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Enhancing your health cover--Top-up better than restoration option
[Posted by: InsuringIndia News on Tuesday, May 26, 2015 10:44 AM]
It takes a medical crisis to make most of us realise that our health insurance cover is too small.Insurers are aware of this and therefore, almost all comprehensive medical plans from standalone health insurance companies now come with a built-in sum insured restoration or refill benefit.

Under these plans, the basic cover automatically gets reinstated in case you exhaust it during a policy year. Take for instance, you have a health insurance cover of Rs 5 lakh. During the policy year you fall ill and run up a claim of Rs 2 lakh which the companies settles. In a few months, another claim of Rs 4 lakh arises. In regular policies you would have got only the outstanding Rs 3 lakh out of the total Rs 5 lakh cover and would have had to pay the remaining Rs 1 lakh from your pocket. However, in a policy that comes with the restoration benefit, you will get the full Rs 4 lakh.

Health insurers reinstate up to 100% of the sum insured in a year. In effect, you are actually covered for double the amount of your basic cover size. For a Rs 5 lakh cover, you can claim up to Rs 10 lakh with the restoration benefit. Not surprisingly, this benefit costs slightly more than a standard health plan. For instance, a regular Rs 5 lakh indemnity plan would cost a 35-year-old a little more than Rs 6,000 annually , while the plan with restoration benefit would cost more than Rs 7,000.

Also, there is no loading on your next year's premium for using the refill benefit. "According to the new health insurance regulation, a health insurance company is not allowed to charge a higher premium from the customer post a claim. The rule applies to restoration plans as well and the cost for this benefit is built-in from day one," says V Jagannathan, CMD, Star Health and Allied Insurance. Sounds too good a deal to be true? The catch is that the restored sum insured can be only used for any other illness or diseases unrelated to the ones for which claims have been made during the year. So, if your previous medical claim was related to your heart ailment or diabetes, any hospitalisation that remotely relates to the illness won't be claimable.

In a family floater plan the treatment is slightly different. "Under floater plans, the illnesses are individual specific and each ailment is treated as fresh case for different members," says Jagannathan.

Nevertheless, this clause beats the whole purpose of having a bigger cover as the chances of you falling ill with an existing condition or a relapse is always higher than developing a new ailment.

It is, therefore, better to opt for a basic health plan and a top-up combo. Though buying two products may cost slightly more, the benefits are bigger. One, the top-up plan does not come with the Rs claims different ailments only' clause. It simply kicks in once you cross the basic thresholddeductible limit and pays for all ailments irrespective of where a similar claim has been made during the year.

Two, you have the flexibility to choose a higher cover. This means even if you have a base cover of Rs 5 lakh, you can always opt for a Rs 10 lakh top-up. In a restoration plan, the maximum you get is double the sum insured.

However, make sure you pick a Rs super topup' and not any regular top-up plan.

The difference is that in the case you choose a regular top-up policy , for you to get the claim, the expenses for a single treatment should be over the threshold. Whereas, in a super top-up your total expenses in a year have be above the threshold level for the policy to kick in.

75 per cent of two-wheelers in India have no insurance
[Posted by: InsuringIndia News on Monday, May 25, 2015 1:40 PM]
If you get hit by a two-wheeler, there is little chance of getting compensation. That's because nearly 75per centof two-wheelers in India run without insurance, putting vulnerable road-users like pedestrians and cyclists at risk.

The revelation, made by Insurance Regulatory Development Authority (IRDA), has prompted a Supreme Court-appointed committee on road safety to ask the agency and the transport ministry to work out a protocol for identifying such vehicles within three months and submit a report.

"IRDA representatives told us early this month that most two wheelers either have no insurance or their insurance has lapsed. Most of the owners don't renew them since there is little enforcement," said committee chairman Justice (retd) K S Radhakrishnan.

According to rough estimates, two-wheelers have a formidable presence on roads, constituting 70per centof all vehicles in the country.

Around 82per centof vehicles in India are privately owned and a majority of these are two-wheelers. In recent years, the number of two-wheelers has grown exponentially in rural areas where insurance papers are seldom checked by the enforcement agencies.

"Running an uninsured vehicle should be treated as a criminal act and there should be harshest of punishment since such people cannot play with the lives of others. The vehicle owner has the liability to pay the compensation for any accident. But in case he doesn't have the capacity to pay compensation, the victim becomes helpless," said S P Singh of IFTRT, a Delhi-based transport think tank.

A road transport ministry official said they had flagged this issue to IRDA about two years back and had asked it to integrate data of vehicles without third party insurance.

