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Saturday, 28 February 2015

Five health insurance resolutions to protect your family

Much has been said and written about the importance of having a health insurance policy. Many online forums and comparison sites provide ample information on the same. Yet, often we find people of different ages hesitant on buying a health insurance policy. Surprisingly, they are less concerned about the benefits of buying a policy but more concerned about getting benefits of equal value for their money.

Having the right health insurance is not only important but is essential to protect ourselves from medical emergency which can incur sudden expense.Below are the five health insurance resolutions that each of us should take this year with the determination to protect our near and dear ones. These steps will also help us in saving money on health insurance.

Start early. Stay smart

The common attitude towards buying a health insurance policy is that ‘it is not required now’ - especially if one is young. Don’t fall prey to such misconceptions! Purchase at least a basic health insurance policy as early as possible. Buying a policy at an early age results in less premium than the one purchased at a later age. Moreover, those who buy a health insurance policy at a later age receive less benefits and coverage due to age-related limitations, waiting periods and exclusions. Starting early would not only help you save money in long term but will also ensure adequate coverage for your health.

Evaluate your needs

‘How much cover do I need?’ is the right question to start with. Due to rising medical costs, having the right amount of sum insured for an individual and the family is of utmost importance. While evaluating your requirements, keep in mind to consider few factors such as age, gender, pre-existing diseases, individual/family cover, individual’s/family’s medical history etc. These factors will help you determine the right amount required for you and your family. 

Learn about your options and policy 

Be an informed customer. Before opting for a health insurance or an add-on cover, it is imperative to learn about the varied options available in the market. Make it a ritual to learn about different components of a product such as inclusive and exclusives, co-payment, claims process, long-term benefits etc. as these vary for products.Even if you buy a product without reviewing or exploring options, you can always do that during the ‘free-look’ period. The recent regulation on standardisation allows you to revisit your policy, make revisions or even cancel it within the given time frame. 

Know the ‘catch’ in cheap policies 

Often companies offer policies at a cheaper rate. However, you need to take a mental note of the fact that ‘cheapest is not always the best’.In order to provide cheaper premium rate insurers may provide benefits with cost-sharing agreement such as co-payments, deductibles, sub-limits etc. Don’t go by the cheaper rate. Instead, evaluate your requirements and buy one that suits you the most. 

Transparency is the best policy 

Getting the claimed amount is of greater importance and at times highly needed. However, if you don’t disclose all the relevant information, including your and your family’s medical history such as pre-existing diseases, your claim can be rejected. Thus, it is important to share all the required details with the company. Also, make sure that the insurance company or agent is sharing complete information with you. Lastly, while you must try to remain healthy, be smart and invest in a comprehensive health insurance plan. With the rising cost of medical facilities, don’t let a health issue burn a hole in your pocket.


Wednesday, 25 February 2015

Insurance companies may cull your Facebook, Twitter data to price a policy

Facebook and Twitter have spread happiness among people by transforming the way they exchange information about their holidays, birthday parties, and college reunions with the rest of the world. But the same medium have also landed many in trouble for innocuous comments that have ruffled feathers and in some cases even led to loss of jobs, thanks to the ease of communicating.

That combination of pleasant and painful experience of the medium could soon extend to the insurance industry. But in this case, the winners will be the companies, and individuals will be the losers.

How is that? If you are an active Facebook, or Twitter user posting most of your daily life, you wouldn't be able to hide your drinking, or driving habits. Insurance companies will follow your Facebook postings to learn how many days in a year you party. How rashly you drive your vehicle or how much you eat outside, especially junk food in restaurants such as McDonald's, would determine the premium you pay and so on.

Welcome the big data for Indian insurance. "Companies are investing in big data as they face pressure to perform," says Anurag Shah, founder of Aureus Analytics, an insurance-focused data analytics company funded by Rajan Anandan of Google India, and Arun Venkatachalam of the Murugappa family. "Insurance companies are leveraging data."

Many of the Indian insurance companies have been poor on profitability as they have struggled to improve revenues. Some of them have been waiting for the government to raise the FDI limit in insurance to tap capital. Now, with many companies such as Prudential ICICI and HDFC Life planning to tap the stock market, profitability has become the focus.

The more data they use to study an individual behaviour, the better they could do on the claims-settlement. When it comes to data on individuals not much is available with most of the country away from the mainstream financial services market.

