Month: July 2021

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Insurance

What is Loss Ratio in Insurance?

What is Loss Ratio in Insurance?

The loss ratio in insurance indicates how financially stable an insurance company is. The loss ratio represents the ratio of losses to the premium earned. In simple words, it is a comparison of how much a company spent while settling claims and how much it earned from customers. Insurers also use the loss ratio to determine the premiums of future policies.

In the loss ratio, the losses include paid insurance claims and adjustment expenses. The formula for loss ratio is insurance claims paid plus adjustment expenses divided by the total earned premiums. The three parts of this formula are:

  • Insurance claims paid: This is the amount the insurance company has spent directly on claim settlements. This includes money spent on the repair of damaged goods or property, cash settlements, etc.
  • Adjustment expenses: This is the money that the company has spent on investigating and adjusting claims.
  • Total earned premiums: This is the sum of all the premiums that were paid by the company’s customers.

Types of Loss Ratios:

  1. Medical Loss Ratio: This is the amount of premium spent by the health insurers towards activities and claims that improve the quality of care.
  2. Commercial Insurance Loss Ratio: In order to avoid increased premium and cancellations, a business with commercial property and liability policies should maintain a proper loss ratio.

What is the purpose of the loss ratio?

The loss ratio gives an estimate of how much profit an insurance company has made. An insurance company will be able to make money and stay solvent only when it pays out less than what it collects. This means that the company will make a profit if the claims it pays are less than the premiums it collects.

If a company is constantly paying out high proportions of premiums in claims, it could get into financial problems. It would make the company lose its capital, in turn making it lose its capacity to pay for future claims.

A high loss ratio could mean that the company is facing financial problems. For instance, If the insurance company with which you have an insurance policy has a higher loss ratio, it could mean that the insurer might raise the premiums.

What is a good loss ratio?

Though it is common for loss ratios to fluctuate every year, it is still advisable for insurance companies to aim for a loss ratio that is in an acceptable range. For instance, generally, an acceptable loss ratio is between 40%-60%.

As the loss ratio fluctuates from year to year, insurance companies often look at it in 5-year chunks. This allows them to get a wider view of the company’s performance and take measures accordingly.

Different types of insurance have different loss ratios. Some types of insurance may have a higher loss ratio than others. For example, health insurance will have a higher loss ratio than property and casualty insurance.

The loss ratio in insurance is important in determining how well an insurance company is doing. It helps insurers to get an insight into their company. But it is often combined with the expense ratio to create the combined ratio. This combined ratio is a measure that depicts the company’s overall profitability.

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What is Fidelity Insurance?

What is Fidelity Insurance?

It takes a lot of effort to make a business succeed and it is no one man’s play. The cooperation, coordination and trust amongst the team members lies at the base of every successful business. But the dishonesty of even one employee might cause a huge loss to the business and may lead to its downfall. Therefore, even after selecting the right team, it is necessary to be prepared for any such instances. Fidelity Insurance is one such precautionary measure against fraudulent employees every business must take.

What is Fidelity Insurance?

Fidelity insurance is an insurance policy that offers protection to businesses against business losses caused by employee fraud, theft or dishonesty. It also covers losses caused to customers due to such dishonest employees. The amount of premium for this insurance premium amount is determined by factors like the number of employees, risk exposure and nature of business.

Every business which has employees that handle money processes is eligible to take up fidelity insurance such as, restaurants, cafes, retail businesses, etc.

The types of fidelity insurance plans

The various types of fidelity insurance plans available are:

1. Individual policy: Under this, the cover is limited to the losses caused due to fraud or dishonesty of an individual employee.

2. Blanket policy: This policy covers a group of employees without mentioning the name of the guaranteed person.

3. Collective policy: Under this policy, coverage is provided against the losses caused due to the fraudulent acts of a group of employees. The coverage under a collective fidelity insurance policy is decided based on each employee’s position and responsibility.

4. Floater policy: One amount of guarantee is given across a group of employees. To avail of this cover, the group should contain at least five employees.

What are the benefits of Fidelity Insurance?

The benefits of this policy are as follows:

  • It helps in covering up the losses caused by dishonesty or faulty practices of the employees.
  • It provides coverage for the loss of essential business assets like property, technological tools, important documents such as stock papers, etc.
  • It protects the interests of the customers and provides coverage for the losses faced by them too.It prevents financial crises that might occur in the business resulting from the misconduct of a few dishonest employees.
    It helps in saving the reputation of the business in the market that might otherwise get affected
  • due to the incident.
  • It also ensures transparency and accountability in supervision within the business.

What is covered by Fidelity Insurance?

The coverages offered under fidelity insurance are as follows:

  • Theft committed by employees. This includes complaints of stolen valuables made by customers and also stolen assets.
  • Any dishonest act by employees such as embezzlement or misuse of employment capacity for personal gains.
  • Any act of misuse or forgery of the company’s money by employees.

The coverage that is offered to the insured company is limited to:

  • The total sum that is specified in the policy.
  • The amount of guarantee that is stated against the employee’s name or against the relevant category/group of employees that are mentioned in the policy schedule.


