25-Jun-2011
Source : News Tonight
IRDA has delayed execution of portability of health insurance plans crosswise non-life insurers to October 1.
Previously, insurance watchdog had declared that it would implement health insurance portability that permits a client to shift from one insurance company to the other while keeping on the policy, from July 1.
IRDA has embarked upon offering up a web-based trait for the insurance companies to feed in all appropriate details on health insurance plans issued by them to people, which will be accessed by the novel company to which a customer wants to port his insurance plan.
Such a system will permit the novel insurance company to get efficiently information on record of health insurance of the client wishing to port.
Such a trait is required to facilitate the smooth running of the system.
In a release, IRDA stated, "The web-enabled facility is being established by IRDA and the Authority will implement portability of health insurance policies across non-life insurers in the country not later than 1st October 2011."
IRDA stated that the modes of portability to be effective and customer friendliness have been discuss with the non life insurance companies in India.
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Tuesday, June 28, 2011
Friday, June 24, 2011
LIC Jeevan Arogya - Better medical cover for your parents
22-Jun-2011
Source : Business Line
Escalating medical expenses are a cause for concern not only for the elderly, but also for those in their middle age. As health awareness increases not just regular insurance companies, but life insurance companies too are coming up with new health policies.
LIC has recently launched Jeevan Arogya, a non-linked health insurance plan that provides health insurance cover against specified health risks, with benefits such as daily hospital cash benefits, major surgical benefits and day care procedure to meet medical emergencies. In the event of any major illness suffered by the insured, the plan allows waiver of premium for the subsequent one year.
What’s on offer* Guaranteed coverage for the policyholder up to the age of 80 and his family including parents and parents-in-law against medical expenses incurred due to hospitalisation.
* Financial protection in case of hospitalisation and surgery
* Automatic increases in cash benefits every year at 5 per cent
* Fixed benefits to the individual irrespective of the cost incurred
* No-claim benefit of five per cent, for three claim-free years
* Flexible premium payment options with rebates and discounts for higher premium
* Sum insured increases by 5 per cent a year, to the maximum limit of 1.5 times of the initial sum insured.
* Fixed premium for first three years, irrespective of the claims. Age at entry is the base for all future premiums till the policy is in force.
* Riders such as term insurance and accident benefit. The overall cover under the plan inclusive of the two riders is Rs 10 lakh.
* Tax benefits under section 80D available for all health insurance.
How it works
Individuals can choose the amount of daily hospital cash benefit (HCB) as per their estimated requirements. The plan allows a minimum of Rs 1,000 per day and maximum of Rs 4,000 per day to cover the daily cost of hospitalisation. For instance, for a family of six with parents above 70 and principal insured at 40 for a sum insured of Rs 2 lakh each the premium will works out to a maximum of Rs 31,502(before any rebate).
Daily hospital cash benefit: If the principal insured or any of the persons covered under the policy are hospitalised due to accident or sickness and stay in hospital for more than 24 hours in non-ICU ward an amount equal to HCB will be paid for 30 days in the first year and 90 days from the second year. In the event they stay in an ICU an amount equal to twice the HCB will be paid for 15 days in the first year and 45 days from the second year. This will be within the overall limit for each year.
Major Surgical Benefits (MSB): 100 times of the HCB or applicable daily benefit with an increase by five per cent from the second year onwards. For instance, if the HCB is Rs 2,000 in the first year, it will increase by five per cent to Rs 2,100 (daily cash benefit) from the second year onwards. MSB benefit will be available for minors also. The total number of surgeries covered under the plan is 140. The sum insured is payable based on the categorisation of surgery and it varies from 40-100 per cent.
Day Care Procedure (DCP): In the event of the insured undergoing for any of the 140 day care procedures LIC has specified, the amount paid will be equal to five times of the daily benefit and it will be allowed three times a year and 24 times for whole of the policy.
Other surgical procedures: In the event of the insured undergoing surgery not listed under the above options, and is hospitalised for more than 24 hours then two times the daily cash benefit will be paid for 15 days in the first year and 45 days in the subsequent years.
Quick cash facility: An advance of 50 per cent of the major surgical amount will be paid to the insured for the specified surgeries. To avail the benefit insured has to inform the LIC or the facilitator for the claims. After the latter processes the request LIC credits the eligible amount to the policyholder’s bank accounts.
Our takeWith health insurance plans netting large losses for general insurance companies, they have imposed many restrictions on insuring older family members. Hikes in premia too have been steep. Individuals finding it difficult to include their parents/parents in-law in their existing policies may find this plan suitable to their needs. However, LIC’s Jeevan Arogya has a cap on entry age at 75.
You should also note that a health policy offered by life insurance companies can only supplement health policies offered by general insurers. The health policies are an indemnity plan - the hospital expenses are reimbursed up to a maximum sum insured without any limitation. The health cover offered by life insurers are benefit plans and the cover is restricted by various conditions.
The advantage under the Jeevan Arogya is that pre-existing diseases are covered after two years, against the usual four-year waiting period . However, the premia during the initial years are higher compared to the top-up plans offered by the general insurer. But an individual signing up for this plan at an early age has the potential to save on premium later .
This plan is ideal for self-employed professionals, people with a family history of critical illness and for those above 65 who do not have a medical cover.
Source : Business Line
Escalating medical expenses are a cause for concern not only for the elderly, but also for those in their middle age. As health awareness increases not just regular insurance companies, but life insurance companies too are coming up with new health policies.