Although the credit data from credit information bureaus have helped banks in reducing their exposure, it has not been of much help when it comes to insurance. Life Insurance Corp, the state-run near monopoly with almost three fourths of the market share, has been content with the historical analysis it did.

Because of its sheer size, its inhouse data base of historical claims helped it to prevent deterioration in profits. But rival private sector companies are not that lucky.

"Instead of relying only on internal data sources such as loss histories, which was the norm, auto insurers started to incorporate behaviour-based credit scores from credit bureaus into their analysis when they became aware of empirical evidence that people who pay their bills on time also are safer drivers," says a McKinsey report.

The study of data such as payment of bills is being extended to social media behaviour and even credit card spends will be factored in to sell a policy to an individual.

Insurance industry's plans on using big data to build its profitability is opening up numerous opportunities for entrepreneurs who want to do something similar to what financial services did for software outsourcing firms such as Infosys Technologies. Those who are equipped with the ability to understand data are seeing an upswing in their career prospects.

Muskan Gupta, a 27-year-old from the Indian School of Business, was recently hired at an above-industry average pay by a private sector insurer which has been struggling to make a mark in the Indian insurance industry.

"Anyone who loves numbers, understands the customer psyche and has capabilities of data management can get into the business of data analytics," says Gupta.

"Demand for analysts is booming." Analytics plays a critical role in blending all available data to design products which are appealing to customers and at the right price based on various parameters. This becomes crucial especially when the regulator has a restricted number of products by a company to just 3, or 4, in a year.

"Proper use of analytics can lead to 25-30% improvement in business performance," said Piyush Singh, managing director, financial services at Accenture. "Use of data will transform what insurers offer to their customers." At this point, 18 of the 23 private life insurers are profitable. Among the general insurers, things improved in the past few years with the regulator lifting controls on the pricing of policies.

Analysing big data may yield good results. But the question is whether India has the capacity to build such skills given its past record of falling behind in producing actuaries. In fact, the Insurance Regulatory and Development Authority had to search for four years to fill the post of head of actuary in the institution as there were not many actuaries.

"Marrying of analytical skills with technical skills is going to be a huge problem," says Bhavish Sood, research director at Gartner, a research firm. "There is very little dedicated course to fill the gap." Actuaries, who have been the first users of data, are few. In more than a decade of private insurance industry, India has produced just 74 actuaries.

"Marrying of analytical skills with technical skills is going to be a huge problem," says Bhavish Sood, research director at Gartner, a research firm. "There is very little dedicated course to fill the gap." Actuaries, who have been the first users of data, are few. In more than a decade of private insurance industry, India has produced just 74 actuaries.

It is not that the profession of actuary is not rewarding. An actuary is probably the highest paid in an insurance company, at times even higher than the chief executive itself given that he is indispensible. The average sale for an actuary in India is above Rs 1 crore. The salary of the chief executive of Kotak Life Insurance is Rs 1.8 crore, according to filings. But not many come forward to become an actuary because of the fact that it could take as long as 7 to 10 years to successfully complete the programme conducted by the industry's global gold standard Institute of Actuaries, UK.

Given the state of the Indian industry's needs, the Institute of Actuaries has come up with a certification programme that will help them analyse industry data, but won't be on par with actuaries. Nevertheless, companies could improve their profitability.

The most profitable of the private insurers, Prudential ICICI, is expected to be valued at $6 billion and HDFC Life is likely to be valued at $3 billion. These companies may not benefit much from the data big push, but others such as Future Generali and Aviva Life which could look for private funding, could be beneficiaries. "Most companies are in the investment phase and shareholders are looking to unlock value," says Sood. "Analytics can play an important role is improving market share when the nature of business is getting competitive."

Source: The Economic Times

Monday, 23 February 2015

Government to digitally map farms with satellite for crop insurance; proposal being discussed with IRDA

The government is preparing to deploy orbiting satellites to digitally map each farmland in the country, data from which will be used to provide tailor-made crop insurance cover to farmers. A senior government official told ET that a proposal in this regard is being discussed with the insurance regulator, Insurance Regulatory and Development Authority of India ( Irda).

Explaining the move, the official said the idea is to digitally map all of India's farming plots using GPS readings and offer farmers yield-based insurance products, which will cover their individual risks. At present, crop insurance mainly covers the loans taken by a farmer and not his farming activities.

"Satellite based estimation model is very important because of small farm sizes in the country," the official said. "Based on the imagery from the satellite, a vegetative index will be determined and after co-relating the data with yield for a particular crop, the yield of the individual farmer will be estimated to work out a tailor-made insurance cover."