What is not covered by Fidelity Insurance?

A fidelity insurance policy does not cover certain situations. Some of these exclusions are:

  • Any loss that happens due to willful acts or negligence by the insured, employee or any person acting on their behalf.
  • Trading losses, damages in the goods and losses which are not caused due to fraud or dishonesty.
  • Losses arising due to relaxation and non-observance of precautions and protocol.
  • More than one claim filed against an employee.
  • Losses occurring anywhere outside the territorial limits that are mentioned in the policy.
  • Losses caused due to hiding facts that affect the risk at the time the policy was implemented.
  • The loss that is detected a year after the employee has terminated his or her service.

What is the claim process for fidelity insurance?

Any business wanting to avail of fidelity insurance should have proper records and details. The business should fill in the proposal form and give all the information and additional documents required. For instance, a company seeking fidelity insurance has to provide a detailed list of departments and employees to the insurer. Every important detail should be disclosed to the insurance company.
The claim process for fidelity insurance is easy. The steps are as follows:

Step 1: The insured business should immediately intimate the insurer about the claim incident. Based on the situation, the business should also take quick disciplinary action against the employee.

Step 2: The claim documents must be submitted along with the relevant proofs of the act of infidelity and loss.

Step 3: The insurer will hold a forensic audit. If the claim is approved, the auditor will verify and approve the claim amount. If it is rejected, the insured company will be informed. The reason for rejection will also be mentioned.

If the claimant is dissatisfied with the solution provided, they can take the matter to the court of law.

What are the documents required for a fidelity insurance claim?

The documents required for fidelity insurance claims are:

  • A duly signed and filled claim form.
  • A xerox of the fidelity insurance policy document.
  • A detailed description of the employee’s duties
  • Private reference of the dishonest/ fraudulent employee.
  • An Internal investigation report
  • A Police FIR regarding the theft or embezzlement.
  • Auditor’s report estimating the loss
  • Details about the date of discovery of the loss.
  • Statements from witnesses.
  • Proof of loss along with evidence of forgery or identity theft.
  • Evidence such as invoices or receipts of stolen property, if any.

The coverage offered by a fidelity insurance policy can be different for every business. The coverage offered will depend on the requirements of the business.

The cover can be availed for all employees or even particular departments. There are various types of fidelity insurance policies that are offered by insurance companies today.

That is why businesses who want to opt for fidelity insurance should conduct proper research, both offline and online before making a decision.

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What is Ayushman Bharat Yojana? (Benefits, Registration & Eligibility)

indian flag

What is Ayushman Bharat Yojana? (Benefits, Registration & Eligibility)

Ayushman Bharat Yojana was the flagship program launched by the Government of India in the year 2018. It aims at making healthcare services accessible and affordable for the low-income group of people. Let’s understand this scheme in a little detail.

What is Ayushman Bharat Yojana?

The Ayushman Bharat Yojana also known as the Pradhan Mantri Jan Arogya Yojana (PMJAY) has been recognized as the biggest healthcare scheme all around the world. It was announced by Prime Minister Narendra Modi on 23rd September 2018. It is a national health insurance scheme that is designed to offer coverage and make the best healthcare services available to Indians who are economically disadvantaged.

It aims to cover approximately 50 crore Indian citizens and provides average coverage of Rs.5 lakhs per year to all the beneficiaries. The scheme covers most of the costs incurred in the medical treatments including, the costs of medicines, diagnostics and even pre-hospitalization expenses.

The beneficiaries who come under this scheme get an e-card. This card can be used to avail cashless services at any of the empaneled hospitals around the country.

What are the benefits of Ayushman Bharat Yojana?

There are various benefits that this scheme offers. To list a few:

  1. A cashless facility is available for beneficiaries.
  2. It can be used by all family members, and there are no restrictions regarding age or gender.
  3. It covers the cost of medical examination, diagnostic and laboratory services, consultation, medicine and medical consumables, food, and accommodation.
  4. The policy covers expenses from 3 days before hospitalization and 15 days after hospitalization.
  5. It covers the day-care expenses which are included within the insurance package.
  6. It provides cover for the pre-existing ailments which are included under the Ayushman Bharat Yojana.
  7. It covers transport costs of the beneficiary before and after hospitalization.
  8. It includes provisions for post-treatment care.

What are the critical illnesses covered under Ayushman Bharat Yojana Scheme?

Did you know that the Ayushman Bharat Yojana covers around 1,400 procedures along with all related expenses? Here are some of the critical illnesses that are covered under PMJAY:

  • Coronary Artery bypass graft
  • Skull base surgery
  • Anterior spine fixation
  • COVID-19
  • Double valve replacement
  • Prostate cancer
  • Carotid angioplasty with stent
  • Tissue expander for disfigurement following burns
  • Laryngopharyngectomy with gastric pull-up

The registration process for the scheme

Ayushman Bharat Yojana is a government scheme exclusively for the lower-income group people hence there is no specific enrollment process. The beneficiaries are selected based on the SEC 2011 and amongst the people that are a part of the RSBY plan although one can check their eligibility criteria through the following steps:

  1. Visit the PMJAY government website (https://pmjay.gov.in/) and click on the icon that says “Am I Eligible”.
  2. Enter your contact details and generate the OTP.
  3. Select your state.
  4. Now search with your name, mobile number, HHD number or ration card number.
  5. The displayed results will let you know if you’re eligible for the Ayushman Bharat Yojana Scheme or not.

