Govt’s ambitious health plan proposes insurance cover for poor

Health Minister Harsh Vardhan today offered first glimpses into the BJP government’s ambitious Universal Health Assurance (UHA) Scheme which, he said, would have an insurance component, assured package of diagnostics and availability of at least 50 essential drugs.

The government, he said, will pay premium for the poor who cannot afford it and he will ask the Finance Ministry to give incentives to those opting for it so that there is a “big pool” of people availing the benefit which will bring down the premium.

“There has to be an assured preventive and positive health package. There has to be an assured availability of at least 50 medicine which are essentials and an assured package of diagnostics which are absolutely essential.

“The premiums for those underprivileged who cannot pay will be taken care of by the government,” Vardhan said at a Confederation of Indian Industry (CII) meet on health insurance.

The 50 medicines will take care of at times 95 per cent of diagnostic.

“UHA Scheme is in the process of being finalised and will be presented to the nation within the current financial year,” he said, adding that he would not share more details because it has to be presented before the Cabinet for final approval.

The government, he said, will negotiate premiums with insurance companies for those who will find it difficult to pay because they think that the companies will exploit them.

Recalling the President’s address to Parliament in June in which he had spoken about the government’s commitment to universal health care, Vardhan said he had formed a committee of experts drawn from related fields and they have reached a “concrete end” after long deliberations.

“Their interim report is with me and I can disclose at this stage that the future indeed looks good,” he said.

Health sector, he said, will seen a boom once the scheme takes off and different industries will benefit from it.

One of the biggest challenges, Vardhan noted, would be to keep up the supply of doctors and technical personnel. The present doctor to population ratio, one to 1,700, needs to be improved. A great number of technical personnel in diagnostics and radiology among others are also necessary, he said.

Insurance sector is hot again, global cos revive India plans

With foreign direct investment (FDI) limit in insurance set to go up to 49% from the current 26%, several global insurance giants are likely to revive their plans to enter the under-penetrated Indian market, according to a report in The Hindustan Times. 

Canada-based Manulife and South Korea’s Samsung Life among others are likely to scout for partners in India, an industry source, who did not wish to be identified, told HT.

Global insurance firms including Metlife, Aegon, Prudential are already present in India.

While the government has failed to get the insurance bill introduced in Parliament in the recently concluded budget session, it has sent it to the select committee in keeping with the Opposition’s demand. Finance minister Arun Jaitley has asked the committee to submit its report by the last day of the first week of the next session. Jaitley has expressed hope that the bill will be taken up during the winter session of Parliament.

While the FDI limit will be raised to 49%, the management control of these firms will remain with Indian promoters for now.

"Due to the delay in the government’s part to increase the FDI limit, most insurers decided to shelve their plans…now with the new government moving fast on raising the FDI limit, these big players would come into the market," the source told Hindustan Times. 

According to estimates by consulting firm KPMG, the move is likely to result in foreign inflows of up to Rs. 25,000 crore. In 2000, the insurance sector was opened up for private players after the enactment of the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act, 1999).

Paperless insurance is here, say bye-bye to paper policies

The new initiative is expected to digitise 1,800 million pages annually and save more than Rs 100 crore for the industry.

Say bye-bye to paper documents for an insurance policy. Life Insurance Corporation of India (LIC) has tied up with all the five insurance repositories to offer policies in the digitised format, paving the way for paperless insurance. More insurers are likely to follow suit and go for tieup to offer paperless policies.

Insurance behemoth LIC has launched a two-month pilot project in Mumbai to digitise policies. "Would like to clarify that discussions with repositories have been held for the limited purpose of a pilot launch as per guidelines issued by regulator Insurance Regulatory and Development Authority (Irda) following the June 10, 2014 circular," LIC said in a statement.

The company clarified that the agreement is only for a two-month pilot project and no final decision has been taken in this matter or no agreement has been signed.

While LIC will be offering the services to existing customers, for new customers, the service will be first offered in the Mumbai division and later be extended to other regions. LIC is expected to digitise at least 5,000 policies in the next 10 days.

Irda has asked all life insurers and insurance repositories to participate in the paperless project in order to increase the pace of insurance digitisation. The pilot project will be for two months with effect from July 1.

