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Sunday, 29 March 2015

For Indians, It's Family First

More and more Indians are starting young and purchasing Health Insurance for their entire family

It is a widely known fact that we Indians have close attachment to our families. We have close bonds with our loved ones and don't hesitate to invest for their well-being. Now, a new study has revealed that more and more Indians are buying health insurance for their entire family. Not only this trend has witnessed a sharp increase but also the buyers (average age 32 years) are starting young. The findings were published in the Max Bupa Health Insurance Pulse 2015.

This first of its kind multi city study was conducted to understand how health insurance is perceived, bought and utilized in India. The study conducted among 1500 plus respondents in leading metros like Delhi, Mumbai, Chennai and tier 1 and 2 centres like Hyderabad, Punjab and Rajasthan states that 6 out of 10 Indians prefer family health cover as against 4 out of 10 for individual cover.

40 per cent people buy Health Insurance due to rising healthcare costs and over 30 per cent feel that their employer provided health cover is insufficient. Further, comprehensive coverage for multiple diseases and protection against lifestyle and critical illnesses are the key reasons for purchase, affordability is the least important. 32 per cent of the respondents admitted they have not read their policy documents; trust on agent cited as the key reason for not reading terms and conditions.

Among the metros, Mumbai demonstrates better understanding of Health Insurance with 66 per cent Mumbaikars aware of the distinction between life and Health Insurance, as  against 36 per cent Delhiites  and 39 per cent people in Chennai. Doctor's advice triggers Health Insurance purchase for 46 per cent respondents in metros as well as tier 1 and 2 cities.

"Health Insurance consumers are evolving from being price conscious to being value conscious with majority of them preferring family health plans over individual coverage and opting for a sum insured of is Rs 6-7 lakh. Also the average age of Health Insurance owners has reduced to 32 years across metros and non-metros. Most of the owners still feel inadequately protected as cost of hospitalization and incidence of illnesses across age groups is on the rise," said Anika Agarwal, Head, Marketing, Max Bupa.

In terms of gender related findings, an increasing number of women are becoming the sole decision makers in buying Health Insurance (55 per cent), however almost two third of them are not aware that new born and in-laws can be covered under Health Insurance.

Friday, 27 March 2015

Indians are more concerned about Health Insurance: Max Bupa study

The study conducted among 1500+ respondents in leading metros like Delhi, Mumbai, Chennai and tier 1 and 2 centres like Hyderabad, Punjab and Rajasthan states that 6 out of 10 Indians prefer family health cover as against 4 out of 10 for individual cover.

Indians are more concerned about insuring the health of their loved ones than their own, reveals Max Bupa Health Insurance Pulse 2015. The first of its kind multi city study was conducted to understand how Health Insurance is perceived, bought and utilized in India. The study conducted among 1500+ respondents in leading metros like Delhi, Mumbai, Chennai and tier 1 and 2 centres like Hyderabad, Punjab and Rajasthan states that 6 out of 10 Indians prefer family health cover as against 4 out of 10 for individual cover. More than two third of those planning to buy Health Insurance wish to cover their children (70%), followed by the spouse (66%). Nearly 30% of respondents who are planning a family also think of buying Health Insurance. The decision regarding Health Insurance purchase is driven by the family with the spouse as the strongest influencer, which shows that Health Insurance is no more just the bread winner’s call.

More than half of the owners (54%) self-initiate the purchase process. However, only 40% Health Insurance policy renewals were self-initiated by the owner, which shows that people don’t understand the long term benefits of Health Insurance. The study also brings into focus the shift in age groups of Health Insurance buyers, with 32 years emerging as average age of Health Insurance purchasers across cities. Contrary to popular belief, tax planning and age are not the only triggers for the purchase of Health Insurance in India. Doctors’ advice (50%) is a key reason for Health Insurance purchase, followed by rise of lifestyle diseases (33%), tax planning (31%) and age (31%). Furthermore, in addition to hospitalization, consumers also seek day care treatment (41%), loyalty or renewal benefits (40%) and new benefits like maternity (34%) as significant features in their Health Insurance cover. Amongst purchase channels, more than half of the people purchase or intend to purchase Health Insurance from an Agent 58% which clearly shows the dependency and trust on agents. Banks also emerged as a preferred channel of purchase in the metros.

