled to pay it since the coverage benefits them as well. Moreover, due to your young age, the premium for term insurance will be exceptionally affordable.

Streamline Your Finances: The Advantages of Opening a Marines Account

To make managing your finances simpler for you and your family, it is recommended to open a Marines Account. This account provides various benefits, including the option to maintain a zero or minimum balance, easy international money transfers, no charges for ATM withdrawals, higher withdrawal limits, unlimited and free debit card transactions within India, and access to free privileges like net banking, ATM/Debit card, NEFT, and RTGS facilities. Additionally, you can enjoy higher interest rates on this account.

Depending on the insurance provider you choose, you may also be eligible for enticing perks such as cash-back offers, free movie vouchers, special promotions, promo codes, and discount coupons. Opening a Marines Account not only simplifies your financial management but also provides you with access to exclusive benefits and rewards.

Documentation Checklist for Merchant Navy Term Insurance

When evaluating term insurance applications, insurance companies often review the stability of the applicant's income and employment history. These details are verified through documents like

• Active contracts,
• Bank statements, and
• Income Tax Returns.

In the event of filing a claim under a term insurance policy, it is important for merchant navy personnel to keep essential documents handy. These include the

• Policy contract,
• Death certificate,
• Relevant medical reports (if applicable),
• Employment records,

-and any other documents specified by the insurance company for the claims process.

Additionally, insurance companies may also conduct further verification by considering factors such as personal loans, credit card debt, outstanding mortgages, and the income of dependents if they are not entirely satisfied or convinced with the aforementioned documents.

By having these documents ready and accessible, merchant navy personnel can ensure a smoother claims process and a higher likelihood of successful claim settlements.

Conclusion:

In conclusion, purchasing a term plan is a vital step for Merchant Navy personnel to ensure the financial security of their families. This blog has provided a comprehensive guide, including premium calculation and factors considered during the application process. By following these steps, Merchant Navy personnel can make informed decisions and protect their loved one’s future. Seeking expert advice and staying up-to-date with any changes in your policy are also crucial for long-term security. Don't delay; secure your family's financial well-being with a term plan today.

On the other hand, as preachy as we may sound, we also acknowledge the fact that going cold turkey or quitting a habit like that might not really be feasible in a short span of time. But that doesn’t mean that their families and loved ones be on the receiving end of a bad financial fall-through in the case of one’s unfortunate demise. And hence, our discussion of term insurance for smokers becomes crucial.

Are Smokers Eligible for a Term Insurance Policy?

In the case of whether smokers can get term insurance plans or not, the verdict goes - YES, smokers can avail of term insurance plans. However, there are a few compromises that policyholders need to accept for the plan to work. Take a look at some important pointers

1. Smokers pay a spiked premium for their term plan

Smokers are susceptible to multiple fatal ailments like lug and oral cancer(among others). This increases the chances of a policyholder’s death and thereby, spikes the risks of a payout for the term insurance provider. Thus, even the best term insurers charge smokers a 30% - 50% higher premium than non-smokers. This is a financial risk management step taken by insurers to safeguard their standing.

2. Who is a smoker for term insurers?

When it comes to acknowledging who are smokers as per term insurers, there are 2 aspects

• The term “smokers” doesn’t just apply to individuals who smoke cigarettes. Anyone who uses tobacco products is considered a smoker.
• Any policyholder who had used tobacco products in the last 12 months before availing of a term insurance policy, is taken as a smoker.
3. Repercussions in case of non-disclosure of smoking habits

When it comes to disclosure of smoking habits, it is best if you be transparent to your term insurer. Because, if you hide your smoking habit from your term insurers, you may end up being accused of an insurance scam, face a rejection of your insurance claim, or have to deal with a nullified term insurance plan all together. This would mean that one’s family will have to bear the brunt of no insurance overage in case of his/her unfortunate demise.

So, even if you are paying toward a surge in your premium, the sum assured is a substantial amount that will be ensuring the financial safety of your loved ones in case of your absence.

(P.S.: The best term insurance plans are usually quite affordable and rarely put a dent in one’s yearly savings. And the smoking habit of policyholders spikes the premium substantially. However, if you really want to reduce the premium, it’s best you quit smoking at least a year before you avail of a term insurance policy.)

But, what happens if say you start smoking after availing of the term plan? Well, even in that case, you will need to declare this recent habit that you have picked during your term insurance renewal. Because, in the case in the future, during your policy tenure, if you raise a claim and this smoking aspect is revealed, your loved ones are looking at a hassle-filled term claim process with delayed or reduced payment disbursal.

While acknowledging the significance of life insurance plans in general, there is one specific plan category that has gained ground over the years - Postal Life Insurance. All thanks to its long-standing reputation for dependability, trustworthiness, and affordable premiums.

So, read on to learn how Postal Life Insurance can be the safety net you need in uncertain times!

What is Postal Life Insurance?

Postal Life Insurance (PLI) is a government-backed life insurance scheme that is offered by the Department of Posts, Government of India. As of 2023, the scheme continues to provide affordable life insurance coverage to individuals, including government employees, defense personnel, paramilitary forces, and the rural and semi-urban population of India. Graduates as well as diploma holders from all recognized universities are now also eligible for post office life insurance.

The premium payments for the PLI policy are made through post offices across the country. The scheme also offers loan facilities against the policy's surrender value

Overall, PLI is a reliable and popular life insurance option in India, especially for individuals seeking affordable insurance coverage. The scheme provides an important safety net for individuals and their families, ensuring financial security in case of unforeseen events.

What differentiates Postal life insurance from any other Term insurance?

PLI is a government-run insurance programme to give policyholders and their families financial stability and security.

The primary distinction between PLI and other types of life insurance is that PLI is provided by the government, whereas other types of life insurance are offered by private insurance companies. As a result, PLI policies are typically more cost-effective than other types of life insurance and offer higher rates of interest than many other types of investment options.

However, one limitation of PLI is that it is only available in India and is primarily meant for government and semi-government employees in India. In contrast, other life insurance policies may be available to people in different countries and regions.

Overall, both PLI and standard life insurance plans provide policyholders and their families with financial security, but PLI is a special, government-run programme with certain advantages and restrictions, which we will be examining in this article.

Postal Life Insurance Plan Details

Several types of Postal Life Insurance (PLI) plans are available under the Post Office Insurance Scheme in India.

• Whole Life Assurance (Suraksha): This lifetime coverage plan provides financial security to the policyholder's family in case of his/her untimely death. The premium payments for this plan are fixed and remain constant throughout the policy's term.

This policy can be converted into Endowment Assurance Policy up to 59 years of age of the insurant provided the date of conversion does not fall within one year of the date of cessation of premium payment or date of maturity.

• Endowment Assurance (Santosh): This plan offers a combination of life insurance coverage and savings. The policyholder pays a fixed premium for a specified period, and on maturity, the policyholder receives the sum assured along with the accumulated bonus.
• Convertible Whole Life Assurance (Suvidha): This plan allows the policyholder to convert their policy to an endowment plan after a specified period. The premium payments for this plan are also fixed.
• Joint life assurance (Yugal Suraksha): This plan covers the lives of two individuals under a single policy. The premiums for joint life assurance policies are typically less expensive than purchasing two separate policies, making it an attractive option for some individuals.

It is important to note that joint life assurance policies only pay out once, typically upon the first death of the two individuals covered. After the payout, the policy will generally end, and no further benefits will be provided.

• Anticipated Endowment Assurance (Sumangal): This plan provides a lump sum payment at specified intervals during the policy term, in addition to the sum assured and the accumulated bonus on maturity.
• Children Policy (Bal Jeevan Bima): This plan provides insurance coverage for the children of policyholders. The policy matures when the child turns 18, and the sum assured, along with the bonus, is paid out to the child.

Features of Postal Life Insurance Policy

1. Insurance Coverage: Postal Life Insurance provides life insurance coverage to individuals at affordable premiums. The coverage amount depends on the policy selected and the premium paid.
2. Premium Payment: Premium payment can be made monthly, quarterly, half-yearly, or annually, depending on the policy terms.
3. Nomination Facility: PLI allows policyholders to nominate a beneficiary who will receive the sum assured in the event of the policyholder's death and can also make changes to the nomination.
4. Loan Facility: Policyholders can avail of a loan against their policy after completing three years of the policy tenure.
5. Surrender Value: If a policyholder wants to discontinue their policy before its maturity, they can surrender it and receive the surrender value as per policy terms.
6. Revival of Policy: If the policy lapses due to non-payment of premiums, the policyholder can revive the policy within five years from the date of the last premium payment.
7. Grace Period: Postal Life Insurance allows a grace period of one month for premium payment. During this period, the policy remains in force, and no interest is charged on the outstanding premium.
8. Conversion of Policy: Policyholders can convert their PLI policies into Endowment Assurance policies or Whole Life Assurance policies after three years of the policy tenure.
9. Free Look Period: A policyholder can cancel their policy within 15 days from the date of receipt of the policy document and receive a refund of the premium paid.
10. Duplicate Policy Document: In case of loss or damage to the policy document, a policyholder can obtain a duplicate copy by submitting an application and paying the prescribed fee.

Postal Life Insurance Scheme Bonus

PLI provides bonus payments to policyholders based on the performance of the scheme's investments. These bonus payments are in addition to the guaranteed benefits offered by the policy. The bonus is declared annually, and the rate of the bonus varies based on the type of policy and the performance of the PLI fund.

The bonus is calculated as a percentage of the sum assured and is added to the policy's accumulated savings. The accumulated bonus is paid out to the policyholder upon the maturity of the policy or in case of the policyholder's death.

Overall, the bonus payment under the PLI scheme serves as an added benefit to policyholders and can increase the overall value of the policy.

Benefits of Postal Life Insurance Policy

1. Income Tax Exemption: Premium paid towards PLI is eligible for tax exemption under Section 80C of the Income Tax Act, 1961.
2. Low Premium Rates: PLI offers some of the most affordable premium rates in the market.
3. Additional Facilities Offered: PLI offers several additional facilities such as loans against the policy, surrender value, and revival of lapsed policies.
4. High Sum Assured: PLI offers a high sum assured, which is up to Rs. 50 lakhs.
5. Transferred to any Circle within India: PLI policy can be easily transferred to any Circle within India at no additional charges.
6. Passbook Facility: PLI provides a passbook facility to policyholders to keep track of their premium payments and policy details.
7. Discounts on advance Premium Payment: Policyholders can pay their premium in advance for up to two years.

A 1% of the value discount on the premium is available if you pay your premium in advance for a six-month insurance period.

A 2% of value discount on the premium is available if you pay your premium in advance for a twelve-month insurance period.

1. Quick Claims Process: The claims process of PLI is quick and hassle-free.
2. No Medical Examination Required: PLI does not require a medical examination for policies with a sum assured up to Rs. 5 lakhs.

Postal Life Insurance Eligibility

Postal Life Insurance (PLI) offers eligibility to various categories of individuals and organizations. Eligible individuals include Defense Services personnel, Para Military Forces personnel, Central and State Government employees, employees of Local Bodies, employees of the Reserve Bank of India (RBI), graduates and diploma holders, employees of Government-aided Educational Institutions, employees of Public Sector Undertakings, employees of Nationalized Banks and Financial Institutions, employees of Autonomous Bodies, contract-based employees in Central/State Government, employees of all Scheduled Commercial Banks, Extra Departmental Agents in the Department of Posts, and employees of accredited Educational Institutes.

In addition to individuals, certain organizations and entities are also eligible for PLI. These include Credit Co-operative Societies and other Co-operative Societies registered with the Government under the Co-operative Societies Act, which are partly or fully funded by the State Government, Central Government, RBI, Nationalized Banks, State Bank of India (SBI), National Bank for Agricultural and Rural Development (NABARD), and others. Joint ventures with a minimum 10% government/PSU stake are also eligible for PLI.

These eligibility criteria ensure that a wide range of individuals and organisations, including government employees, defense personnel, educational institutions, banks, and co-operative societies, have access to Postal Life Insurance services.

Conclusion

In conclusion, Postal Life Insurance (PLI) is a popular insurance scheme offered by the Indian Postal Service. The scheme has been designed to provide affordable life insurance coverage to individuals, including those who reside in rural areas of India. The post office insurance plan offers a range of policy options to choose from, including endowment policies, whole-life policies, and term policies. PLI scheme benefits include flexible premium payment options, tax benefits, and a loan facility. The post office insurance schemes are known for their simple application process and quick claim settlement. Overall, Postal Life Insurance is a reliable and convenient option for individuals looking for affordable life insurance coverage in India.

What is Insurable Interest?

Insurable interest refers to the financial interest that a policyholder has in the insured person’s life. This means that the policyholder will experience a financial loss if the insured person dies. In other words, insurable interest ensures that the policyholder has a legitimate reason to purchase a life insurance policy.

What is Insurable Interest in life insurance policies?

The purpose of insurable interest is to prevent people from taking out life insurance policies on individuals they have no financial interest in and benefiting from their death without any real loss. Insurable interest helps to ensure that life insurance policies are only purchased by those who have a legitimate financial interest in the life of the insured person.

Insurable interest is usually determined at the time of application for a life insurance policy. If an insurable interest does not exist, the policy may be considered invalid, and the insurer may not be required to pay out any death benefits.

Why are insurable interest important in a life insurance plan?

Insurable interest is crucial in protecting against fraud in the life insurance industry. Without insurable interest, anyone could purchase a life insurance policy for anyone else’s life, leading to the potential for fraudulent claims.

Insurable interest also prevents gambling in life insurance. It ensures that a policyholder does not purchase a life insurance policy with the intention of profiting from the insured person’s death.

Additionally, insurable interest ensures that the beneficiary has a financial loss if the insured person dies. This is important because it prevents the beneficiary from taking out a policy on the life of someone who they do not depend on financially.

By understanding the concept of insurable interest, we can make better-informed decisions when purchasing life insurance policies. It is important to have a clear understanding of the different types of insurable interest and the exceptions to the requirement to ensure that we choose the right policy for our needs.

Finally, insurable interest ensures that the policyholder has an interest in the insured person’s life. This means that the policyholder is not purchasing a policy for someone else’s life without a legitimate reason.

Exceptions to the Insurable Interest in life insurance

There are a few exceptions to the insurable interest requirement in life insurance.

• Life insurance policies for charitable purposes do not require insurable interest.
• Group life insurance policies do not require insurable interest because the policyholder is not an individual, but rather a group of people.
• Life insurance policies for minors do not require insurable interest because the minor cannot legally purchase a policy for themselves.
• Finally, life insurance policies for business purposes do not require insurable interest because the policyholder has a financial interest in the life of the insured person.

Eligibility Criteria for insurable interest in life insurance

• Legal insurable interest involves situations where the policyholder has a legal obligation to protect the life of the insured person.
• Examples: Parents insuring the life of their minor child or business partners insuring each other’s lives. In these situations, the policyholder has a legal obligation to protect the life of the insured person.
• Financial insurable interest involves situations where the policyholder has a financial interest in the life of the insured person.
• Examples: Creditors insuring the life of their debtor or employers insuring the lives of their key employees. In these situations, the policyholder has a financial interest in the life of the insured person.
• Blood or marital insurable interest involves situations where the policyholder has a blood or marital relationship with the insured person.
• Examples : Spouses insuring each other’s lives or children insuring the life of their parents. In these situations, the policyholder has a blood or marital relationship with the insured person.

Insurable interest is a requirement in life insurance to prevent fraud and ensure that the policyholder has a legitimate reason to purchase the policy.

Conclusion

In conclusion, insurable interest is a crucial concept in the world of life insurance. It ensures that the policyholder has a genuine interest in the life of the insured and helps prevent fraud and gambling. Insurable interest is required by law in many countries to ensure that life insurance policies are not used for immoral or illegal purposes.

Overall, insurable interest plays a vital role in the life insurance industry and should not be overlooked when purchasing a policy. It is essential to ensure that both the policyholder and beneficiary have a genuine interest in the life of the insured, ensuring a secure and reliable insurance policy.

Never before had term insurance policies seemed like a better financial move. At least after one passed away, their loved ones would be financially covered. And hence, there was a rise in the supply and demand of term insurance policies across the industry. With a bitter taste of reality, such insurance products had become a much-sought necessary tool.

However, now the question was, which term insurance plans would be the best? Which term insurance provider should one approach for the plans? How affordable were these plans? How could one make such choices? And here’s our answer to all of this -

What are term insurance plans?

Term insurance plans are insurance tools that function as a replacement for the source of income of the insured individual in case of his/her untimely demise. The insured person’s passing away is followed by a lumpsum amount being offered to the loved ones to ensure that they are financially secure. Such an amount caters to the financial goals of the loved ones in the absence of the insured individual.

The amount offered by the term insurance companies in exchange for the policy purchased and the premium paid helps the dependents fend off for themselves in the absence of the breadwinner of the family. The amount might be used to fund a multitude of expenses including

• Educational requirements of the children
• Major life events
• Purchase of an asset

Considering that you are a young individual with a steady source of income with dependents or loved ones, term insurances are your ideal way out to help your family in case of your unfortunate absence.

However, since buying term insurance is a significant financial decision, you must know how to pick the best term insurance plans for yourself. Remember, term insurance is a heavily customisable plan that caters to your and your loved one’s future financial stability. Choosing an ideal plan is thus crucial. Here’s a look at the pointers to choose the best possible term insurance policy for yourself

How to choose the best term insurance policies in 2023?

One of the most crucial questions that you are going to ask yourself when choosing a term life insurance policy is the sum assured. What amount would be enough to support your loved ones for the next decade or so in your absence? Deciding upon this wouldn’t be easy because there are so many factors to consider when choosing the right coverage amount for your policy

Let’s say, you were smart and bought a life term insurance policy the moment you kickstarted your professional life, at the age of 24. You made the right choice and bought an INR 1 crore plan. However, as you grow older, and you end up having added responsibilities/dependents in the form of a spouse and kids, will this coverage still be enough?

However, the problem is, term insurance providers are extremely strict about the pre-decided coverage amount and are always reluctant to introduce any changes to the same. That is unless you have opted for a life-stage benefit feature in your policy. In this case, your term insurer will offer you the opportunity to boost your cover during major life events wherein you need extra financial support.

So, when choosing your cover, do remember no matter the amount you settle on, a life-stage benefit is crucial to be included. That would be the much-required security net for your family’s future.

Your current income supports your family and meets their financial requirements. Thus, this becomes a deciding factor in choosing your coverage amount for your term insurance plan.

Remember when sugar used to be INR 18/kg? Well, it isn’t so anymore, is it?

And FYI, we are just talking about 2018. In 5 years Sugar has gone up from INR 18/kg to INR 45/kg. Wonder what the price inflation for other commodities look like from 2018 to 2023!