LIC has recently launched Jeevan Arogya, a non-linked health insurance plan that provides health insurance cover against specified health risks, with benefits such as daily hospital cash benefits, major surgical benefits and day care procedure to meet medical emergencies. In the event of any major illness suffered by the insured, the plan allows waiver of premium for the subsequent one year.
What’s on offer* Guaranteed coverage for the policyholder up to the age of 80 and his family including parents and parents-in-law against medical expenses incurred due to hospitalisation.
* Financial protection in case of hospitalisation and surgery
* Automatic increases in cash benefits every year at 5 per cent
* Fixed benefits to the individual irrespective of the cost incurred
* No-claim benefit of five per cent, for three claim-free years
* Flexible premium payment options with rebates and discounts for higher premium
* Sum insured increases by 5 per cent a year, to the maximum limit of 1.5 times of the initial sum insured.
* Fixed premium for first three years, irrespective of the claims. Age at entry is the base for all future premiums till the policy is in force.
* Riders such as term insurance and accident benefit. The overall cover under the plan inclusive of the two riders is Rs 10 lakh.
* Tax benefits under section 80D available for all health insurance.
How it works
Individuals can choose the amount of daily hospital cash benefit (HCB) as per their estimated requirements. The plan allows a minimum of Rs 1,000 per day and maximum of Rs 4,000 per day to cover the daily cost of hospitalisation. For instance, for a family of six with parents above 70 and principal insured at 40 for a sum insured of Rs 2 lakh each the premium will works out to a maximum of Rs 31,502(before any rebate).
Daily hospital cash benefit: If the principal insured or any of the persons covered under the policy are hospitalised due to accident or sickness and stay in hospital for more than 24 hours in non-ICU ward an amount equal to HCB will be paid for 30 days in the first year and 90 days from the second year. In the event they stay in an ICU an amount equal to twice the HCB will be paid for 15 days in the first year and 45 days from the second year. This will be within the overall limit for each year.
Major Surgical Benefits (MSB): 100 times of the HCB or applicable daily benefit with an increase by five per cent from the second year onwards. For instance, if the HCB is Rs 2,000 in the first year, it will increase by five per cent to Rs 2,100 (daily cash benefit) from the second year onwards. MSB benefit will be available for minors also. The total number of surgeries covered under the plan is 140. The sum insured is payable based on the categorisation of surgery and it varies from 40-100 per cent.
Day Care Procedure (DCP): In the event of the insured undergoing for any of the 140 day care procedures LIC has specified, the amount paid will be equal to five times of the daily benefit and it will be allowed three times a year and 24 times for whole of the policy.
Other surgical procedures: In the event of the insured undergoing surgery not listed under the above options, and is hospitalised for more than 24 hours then two times the daily cash benefit will be paid for 15 days in the first year and 45 days in the subsequent years.
Quick cash facility: An advance of 50 per cent of the major surgical amount will be paid to the insured for the specified surgeries. To avail the benefit insured has to inform the LIC or the facilitator for the claims. After the latter processes the request LIC credits the eligible amount to the policyholder’s bank accounts.
Our takeWith health insurance plans netting large losses for general insurance companies, they have imposed many restrictions on insuring older family members. Hikes in premia too have been steep. Individuals finding it difficult to include their parents/parents in-law in their existing policies may find this plan suitable to their needs. However, LIC’s Jeevan Arogya has a cap on entry age at 75.
You should also note that a health policy offered by life insurance companies can only supplement health policies offered by general insurers. The health policies are an indemnity plan - the hospital expenses are reimbursed up to a maximum sum insured without any limitation. The health cover offered by life insurers are benefit plans and the cover is restricted by various conditions.
The advantage under the Jeevan Arogya is that pre-existing diseases are covered after two years, against the usual four-year waiting period . However, the premia during the initial years are higher compared to the top-up plans offered by the general insurer. But an individual signing up for this plan at an early age has the potential to save on premium later .
This plan is ideal for self-employed professionals, people with a family history of critical illness and for those above 65 who do not have a medical cover.
LIC joins hands with Axis Bank to offer credit cards to policyholders and employees
21-Jun-2011
Source : MSN News
Life Insurance Corporation (LIC) of India on Monday announced a tie-up with Axis Bank to offer co-branded credit cards to its policyholders and employees.
The insurance behemoth also has a similar arrangement with public sector lender Corporation Bank, through which it sells credit cards to its policyholders through a wholly-owned subsidiary, LIC Cards Services Limited.
According to insiders, LIC’s decision to rope in another bank was a direct fall-out of Corporation Bank’s limitation in scaling up business to the insurance behemoth’s liking. The insurer is also open to future tie-ups with other institutions to broad-base its card business.
The move has apparently made Corporation Bank jittery, since it is unsure how the existing tie-up would fit into LIC’s picking order once it enters into an agreement with Axis Bank, which boasts of greater and efficiency in the credit card business.
Corporation Bank, on its part, plans to approach LIC officials and sort out the matter. "The only issue we were facing was scaling up. We would be meeting LIC officials soon and if there are any issues, we will sort them out," said Ramnath Pradeep, chairman and managing director, Corporation Bank.
The Karnataka-based bank has issued 30,000-35,000 credit cards to LIC policyholders, since the tie-up in 2009. LIC holds a stake of 26 per cent stake in Corporation Bank.
"Axis Bank would manage the card business and it would be available in three different platforms like gold and titanium. These would be targeted at high-end customers. The tie-up with Corporation Bank remains, but there are certain limitations to how much they could scale up. The tie-up with Axis Bank would give more options to our policyholders," said a senior LIC official.