During the pilot launch, each life insurer have to convert a minimum of 1,000 or five per cent of the existing individual policies into electronic form.

Insurance repository is a facility to help policy holders buy and keep insurance policies in the electronic form, rather than as a paper document. At present, five companies have been registered as insurance repositories to offer this service, which include NSDL Database Management, Central Insurance Repository, CAMS Repository Services, SHCIL Projects and Karvy Insurance Repository.

While Irda has only allowed life insurance policies to be digitised first, non-life policies like health and motor insurance will also be allowed to be digitised in due course.

The insurance regulator expects all insurance policies in digital format in five years. While this has not been formally announced, it is expected that policies with annual premiums of above Rs 25,000 could be mandated to be stored digitally from the next financial year onwards.

The life insurance sector issued 3.81 million policies between April 1, and June 30.

CAMS Repository Service (CAMSRep) CEO SV Ramanan said with LIC coming on board, the process of converting physical policies into demat format would become faster. Ramanan said till now, the repositories have opened 150,000 e-insurance accounts of which CAMSRep has 85,000 accounts. He added there have been 20,000 policy credits or requests for conversions among other service requests.

A senior official with another insurance repository said private life insurers were in a wait-and-watch mode. While we understand that customers have not begun contacting insurers since there is low awareness about the new system, insurers were waiting for large companies to tie up.

Irda has said during the pilot launch, an insurer will not deny any request for electronic policy from any policyholders.

Industry officials said that while almost all life insurers have tied up with repositories, issuance of policies in an electronic format has been slow. Policyholders have not begun receiving intimation from insurers giving them the facility to convert their policies.

For the policies converted or issued in electronic form, within an e-Insurance account, the insurance repository would be responsible for providing mandatory information such as policy status (including premium status, net asset value status, bonus status, loan status, claims status, nominee/assignment status, etc), premium due calendar and online premium payment facilitation, premium history and annual statements.

At present, there are more than 330 million life insurance policies and 90 million general insurance policies in India. On an average, IrdaÆs estimates suggest that Rs 150-200 per customer is spent by an insurance company annually in maintaining policies in the physical form. The new initiative is expected to digitise 1,800 million pages annually and save more than Rs 100 crore for the industry.

Long-term motor insurance might just work

A large number of two-wheelers on Indian roads are uninsured. This is not due to high annual premiums, but because the perceived benefits of taking an insurance policy are just not apparent.

Let us briefly look at the major risks associated with having a vehicle on the roads:

The first risk is the damage to your own vehicle in case of an accident. But unlike cars, where you would run to the paint shop even if there is a small scratch, owners of two-wheelers tend to go to a service centre only if the vehicle is not functional. A paint job requirement or even a minor dent on the bumper is usually ignored.

The second is the risk of causing damage to others. This is a major risk and is covered under the third-party component of an insurance policy. This is mandatory by law as it puts others at risk. But since one generally never makes a claim for one’s own damage, the insurance policy itself is completely ignored.

A buyer usually takes an insurance policy at the time of purchase and then tends to forget or ignore it at the time of renewal. Policing is the only way to discover an uninsured vehicle. As a result, we have a large number of uninsured two-wheelers on Indian roads.

One smart solution that the industry has been suggesting is a long-term policy – issue a policy of a longer duration than the current one-year period to solve the problem of renewal reluctance.

The insurance regulator has now allowed three-year insurance policies. The good part for consumers is that premiums would not change within the three years. Insurance companies on their part would be happy as the claims in this segment are not too high, and hence would market it aggressively.

If the move is successful, we may even see four-wheeler insurance being offered for a longer duration. Third-party insurance is crucial as you are putting others at risk while you are driving on the roads. Any steps to mitigate this risk are always welcome.

Health Assurance Plan is Being Worked Out: Vardhan

India will have to follow the middle path in healthcare, shunning both the American and the British models, Union Health Minister Dr Harsh Vardhan has said. Dr Vardhan, who was on a two-day visit to the city, spoke to Express on a range of health topics from insurance to drug resistant tuberculosis. He also spoke of the need to help the 350 million people who are below poverty line in India. Excerpts:

Are we copying the American model of healthcare in India? Do we all have to get medical insurance?