The consumers with evolving expectations are now looking at holistic health benefits and comprehensive coverage, rather than just the Health Insurance premium that they pay. 70% respondents across metros and non-metros agree Health Insurance is more important than life insurance which shows the increasing awareness about the need for adequate health coverage. Increase in awareness is leading to rise in expectations from the health insurers, with 69% of the people expecting their health plans to cater to all their health care expenses. Medical inflation and growing incidence of lifestyle diseases has triggered an increase in the sum assured with a realization that a health cover of Rs. 2-3 lakh will prove insufficient in the future. The study reveals that amongst all 6 cities, the average sum insured is Rs 6, 25,000 and the average annual premium paid is Rs12,000.

“Health Insurance consumers are evolving from being price conscious to being value conscious with majority of them preferring family health plans over individual coverage and opting for a sum insured of is Rs. 6-7 lakh. Also the average age of Health Insurance owners has reduced to 32 years across metros and non-metros. Most of the owners still feel inadequately protected as cost of hospitalization and incidence of illnesses across age groups is on the rise. We at Max Bupa, have also observed that the most common sum insured individuals opt for is Rs5 lakh and Rs10 lakh in case of a family cover. In fact, there has been a two-fold increase in the claims from the segment with a ticket size of over Rs 10 lakh since last year. Although there has been a significant increase in awareness amongst people, category understanding remains low with a significant section of the country still plagued with misconceptions such as Health Insurance only being relevant for the elderly or that it is too complicated with several hidden clauses,” said Anika Agarwal, Head-Marketing, Max Bupa.

However, 40% lacked clarity on the process of increasing their sum insured through top ups and 40% are not aware of the difference between cashless and reimbursement claims. Over one third of Health Insurance owners admit that they have not read their policy documents. 60% attribute trust on their agent as the most important reason for not going through the documents.

While 64% of Delhiites and 61% of the respondents from Chennai confuse life insurance for Health Insurance, only 34% Mumbaikars are well aware about the difference. This clearly states the lack of category awareness and understanding amongst leading metros. While 95% people in Mumbai give preference to Health Insurance over life insurance, 90%, people in Punjab and 75% people in Hyderabad, prefer Health Insurance to Life Insurance as compared to only 53% in Delhi. This shows that more importance is attributed to Health Insurance in non-metros as compared to some leading metros. The study shows an increasing demand from people living in tier I and II cities to be optimally insured,  where Hyderabad recorded the highest average sum insured of Rs 8,70,000,  with Rajasthan and  Punjab at Rs.4,50,820 and Rs.6,80,270 respectively. Among the metro  cities, Delhi feel the most dissatisfied with their current health coverage with 72% of Health Insurance owners in city saying that their health policy is not enough for their future health needs. 80% of the Health Insurance owners in Mumbai and 54% in Chennai consider themselves to be adequately protected.

In terms of gender related findings, an increasing number of women are becoming the sole decision makers in buying Health Insurance (55%), however almost two third of them are not aware that new born and in-laws can be covered under Health Insurance.


Wednesday, 25 March 2015

6 Myths Of Health Insurance Assumed To Be True

Generally, most of the world’s population hesitates to buy health insurances due to some misconceptions. These misconceptions gives rise to confusions over what to buy or how to use a product and thus, it ends up being costly.

But the Finance Minister in his recent budget session has announced many reforms related to health insurance to encourage insurance seekers to choose the best possible insurance that would suit them. The deduction for claiming health insurance premium has been increased up to Rs. 25000 for individuals and Rs. 30000 for senior citizens.