The Visa branded credit card would be managed by Axis Bank and would have a photo of the cardholder and a signature digitally imprinted on it. "It would be valid internationally and would facilitate policyholders to pay premiums from other places, thus saving on the bank charges," the official said.
Source : MSN News
Life Insurance Corporation (LIC) of India on Monday announced a tie-up with Axis Bank to offer co-branded credit cards to its policyholders and employees.
The insurance behemoth also has a similar arrangement with public sector lender Corporation Bank, through which it sells credit cards to its policyholders through a wholly-owned subsidiary, LIC Cards Services Limited.
According to insiders, LIC’s decision to rope in another bank was a direct fall-out of Corporation Bank’s limitation in scaling up business to the insurance behemoth’s liking. The insurer is also open to future tie-ups with other institutions to broad-base its card business.
The move has apparently made Corporation Bank jittery, since it is unsure how the existing tie-up would fit into LIC’s picking order once it enters into an agreement with Axis Bank, which boasts of greater and efficiency in the credit card business.
Corporation Bank, on its part, plans to approach LIC officials and sort out the matter. "The only issue we were facing was scaling up. We would be meeting LIC officials soon and if there are any issues, we will sort them out," said Ramnath Pradeep, chairman and managing director, Corporation Bank.
The Karnataka-based bank has issued 30,000-35,000 credit cards to LIC policyholders, since the tie-up in 2009. LIC holds a stake of 26 per cent stake in Corporation Bank.
"Axis Bank would manage the card business and it would be available in three different platforms like gold and titanium. These would be targeted at high-end customers. The tie-up with Corporation Bank remains, but there are certain limitations to how much they could scale up. The tie-up with Axis Bank would give more options to our policyholders," said a senior LIC official.
The Visa branded credit card would be managed by Axis Bank and would have a photo of the cardholder and a signature digitally imprinted on it. "It would be valid internationally and would facilitate policyholders to pay premiums from other places, thus saving on the bank charges," the official said.
Monday, June 20, 2011
Health insurance portability likely to be delayed
15-Jun-2011
Source : Financial Express
There are indications that the much-awaited health insurance portability will be delayed beyond July 1 when the new system is supposed to be implemented by the general insurers.
The delay in launching the scheme may happen as the insurers are yet to put in place the required system.
The Insurance Regulatory & Development Authority (Irda) has called a meeting of all general insurers on June 24 to take stock of the preparedness of the insurers to unveil the new scheme.
J Hari Narayan, chairman, Irda, said, “We have called a meeting of the chiefs of non-life insurance companies on June 24 to discuss the modalities of the implementation of the health insurance portability. After the meeting, if I am confident that they are ready to go for it, then only I will issue a final notification to kick off the new scheme on July 1.”
M Ramadoss, CMD, New India Assurance said the insurers are likely to discuss some operational issues during the forthcoming meeting. Once we know how to address the issue, we are ready to kick it off on July 1.
A senior official of a another state-owned non-life insurance company admitted that without proper control system in place, the new system will create chaos.
“This has to be system driven. Each of the insurance company’s system should be able to access the system of its peer so as to know the details like medical and claim history of the policyholders,’’ he said.
Health insurance is not a profitable and general insurers on are already incurring losses in this segments and launching the new system will them a further jolt in case there is no proper system in place.
Gaurav Garg, MD & CEO, Tata AIG General Insurance said , the portability scheme is good for the consumers, but finer points need to be addressed.
Some of those issues may include standardisation of a product, sharing losses among the insurers.
Amarnath Ananthnarayanan, MD & CEO, Bharti AXA General Insurance said that there is a need for clarity on host of issues before the scheme is launched.
Source : Financial Express
There are indications that the much-awaited health insurance portability will be delayed beyond July 1 when the new system is supposed to be implemented by the general insurers.
The delay in launching the scheme may happen as the insurers are yet to put in place the required system.
The Insurance Regulatory & Development Authority (Irda) has called a meeting of all general insurers on June 24 to take stock of the preparedness of the insurers to unveil the new scheme.
J Hari Narayan, chairman, Irda, said, “We have called a meeting of the chiefs of non-life insurance companies on June 24 to discuss the modalities of the implementation of the health insurance portability. After the meeting, if I am confident that they are ready to go for it, then only I will issue a final notification to kick off the new scheme on July 1.”
M Ramadoss, CMD, New India Assurance said the insurers are likely to discuss some operational issues during the forthcoming meeting. Once we know how to address the issue, we are ready to kick it off on July 1.
A senior official of a another state-owned non-life insurance company admitted that without proper control system in place, the new system will create chaos.
“This has to be system driven. Each of the insurance company’s system should be able to access the system of its peer so as to know the details like medical and claim history of the policyholders,’’ he said.
Health insurance is not a profitable and general insurers on are already incurring losses in this segments and launching the new system will them a further jolt in case there is no proper system in place.
Gaurav Garg, MD & CEO, Tata AIG General Insurance said , the portability scheme is good for the consumers, but finer points need to be addressed.
Some of those issues may include standardisation of a product, sharing losses among the insurers.
Amarnath Ananthnarayanan, MD & CEO, Bharti AXA General Insurance said that there is a need for clarity on host of issues before the scheme is launched.
