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Insurance

What is the time limit for approaching an Insurance Ombudsman?

What is the time limit for approaching an insurance ombudsman?

There are rare occasions where you are not satisfied with the grievances redressal of your insurance company. On these rare occasions, you may want to escalate your issue to a higher forum. The Insurance Ombudsman was formed with exactly this in mind. The Insurance Ombudsman looks after the interests of the policyholders and provides arbitration and resolution services.

That being said, one must be cognizant of the time limit for approaching an insurance ombudsman, and ensure that their case is raised within the stipulated time limit.

In this article, we will cover all the nitty-gritty of how you can approach the insurance ombudsman with your complaint and get a resolution.

This article will be covering the following:

  • What is an Insurance Ombudsman?
  • Where can you find the Insurance Ombudsman?
  • Who can approach the Insurance ombudsman?
  • When can you approach the Insurance Ombudsman?
  • What are the steps to follow while approaching the Insurance ombudsman?
  • What is the time limit for approaching the Insurance Ombudsman?

What is an Insurance ombudsman?

The Institution of Insurance Ombudsman was formed by the Government of India in November 1998.
Its main objective is to handle customer grievances systematically and bring fair resolution. The policyholders can get their complaints resolved in an unprejudiced and efficient manner.

Location of Insurance Ombudsman

There are 17 main insurance ombudsmen offices located in India. The website of IRDA mentions all the details and contact information of all the Ombudsman centers. An aggrieved policyholder can accordingly choose to visit the nearest insurance ombudsman center.

Who can approach Insurance Ombudsman?

Any policyholder, their legal heirs, or nominees can approach the insurance ombudsman to file their complaints.

When can you approach the Insurance Ombudsman?

If a policyholder has approached his insurance company and they were not satisfied with the resolution provided by the company, the policyholder can approach the Insurance Ombudsman within 30 days of the initial grievance.

You can approach the Insurance Ombudsman for the following reasons:

Any issues about the violation of provisions of the Insurance Act 1938 or the guidelines and regulations issued by the Insurance Regulatory and Development Authority (IRDA)

  1. Total or limited rejection of your claims.
  2. Any matter related to premiums payable or paid.
  3. Holding up the claim process.
  4. Not providing the policy documents to the policyholder after the premium has been paid.

Steps to be taken while approaching the Insurance Ombudsman?

Step 1 – As mentioned above, if you have already addressed your grievances with the insurance company and are not satisfied with the outcome, you can approach the insurance ombudsman and launch a complaint within 30 days of your issue.

Step 2 – You can get in contact with the Insurance Ombudsman center in your jurisdiction.

For Instance, if the policyholder is staying in Mumbai and his insurance company is located in Mumbai, he may file a complaint with the Insurance Ombudsman center located in Mumbai.

Step 3 – You must register a written complaint by writing a letter to the Insurance Ombudsman. You could also email your complaints to the Ombudsman, but you would also need to send a formal letter to them.

Step 4 – All valid and important information must be provided in the letter. Details such as name, policy number, date of the policy, etc.
You must provide a detailed explanation of your grievances and the details surrounding them. Also, all relevant documents must be enclosed with the letter and should be sent to the Ombudsman center.

Step 5 – You will be required to fill in P-II and P-III forms (These are simple forms used for taking down the complaint details in a particular format). You can also fill the forms and send them by post to the Insurance Ombudsman and they will reach back to you shortly.

Step 6 – Once you register the complaint and submit all the appropriate documents, you will be given a date where you and a representative of the respective insurance company will be called for a hearing.

An executive will be assigned by the Insurance Ombudsman to represent you free of charge. Usually, the matter will be solved within just one hearing as there is no system of providing further dates.

What is the time limit for approaching the Insurance Ombudsman?

You will have to register your complaint with the Ombudsman within one year of your claim rejection by the insurance company.

Process of judgment

During the hearing, the Insurance Ombudsman will pay detailed attention to what the policyholder and the insurance company have to say. The Ombudsman will decide on a fair conclusion. It will pass an unprejudiced judgment and the minutes will be prepared.
If the policyholder accepts the Ombudsman’s judgment as full and final, it will intimate the insurance company and the company must comply with the terms of the settlement within 15 days.