Things Required to apply for the Ayushman Bharat yojana

Below mentioned is the list of documents and other details that are necessary for applying for this scheme:

  1. Identity proof and proof-like Aadhar card or Pan card.
  2. Details like mobile number, residential address and email address.
  3. Caste Certificate
  4. Income Certificate
  5. Documents stating your family status

How to download the Ayushman Bharat Yojana Card online?

To ensure cashless, paperless and portable transactions, the Ayushman Bharat Yojana Golden Card is issued to its beneficiaries. The card contains all the necessary details of the patient and is to be mandatorily presented in order to avail the facilities at the empaneled hospitals. By following these steps one can download the Ayushman Bharat Yojana Card:

  1. Visit the PMJAY website and log in with the registered mobile number.
  2. Generate the OTP by entering the “CAPTCHA CODE”.
  3. Choose the HHD code.
  4. Go to the Common Service Centre and provide the HHD code. They will check the code and other information.The Ayushman Mitra or the CSC representatives will complete the rest of the formalities and procedures.
  5. Pay Rs.30 and get your Ayushman Bharat yojana Card.

What are the eligibility criteria for the Ayushman Bharat Yojana?

The Ayushman Bharat Yojana Eligibility is made with pre-conditions to make sure that only the ones that need and deserve get to avail the benefits, underprivileged people of the society. It has been launched to cover the bottom 40% of the economically weaker sections of the country. It automatically covers destitute and manual scavenger families, living through alms, bonded laborers, primitive tribal groups. Given below is the eligibility criteria for rural and urban population:

1. Rural population

The scheme covers people who fall under at least one of these deprivation categories:

  • Families without an adult member in the 16 to 59 years age range.
  • Families without a male member in the 16 to 59 years age range.
  • Families without an able-bodied member
  • Families with a disabled member in the household
  • Houses with only one room made of Kucha walls and roof
  • SC and ST
  • Landless households who earn a majority of their income through manual casual labor

2. Urban Population

Urban households are classified according to occupation. The categories who are eligible for PMJAY are:

  • Domestic worker
  • Beggar
  • Ragpicker
  • Service providers on the street such as cobbler, street vendor, hawker
  • Sweeper, gardener, sanitation worker
  • Watchmen, Washer-men
  • Artisan, tailor, handicrafts worker, home-based worker
  • Plumber, construction worker, mason, laborer, welder, coolie
  • Driver, conductor, transport worker, cart or rickshaw pullers, helpers to drivers or conductors
  • Mechanic, electrician, repair worker, assembler
  • Peon in small establishment, assistant, helper, waiter, shop workers, attendant, delivery assistant

Who is not eligible for the Ayushman Bharat Yojana?

People are not eligible under the scheme if they:

  • Have a two, three or four-wheeler or a motorized fishing boat
  • Are government employees
  • Have 5 acres or more of agricultural land
  • Earn a monthly income above Rs. 10,000
  • Own refrigerators and landlines
  • Have mechanized farming equipment
  • Have decent built houses
  • Have a Kisan card with a credit limit of Rs. 50,000

You can register your grievances in the grievances section of the PMJAY website. Through this portal, you can also track the status of your grievances.

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Frequently asked questions about Ayushman Bharat Yojana?

  • Can I download my Ayushman Bharat Yojana Card through Digilocker?

    Yes. You can download your Ayushman Bharat Yojana card through Digilocker under the National Health Authority section.

  • How can I check my Ayushman Bharat eligibility?

    Please contact the government helpline number 1800 111 565 to check your eligibility. Alternatively, you can also visit their website and click on on the 'Am I Eligible ' tab.

  • What is the coverage provided under Ayushman Bharat Yojana?

    Coverage is ₹5 lakhs per eligible family per year.

  • Do I need to pay a fee to get the Ayushman Bharat Yojana Card?

    No, all eligible benefactors will get the card free of charge.

  • Are pre-existing conditions covered under this yojana?

    Yes, pre-existing conditions are covered under this scheme.

  • How can I find which hospital is covered under the Ayushman Bharat Scheme?

    You can find the complete list of empaneled hospitals here.

  • Are OPD charges covered under this scheme?

    No, they are not.

  • Where can I lodge a complaint?

    You can lodge a complaint using the Central Grievance Redressal and Management System.

    • Categories
    Health Insurance

    What is a TPA in Insurance? (Functions, Benefits & Role)

    What is a TPA in Insurance? (Functions, Benefits & Role)

    Many businesses across various industries outsource services from agencies or companies. The insurance industry is no exception. In the insurance industry, there are TPAs (Third-Party Administrators) which are licensed to make the processes related to insurance more efficient. As time has gone by, TPAs have become the problem-solvers for policyholders. Continue reading to know more about TPA in insurance.