Now, since term insurance plans are supposed to be a long-term financial replacement of a policyholder, taking into account the inflation aspect is crucial. Even after paying your premiums diligently, one definitely wouldn’t want to leave their loved ones with a sum assured that falls short significantly due to the imminent inflation over the coming years.

Term life insurance policies are a financial lifesaver and often act as a financial replacement for the policyholder in case of his/her unfortunate passing away. Hence, when deciding the sum assured, it is important that you factor in your current financial liabilities that includes

• the probable financial requirements of your family in the future,
• your current EMIs,
• the returns that you can get over your diverse investment options,
• monthly expenses in general, and
• any short-term immediate financial goals to be met.

Factoring in all of the above will ensure that the chosen sum assured covers all existing and probable financial needs that the policyholder would have otherwise been responsible to pay.

Your existing lifestyle incurs a specific amount out of your monthly salary. Before you buy term insurance policies with specific riders, it is thus crucial that you take into account your spending habits and general standard of living. Balance out these expenses and then decide upon your cover amount for which you can pay the premium sans financially burdening yourself.

There are 24 term life insurance policy providers and multiple policies available widely across the industry due to the wide acknowledgment and demand for the same. However, availing of such policies is a significant financial decision to take up. This policy would become a financial replacement for your family in your absence. So, you would definitely want a plan that doesn’t fail to serve its purpose. And for that, you need a credible term insurance provider.

But the question is how can you be sure that an insurer is actually credible? Here’s how

The Claim settlement ratio in term insurance suggests the number of claims settled across a year measured against the total number of claims raised in the year.

This is an indicator of the credibility of the insurance provider and proof of their claimed promises as to how they prioritise their policyholders. However, the CSR of a term insurance provider isn’t enough to determine its reputation.

The Solvency Ratio of a term insurance provider measures the liabilities of the insurer and the cash flow of the term insurance company. This gives away a transparent picture of the financial stability of the provider in its ability to handle its short-term and long-term financial liabilities. It is determined by

The minimum solvency ratio of term insurers as proposed by the IRDAI, Insurance Regulatory and Development Authority, is 150%.

As policyholders, now you have a fair idea about how future-ready your term insurance provider is and how well it keeps up its financial words of providing the pre-decided cover amount in your absence to your loved ones and dependents

Usually, term insurance coverage is pretty rigid, and hence, the premium doesn’t change across the policy period. The insurance providers are reluctant to introduce any changes in the coverage amount, irrespective of the issues faced by the policyholders considering the lumpsum amount and the associated risks.

However, with some of the best term insurance providers and some quality term insurance riders, increasing and decreasing the cover amount becomes conveniently feasible. But why would you want to increase or decrease the coverage amount for your term insurance plan? Read on

• Increase the term insurance cover - Inflation, new and major life events, and the addition of dependents would suggest the need to boost the term insurance coverage bandwidth.
• Decrease the term insurance amount - Considering that you are through with paying your EMIs and have less number of dependents on you (your children become financially independent), why would you still want to continue with a higher coverage amount requiring spiked premiums? Rather you can choose a lower coverage amount and premium and invest the additional amount in meeting your short-term goals and dreams.

As said before, term insurance plans are heavily customisable insurance products. Such tailored products are made feasible with the help of inclusions of term insurance add-ons. While there are multiple riders across the term insurance industry, not all can be considered mandatory and essential. Here are a few which can be considered essential

When you are looking for term insurance plans, you need to prioritise the flexibility of the policy. A pre-decided coverage amount might feel inadequate once you are facing a major life event - a wedding, higher education, or childbirth. During such times, you would need your term insurance provider to give you the option of being flexible and increasing the coverage bandwidth to support your then-current financial requirements. All of this can be well achieved over a life stage benefit rider.

In case an insured individual is unable to pay the premium towards his/her term insurance plan due to loss of income over

• partial or complete disability,
• some serious/critical ailment, or
• burdening financial obligations

this rider would allow you to skip premium payments. This would help you stabilise your financial situation during a time of distress.

Death is always an unavoidable destiny that one never wishes to witness for their loved ones. However, when death comes over critical illnesses at least the loved ones are slightly prepared for the ending. On the other hand, if it’s an accident that brings the end of life, the unexpected nature of the same is a psychological and financial “out-of-the-blue” situation.

With an accidental death benefit as a rider on the term life insurance plan, insurers offer the loved ones an additional amount over the pre-decided sum assured. The additional cushion amount is meant to try and replace the additional loss of income over the early demise of the policyholder.

A health insurance plan to deal with the charges incurred over hospitalisation bills due to a critical ailment is the first step in dealing with a critical illness. However, when it comes to handling the issue of loss of income due to repeated hospitalisations and lack of the ability to work, only a term insurance policy with a critical illness rider can help.

With this rider, the insurer offers the loved ones a part of the term cover in cash. This amount can be used to cater to hospital bills, daily expenses for the family, and more in the temporary absence of the breadwinner of the family.

However, since the amount is taken out of your term cover, you will be looking at a reduced coverage amount.

Diagnosis of a terminal illness for any individual is a huge psychological hit that paralyses one with fear. Thinned-out hope, and marginal chances of getting a convenient treatment option - raise concerns. But what if you come to know of a treatment option that ensures positive results of a cure but is just pricey? The term life insurance plan that you had been saving for so long comes to the rescue.

With a terminal illness rider in place with your base policy, in case you are diagnosed with a terminal ailment and are acknowledged by the insurer, you get a lumpsum amount out of your term cover. This will help you meet your treatment bills and travel expenses among other things.

(The inclusion of these riders into your term insurance policy fetches a very small addition to the premium to be paid and yet yields a very high value to the policy that is targeted at safeguarding the future of your loved ones.)

The aforementioned factors would help you choose the ideal term insurance cover for you. And of course, you can always reach out to the insurance experts who can guide you with the perfect term insurance plans that best caters to your financial requirements and that of your loved ones.

However, there is one more aspect of term insurance plans that you need to get familiar with before you buy term insurance plans - the eligibility criteria required to purchase the best term life insurance in India.

What are the required eligibility criteria for availing of term insurance policies?

To land with the best plans, you can always go ahead with our free term plan comparison tool and decide upon the policy that would best suit the financial requirements of your family in the future during your absence and your current financial plans that would ensure easy premium payment sans much financial burdening.

It is at this crucial juncture that the significance of an insurance company's Amount Settlement Ratio (ASR) becomes apparent because had this factor been considered during choosing of the insurer, the current financial disaster could have been completely avoided. But in this context, why are we so specifically focused on ASR? Let’s find out!

Understanding Amount Settlement Ratio in Term Insurance

The Amount Settlement Ratio is a metric to evaluate how effectively insurance companies are settling claims. This ratio serves as a tool for individuals to assess an insurer's track record in providing timely and accurate financial compensation when a claim is filed.

In simple terms, the ASR is the percentage of the total amount of claims received by the insurance company that is actually settled.

• A high ASR indicates that the insurance company is settling claims fairly and efficiently.
• A low ASR may indicate that the company is delaying or denying claims, which can lead to unhappy customers and damage the company's reputation.

By conscientiously considering this ratio when selecting an insurer, an individual can ensure that their beloved family members receive the appropriate amount of financial assistance precisely when it is needed the most, should any unfortunate circumstances arise.

However, it's important to note that the ASR should not be the ONLY factor you consider when choosing an insurance company. Other factors, such as

• the company's financial stability,
• customer service, and
• coverage options,

should also be taken into account.

How is the Amount settlement ratio calculated?

• CASE 1: When ASR is less than 100

The Amount Settlement Ratio for this insurance company is 80%. This means that they settled 80% of the claims they received and the rest 20% is either denied by the company or they are delaying in settling those claims.

• CASE 2: When ASR is 100

An ASR of 100% means that the insurance company has settled all the claims they received, while an ASR of less than 100% indicates that they have not settled some of the claims.

Importance of a High Amount settlement ratio

Let’s find out the significance of a High Amount Settlement Ratio (ASR) from the perspective of both the customer and the company.

From the perspective of the customer, a high ASR is important because:

• Customer Assurance: It indicates that the company is responsive to the policyholder’s needs and concerns, and is committed to settling claims in a timely and fair manner.
• Peaceful Protection: A high ASR can provide policyholders with much-required peace of mind, as they know that they will be compensated appropriately if they pass away, which is covered by their policy.
• Reliable Settlement: It can reduce the stress and uncertainty associated with filing a claim, as customers are more likely to trust such companies to settle their claims fairly.

From the perspective of the company, a high ASR is important because:

• Boosting Loyalty: It indicates that the company is settling claims efficiently and fairly, which can lead to increased customer satisfaction and loyalty.
• Trustworthy Reputation: A high ASR can help build the company's reputation in the industry, as it shows the company is reliable and trustworthy.
• Legal Protection: It can reduce the risk of legal action or regulatory fines, as customers are more likely to accept the settlement offered by the company if they believe it is fair.

Factors Affecting Amount Settlement Ratio

• Fraudulent Claims: The insurance company may reject fraudulent claims or settle them for a lower amount, which can affect the settlement ratio. It is crucial to refrain from making false claims or exaggerating the loss to receive a higher payout.
• Nomination Accuracy: In case of the policyholder's demise, the nominee's incorrect or incomplete information can lead to claim settlement hiccups. It is important to keep the nominee information up to date and accurate to avoid claim rejection or delays.
• Policy Comprehension: The policyholder's lack of understanding of policy terms and conditions can lead to claim settlement issues. It is essential to carefully read and understand the policy document and seek clarification from the insurance company or agent in case of any doubts or confusion.
• Truthful Disclosure: The policyholder's failure to disclose relevant information or to provide false information while purchasing the policy can negatively affect the settlement ratio. It is important to provide accurate and complete information while purchasing a policy to avoid claim rejection or underpayment.

Conclusion

Choosing the right insurance policy is vital for ensuring financial protection during unforeseen events. When selecting an insurance company, the Amount Settlement Ratio (ASR) plays a crucial role. A high ASR indicates that the insurer settles claims efficiently, providing peace of mind to policyholders. However, it is essential to consider other factors like financial stability, customer service, and coverage options before making a decision. Thorough research and comparisons will help secure the well-being of loved ones, offering the peace of mind needed to face uncertainties ahead.

This is where seeking and availing of health insurance for chronic diseases comes into the scenario. Having access to a significant fund that is there to act as a financial security net and help you meet the expenses for your medical treatments, takes half the stress out of the situation. Following up with similar ideas, the top health insurance providers across the country have been offering the best-possible policies to critical illness individuals.

Of course, there are certain restrictions, hold-backs, and exclusions in such policies. However, are these health insurance policy variants still worth availing of? That’s what we are here to find out!

What are Chronic Diseases?

Chronic diseases are those health conditions that continue for a prolonged period of more than a year and require continued medical attention. Such medical situations prove to be guaranteed hindrances in the professional and personal lifestyles of individuals. Such chronic ailments comprise

1. Diabetes (Type 1, Type 2, Gestational, and Pre-Diabetic, Diabetic Retinopathy, Diabetic Tripathy)
2. High blood pressure
3. Renal conditions
4. Cardiac conditions (Eg: Myocardial Infarction, Arrhythmias, Cardiovascular diseases etc.,)
5. Arthritis
6. Osteoarthritis
7. Rheumatoid Arthritis
8. Cancer (Any type of cancer, undergoing treatments or considered as PED)
9. Autoimmune diseases

Individuals are often torn between carrying on a normal life and frequent hospital visits. This isn’t just a psychological burden, but a financial one too.

And if one starts dipping their toes into their savings to meet with such issues, it won’t be long before the savings melt away. However, there’s the perfect solution to this - availing of health insurance for chronic diseases. Compared to the original hospital invoices over frequent hospitalisations, the premiums to be paid for the best health insurance plans are minimal.

Also, if you end up choosing a suitable provider and a tailored health insurance plan for diabetes and the rest of the chronic ailments, you may end up having more benefits than you aimed for. Such advantages include

• Tax benefits under Section 80D
• Pre and post-hospitalisation coverage
• Domiciliary and daycare treatment coverage
• No-Claim Bonuses, and more.

Here’s a look at some of the best health insurance plans for such chronic ailments

Things to remember while choosing health insurance plans for chronic diseases

In general, when one avail of health insurance plans, it is a significant financial decision. However, when it comes to choosing a health insurance plan covering pre-existing conditions or chronic ailments, the decision becomes much more crucial. That’s because

• In the standard cases, where a healthy individual seeks a plan, the medical conditions do not exist yet, it is a financial move with anticipatory reasons.
• On the other hand, when it comes to choosing plans for chronic ailments, the costs are already a reality, and hence, the plans have to be chosen with utmost care keeping in mind that this same policy would come in handy in case of any auxiliary health complications too.

Taking into account, the importance of a health insurance plan for chronic ailments and how it is instrumental in ensuring quality healthcare services sans facing any financial distress, here are a few points to remember when you choose your plan.

Chronic diseases, if acquired before availing of the health insurance policy, need to be disclosed to the Third Party Administrator (TPA) or directly to your health insurer. Else, in case of future treatments, while in the continuance of the insurance policy, your insurer might reject your claim or cancel the policy overall.

So, it’s best to disclose any chronic ailments that you are or had been treated for. This will also help your health insurance provider suggest the most suitable health insurance plan, one that caters to your existing medical conditions.

Since there is a pre-existing chronic disease, any health insurance provider would consider the policyholder to be a high-risk individual with increased (read: guaranteed) chances of multiple hospitalisations across the year. Hence, they include loading charges into the premium for a health insurance policy.

This means you are looking at a spiked premium for your health insurance plan. However, this spike is minimal compared to the total bills generated from hospital treatments. All that you need to do is compare various health insurance plans over our free comparison tool and then decide upon a financially convenient one.

Now, it is true that health insurance providers do offer plans to chronically ill patients. However, they also include certain exclusions in their plans. So, when purchasing a health insurance plan for cancer, diabetes, or any other such ailments, make sure to read into the finer prints of the plans to get familiar with the exclusions in your plans. This will help you make an informed decision when availing of a plan.

Health insurer providers do offer coverage for a queue of chronic ailments. However, there is also an associated waiting period that a policyholder needs to hold on to before their treatments regarding a chronic ailment are covered. Since there is a chronic ailment involved, the waiting period is essential for the insurance provider to safeguard their financial stability.

On the other hand, the less the waiting period, the better it is for the policyholders because during the waiting period, an individual needs to pay for their treatment out of their own pocket.

When you inform your health insurance provider/expert insurance advisor that you have a chronic ailment, there is a high chance that they request a complete medical checkup (this is a probability, but not a compulsion). This will help the insurance provider be completely aware of any and all pre-existing health conditions.

• Michael Phelps, the Gold Olympic winner in swimming, has ADHD
• Leonardo DiCaprio, the oh-so-handsome Jack from Titanic, has obsessive-compulsive disorder (OCD)
• Lady Gaga, the honey-voiced singer and actor, has post-traumatic stress disorder (PTSD)
• Daniel Radcliffe, our very own Harry Potter, has OCD
• Cardiac issues, etc.

Well, the problem is, when celebs have mental health issues/disorders, we find ourselves inquisitive about it. We read tabloids recording the root cause and symptoms. However, when our next-door neighbour is diagnosed with such mental conditions, the situation goes ‘hush-hush.’ As regressive as this sounds, this is the truth across the entire country. Subsequently, all treatment related to mental health conditions becomes taboo, which unfortunately doesn’t make it any less expensive.

Nonetheless, we need to keep reminding ourselves that mental health is as crucial as physical health and the perfect balance between the two is pivotal in living a great life. And these days it seems that the nation and the globe at large are acknowledging this. Hence, to offer aid with the costs of diagnosis, treatment, and consultations, health insurance providers are now offering plans that offer adequate coverage for mental health conditions.

Such health insurance plans are the demand of the hour, especially among those in the younger age bracket. But the question is, how relevant and effective are these policies in dealing with mental health fallouts? Does it really offer the relief of a financial cushion during the most difficult times or is it just a marketing gimmick? Here’s what we, as insurance experts, think of these health insurance policies.

Mental health awareness in India 2022-23

Psychological disorders are mental conditions and/or behavioural patterns that reflect an individual’s thoughts and feelings that have been affected by past trauma, circumstances, or certain experiences. Such ailments have a major impact on the way an individual deals with stress, takes decisions, and makes life choices.

Some of the most important psychological disorders include

• Sleep disorders
• Eating disorders
• Bipolar disorders
• Anxiety disorders
• Stress disorders (Post Traumatic Stress disorders)
• Schizophrenia and other psychosis
• Depressive disorders
• Dissociative disorders
• Panic attacks
• Neurodevelopmental disorders, and more

Such psychological disorders often lead to cognitive ailments that complicate the health conditions of individuals. Such high risks to one’s physical well-being make this a priority concern that needs to be addressed specifically. However, when it comes to our country, talks about mental health are such a cumbersome topic.

As of now, we are battling to put ourselves ahead of this stereotyped taboo. More and more importance and priorities are being set toward mental health and well-being. And here’s a look at how India is handling psychological ailments over funds being directed towards its diagnosis, treatment, and consultations.

The burnout over pushing their career forward, the stress from education, and the diverse peer pressures have altogether raised psychological health concerns in India. Add to this the result of the prolonged lockdown during the COVID-19 pandemic, the stress of loss in business and finances, and the consequent rise in cases of depression, anxiety, and so on and so forth.

Following this, India is tackling the concern about psychological ailments in a two-fold manner

1. In Budget 2023, the Ministry of Health and Family Welfare received INR 89,155 crore. Of this, INR 133.73 crore has been directed at the National Tele Mental Health Programme. This is an initiative launched in 2022 under the National Health Mission that is targeted at improvising the mental health of individuals.

2. In addition to the latest budget allocation, the inclusion of the Mental Healthcare Act of 2017 into the best health insurance plans by the IRDAI has offered individuals with all the financial aid that they primarily require to deal with their psychological concerns.

While India is still on the back foot in dealing with such a serious issue as mental health, their endeavors are worth mentioning. And in an attempt to follow up with these efforts, health insurance providers are also putting in their contribution by offering coverage for mental ailments to their policyholders. However, is that all that health insurance plans do for those affected by psychological issues? Let’s find out!

Why do psychologically challenged individuals seek health insurance?

• Psychological treatments aren’t exactly cheap

As crucial as psychological health is, taking care of it isn’t inexpensive. From the diagnosis to the doctor’s consultation fees to the continued treatment of the same - the sessions are pricey since it is a rare specialty that needs to be handled delicately. And compromising with this healthcare service can have an immense dire impact on an individual.

So, to ensure the best quality psychological healthcare you need convenient access to a significant fund. This is feasible quite easily over availing of a health insurance plan. All that you need to do is choose the best health insurance provider and a suitable health insurance policy. This helps you enjoy access to quality healthcare service that caters to your customised medical requirements.