The Economic Times has set out to find the worst sources of the confusions based on certain myths. Here are such myths which are considered to be true:

Myths1: The first myth is about certain misconceptions regarding employer mediclaim. If you have already been a beneficiary of corporate group health insurance, then you should never to claim for another individual insurance. In order to avoid excessive premium rates and decrease the burden, employers often choose to remain confine to their specific and small cover.

Planning to seek cover at the time of retirement will prove to be very expensive. It might not also be helpful at the worst health situations. Even it is wise to be aware of the fact that when your employer medic aim will be available to you.

Myth 2: Smokers and AlcoholicsThere was a dilemma among the smokers and alcoholics that they might be exempted from seeking out health insurance policy for themselves. But this is not true. As they are most vulnerable to health hazards, insurance companies have put their steps forward to offer health insurance to such set of people.

They have to undergo through a stringent health examination in order to qualify the benefits of the insurance and even they are imposed with higher premium as they are prone to high risk in health disorders.

Myth 3: Some people think that they don’t need to seek a health insurance if they are fit. But this is a misconception. Though you may be healthy but health hazards always never come with providing prior symptoms, they can arise all of a sudden.

Unforeseen health hazards like seasonal disorders (dengue, malaria, swine flu) or accidents may attack at any time. Even with the exponentially growing medical costs, it is very difficult to cope up with your finances. So, it is wise to take necessary steps before time.

Myth 4: Another misconception about insurances is that often people feel that they will be offered with the insurance facility only if they get hospitalized, which is a wrong concept. With the adverse effect of technology, there have been vast improvements in the health sector.

Earlier patients used to be hospitalized after a surgery but now days with the advance technology and medical treatments patients with minor operations are discharged within few minutes. Health insurance companies cover such hospitalizations also and even they cover doctor consultation charges too.

Myth 5: Some people think that they can get their work done as soon as they get a health cover, but it is not true. There are certain strict rules under insurance policy which prohibit insurance claims during the first 1 to 6 month.

You should be careful and honest in providing your details while filling up the form because if you are found to mislead any information or hide any health details to your issuer then, your application may get rejected at that moment.

Myth 6: Be aware of the promotional advertisements presented by these insurance companies. They may highlight their policy by claiming best medical facilities by co operating with 5000 hospitals.

There are chances getting drowned if you weigh the merits of policy by just considering the procedures covered by the company. Instead you should read the terms and conditions carefully to understand the depth of their publicity.


Sunday, 22 March 2015

Which type of life insurance plan should I buy?

Life insurance industry in India has come of age. You can expect comprehensive solutions at very cost effective premium rates. There are different types of insurance plans available for different profiles of people. It is of critical importance to understand the various types of insurance plans first, and then do some research on the basis of your demographic and income profile, risk appetite, requirements and expectations.

Broadly, life insurance plans in India come into five types:

  • Term insurance plan
  • Whole life plan
  • Endowment plan
  • Money back plan
  • Unit linked insurance plan
  • Types of Life Insurance Plans

Term insurance plan: As the name suggests, this type of life insurance plan remains valid for a particular term. You have to pay premium amount in order to get yourself covered. The premium paid should be treated as an expenditure as this type of life insurance neither generates any returns nor you get it back in any form.

Whole life plan: Under this plan, you can get life insurance coverage for lifetime. The advantage is that you do not miss life insurance for any period. Accidents happen when you least expect them. If you are uninsured even for a negligible period, it may turn out to be a big blow for your family later.

Endowment plan: These plans can also act as great savings tools. You get life cover during the tenure of the policy and get all the premium paid back, along with added benefits like bonus, once the term is over.

Money back plan: Under this, you get your investment in premium back over a period of time. The amount is paid in regular intervals as determined in the policy.

Unit linked insurance plan: Under this plan, your premium is invested in both government securities as well as equity market. The returns generated by these plans are better than average, in the long term. These plans are popularly called ULIPs, an abbreviation for the same.