However, If the policyholder does not accept the terms of the settlement the Insurance Ombudsman will pass an award within 90 days after receiving all the requirements from the complainant. This will be binding on the insurance company.
The insurance company cannot challenge this settlement decision further and is bound to comply with the terms of settlement within 30 days of award receipt.

However, if the policyholder is not satisfied with the terms of the settlement he is free to go to court and challenge the order passed.

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Insurance Ombudsman in Mumbai

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Life Insurance

What is an endowment policy? (Meaning and types)

What is an endowment policy? (Meaning and types)

With so many types of life insurance products available in the market, we may tend to get confused. In this article, we will talk about what is an endowment policy? and the types of endowment policies.

What is an endowment policy?

An endowment policy is a life insurance policy with dual benefits. It provides you the benefit of a life insurance cover along with a savings plan. It helps the policyholder save regularly over a specified time so they can receive a lump sum amount on the maturity of the policy. However, in case the policyholder dies during this period, the insurance company will be liable to pay the sum assured as well as any accumulated bonus to the policy nominee.
An endowment policy is a well-suited plan for post-retirement.

Now, let us understand the various types of endowments policies

Types of endowment policies

Unit-linked endowment Plan (ULIP)

A unit-linked endowment plan is a policy that is a combination of life insurance and investment. In this plan, part of your premium will be taken towards your life coverage and part will be systematically invested in equity/debt securities (based on the plan you choose). The return on your investment will depend on the performance of the fund.

Full/with profit endowment plan

As the name suggests, A full/with profit endowment plan provides the policyholder with the sum insured as well as any bonus accumulated with it on the maturity of the policy. In case of death of the insured, the nominee will receive the sum insured as well as the bonus amount. The final payout will be relatively higher than the sum insured as it is combined with profits generated from the bonus.

Low-cost endowment plan

Low-cost endowment plans have been specifically designed for individuals who want to save their funds (savings) and use them for a specific purpose after a certain period of time such as repayment of loans etc. If the policyholder dies, the nominee will receive the entire fund amount.

Endowment policy for child

A child endowment policy is specifically designed to protect and cater to the financial requirements of your child in the future. It offers protection, savings, and investment. The sum assured as well as return from the investments will be payable to your child as a lump sum when your child attains maturity between 18-22 years of age.

Non-profit endowment plan

Under this plan the sum assured will be paid to the policyholder on the maturity date of the policy or the nominee of the policy in case the policyholder passes away. As the name suggests, only the sum assured will be paid no additional bonus will be included.

Now lets us look into some benefits of an endowment policy and how they may help you.

Benefits of an endowment policy

  1. Insurance cover: An endowment policy provides life insurance coverage to the insured. In case the policyholder passes away, the nominee of the policy will receive the assured sum. This provides your loved ones financial stability.
  2. Dual purpose: It provides a dual purpose of life coverage as well as investment-related benefits.
  3. Additional bonuses: It gives the benefit of accumulated bonus and the sum assured leading to a relatively higher payout.
  4. Low risk investments: Endowment plans are safer investment options compared to other options in the market.
  5. A Long-term savings plan: It is a systematic long-term savings plan that helps you secure funds that you can use in the future.
  6. Tax benefit: You can get tax exemption on premium payments and final payment Under Sec 80 and Sec 100 of The Income Tax Act,1961.
  7. Rider benefit: If you choose so, you can add optional rider covers to your base policy. This will make your plan more customized to your needs.

Types of optional rider cover that can be applied are

  • Disability rider– This offers coverage in case the insured meets with a permanent or partial disability.
  • Accidental rider– This rider protects you from the financial losses incurred due to an accident. It provides compensation to the beneficiaries of the policy in case of accidental death of the policyholder.
  • Critical Illness rider– If at any point the policyholder has been diagnosed with a critical illness the insurance company provides them with financial assistance in a lumpsum amount.

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What is a deductible in insurance? (With examples)

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What is a deductible in insurance? (With examples)

Sometimes complicated terms used in insurance policies can be confusing. Don’t worry, let us help you understand them simply and easily. Let us understand what is an insurance deductible.

What is a health insurance deductible?

A deductible is a fixed sum that a person has to pay himself before the insurance company takes care of the rest of the medical expenses of the policyholder.

