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.
Source: Tribuneindia.com
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
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