One cannot have the Obamacare model. However, the spirit is everyone gets medical insurance. Who pays the premium, what are the services, how and where is all being worked out. Neither the American nor the British model of healthcare will suit India. We will have to develop our own path, a middle path which will be good for India. A Universal Health Assurance Plan is being worked out to make at least a few services available.

The poor will have to be helped by the government in paying the premium. The National Health Assurance was a part of the President’s speech recently, was indirectly a part of the budget and the Prime Minister is also keen about it. I have always supported it.

There is a serious shortage of medical specialists as well as medical workers at the Primary Health Centre level in villages. How do you plan to address these shortages?

We strongly feel there is a gross deficiency of medical manpower and must utilise the potential of postgraduate students. We are creating All India institutes of Medical Sciences all over the country. We are converting medical colleges into super specialty hospitals and converting district hospitals into medical colleges. We will open more medical colleges in future.

We feel students of postgraduate courses must do a stint in rural areas. This would be a condition for registration. We will open up the medical sector to more institutions. There is a course of BSc, where students are trained for three years in community medicine which will cover some gaps and strengthen the PHCs. We need to improve our numbers and quality in medical education.

Would you say the Revised National Tuberculosis Control Programme has failed as tuberculosis patients and multi-drug resistant (MDR) TB cases are increasing?

We are keeping a close watch on the programme as the number of multi-drug resistant TB cases is rising. The programme is strong enough to catch these cases early through its testing facilities for drug resistance. The DOTS programme (Directly Observed Treatment, Short-Course) is a comprehensive package for TB control is also working. We are reviewing the programme. We do have treatment for drug resistant TB. Recently, there was a shortage of adult anti-retroviral therapy (ART) drugs at a centre in Bangalore and the patients had to be given pediatric drugs. There is no shortage. This must have occurred at that centre for a short while but I do not think we are short on ART drugs.

Independence Day: Govt to launch Jan Dhan scheme

Prime minister Narendra Modi on Friday launched 'Pradhan Mantri Jan Dhan Yojana' to help the poor open bank accounts. It will come with the facility of a debit card and an insurance cover of Rs 1 lakh. "We want to integrate the poorest of the poor with bank accounts with Pradhan Mantri Jan Dhan Yojana," he said in his maiden Independence Day address to the nation.

"Today there are crores of families which have mobile phones but no bank accounts. We have to change this. The economic development must benefit poor and it should start from here," he said. Under the Jan Dhan Yojana, he said, "the person who will open bank account will get a debit card and the family will get Rs 1 lakh insurance cover. This will help the family to tide over the unforeseen eventuality."

The Union Cabinet has already cleared the two-phase financial inclusion scheme under which bank accounts will be opened for 15 crore poor persons with an overdraft facility of Rs 5,000 and accident insurance of Rs 1 lakh.

The scheme, to be pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore identified households by August 2018.

The main features of the scheme include Rs 5,000 overdraft facility for Aadhar-linked accounts, Ru Pay Debit Card with inbuilt Rs 1 lakh accident insurance cover and minimum monthly renumeration of Rs 5,000 to business correspondents who will provide the last link between the account holders and the bank.

PM Narendra Modi to kick off pan-India financial inclusion plan in late August

Prime Minister Narendra Modi will launch a nation-wide financial inclusion campaign by the month-end to provide banking, insurance and pension covers to 7.5 crore households and will also rope in non-banking finance companies (NBFCs) to widen the coverage. Modi will announce the National Mission on Financial Inclusion in his Independence Day speech, and kick off the project in the Capital either on August 28 or 29. The Reserve Bank of India has allowed NBFCs to act as business correspondents and open bank accounts, which is expected to bolster the government's plans to reach remote parts of the country, senior government officials said.

As a sweetener, the finance companies will be allowed to tap into the pool to offer loans and other products since the firms are banned from accepting deposits.According to the plan, the government aims to provide banking facilities to up to 15 crore individuals by 2015 in all areas except those facing connectivity and infrastructure bottlenecks. These segments are expected to be covered in the second phase of the National Mission on Financial Inclusion starting 2015.