Annuities and Pension: These types of life insurance plans are aimed at retirement income. You get a combination of life coverage and pension income during retirement.

What if policy holder loses life?

There are plans which waive off premium payment in case a policy holder loses life during the policy tenure. Under some policies, insurance premium is paid by life insurance companies themselves for the rest of the period.

Waiver of premium is generally available with child plans, which helps in continuing the insurance policy even when the parent is unable to pay the premium due to the death or disability. Accidental death benefit is the benefit that provides the coverage in case of death due to an accident.

Dismemberment provides relief to the policyholder in case he loses his limbs or vision in an accident. Accelerated death benefits include benefits like terminal illness, dreaded disease and long term care. This kind of benefit provides protection to the policyholder when he has less time to live and/or needs money for getting medical treatments to live further.

Life insurance is no more a matter of choice but a necessity. Apart from protection, it is an investment tool as well. So go ahead, buy a life insurance policy and plan not just your finances but you life as well.

How about tax exemptions?

Section 80C of the Income Tax Act makes all the above-mentioned life insurance plans eligible for tax exemption. Until last fiscal year, the total limit of deduction was set at Rs 1 lakh. However, from the current fiscal, this limit is enhanced to Rs 1.5 lakh.

So, is it wrong if we say that there is no reason why you should not consider life insurance plan in your portfolio? In fact, it is advisable to get a combination of life insurance plans to generate better returns and balance your insurance portfolio.


Monday, 16 March 2015

Smart financial planning for your child’s future

As a parent, we are getting more and more ambitious with each passing year. Everyone wants his and her kids to excel in whatever field they choose their career. However, to pursue higher education and to expend on other related activities one needs to have funds. If you consider inflation, what you save today, may not be sufficient to fulfil even the half of the requirements after 10 years.

So you need to be thoughtful and plan effectively. Your capability to earn may not remain the same at a later stage of your life. Finding out the instruments that can compound your accumulated savings is the only way out to finance your child’s education in later years of your life. Moreover, your planning should take unknown unfortunate events into account as well, so that there is nothing which can obstruct your child to pursue his/her dreams. Another important point to note is to start investing as much early as you can. It gives more time to your investments to multiply and to give better returns.

Without waiting anymore, decide the best course of action right now. You can find one of the best options to invest your funds below and move forward with planning your child’s precious future.

Insurance: There are many options to consider when you are planning to have an insurance plan. Many say, you should have a child insurance plan, when you are saving for your child. This may prove to be right for some of you, when you need funds at a defined phase of life. However, you can look for other insurance options as well, like term life insurance plan and investment insurance plan.

Your requirements hold much importance when you are choosing an investment option. Therefore, go through various kinds of insurance plans and choose that is suitable in your individual case. For instance, if your budget is on the lower side, you can go for term plan. It lets you secure your family’s future at an affordable price. Many choose the term plan as they do not want to mix investment with insurance, so they prefer to invest the difference in the scheme they find lucrative. If you have a longer horizon, you can go for an investment insurance plan with aggressive mix of funds and adjust your risk accordingly.


Friday, 13 March 2015

How policy holders stand to benefit from new Insurance Law

The hike in the foreign direct investment (FDI) limit in Indian insurance companies to 49% from 26% is the most talked-about aspect of the Insurance Laws (Amendment) Bill 2015, passed by the Rajya Sabha on Thursday, but it has several implications for the policyholders, too.

For one, higher participation from foreign partners could translate into innovative products, better services and technology and improved customer service standards. "With more capital and domain knowledge flowing in, you could see more competitive products in the market. We could also see product innovations and better use of technology," said Vighnesh Shahane, CEO and whole-time director, IDBI Federal Life.

The new law also makes provisions for levying stiffer penalties, ranging from Rs 1 crore to Rs 25 crore for various violations, including mis-selling and misrepresentation. This could act as a deterrent against the rampant mis-selling menace which has resulted in many policyholders being duped into buying unsuitable products.