• Psychological health plays a significant role in overall well-being

When you think of why you avail of health insurance policies, you know it is so that you can continue keeping great physical and financial health. It is so that you can continue to safeguard your finances during a time of medical distress. However, to keep up with an overall great health condition, you can’t ignore the psychological impact. And in case such psychological ailments raise additional physical diseases, you will eventually have to fall back on your health insurance plan for financial coverage during medical emergencies.

Such a tailored approach in comprehensive health insurance policies makes them the ideal plan for those seeking psychological help.

However, the question is - how relevant is insurance for women's health? Are they worth the investment? Do they come with any downsides? Well, because health insurance policies are a substantial and crucial financial responsibility, jumping into availing of one without considering its pros and cons would be unwise.

So, here, take a look at how and what health insurance plans are (in)effective -

Why are Women health insurance plans crucial in India in 2023?

India has been on the back foot for a long time when it comes to gender disparity. Women's health has been neglected for long. With looming issues like

• Child marriage,

• Multiple childbirth without expert supervision (over the desire of a boy-child),

• Specific health complications like anemia, breast cancer, and more

–women are actually the ones who require increased funds directed specifically toward them to cater to their medical conditions. Here’s a look at some number that throws some light on the recent women's healthcare conditions across the country While the data above showcases the grave health condition of women across the nation, this year’s budget comes off as a sigh of relief With a majority of the women across the nation still financially unstable, significant funding becomes a prerequisite to ensure premium healthcare services to address their queued-up health conditions. Regarding this, the increased budget definitely is a big help. However, one still needs the financial safety net that is guaranteed by the best health insurance policies to ensure that not a penny is spent from one’s savings to cater to one’s medical well-being.

How to choose the best health insurance policy for women?

In general, health insurance plans from the best health insurers are a financial perk considering how it ends up helping insured individuals safeguard their savings in cases of any medical happenstances and their consequent treatments.

Surely enough more and more individuals have been availing of health insurance plans. And in response to this rising demand, insurers are building multiple customised insurance products that cater to specific sections of the population. Women health insurance plans are one such tailored insurance variant.

Here’s how you can choose the best plans on insurance for women's health, by looking into the features of the plan -

• Best health insurance provider

Health insurance plans for women are a specifically tailored product that is relatively new in the market. So, it’s best to choose a credible health insurance provider that ensures the safety of your investment by guaranteeing an excellent claim settlement history. Make sure to check out the claim settlement ratio and incurred claim ratio of an insurance provider before you avail of a plan from them.

• Mandatory maternity coverage

One of the most important aspects of any women's health concern is maternity complications. Be it issues with conceiving a child, ectopic pregnancies, miscarriages, pre and post-natal care, delivery process complications, or post-delivery medical care - having access to premium healthcare services is a must. Unfortunately, such services do not come cheap. This makes it extremely difficult for women to have the required medical attention.

Add on to this the issue of child marriage followed by early conceiving of children leading to massive health complications. And now you know why you need a health insurance plan that comes with maternity coverage. Best choose a plan that offers coverage for a baby from day 1 too. Not all plans offer childcare coverage, so choose wisely. This would financially safeguard your child from multiple post-birth health complications and give them access to quality healthcare services without the worries of the funds required to avail of these treatments.

• Coverage for women-specific ailments

With the best health insurance policies, you can always count on the fact that they will be covering a long queue of ailments. However, when you are on the lookout for the best women health insurance plans, you need to essentially choose a plan that offers coverage for the most important women's ailments, including

• Breast cancer

• Gestational diabetes screening

• Ovarian cancer

• Uterus cancer

• Anemia screening

• Best network hospitals for women-centric treatments

When choosing family or individual health insurance plans, one of the primary aspects that need to be considered is the range of network hospitals that the insurer brings to the table. The more the number of partner hospitals, the better and easier access to premium healthcare services, which is a mandate during medical emergencies. This would also help with availing of a cashless mode of repayment.

Now, when choosing a women's health insurance policy, you need to take a look at the available network hospitals that have specialists to treat women-related ailments. This would make your health insurance policy specifically customised to cater to health concerns for women.

• Best women-based health insurance add-ons

Health insurance add-ons are a crucial aspect of deciding which customised health insurance policy would best suit you. In the case of the add-ons with women health insurance policies, they make the policy even more tailored to suit one’s requirements. In such cases, you should be looking for add-ons like - maternity (in case your original plan is great in every other aspect but doesn’t have the maternity benefit), critical illness add-ons, etc.

Apart from the aforementioned determiners to choose the best health insurance policy for women, do also take into account the following basic features

• No room rent restrictions

• Minimum waiting period

• No copayment requirement

• Maximum No-Claim Bonus

• No disease-wise sub-limits

• Tax benefits under Section 80D

• AYUSH treatment coverage

• Minimum premium

• Significant coverage

• Pre- and post-hospitalisation coverage

• Great restoration benefits

• Daycare coverage

• Domiciliary coverage

So, which ailments fall under the pre-existing disease category in health insurance? Can you actually blindly trust all the health insurance plans for pre-existing diseases in India? What are the cautionary pointers that you have to notice when choosing such a health insurance policy? What are some of the best health insurance plans for pre-existing diseases in India that you can avail?

What are pre-existing diseases or PEDs in health insurance?

Pre-existing diseases, as the name suggests, are ailments that have been diagnosed in the individual prior to the purchase of the health insurance plan. Considering our recent hectic lifestyle and habits, we often fall prey to multiple ailments that can cause health complications. And in this case, age is no barrier. Such diseases can affect an individual of any age range. They can keep causing health hurdles in the future too and availing of a health insurance plan at the earliest is the exact financial-security measure that you need to take.

In the case of health insurance plans, any and all health conditions that have been detected in the individual prior to the availing of the health insurance plan are considered pre-existing ailments. Some such pre-existing diseases that are considered by health insurance providers are -

• Blood pressure

• Diabetes

• Thyroid

• Surgeries (across the last 4 years)

• Cardiac issues, etc.

Based on this, sometimes health insurance providers can

• Outright reject the application of an individual, or

• Can even charge a much higher premium (that would include a high loading charge), or

• Can put on an extensive waiting period clause in the health insurance plan prior to the completion of which, no coverage will be provided for the treatment of these conditions.

• Can charge a mandatory copayment for the treatment of such diseases.

The insurers justify their decisions by explaining that these individuals with pre-existing medical conditions pose a much higher risk of payout over frequent hospitalisation and expensive treatment procedures.

As high-end as this sounds, not having a health insurance policy at all is much riskier and might end up becoming a pricier situation. Thus, one must be extremely careful when opting for a health insurance plan for pre-existing diseases. It is crucial that one weighs out its pros and cons and recognises the pointers that need to be avoided and considered when availing of such plans -

Things to remember when availing of a health insurance plan with Pre-Existing Diseases

1. Not all health insurance plans offer coverage for pre-existing ailments

Catering to the rising demand for health insurance coverage, more and more plans have emerged to ensure the financial safety of insured individuals. However, not all plans offer coverage for pre-existing ailments. Only a few of the best health insurance policies cover such ailments. However, it is still advisable to enquire about the coverage prior to availing of any health insurance plan.

2. Pre-existing diseases tend to spike the premium of health insurance policies

When it comes to individuals with prior medical conditions, they pose a high risk for insurance providers (as has been stated before). To safeguard their financial interest and well-being, health insurers often impose a hefty loading charge on the premium to be paid towards the plan. In this case, the premium gets significantly spiked. On the other hand, this spike in the premium can be handled when compared to having no coverage at all and the consequent charges to be paid for the treatment.

3. Expect a waiting period for the treatment of those PEDs under your policy

The treatment of pre-existing ailments almost always has an extensive waiting period involved. This waiting period varies based on the following factors -

• Health insurer

• Pre-existing disease

During this span, health insurance providers refuse to provide coverage for specific pre-existing ailments. Any cost incurred for the treatments for those specific medical conditions during this span will have to be borne by the insured individual themselves. So, try and choose a plan that comes with the shortest waiting period.

(P.S. With some health insurance providers, you can waive the entire waiting period on your pre-existing ailments by paying a certain sum. However, not all health insurance providers offer this provision.)

4. Health insurers can deny one’s policy application over a PED

If you are applying for a health insurance plan with some long-term severe pre-existing ailments, you should expect that there will be chances of your application being rejected completely. Under such circumstances, you would need to look out for the industry-best insurers who would offer coverage for the ailment. You can also contact neutral insurance experts who would give their unbiased opinion about the best plans for your medical conditions.

5. Disclosure of any and all Pre-Existing Diseases is a must

Disclosing any health conditions is a must when availing of health insurance plans. While some health insurance providers request a complete medical and health checkup before purchasing a health insurance plan, others don’t. However, in the case of the latter, it doesn’t mean that you can hide your pre-existing ailment. Your medical history would be taken into consideration by the doctors in case of any hospitalisation and that would eventually get back to your TPA (Third Party Administrator) and/or your insurance provider who may reject your claim or altogether discontinue your insurance plan.

Thus, when your health insurance expert asks you “Are you on any medications?” or “Do you have any pre-existing health conditions?” be honest. The expert will be able to give you a customised plan that would specifically cater to your conditions sans you having to face the banter of too many terms and conditions.

Considering that now you know about the important pointers that you should keep in mind while you choose a health insurance plan that covers pre-existing diseases, it’s time you take a look at some such health insurance policies .

Let's go on this journey together, equipped with the knowledge and tools to face any challenges that may come our way.

Is term insurance really the right choice of insurance?

For solo parents, an insurance plan that's affordable and adjustable, like term life insurance, is ideal. It offers protection during the time your loved ones will need it most, and you won't waste money on expensive permanent insurance.

However, if you require lifelong coverage and a way to accumulate cash value, permanent life insurance could be the solution. Be aware, though, that it's more complex and costly than term life insurance and may only be appropriate for those with higher earnings.

The Importance of Life Insurance for Single Parents

Many people believe that life insurance is only necessary for married parents. However, the reality is that if your demise would have financial implications on anyone, then you should consider life insurance. It's a common myth that needs to be debunked!

Single parenting in India is becoming more common due to reasons such as divorce, death, or unwed mothers. Raising a child alone is tough, and the financial responsibilities are especially challenging. With the high cost of raising a child in India, it's important for single parents to plan for the unexpected, including the possibility of sudden death. Life insurance is crucial for providing financial protection for both the parent and child in these situations.

3 reasons why single parents should buy a life insurance

1. The Cost of Your Child's Education

Parents prioritize their children's education and career and would never compromise on it. However, the cost of education in India is high and constantly increasing. Good colleges can cost anywhere from Rs 20 to Rs 40 lakh, and this can add up quickly if you have more than one child. Even if you're regularly contributing to college funds, what happens if you pass away? Adequate life insurance is a great way to ensure that your children can receive a quality education without accruing a lot of student loan debt.

2. Financial Responsibilities

Parents must consider the amount of debt and financial obligations they will leave behind for their family after they're gone. Common expenses include mortgage payments, car loans, and home loans. If you have debt, it's wise to opt for higher life insurance coverage that can cover these debts. This will prevent your loved ones from facing a financial burden while they're grieving your loss.

3. The Expense of Nurturing a Child

Single parents must consider the costs of caring for their children when they're no longer around. This includes basic necessities like food, clothing, transportation, and medical expenses, as well as entertainment and daycare for younger children. It's important to think about these costs in the bigger picture to ensure that the person raising your child in your absence has enough financial support. The amount of term insurance needed will depend on your child's age and specific needs, with younger children requiring a higher coverage amount.

How much term insurance do single parents need?

Here are some essential factors to consider:

1. Determine the coverage amount based on your annual income (at least 50% coverage).

2. Consider your child's age and needs (i.e., schooling costs and medical expenses).

3. Pay off outstanding debts to ensure beneficiaries receive intended coverage.

4. Determine the coverage amount you can afford based on your budget.

5. Evaluate the benefits of riders and their associated costs.

6. Use a term insurance calculator, human life value calculator, or income multiplier method to calculate the sum assured.

What should be the ideal policy period?

When you're buying life insurance, make sure you choose a policy length that provides enough coverage for your children's needs if something happens to you. As a general guideline:

Get a term life insurance policy for the length of time you actually need coverage.

Avoid buying the longest available term, which can be expensive and unnecessary.

Renewing life insurance can become more costly as you get older due to increased risk, so choose your policy term wisely to avoid having to renew at the end.

Read more about choosing an ideal policy period in our guide.

Naming the Right Beneficiary for Life Insurance as a Single Parent

If you are a single parent, it is important to choose the right beneficiary for your life insurance policy. Your dependents, who are most likely your children, should be your beneficiaries.

However, keep in mind that life insurance companies will not pay out claims to minors, which can lead to legal complications if you do not make arrangements beforehand.

To avoid this, you can name a trustee when you take out the policy, which is usually required.

This trustee will oversee the payment of your death benefit and ensure that your children are taken care of in the event of your passing.

It is important to plan ahead to ensure that your loved ones are protected and provided for after you are gone.

Conclusion

As a single parent, taking care of your child's future can be a big responsibility. Term insurance can help provide financial security for your child even after you're gone. With term insurance, your child can have peace of mind and comfort in knowing that they will always be taken care of. Term insurance is more than just a financial tool, it's a symbol of your love and dedication to your child. So, take the first step towards securing your child's future today with term insurance. Your child deserves it, and so do you.

A joint life insurance plan is a type of life insurance policy that provides coverage to both partners under a single policy. This policy offers various features and benefits depending on the insurance provider. Typically, joint life insurance policies offer a single death payout, which means the policy will end once the death benefit is paid after the death of one of the partners.

In addition, joint life insurance policies may include riders for critical illnesses, permanent disability, dismemberment, and accidental death. Regardless of the policy's variations and conditions, a joint life insurance policy has numerous features and benefits that are highly advantageous to the couple, their children, or dependents.

Types of Joint Life Insurance Plans

When it comes to joint life insurance, there are different types of plans that you can choose from. Below are some of the most common types of joint life insurance plans:

This type of plan is similar to a regular term life policy.

The policyholders pay premiums for a certain period, and if one of them passes away, the other can file a claim.

Once the insurer pays the claim, the policy ends.

This type of plan offers both investment and insurance benefits.

The policy has a cap on its coverage period, usually until the policyholder retires.

If the policyholder survives until the policy matures, they receive an amount from the insurer, which is referred to as an endowment.

If one of the policyholders dies within the coverage period, the other receives the sum assured amount.

How does a joint life insurance policy work?

Joint life insurance is a policy that covers two individuals, and it pays out a lump sum of money when one or both of the insured people pass away. The table below illustrates how this type of policy works.

As you can see from the table, there are two types of joint policies first-to-die and second-to-die.

The first-to-die policy pays out a lump sum of money to the surviving policyholder after the first policyholder passes away. This is typically used for couples who want to ensure that the surviving spouse is financially protected if one of them dies.

The second-to-die policy, on the other hand, pays out a lump sum of money to the beneficiaries after both policyholders have passed away. This type of policy is commonly used for estate planning purposes.

Benefits of a Joint Life Insurance Policy

If you are considering life insurance, a joint life policy may be worth considering. Here are some reasons why:

Affordable premiums: Joint life policies are cost-effective compared to buying separate life insurance policies for each partner.

Additional benefits: Depending on the policy, a joint life policy may come with added benefits such as a bonus payment or a regular income for the surviving policyholder.

Financial protection: A joint life policy provides financial protection for your loved ones in any unfortunate event of demise

Equal distribution: If both policyholders die at the same time, the life cover is distributed equally among the beneficiaries nominated by the policyholders.

A joint life insurance policy can be an ideal option for young couples and nuclear families looking for financial security. The lower premiums make it easier to afford, and the added benefits can be invaluable in times of need.

Disadvantages of Opting for Joint Life Insurance Policy

Some situations in which joint life insurance might not be the right option are

Age and Health: If one spouse has health issues, smokes, or is a bit older, you will likely pay a higher premium than if you were both in good health.

Complications in the case of divorce: Things can become complicated if the policyholders get divorced.

One payout for two people: There may only be one payout for two people, whereas two individual policies will provide two death benefits.

Coverage not personalised: Coverage cannot be personalised for each insured person.

Joint life insurance may be a good option for some married couples and business partners. For others, it might make more sense to buy two individual life insurance policies or even just one. It depends on you, your priorities, and your financial situation. Therefore, it is recommended to consult a financial advisor before choosing a policy that best suits your requirements.

Conclusion

In conclusion, a joint life policy is a type of life insurance policy that can provide financial protection for two individuals under a single policy. It offers numerous benefits, including lower premiums, simplified policy management, and financial security for both policyholders in the event of the other's death. However, it is important to carefully consider the type of joint life policy and the basis chosen, whether first death or second death, to ensure that it aligns with your specific financial circumstances and goals.

Overall, a joint life policy can be an effective way to secure financial protection for you and you're loved one(s) and can offer peace of mind knowing that you have taken steps to safeguard your financial future. Don't hesitate to consult with a financial advisor to explore your options and determine the best course of action. With the right joint life policy in place, you can rest assured that you have taken a proactive approach to protecting your financial well-being.

What is a Keyman Insurance Policy?

A keyman insurance policy, also known as key person insurance, is a type of life insurance policy that a company or organization takes out on the life of one or more of its key employees or executives. The business, known as the proposer or premium payer, pays the premiums for the policy, and in case of the insured employee's death or disability, the policy pays out a lump sum to the business. The purpose of the policy is to provide financial protection to the company in the event of a key person's death, disability, or critical illness.

The lump sum paid out by the policy can be used by the business to cover the financial losses resulting from the loss of the key employee. This can include costs such as recruiting and training a replacement, lost profits, and debts or loans that may become due.

It is important to note that the keyman insurance policy is not intended to benefit the insured employee or their family. The policy's sole purpose is to protect the business from financial loss in the event of a key employee's unexpected death or disability.

Features of Key Man Insurance

Let's explore the features that make this insurance a vital investment for any company!

Insurable Interest: The keyman insurance policy must have a valid insurable interest, which means the company or the business owner must have a financial interest in the employee's life or ability to work.

Tailored Protection: Key man insurance policies can be customized to meet the specific needs of the company, including the amount of coverage, the length of the policy, and the type of coverage required.

Affordable Premiums: The premiums for a keyman insurance policy can vary depending on the age, health, and occupation of the key employee, as well as the coverage amount and policy term. The premiums are generally tax-deductible for the company, making it a cost-effective way to protect the business.

Policy Pivot: Key man insurance policies can be renewed at the end of the term, or the company may choose to convert the policy to permanent life insurance.

Secret Safeguard: Keyman insurance policies are confidential, and the company does not need to disclose the policy or its details to anyone outside the company.