    What is a TPA?

    TPA or Third-Party Administrator is a body that provides services such as processing claims and employee benefits. This body can be a company, an agency or an organisation. A TPA is licensed by the Insurance Regulatory Development Authority (IRDA). It can be independent, or it can also act as an entity belonging to the insurer.

    The TPA is appointed by the insurance provider. Hence, if the insurance holder faces any issues regarding the claim settlement, then he/she should contact the insurer and not the TPA. However, if there is a problem with the process of the claim, then the policyholder can reach out to the TPA.

    Why are Third-Party Administrators needed?

    The process of claim settlement is not effortless. Sometimes, there are many hurdles that need to be crossed. Having a TPA can reduce these hurdles. It can ensure that the services are delivered with greater efficiency. As a TPA cross checks documents and information, it increases the quality of the services provided. It also improves standardization procedures. TPAs have also increased the knowledge base of services such as healthcare services. This has allowed for greater penetration of health insurance.

    TPAs also establish protocols to carry out the investigation faster and reduce unnecessary delays. This minimizes the expenditures. Along with that, TPAs are also needed to pave the way for lower insurance premiums.

    What are the functions of a TPA in Insurance?

    Some of the functions of a Third-Party Administrator are:

    1. Easy Claim Settlement

    Whenever a claim is filed, it is the responsibility of the TPA to check all the documents that are submitted in support of the claim. The TPA can request more information to double check the details. The TPA also guides the policyholder about the right kind of documentation. This simplifies the claim settlement process. Hence, the TPA helps in easy processing and settlement of claims.

    2. Connecting Link

    A Third-Party Administrator is the link between the insurance company and the policyholder. Whenever a claim is filed, the policyholder will directly and indirectly meet the TPA.

    3. Record Keeping

    All the documents related to the policyholder are maintained by the TPA. For instance, if a policyholder is admitted as a patient, all the important documents will be maintained by the Third-Party Administrator. These records are usually stored in a secure database.

    4. Support to Policyholders

    Many Third-party Administrators provide information and assistance to policyholders related to their claims. TPAs also offer 24×7 support to policyholders through call centers and mobile applications.

    What is the role of a TPA in a Health Insurance?

    Many health insurance companies use third-parties for their claims processing. During the processing a of health insurance, a TPA would:

    1. Give Health Cards to the Insured

    A validation procedure is carried out for every policy issued to the policyholder. After the validation procedure is complete, an authorized health card is issued. This card is very important for claim processing. The card has the details of the policy number and the TPA who is responsible for the processing of claims. While getting admitted to the hospital, the insured can start the process of the claim by offering this card.

    2. Provide Additional Services

    Some TPAs also offer extra services to the policyholder. These services can include helping with procurement of extra beds, ambulances, medicine, etc.

    3. Strengthen the Hospital Network

    Having a TPA helps the policyholder get the important benefits that come with a health insurance policy. A TPA finds and enlists good hospitals which can arrange for quick cashless treatment. The TPA builds a strong network of hospitals so that the policyholder can get the best treatment.

    According to some experts, the primary service offered by TPAs should be providing cashless hospitalization of the insured.

    What is the Cashless Claim Facility?

    Your insurer will provide you with a Guide Book and a list of Network Hospitals when you buy a health policy. Whenever a claim is filed, a TPA can approve of a cashless claim settlement or reimburse it later. It basically means that you won’t have to pay your hospitalization bills at the time of discharge.

    To avail the cashless facility, you need to visit one of the network hospitals that come under the network group of your insurer.

    The hospital coordinates with the TPA for authorization in the case of a cashless claim facility. To avail this facility, you just need to take an identity proof and the valid policy proofs to the hospital. If you want to be referred to a network hospital, then you need to give the following documents to you TPA for the authorization of the cashless facility:

    • An original detailed prescription from the doctor. It should contain a description of the symptoms of the diagnosed disease on the letterhead of an authorized medical practitioner.
    • The hospitalization form mentioned by the insurer.
    • And details of the old policy (if the TPA does not have a copy of it).

    If there are missing or incomplete details of hospitalization, or if your disease is not covered under the policy, you will not be able to avail the cashless treatment. This is why you should provide complete and accurate details about your hospitalization history.

    Under a health insurance policy, the waiting period is 30 days. This means that any disease that gets diagnosed or happens within that period will not be covered by the policy. But the policy will cover any accident that takes place in the initial 30 days of the policy.

    Even though one of the main purposes of TPAs is to help policyholders, many policyholders still need to learn more about TPA in insurance. By gaining more knowledge about the services and benefits provided by TPAs, the insured will be able to get the best out of their insurance policies.

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    What is a Nominee in Insurance? (Meaning, Benefits and more)

    nominee

    What is a Nominee in Insurance? (Meaning, Benefits and more)

    A nominee in insurance is a person who receives the proceeds and benefits of the life insurance policy after the demise of the policyholder. Usually, a nominee is registered in the proposal form while buying the life insurance policy but nominees can be added anytime during the policy tenure.