A basic bank account with Rupay debit card would be opened. This would have an inbuilt accident insurance cover of Rs 1 lakh. While the plan is to allow banks to offer an overdraft of up to Rs 5,000 with every bank account after six months, banks may be given the option to offer the facility later once they have complete financial profile.

CASH TRANSFERS
The finance ministry and banks expect the fresh attempt to give the financial inclusion plan a real boost once cash transfer for subsidy payments for cooking gas, fertilizers and kerosene makes a comeback. The government is keen on using the Aadhar platform and the banking coverage to overhaul the subsidy payment system and banks are awaiting a cue from the government, which may be available in Modi's speech on August 15.

The plan being readied involves mapping the country's six lakh villages into sub-service areas of 1,0001500 households. These service areas would be allotted to banks to provide at least one fixed point banking outlet -either a branch or a business correspondent, to be called Bank Mitra. Financial literacy programs would be conducted in villages and the plan will provide micro-insurance. Unorganized sector pension schemes such as Swavlamban would be through business correspondents. Farmers, who hold kisan credit cards, will be given RuPay Kisan cards as the government study has shown that a large number of farmers are not covered under the Kisan credit card scheme. With the Modi government's emphasis on cooperation with states, the financial inclusion plan will lean heavily on provinces for effective implementation.

The central government has written to state governments, seeking their active participation in the mega financial inclusion plan. States have been asked to appoint senior officers to the state-level bankers committee as well as state-level mission directors.

The government is also considering special incentives for district collectors who achieve full coverage within a year and has asked banks to prepare an action plan under which districts can be declared fully covered on a quarterly basis..

GAPS IN EARLIER MODEL

The Modi administration wants to implement the program on a mission mode, with the monitoring mechanism headed by finance minister Arun Jaitley. A review of the earlier financial inclusion programs has pointed to gaps in implementing the scheme. Villages with more than 2000 population were covered, which limited the geographic spread.

There was no emphasis on urban financial inclusion. The focus was on coverage of villages and not on households and emphasis was on opening large number of accounts which have remained dormant. The earlier plan did not have financial literacy, micro-insurance, debit card and pension for the unorganized sector.

Best ways to cut tax under Sec 80C

Salespersons try to draw your attention to their counters, pitching their merchandise aggressively. Will you buy whatever new gizmo they are trying to sell? Or will you utilise the money to purchase something you actually need for the household? The additional Rs 50,000 deduction given to taxpayers under Section 80C in this year's budget is also like a gift voucher from the government. Instead of investing at random, a taxpayer should assess his needs and invest to fill the gaps in his financial planning.

Do you need to invest more?

Before you start planning your investments, find out if you actually need to invest more.

Section 80C is an overcrowded deduction, which includes more than a dozen instruments. Besides, it has the principal repayment of home loans and tuition fees of up to two children. Many taxpayers may find that their Section 80C investments already exceed the enhanced deduction of Rs 1.5 lakh.

In the lower income segments, taxpayers may not need to save too much. Note that the basic exemption limit has also been raised by Rs 50,000 to Rs 2.5 lakh for ordinary citizens and to Rs 3 lakh for senior citizens. So, if a person has a taxable income of Rs 3.5 lakh, he needs to invest only Rs 1 lakh to reduce his tax liability to zero. Even otherwise, a person earning less than Rs 4 lakh a year might find it difficult to invest an additional Rs 50,000 under Section 80C just to save tax. Unfortunately, many people are either not aware of their actual tax liability or are fooled into investing more.

For many home loan customers, the loan repayment alone can take care of the investments under Section 80C. Pune-based IT professional Vilas Pacharne will reap three benefits from the budget proposals, but won't have to invest even a rupee more to avail of them. He gains from the increase in the basic exemption, the raising of the Section 80C limit and the increase in the home loan deduction under Section 24(b) to Rs 2 lakh.

Though he does not contribute a very large amount to his EPF and PPF, his home loan repayment adds up to around Rs 92,000 a year.

"My Section 80C investments are already more than Rs 1.5 lakh and the home loan interest is close to Rs 2 lakh," he says.