"A couple of months back, we asked National Informatics Centre (NIC) to populate the state-wise data of such vehicles. Once it's prepared, we will send them to states so that their law enforcement agencies can take action against such offenders," he said.

Moreover, to put check on such offenders, the Road Safety and Transport Bill proposes very high penalty- impounding of uninsured vehicle and imprisonment of its owner.

Giving details of directions that the SC-appointed panel has issued to state governments, Justice Radhakrishnan said they have been asked to ban sale of alcohol along the national and state highways.

"There should not even be a signage on the highway indicating location of such shops. We have asked them to take concrete action on dozens of issues by June-end. If they fail to comply, we will submit the details to SC," he said.

New India Assurance launches health insurance products in Dubai
[Posted by: InsuringIndia News on Saturday, May 23, 2015 10:23 AM]
The New India Assurance Company Ltd has launched health insurance products catering to individuals and families in Dubai and Northern Emirates.

Euromed Silver Plus, Gold Plus and Diamond Plus are new variants compliant with Dubai Health Authority (DHA) that cover maternity, pre-existing disease cover and dental treatments with a focus on treatment in the UAE.

"New India Assurance will have inclusive participation in all countries of operation and this launch comes at a time when DHA has made health insurance compulsory for all in phased manner," said K Sanathkumar, Director and General Manager. An additional feature is optional travel cost reimbursement to home country to avail in-patient treatment.

"The price is an attractive feature for all prospects, he said. Middle East, particularly GCC, is a significant market for us and our focus will now be to increase our presence in this market and to grow our business by offering our products to a multinational clientele in the region," he said.

"In 2014, the New India Assurance business in Dubai alone in terms of gross premium was to the tune of Dirham 203 million and in the UAE it was Dirham 285 Million.

"The New India Assurance declared 150 per cent dividend to its shareholders last year and is confident that with the strong economic trends and boom in sectors like property, construction etc..., we are bound to grow further," he further added.

The New India Assurance operates in 27 countries through their branches and agencies and has three subsidiary companies and four associate companies.

Across the GCC, The New India Assurance has five branches - two in the UAE, one office each in Oman, Kuwait and Bahrain.

GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

Important things to know as an insurance policyholder
[Posted by: InsuringIndia News on Friday, May 22, 2015 10:11 AM]
When Mumbai resident M.K. Shedha travelled to Geneva two years ago on an official trip, he bought a travel insurance policy from a private general insurer. His ordeal began when his baggage was stolen at the airport. The insurer rejected his baggage loss claim on the ground that it was not included in the coverage plan. Shedha's contention that the company had mailed him only the soft copy of the policy document, which did not contain the terms, fell on deaf ears.

After following the grievance redressal mechanism at the company level, Shedha approached the insurance ombdusman, which awarded him a nominal compensation of Rs 3,000. Unhappy with the verdict, he moved the consumer court and won Rs 80,000 in compensation, which included 6% interest on the original estimated loss.

Businessman Vishal Shah tells a similar harrowing tale. His grandfather bought a single premium life insurance policy by paying Rs 1 lakh in 2001 to fund the future education of his nephew. The policy was to make monthly payouts, with the installment value going up every five years. In 2011, the insurer refused to pay the increased installment (Rs 2,000 against Rs 1,000), citing a change in terms and conditions in 2006.

"We were never intimated of this change and the insurer failed to prove their claim that a letter was sent to us," says Shah. The modification in the terms would have resulted in a loss of Rs 30,000-40,000 for the family. The Shahs decided to approach the consumer court, which directed the insurer to adhere to the commitment.

"We won in 2013 and the insurer has been releasing the amount originally agreed upon since then," says Shah. The two cases highlight the importance of taking your insurer to task, instead of meekly accepting technical arguments for rejecting claims or other service deficiencies.

The Insurance Regulatory and Development Authority of India (IRDAI) is also cracking down on insurers not handling customer grievances as per procedure, bringing the redressal framework into focus. You the policyholder need to understand how it works as well as the recourse available if it fails to satisfy you. Rules on handling grievances The entire process is governed by the IRDA Protection of Policyholders' Interests (PPHI) Regulations 2002. The regulator issued detailed guidelines specifying turnaround time in July 2010.

The insurer is required to send a written acknowledgement to the complainant within three working days, mentioning the name and designation of the officer in charge of resolving the grievance, in addition to details of the redressal process. The maximum turnaround time for resolving complaints is two weeks. If the complaint is rejected within two weeks, the insurer has to give reasons for the same and guide the policyholder on recourse options.