A concept note on 'development of plot-level insurance' through satellite technology is being prepared, which will be discussed with all stake holders, the official added. The data will also be useful in providing vital agricultural knowledge inputs to the farmers. "Irda will work with insurers to develop a standard product that will be easy to market with terms of settlement to attract farmers," said another official aware of the deliberations, adding that working groups at state government level will be set up to chalk out a roadmap. The scheme will be first launched in select states before being taken up nationally in phases. "Discussions are on with Madhya Pradesh and Punjab. The implementation of this model can be initiated from the next rabi period," the official said. The government is also looking to run a pilot model, where in insurers will promote plot-level insurance with a target of around 500 acre per village.

The move is in sync with Prime Minister Narendra Modi's call for focusing attention on the health of soil in agricultural areas to boost productivity and bring about increased prosperity.

At present, the National Crop Insurance Programme provides for taking up pilot studies to explore the possibility of using modern technologies like remote sensing technology to supplement yield assessment through crop cutting experiments. 

Source: The Economic Times

Friday, 20 February 2015

IOB, Apollo Munich to offer health insurance plans to 35mn IOB customers

Indian Overseas Bank (IOB) and Apollo Munich Health Insurance announced that they are joining hands to provide specialized health and personal accident products to IOB’s customers. Through this arrangement, IOB will sell Apollo Munich’s products under the ‘GO HEALTH with an expert!’ campaign across the country in over 3,350 branches of the bank.

Apollo Munich will offer customized products with sum insured ranging from Rs. 3 lakhs to Rs. 10 lakhs to IOB”s customers. In observance with Apollo Munich’s uncomplicated product offering, IOB customers would be able to enjoy policies without any sub limits or copay clauses; inbuilt accidental covers, etc. The health policy offers  double sum insured with the same premium for claims related to listed critical illnesses  upto Rs. 5 lakhs  and an annual health check-up benefit worth of Rs. 3,500 for Sum Insured Rs. 7.5 Lakhs to Rs. 10 Lakhs. The health policy will be handed over to the customer on the spot in the respective branches of IOB itself.

Indira Padmini, General Manager –Retail Banking &Marketing, Indian Overseas Bank opined, “The health of our customers is of utmost importance to us – be it their financial or physical health. Health insurance is a great financial protection tool that will enable our customers to strengthen their financial portfolio. This partnership with Apollo Munich will provide our customers with innovative and specialized health insurance plans.”

The quality of healthcare available in India continues to improve every day.  These new techniques and procedures have better outcomes, but cost significantly more than earlier generation procedures. It may not be possible for customers to pay these expensive bills from their personal savings or through loans. This creates a ‘protection gap’ that health insurance is best placed to fill.       

Speaking about the bancassurance tie up with IOB, Mr. Antony Jacob, CEO, Apollo Munich Health Insurance said, “By partnering with Indian Overseas Bank under Stand Alone Insurance model, we aim to deepen our reach across the country. We have designed customised products for Indian Overseas Bank customers according to their needs. I am confident that Apollo Munich’s association with the Indian Overseas Bank will enable the bank to offer well researched, unique and customer friendly products to its customers.”


Tuesday, 17 February 2015

Tax-free medical expenses cap may be hiked

The government is reviewing the tax-free medical reimbursement limit, currently fixed at Rs 15,000 a year, besides looking at making it more attractive for individuals to buy medical insurance policies.

Sources said both the issues are being looked at ahead of the Budget with some indicating that there is a possibility that the limit on tax-free medical reimbursement from employers may be raised to Rs 25,000 a year, given the rising medical costs in the country.

Similarly, the government, which allows a deduction of Rs 15,000 a year for medical insurance premium paid for spouse, children as well as the policy holder, is looking at encouraging individuals to buy a higher cover. In case of senior citizens the limit is Rs 20,000.

The review comes as the limits were fixed several years ago and costs have gone up significantly since them. For instance, in the wake of rising claims, insurance companies have increased the premium on medical insurance on several occasions over the past few years.

There is also a view that medicine costs have increased and a Rs 15,000 annual limit on tax-free medical reimbursement often does not meet the hospitalization requirements. While getting admission in government hospitals is not an easy task given the pressure on beds, private hospital charges are very high, resulting in the limit being breached easily.