Example of a deductible in health insurance

Lets us understand this using a simple example. Let us assume that Mr. Jamnalal has taken a Rs.3 Lakhs insurance policy with a deductible amount of Rs.30,000. Let us further assume that Mr. Jamnalal is hospitalized and his hospital bill comes up to Rs.1 Lakh.

Since Mr. Jamnalal has opted for a health insurance policy with a deductible component of Rs.30,000, all expenses up to Rs.30,000 will have to be paid by Mr. Jamnalal himself. Any expense over Thirty Thousand will be covered by the insurance company (up to Rs.3 Lakhs). Thus, Thirty Thousand is the deductible component for Mr. Jamnalal which he will have to pay himself before the policy benefits kick in.

Deductible in a top-up health insurance policy

First, let us understand what is a top-up policy. A top-up policy is an insurance policy that looks after your hospital treatments and gives you extended coverage after your base policy coverage has reached its limit.


What is deductible in a top-up policy

In a top-up health policy, a fixed amount of the sum will be borne by the policyholder towards their medical treatments before the insurance company starts to cover their medical expense. This deductible cost will be paid by the insured after every claim.

What is deductible in car insurance

Lets us understand what a deductible is in car insurance with a simple example.

Example

Let us assume that Mr. Kishan bought a motor insurance policy from HDFC ERGO. He opted for a voluntary deductible component in his motor insurance policy so that he could reduce his premium. Mr. Kishan’s deductible is Rs.5000.

Now, let us further assume that Mr. Kishan’s car has met with an accident and the claim amount is Rs.10,000. As he opted for a deductible component of Rs.5000, Mr. Kishan will have to pay Rs.5000 from his pocket and the insurance company will pay the remaining expense.

Types of deductibles in car insurance

Now, there are two types of deductibles in car insurance, compulsory and voluntary deductibles. Let us understand them in detail:

Compulsory deductible

It is a compulsory amount that a car policyholder has to pay towards his policy claim. It is a mandatory expense a vehicle owner has to bear in case of a claim. It is as per the guidelines of the Insurance Regulatory Development Authority of India (IRDAI).

As per IRDA guidelines, the rates of compulsory deductibles in cars are given below accordingly: Rs.1,000 for cars up to 1,500 cc and Rs.2,000 for cars exceeding 1,500cc

Voluntary deductible

A voluntary deductible comes into action when a policyholder himself decides to pay an extra amount for his car expenses during his claim. The policyholder must carefully decide on the limit he chooses to pay according to his affordability with the help of his insurance advisor.

When one opts for a voluntary deductible they usually pay a lesser premium. A voluntary deductible also encourages the insurer to drive carefully and take care of their respective vehicles by maintaining them. If a claim is made, the car insurance policyholder will have to pay both the voluntary deductible with the compulsory deductible.

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Utmost Good Faith in Insurance (Meaning, characteristics & Examples)

What is Utmost Good Faith in insurance? 

There are a few core principles of insurance that every insurer and insurance company must adhere to. Any violation of these core principles can lead to the termination of the insurance contract. Let us talk about one of the most important principles of insurance, the principle of utmost good faith.

What is utmost good faith in insurance?

The principle of utmost good faith states that both the insurer and the insured must be transparent with each other, and must reveal all pertinent and valid information to each other before the inception of the policy agreement.

The complete truth must be revealed about the subject matter of insurance and the conditions surrounding it.
For instance, if you buy a life insurance policy, it is your duty to disclose all correct and relevant details pertaining to your health to the insurance company. Details such as any pre-existing conditions, medical history, etc must be truthfully mentioned to the insurer.

Intentional withholding of relevant details is considered a strong breach of utmost good faith and can lead to the termination of the policy agreement.
Also, it is equally important that the policyholder is well aware of the insurance cover that they are buying. The insurance company also be equally truthful about the policy they are selling to the insured.

Characteristics of utmost good faith in insurance

The insured and insurer are legally bound to make full and truthful disclosure about the insurance contract. This responsibility applies to all kinds of insurance.

 

How breach of utmost good faith occurs

Breach of utmost good faith in Life insurance

Section 45 of the insurance Act 1938 states that If the insurance company finds out that the policyholder has misrepresented relevant details or provided false disclosure of facts, the insurer can deem the policy null and void. This can only be done within 2 years of the inception of the policy.