Policy Exclusions: The keyman insurance policy may have certain exclusions, such as suicide, self-inflicted injury, or engaging in high-risk activities. It is important to review the policy carefully to understand any exclusions that may apply

Sum assured: The maximum sum assured under Key Man Insurance is the lesser of:

• Three times the average gross profit of the company over the last three years

• Five times the average net profit of the company over the last three years

• 10 times the annual compensation of the keyman

Some basic eligibility requirements:

Protecting your business and its future success requires careful consideration of key stakeholders, especially when it comes to the keyman - the person who holds significant influence and value in your company. But did you know that there are specific guidelines to follow when purchasing keyman insurance? From share limits to nominee options, it's crucial to understand the requirements to ensure your business is fully covered. Here's what you need to know

• The keyman should not hold more than 51% of the company’s shares. Also, the total shares held by the keyman and their family should exceed 70% of the shares of the company.

• Only term insurance policies can be bought as Keyman Insurance.

• The company can be the only nominee.

• The business must provide evidence to support the claim that the keyman plays a crucial role in the operation.

Advantages of Keyman Insurance Policy

Keyman Insurance policy not only provides a safety net for unexpected events but also offers attractive benefits for both the company and its key employees. Let's explore the advantages of the Keyman insurance policy in more detail.

KeyShield Coverage: Keyman insurance helps to protect a business from financial losses that may occur as a result of the death or disability of a key employee. It provides the necessary funds to help the business recover from the loss of a key employee.

Death benefit: The primary purpose of key man insurance is to provide a cash benefit to the company in the event of the key person's death. The benefit can be used to cover expenses such as hiring and training a replacement, paying off debts, or compensating for lost profits.

Helps with recruitment and retention: Keyman insurance can be used as an incentive to attract and retain key employees. It shows that the business cares about the employee's well-being and provides an added layer of security to the employee.

Simple Safeguarding: Keyman insurance policies are relatively easy to set up and can be tailored to suit the needs of the business.

Disability Protection: Key man insurance can also provide a cash benefit in the event of the key person's disability. This can help cover the cost of medical bills, ongoing care, and lost income.

Keyman Insurance Policy Tax Benefits

Did you know that protecting your business with a keyman insurance policy not only secures the future of your company but also offers some exciting tax benefits? Let's dive deeper into the details!

• The premium paid by the business for a keyman insurance policy is tax-deductible as a business expense under Section 37(1) of the Income Tax Act, 1961. This means that the business can claim a tax deduction on the premium paid for the policy.

• Keyman is not provided with tax benefits because the firm pays its premiums. If a keyman is given control over the policy, they can choose the nominee. Therefore, in the event of the insured's passing within the term of the policy, his or her dependents would receive death benefits that, in accordance with the Income Tax Act, would be tax-free.

Conclusion

In conclusion, a keyman insurance policy is an important protection mechanism for businesses that rely on the skills and expertise of a key employee or group of employees. This policy provides financial support to the company in case of unforeseen events such as the death or critical illness of the insured key employee(s). It covers the costs of recruiting, training, and compensating a replacement, as well as mitigating any losses incurred as a result of the key employee's absence.

The policy offers peace of mind to business owners and investors, protecting them from the risks of losing a key member of staff who have unique skills and knowledge that are critical to the success of the company. Additionally, it assists companies in keeping up their operations' continuity and preserving the trust of their customers, suppliers, and other stakeholders.

What is Return of Premium rider?

The return of premium rider is an additional feature that some insurers offer as part of their term insurance plans. As the name suggests, it enables policyholders to receive a refund of all the premiums paid if they survive the policy term. But is it really a good option?

To help you understand better and make an informed decision, here is a comparison table for different policy options:

As you can see from the table, the return of premium rider comes at a cost. You will have to pay a higher premium to get this feature, and the refund amount is not significantly higher than the additional premium paid.

There are many popular term plans in the market which are smoothly offering return of premium rider option as an add-on in their plan like HDFC Life Click 2 Protect Super, Max Life Smart Secure, ICICI Pru iProtect Smart, etc.

Pros of the Return of Premium Rider

• Refund of Premiums Paid:

The biggest advantage of the return of premium rider is that you get back all the premiums you paid over the policy term if you outlive the policy term. This can be a significant amount, especially if you have paid premiums for a long duration.

• No Tax Implications:

The refund of premiums paid under the return of premium rider is tax-free as per section 10(10D) of income tax act. This means that you don't have to pay any taxes on the amount received, which can be a significant benefit.

• Lower Risk:

With the return of a premium rider, you are essentially getting a risk-free investment. Even if you outlive the policy term, you will get back all the premiums paid. This can give you peace of mind and security.

Cons of the Return of Premium Rider

• Higher Premiums:

The return of premium rider comes at a cost. You will have to pay a higher premium for the same coverage amount as compared to a regular term insurance plan. This means that you will end up paying more over the policy term.

• Opportunity Cost:

The higher premium for the return of premium rider means that you are losing out on the opportunity to invest that money elsewhere. If you had invested the additional premium in other investment options, you could have earned a higher return.

• Limited Options:

Not all insurers offer the return of premium rider/ add on in term insurance plans. This means that your options for getting this feature are limited, and you may have to pay a higher premium for the same coverage amount.

Is Return of premium really worth it?

Here's an example that will help you all calculate the likely cost and potential benefit of a return of premium rider.

Meet Rajesh, a 40-year-old who has recently bought a 30-year term policy worth Rs. 25,00,000 with annual premiums of Rs. 12,000. If he decides to add a return of premium rider to the policy, the cost will increase to Rs. 20,000 per year, which is Rs. 8,000 more than his current premium. Without the rider, Rajesh will end up paying a total of Rs. 3,60,000 over the policy's life. However, if he decides to go with the rider, the total cost will jump up to Rs. 6,00,000.

The real question here is whether the additional cost of Rs. 2,40,000 is worth it for the refund of premiums. This depends on Rajesh's opportunity cost, i.e., what he could earn if he invested the extra money instead. For example, if Rajesh decides to invest the extra Rs. 8,000 annually in a mutual fund with an annual growth rate of 8% , he could potentially earn around Rs. 10,45,957 after 30 years. In this scenario, investing the money instead of adding the rider would be the better choice for Rajesh.

However, this calculation is not the entire story, as it does not take into account Rajesh's risk tolerance. If Rajesh has a low-risk tolerance, he can instead invest the money in Fixed deposit (FD), paying a 5 % interest rate, in that case he would still earn the returns which is more than what he would pay without the rider.

Ultimately, Rajesh must consider his individual circumstances, his risk appetite and weigh his options before making a decision.

Conclusion

In conclusion, the return of premium rider in term insurance is a double-edged sword. While it offers the advantage of getting back the premium paid if one outlives the policy term, it comes at a higher cost than regular term insurance. It may be a good option for those who want to ensure their families' financial security and get some money back in case of survival. However, it may not be a suitable option for those who prioritize affordability and adequate coverage. Ultimately, the decision to opt for the return of premium rider in term insurance depends on individual preferences and circumstances. One must weigh the pros and cons carefully and make an informed choice. It's always recommended to take proper insurance advice and compare various insurance plans, including those with and without the return of premium rider, before making a decision.

When choosing a term insurance plan, you need to consider various factors such as the coverage amount, premium, and policy period.

• The coverage amount is the amount paid out to your beneficiaries in case of your untimely demise.

• The premium is the amount you pay regularly to the insurance company for the policy, and it is based on factors such as age, health, and lifestyle choices.

• Lastly, the policy period is the duration of time that the policy will remain in effect.

Determining the Ideal Policy period in Term Insurance Plans

One of the critical factors to consider when selecting a term insurance plan is the policy period. The ideal policy period varies for each individual, and it is determined by factors such as age, financial obligations, and life goals.

For instance, suppose you are a young professional in your 30s with a mortgage, children, and aging parents who depend on your income. In that case, you may want to consider a policy period that coincides with the duration of your mortgage, or until your children become financially independent. On the other hand, if you are nearing retirement age, your policy period may be shorter, such as 10-15 years, to provide coverage until your retirement savings are enough to cover your expenses. There are several such factors that affects the choice of an ideal policy period like,

Factor 1: Age of the Policyholder

The age of the policyholder plays a vital role in determining the ideal policy period for term insurance plans. The younger the policyholder, the longer the policy period can be. This is because the risk of the policyholder dying during the policy period is relatively low.

On the other hand, if the policyholder is older, the policy period should be shorter. This is because the risk of death increases with age, and it is better to have a shorter policy period with higher premiums than a more extended policy period with higher chances of a claim being made.

Factor 2: Financial Obligations

Another essential factor to consider when determining the ideal policy period for term insurance plans is the policyholder's financial obligations. If the policyholder has dependents, such as children or elderly parents, a more extended policy period is recommended. This is because the policyholder's death can cause financial strain on the dependents, and a more extended policy period ensures that they are protected financially for a more extended period.

If the policyholder does not have dependents or financial obligations, a shorter policy period may be suitable. This is because the policyholder's death would not cause significant financial strain on anyone, and a shorter policy period can save on premiums.

Factor 3: Purpose of the Insurance Plan

The purpose of the insurance plan also plays a crucial role in determining the ideal policy period for term insurance plans. If the policyholder's primary goal is to cover a specific financial obligation, such as a mortgage, a shorter policy period may be suitable. This is because the policyholder's financial obligations will be covered by the policy, and a more extended policy period may not be necessary.

On the other hand, if the policyholder's primary goal is to provide financial protection to their dependents, a longer policy period is recommended. This is because the policyholder's death can have a significant impact on their dependents' financial well-being, and a longer policy period ensures that they are protected for a more extended period.

Factor 4: Future Plans

The policyholder's future plans are also a crucial factor to consider when determining the ideal policy period for term insurance plans. If the policyholder plans to retire within a few years, a shorter policy period may be suitable. This is because the policyholder's financial obligations will decrease, and a shorter policy period can save on premiums.

On the other hand, if the policyholder plans to work for an extended period, a longer policy period is recommended. This is because the policyholder's financial obligations will continue, and a longer policy period ensures that they are protected financially for a more extended period.

Factor 5: Premiums

The premiums paid for the term insurance plan are also a vital factor to consider when determining the ideal policy period. A more extended policy period requires higher premiums, while a shorter policy period requires lower premiums. The policyholder should choose a policy period that is suitable for their financial situation.

Pros and Cons of choosing a longer or shorter Policy period

Choosing a longer or shorter policy period has its advantages and disadvantages. A more extended policy period means that you are covered for a longer duration, and your beneficiaries will receive the payout if you pass away during that time. However, a longer policy period also means that you will pay a higher premium.

On the other hand, a shorter policy period means that you will pay lower premiums, but the coverage will only be for a specific duration. If you pass away after the policy period ends, your beneficiaries will not receive any payout.

Tips for choosing the right Policy period

Choosing the right policy period can be challenging, but here are some practical tips to help you make an informed decision:

• Evaluate your life goals: Your life goals can influence the policy period you choose. Consider your long-term financial obligations and plan accordingly.

• Assess your financial obligations: Take into account your current financial obligations, such as mortgages, loans, and other debts, to determine the policy period.

• Consider potential life changes: Life is unpredictable, and you never know what changes may occur in the future. Consider any potential life changes, such as starting a business, and choose a policy period accordingly.

• Review and update your policy periodically: To choose the right policy period, it's crucial to regularly review and update your policy. Life is unpredictable, and circumstances may change. Suppose you have taken a 20-year policy, and during the 10th year, you take another financial obligation. In that case, it's essential to update the policy period to ensure adequate coverage until the obligation is fulfilled.

In conclusion, selecting the ideal policy period for a term insurance plan is a crucial decision that requires careful consideration of various factors such as age, financial obligations, and life goals. By taking the time to evaluate these factors, you can make an informed decision and choose a policy period that provides adequate coverage for your loved ones. Additionally, regularly reviewing and updating your policy is essential to ensure that it remains relevant to your changing circumstances. Remember, the right policy period can provide peace of mind and much-needed financial protection to your loved ones in case of your untimely demise, so choose wisely.

So, which ailments fall under the pre-existing disease category in health insurance? Can you actually blindly trust all the health insurance plans for pre-existing diseases in India? What are the cautionary pointers that you have to notice when choosing such a health insurance policy? What are some of the best health insurance plans for pre-existing diseases in India that you can avail?

What are pre-existing diseases or PEDs in health insurance?

Pre-existing diseases, as the name suggests, are ailments that have been diagnosed in the individual prior to the purchase of the health insurance plan. Considering our recent hectic lifestyle and habits, we often fall prey to multiple ailments that can cause health complications. And in this case, age is no barrier. Such diseases can affect an individual of any age range. They can keep causing health hurdles in the future too and availing of a health insurance plan at the earliest is the exact financial-security measure that you need to take.

In the case of health insurance plans, any and all health conditions that have been detected in the individual prior to the availing of the health insurance plan are considered pre-existing ailments. Some such pre-existing diseases that are considered by health insurance providers are -

• Blood pressure

• Diabetes

• Thyroid

• Surgeries (across the last 4 years)

• Cardiac issues, etc.

Based on this, sometimes health insurance providers can

• Outright reject the application of an individual, or

• Can even charge a much higher premium (that would include a high loading charge), or

• Can put on an extensive waiting period clause in the health insurance plan prior to the completion of which, no coverage will be provided for the treatment of these conditions.

• Can charge a mandatory copayment for the treatment of such diseases.

The insurers justify their decisions by explaining that these individuals with pre-existing medical conditions pose a much higher risk of payout over frequent hospitalisation and expensive treatment procedures.

As high-end as this sounds, not having a health insurance policy at all is much riskier and might end up becoming a pricier situation. Thus, one must be extremely careful when opting for a health insurance plan for pre-existing diseases. It is crucial that one weighs out its pros and cons and recognises the pointers that need to be avoided and considered when availing of such plans -

Things to remember when availing of a health insurance plan with Pre-Existing Diseases

• 1. Not all health insurance plans offer coverage for pre-existing ailments

Catering to the rising demand for health insurance coverage, more and more plans have emerged to ensure the financial safety of insured individuals. However, not all plans offer coverage for pre-existing ailments. Only a few of the best health insurance policies cover such ailments. However, it is still advisable to enquire about the coverage prior to availing of any health insurance plan.

• 2. Pre-existing diseases tend to spike the premium of health insurance policies

When it comes to individuals with prior medical conditions, they pose a high risk for insurance providers (as has been stated before). To safeguard their financial interest and well-being, health insurers often impose a hefty loading charge on the premium to be paid towards the plan. In this case, the premium gets significantly spiked. On the other hand, this spike in the premium can be handled when compared to having no coverage at all and the consequent charges to be paid for the treatment.

• 3. Expect a waiting period for the treatment of those PEDs under your policy

The treatment of pre-existing ailments almost always has an extensive waiting period involved. This waiting period varies based on the following factors -

• Health insurer

• Pre-existing disease

During this span, health insurance providers refuse to provide coverage for specific pre-existing ailments. Any cost incurred for the treatments for those specific medical conditions during this span will have to be borne by the insured individual themselves. So, try and choose a plan that comes with the shortest waiting period.

(P.S. With some health insurance providers, you can waive the entire waiting period on your pre-existing ailments by paying a certain sum. However, not all health insurance providers offer this provision.)

4. Health insurers can deny one’s policy application over a PED

If you are applying for a health insurance plan with some long-term severe pre-existing ailments, you should expect that there will be chances of your application being rejected completely. Under such circumstances, you would need to look out for the industry-best insurers who would offer coverage for the ailment. You can also contact neutral insurance experts who would give their unbiased opinion about the best plans for your medical conditions.

5. Disclosure of any and all Pre-Existing Diseases is a must

Disclosing any health conditions is a must when availing of health insurance plans. While some health insurance providers request a complete medical and health checkup before purchasing a health insurance plan, others don’t. However, in the case of the latter, it doesn’t mean that you can hide your pre-existing ailment. Your medical history would be taken into consideration by the doctors in case of any hospitalisation and that would eventually get back to your TPA (Third Party Administrator) and/or your insurance provider who may reject your claim or altogether discontinue your insurance plan.

Thus, when your health insurance expert asks you “Are you on any medications?” or “Do you have any pre-existing health conditions?” be honest. The expert will be able to give you a customised plan that would specifically cater to your conditions sans you having to face the banter of too many terms and conditions.

Considering that now you know about the important pointers that you should keep in mind while you choose a health insurance plan that covers pre-existing diseases, it’s time you take a look at some such health insurance policies .

The frequency of hospitalisation if any, should be lower in early thirties — which should allow for maximising the coverage amount through NCBs (No claim bonus). Policies offer not only doubling of coverage amount but also accomplish the same in the shortest time. A ₹5-10 lakh policy of a 30-year-old can increase to ₹10-20 lakh in 3-5 years. While 60-year-olds should also go for the same, a higher frequency of hospitalisation can dilute the benefits of such a feature. Niva Bupa Reassure Direct 2.0 and Manipal Cigna Prime Advantage offer high NCB accumulation to the tune of 2x-5x times base policy in 3-5 years.

The health and fitness conscious 30-year-old can also gain from discounts on premiums for an active lifestyle. Wellness-centred products let the policyholder gain points which are then redeemed for benefits including, discounts on next premium payment. One can annually save up to 10-25 per cent with these rewards. ICICI BeFit app, Aditya Birla’s Activ suite of products can capture lifestyle data through wearable tech, which is then used to deliver benefits.

From 30 years onwards, the individual is likely to take on the responsibility of parents or in-laws on one hand, and spouse and children on the other. A policy that can be expandable to a family floater, has options for maternity covers, large enough restoration cover, should be priority for a 30-year-old. HDFC Optima Secure plans can accommodate the full family (parents, spouse, and child) and can cost between ₹60,000 and ₹1 lakh per annum compared to taking individual plans.

The jet-hopping global citizen of today should also prioritise a health policy that offers a worldwide coverage — including not only emergency hospitalisation but also in-patient care when on an overseas trip. Tata AIG Medicare plans offers the widest scope for worldwide covers.

Wider coverage and lower hassle for the elderly

A first-time health insurance buyer at the age of 60 can face a lower availability of products but compared to five years back the current market is an improvement. However, pricing is thrice compared to a 30-year-old’s premium at average of ₹25,000 per year.

The buyer should focus on coverage and hassle-free settlement at this age. Waiting period for pre-existing diseases starts at 4 years across policies but Star Senior Citizen Red Carpet reduces PED waiting to one year, Niva Bupa or Care Health Insurance and a few others offer two years waiting and so on. Another useful tool to have is to restore the base cover amount used up in the year, and that too for related illness.