"In case the policyholder receives no response from the company, he or she can approach IRDAI's call centre (toll-free 155255)," says consumer rights activist Gaurang Damani, who filed a petition in the Bombay High Court seeking guidelines on health insurance, following which they were framed by IRDA. You can also register your complaints through the regulator's Integrated Grievance Management System portal (igms.irda.gov.in).

The next level If you are unhappy with the company's response, you can approach the insurance ombudsman's office in your city 30 days after complaining to the insurer. It is a quasi-judicial body which deals with cases involving up to Rs 20 lakh and has the power to award compensation to policyholders. For simpler complaints, IGMS is the answer (see chart). Some consumer activists feel the ombudsman framework has not turned out to be as helpful as expected.

One year of Modi govt--New insurance schemes get off to impressive start
[Posted by: InsuringIndia News on Wednesday, May 20, 2015 10:14 AM]
If PM Narendra Modi's Independence Day speech unveiled Jan Dhan that was to bring banking facilities to the unbanked, finance minister Arun Jaitley's second Budget speech was about providing social security to millions of Indians.

Like Jan Dhan, Modi's ministers fanned out across the country to ensure effective rollout of the social security road map. The PM flew to Kolkata and announced ambitious schemes to provide life insurance, pension and accident cover at nominal rates.

And, the scheme has been a success, at least that's what things look like in the initial days. By June 11, within two days of launch, 6.3 crore people opted for it. In less than a week, the number was touching 7 crore, over 5 crore going for accident cover and more than 1 crore for life insurance.

The offer is compelling: A Rs 2 lakh life cover at less than Re 1 a day and accident insurance for the same amount at Re 1 a month and fixed monthly pension of Rs 1,000-Rs 5,000 a month. It isn't that only the less affluent are opting for the schemes, even the middle class is buying these covers.

In the Budget, Jaitley offered incentives for the middle class to save for old age in the form of a tax deductions of up to Rs 50,000 a year for funds parked in the National Pension Scheme that's not taken off for years.

As financial advisors tell you, unlike other products, pensions must be sold, not bought. Probably, that's why the Atal Pension Yojana, also launched on May 9, has been a tad slow off the blocks.

Private firms may step in to cover government’s insurance plan
[Posted by: InsuringIndia News on Tuesday, May 19, 2015 10:44 AM]
The private sector, which didn't quite warm up to the call to open Jan-Dhan Yojana bank accounts to increase access to financial services, is cozying up to the government's efforts to provide universal insurance.

With premiums close to market rates, companies including ICICI Lombard General Insurance, SBI Life Insurance and Star Union Dai-ichi Life Insurance are finding the government's new schemes attractive.

The government last week launched the Pradhan Mantri Jeevan Jyoti Bima Yojana to provide life cover of Rs 2 lakh at an annual premium of Rs 330 and the Pradhan Mantri Suraksha Bima Yojana for accidental death and disability at Rs 12 a year for a cover of Rs 2 lakh. The life insurance policy can be bought by people up to the age of 50 and the accident cover by anyone between 18 and 70 years old.

"The government is talking about insuring crores of underinsured and uninsured people," said Girish Kulkarni, MD and CEO of Star Union Dai-ichi Life Insurance. "Risk estimates will emerge as we go forward."

From the Rs 330 premium, Rs 44 goes to distributors and intermediaries. Stamp duty of Rs 40 is also deducted from the premium, leaving insurance companies with Rs 246 for a policy of Rs 2 lakh.

"At a certain volume, it makes sense to be selling Pradhan Mantri Suraksha Bima Yojana," said Sanjay Datta, head of underwriting at ICICI Lombard. "We believe that the scheme will be viable if we rope in 40 lakh policyholders."

To make the scheme workable, insurance companies have asked the Insurance Regulatory & Development Authority and the government to waive the stamp duty and allow reinsurance on the portfolio.

As per Irda rules, life insurance companies need to retain risks for policies of up to Rs 10 lakh. Since the sum assured with these policies is Rs 2 lakh, they cannot be reinsured. Insurance companies that have been in operation for a few years don't have the capacity and the experience to take on such risks, making it challenging for them to offer government's new policies.

"It is difficult for us to offer a policy at Rs 12," said Bhaskar Sarma, managing director and CEO at SBI General Insurance, a venture with Insurance Australia Group that started in 2010.

Five tips on making the most of health policy top-up plans
[Posted by: InsuringIndia News on Monday, May 18, 2015 10:23 AM]
Top-up plans complement one's primary health policy and shield the buyer from additional expenses. Here are 5 tips on making the most of health policy top-up plans.