Breach of utmost good faith in Life insurance with an example

Example

Mr. Manilal bought a life insurance policy for himself. Mr. Manilal is a heavy smoker and he has not disclosed this fact to the insurance company, and within 2 years Mr. Manilal is diagnosed with lung cancer and passes away. In this case, the insurance company can reject the claim on the ground of non-disclosure or misrepresentation of facts. This would be a breach of utmost good faith.

Breach of utmost good faith in health insurance with an example

Let us assume, Mrs. Sushiladevi bought a health insurance policy for herself. Mrs. Sushiladevi deliberately chooses to withhold her diabetic status from her insurance company to reduce the premium sum.

Let us now assume that Mrs. Sushiladevi gets admitted into the hospital due to complications caused by high blood pressure and sugar. The insurance company may choose to reject her claim on the ground of non-disclosure of facts, as her medical reports would indicate that she was already a diabetic and blood pressure patient before buying the policy.

Breach of utmost good faith in motor insurance

The principle of utmost good faith not only applies to life or health insurance, but all types of insurance agreements, including motor insurance.

Example

Let us assume that Mr. Joy bought a motor insurance policy. In order to pay less premium, Mr. Joy deliberately hid the information that his car had an externally fitted CNG kit. Let’s further assume that Mr. Joy’s car caught fire due to some complications in the CNG kit. The insurance company will reject Mr. Joy’s claim on the ground of non-disclosure of material facts. This would also lead to termination of the policy by breach of utmost good faith.

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Types of Fire Insurance (With Simple Examples)

Types of Fire Insurance (With Simple Examples)

It is important to ensure the safety of your property (flat, shop, goods, etc) from unforeseen accidents that can be caused due to fire. In this article, we will discuss the various types of fire insurance policies, but first, let us know what is fire insurance?

What is fire insurance?

Fire insurance is an agreement between the insured and the insurance company, in which the insurance company agrees to compensate the insured against the damages caused to the insured property due to fire. It can be bought as a part of property insurance or standalone insurance.

What are the types of fire insurance?

Floater policy

A floater policy covers various assets at different locations. All the assets can be covered within one single policy. The assets will be covered on a floater basis. This would be an ideal policy for a person who owns various warehouses at separate locations.
The policyholder needs to provide updated and correct details about the insured properties. If the provided details are falsified in any way it will lead to a breach of utmost faith resulting in the insurance contract being null and void, thus is crucial to provide the correct information to companies at all times.

Comprehensive policy

A comprehensive policy covers the insured against maximum possible accidents and setbacks. A comprehensive policy provides coverage against fire, earthquake, burglary, lightning, theft, explosion, labor unrest, third-party liabilities, and other dangers. It is also known as an all-risk policy.

Valued policy

A valued policy is issued when the value of the asset cannot be ascertained. In this case, a predetermined amount is fixed between the insurance company and the insured. in case a claim is made, the agreed value will be paid by the insurance company to the policyholder. A valued policy is opted to cover items such as jewelry, artwork, craft, etc.

Specific policy

In a specific policy, a specified amount is fixed in advance for an asset. In case of an incident, the predetermined amount or the actual amount of the loss, whichever is less will be paid to the insured.
For instance, Mr. Roy has taken a specific fire insurance policy with a value of Rs.2 lakh, if there is a loss of Rs.2.5 Lakhs due to fire, the insurance company will be only liable to pay Rs.2 lakhs even though the loss caused is Rs.2.5 Lakhs.

Replacement policy

This is a policy where the insurer undertakes to replace the property or goods destroyed by fire. In this policy, instead of paying the compensation for the property lost by fire, the property is instead replaced.

While paying the compensation, the depreciation value of the property is not calculated.

Average policy clause

An average clause is added to penalize the insured for taking up a policy for a lesser sum than the value of the property. The compensation payable will be proportionally reduced if the value of the policy is less than the value of the asset. It discourages the insured from getting an undervalued policy

Example

If you have taken a policy of Rs.1 Lakh against the market value of 2 Lakhs and the loss incurred due to fire is Rs.50,000, since you have only covered 50% of the asset, the company will be liable to pay only 50% of the loss amount. in this case, the insurance company will be liable to pay only Rs.25,000.