    If the policyholder wishes he can add multiple nominees too, specifying the receives he wants each one of them to have. The policyholder can also change the nominee during the premium payment tenure.

    Who can become a nominee?

    A nominee is someone who is trustworthy and close to the policyholder. Hence usually, parents, spouses, children, relatives and close friends are appointed as nominees. Insurers always make sure that the policyholder has provided complete details about the nominee and their relationship with the policyholder during registration.

    Legally, minors are not considered to be competent to enter a contract. This means that they are ineligible to receive the claims directly. Hence, when a policyholder wants to nominate a minor, they have to assign a custodian. If a situation arises where the minor nominee needs the money, the insurer discharges the claim amount to the custodian until the nominee turns 18.

    Insurers also allow policyholders to have successive or multiple nominees.

    For example, if someone nominates three successive nominees, A, B and C, the claim proceeds will first go to nominee A. If nominee A is unable to receive the proceeds, they will go to nominee B, and if nominee B is unable to receive the benefits, they will go to nominee C.

    Having multiple nominations means that the benefits will be divided among them. Even if insurers allow multiple nominations, many insurers prefer giving the full claim amount to just one of the nominees. This is done after getting the consent of all other nominees. Hence, to avoid legal disputes, it is better to appoint one reliable nominee.

    Many insurers also avoid accepting unrelated parties as nominees, as it increases the risk for the insurer.

    What is the importance of a nominee in insurance?

    The policyholder gets insurance to support his/her dependents in case of unfortunate events. Appointing a nominee fulfills the main purpose of life insurance, that is, it protects the interest of the policyholder. Hence many insurers accept a nominee who is a close relative or someone who will take care of the deceased’s family after his/her death.

    If there is no nominee, the insurance company asks the claimant for a succession certificate, which will be issued by the court of law. This process is tiring and it can be easily avoided if the nomination is registered at the proposal stage. If a clear nominee is absent, it beats the purpose of offering immediate financial help to the family of the insured. Stating a clear nomination allows the insurance company to settle the claim quickly without any confusion.

    A life insurance acts as the financial shield of the policyholder’s family after his/her death. To make sure that the family does not suffer after an accidental demise, it is very important to have a nominee in insurance.

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    What are the best LIC Child Plans? (Best Plans & Their Benefits)

    What are the Best LIC Child Plans? (Best Plans & Their Benefits)

    Making provisions for securing the child’s future is the responsibility of parents. Taking up the right investment plans that can help the child to fulfill his long-term financial need is extremely important in today’s world when the expenses are increasing rapidly.

    To serve this need, the leading and the most trusted name in the insurance industry of India, LIC offers various policies.

    In this article, you’ll get to know about the Best LIC child plans that can help you plan better for your child’s future.

    Given below are some of the Best LIC child plans:

    1. LIC Jeevan Tarun

    This plan is a participatory non-linked limited premium payment plan. It offers the combined benefit of savings and insurance for children. LIC Jeevan Tarun Plan is made to meet the educational and other financial needs of growing children. This plan can be taken by a parent or grandparent for a child between the age of 0-12 years of age. The age of maturity for this plan is 25 years. The premium payment term can be 10 years, 5 years or below 5 years.

    The tenure of this plan is dependent on the age of maturity of the child. For example, if Sahil’s father takes the plan when he is 9 years old, the tenure of his policy will be 25-9=16 years

    2. Survival Benefit

    This plan offers an annual survival benefit from the ages of 20 to 24. A fixed percentage of the sum assured will be paid on each policy anniversary coinciding with or immediately following the completion of 20 years of age. Hence it will be paid for the next four policy anniversaries. The policyholder can choose the percentage of the sum assured they would like to receive as the survival benefit.
    The options are given below:

    Options

    Percentage of Sum Assured to be Paid as Survival Benefit

    Option 1

    Nil

    Option 2

    5% each year

    Option 3

    10% each year

    Option 4

    15% each year

    Maturity Benefit

    If the policyholder survives during and past the tenure of the policy, a fixed percentage of the Sum Assured will be paid on maturity. The age of maturity is 25 years old. The fixed percentages can be chosen from the options given below:

    Options

    Percentage of Sum Assured to be Paid as Maturity Benefit at Maturity Age

    Option 1

    100%

    Option 2

    75%

    Option 3

    50%

    Option 4

    25%

    Death Benefit

    In case the life assured passes away, the death benefit is offered as:

    • If the Life Assured dies before the commencement of risk, the full amount of the premium paid till date excluding the taxes, extra premium (and rider premium, if any) will be paid to the beneficiary without interest.
    • If the Life Assured dies after the commencement of risk, the death benefit offered will be the total “sum assured on death”. It will also have the vested reversionary bonus and final additional bonus that will be paid to the beneficiary.

    The Sum Assured on death is higher of:

    • 125% of the Total Sum Assured
    • 7 times the Annualized Premium

    The death benefit that is offered to the beneficiary should be 105% of the total premium that is paid till date.

    Sample Premium Rates

    Given below are the rates according to the options in Rupees if the Sum Assured is Rs.50,000.