Work out the cost
You can buy top-up policies to complement the group health cover offered by your employer. "Companies allow employees to buy top-up covers between Rs 2 lakh and Rs 5 lakh. The annual premium for employerfacilitated covers is around Rs 1,000 per Rs 1 lakh," says Arvind Laddha of Vantage Insurance Brokers. If your employer does not allow you to buy a top-up cover, you can always buy a top-up plan independent of the base plan.

Top-ups are cheaper than family floaters. According to data from MyInsuranceClub. com, a Rs 5 lakh family floater covering self, spouse and one child will cost anywhere between Rs 10,000 and Rs 17,000 annually. A Rs 5 lakh individual health plan will cost a 35-year-old Rs 4,000-7,000 a year.

Choose carefully

If your hospitalisation bill is Rs 5 lakh, a policy with a Rs 3 lakh deductible will cover the difference of Rs 2 lakh. But, if you are hospitalised twice in a year, and the two bills amount to Rs 2 lakh each, then your normal top-up plan will not kick in. A basic top-up policy will apply the threshold deductible to every claim, that is, every hospitalisation. Even as the total bill overshoots the Rs 3-lakh limit, each instance of hospitalisation is well within the deductible limit. However, a super topup policy puts together all hospitalisation claims to calculate the deductible limit. So, in the above example, since the total hospitalisation expense, Rs 4 lakh, crosses the deductible limit of Rs 3 lakh, the top-up plan will pay Rs 1 lakh. Therefore, it's best to buy a super top-up plan.

Understand the deductible

If one opts for a Rs 5-lakh plan with a deductible of Rs 2 lakh, it implies that the insurer providing the top-up plan pays Rs 3 lakh as the maximum claim amount. In order to pay the deductible amount, the insured can either use the sum insured from an existing health plan or contribute from his/her own pocket, says Subramanyam B, Senior VP, Bharti AXA General Insurance.

If your employer provides a cover of Rs 2 lakh and you want a cover of Rs 10 lakh, you should opt for a high-deductible top-up plan with a cover of Rs 10 lakh and deductible of Rs 2 lakh. If the deductible is more than Rs 2 lakh, you will have to pay for it. So, ensure that the deductible of the top-up policy is close to the sum insured in your primary health plan— individual or employer's group plan.

Stick with one insurer

The biggest advantage of buying a top-up linked to employer-provided policy is that the waiting period for pre-existing diseases (PED) is waived off, says Laddha of Vantage Insurance. If an individual top-up is bought from the same company as an existing health cover or the employer-provided cover, then also some insurers offer continuity in PED waiting period. "The number of years the individual is covered in the base policy will be deducted from the waiting period," says Suresh Sugathan, Head, Health Insurance, Bajaj Allianz General Insurance. But not all products offer waiting period continuity. Hiren Dhakan of Bonanza Portfolio cautions that waiting period continuity may not be provided when both the base and the top-up plans are bought together.

Claim I-T deduction

The premiums paid on top-up or super top-up plans are eligible for income tax deductions under Section 80D. If the premium is being paid for a plan that covers self, spouse and children, a maximum of Rs 25,000, under Section 80D can be claimed as deduction. Deduction of another Rs 25,000 is available for premium contribution towards a plan that covers parents, and if the parents are aged 60 years or more, then deduction of up to Rs 30,000 can be claimed.

Insurers see pick up in demand for senior citizens’ health policies
[Posted by: InsuringIndia News on Saturday, May 16, 2015 9:52 AM]
General insurers are witnessing a spurt in interest for senior citizens' health insurance policies, as shrinkage in parental coverage offered by corporate employers and rising healthcare inflation prompt senior citizens to seek health cover.

According to insurers like Star Health and Bajaj Allianz, which offer products meant for senior citizens, the category has registered a growth of 20-25% in 2014-15. "We have seen a growth of 21% in our senior citizens' policy sales this financial year," said V Jagannathan, CEO of standalone health insurer Star Health. Bajaj Allianz has seen an average increase of 25% - higher than the 20% growth in its overall retail portfolio - in the number of polices bought by senior citizens in the last three years. Premium growth for the segment across insurers is in the range of 10-20%. As per industry estimates, the size of this segment is close to Rs 400 crore.

Senior citizens' products typically come with co-pay ratios, where the insured has to pay say 10-25% of the claim amount, loading on premium for covering certain conditions like hypertension and diabetes and so on. The advantage here is that unlike regular health policies, where those over 65 are not extended coverage, these policies are designed specifically for senior citizens between 60 and 80 years of age.