The encouragement to medical insurance is also aimed at reducing the pressure on state-run hospitals, while encouraging people to cover their risks. Often individuals buy insurance policies only to ensure that they are able to claim tax deductions and end up having lower than required cover for their family in case of a health emergency.

The BJP government has repeatedly said that it is against high taxation and wants to leave more money in the pockets of individuals to help increase investment and boost savings. The review of benefits for health spending is aimed at making the limits more realistic and in sync with current requirements.


Sunday, 15 February 2015

Buying medical insurance? 5 things to keep in mind

Thinking of buying a comprehensive health insurance plan? Smart decision. Go right ahead, but before you do so, it would help if you gain a thorough understanding about various aspects of medical insurance.

Buying health insurance can be a daunting, painstaking chore. But it is worth the while to put in some effort to understand its various features and go for the one best-suited to you and your family. It might make all the difference in case of a health emergency.

For this purpose, you need to answer multiple questions like: do you want individual insurance or group insurance; do you also want investment returns along with insurance; what diseases are covered, so on and so forth.

Here are five things to keep in mind before buying medical insurance:

1) Group insurance or individual insurance: Both types of insurances are available, but you need to figure out whether to opt for an individual or a group/family policy. If you are buying for a family, take proper advice on whether you would like to go for individual sum insured or a floater sum insured. A floater sum insured policy is more cost-effective as compared to an individual sum insured, but its coverage may not be enough if the total amount insured is low. Also, remember, premiums for the elderly are higher. This may drive up your premium amount for the floater policy. In such a case, it may be more practical to have a separate policy for the older members of the family.

2) Policy coverage: It is always better to read the fine print and understand what ailments are covered or not covered under your medical insurance. This will help save you from nasty surprises and bitter disputes with the insurance company later in case of any dispute. Also, remember, your past medical health history is not a reflection of what might ail you in future. So, do consider coverage for unexpected health scenarios. Ensure your insurance covers critical illnesses, accident-related injuries, and hospitalization/surgery expenses before buying medical insurance. If you want to lower your premium, you could look at excluding rare diseases and treatments like cosmetic surgery, maternity-related expenses or injury from adventure sports for which you may not require a cover.

3) Understand the premiums: The costs of healthcare services are rising exponentially every day. This makes it important to have a comprehensive health insurance cover so that timely treatments could be afforded. However, before buying a medical insurance plan, it is important to compare costs with the coverage and total insurance sum provided. It would be best to have a plan that offers comprehensive coverage at a reasonable cost. Don’t just select the lowest-priced plan; do take into account what type of expenses, diseases and treatments are covered by the policy and then make a comparison with policies offered by other companies.

4) Cashless option: To secure a hassle free policy, do look up what cashless services the insurance provides. For example, when you get hospitalized, you could get the treatment by just showing your medical insurance card. You would not have to pay any money. However, for this service, the insurance provider should have tied up with a wide coverage of hospitals. Otherwise, you would not be able to use the cashless service, but ask for a reimbursement later, which often takes time.

5) Employer-provided insurance: Do check out whether your employer has extended any insurance cover. There could be chances that even if you and your spouse are covered by the employer’s group health insurance, you may still need an individual health insurance policy. This could be because the amount of insurance provided by your employer may not be adequate.


Tuesday, 10 February 2015

Tata AIG General Insurance launches ‘Drive Safe’ app

TATA AIG General Insurance Co. Ltd. has launched Drive Safe, a mobile application based on the telematics technology to help customers monitor their driving skills on the road. The Drive safe app is specially designed to showcase the driving patterns of drivers with respect to speed, location and time, in addition to incorrect breaking and acceleration events, undertaken in case of emergencies or due to carelessness. It also assesses the distance travelled and his/her driving behaviour. Going forward, TATA AIG General Insurance plans to align this with their auto insurance premium.  

The app gauges the driving skills on five parameters - Smoothness, Pace, Anticipation, Calmness and Braking. A special feature of the Drive Safe app is that it shares a score for every journey completed, which is calculated on a scale from 1 to 5 – 5 being the highest and 1 being the lowest score. A detailed summary is given after the customer completes 400 kms.   

The recording is done through a mobile application, which can use the GPS functionality of the phone to record the above movement and transmit data back to the server. The data being recorded is then analyzed on various factors and a driving score is given to the user. Currently, this technology and concept is in use in developed countries like US and Europe. The Drive Safe app is currently available only on Google Play Store.  