"The Insurance Bill says that insurers will be held responsible for mis-selling by agents. We have asked for clarification on this matter. It remains to be seen whether penalties will be levied even after the insurer has taken appropriate action against the erring distributors," said Arijit Basu, managing director and CEO, SBI Life.

Another clause that directly impacts policyholders relates to information provided by them at policy inception. Insurers will not be able to call a life policy into question after three years, on any grounds. Within three years, doubts can be raised in case of frauds. In such cases, the insurance company will have to give in writing the grounds on which it has based the decision.

A policyholder can prevent the repudiation if she is able to prove that she did not knowingly make a wrong statement, suppress material important facts or that necessary disclosures were made to the insurer. In case of a death claim, the onus of disproving the charge of fraud will fall on the nominee.

"It works in favour of honest policyholders as their claim settlement will become smoother," said Basu. However, many insurers also fear that fraud syndicate rings could exploit this clause to their advantage.

The new law has also paved the way for easier nomination process. At present, the nominees are not beneficiaries, but mere receivers of the proceeds. The insurance company is discharged of its legal liabilities once the payment was made to the nominee.


Monday, 9 March 2015

10 Questions to be asked while buying health insurance

Many people face the confusing proposition of choosing health insurance. To help wade through the piles of paperwork, here's a list of ten questions you should ask before picking a health care plan:
Q. What does it cover?
A. There are many types of health plans ranging from basic hospitalisation and critical illness to disease-based, top-up and daily cash. Buy a basic hospitalisation policy first. Others such as critical illness and disease-specific ones should be the next level of protection.

Q. Is it an indemnity or a benefit plan?
A. While indemnity plans cover hospitalisation expenses such as room rent, doctor's fee, etc, benefit plans pay a lump sum on diagnosis of the disease.

Q. What does it exclude?
A. You need to carefully read policy papers to know what is not covered by the plan.

Q. How long do you have to wait for the coverage to start?
A. It is important to understand what the policy will not cover, whether for a stipulated period or forever.

Q. What additional covers can you take with the policy?
A. If there is a need, additional covers such as international treatment, maternity and critical illness should be considered.

Q. Are there sub-limits?
A. You need to check expense limits for different heads such as room rent and consultant fee to avoid last-minute surprises.

Q. Are there any treatment-specific limits?
A. There can be treatment-specific caps which restrict the amount of money you can claim for a particular treatment even if the sum insured is big.

Q. Is the policy portable?
A. Ask your agent if the policy can be ported. This means you can transfer the policy to another insurer without losing continuity benefits such as coverage of pre-existing illnesses after completion of four years.

Q. How good is claim paying ability of the insurer?
A. Check the claim ratio of the insurer and compare it with that of its peers.

Q. Can you extend the coverage later?
A. As your responsibilities grow you may need to increase your sum insured. Ask your insurer as to what extent it can be done.

Source: businesstoday

Wednesday, 4 March 2015

This women's day opt for special health plans

Politics, work places, education or manufacturing units, women are breaking the glass ceiling and seeking equality in all walks of life. But differences exist, especially with regards to the health issues that women wrestle with. Illnesses such as cervical cancer, breast cancer, arthritis, burns and fallopian tube cancer are far different from what men face.

With the finance minister announcing enhancement of the medical insurance exemption limit to Rs 25,000 for general and Rs 30,000 for senior citizens, we decided to take a sneak peek at the health insurance options available for women in India.

Fewer women opt for health insurance in India as per the Irda Insurance Awareness Survey Report released in 2012, which states, "The male female ratio among those having health insurance are 70:30 for government, and 67:33 for private."

But the chances of women being hospitalised vis-à-vis men aren't too different. Somesh Chandra, chief operations officer & chief quality officer, Max Bupa, says, "We have registered a competitive number of claims filed by women and men… Changing lifestyle and increasing stress levels among other factors have exposed women to growing health issues including critical illnesses."