Industry estimates peg annual healthcare inflation at 12-18%. Since 2010, many corporates have either partially or fully withdrawn parental coverage, introduced restrictions like co-pay or passed on the premium burden to employees who wish to cover their parents under the group policy. "The trend continues this year too. Many corporates have transferred the responsibility of funding parental cover premiums to the employees," said a senior executive of a large general insurer. As per a group health insurance survey released by Marsh India in February, 35% of organisations polled offered parental cover on a voluntary basis, where the employee had to pay the premium.

"There are multiple reasons for this (spike in interest for these policies), apart from shrinkage of corporate parental cover. The most common one is the increased awareness of high value claims being lodged by this segment and children opting for health cover for their parents as a part of their financial security measures," said Suresh Sugathan, head, health insurance, Bajaj Allianz General Insurance. Insurers say the average ticket size of health insurance cover bought by those over 60, too, has been going up steadily, from Rs 2-3 lakh a couple of years ago to Rs 4-5 lakh now. "The awareness about rising healthcare costs is growing. Often, it's the sons and daughters who take the lead to enhance their parents' health cover. Tax breaks on health insurance have also contributed to this trend," said a senior official of a private general insurance company.

"We receive maximum enquiries from the older age-groups as they are most vulnerable to diseases. However, the state of health of this group calls for a higher premium which is often beyond their budget," said a senior official of a general insurance company. The Insurance Regulatory and Development Authority of India (IRDAI) has stipulated a minimum entry age of 65 years and barred insurers from rejecting renewal requests throughout the insured's lifetime, except on the grounds of fraud and misrepresentation. The insurance regulator has also directed insurers to form grievance redressal cells dedicated to handling complaints from senior citizens.

Internet to drive insurance sales of up to Rs 4 lakh cr annually--Survey
[Posted by: InsuringIndia News on Wednesday, May 13, 2015 2:21 PM]
The internet will help drive insurance sales of up to Rs 4 lakh crore annually in about five years as customers in non-metro cities and youngsters buy more policies online than anticipated, a survey shows.

"Our studies indicate that the internet will influence Rs 3 lakh crore-4 lakh crore worth of insurance sales in India by 2020," said Vikas Agnihotri, industry director at Google India, which conducted a joint survey with private non-life insurer ICICI Lombard.

"The findings from this report clearly outline that consumers are shifting to the internet at a more rapid pace than perceived earlier." The survey did not indicate the proportion of sales from the internet. Life and general insurance companies did new business worth Rs 2 lakh crore in 2014-15, according to data collated by the industry. While life insurance earns income from the renewal of policies, general insurance is usually a one-year contract. Customers of non-life companies can move to other companies if they are unhappy with the present provider.

IRDAI seeks suggestions on proposed amendments to its rules
[Posted by: InsuringIndia News on Tuesday, May 12, 2015 11:02 AM]
Insurance sector regulator IRDAI has sought public comments on proposed amendments to its existing norms pursuant to the introduction of Insurance Laws (Amendment) Act, 2015.

The regulator in a notice today said that the Insurance Laws (Amendment) Act 2015 has a bearing on registration regulations for insurance companies which has necessitated amendments in existing norms.

The Insurance Laws (Amendment) Act, 2015, provides for enhancement of foreign investment cap in an Indian insurance company from 26 per cent to 49 per cent, among others.

The regulator has proposed amendments such as modification in the manner of computation of Foreign Direct Investment ( FDI) in Indian insurance companies, the notice said.

IRDAI has also suggested deletion of redundant definitions, modification of few definitions and introduction of definition of applicant, foreign investors, Indian investors and preliminary expenses.

The regulation also covers registration of health and reinsurance companies.

Also, IRDAI said that company needs to be compliant with the provision of 'Indian owned and Controlled' norms. And existing companies to also comply with "Indian & Owned and controlled" within a maximum period of one year.

The regulator has invited comments by June 8, 2015, the notice said.

PM Narendra Modi launches three mega social security schemes — 2 on insurance, 1 on pension
[Posted by: InsuringIndia News on Monday, May 11, 2015 10:39 AM]
Prime Minister Narendra Modi on Saturday launched three ambitious social security schemes, relating to the insurance and pension sector and intended at widening the process of financial inclusion.