    Age (in Years)

    Option 1

    Option 2

    Option 3

    Option 4

    0

    4480

    4580

    4680

    4780

    4

    5595

    5750

    5900

    6055

    8

    7565

    7800

    8040

    8275

    12

    11,270

    11,665

    12,060

    12460

    3. LIC New Children’s Money Back Plan

    This plan is one of the best LIC Child plans. It is a traditional money-back plan that is designed to fulfill the needs and requirements of the child when he/she grows up. These financial needs could be anything from educational needs to marriage. Along with survival benefits, this plan also offers risk cover for the life of the child throughout the policy period.
    This plan can be bought by the parent or grandparent of the child aged between 0 to 12 years of age. The term of this plan is ‘age of maturity (25 years) – age of starting the policy’. The premium payment term can be 7 years, 10 years or a term below 5 years.
    There is also an option of choosing the LIC Premium Waiver Benefit Rider. This means that if the proposer passes away, the rest of the premiums will be waived off. Know more about insurance riders.

    Survival Benefit

    The Life Assured will receive 20% of the Basic Sum Assured on policy anniversaries that are either coinciding or are followed by the completion of 18, 20, and 22 years of age.

    Maturity Benefit

    If the Life Assured survives the policy period, then he/she will receive 40% of the Sum Assured on maturity as maturity benefit. This maturity benefit will also include the Final Additional Bonus and Vested Simple Reversionary Bonuses.

    Death Benefit

    On the death of the Life Assured, the death benefit offered is:

    • If the child dies before the commencement of risk, all premiums paid will be returned to the nominee. Taxes and rider premiums will be excluded.
    • If the child dies after the commencement of risk, the nominee will be given the Sum Assured on Death along with the Simple Reversionary Bonus and Final Additional Bonus.

    The Sum Assured on Death is equal to the higher of:

    • The basic Sum Assured that is mentioned in the policy
    • 10 times the Annualized Premium

    Sample Premium Rates

    Given below are the rates in Rupees if the Sum Assured is Rs.1 lakh, Rs. 2 lakhs and Rs. 5 lakhs.

    Age (in Years)

    1 Lakhs

    2 Lakhs

    5 Lakhs

    0

    4415

    8830

    22,075

    5

    5700

    11,400

    28,500

    10

    8060

    16,120

    40,300

    12

    9390

    18,780

    46,950

    The plans mentioned above are some of the ongoing and best LIC Child plans. Child plans are effective in managing and preparing for the financial liability that comes with a child. As all the expenses associated with a child are increasing, it is necessary to consider buying a child insurance plan suitable for you while planning your finances.

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    What is Travel Insurance? (Benefits, Inclusions & Exclusions)

    What is Travel Insurance? (Benefits, Inclusions & Exclusions)

    While traveling abroad, we prepare to the best of our capacity for any emergencies. However, some emergencies like medical expenses, cancellations, delays, etc cannot be predicted. To safeguard yourself and your family from such situations you must invest in travel insurance for overseas.

    Travel insurance provides financial aid against a wide variety of problems that may arise on a foreign trip. It may come in handy especially for those who are traveling to distant countries. If you’re planning to travel soon, you must understand what overseas travel insurance covers and what are its exclusions.

    Coverage under Overseas Travel Insurance

    1. Illness Cover

    Travel insurance offers complete protection in case of unexpected illness, accidental injuries, and death. The insurance covers various expenses like pre and post-hospitalization costs, permanent disability expenses, dental cover, repatriation costs, etc.

    2. Loss of baggage

    The insurance company provides complete reimbursement in case of loss or displacement of baggage after checking in to the airport.

    3. Flight Cancellation/ Delay Cover

    Trip cancellation cover takes care of all the expenses in case the trip is delayed for 12 hours or more due to the airline’s fault. Also, you will be provided reimbursement if you miss a connecting flight due to the delay of the first flight.

    4. Financial Emergency Benefits

    In case you need urgent money due to theft or robbery on the trip, the insurance company provides you the necessary help.

    5. Document Loss Cover

    Insurance covers the loss of not only passports but any important travel documents and also reimburses you the cost of obtaining the duplicate / fresh documents.

    6. Third-Party Cover

    In case your involuntary actions result in demise, injury, or damage of a person, the insurance will pay the necessary compensation to the concerned person.

    7. Hijack Risk Cover

    If you are caught in the unfortunate event of a hijack, you will be given compensation provided the hijack lasts for more than 12 hours.

    8. Home Burglary Cover

    If your house is robbed during your international trip, you will be provided compensation for the loss of valuables.

    Exclusions Under Overseas Travel Insurance

    • In case of passport loss, if the complaint goes unregistered with police authorities, the company is not liable to pay any compensation.
    • The insured person will not be given medical cover if he/ she did not disclose any pre-existing diseases before the commencement of the policy. Also, patients suffering from HIV/AIDS and venereal diseases are not given cover.
    • The insurance company is not bound to pay compensation if the loss occurs due to mental incapability, depression, the influence of alcohol and drugs, and suicidal attempt.
    • The cover is excluded if you are traveling abroad for medical treatment and also if you are traveling without a valid recommendation from the doctor.
    • You won’t be eligible for insurance if you are diagnosed with life-threatening diseases before your travel.
    • The insurance won’t be liable for any casualties or damage if the visiting country has a risk of war or nuclear threat.