On the other hand, there are taxpayers with higher incomes who may want to invest more to save tax. Salaried employees who contribute to the Provident Fund often find they have to invest very little under Section 80C. Delhi-based finance professional Puneet Narang contributes nearly Rs 92,000 to his Provident Fund. "I have never had to do any tax planning because my PF and an insurance policy take care of it," he says. But now that the limit has been enhanced by Rs 50,000, Narang is contemplating investing in ELSS funds to gain the equity exposure that's missing in his portfolio. "If you do not have any equity exposure, an ELSS fund can be the first step towards this asset class," says Nisreen Mamaji, founder of Moneyworks Financial Advisors.

Choose instruments carefully

The enhanced deduction limit is certainly an opportunity for taxpayers to reduce their tax liability, but how much you benefit from it will depend on how you deploy the money. "Insurance companies and agents will now become more aggressive and push bundled products under the pretext of helping you save tax," cautions Neeraj Chauhan, CEO of Delhi-based Financial Mall. For example, investment-linked insurance policies, also known as Ulips, neither offer you adequate cover nor give good returns.

Says Mamaji: "Buying a high-cost product with a long lock-in period many not be the best idea."

The good part is that Section 80C offers enough choices to fulfill all your financial needs.

Is your insurance in place?

Before taxpayers like Narang allocate money to ELSS, they should assess their insurance needs.

Most experts say that adequate life insurance cover is the first step in a financial plan. A pure protection term plan can be useful here. It offers a large insurance cover at a low price. Narang is grossly underinsured and should buy a term plan of Rs 1 crore for himself. That will cost him around Rs 18,000 a year. The balance amount of the additional limit can be put in ELSS funds. If he needs more equity exposure, he can go for diversified equity funds instead of ELSS.

If you already have adequate life insurance, move to other tax-saving avenues. Do consider the tenure of the instrument you invest in. The lock-in ranges from three years for ELSS funds to 15 years for PPF. Choose a tenure that coincides with your financial goals. For long-term goals such as retirement, you may choose to invest in the 15-year PPF or the NPS. The Budget has also raised the ceiling for investments in the PPF to Rs 1.5 lakh, which may entice some to invest more in this vehicle.

Saving for retirement

Before deciding to invest more in PPF, consider adding more to your EPF. The 12% of your basic salary that you contribute every month will help build your retirement kitty. You also have the option of contributing a higher amount through the VPF. Both the PPF and EPF enjoy exempt tax status, which means the initial contribution, interest earned and the maturity proceeds are all tax-free. However, if you encash your EPF before five years, the interest component is added to your total income and taxed at the rate corresponding to your tax slab.

The 80C benefit you claimed in earlier years is also reversed. Pension plans offered by insurers are not an attractive option.

Harness the power of equities

Experts advise against depending purely on EPF and PPF for retirement needs. They are debt based instruments and their returns will not be able to beat inflation. "People have been depending on PPF for too long," says Mamaji. "It is time investors realised that these are not sufficient for their retirement needs." If you want to build a decent corpus for retirement invests in equities. ELSS funds can be an investor's first step in the equity market. Says Hemant Rustagi, CEO, Wiseinvest Advisors: "Besides your compulsory savings towards PF and insurance, investors should make use of this enhanced limit to take exposure to a different asset class like equity."

Ideally, you should start an SIP in an ELSS from the beginning of the financial year, spreading investments over 12 months. The best thing about ELSS funds is the flexibility they offer.

The minimum investment is very low at Rs 500 and the investor can put in money on any trading day of the year. Unlike a Ulip or a pension plan, there is no compulsion to invest every year. Turn to page 15 to know more about the advantages of ELSS funds.

You can take equity exposure through other instruments, such as Ulips, unit-linked pension plans and the NPS, as well. However, the high charges of Ulips and pension plans make them poor choices. On the other hand, the NPS is a low-cost product that can be effectively used for retirement planning. You can decide the allocation to equity, corporate bonds and government securities, as per your risk profile.

Saving for short-term goals

Not all financial goals are 15-20 years away. For taxpayers who need the money sooner, NSCs and five-year tax-saving bank fixed deposits can be useful options. NSCs can be purchased from designated post office branches. The tax-saving FD is offered by most nationalised banks and the rate currently on offer is 9-9.5%. However, the interest earned through NSCs and tax-saving bank FDs is fully taxable as income at the applicable rate. So, for an individual in the highest 30% tax slab, the post-tax returns from a five-year NSC will be only 5.95%. This makes them tax-inefficient compared to the PPF and EPF.