On his first visit to West Bengal after taking over as Prime Minister, he kickstarted the "Pradhan Mantri Suraksha Bima Yojana" (accident insurance), "Pradhan Mantri Jeevan Jyoti Yojana" (life insurance) and "Atal Pension Yojana" at a programme in Nazrul Manch here.

West Bengal governor KN Tripathi, chief minister Mamata Banerjee, and Union ministers Jayant Sinha and Babul Supriyo attended the function where Modi inaugurated a plaque by pressing a remote button to launch the schemes.

An audio visual film was then shown highlighting salient features of the three schemes. The Prime Minister then handed out certificates to the first three subscribers — including two women.

Corporate health insurance plan--Is it a complete solution to stay covered
[Posted by: InsuringIndia News on Monday, May 11, 2015 10:56 AM]
Ashish graduated a couple of years ago and was lucky to get placed in a top IT company. With a stable job, he is planning to soon get married. His health-insurance is covered under a corporate group health insurance policy and forms part of his CTC. An amount is deducted from his monthly salary. How should Ashish be assured that this is adequate?

The benefits of this policy can be availed at the time of hospitalization of those covered in the plan typically the employee and dependents. An employer-sponsored health insurance is usually a master policy, which covers all the employees in the organization and is mandatory for all employees. Such policies are usually cheaper than individual policies and may seem attractive to the employees. But do they provide enough coverage? Employees such as Ashish must make sure they know the benefits offered, the sublimits and the sum assured at the time of joining. It may not be enough to cover two claims in one year or sum assured may be insufficient to cover the actual expenses.

Ashish cannot accurately foresee his actual medical expenses to evaluate whether the cover is adequate. He should however make an estimate, in high risk cases such as his elderly parents. If he is able to estimate the costs of say 10 days of hospitalization in a year, he will be able to evaluate whether his insurance covers such an eventuality. It is prudent to have another health insurance policy that adequately covers his parents, as a top up.

An independent health policy may also come in handy when he is in between jobs. What if his next employer did not provide the same level of health cover? Some companies have insurance policies that require a co-pay arrangement, exclusion of family members or reduce sum assured and other limits in order to cut costs. Ashish must make sure he buys atleast one standalone health insurance plan which he can control, in addition to the group coverage. He must get a family floater when young at better premiums covering more illnesses. He could consider bundling it with a critical illness plan and/or personal accident cover.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.

Insurers factored in Salman Khan's likely arrest; denied non-appearance cover for his shoots
[Posted by: InsuringIndia News on Saturday, May 09, 2015 10:16 AM]
Insurance is the art of factoring in the probability of an event and then taking a call on it.

And, when it comes to actor Salman Khan — he was convicted and sentenced to five years rigorous imprisonment in a 2002 hitand-run case on Wednesday — the industry seems to have stayed ahead of Bollywood.

The judiciary may have taken 13 long years to come up with its verdict on Khan, but insurers had factored in his possible arrest while insuring his movies. In fact, insurance companies had denied non-appearance cover for the actor in case he didn't turn up for his shoots.

Analysts reckon that Rs 200 crore is riding on his unfinished films, Dabangg 3 and Prem Ratan Dhan Payo. Insurers also said that they would not honour third-party claims since Salman was driving without a licence and was under the influence of alcohol when his car rammed into a Bandra bakery, killing one and injuring four.

Insurance policies do not pay third-party motor claims when the person who is driving is under the influence of alcohol. "Salman Khan was driving without a licence and insurance policies do not kick in such a case," said a senior executive of a general insurance company.

Two of his films which are nearing completion — Kabir Khan's Bajrangi Bhaijaan and Suraj Barjatya's Prem Ratan Dhan Payo — would be the worst affected, but would not raise any claims.

"Insurance companies would not insure actors accused in criminal acts," said Sanjay Datta, head of insurance ICICI Lombard.

Insurance companies charge a premium of up to 3-5% of the sum assured, which depends on the Budget of the film.

Production houses, which are trying to bring in professionalism into the film industry, have started buying insurance cover for their ventures. So, in case of a cancellation or postponement, an insurance company reimburses the losses.

"Other than traditional event cancellation cover, insurance companies insure losses arising out of trouble in movie release in certain cities," said the executive.

"This cover was introduced in Fanaa, which could not be released in Gujarat," said the executive.

Non-metro residents jump onto the online insurance purchase bandwagon
[Posted by: InsuringIndia News on Friday, May 08, 2015 11:11 AM]
Non-metro cities in India are either at par with, or ahead of, their metropolitan counterparts when it comes to buying on renewing health and motor policies online, a survey conducted by Google India and private non-life insurer ICICI Lombard has found.