Tuesday, June 14, 2011
Ambani Vs Ambani: Mukesh Ambani enters direct competition with Anil Ambani’s insurance business
13-Jun-2011
Source : The Economic Times
By T V Mahalingam,
It’s Ambani versus Ambani, again. On Friday, Mukesh Ambani’s $58-billion Reliance Industries (RIL) announced that it inked an agreement with Bharti and French insurance major AXA to acquire Bharti Enterprises’ 74% stakes in two insurance joint ventures — Bharti Axa Life Insurance and Bharti Axa General Insurance. ET broke the story on April 29.
The move marks Bharti’s exit from insurance and Mukesh’s entry into another business in which his brother, Anil, is present. It is Reliance’s second foray into financial sector — one in which his brother, Anil, has established firms like Reliance Securities, Reliance Capital, Reliance Life Insurance Company and Reliance General Insurance Company.
In March, RIL had announced a JV with US-based DE Shaw Group for the financial services business, after the brothers had scrapped a non-compete agreement between them in May 2010. RIL is yet to announce concrete plans it has for the space.
"It is obvious that Mukesh is moving into a business that he could not move in earlier because of the non-compete agreement. And he is choosing new businesses which have a significant retail play to do so," says a Mumbai-based analyst with an Indian brokerage, who did not want to be identified.
RIL’s plans in most of these new businesses, with the exception of insurance, are still nascent. Take RIL’s telecom play for instance. RIL has spent nearly $2.8 billion on acquiring 4G licences and spectrum by Infotel Broadband Services but the company is yet to announce what it proposes to do with the broadband.
In a recent interview with ET, Mukesh Ambani said the company was still "brainstorming" about how it plans to utilise the 4G licences but hinted that it would be beyond just a telecom play. "We want to be the Walmart of digital distribution," Mukeshi said. "In the cellular revolution, we were 15 years behind the world. When it comes to the data revolution, we will be on time," he added. RIL has also put its plans to start power plants on the backburner.
Meanwhile, Anil’s cash- strapped Reliance Communications, with an accumulated debt of Rs 32,000 crore, is trying to sell off a controlling stake of its tower infrastructure arm, Reliance Infratel. It also recently announced an 86% fall in net profit for the January-March quarter, largely due to a hyper-competitive market.
Source : The Economic Times
By T V Mahalingam,
It’s Ambani versus Ambani, again. On Friday, Mukesh Ambani’s $58-billion Reliance Industries (RIL) announced that it inked an agreement with Bharti and French insurance major AXA to acquire Bharti Enterprises’ 74% stakes in two insurance joint ventures — Bharti Axa Life Insurance and Bharti Axa General Insurance. ET broke the story on April 29.
The move marks Bharti’s exit from insurance and Mukesh’s entry into another business in which his brother, Anil, is present. It is Reliance’s second foray into financial sector — one in which his brother, Anil, has established firms like Reliance Securities, Reliance Capital, Reliance Life Insurance Company and Reliance General Insurance Company.
In March, RIL had announced a JV with US-based DE Shaw Group for the financial services business, after the brothers had scrapped a non-compete agreement between them in May 2010. RIL is yet to announce concrete plans it has for the space.
"It is obvious that Mukesh is moving into a business that he could not move in earlier because of the non-compete agreement. And he is choosing new businesses which have a significant retail play to do so," says a Mumbai-based analyst with an Indian brokerage, who did not want to be identified.
RIL’s plans in most of these new businesses, with the exception of insurance, are still nascent. Take RIL’s telecom play for instance. RIL has spent nearly $2.8 billion on acquiring 4G licences and spectrum by Infotel Broadband Services but the company is yet to announce what it proposes to do with the broadband.
In a recent interview with ET, Mukesh Ambani said the company was still "brainstorming" about how it plans to utilise the 4G licences but hinted that it would be beyond just a telecom play. "We want to be the Walmart of digital distribution," Mukeshi said. "In the cellular revolution, we were 15 years behind the world. When it comes to the data revolution, we will be on time," he added. RIL has also put its plans to start power plants on the backburner.
Meanwhile, Anil’s cash- strapped Reliance Communications, with an accumulated debt of Rs 32,000 crore, is trying to sell off a controlling stake of its tower infrastructure arm, Reliance Infratel. It also recently announced an 86% fall in net profit for the January-March quarter, largely due to a hyper-competitive market.
Health policies: To buy from life or general insurers?
14-Jun-2011
Source : Business Standard
By Dipta Joshi,
There are more restrictions on policies from life insurers as compared to a mediclaim. Need to visit a hospital for a minor surgery? Given the rising healthcare costs, it could set you back by at least Rs 20,000. For anything serious, be ready to pay in lakhs.
Though most of us agree that a health policy is a necessity, picking the right one remains tricky. Especially with life insurers offering medical policies like traditional mediclaim policies of general insurers.
The sales pitch: Traditional mediclaims, being indemnity plans, cover hospitalisation-related expenses for an ailment. Health polices from life insurers pay the entire sum assured as soon as an illness is diagnosed. That would mean the latter is better. But here’s some fine print.
Limited coverage: A mediclaim policy is an indemnity-based plan that settles claims, either on a cashless basis or by reimbursing bills. Life insurers have similar plans where hospital cash benefit (HCBs) is offered. Additionally, some companies also offer surgery benefits. But the benefits are defined and fixed components come into play.
There are more limits -- on both per day amount and the number of days one can avail that amount. Depending on the insurer, the amount could be between Rs 1,000 and 5,000 per day.
Such restrictions may not always work in favour of the customer. If you were to get paid Rs 25,000 for a surgery, you will get it. If the actual expenses were Rs 40,000, then the extra Rs 15,000 will have to be borne by you.