A ₹1-crore health policy or alternatively a top-up to a base policy may not be outlandish anymore, considering medical inflation. But despite a strong base cover, a critical illness rider may be useful to cover large outlier risks. For cancer, cardiac or transplant diagnosis, a critical illness rider can provide a large payout (then the policy terminates) to address the treatment suitably.

The senior policy buyer must also confirm the coverage for therapies which are placed under sub-limits. Cataract, knee replacement, dental, are a few of the procedures that are capped on coverage or have an extended waiting period, which is better avoided.

OPD or teleconsultation is becoming a widely used feature and policies that focus on such coverage can be a useful addition to the elderly. The cost of consultation and the frequency of consultation will increase with each passing year and the convenience and coverage can become a coveted feature of policies.

A wide array of features in today’s health policies should allow one to build a product fit to his/her needs. While a 30-year-old can focus on NCB, wellness, global and family floater, seniors can choose policies prioritising coverage, PED waiting and lower hassle achieved through years spent with the insurer.

Money back insurance policy is a special form of life insurance policy where the insured receives a part of the sum assured as a regular installment rather than receiving a lump sum at the end of the policy period. In fact, a money-back insurance policy acts as an endowment scheme with liquidity.

Features of a Money Back Insurance Policy

1. Money Back Plan Offers Assured Returns

A money-back policy provides guaranteed returns and is an ideal investment for people looking for a safe and secure option. It also provides insurance coverage, making it a great choice for those seeking definite returns. If you're seeking secure and dependable returns, a money-back policy can be a great investment option. The returns are not affected by the variations in the equity market, which means you'll receive a guaranteed return regardless of how the market is performing.

2. Death Benefits:

If the policyholder passes away, the nominee of the money-back policy will receive the sum assured and any bonus. This policy is like a life insurance plan that secures your family's future even if you're not there. It's a guaranteed plan, so the nominee will definitely receive money.

3. Optional Riders to Enhance Your Money-Back Policy Coverage

As an add-on to money-back policies, insurance companies provide optional riders that policyholders can opt for. These riders can be related to specific medical conditions, like critical illnesses, or riders like waiver of premium are also offered

4. Lifetime Income from a Money Back Plan

Money-back policies provides a guaranteed source of income for policyholders at regular intervals. The survival benefit feature enables policyholders to accumulate a corpus of funds that can be utilized for various expenses such as travel, education, or unforeseen events. This unique feature makes money-back plans an attractive option when compared to other life insurance plans available in the market.

5. Bonus Amounts:

A money-back insurance plan is a type of participating policy, where the policyholders have the possibility of receiving a bonus amount upon maturity. However, it is essential to keep in mind that the bonus is only given if the insurance company's investments have yielded profits and the policyholders have made timely premium payments.

What are the applicable riders in Money back policies?

Money back policies offer a variety of riders that can be added to the base policy for a small additional premium.

Riders can help increase coverage and protect against various risks in life.

Critical illness rider provides a guaranteed cash sum in case the insured is diagnosed with a critical illness, such as heart attack, cancer, paralysis, or organ failure.

Accident or disability rider pays a part or the entire sum assured amount in case of temporary, partial, total, or permanent disability or death resulting from an accident.

Waiver of premium rider prevents loss of the insurance cover if the insured is unable to pay the premium due to illness or any other reason.

Riders offer extra protection and can be beneficial in case of unforeseen events.

How Does a Money-Back Insurance Policy Work?

A money-back insurance policy provides the policyholder with survival benefits, investment opportunities, and maturity benefits. Here's how this type of policy works:

Plan for your financial goals: You can use a money-back policy to plan for financial goals like your child's education or your retirement.

Buy the policy: Suppose you want to buy a child money-back plan. You purchase a money-back policy for a sum assured of Rs 40 lakhs in 2021, with a policy tenure of 25 years. You will pay a premium throughout the policy tenure.

Receive survival benefits: As per the policy terms, you will receive survival benefits of 20% of the sum assured (Rs 8 lakhs) every five years. For example, in the fifth year, you receive Rs. 8 lakhs, which you can use for your child's tuition fee.

Use the payouts: You can use the payouts you receive at various intervals for different purposes. For example, you can use the second payment of Rs. 8 lakhs in the policy's tenth year for your child's higher education. The third payment of Rs. 8 lakhs can be used for your child's marriage expenses when they turn 27. The fourth payment of Rs. 8 lakhs can be kept for your retirement purposes.

Receive maturity benefits: On maturity, you will receive your last 20% along with any applicable bonus. In this case, you will receive the remaining Rs. 8 lakhs from the policy, plus any applicable bonuses, in the 25th year of the policy.

Death benefit: In the unfortunate event of your passing during the policy term, your nominated beneficiary will receive a lump sum of Rs. 40 lakhs along with any accumulated bonuses, and the policy will cease.

In summary, a money-back insurance policy is an excellent investment option for those looking to plan for their future financial goals. With this policy, you can receive survival benefits and maturity benefits while securing your loved one's financial future in case of any unfortunate event.

Benefits and Components of a Money-Back Insurance Policy

1. Policyholders Stand to Gain from Survival Benefit

A money-back insurance policy pays a portion of the sum assured to the policyholder at regular intervals during the policy term. For instance, a policyholder may receive 10-15% of the sum assured after every 5 years until the policy matures. At maturity, the policyholder receives the remaining sum assured plus any applicable bonuses.

A money-back plan provides returns after a few years of investment. The payouts are made every few years during the policy term, and the remaining benefits are paid upon maturity. Insurance companies offer this benefit in two stages - survival benefits paid every few years and a larger final payout at maturity. Survival benefits are only given if the individual who is insured manages to stay alive. If any unexpected circumstances occur, the beneficiaries will be compensated with the assured sum along with any additional bonuses.

2. Maximizing the Value of Money with a Money Back Policy

Money-back plans may not offer high investment returns, but they provide three-way payouts, including survival benefits, a sum assured at maturity, and a bonus. The value of the survival benefits is particularly significant, as inflation reduces the value of money over time. Even your favorite dish at a restaurant now costs more than it did a few years ago. So, payouts received earlier in the policy period are worth more due to the decreasing value of money.

3. Market-Linked Investments Lose Ground Against Money-Back Plans

Adding a money-back plan to one's investment portfolio is a wise decision as it protects against market volatility. Even the best investments in the stock and commodities market are not immune to market fluctuations. With a money-back plan, individuals receive guaranteed returns on their investment and insurance coverage to safeguard against any unforeseen events. The survival benefits received at different stages of the policy can be used for expenses or investments like paying off loans, purchasing real estate, and more.

4. Death Benefits

In case of the unfortunate event of the insured person's passing, the nominee of the policy will receive the death benefit. This benefit includes the sum assured and bonus accumulated on the policy up to the date of the insured person's death. However, the survival benefits, which are only paid to the insured person while they are alive, are not included in the death benefit. For instance, if the insured person passes away before receiving any survival benefits, the nominee will only receive the sum assured and bonus amount accumulated up to the date of the insured person's death, and not the remaining survival benefits.

5. A Tax-Saving Advantage of Money-Back Plans

Money-back policies come with a tax-saving benefit under section 80C of the Indian Income Tax Act, given that the premium amount is less than 10% of the sum guaranteed. If the sum assured is more than five times the premium paid, the maturity amount will be exempted from tax deduction at source. This tax benefit can enhance the overall returns of the policyholders, especially those who prefer secure and guaranteed returns. Opting for a money-back policy can help them save on taxes while also availing of survival benefits, assured sum at maturity, and bonuses from the insurance provider.

How to Choose A Money-Back Policy?

When choosing a money-back policy, you need to consider the following factors:

1. Determine your financial goals for the upcoming years.
2. Evaluate how much money you have available to invest in a money-back policy.
3. Decide on the investment duration.
4. Determine the type of payouts you expect to receive.

Other than these factors, you must also consider the policy tenure, which is typically 20 years. It is important to understand how much of the sum assured will be paid out in installments to cover any future expenses. Making an informed decision based on these factors can help you choose the best money-back policy to meet your investment needs.

Money back policy Vs. Term Insurance plan

Money back policies and term policies serve different purposes, and which one is better depends on your individual needs and circumstances.

Money-back policies provide a lump-sum payout at regular intervals during the policy term while also offering life insurance coverage. This type of policy is designed to provide both protection and savings and can be beneficial for individuals who want to plan for specific financial goals, such as their children's education or retirement. However, money-back policies tend to have higher premiums and lower returns compared to other investment options. At the same, the protection component i.e. Insurance coverage is much less in case of a money back policy.

On the other hand, term policies offer life insurance coverage for a specific period of time, typically 10, 20, or 30 years. They do not offer any savings component and are designed to provide a large payout to beneficiaries in the event of the policyholder's death. Term policies are often more affordable than other types of life insurance, making them a popular choice for individuals looking to protect their loved ones without breaking the bank.

In summary, money-back policies are better suited for individuals who want both life insurance coverage and a savings component, while term policies are a good option for those seeking affordable life insurance coverage without the added savings component. It's important to carefully consider your own financial goals and needs before choosing a policy.

Conclusion

In conclusion, a money-back policy is a valuable feature that offers customers peace of mind when making purchases. With its promise of a full refund, this policy incentivises consumers to take a chance on a product or service they may have otherwise hesitated to try. However, it is important for businesses to clearly communicate the terms and conditions of their money-back policy to avoid any misunderstandings or disputes. By providing a clear and fair policy, businesses can build trust with their customers and create a positive reputation in the marketplace. Ultimately, a well-executed money-back policy can lead to increased customer loyalty and a stronger bottom line.

Coverage level: You must consider factors such as the home’s value, the cost of rebuilding, and the value of other personal property, etc. Mishra said, “It’s essential to consider a worst-case scenarios and ensure adequate coverage for rebuilding your home and replacing valuables, if required.

For instance, the Bharat Grih Raksha Policy provides additional benefits such as coverage for buildings, furniture, fixtures, fittings, and contents at home, etc, besides renovation."

Deductibles: Several insurers offer comprehensive coverage without deductibles. “For instance, the Bharat Grih Raksha Policy has no deductible and provides coverage for flood and earthquake damage, architect fees, alternative accommodation, and debris removal to a specified limit. It also imposes no penalty for underinsurance claims of less than 15%," said Mishra.

The claims process: You must know how to file a claim, the type of documentation required, and the typical time taken for claim settlement. You should also be aware of any limitations or exclusions to the coverage and any applicable deductibles. Also, you must check the claim settlement ratio from the website of Irdai while choosing the insurance company.

Additionally, Sudhish Ramteke, associate director–head of Property Practice at Anand Rathi Insurance Brokers, said, “ You must ensure the correctness of particulars. For instance, property description, content description, location address etc., should be complete. Any mismatch in these areas can cause problems in the event of claims."

For the records: Maintaining a record of your personal property is vital. This includes ownership deeds, with visuals of the exteriors and interiors of the property, and receipts for expensive items such as electronics and jewellery. These records can be helpful in the event of loss or damage, as they can provide proof of ownership and help expedite the claims process.

As the battle for dominance raged on, people were left wondering which option was better. Some lauded the zero-cost term insurance for its affordability, while others praised the term plan with return of premiums for its dual benefits. The debate continued to rage until, one day, a hero emerged. Armed with knowledge and understanding, this hero set out to uncover the truth about these two rivals and settle the score once and for all.

Dear reader, join us on this journey as we explore the world of term insurance and pit these two rivals against each other. Who will emerge victorious? The answer lies ahead.

Difference between Zero Cost Term Insurance and Term Plan with Return of Premium

You might already know that under regular-term insurance if one dies within the policy tenure, his/her family gets the insured amount. There are no maturity benefits in case of no trigger events.

But, as a prudent individual in your 20s- uncertain of your future financial needs- you want a term plan with survival benefits.

And fortunately, depending on WHEN you'd like your premiums back, there are two types of plans you can check out - Zero-cost term insurance & term insurance with Return of Premiums (TROP).

Suppose you get a term plan of Rs. 1 crore for 40 years. Be it a zero-cost or TROP, both plans will give your family money if you pass away before your policy's tenure.

But, with a zero-cost plan, you get the option of getting your premiums back BEFORE your plan's maturity (excluding GST, obviously).

After a certain time span (depending on your insurer), you'll be given a choice- you can continue your plan or end it & get your money back.

If you're sure that your 'dependents' are financially independent and you're ready to go on that world tour, you can choose the second option. Otherwise, you can move ahead with the first option.

However, a TROP works a little differently- it refunds your premiums AFTER your policy matures (minus GST).

Although this arrangement works well for people who are well-off or do not have any dependents, most usually prefer a zero-cost term policy over it.

This is because TROPS are much more expensive than regular and zero-cost term plans. In fact, a TROP costs almost twice as much as a regular one!

Meanwhile, the zero-cost term plans we recommend come at no extra premium cost.

So, it may be better to go for a zero-cost plan and invest the extra sum (compared to TROPS) someplace else for better long-term returns.

Conclusion

And so, after an intense battle between the zero-cost term insurance and the term plan with return of premiums, we have finally come to a conclusion.

While both options have their advantages and disadvantages, it ultimately comes down to individual needs and preferences. For those who prioritise affordability and simplicity, the zero-cost term insurance may be the way to go. It provides basic protection without added costs. On the other hand, for those who want the added benefit of getting their premiums returned at the end of the term, the term plan with return of premiums may be the better choice.

Mental Health Insurance

Mental health illness includes various conditions that affect the day-to-day life activities and decisions of an individual. Mental disorders may heavily impact a person's mood, thinking capacity, perception, orientation, and memory. All such issues can be discussed and recovered with the help of a consultant. These mental disorders are covered by mental health insurance, and those suffering from any of these may seek the immediate help of a mental health expert. Depending on the mental health insurance policy that you choose, you may either get in-hospital or only out-patient treatment coverage.

What is Covered Under Mental Health Insurance?

Mental health insurance covers almost all major mental conditions. Check out the list of coverages that mental health insurance generally provides. Please note that the coverage may vary in different health insurance policies :

List of Mental Disorders Covered

Normally, mental health insurance plan may cover the following conditions:

⦿ Depression

⦿ Anxiety

⦿ OCD (Obsessive Compulsive Disorder)

⦿ PTSD (Post-Traumatic Stress Disorder)

⦿ ADHD (Attention Deficit Hyperactivity Disorder)

⦿ Mood disorder

⦿ Schizophrenia

⦿ Bipolar disorder

⦿ Psychological disorder

OPD Charges

The cost of OPD consultancy is mostly covered by a health insurance plan. These are the outpatients who do not require immediate hospitalisation, and the treatment is completed in less than 24 hours without a need for hospitalisation. Such costs are borne by your insurance provider.

Hospitalisation Cost

Some mental health disorders may require the patients to get hospitalised for better treatment and quick recovery. However, you need not worry as the cost of medical treatment is covered by your insurer. It helps the insured to seek the best possible medical help without having to stress about financial aid.

What is Not Covered Under Mental Health Insurance?

Here are some conditions that are mostly excluded from a health plan:

⦿ Mental disorder due to drug abuse

⦿ Mental retardation

⦿ Waiting period (may range up to 2 years)

⦿ Some mental health plans only cover the expenses when the patient is hospitalised

⦿ Some plans may exclude recurring mental illness.

Benefits of Mental Health Insurance

A mental health insurance plan offers several benefits and relaxation to the insured. These include:

A). A Wide Range of Mental Conditions Covered

Not 1 or 2, but a mental health plan covers a range of illnesses, so the patient does not have to spend from their pocket. Anxiety, depression, and bipolar disorder are a few to name.

B). A Mandatory Cover

As per the Mental Health Act 2017, it is now compulsory for every health insurer to provide mental health coverage to patients. Hence, you need not look for a separate plan to cover the same.

C). Mental Peace

All you need while seeking medical help is mental peace so you can focus better on the treatment process. With a health insurance plan, you need not worry about the treatment cost as your insurer is there to cover it.

Conclusion

Amid and post-Covid, there have been considerable cases of post-trauma mental illnesses like anxiety and depression. Distance from near and dear ones and the isolation that the pandemic brought with it majorly affected the mass population. Consequently, more and more people realise that mental health matters should be taken seriously and addressed in order to ensure that people live healthily and have fulfilling lives. It is essential that we recognise the importance of mental health and work together to create communities where individuals can access services, treatment, and support when needed. So, it is essential to understand the significance of mental health and take care of it.

Women-centric health plans

Women are susceptible to certain illnesses that are unique to their gender, such as breast cancer, ovarian cancer, and others. The cost of treatments for these illnesses can be extremely high, and without the protection of a health insurance plan, women may struggle to cover these expenses. That's why it's crucial for women to have health insurance coverage that specifically addresses these illnesses, ensuring that they can afford the necessary medical care without facing financial hardship.

Cashless claims make things easier and simpler

Insurance companies collaborate with hospitals to offer cashless medical treatments to their policyholders. This means that if your mother is sick or needs hospitalisation, all you need to do is take her to the nearest network hospital and produce the policy credentials. The whole process, from admission to treatment and discharge, will be cashless as the insurer will directly settle the bills with the hospital. This will ensure a seamless and stress-free experience.

Offers peace of mind

At times when you are not around, your mother’s health can add to your tension. With a good insurance policy, you can ensure that your mother receives regular medical check-ups without any difficulties. Additionally, it can be a source of relief in times of sudden health emergencies by covering all aspects of medical care, including transportation and expenses.

Tax benefits

Under Section 80D of the Income Tax Act, of 1961, women can receive a tax benefit on the health insurance premiums they pay. They can claim a deduction of up to INR 25,000 for the premiums paid towards a health insurance policy for themselves, and the deduction limit increases to INR 50,000 in the case of senior citizen parents. This can effectively reduce their taxable income and lower their overall tax liability.

Coverage for maternity

While women are blessed with the ability to bear children, the cost of maternity can be substantial. In case of any complications during childbirth, medical expenses may arise. Investing in a women's health insurance plan can cover these expenses, ensuring that women receive the best possible care during their pregnancy and childbirth without any financial burden.

Covers mental health

Mental health is an essential part of the overall well-being of an individual, and it has a direct impact on one’s physical health. Illnesses such as depression, anxiety, bipolar disorder, post-traumatic stress disorder (PTSD), and schizophrenia are some issues that women may be facing knowingly or unknowingly. Health insurance policies also offer coverage for mental health issues as per the Mental Healthcare Act of 2017.

How to choose the best health insurance coverage for mothers?

While choosing a health insurance plan for your mother, here are a few important points to consider:

Weigh the benefits

To ensure that your mother receives the best health insurance plan, you should carefully consider the benefits that each policy covers. A good health insurance policy covers a broad range of services that cater to your mother's healthcare needs.

Look for additional features

In addition to coverage for medical expenses, look for added features that can make managing health insurance easier. Choose a policy that offers convenient payment options for health insurance premiums and pre- and post-hospitalisation expenses.