    Traveling abroad can be filled with many contingencies, but investing smartly in travel insurance for overseas will help protect you from it. Irrespective of the country you are traveling to, make sure that you purchase overseas travel insurance for the safety of yourself and your family.

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    What Is Office Insurance?

    What Is Office Insurance? (Features, Inclusions & Exclusions)

    A business owner very well knows that any damage caused to the office building or premises can have adverse effects and disrupt the functioning of the business. Therefore, it is very important to protect the office infrastructure against any unforeseen event.

    Office insurance is a comprehensive insurance policy specifically designed to protect organizational infrastructure against unprecedented threats. This policy covers all office premises including manufacturing plants and warehouses.

    Let’s dive deeper and understand the inclusions and exclusions under the office insurance.

    Inclusions under Office Insurance

    • The insurance protects your office in cases of natural disasters like fires, earthquakes, cyclones, and also man-made disasters like mechanical and electrical breakdowns, accidental breakage, etc. Some insurance policies also include damages caused by terrorist activities.
    • Office insurance also offers double benefit by covering your employees for accidental death or injury during their employment tenure.
    • The policy offers third-party legal liability cover.
    • It also provides coverage for personal accident expenses incurred by the organization.
    • This insurance protects your office from any loss caused by break-ins, burglary, and theft.
    • Natural disasters like earthquakes and cyclones can cause significant damage to your office. The office insurance might cover the expenses incurred for fixing broken glasses and other interiors of the office. Moreover, it also covers the cost of housekeeping services required after the loss.
    • The insurance covers not only post-disaster losses but also some pre-disaster safety measures. It covers the costs of putting up precautionary neon signs and hoardings for the safety of employees.
    • It provides special compensation in case the insured employees die or suffer injuries or disabilities.

    Exclusions under Office Insurance

    • The insurance does not cover damage caused by dishonest acts of employees like robberies, fraudulent conversions, insider trading, etc.
    • Although office insurance protects the office infrastructure from damages, it does not provide coverage for normal wear and tear and steady deterioration of the building.
    • The policy will not cover any intentionally made damages to the office building.
    • Any loss caused by war or war-like situations will not be covered. Also, damage due to nuclear or atomic radiation will be excluded from the policy.
    • The insurance company will not be responsible to pay for any damages caused by illegal activities.
    • In case of fires, if the insurance company finds the actual registered property value to be less than the chosen sum insured, they will make the necessary deductions in the claim amount.
    • The insurance company is not liable to pay any compensation in case the damage is caused by environmental pollution.
    • In case of unprecedented incidents, office insurance covers physical damages caused to your infrastructure. However, it does not cover the loss of business revenue caused by that incident.
    • The loss caused by manufacturers, repairers, suppliers, or any other third party is not covered.

    While we try to protect our business to the best we can, there are some emergencies that we just cannot prepare for. Investing in office insurance will surely help you if you face any such emergencies. There are a plethora of insurance companies that offer this insurance policy, compare and choose the best one for your business.

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    Life Insurance

    The Life Insurance Council and its Functions

    council building

    The Life Insurance Council and its Functions

    The life insurance industry in India has seen significant growth over the years. Hundreds of new insurance companies have been set up since independence and thousands of people are purchasing new insurance policies every day. With the life insurance market seeing such a high inflow of investments, the need for a government organization that regulates all the transactions and monitors the life insurance policies of various companies was paramount.

    Therefore the life insurance council was formed. It is the organization that maintains the smooth and efficient functioning of the insurance industry. Let’s now learn about the life insurance council in a little brief.

    What is the Life Insurance Council?

    The life insurance council is a regulatory body that governs all the transactions made regarding insurance policies. It monitors every new and old life insurance policy available in the market. It also safeguards the interests of the policyholders and protects them from any kind of exploitation. The council was formed under Section 64 of the Insurance Act 1938. All the life insurance companies in India function under the guidance of the life insurance council. There are a total of 24 Life insurance companies that work closely with the council to offer a variety of life insurance policies to the customers.

    Missions of the life insurance council

    • To maintain high standards of service in the insurance industry.
    • To interact with the government and other financial bodies on policy matters.
    • To actively participate in spreading awareness in the masses about life insurance.
    • To further develop education and research in the insurance sector.
    • To implement global insurance practices into the Indian insurance industry for the betterment of the consumers.

    Functions of the Life Insurance Council

    • The life insurance council is a platform that brings together many stakeholders in the insurance sector. It’s a place that addresses and resolves all concerns regarding life insurance policies.
    •  It initiates and regulates all the talks between the Government of India, regulatory boards, and the consumers regarding new insurance policies.
    •  It advises all insurance companies for maintaining and offering high standards of service to the customers.
    •  The life insurance council regularly hosts conferences that bring together the brightest minds in the insurance industry.
    •  It conducts multimedia campaigns that spread awareness and curbs misconceptions around insurance policies. These campaigns make the masses understand life insurance policies in a better way and also help them in better financial planning.
    •  The life insurance council takes active measures against any frauds or other faulty practices that might be detected in the market. It has imposed strict penalties for fraudsters and also spreads awareness regarding fraud on various social media platforms.
    •  It works towards increasing foreign Investments in the Indian insurance industry. The council also acts as a mediator for all the information which is to be exchanged with foreign insurance companies.