Commenting on the launch of the Drive Safe app, Madhukar Sinha, National Head - Personal Lines, TATA AIG General Insurance Company Ltd. said, “We have always been a technologically driven organisation that believes in continuous innovation of products to suit our customer needs. The Drive Safe app is an example of such innovative technology being churned out at our end, besides being a unique step taken to ensure customers stay safe on the road”.


Thursday, 5 February 2015

New India Assurance offers 3-year bike coverage

The law states that it is mandatory for every vehicle in the country to posses a valid insurance coverage. Till now vehicle owners were required to renew the policy on an annual basis, and most often motorist would forget to renew them. In order to make things better and provide long term coverage, country's leading insurer New India Assurance has been working on providing a three-year insurance coverage for two wheeler owners. The company is yet to receive a final approval from insurance regulator for such product.

The new policy in-work is expected to reduce the number of uninsured vehicles on Indian roads. Speaking more on the occasion at the company's third quarter results announcement, G Srinivasan, Chairman, New India Assurance, said, “We will be launching this policy in a few days and the pricing will be announced at the time of the launch.” the company reported a net profit of about Rs. 996 crore which was indeed up by about 42% in comparison to the previous year.


Monday, 2 February 2015

Health insurance: Disclose all facts correctly

Having health insurance is not an option anymore — it is a necessity today with rising medical costs. Yet, adequate care is not taken while buying a health insurance — a product that is so critical. Insurance claims, at times, get rejected also because the policyholder fails to provide all adequate information — sometimes intentionally, and most of the times, out of ignorance.

The business of insurance is based on the doctrine of utmost good faith, which requires that the party seeking insurance discloses all relevant personal information. This means if you are applying for a health insurance, you are required to correctly disclose all your lifestyle and occupation-related information and any health problems you or your family members may have had. (In the same token, the insurance agent selling the coverage to you must disclose all the critical information you need to know about your contract and its terms.) 

The seeds of a potential rejection could be sown at the time of filing the insurance form. Apart from understanding the product, its span of coverage and inclusions/exclusions, it is essential that you fill the application form yourself instead of outsourcing the job to your insurance agent. Just signing the form and expecting the insurance agent to do the rest can prove costly. Remember, when you sign the form, you are declaring that you have understood all policy features and its terms and conditions. 

The declarations in the application form are the basis on which the insurance companies underwrite policies, that is, assess the risk and calculate the premium to cover that risk. When you file for a claim, the insurer checks the authenticity of these declarations. Furnishing of incorrect information or suppression of facts can be a cause of rejection. Let’s look at some crucial information that must be disclosed in the proposal form for avoiding surprises at the time of claims. 

Personal health: The first parameter that comes to our mind when we mention health insurance is the smoker/non-smoker criterion. Logically, addictive substances such as tobacco and alcohol impact health adversely. So, if you are a tobacco user, insurers must know. 

The premium depends on the frequency, the type of consumption, the quantity consumed and the period for which you have been addicted. Depending on the underwriter’s assessment, the insurance company can take a call on whether to extend the cover to such applicant and at what premium. You cannot get away if you have quit smoking years ago. Even after you quit smoking, the effects of smoking take some years to go away. You must disclose all the details to the insurer, whose assessment will be based on factors like duration for which you were addicted and the effect the habit has had on you. 

Medical history: This is carefully scrutinised to assess the long-term costs of financing healthcare. If an applicant has a history of illness, it must be disclosed upfront. While disclosing correct medical history means higher premium, there will not be any surprises at the time of claims. 

Family history: Not only your own, but your families’ medical history is taken into account by the underwriter before extending an insurance coverage to you. A critical illness of an immediate family member could make an insurance company wary. This is because some illnesses can be hereditary. They consider such cases carefully and include this point during the risk assessment process. However, all family histories need not have a negative impact. Only certain types, especially genetic, are viewed as bad risk. So are cases where both parents are suffering from the same disease and disorder, and therefore there is high probability that it can impact the life of the individual as well. 

Occupation: Occupational risk is a key measure to evaluate wellness and risk of accident. People in sedentary jobs are more prone to cardiovascular diseases. So, the nature of work is important for risk assessment. The premium also depends on the occupational details. The basic premium is calculated considering normal risk. Any increased risk is covered by additional premium. There is additional premium for individuals in hazardous occupations or those who have riskier hobbies. The insurer can even refuse them coverage.

Source: TribuneIndia

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