According to Mahavir Chopra, head, e-business and retail, medimanage.com, “If one were to only opt for hospital cash policies, not getting covered for the entire amount is the risk taken.”
Exclusions: HCBs permanently exclude pre-existing ailments. But a general insurer will cover pre-existing diseases after four years of continuous cover.
“Life insurance policies usually have a longer cooling period of 90 days from the effective date of the policy. So, even those ailments mentioned in their policy documents, will not be covered if diagnosed within this period,” says Shreeraj Deshpande, head–health insurance, Future Generali Insurance.
However, both mediclaim and HCBs cover hospitalisation due to accidents within the first 30 days of buying the policy.
Premiums: Typically, premiums are marginally cheaper than a mediclaim. But if one opts for a surgery benefit product, the premium rates rise substantially. For instance, if a person aged 32 buys New India Assurance’s family floater policy for a sum insured of Rs 2 lakh, he pays Rs 5,725. He would be paying Rs 5,365 for Tata AIG’s Wellsurance family-classic, a standard HCB. His premium would rise to Rs 13,794 for an additional surgery benefit of Rs 50,000 from Aegon Health Insurance.
If the same person underwent an angioplasty and hospitalisation that costs Rs 1.75 lakh, his standard HCB would pay him the least. With a fixed payout of Rs 2,000 per day, he would get only Rs 6,000. Had he opted for the surgery benefit, too, he would get Rs 6,000, plus the Rs 50,000 for surgery benefit.
Indemnity-based products that cover the entire hospitalisation expenses are a must, say insurance experts. Benefit-based products like HCBs could be bought as an add-on, as the lump sum amount can help cover additional expenses like loss of income, conveyance and so on, that one incurs during hospitalisation.
Source : Business Standard
By Dipta Joshi,
There are more restrictions on policies from life insurers as compared to a mediclaim. Need to visit a hospital for a minor surgery? Given the rising healthcare costs, it could set you back by at least Rs 20,000. For anything serious, be ready to pay in lakhs.
Though most of us agree that a health policy is a necessity, picking the right one remains tricky. Especially with life insurers offering medical policies like traditional mediclaim policies of general insurers.
The sales pitch: Traditional mediclaims, being indemnity plans, cover hospitalisation-related expenses for an ailment. Health polices from life insurers pay the entire sum assured as soon as an illness is diagnosed. That would mean the latter is better. But here’s some fine print.
Limited coverage: A mediclaim policy is an indemnity-based plan that settles claims, either on a cashless basis or by reimbursing bills. Life insurers have similar plans where hospital cash benefit (HCBs) is offered. Additionally, some companies also offer surgery benefits. But the benefits are defined and fixed components come into play.
There are more limits -- on both per day amount and the number of days one can avail that amount. Depending on the insurer, the amount could be between Rs 1,000 and 5,000 per day.
Such restrictions may not always work in favour of the customer. If you were to get paid Rs 25,000 for a surgery, you will get it. If the actual expenses were Rs 40,000, then the extra Rs 15,000 will have to be borne by you.
According to Mahavir Chopra, head, e-business and retail, medimanage.com, “If one were to only opt for hospital cash policies, not getting covered for the entire amount is the risk taken.”
Exclusions: HCBs permanently exclude pre-existing ailments. But a general insurer will cover pre-existing diseases after four years of continuous cover.
“Life insurance policies usually have a longer cooling period of 90 days from the effective date of the policy. So, even those ailments mentioned in their policy documents, will not be covered if diagnosed within this period,” says Shreeraj Deshpande, head–health insurance, Future Generali Insurance.
However, both mediclaim and HCBs cover hospitalisation due to accidents within the first 30 days of buying the policy.
Premiums: Typically, premiums are marginally cheaper than a mediclaim. But if one opts for a surgery benefit product, the premium rates rise substantially. For instance, if a person aged 32 buys New India Assurance’s family floater policy for a sum insured of Rs 2 lakh, he pays Rs 5,725. He would be paying Rs 5,365 for Tata AIG’s Wellsurance family-classic, a standard HCB. His premium would rise to Rs 13,794 for an additional surgery benefit of Rs 50,000 from Aegon Health Insurance.
If the same person underwent an angioplasty and hospitalisation that costs Rs 1.75 lakh, his standard HCB would pay him the least. With a fixed payout of Rs 2,000 per day, he would get only Rs 6,000. Had he opted for the surgery benefit, too, he would get Rs 6,000, plus the Rs 50,000 for surgery benefit.
Indemnity-based products that cover the entire hospitalisation expenses are a must, say insurance experts. Benefit-based products like HCBs could be bought as an add-on, as the lump sum amount can help cover additional expenses like loss of income, conveyance and so on, that one incurs during hospitalisation.
Friday, June 10, 2011
No tax return for salary, interest income up to Rs 5 lakh
07-Jun-2011
Source : Moneycontrol.com
As many as 85 lakh salaried tax payers whose taxable income, including salary and interest income, is up to Rs 5 lakh, are not required to file income-tax return from now onwards.
"No income-tax returns is required for salaried persons whose annual annual taxable income including salary and interest is up to Rs 5 lakh. We would shortly notify this," a Central Board of Direct Taxes official said.
However, he said this would not cover income from other sources like house property, capital gains and gains from profession and business. The scheme would be applicable from assessment year 2011-12 onwards. This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year).
Under the scheme, those salaried persons who want to claim tax refund, would have have to income tax file return. As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting ’classes of persons’ from the requirement of furnishing income tax returns.