Conclusion

Having adequate health insurance coverage can help in bridging the gulf between healthcare needs and financial conditions. The right plan ensures that women have access to the health services that they need. Women also need to have health insurance in order to protect themselves from the potential financial burden of medical expenses. Having access to preventative care and basic treatments can help improve medical outcomes and also reduce the treatment burden. With easy access to health care, here’s hoping that mothers would no longer have to push their medical care needs to the backseat.

Heart insurance comes under a critical health insurance plan where you get comprehensive coverage for heart-related treatments at the best possible hospital/ healthcare center. Cardiomyopathy, refractory heart failure, high blood pressure, etc., are a few conditions where you need not worry about financial coverage.

Check out the various benefits of a health insurance policy for heart patients:

1). Coverage for various heart-related conditions

Depending on the type of policy you purchase and the insurance company, a range of heart diseases are covered. For instance, angioplasty, stent, myocardial infarction, heart valve surgery, open chest CABG, etc., are treatments that, though they cost heavily, are covered under heart health insurance.

2). Financial support

Being diagnosed with a critical illness can be emotionally traumatic. In such a time, it is essential that the patient has mental peace so they can focus better on the treatment. Only when there is a financial backup can one really go for the best medical treatment available. Heart health insurance covers all the admissible charges of enlisted heart conditions, so you do not have to compromise on the treatment.

3). Income tax benefit

People who are investing in health insurance are also eligible for income tax benefits. One can claim up to tax deduction under Section 80D of the Income Tax Act, 1961. However, bear in mind that the premiums should be paid in a mode other than cash.

4). Benefit of riders

Most health insurance plans allow the insured to purchase several add-ons. These riders let you expand the coverage of the plan by paying a slightly higher premium. Those coverages that are not a regular part of the base plan can be availed by purchasing riders.

5). Premium waive off

Some heart health insurers do not charge a premium during the treatment tenure of the patient/insured. This is to ensure that the insured does not fall short on money while going under heavy treatments. It is especially beneficial for families where the bread earner goes under treatment.

6). Income benefit

For the time the insured has to take a break from work to go for treatment, some insurance plans provide a steady flow of regular income to the family. It ensures that the family does not have to suffer a financial crisis and can continue living a decent life. Because some people have to pause or even quit their job during treatment, this coverage becomes quite beneficial.

7). A wide range of coverage

Following are some of the basic coverages:

In-patient hospitalisation: When a patient is diagnosed with a heart problem and has to be hospitalised for more than 24 hours for treatment, the cost of treatment is borne by the insurance company.

Pre and post-hospitalisation: A few days before and a few days after hospitalisation, the patient needs medical care. Such costs are also covered under the heart health insurance plan.

Domiciliary treatment: During certain heart conditions, patients cannot be moved to the hospital, and the treatment has to be continued in their house. In such a case, the cost of treatment is covered by the insurer.

Conclusion

Without the right coverage, the cost of treatments and medications can be cripplingly expensive. Health insurance can give heart patients peace of mind knowing that their medical costs are taken care of in case any unexpected complications arise. Having health insurance is, therefore, critical for heart patients.

So, here goes the details on loading charges in health insurance - how it works, what factors affect it, and what are some of the health insurance plans that come without loading charges. Read on!

What are Loading Charges in Health Insurance?

Loading charges in health insurance plans is the extra amount that is added over and above the premium amount for a particular person depending his health profile. This amount is dependent on the claim risk that the insured individual projects for the health insurance provider.

The health insurers take into account the “risk” factor of the individual (that may include age, medical history, hazardous occupations, and more) and arrive upon a customised sum that is then added to the premium during the purchase of the policy or health insurance renewal.

To know how health insurance providers determine the loading charges, you need to know what factors sway the charges. Take a look -

What factors determine the loading charges in health insurance policies?

Health insurance providers, when deciding upon the loading charge for a health insurance plan, look into the detailed medical history of an individual. This helps them

• Gauge their family history regarding any genetic diseases that the patient might acquire later on in their lives,
• Analyze the frequency of past hospitalisations.
• Compute the number of hospitalisations that fetched health insurance claims.

Based on this detailed history, the insurer accordingly decides upon a loading charge. They charge higher if the medical history reflects health complications, repeated hospitalisations, and frequent visits to medical facilities.

Body Mass Index or BMI is a crucial deciding factor for health insurance providers when calculating loading charges in policies. BMI is usually considered indicative of the existing medical condition of an individual and their probable future health issues. The BMI of any individual ranges from 18 to above. And based on the score, a health insurance plan is accepted, rejected, or accepted with loading charges.

Pre-existing medical conditions

When potential individuals with certain pre-existing ailments approach health insurance providers, any of these cases might occur -

1. CASE 1: Their applications get outright rejected because insurers are reluctant to offer coverage for specific ailment treatments.
2. CASE 2: Their applications do get accepted with or without a disease-wise capping on the pre-existing ailments.
3. CASE 3: Their applications get accepted with a loading charge and with/without a disease-wise sub-limit.

Among the cases mentioned above, the last option seems the most acceptable, considering that the individual gets to avail of a health insurance plan despite their pre-existing ailments. Considering how expensive medical procedures can be, insurance plans become a financial security net while catering to medical requirements. And that’s why individuals avail of health insurance policies.

And here’s where loading charges come to the rescue. In exchange for a spike in health insurance premiums, individuals get coverage for a much higher amount over hospital bills/invoices. And thus, an individual whose pre-existing disease could have gotten him/her rejected by any health insurance provider now has coverage to act as a financial umbrella during rainy healthy emergencies.

Why are loading charges in health insurance plans considered crucial?

First of all, let’s clear this out - yes loading charges cause a spike in health insurance premiums. And yes, this can cause a financial burden for an insured individual.

However, Loading charges in health insurance policies -

1. Allow individuals with pre-existing ailments to have a health insurance plan.Sans this, there are high chances of rejection of plans, in such cases.
2. Safeguard health insurance providers financially over higher premiums in cases of high payout risk insurance candidates.

What are the best health insurance plans without loading charges?

While a majority of health insurance policies across the industry have a loading charge provision in place already, there are still a few plans that come without these charges.

(However, please note - policies without loading charges don’t necessarily indicate that those policies should be preferred over others. So, it’s better if you would reach out to a health insurance expert, or go ahead with a free health insurance comparison calculator to find a plan that best caters to your medical and financial goals.)

Well, health insurance providers have followed in their footsteps it seems! As health services got pricey and yet popular post the pandemic, insurers needed to provide insured individuals with an edge that would incentivize their insurance purchase. With multi-year health insurance plans that offered financial and other benefits, incentivizing such potentially insured individuals became feasible.

So what exactly is a multi-year health insurance policy? Why are these plans gaining ground among individuals with an interest in purchasing health insurance plans? Do these policies come with some serious hidden cons? Well, let’s find out!

What is a multi-year Health Insurance plan?

Multi-year health insurance plans are insurance policies for which the insured individual pays up the premium for 2 or 3 years upfront.

For the financial year 2018-19, India’s total health expenditure was estimated to be around ₹5,96,440 crore. This was 3.2% of GDP and amounted to ₹4,470 per capita. For the year, the out-of-pocket expenditure was an estimated 48.2%, while the Government health expenditure was 40.6%.

Such out-of-pocket expenses are a serious concern considering that substantial financial aids are available to help individuals meet their medical requirements. However, this is not surprising considering the low health insurance penetration across the country.

Despite a growth of 106 times from a modest ₹690 crore of premiums in 2001, to ₹73,300 crore in 2021-2022, India is yet to undergo the desired health insurance penetration (though thankfully nobody is asking now why they need health insurance).

What are the advantages of multi-year Health Insurance plans?

Inflation is inevitable and imminent each year and that keeps affecting the premiums to be paid for health insurance plans from the best health insurance providers across the nation. With a spiked premium, your personal savings also take a hit.

So, it’s best to opt for a multi-year health insurance policy that requires an upfront premium payment for 2 or 3 years where you don’t have to worry about spiked premiums. With a locked-in premium amount that is shielded from inflation, you save substantially.

(P.S.: If you are yet to opt for a multi-year health insurance plan, you can always secure your existing plan from inflation by availing of a health insurance rider - Protector add-on that acts as an inflation shield, protects your No-Claims Bonus against small claims, and offers coverage for consumables).

When it comes to premiums for multi-year health insurance plans, health insurance providers sweeten the deal with substantial discounts on the entire premium amount. This means, you, as insured individuals, while paying the premium for 2-3 years upfront, will be saving on the total premium amount. This again adds to your financial leverage.

Health insurance plan renewals are a hassle. From remembering to renew the policies on an annual basis, to face the downsides of missing out on health insurance premium payments leading to losing out on the accumulated No-Claim Bonus, the continued and covered waiting period, and the entire plan in total.

On the other hand, when you have opted for a multi-year health insurance policy, you don’t have to worry about the renewal for the next 2 or 3 years. You can enjoy continued financial aid to cater to your medical requirements for a long span without worries about renewal.

One of the major concerns that potential policyholders have about multi-year health insurance plans is the substantial upfront premium payment for 2 or 3 years since premiums are relatively pricey. However, here’s something that people are unaware of - in the case of 2 or 3-year health insurance plans, health insurance providers are more than willing to split the premium payment over EMIS. so, you can pay up the entire sum in quarterly, half-yearly, or annual instalments.

So, it’s a win-win situation: the health insurance provider gets a long-term policyholder and you, as the policyholder, get an affordable plan for the long run.

Much like in the standard cases, policyholders with multi-year health insurance plans also get to enjoy tax benefits under Section 80D. However, though the premium that they pay is an upfront amount for 2 or 3 years, the tax benefits that they reap cannot be collectively collected for 2 or 3 years. The tax benefits are split 2 or 3 ways and disbursed once a year. Here’s an example to understand this better

What are the disadvantages of Multi-Year Health Insurance plans?

• Porting your Health insurance plan becomes a tedious task: Health insurance policies come with an escape plan called health insurance portability in case your existing insurer throws a few hiccups in financially covering your medical requirements. Say, if they are not covering any pre-existing ailments, not providing ample no-claim bonus, posing certain room rent restrictions, requiring extensive waiting periods, and more.

Now, in case either or all of the aforementioned cases occur, policyholders usually have to option to go ahead with health insurance portability. However, when one has made an upfront payment on their health insurance plan for the next 2 or 3 years, they have to stay with their existing insurer.

SOLUTION:Availing of a health insurance plan should always be done after careful consideration, especially in the case of a plan for which you are planning to go up with a multi-year premium payment. In case you are wondering about the factors that you should consider to land on the best health insurance plans, scroll down to read.

• The upfront premium payment seems taxing: While we do mention that health insurance providers offer discounts on the upfront premium amount to be paid for 2 to 3 years, the entire premium still is high. Paying that kind of premium digs a hole in one’s pockets.

SOLUTION:Ask your health insurance provider about the EMI option on your premium payment. Since you will be posing as a valuable potential policyholder who is interested in purchasing a health insurance policy for 2 or 3 years, they will be more than willing to offer you the EMI option on premium payment. With a quarterly, half-yearly, and annual payment option on your premium, you won’t have to worry much about losing out a large chunk of your savings quickly.

Overall, opting for multi-year health insurance plans is an economic option that also takes you out of the hassle of insurance renewal. However, when it comes to taking up such a significant financial decision, you must choose a suitable health insurance plan that caters to your customized financial and medical goals. Here are some things that you must factor in to choose your health insurance plan

How to choose a plan for your Multi-Year Health Insurance policies?

A health insurance plan that offers

1. No room rent restrictions
2. No copayment
3. No disease-wise sub-limits
4. High No-Claim Bonus
5. Extensive pre-and post-hospitalization expense coverage
6. Lucrative restoration benefits
7. Daycare and domiciliary treatment coverage
8. Low waiting period

can be considered ideal plans for multi-year policies.

What is a terminal illness rider?

A terminal illness rider, also referred to as an accelerated death benefit rider, is an optional addition to life insurance policy that enables the one to access your policy's death benefit in advance in case he/she is diagnosed with a qualifying serious illness, usually a terminal one. The sum received through the rider will be subtracted from the total death benefit.

Those who opt for an accelerated death benefit rider generally have less than one year to live and utilize the funds for various expenses, including medical treatments, to sustain their life.

How does a terminal illness rider work?

As you all read above this Terminal Illness Rider in Term Insurance is an additional benefit that can be added to your term insurance policy, which offers an early payout in the event of the policyholder being diagnosed with a terminal illness.

Now!! this payout can assist in covering medical expenses, hospice care, and other costs that may arise during this difficult period.

For instance, consider Sushma, a 40-year-old mother of two, who purchased an HDFC term insurance policy with a Terminal Illness Rider. Five years later, she was diagnosed with stage 4 cancer, and the doctors gave her only a few months to live. Fortunately, her policy allowed her to withdraw the sum assured early, which helped her cover medical expenses and provide for her family's financial needs.

This example highlights the importance of the Terminal Illness Rider in Term Insurance as it provides the policyholder with a financial safety net during a challenging time. It enabled Sushma to concentrate on her well-being and health without worrying about the financial burden of her terminal illness.

All in all, the Terminal Illness Rider in Term Insurance is a beneficial and unique feature that can make a significant difference in the lives of individuals dealing with a terminal illness.

Why is Terminal Illness Benefit in Term Insurance Important?

When a person is diagnosed with an illness, the first concern that arises is medical coverage. Medical emergencies can significantly affect an individual's financial standing, especially if they do not have enough savings or insurance coverage.

Treatment for terminal illnesses such as heart and liver diseases is particularly costly, and even small doses of medication or injections for various cancers can require a lot of money. Successful treatment often requires multiple doses, and the expenses for such treatments can run into lakhs of rupees.

Although medical policies cover hospitalization expenses, they do not typically cover the costs of medications. Therefore, it becomes necessary for individuals to explore alternative options for insurance coverage beyond traditional health insurance plans.

Investing in a terminal illness benefit within a term insurance plan can be a wise decision as it provides a lumpsum payout that can be used for comprehensive medical expense coverage and mortality benefits.

Conclusion

In the face of a terminal illness, the Terminal Illness Rider in Term Insurance can make all the difference. It provides a safety net that can help ease the financial burden and allow you to focus on what matters most - spending time with your loved ones. By taking advantage of this powerful tool, you can find peace of mind knowing that you have taken steps to protect your family's future. Remember, life is unpredictable, but by being proactive and prepared, you can navigate even the toughest challenges with confidence. So, take the time to consider the Terminal Illness Rider in Term Insurance and discover how it can make a difference in your life.

A powerful tool that can help safeguard your term insurance policy from creditors, ex-spouses, and other potential threats. This little-known provision can provide an additional layer of protection for your loved ones, ensuring that they receive the financial security you worked so hard to provide.

Now after reading all this, we know you all must be curious and getting many questions and queries in your head, right? No worries

In this blog, we'll explore everything you need to know about the MWP Act in term insurance. We'll break down what it is, how it works, and why it's so important for protecting your loved ones' future. We'll also provide some real-life examples of how the MWP Act has helped families overcome unexpected obstacles and secure their financial future.

So buckle up and get ready to learn about a powerful tool that can help you ensure your loved ones are always protected, no matter what life throws their way.

What is the MWP Act?

Now before understanding the effect of this act in term insurance, let's first understand what MWP act is?

Back in 1874, the MWP Act came into being, ensuring that married women have full rights over any property they obtain or acquire. This means that once a woman gets married, her husband cannot claim any interest in her property or savings. It was a welfare measure to secure a woman's financial independence, as no one, not even her in-laws or relatives, can take ownership of her hard-earned money.

What is MWP Act in term insurance?

Section 6 of the MWP Act provides protection for the benefits resulting from a husband's insurance policy for his wife.

This section specifies that if a husband buys an insurance policy and names his wife and children as the beneficiaries, any death benefit or additional bonuses resulting from it must be given exclusively to his wife and children.

This amount is no longer considered part of the husband's assets, and any creditors of the deceased husband cannot demand any portion of this amount to satisfy the husband's outstanding debts and obligations.

How to buy term insurance under the MWP Act, 1874?

Obtaining term insurance under the MWP Act, 1874 is a straightforward process.

When completing the insurance application, you will encounter a query about whether you want to buy term insurance under the MWP Act. In response, you should choose 'Yes.'

If you select this option, you will need to furnish details about your nominee, including their name, date of birth, your relationship with them, and the percentage of their share.

However, note that the policy under the MWP Act only permits your wife and children to be your nominees for the insurance policy.

Who Can Opt For Insurance Under MWP Act?

The MWP Act enables individuals to obtain insurance coverage without impinging on women's property rights. Whether you're a married man, a widower, a divorcee, or a married woman, you can choose to purchase insurance under the MWP Act. This insurance option can be particularly beneficial for married women who want to ensure the security of their children. It is recommended that people in the following categories consider opting for MWP insurance in the event of the policyholder's demise:

1. Business owners facing mounting debt
2. Salaried individuals with outstanding loans
3. Members of joint families or Hindu Undivided Families (HUF)
4. Policyholders with unpredictable or irregular income sources.

Advantages of MWP act in term insurance plans

Here are the advantages of the MWP Act in term insurance, in simple and dramatic points:

• Your loved ones are the sole beneficiaries - with the MWP Act, the money from your term life insurance plan goes directly to your wife and children. No creditors or lenders can claim any part of it.
• It's a safety net - the MWP Act ensures that your family has a safety net to rely on in case of your untimely demise. It gives you peace of mind knowing that your loved ones will be taken care of.
• No interference with women's property rights - the MWP Act doesn't interfere with women's property rights. Even if the policyholder is a married woman, she can still opt for insurance under the MWP Act and protect her children's future.
• Protection against creditors - since the MWP Act keeps the insurance proceeds separate from your assets, no lender or creditor can claim any part of it. This means that your family can use the money without worrying about outstanding loans or debts.

How can the Married Women's Property Act Benefit your Family?

The MWP Act offers a layer of protection for your wife and children through insurance, ensuring they have a safety net to fall back on in the event of your sudden demise. With term life insurance plans under the MWP Act, the proceeds are transferred solely to your wife and children, and no other creditor can claim a share of it.

This means that even if you have outstanding debts, the insurance payout cannot be seized to repay those debts. Buying a term life insurance plan under the MWP Act ensures that your family remains financially secure, no matter what happens.

The MWP Act provides an added level of protection by keeping the insurance proceeds separate from your assets, making it inaccessible to any lender. With this added protection, your family can use the insurance funds without worrying about any outstanding loans or debts. Choosing a term life insurance plan under the MWP Act is a wise investment in your family's future.

You can add your spouse and children as beneficiaries under the MWP Act, safeguarding them against any potential lenders in your absence. By securing your insurance policy with the MWP Act, you can provide your loved ones with the security and peace of mind they deserve.