Tax-saving options for senior citizens

Senior citizens looking to save tax should consider their cash flows carefully. Many, like Mumbai-based Shripad Narvekar may not find it easy to spare for tax-saving investment. They should also steer clear of long-term investments. "It would not make sense for retirees to keep their money locked for long tenures," says Chauhan. The Senior Citizens' Savings Scheme is a perfect option. There is a five-year lock-in period but interest is paid out every quarter to generate an income stream for the individual. Though premature withdrawals from the scheme are allowed, there is a penalty if the amount is withdrawn before five years.

Invest in equities for long-term wealth

Jitendra Nalawade (32) lives with his wife Reshma (29) and son Sarvadnya (4) in Noida. Both Jitendra and Reshma are post-graduates and work in the private sector.

What are they saving for?

The couple wishes to buy an additional house worth Rs 35 lakh after two years. They would also need Rs 25 lakh after 13 years for their son's education and an additional Rs 25 lakh for his marriage. They would also want to provide Rs 10 lakh to support Jitendra's parents who stay in Pune. Post retirement, the family would require a corpus that would generate Rs 36 lakh annually. These costs will be revised on the basis of inflation.

Where are they today?

Cash flow: The couple's annual gross inflow from all sources is Rs 17.94 lakh, against a total outflow of Rs 8.55 lakh. The outflow includes routine expenses, insurance premium, rental expenses for their current house in Noida and EMIs for a house in Pune. About 21% of the inflow is consumed by EMIs.

Net worth: The couple's total assets are worth Rs 77.50 lakh. These include personal assets worth Rs 70 lakh, which comprise house and jewellery. There is an outstanding liability of Rs 13.20 lakh taken as a loan. The net worth comes to Rs 64.30 lakh.

Contingency fund: Against the mandatory monthly expenses of Rs 57,000, the couple has Rs 50,000 in a liquid fund. This is less than a month's reserve.

Health & life insurance: Jitendra has a Rs 1.25 crore life insurance policy by way of a term plan. He has a health insurance of Rs 2.50 lakh provided by his employer.

Savings & investments: In addition to the liquid fund, the couple's EPF is worth Rs 7 lakh. There is no other investment.

Fiscal analysis

The couple has a decent fund inflow. Their contingency fund is insufficient. Their savings rate is very good. However, their health insurance is insufficient and needs enhancement. Jitendra's life cover by way of a term plan is good but, given his major family responsibilities, it needs to be enhanced. For long-term wealth creation, the couple needs to start investing in equity-based investments. Currently, their overall portfolio is illiquid.

The way ahead

Contingency fund: The couple must maintain a contingency reserve of Rs 1.70 lakh, out of which Rs 15,000 can be held as cash in hand and the balance in an FD linked to savings bank account.

Health & life cover: They couple should increase health cover to Rs 5 lakh for each member of the family and also top this up with an additional Rs 20-lakh floater policy. Jitendra has a life cover by way of a term plan but, considering he has family responsibilities, he should enhance this by Rs 1.14 crore.

Planning for financial goals

Additional home buying: The couple must focus on paying back their existing home loan, redirecting all bonus and increments for the purpose. Also, since their existing composition is illiquid, they should refrain from an additional home purchase for the time being.

Son's education & marriage: The couple can set aside about Rs 21,000 every month. This can be invested in a large-cap equity fund, a gold fund and an international equity fund in equal proportion. They can increase the amount by 10% every year.

Retirement planning: Once the earlier financial goals are achieved, the couple can continue the SIPs in equity funds to accumulate a corpus for retirement. They should start contributing to PPF regularly.

Parental responsibility: The couple can start another SIP of Rs 10,000 in a mutual fund with 80:20 debt-to-equity ratio to create a corpus to support parents as and when needed.

There is no doubt that real estate is a good growth-oriented asset class. However, it is illiquid, indivisible and immovable. Creating a portfolio of real estate early on in life many a times jeopardizes overall fund requirements for meeting other financial goals. For example, imagine a family that has a piece of real estate costing Rs 1 crore but does not have Rs 25 lakh liquid to fund the son's education, or Rs 10 lakh to support an ageing family member. So, from an investment perspective, be careful while creating a real estate portfolio.