Under the scheme, the salaried person wants exemption from filing IT return, has to disclose about the incomes like dividend and interest to his employer for tax deduction.
In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. At present, it is obligatory for all salaried persons to file income tax return under the Income Tax Act, 1961.
The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.
Source : Moneycontrol.com
As many as 85 lakh salaried tax payers whose taxable income, including salary and interest income, is up to Rs 5 lakh, are not required to file income-tax return from now onwards.
"No income-tax returns is required for salaried persons whose annual annual taxable income including salary and interest is up to Rs 5 lakh. We would shortly notify this," a Central Board of Direct Taxes official said.
However, he said this would not cover income from other sources like house property, capital gains and gains from profession and business. The scheme would be applicable from assessment year 2011-12 onwards. This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year).
Under the scheme, those salaried persons who want to claim tax refund, would have have to income tax file return. As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting ’classes of persons’ from the requirement of furnishing income tax returns.
Under the scheme, the salaried person wants exemption from filing IT return, has to disclose about the incomes like dividend and interest to his employer for tax deduction.
In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return. At present, it is obligatory for all salaried persons to file income tax return under the Income Tax Act, 1961.
The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.
Thursday, June 9, 2011
Simple steps to ensure hassle-free insurance claims settlement
05-Jun-2011
Source : The Economic Times
By Balram Sarma, CHIEF - OPERATIONS, Future Generali India Life Insurance Co,
Every day, we come across many complaints about the agony being faced by customers in trying to claim money from life insurance companies.
Normally, a life insurer’s endeavour is to settle all genuine claims at the earliest. Some basic care taken at the time of applying for the policies can go a long way in ensuring smooth claim settlement irrespective of the company the person deals with.
First and foremost is the selection of the right product. The customer needs to evaluate his/her requirement and the cash flows he/she needs to commit to keep the policy, and hence the benefits, in force. There is no point in taking a product that promises great benefits, but whose premium the customer cannot afford. If the premium is not paid regularly, the customer risks losing the primary benefit of the insurance cover. There has been an instance where on a pension policy with a lock-in of three years, a claim was lodged because the money was needed for a marriage, even though the life assured was still alive!
While choosing an insurance company, do not decide on the claim settlement record shown by a sales person. Claim payment record is a factor of vintage and the customer base the company has. Typically, in a new company, almost all the claims will be an early claim as all of them would be within 1-2 years of commencement, which will necessarily force the insurance company to investigate each case.
Whereas, for a company which has been in existence for more than 5-6 years, there will be lesser number of cases going for investigation and, thereby, a better claim payment ratio. Therefore, the key for a successful claim settlement is in proper disclosure of facts rather than the vintage of the company.
Having decided to go in for the right product, go through the proposal form carefully and ensure that it is filled up properly and that all known facts are disclosed. It is always better to fill up the form yourself rather than relying on an agent. The general apprehension in the market is that disclosure of common conditions like diabetes, BP, asthma, etc, would result in an adverse evaluation while the company processes a case in underwriting.
On the contrary, insurance companies have loading for various conditions and occupations’ risk and the customer can still benefit to enjoy full coverage on paying the little extra premium. A wrong disclosure or non-disclosure results in rejection of a claim at a later point. The irony is that the wrong/non-declaration at the time of filling up the proposal actually make the claimant rather than the policy owner run from pillar to post and feel dejected at the end of the day since the claim gets repudiated.
Avail of the nomination facility and nominate near relatives only. Avoid nominating others as far as possible. If the nominee is a minor, add an appointee who can receive the claim money during the minority of the nominee. Update/modify the nominee in case of events like marriage of the life assured or death of the nominee, etc.
Having bought a product, please go through the policy docket carefully. The entire terms and conditions and also the copies of documents submitted with the proposal form should be examined to ascertain that every thing is in order. Any anomaly noticed should be immediately brought to the notice of the insurance company.
Another important point to be noted is to keep the family members/beneficiary informed about the policies, including where the documents concerned are stored, etc. Since insurance is a long-term contract, people tend to lose track of important documents, including policy documents.
Keep paying premiums regularly. It is necessary to keep the policy in force, in order to obtain the full benefits of the policy in case of the unfortunate event.
Insurer understands the need of the beneficiary to obtain the claim amount at the earliest. Normally, the insurer will try to settle a claim within a week of receiving all the relevant documents, if the policy has run for a minimum of three years.
However, to protect the interests of the other existing policyholders, the insurer declines claims where material information is not disclosed/incorrectly stated by the proposer at the time of application. To identify such policies, the insurer investigates the "early" claims - claims that occur before the completion of three years from the inception of the policy. As these investigations require time and effort in obtaining the information, there may be a delay in the settlement of claim; the delay sometimes could even be for months.
Before submitting the claim, ensure that the insurer is informed immediately about the unfortunate event for which the claim is being made. Give the correct policy number and mention other policy details if necessary. Also ensure that all the relevant information and documents are made available to the insurer, particularly in case of accidental death.
To summarise, while you are applying for any life insurance plan, the application form should have the necessary disclosure from your end and it should provide the desired returns to meet your future needs and it should also match your present capacity to pay. You can rest assured that life insurers will have to certainly pay all genuine claims wherein the policy owner has disclosed all material facts necessary for the insurance contract.
Source : The Economic Times
By Balram Sarma, CHIEF - OPERATIONS, Future Generali India Life Insurance Co,
Every day, we come across many complaints about the agony being faced by customers in trying to claim money from life insurance companies.