Some real life examples of how MWP act in term insurance can be life saver-

1. A man, who was the sole breadwinner for his family, purchased a term insurance policy under the MWP Act. Unfortunately, he passed away suddenly, leaving his wife and children in a state of shock and distress. However, thanks to the MWP Act, the proceeds from the insurance policy went directly to the man's wife and children, ensuring their financial security and stability during this difficult time.
2. A woman who was running her own business was struggling to make ends meet and had outstanding loans to pay off. Worried about what would happen to her children if something were to happen to her, she opted to purchase a term insurance policy under the MWP Act. This decision gave her peace of mind, knowing that her children would be taken care of in the event of her untimely demise, and that the insurance payout would not be claimed by any lenders or creditors.
3. A young couple, both of whom were working professionals, decided to purchase a term insurance policy under the MWP Act. They added each other as beneficiaries and specified that their children would also receive a share of the payout in case of their demise. This decision allowed them to secure their family's financial future and ensure that their children would be taken care of in their absence. Additionally, since the policy was under the MWP Act, they did not have to worry about any lenders or creditors claiming a stake in the insurance payout.

Conclusion

In conclusion, the MWP Act is a powerful tool that provides protection to women in India. The sixth section of this act safeguards the interests of women and children by ensuring that the benefits arising from an insurance policy bought by a husband are solely theirs.

By protecting the insurance proceeds from creditors, the MWP Act shields women from financial instability and empowers them to become independent decision-makers.

This act serves as a reminder of the importance of gender equality and ensures that women can have an equal stake in the financial success of their families.

So, let us pledge to spread awareness about the MWP Act and empower women to take charge of their lives and secure their financial future.

Understanding the impact of smoking on life insurance premium

The underwriting process of life insurance products varies from one life insurance company to another. However, smoking is one key factor that every insurance company considers in the first place while underwriting term insurance policies in comparison to other factors like an occupation. That means, if you are a non-smoker in a high-risk job, you would pay a lower rate of premium in comparison to a smoker in a low-risk job. Insurance companies may even deny term insurance coverage for a smoker if there are any serious tobacco-related medical conditions found in a pre-policy medical check-up. Smokers are considered people with a high risk of mortality and hence the cost of availing the term life cover is higher in comparison to non-smokers. Let us take an example to understand this.

Let us say, Mr. Suman, a 27-year-old employed in an MNC is seeking INR 50 lakhs of term insurance coverage. The premium for Suman would be INR 7,500 a year if he is a non-smoker and INR 11,000 a year if he is a smoker. That is a huge difference in cost for term insurance. Isn’t it?

As per the underwriting rules of the life insurance companies, the cost of the term insurance coverage for smokers is determined based on the detailed information sought from them. If you are a smoker, the life insurance companies would ask following information to determine the premium for the term insurance coverage that wishes to avail of.

1. Frequency of tobacco usage in the last few months or days

2.The form in which you take tobacco such as chewing tobacco, cigars, or cigarettes

Based on the above information provided by you, life insurance companies decide whether you are a habitual smoker or an occasional smoker. The term insurance premium would be even higher for habitual smokers than the occasional smokers. There would be a medical check-up before the term insurance policy is issued to you. Medical reports anyways disclose about smoking and thus it is important to not provide incorrect information even if you are an occasional smoker.

It is extremely important to note that smokers can get sufficient term insurance coverage and life insurance companies do not make upright denial. People should not have the misconception that smokers cannot get term insurance coverage. It is crucial for every earning individual to financially protect their family in case of eventualities in the future.

Considering the health risks, it becomes even more prudent for smokers to buy sufficient term insurance coverage to shield their loved ones from the financial consequences of their unfortunate demise or from critical illnesses. Though it is best to come out of addictive habits like smoking, it is equally important to be prepared against the uncertainties of life to secure family members and dependents financially.

Impact of Pre-Existing Medical Conditions on the Life Insurance Application

Disclosure of health details and health conditions is important at the time of applying for term insurance policies. Pre-existing medical conditions will have an impact on the premium of term insurance policy as it increases the mortality risk. The premium for the person seeking a term insurance policy with pre-existing illnesses would be generally higher. However, not disclosing the right information about health or hiding the facts can have adverse repercussions later at the time of term insurance claims. The beneficiary would have to face the rejection of claims due to non-disclosure of material facts. Hence, it is crucial to fill in all the correct information and state all material facts at the time of applying for life insurance policies. If there are pre-existing health conditions, a person seeking term insurance coverage can opt for suitable riders along with the basic term insurance coverage.

Things to keep in mind while buying term life insurance with a history of illness

Buying term life insurance to secure your family’s financial future during eventualities is an important and rational decision to make. If you are applying for term life insurance coverage, keep a few important things in mind before you purchase the policy.

1. Apply for a life insurance policy

When you are young and as soon as you start earning. Along with a higher coverage amount, you could get the comprehensive term insurance policy at a much lower rate.

2. Consider applying for life insurance online

The digital platform not only gives the cost advantage but also gives the benefit of easy comparison. Plenty of term insurance plans offered by various life insurance companies can be compared side by side both in terms of cost and benefits. Remember, the comparison is the key to choosing the right term life insurance plan suitable for your need.

3. Disclose every material fact rightly

Give the complete details of any pre-existing medical conditions at the time of applying for the term life insurance policy. However, the life insurance companies that insist on medical check-ups would have your complete health details. Life insurance policies offered without medical check-ups would come at a relatively higher cost.

4. Go for riders

Like critical illness riders, disability riders, etc, depending on your health history and need for the coverage to enhance the basic term insurance policy that you buy.

Apart from buying term insurance coverage, you can complement the life cover with health insurance coverage in case of any history of illness. Generally, health insurance policies provide coverage for pre-existing health conditions to bear the hospitalisation expenses after the completion of the waiting period. Generally waiting period for pre-existing illness in a health cover vary from 24 months to 48 months from the start of the health insurance policy. Provisional riders and the health insurance policy, along with the term insurance coverage, is a great way to financially secure your family in case you have any history of illnesses. Term insurance is the need of the hour for every individual. Avail the adequate cover and shield your loved ones.

The world endured an entire pandemic together as a whole. The psychological impact, frequent health scares, & resultant financial chasm did what the IRDAI (Insurance Regulatory and Development Authority of India) had been attempting for since long. It brought in increased health insurance awareness among the common masses. Availing health insurance plans for family became a necessity.

While securing oneself against any financial crisis during a medical emergency is commendable, taking responsibility for the same for your family is an added relief. However, before you purchase a family health insurance plan, you must know the heart and soul of the coverage. This will help you make a sound financial decision as per which your family will be covered during medical emergencies.

What is Health Insurance Plan for Families?

Health insurance plans for families are significant funding offered under an insurance policy that caters to the medical requirements of an entire family. The number of family members that can be included in the policy is largely depended on the chosen insurance provider and the availed health insurance plan.

The acceptable combination of policyholders for most health insurance providers is as follows

1. Policyholder + Spouse + Children under 25 years old
2. Policyholder + Spouse

Apart from the affordability perk that the best family health insurance plans in India offer, there are other benefits too. We will be mentioning them below. Unfortunately, the plan has a few drawbacks too, without acknowledging which purchasing this policy wouldn’t be a wise financial decision. Read on!

What are the advantages and disadvantages of Health Insurance Plans for Families?

• Relatively affordable premium

Compared to purchasing a health insurance plan for each member of your family and the subsequent total premium to be paid, the premium for a mediclaim policy for family is significantly less. This mitigates your financial burden to a large extent.

• Increased bandwidth on tax benefits

Similar to a standard health insurance plan that offers coverage to a single individual, the family medical insurance plan also offers tax benefits under Section 80D. However, in the case of the family floater health insurance plan, the tax benefits offered are as per the eldest member of the policy.

So, say, if the oldest member in your family health insurance plan is a senior citizen, there is an automatic increase in the tax benefit threshold amount, which rises from INR 25,000 to INR 50,000.

Inclusion of children below 18

Health insurance plans for individuals younger than 18 years of age are sparse in the insurance industry. While some maternity health insurance plans offer coverage to newborns, they come with a short-lived term span, leaving the individual vulnerable to financial pitfalls in the case of any medical emergencies.

However, with the health insurance plans in India for families, such financial vulnerabilities are now out of the equation for those under 18. They can be included as dependents in the policy until they are 18 years old (some insurers allow dependents up to the age of 25), after which they can avail of the Individual Health Insurance Policy.

Conveniently available with all health insurers

All health insurance providers across the industry in India offer family health insurance plans. With a majority of the reputed health insurance providers, all of their plans carry the family floater option.

• The eldest member under the plan often determines the premium of your health insurance policy for family. So, even if you have one member in their senior year, the chances are high that you will see a spike in your premium.
• The coverage offered under a mediclaim for family plan isn’t adequate for all the family members. If you have a member of the family who has a chronic ailment, cancer, or any other critical illness that requires frequent hospitalization, it’s best not to include him/her under this policy coverage. You can always avail of an individual plan in this case. Otherwise, the other members under the policy will be left financially unprotected despite having coverage.
• You can’t afford to skip a single premium because your entire family loses coverage.
• With the best health insurance plans, there is a restriction on who you can and can’t include as dependents in your policy. Under no circumstances can you include your siblings, in-laws, or parents (if you are above 18/25/or 30 - it depends on the insurer).

Importance of cancer insurance

Investing in a cancer insurance policy provides financial security for both the policyholder and their loved ones in the event of a cancer diagnosis. Cancer is a critical illness that can cause emotional distress and financial burdens. A cancer insurance policy can help alleviate these burdens by providing financial assistance when needed.

The cost of cancer treatment is usually high, and not everyone may be able to afford it. A cancer insurance policy helps individuals pay for their medical expenses, including hospitalisation, medications, regular follow-ups, chemotherapy, and other necessary treatments. Having insurance can help reduce stress levels and allow individuals to focus on their treatment and recovery without worrying about their finances.

Choosing the right cancer coverage

Investing in cancer insurance should be a priority for everyone since cancer can affect anyone, regardless of age or lifestyle. Therefore, in today's world, purchasing a critical illness policy such as cancer insurance is a must. However, it is equally important to choose the right policy that aligns with your needs, so you can benefit from it when the need arises. Here are a few factors to consider when purchasing a cancer insurance policy:

Understand the type of policy and coverage

To obtain coverage for cancer, you can choose from different insurance policies, such as an exclusive cancer insurance policy or a cancer cover add-on with a basic health insurance policy. It's important to select the right type of policy that matches your individual needs to maximise insurance benefits.

◉ Tip: Make sure to check that the policy covers all stages of cancer, including pre-cancer, early stage, and major stage, as payouts may vary depending on the stage.

Choose the right insurer

Selecting the right insurer is crucial to ensure a seamless purchasing and claim settlement experience. It's recommended to review the claim settlement ratio, online ratings, customer support, etc., of an insurance company before deciding on one.

Waiting and survival period

Health insurance plans that cover cancer comes with both a waiting period and a survival period. During the waiting period, you cannot make claims for medical expenses related to cancer. On the other hand, the survival period is the duration for which the policyholder must survive from the time of cancer diagnosis to qualify for a settlement. Opting for a policy with a shorter waiting and survival period will ensure that your coverage starts as early as possible and you receive the sum assured.

Read the fine print

It is always important to read the fine print in the health insurance policy documents to understand all the inclusions and exclusions of a policy. Thus, make sure to go through the document.

◉ Tip: Take the help of an insurance expert to understand the jargon in the policy document.

Coverage for different stages of the cover

Before choosing a cancer insurance policy, it's essential to verify the coverage offered for different stages of cancer. Many policies offer 100% payout for the major stage of cancer, while for pre-cancer, a certain percentage of the sum assured is paid out.

Conclusion

Having health insurance is a critical component of any individual's financial security, especially when it comes to covering cancer treatments. Recent studies have highlighted the importance of having adequate coverage for medical expenses associated with cancers and other serious illnesses. It is important to ensure that your health insurance policy covers cancer-related treatments, if not you can opt for one today.

◉ What can be done:

Opting for companies that have their in-house claim departments generally have a more direct and quick claim settlement. IRDAI should lay stricter rules so that insurance companies pay attention to prompt payment of all claims that are due.

◉ Network hospitals may bill more:

Empanelled hospitals are likely to charge more when patients have health coverage, resulting in higher payouts for insurance companies and increased premiums. This premium increase surpasses the rise in medical care costs. There is also the issue of misuse of group insurance policies by hospitals and patients, as uninsured individuals can receive treatment without proper identification leading to potential exploitation.

◉ What can be done:

To avoid incurring extra bills, insurers must conduct hospital visits to assess the patients who have made a claim. If the originator policyholder is determined to be at fault, the insurer may decide to not renew their policy. Insurers should establish pre-determined rates for medical procedures like surgeries and treatments to eliminate any variations in prices between insured and uninsured patients. Any additional costs incurred by the patient must be billed to them directly by the hospital.

◉ Customers make false claims:

Many patients are hospitalised for unnecessary reasons, and some people only buy health insurance after being diagnosed with a condition but fail to fully understand the policy's terms and limitations.

◉ What can be done:

False claims can have serious consequences like increased future premiums in response to an unusual claim and also rejection of a legitimate second claim during the same policy period if the limit has already been reached during the first false claim. It's important to review the entire policy document carefully before purchasing an insurance policy to avoid making false claims. Be sure to ask your sales representative for the "policy wordings" in case of doubt.

◉Companies stressing products with a higher commission:

Salesmen may mis-sell products to meet targets and earn incentives, often selling inappropriate policies to clients who may not fully understand the terms.

◉ What can be done:

Before considering any insurance policies, policyholders should request additional information from companies and have a clear understanding of the product and its benefits. Increased transparency in brochures and other marketing materials, facilitated by IRDA intervention, can be helpful in gaining insights.

Some other challenges with health insurance

Given below are some of the other challenges in health insurance that cause encumbrance in its development:

• With a population of over 1.39 billion, raising awareness about health insurance and its importance is probably one of the biggest challenges

• Apex body IRDAI, the Insurance Regulatory and Development Authority of India (IRDA), needs to be more efficacious. There is an urgent need to focus on the quality, availability and affordability of health insurance.

• As health insurance is not mandatory, many prefer to avoid buying a cover despite its advantages.

• There is a dearth of appropriate data and information for the planning and management of health insurance schemes.

• A number of myths and misconceptions exist about health insurance

• There aren’t enough suitable health insurance products for people living in remote/ rural areas as well as for those who are below the poverty line

• There is a gulf between the rural and the urban and the rural in terms of healthcare facilities.

Conclusion

Despite the fact that health insurance is an essential tool to ensure the well-being of the entire family, there are many who lack adequate access to health insurance due to inadequate government policies and a lack of prioritisation. This needs to be rectified as soon as possible so that people from all economic backgrounds have access to quality healthcare services and protect themselves against financial hardship during a medical emergency. The IRDAI and the government need to focus more on health insurance policies that make it easier for everyone to obtain suitable and affordable coverage

Kidney Ailment and Health Insurance

If you have been diagnosed with kidney disease or/ and are currently undergoing dialysis, you will be able to go for a health plan with a pre-existing illness. The terms and conditions of such health policies would be slightly different from that of a regular health plan. You would also have to pay a higher premium as compared to someone who does not suffer from any ailment.

However, do not let a higher premium dissuade you from getting a health plan. The premium you pay would be much more affordable than having to go bear the treatment expenses from your pocket. To get an idea of the treatment costs related to kidney issues, take a look at the average expenses:

• Nephrologist consulatation fee: INR 1,000 to INR 3,000

• Radiology tests: INR 3,000 to INR 12,000

• Dialysis: INR 12,000 to INR 20,000

• Kidney stones: INR 1 lakh to INR 2 lakh

• Post-surgery: INR 3,000 to INR 7,000 a month.

• Transplantation

◉ Pre-transplantation costs: INR 1 lakh to INR 1.5 lakh

◉ During transplantation: INR 1 lakh to INR 1.5 lakh

◉ Transplantation cost: Up to INR 5 lakhs

◉ Post transportation: INR 30,000 to INR 35,000 a month.

Things to Know When You Opt for a Health Insurance Plan with Kidney Disease:

Getting the right insurance plan for an existing kidney disease requires you to be well informed of all the details. So, here are a few points that you must know if you are planning for a health insurance plan with kidney disease coverage:

• Informing your insurer is crucial:

Whenever an individual purchases a health insurance policy, it is their duty to inform the insurer about any existing diseases. For instance, if you already have kidney disease and you are looking for a health insurance plan, you must inform your insurer without fail. Any fraud or misinformation may lead to the cancellation of the policy and even legal actions.

• Be aware of the co-payment clause:

Co-payment refers to the percentage of the claim amount that is borne by the insured/policyholder. Suppose you agree to a co-payment clause of 10% at the time of purchasing the policy. Now, when you raise a claim of, say, INR 2 lakh, then 10% of INR 2 lakh (i.e. INR 20,000) will be paid by your own pocket, and the rest of the admissible charges will be covered by the insurer.

• Understand the waiting period:

It is crucial to carefully check the waiting period, especially when you have a pre-existing disease. Until the waiting period is over, you cannot raise a claim for any medical expense. Pre-existing diseases may have a longer waiting period.

• Your premium would be higher:

The premium charged for a pre-existing disease is generally higher than for those with no pre-existing ailment. So, make sure the premium is within your budget and you get the best deal available.

• Read the offer document carefully:

Before you proceed with the formalities, it is vital to carefully read all the wording of the fine print. Before you sign, it is important for you to know all about your health insurance policy.

• Avail of tax benefits:

Section 80D of the Income Tax Act of 1961 offers health insurance policyholders to enjoy tax benefits. Citizens below 60 years of age can claim a tax deduction of up to INR 25,000, whereas those above 60 years of age can claim a tax deduction of up to INR 50,000.

• Compare all your options:

Do not rush, or you may miss the best deal. Take your time and search actively. Compare all the available options online and shortlist the ones offering the best coverage for pre-existing kidney disease. Once you are satisfied with the plan, make the payment to purchase it

Conclusion

It would be a relief to many that health insurance plans are available to those with pre-existing medical conditions, even if it is kidney disease. Just make sure that at the time of buying the policy, you are completely honest with your insurer. Do not try to hide any information, as it can not only lead to claim rejection but also put you in legal trouble.

How to Choose the Right Health Insurance Company?

Let’s discuss a few points that can help you to make an informed decision when choosing the right health insurance company in India:

• Network Hospitals:

Ensure that the health insurance company you choose has a wide network of hospitals. This will ensure that if you need medical attention, you can conveniently receive cashless treatment at any of the hospitals within the network without having to worry about arranging money for the treatment.