    The life insurance council is counted amongst the most important financial institutions in the country. It ensures the proper functioning of the life insurance industry and also works to protect the interests of the policyholders. It overlooks the operations of insurance companies and ensures that they provide life insurance policies that meet global standards

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    Frequently asked questions about The Life Insurance Council

  • How can I contact The Life Insurance Council?

    You can contact The Life Insurance Council via their contact us page. You can also reach out to them on (+91-22) 26103303 / 06 or email them at licouncil@lifeinscouncil.org.

  • Where is the head office of Life Insurance Council?

    Life Insurance Council
    4th Floor, Jeevan Seva Annexe Bldg.
    S. V. Road, Santacruz (W)
    Mumbai 400 054.

  • What are the functions of Life Insurance Council

    Functions of Life Insurance Council include:

    • Regulating the insurance industry.
    • Assisting in the growth of the life insurance industry.
    • Conducting research on topics within the life insurance sector.
    • Educating policyholders.
    • Promoting the life insurance sector in India.
  • When was The Life Insurance Council formed?

    1938.

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    Insurance

    Insurance with Home Loan (Types, Features and Benefits)

    Insurance with Home Loan (Types, Features and Benefits)

    Home loans have become extremely popular in today’s world, but the personal and financial risks involved with them have increased too. Therefore, to protect you in such situations it is recommended to purchase an additional insurance with home loan known as the home loan insurance. To better understand the concept of home loan insurance, let’s understand what it means and analyze its features and benefits

    What is Home Loan Insurance?

    When you purchase a home loan, you are bound to pay its EMI regularly to the lender. However, due to unforeseen emergencies, you might experience a financial crunch which would result in default of EMI payment. This is where home loan insurance will help you as the insurance company will settle your outstanding home loan amount with the lender.

    There is always confusion amongst people about home loan insurance and home insurance. While home loan insurance clears your home loan debt, home insurance offers coverage to your home and its contents against emergencies like fires, explosions, lightning, theft, burglary, etc.

    Features of Home Loan Insurance

    1. Premiums

    A majority of home loan insurance plans have a one-time premium. The lenders often add this premium amount to your home loan amount i.e., you pay for the premium along with your monthly EMI instalments.
    For example, you have purchased a home loan of Rs 40 lakhs and the premium for your home loan insurance is 2 lakhs. Your monthly EMI will be calculated for 42 lakhs.

    1. Life cover

    Home loan insurance plans also offer life cover. The amount of life cover in this plan is equivalent to your outstanding home loan amount. The cover is valid or offered only until the clearance of the loan.

    1. Add on coverages

    Several home loan insurance plans offer optional add-ons to enhance the cover benefits. Some add-ons offered are mentioned below-

    • Terminal Illness Coverage
    • Accidental Death Coverage
    • Financial help for jobless people up to three to six months of EMI payments
    • Disability coverage

    Benefits Offered Under Home Loan Insurance

    1. This insurance policy safeguards the borrower’s family from financial debt in case of his unfortunate demise.
    2. You can get tax benefits for the premium paid on this policy under section 80C of the Income Tax Act.
    3. The add-on coverages on this policy ensure that the outstanding loan amount is paid not only in the case of unfortunate death but also for critical illnesses and disability of the borrower.

    The Two Types of Home Loan Insurances

    You can buy home loan insurance in two forms- either as term insurance or separate home insurance.

    Term Insurance– This policy covers all your liabilities and debts in case of emergencies.

    Separate Home Insurance– This policy only clears the outstanding loan debt.

    • Separate Home insurance policies come with reduced coverage. This means that the coverage is linked to the outstanding loan amount and gets reduced as you pay off the loan. In a term insurance policy, the coverage remains the same.
    • While a term insurance policy reimburses you for the loan amount you pay to the lender, in the case of separate home insurance the amount is directly paid to the lender.

    Points to Remember While Buying a Home Loan Insurance

    • Home loan insurance is offered by both general life insurance companies and life insurance companies. General life insurance companies require you to renew the policy on an annual basis whereas life insurance companies offer the policies for longer terms. Choose wisely based on your needs.
    • Always check that your insurance policies have riders that cover situations like unemployment, disability, natural or accidental death. These riders will help you gain extended coverage upon the original policy.
    • Make sure that your insurance cover period and the loan tenure match.
    • Avoid purchasing a shorter cover period while buying a home loan insurance when you’re young. This is because insurance companies usually hesitate to offer longer coverage to aged people. Even if they do agree, they might charge a very high premium for it.

    Make sure that you are financially stable before purchasing insurance with home loan, as the total cost of EMI’s and premiums might take a toll on your savings. Also, make sure to compare different policies in the market to get the lowest premium amount with the best coverage.

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