Normally, a life insurer’s endeavour is to settle all genuine claims at the earliest. Some basic care taken at the time of applying for the policies can go a long way in ensuring smooth claim settlement irrespective of the company the person deals with.
First and foremost is the selection of the right product. The customer needs to evaluate his/her requirement and the cash flows he/she needs to commit to keep the policy, and hence the benefits, in force. There is no point in taking a product that promises great benefits, but whose premium the customer cannot afford. If the premium is not paid regularly, the customer risks losing the primary benefit of the insurance cover. There has been an instance where on a pension policy with a lock-in of three years, a claim was lodged because the money was needed for a marriage, even though the life assured was still alive!
While choosing an insurance company, do not decide on the claim settlement record shown by a sales person. Claim payment record is a factor of vintage and the customer base the company has. Typically, in a new company, almost all the claims will be an early claim as all of them would be within 1-2 years of commencement, which will necessarily force the insurance company to investigate each case.
Whereas, for a company which has been in existence for more than 5-6 years, there will be lesser number of cases going for investigation and, thereby, a better claim payment ratio. Therefore, the key for a successful claim settlement is in proper disclosure of facts rather than the vintage of the company.
Having decided to go in for the right product, go through the proposal form carefully and ensure that it is filled up properly and that all known facts are disclosed. It is always better to fill up the form yourself rather than relying on an agent. The general apprehension in the market is that disclosure of common conditions like diabetes, BP, asthma, etc, would result in an adverse evaluation while the company processes a case in underwriting.
On the contrary, insurance companies have loading for various conditions and occupations’ risk and the customer can still benefit to enjoy full coverage on paying the little extra premium. A wrong disclosure or non-disclosure results in rejection of a claim at a later point. The irony is that the wrong/non-declaration at the time of filling up the proposal actually make the claimant rather than the policy owner run from pillar to post and feel dejected at the end of the day since the claim gets repudiated.
Avail of the nomination facility and nominate near relatives only. Avoid nominating others as far as possible. If the nominee is a minor, add an appointee who can receive the claim money during the minority of the nominee. Update/modify the nominee in case of events like marriage of the life assured or death of the nominee, etc.
Having bought a product, please go through the policy docket carefully. The entire terms and conditions and also the copies of documents submitted with the proposal form should be examined to ascertain that every thing is in order. Any anomaly noticed should be immediately brought to the notice of the insurance company.
Another important point to be noted is to keep the family members/beneficiary informed about the policies, including where the documents concerned are stored, etc. Since insurance is a long-term contract, people tend to lose track of important documents, including policy documents.
Keep paying premiums regularly. It is necessary to keep the policy in force, in order to obtain the full benefits of the policy in case of the unfortunate event.
Insurer understands the need of the beneficiary to obtain the claim amount at the earliest. Normally, the insurer will try to settle a claim within a week of receiving all the relevant documents, if the policy has run for a minimum of three years.
However, to protect the interests of the other existing policyholders, the insurer declines claims where material information is not disclosed/incorrectly stated by the proposer at the time of application. To identify such policies, the insurer investigates the "early" claims - claims that occur before the completion of three years from the inception of the policy. As these investigations require time and effort in obtaining the information, there may be a delay in the settlement of claim; the delay sometimes could even be for months.
Before submitting the claim, ensure that the insurer is informed immediately about the unfortunate event for which the claim is being made. Give the correct policy number and mention other policy details if necessary. Also ensure that all the relevant information and documents are made available to the insurer, particularly in case of accidental death.
To summarise, while you are applying for any life insurance plan, the application form should have the necessary disclosure from your end and it should provide the desired returns to meet your future needs and it should also match your present capacity to pay. You can rest assured that life insurers will have to certainly pay all genuine claims wherein the policy owner has disclosed all material facts necessary for the insurance contract.
Keep corpus ready before you retire
06-Jun-2011
Source : The Financial Express
By Ritu Kant Ojha,
Retirement is a reality that everyone has to accept at one stage in life. It is the time when you would want to do things that you could not do through the years working up the ladder of professional life and raising kids. It is the most important financial goal and you must do your calculations well to make sure you have a corpus ready before you retire.
Calculate the gap
To maintain current standard of living post retirement, you need to estimate the annual retirement expenses. Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. Remember to take inflation into account. A realistic estimate of your expenses will tell you about how much yearly income you will need to live comfortably. For example, health related expenses would increase in your later retirement years.
Once you have estimated your retirement income needs, take stock of your estimated future assets and income. These may come from your PPF, EPF, a part-time job, mutual funds, bank savings etc. If estimates show that your future assets and income will fall short of what you need, the rest will have to come from the additional personal retirement savings.
Prepare a retirement nest egg
By the time you retire, you would need a nest egg that will provide you with enough income to fill the gap left by your other income sources. For the exact amount you need to ask yourself following questions:
* At what age do you plan to retire?
* What is your life expectancy? The more you live, the more retirement years you will have to fund.
* What is the rate of growth you can expect from your investments? Be conservative when projecting rates of return.
* Do you expect to dip into your principal amount? If yes, it may deplete your savings faster. Build in a cushion to guard against such risks.
Build your retirement corpus
When you know roughly how much money you will need, your next goal is to save that amount. For this you should map out a plan that will work for you. Always take a conservative estimate of return on investments. Once the plan is ready, you are ready for the implementation of plan.