While 85% of metro respondents said they had taken the online route for research, evaluation or purchase of health and motor policies, this figure was 82% for non-metro cities.

In terms of actual purchase using the Internet, 22% of non-metro respondents said they had purchased motor insurance policies online. In case of health insurance, this figure stood at 15%. In metro cities, 25% and 8% of respondents had bought motor and health policies respectively through the online channel.

However, non-metros have clearly outpaced metro cities as far as growth in online insurance purchase is concerned. These cities clocked a growth of 48% in health insurance and 43% in motor insurance. These growth numbers were lower at 43% and 32% respectively for metro cities.

The study further states that acceptance of online insurance purchase is growing across all age-groups, with 26% of respondents in the age bracket of 46-55 years saying that they had bought motor insurance online. This figure is comparable to age brackets of 25-35 years (25%) and 36-45 years (20%). The survey polled 3007 respondents in the age-group of 25-55 years, living in five metro and 15 non-metro cities. Close to 70% of the respondents belonged to metro cities.

Federal Bank customers to get Rs 2 lakh accident cover for Rs 12 premium
[Posted by: InsuringIndia News on Thursday, May 07, 2015 10:28 AM]
South-based private sector lender Federal BankBSE 0.19 % today entered into a pact with state-run general insurer New India Assurance (NIA) for providing cheaper accident cover to its savings bank account holders.

It signed a memorandum of understanding with NIA at Kochi for implementation of the Pradhan Mantri Suraksha Bima Yojana (PMSBY), which focuses on accident cover.

Through the tie-up, Federal Bank saving account holders between the ages of 18 and 70 will be able to get a cover of up to Rs 2 lakh by paying Rs 12 as annual premium, the bank said in a statement.

Under the PMSBY, beneficiaries will get Rs 2 lakh for death due to an accident or for loss of sight and limbs.

Loss of sight in one eye or loss of one of the limbs will entail a cover of Rs 1 lakh.

The PMSBY, announced first in the Budget by Finance Minister Arun Jaitley in February, will be formally launched this weekend by Prime Minister Narendra Modi.

Why insurance companies may not cover your house
[Posted by: InsuringIndia News on Wednesday, May 06, 2015 12:13 PM]
Old buildings are obviously more vulnerable so insurers don't like to cover structures more than 30-40 years old. "This is one section which we do not actively seek to insure," admits Sanjay Dutta, Chief of Underwriting and Claims, ICICI Lombard General Insurance.

If your house is more than 30 years old, chances are that it may be denied home insurance cover. Even if some company agrees to insure it, the premium will be quite high. Old buildings are obviously more vulnerable so insurers don't like to cover structures more than 30-40 years old.

"This is one section which we do not actively seek to insure," admits Sanjay Dutta, Chief of Underwriting and Claims, ICICI Lombard General Insurance. If your house is more than 30 years old, chances are that it may be denied home insurance cover. Even if some company agrees to insure it, the premium will be quite high usually followed when insuring new constructions.

The reinstatement method replaces the loss by paying the cost of reconstruction. The indemnity method pays the cost of the house after subtracting the depreciation. The depreciation is calculated at 2.5% per annum. Though the indemnity cover may come at a very low cost, it is not a good idea because it will not fully fund the reconstruction.

Insurance companies gear up to disburse claim
[Posted by: InsuringIndia News on Tuesday, May 05, 2015 11:01 AM]
With the powerful quake wreaking havoc in Nepal, killing thousands and causing damage to the properties running into crores, insurances firms are gearing up to disburse claims to the affected people, including with the help of India's state-run General Insurance Company.

The insurance companies are in the process of assessing the total disbursal of the claim amount as not many people have approached them yet, but they expect the figure will run into several crores.

Although the death toll is high, the situation for the companies won't be alarming. Only five per cent of people in a population of about 28 million in Nepal have life insurance.

The official death toll now stands more than 7,000, but the insurance companies are expecting it to be over 10,000.

"We are prepared to disburse the claims. On an average, over 100 people insured, only 2.5 have died every year. We have earned a lot of profit over the past. And even if it turns out to be a loss making exercise, we are ready to incur the loss," said Ashwini Kumar Thakur, CEO of the Rashtriya Bima Sanstha, a government undertaking formed in 1962.

The company has around 40 per cent market share in the life insurance sector in Nepal.

"Our scheme does cover damage to the structures in an event of an earthquake. Although the disaster is large, we are prepared for such exigencies. We have got the insurance reinsured by the General Insurance Company (of India)," said Ramesh Raj Bhattarai, CEO of the Rashtriya Beema Company Ltd, another government undertaking which deals in non-life insurance like property, health and motor.