Going by the claims history witnessed by general insurers in the country women are prone to heart diseases, bone disorders, cancer of varying kinds and diabetes. If the Insurance Bureau numbers are to be believed medical inflation stands at 15-18%. Hence, getting a health cover is essential.

Though not many different women-specific health insurance plans are available, critical illness offerings catering to women are being offered by select players.

The good news is that insurers are no longer dreaded by the pregnancy related disorders, which come solely in women's share. Today certain general insurers are covering maternity-related medical expenses, which were hitherto excluded under health policies. Health plans such as ICICI Lombard's Health Advantage Plus, Royal Sundaram's Total Health Plus, Max Bupa's Heartbeat and Health Companion plan, Apollo Munich's Easy Health and Star Allied and Health Insurance's Star Wedding Gift Health accept maternity claims.

Apart from these plans, there are critical illness plans offered by Tata AIG General Insurance and Bajaj Allianz General Insurance and a critical illness rider offered with life insurance policies of Aegon Religare Life Insurance. These offer benefits upon detection of 8-11 women-specific diseases.

Unlike a hospitalisation or mediclaim cover, under a critical illness cover the insurer makes a lumpsum cash payment on diagnosis of any of the critical illnesses listed in the insurance policy. You do not have to get hospitalised or show medical bills to claim under this policy. The claim is payable the moment any critical illness is diagnosed and none of the exclusions under the policy apply.

Bajaj Allianz's Critical Illness Cover for Women pays a lumpsum benefit when a policyholder is detected with breast cancer, ovarian cancer, vaginal cancer, cervical cancer, burns, uterine/endometrial cancer, fallopian tube cancer, and paralysis/multitrauma.

There are other implications of a health problem such as loss of job, which too are covered under the plan. But there is a restrictive period of three months for availing this benefit. Additionally, congenital disability benefit and children's education bonus are provided under the policy. An amount equal to 50% of the sum assured will be payable under the plan on the birth of the child with any one or more of the congenital disabilities -- Down's syndrome, Congenital cyanotic heart disease, Tracheo-esophageal fistula, Cleft Palate with or without cleft lip, Spina bifida.

The benefit is paid only if the child survives 30 days after being diagnosed with the disorder. This benefit will be available for first two children only and will not be available if the birth of the child occurs after the proposer attains the age of 40 years.

The Tata AIG Wellsurance offers a higher benefit when it comes to cancer detections. The benefit offered for cancer is double of that offered for the other 10 illness. Apart from cancers, the Tata AIG Wellsurance Women policy covers total blindness, major organ transplant, major burns and even cosmetic reconstructive surgery recommended after accidents and burns.

The diseases common to men and women such as paralysis, first heart attack, kidney failure, multiple sclerosis, stroke, coronary artery bypass grafting are covered under the Tata AIG plan, but not under the Bajaj Allianz plan (except paralysis).

One must note the conditions under which the policy benefits would be nullified. For instance, Bajaj Allianz says that the "Loss of Job" benefit would not be paid if the policyholder opts for voluntary resignation from service.

Also, all the critical illness policies have a survival clause, wherein the policyholder is paid the benefit upon detection of a disease only if she survives for 30 days after discovery of the illness. The company excludes diseases detected during the first 90 days of the policy period. This three-month waiting period is not applicable when it comes to accident cases.

If you have a family history of the diseases covered by women-centric plans, be ready to pay a higher premium of 20-25% and serve a longer waiting period.

Chandra suggests, "To protect and guard against rising medical inflation, women should buy a health insurance policy early in life, preferably before they turn 30. This is beneficial as they can serve the waiting period at a much younger age and utilize their health cover when they need it." He adds that women should review the coverage needed every 3-4 years especially after events such as marriage, children increasing dependency of aging parents and the likes.

Women opting for these covers also gain access to value added benefits such as free health helpline, discounts at health and wellness centers and health check-ups.

So this Women's Day stop ignoring your health and get an optimum health cover to be ready if the need arises.

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