It is never too early to get started. For a good retirement corpus, one must ideally start in his/her 20s. Work on the concept of “pay yourself first” which means that before you take out money for your expenses, the contribution towards investment must be diverted. This will help you avoid some impulsive expenses during the month.
Understand various investment options
With so many financial products being launched each day, it may be difficult to decide which is the best. You need to understand the various options available to you. If you do not have the time, energy or inclination to do it yourself, you must hire a financial planner to do this job for you. You do not want to get stuck in a financial product and realise ten years later that you made a big mistake by investing in it. Do not forget that retirement planning is an enormous task and unlike child education planning or planning to buy a house, this requires much bigger corpus and is a much serious affair than providing for other financial goals. At the age of 70-75, you may not have much options of funding your expenses other than your own savings. You must have understanding of at least 3 asset classes equity, debt and real estate.
Equity
Equity as an asset class is known to give much higher return than others. You can invest directly into stocks or do it through equity mutual funds. Over long term it will help you create a corpus, big enough to let you sail through the retirement years. However, it is a risky asset class and towards retirement some part of it must be liquidated and moved to debt instruments.
Debt
Debt is known for steady returns. Exposure to debt brings in stability to the overall portfolio and plays an important role when you have a short term horizon or there is a need of capital in short term. Debt must be restricted to minimum for any long term goal. Monthly income plans from mutual funds give option of about 20 per cent exposure in equity and 80 per cent in debt.
Real Estate
The investment in real estate is a necessity because when you retire you would want to have a permanent roof on your head. However, realty is an illiquid asset and should be used for self usage. Though real estate can boost your net-worth quite a bit, over exposure to real estate may be dangerous for your portfolio.
An investment once selected is not the end of the retirement planning process. It is a planning which involves 20-30 years and there would be lot of changes in your financial situation as time passes by. This would require portfolio re-structuring from time to time. PV Subramanyam, retirement planning experts says, “You cannot retire when you are ready but only when your retirement corpus is ready.” So if you want to retire at the time when you want, you would have to start investing now.
Source : The Financial Express
By Ritu Kant Ojha,
Retirement is a reality that everyone has to accept at one stage in life. It is the time when you would want to do things that you could not do through the years working up the ladder of professional life and raising kids. It is the most important financial goal and you must do your calculations well to make sure you have a corpus ready before you retire.
Calculate the gap
To maintain current standard of living post retirement, you need to estimate the annual retirement expenses. Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. Remember to take inflation into account. A realistic estimate of your expenses will tell you about how much yearly income you will need to live comfortably. For example, health related expenses would increase in your later retirement years.
Once you have estimated your retirement income needs, take stock of your estimated future assets and income. These may come from your PPF, EPF, a part-time job, mutual funds, bank savings etc. If estimates show that your future assets and income will fall short of what you need, the rest will have to come from the additional personal retirement savings.
Prepare a retirement nest egg
By the time you retire, you would need a nest egg that will provide you with enough income to fill the gap left by your other income sources. For the exact amount you need to ask yourself following questions:
* At what age do you plan to retire?
* What is your life expectancy? The more you live, the more retirement years you will have to fund.
* What is the rate of growth you can expect from your investments? Be conservative when projecting rates of return.
* Do you expect to dip into your principal amount? If yes, it may deplete your savings faster. Build in a cushion to guard against such risks.
Build your retirement corpus
When you know roughly how much money you will need, your next goal is to save that amount. For this you should map out a plan that will work for you. Always take a conservative estimate of return on investments. Once the plan is ready, you are ready for the implementation of plan.
It is never too early to get started. For a good retirement corpus, one must ideally start in his/her 20s. Work on the concept of “pay yourself first” which means that before you take out money for your expenses, the contribution towards investment must be diverted. This will help you avoid some impulsive expenses during the month.
Understand various investment options
With so many financial products being launched each day, it may be difficult to decide which is the best. You need to understand the various options available to you. If you do not have the time, energy or inclination to do it yourself, you must hire a financial planner to do this job for you. You do not want to get stuck in a financial product and realise ten years later that you made a big mistake by investing in it. Do not forget that retirement planning is an enormous task and unlike child education planning or planning to buy a house, this requires much bigger corpus and is a much serious affair than providing for other financial goals. At the age of 70-75, you may not have much options of funding your expenses other than your own savings. You must have understanding of at least 3 asset classes equity, debt and real estate.
Equity
Equity as an asset class is known to give much higher return than others. You can invest directly into stocks or do it through equity mutual funds. Over long term it will help you create a corpus, big enough to let you sail through the retirement years. However, it is a risky asset class and towards retirement some part of it must be liquidated and moved to debt instruments.
Debt
Debt is known for steady returns. Exposure to debt brings in stability to the overall portfolio and plays an important role when you have a short term horizon or there is a need of capital in short term. Debt must be restricted to minimum for any long term goal. Monthly income plans from mutual funds give option of about 20 per cent exposure in equity and 80 per cent in debt.
Real Estate
The investment in real estate is a necessity because when you retire you would want to have a permanent roof on your head. However, realty is an illiquid asset and should be used for self usage. Though real estate can boost your net-worth quite a bit, over exposure to real estate may be dangerous for your portfolio.
An investment once selected is not the end of the retirement planning process. It is a planning which involves 20-30 years and there would be lot of changes in your financial situation as time passes by. This would require portfolio re-structuring from time to time. PV Subramanyam, retirement planning experts says, “You cannot retire when you are ready but only when your retirement corpus is ready.” So if you want to retire at the time when you want, you would have to start investing now.
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