• Claim Settlement Ratio:

Check the historical performance of the health insurance company's claim settlement ratio before making a decision. A high ratio indicates that the company responds quickly to claim requests and provides the necessary assistance in a timely manner.

• IRDAI Recognition:

Make sure that the health insurance provider you choose is recognised by the Insurance Regulatory and Development Authority of India (IRDAI). This will ensure that the company operates within the guidelines set by the regulatory body and that your rights as a policyholder are protected.

• Brand Reputation:

While the cost of premiums is a significant factor to consider, don't make your decision based solely on this. The reputation of the company as a whole is crucial, particularly during medical emergencies when you need reliable support.

How to choose the right health insurance plan?

While deciding on the right insurance plan, it is essential to consider a few factors, those include:

◉ Coverage:

When selecting a comprehensive health insurance policy, it is important to consider the number of illnesses and conditions covered. Opting for a policy with fewer exclusions rather than reducing the list of illnesses covered is advisable.

◉ Network of hospitals for a cashless claim settlement:

Cashless claim settlement is a crucial factor to consider when purchasing health insurance. It enables insured individuals to receive the best possible care without worrying about the financial burden. So, select a health insurance provider with as many network hospitals as possible for easy access and convenience. Make sure you have enough network hospitals in your vicinity as well.

◉ Cost-benefit analysis:

Comparing the prices of various health insurance plans is essential before making a purchase vis-a-vis the benefits available. Evaluating the premium costs of different options helps in choosing the most affordable and reasonable plan. Always remember to compare oranges to oranges and not oranges to apples. Although each health insurance plan could be completely different from another, weighing the costs in isolation is never beneficial. You should do a proper cost-benefit analysis before deciding which health insurance plan would be best for you and your family.

◉ Claim resolution time:

Making a seamless claim can change your entire perspective on health insurance. And this is one of the most important factors that could help you decide on your plan. So, comparing the time it takes for different insurance providers to resolve claims is essential in selecting a comprehensive health insurance plan.

◉ Lifetime coverage:

Choose a policy that offers lifelong coverage, including illnesses or diseases that are more likely to occur in old age.

Conclusion

While it is imperative to ensure that you have sufficient coverage for your needs, it is essential to receive the required care at an affordable cost. Therefore, when selecting a health insurance plan, keep in mind that your needs and budget are in line. From deductibles and co-pays to premiums and coverage, there are many factors to consider when choosing a health insurance plan. Knowing what to look for can help you make the best decision for yourself and your family.

What is a PUC Certificate?

Pollution under control certificate, also known as PUC, is a certificate that states that you can legally drive the vehicle in India as its emissions are in accordance with the pollution norms and do not harm the environment. To obtain the certificate, the car has to undergo a test to evaluate its emission levels and to check if it follows the pollution norms or not.

Not driving the vehicle with a PUC certificate attracts a penalty of Rs. 1000 or more which may vary from city to city.

What is the validity of a PUC Certificate?

In the case of a new car, the PUC certificate is valid for a period of 1 year from the date of issuance. After that you need to get the certificate renewed after every 6 months.

What are the contents of a PUC Certificate?

A PUC certificate contains the following information:

• Date of the emission certificate test

• Emission test readings

• Vehicle details

• Validity of the PUC certificate

• PUC certificate serial number

How to get a PUC Certificate?

You can get a PUC certificate for your vehicle by visiting the emission center or through the VAHAN portal

How to get PUC Certificate Online?

Steps to get PUC Certificate Online

• Visit the Vahan portal

• Click on PUC certificate

• Enter the vehicle registration number, chassis number and verification code

• Click on PUC details

• You can easily proceed with downloading or printing the certificate

Process to Download PUC Certificate

You can easily download PUC certificate online through the Vahan portal

• Visit the official Vahan website

• Click on PUC certificate

• Enter vehicle related details such as registration number, chassis number, etc

• Click PUC details option

• You can either download or print the certificate online

Process to check status of PUC Certificate Online

To check the status of PUC certificate online, follow the below steps

• Visit the Vahan portal

• Select PUC certificate

• Enter vehicle registration number and chassis number

• You can then view the status of your PUC certificate

Can you renew the PUC Certificate Online?

If you are looking to renew a PUC certificate online then it is important to know that the vehicle needs to undergo the emission test for the renewal to happen.

Hence, the process cannot be completed online. It is mandatory to carry the vehicle to the nearest emission center and get the test done to avail the renewed certificate.

What is Tinted Glass?

Tinted glass refers to the glass used on the cars that block the sunlight from entering the car, thus helping you create a cool environment inside. The tint used helps in increasing the effectiveness of the air conditioning while also preventing the car interior from the rear and tear caused due to sunlight.

While using tinted glass on vehicles is not legal in India, there are car manufacturers which manufacture cars with RTO approved window films.

What is the Fine for using Tinted Glass?

In case you use a tinted glass then you have to pay a penalty of Rs. 100 for the first time that you violate the law. However, the penalties vary from state to state and increase in case of repeated offenses.

In some states, violating this law on repeated occasions can also lead to suspension of the driving license

Why are Tinted Windows not Allowed in India?

One of the main reasons why usage of tinted glass is not allowed in India is fear of criminal activity; it also restricts visibility for the driver, thus increasing risk of accidents due to poor visibility.

RTO Rules Applicable for Car Glass Film

The Regional Transport Authority in India has laid down certain rules and regulations that one must follow to drive vehicles on Indian roads. Violation of these rules can attract fines and penalties. For instance, driving on Indian roads without valid motor insurance attracts fine up to Rs. 2,000 or in some cases imprisonment up to 3 months

In the year 2012, the Supreme court passed a judgment, regulating the usage of tinted glass in cars. As per the same, cars must have the below visibility

• Side glasses must have 50% visibility

• Front and rear glasses must have 70% visiblity

Does using Tinted Glasses have an Impact on Car Insurance?

No, tinted glasses usually do not impact your car insurance premium, but they can cause some trouble at the time of claim. Few insurers do not offer coverage for claims made on vehicles with tinted windows.

Ways to Remove Tinted Glass from your Car

If you already have sun film on your car and wish to remove the same then here’s how you can do so.

• Soap water: After removing the tinted frame, you can make use of soap water to get rid of the glue. This will ensure that you are able to drive the car without any hassle. While you can always use a sharp tool to scrape the film, it can increase the risk of causing scratches on the glass.

• Heat gun: You can also use a heat gun to melt the sun foil because as the glue melts, it becomes easier to peel off the tinted glass. You can also use a hairdryer to do so.

Insurance can be defined as a contract between the insurance company and the insured, offering financial protection against unpredictable events. Insured is the policyholder whereas, the insurer is the insurance providing company, also known as underwriter or insurance carrier. Financial protection is provided to the insured in cashless form or reimbursement.

In exchange for the coverage provided by the insurance company, the insurer has to pay a premium which is decided based on various factors such as age, income, requirement, etc. The coverage is offered to the insured based on policy terms and conditions.

Insurance: Coverage Features

Given below are a few features of insurance:

• It is a risk management tool that acts as a hedge against an uncertain loss

• Under insurance, the policyholders pool in their money and pay the premiums. Hence, when one or a few incur any loss, the claimed money is offered from the accumulated amount

• Insurance coverage is provided for medical expenses, property loss, vehicle, mobile phones, etc.

• The main components of an insurance policy are the premium, deductible and the policy limit. Hence, when buying the policy, it is imperative that the policyholder checks on these aspects

Insurance: Coverage Benefits

An insurance policy comes with multiple benefits and given below are a few of them. The policy provides financial reimbursement in case of financial crisis, thus providing peace of mind. Given below are few of the benefits of insurance.

• Provides Protection:

In the times of financial crisis, insurance provides monetary compensation, thus saving the insured from financial woes and thereby ensuring peace of mind.

• Risk Sharing:

Under insurance, money is pooled in from various policyholders. The company takes collective risks and premiums, covering a large group of risk exposed people. The payout in case of any uncertainty is made from the fund. Thus, all the policyholders share the risk of the one who actually suffered from the loss.

• Provides Certainty:

With insurance, policyholders get a sense of assurance since the risk is handled by the insurer. Insurance protects the policyholder in case of accident, hazards or vulnerabilities.

• Savings:

Insurance policies, for instance, life insurance helps the policyholder inculcate the habit of saving money. This, thus, encourages people to save and invest.

Types of Insurance

Insurance policies are classified in the below types i.e. general and life insurance. General insurance is further categorized in categories such as health insurance, motor insurance, home insurance, etc.

1). Life Insurance

This type of insurance helps you protect your and your family’s financial future by providing you coverage for a specific period of time. Lump sum amount is given to the nominee in the event of death of the insured. This, thus, helps the grieving family overcome financial struggles that may otherwise occur in the absence of the policyholder.

2). Few of the types of life insurance are

term insurance, ULIP, endowment plan, retirement plan, money back plan, etc.

3). Endowment Policy

An endowment policy pays out to the policyholder under both circumstances i.e. even on death and survival. One part of the premium paid is allocated towards life cover while another part is invested.

4). Money Back Policy

In simple terms, a money back plan offers periodic payments to the investor. The periodic payments made are generally a fixed percentage of the sum assured.

5). Whole Life Insurance Policy

As the name suggests, this type of policy provides coverage to the policyholder as long as he survives. The policy is designed to cover individuals up to the age of 100 or whole life even.

6). Unit Linked Insurance Plan

Under this insurance, a part of the premium you pay is invested in the market, while the other part is invested towards providing you life cover. Investing in ULIP gives you a chance to choose the funds you want to invest in.

General Insurance

1). Health Insurance

Health insurance protects the health of the family including spouse, parents, siblings, children. Insurance companies have tie ups with hospitals where one can avail cashless hospitalization.

2). Motor Insurance

Buying third party insurance is mandatory as per the law as it offers coverage against damages caused to third party or property. One can also choose to buy a comprehensive policy as it covers damages caused to third party as well as own damages.

3). Travel insurance

Travel insurance covers an uncertain event that takes place when you are traveling. Events such as flight cancellation, baggage loss, flight delay, etc. are covered.

4). Home Insurance

This type of insurance provides coverage to property, covering financial loss and providing monetary aid. Losses caused due to flood, theft, mishaps are covered.

The new rule was announced in an attempt to limit the undue tax-saving advantage enjoyed by high net-worth individuals (HNIs) because of the tax exemptions on insurance policies. Similarly, in the previous budget, tax exemptions for ULIPs with premiums above ₹ 2.5 lakhs were removed.

Here are some important points to be noted as per the new tax rule:

• If a savings insurance policy has a premium of more than ₹ 5 lakhs, the maturity benefit or income from the policy will be taxed.

• The limit of ₹ 5 lakhs is applicable on the first-year premium and not the first-year plus renewal.

• The new rule is also applicable if the aggregate premiums from multiple policies held by an individual are more than ₹ 5 lakhs in a year. The sum thus received will become taxable.

• There are no deductions for health insurance and life insurance policies under the new income tax regime because income upto ₹ 7 lakhs is tax-exempt.

Impact Of Removing The Tax Exemption On Traditional Insurance Policies

The insurance industry is disappointed after the announcement of the tax exemption removal in traditional insurance policies. The impact could be seen in the share prices of leading insurance companies such as ICICI prudential life insurance, HDFC life insurance, etc. The share prices came down by 4% to 11% after the budget announcement.

The LIC share price fell sharply by 8.38%, while SBI life insurance stock came down to 9.31%. Shares of ICICI Prudential Life Insurance and Shares of HDFC Life Insurance were down by 10.97% and 10.96% respectively. All these shares traded in red after the budget 2023 announcement.

Some of the expected impacts on the insurance market, as per the insurance experts are:

• There will be a shift in consumer preference from traditional insurance policies towards pure risk covers like term insurance plans and investment-oriented unit link insurance due to removed tax exemptions.

• There will be a negative impact on the business of insurance companies that have savings products in their portfolios such as HDFC life insurance with a portfolio of 30-35% savings products, ICICI prudential and Life Insurance Corporation having 20-25% savings products in their portfolios, and SBI life insurance and ICICI PruLife having 10% savings products in their portfolios.

• As Indians have a tendency of buying insurance to get tax benefits, the removal of tax-free status will affect the market of life and health insurance products.

• The individuals following the new tax regime will not have to pay any taxes for annual income upto ₹ 7 lakhs and thus no deductions for investment in insurance are applicable.

Conclusion

The government’s decision to remove tax benefits from high-value insurance policies is aimed to reduce cases of tax avoidance in the name of insurance. However, to attract investors (especially the ones under the new tax regime) to buy insurance products, the insurers will have to work towards more consumer-focused products. While shifting towards a simple tax structure and removing the tax incentives associated with traditional insurance policies, the government now needs to focus more on increasing insurance awareness and penetration.

How Does This Change Affect The Consumer?

The change in life insurance maturity taxability will affect consumers who prefer traditional policies that offer insurance coverage and investment.

• A consumer will need different policies for different requirements, such as insurance coverage or investment for financial goals

• A consumer can claim a tax deduction if the combined annual premium of ULIP (tax limit of ₹ 2.5 lakhs) and a non-ULIP insurance plan (tax limit of ₹ 5 lakhs) is upto ₹ 7.5 lakh.

• A consumer with multiple policies must remember that the aggregate premium for all traditional policies should be less than ₹ 5 lakhs in a year to claim a tax deduction. If you use these policies to save tax, fewer policies will exhaust your tax limit.

• A consumer will find traditional plans less attractive because of no tax exemptions and low returns of 4 to 6% compared to ULIPs, mutual funds, and fixed deposits which give higher returns even after being taxable.

• Consumers who buy insurance just for the tax incentive will need to understand the importance of life coverage and saving money.

What should a consumer do?

The new limit will be applicable to the policies purchased after April 1 2023, so policyholders already having such plans will not be affected. Those who are planning to buy a traditional life insurance plan in the coming year can do any of the following,

• Buy insurance before April 1 2023, as the new taxation rule will only affect any policy purchased on March 31, 2023.

• Keep insurance and investment separate to get the maximum benefit of both because a traditional plan will not offer any tax benefits. Additionally, the life cover offered is also insufficient compared to a pure life cover or a term plan, and the returns could be more attractive compared to ULIPs, mutual funds, etc.

Conclusion

Immediately after the announcement of the budget, the stocks of some major insurance providers fell from 4 to 11%. The business of many insurers comes from the premiums earned from such traditional plans.

The biggest concern is the fact that now consumers' interest might shift from traditional plans to pure risk covers. To deal with these changes, insurance providers will have to diversify their product offerings and will have to focus on offering more consumer-centric products.

Buy your policy online
If you buy home content insurance online, your premium will be lower as there are no intermediaries in online mode and very few documents are required. Buying online can also save you a lot of time and effort.

If you agree to pay a portion of the damage in the event of a complaint, this will significantly reduce your monthly premiums. In this way, you can save on monthly premiums while being properly covered.

Comprehensive cover
It is an error to estimate the insurance amount for the past price of properties purchased. In fact, furniture, fixtures and fittings should be insured on a regular basis after taking into account the depreciation. Experts suggest guaranteeing the building structure of the property based on the total building area.

There are separate insurance policies for the structure,household items,and people in the house, but it is best to have a completely comprehensive insurance that includes all of them. The contents are insured against fire, robbery, terrorist activity, or electrical or mechanical failure and include jewellery and other valuables. In-house compensation covers emergencies, accidents, workers' accident compensation, and the cost of alternative housing after accidental family hospitalisation. Fully comprehensive insurance usually means that the premiums are lower than if you had individual insurance for each of these insurances.

If you want to save on your home insurance premiums, refurbishing your property is essential. Consider completing the wiring to repair the damage and avoid the risk of breakdown or fire and make the roof of the house more impact resistant.

Be smart about filing a claim
Claiming is an important step in recovering the damage. Also, there are many ways to make the process of billing easy and free from flaws. First step in this direction is to keep proper records of all property documents, data, and keep safely all important receipts and documents.Also, maintain an inventory of all the items in your home. You can also use the app or website to track items digitally.

When filing a claim, make sure you have this information and all other details about your home are at hand and ready to share. Insurance companies have different time frames for reporting claims. Make sure you submit within these deadlines to make sure your losses are covered.

Check your policy related rules and important updates on a regular basis. Changes to your home, and even in your neighbourhood, can increase or decrease your insurance premiums. If you expand your home, for example, if you remodel a basement or pool, you want to replenish your insurance policy so that you will not be uninsured in the event of serious damage to your property or liability. On the other hand, if the risk is mitigated, insurance premiums may go down. Adding new roofs, security alarms, fences, pool covers, etc., to your home can reduce your risk and reduce your insurance premiums.

Take help from experts
The best way to determine your coverage needs is to consult an independent agent. Your agent will review your situation, home and location and come up with the best policy recommendations for you. The agent can also elaborate on the policies and optional cover age that it may add.

The sub-limit, however, varies across claims. It may be a certain percentage of the sum insured, or up to a certain specific amount. For instance, generally ICU fees and hospital room rent caps are typically 2% and 1%, respectively of the total sum assured. Further, many health insurers allow you to opt out of sub-limits for an additional premium. You can choose between the two options depending on your budget.

Sub Limit Types
Disease-specific: Most insurers have sub-limits on preplanned medical treatments, in the form of a defined cost for procedures such as cataract removal, knee ligament reconstruction, kidney stone removal, tonsils, and sinus removal. The list of ailments and the treatment cost cap differs from one insurer to the next. The treatment sublimit is not related to the sum assured, which means that even if a policyholder has a high amount assured, the sub-limit clause in the policy will prevent him from claiming all of his treatment expenses. For instance, if your policy has a 50% sub-limit clause on a certain medical procedure and your total sum insured is ₹5 lakh, you will be unable to claim more than ₹2.5 lakh for that treatment because of the sublimit clause.

Room Rent: This refers to the maximum rent or room category you are entitled to depending on your health insurance coverage. This is usually 1% of your entire insured. For instance, under a ₹10 lakh policy with a 1% sub-limit on room rent, the insurer will approve a hospital room with a maximum rent of ₹10,000 per day. If the room rent exceeds the set sub-limit, the policyholder will have to bear the rest of the cost.There will be a cap on associated services such as physician consultation fees, anaesthetists' charges, diagnostic tests too, because various hospital expenses are tied to the type of room one chooses and as per the sub-limit applicable on room rent.

Post-Hospitalisation: In many circumstances, policy holders will be required to stay at home under medical supervision for a certain period after treatment. Many insurers cover post-hospitalisation charges with sub-limits, requiring policyholders to pay a portion of the cost.

When compared to a policy with sub-limits, health insurance policies with no sub-limits will have a higher premium. If you have a sub limit cover, make sure that your medical expenses do not exceed the threshold level. So, before you buy a new health policy or renew an existing one, be sure to get one that covers you adequately.