In case of health insurance, the company only insures up to Rs 4 lakh, so the disbursal amount won't be much, he said.

The companies have relaxed norms owing to the natural disaster, after the orders from the Nepal Insurance Regulatory Authority so that the claim amount can be disbursed at the earliest.

"In case of life insurance, we have waived off the autopsy report and many such documents required for passing a claim. Also, if the person who is insured and his nominee has also died, then we will take help of the district administration and identify the next kin so that the claim money could be handed over," said Thakur.

Prime Minister Narendra Modi to launch insurance, pension schemes on May 9
[Posted by: InsuringIndia News on Saturday, May 02, 2015 10:36 AM]
Prime Minister Narendra Modi will launch the flagship social security schemes, including Rs 2 lakh accident cover at a premium of just Re 1 per month, in Kolkata on May 9.

These schemes, to be launched by Narendra Modi, are aimed at providing affordable universal access to essential social security protection in a convenient manner linked to auto-debit facility from the bank account of a subscriber, a Finance Ministry statement said.

These schemes were announced in the Budget by Finance Minister Arun Jaitley on February 28. The two insurance schemes, Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), would provide insurance cover in the unfortunate event of death by any cause, death or disability due to an accident, whereas the pension scheme, Atal Pension Yojana (APY), would address old age income security needs, it said.

The convenient delivery mechanism of the schemes is expected to address the situation of very low coverage of life or accident insurance and old age income security products in the country.

PMSBY will offer a renewable one year accidental death cum disability cover of Rs 2 lakh for partial permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber, it said.

The scheme would be administered through Public Sector General Insurance Companies or other General Insurance companies willing to offer the product on similar terms on the choice of the bank concerned, it added.

PMJJBY on the other hand will offer a renewable one year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum per subscriber.

The scheme would be offered or administered through LIC or other Life Insurance companies willing to offer the product on similar terms on the choice of the bank concerned.

The pension scheme named Atal Pension Yojana will focus on the unorganised sector and provide subscribers a fixed minimum pension of Rs 1000, 2000, 3000, 4000 or Rs 5000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.

Thus, it said, the period of contribution by any subscriber under APY would be 20 years or more. The fixed minimum pension would be guaranteed by the government.

"While the scheme is open to bank account holders in the prescribed age group, the Central Government would also co-contribute 50 per cent of the total contribution or Rs 1000 per annum, whichever is lower, for a period of 5 years for those joining the scheme before December 31, 2015 and are not members of any statutory social security scheme and are not income tax payers," it said.

SBI joins hands with NICL to offer non-life cover under Pradhan Mantri Suraksha Bima Yojana
[Posted by: InsuringIndia News on Saturday, May 02, 2015 3:10 PM]
Country's largest lender State Bank of India today entered into a tie-up with National Insurance Company ( NICL) to offer non-life cover to its savings account holders under the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The bank will offer personal accidental death and disability cover of Rs 2 lakh under the scheme, it said in a release.

The customer will have to pay an annual premium of only Rs 12. All the savings account holders in the age group 18 to 70 years will be eligible for the cover.

GIC Re expects claims worth $50 million from Nepal earthquake
[Posted by: InsuringIndia News on Friday, May 01, 2015 10:06 AM]
The country designated national reinsurer- General Insurance Corporation of India is expects claims worth $50 million (around Rs 320 crore) from the Nepal earthquake.

GIC Re is the largest reinsurance partner of the Nepalese insurance industry. The company's gross exposure in the Nepalese insurance market is around $140 million. The company had sent a team of 10 surveyors to assess the loss. However, it is yet to arrive at any estimate of losses due to the recent earthquake there.

"So far we have not received any cash-calls from any of our cedents. Much will depend on the damages suffered by the insured properties," said GIC Re in a release today. "We reiterate our commitment to accord top priority to all claims arising out of this tragic event,"

A massive earthquake measured at 7.9 on the Richter scale rocked Nepal on April 25Saturday, followed by another one measuring 6.7 on the following day, impacting some parts of India as well. The worst earthquake to hit the region in 80 years brought down several buildings and centuries old temples. The claims are arising out of damage to commercial and industrial properties.

"Our past experience with such calamities in this part of the globe indicates insured losses to be a very small part of the economic losses. It will take some time for an actual picture to emerge. However, we expect the claims to remain with in USD 50 million in worst case scenario," said GIC.


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