Apollo Munich launches two new insurance plans

Apollo Munich Health Insurance today launched two new plans under its Optima series - Optima Vital and Optima Super.

Optima Vital is a critical illness plan, which covers 37 critical illnesses against normal industry standards of providing cover for around 7 to 20 of these conditions, Apollo Munich Health Insurance said in a release issued here.

Another plan, Optima Super, caters to the need of having a low cost cover while one is employed and can be switched to a full-fledged plan at the time of retirement or when the need is felt, without the fear of rejection.

"Given the increased stress levels and changing lifestyles, Indians are encountering critical illnesses more than ever before. Not only the incidence rate of such diseases is increasing, the number of critical illnesses is also on a rise. Hence, there is a need for a one stop shop plan that covers all the major critical illnesses to help reduce the financial trauma related to critical illnesses," Apollo Munich Health Insurance CEO Antony Jacob said.

Optima Vital customers are given the option of taking e-opinion from Apollo Munich's panel of doctors, as and when required by them, he said.

"This is an inbuilt benefit and comes with all sum insured variants. Optima Vital offers the consumer lifelong renewal and shall terminate on first occurrence of any one of the defined critical illnesses. The entry age for the cover is 18 years, with maximum age of entry being 65 years. The policy also offers an income tax benefit," he added.

Optima Super is an aggregate high deductible plan that allows customers to enhance their sum insured coverage as per their need at a lower cost. Its customers do not have to cross the deductible limit at every claim incidence, but can aggregate all claims during a policy period over multiple hospitalisations to cross the deductible limit.

Apollo Munich is joint-venture between Apollo Hospitals Group and Germany-based reinsurance firm Munich Re.

UII launches revamped medicare policy

United India Insurance Co Ltd has launched all new family medicare policy with revised features. The new version provides for a remote medical second opinion from world’s leading medical centres for certain medical conditions.

The insured needs to contact the toll-free number provided by the company and a list of three world leading medical centres would be given to choose from for obtaining a second opinion. All details of present medical records would be collected from the insured and the medical second opinion would be provided within 10 working days, a statement said.

The revised policy has the sum insured options with a minimum of Rs.2 lakh and a maximum of Rs.10 lakh. For hernia and hysterectomy, the maximum sum has been increased to Rs.1 lakh. Also, the restriction of sum insured subject to maximum of Rs.4 lakh for claims in respect of illness or surgeries has been removed and full sum insured will be available for any major claim.

Of course, all these come with a small additional premium. Cashless access would be made available in all network hospitals and in PPN hospitals in PPB cities.

The insured is entitled to a no claim discount of three per cent after three continuous claim free years and for every subsequent claim free year subject to a maximum of 15 per cent.

Left slams FDI in insurance

 With the government deciding to increase the Foreign Direct Investment (FDI) cap in the insurance sector to 49 per cent just ahead of U.S. Secretary of State John Kerry’s visit, the Communist Party of India (Marxist) on Thursday described it as a “welcome gift” for the U.S. leader and a green signal to the “dodgy practices” that led to the global financial crisis in 2008.

Dwelling on the issue in the editorial of the latest issue of the party organ, People’s Democracy, the CPI(M) said the FDI cap in insurance was being raised to appease the U.S. and finance capital though the record of foreign insurance companies does not inspire any confidence as far as financial stability and proper coverage were concerned.

Referring to the 2008 global financial crisis, the CPI(M) said it starkly exposed the vulnerability of the financial sector in the United States and how people were defrauded by these companies and their dodgy practices to maximise profit.

“AIG, the biggest insurance company, was on the verge of collapse and had to be bailed out by the U.S. Government at a huge cost. Refusing to learn from this sobering experience, the volatility and vulnerability of the deregulated financial system is being imported into India’s insurance and financial sector.”

Pointing out that India’s life insurance sector was nationalised in 1956 after a series of failures and scandals in private insurance companies, the CPI(M) warned of a return to those days. “The risk of entry of profit-seeking foreign companies, investing in high-risk ventures and jeopardising the savings and interests of the people is real.”