What will be covered in the fire insurance policy?

Subject to the following terms and conditions of the policy, a fire insurance policy provides coverage to the loss incurred due to accidental fire. Let us see some of the inclusions stated under the standard fire and special perils policy.

  • Fire
  • Aircraft damage
  • Explosion/ Implosion
  • Bush fire
  • Leakage from automatic sprinkler installations
  • Overflowing of water from tanks and pipes.
  • Riots and strikes
  • Damage caused to property from storm, tycoon
  • Rockslide, landslide

Not all situations are covered under the fire insurance policy. Here are some exclusions

Exclusions

  • Loss caused by nuclear perils, nuclear waste, or any radioactivity.
  • Loss due to war, civil war, invasion.
  • Loss due to planned intentional fire.
  • Loss due to earthquake.

Companies that provide fire insurance in India

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Top 10 insurance companies in India

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Top 10 insurance companies in India

The insurance sector has been the fastest expanding sector in India. The first insurance company to be established in India was The Oriental Life Insurance Company in 1818.

After the pre-independence era, the insurance sector has tremendously boomed in India giving birth to many insurance companies. In this article, let us cover a list of 10 life insurance companies in India.

In India, presently 24 insurance companies are have been legally approved and recognized by IRDA (Insurance Regulatory and Development Authority in India).
In this article we will talk about Top 10 insurance companies in India.

Top 10 insurance companies in India

Name of the CompanySectorHeadquarter Location
Life Insurance Corporation of India (LIC)GovernmentMumbai
HDFC Standard Life Insurance Co LtdPrivateMumbai
Max Life Insurance Co LtdPrivateMumbai
ICICI Prudential Life Co LtdPrivateMumbai
Kotak Mahindra Life insurance Co LtdPrivateMumbai
Aditya Birla Sun Life Insurance Co ltdPrivateMumbai
SBI life Insurance Co LtdPrivateMumbai
TATA AIA Life Insurance Co. Ltd.PrivateMumbai
Exide Life Insurance Co. Ltd.PrivateBangalore
Bajaj Allianz Life Insurance Co. LtdPrivateMumbai

Life Insurance Corporation of India (LIC)

  • LIC is the largest Life insurance company In India. Life insurance corporation of India (LIC) is a government-owned insurance and investment organization. Roughly around 245 insurance companies merged into a single organization to form LIC. LIC came into existence after the Parliament of India passed the Life insurance of India Act in 1956.
  • LIC operates with 2048 completely computerized branches, 8 zonal offices, 113 divisional offices, 1408 satellite offices, and central offices.
  • Life insurance corporation of India initially started its operations with around 300 offices, 5.7 million policies, and a corpus of ₹45.9 crores, which has now presently expanded to 350 million policies and a corpus of over ₹800,000 crores.
  • LIC contributed to around 7% of India’s GDP in the year 2006.
  • This massive insurance giant offers a wide range of products from pension plans, unit-linked plans, life insurance plans, child insurance plans, etc.
LIC head office in mumbai
LIC head office in Mumbai.

HDFC Standard Life Insurance Company

  • HDFC Standard Life Insurance Company is one of the largest life insurance companies in India.
  • HDFC Life was established in the year 2000 becoming the first private sector insurance company in India. It is a joint venture between HDFC Limited and Standard Life Aberdeen.
  • HDFC Life settled its first claim in 2001. Presently, HDFC Life has over 420 branches and runs its operations in more than 980 cities in India. Its headquarters is in Mumbai.
  • The company provides individual and group insurance products. It also provides pension, savings, protection, women and children plans. You can also customize your plan by opting for additional covers called riders by paying additional premium charges. The current claim settlement ratio of the company is 96.76%.

Max Life Insurance

  • Max Life Insurance Company (formerly known as Max New York Life Insurance Company) was founded in the year 2000 after the liberalization of the insurance sector in India. It is the largest non-banking private sector life insurance company in India.
  • Max Life Insurance provides insurance products such as unit-linked, participating, and nonparticipating products. Along with life insurance, it also provides Health, pension, retirement, child protection, and growth plans.
  • The headquarters of Max Life Insurance Company is at Worli, Mumbai.

ICICI Prudential Life Insurance

  • It is a joint venture between ICIC Bank and Prudential Corporation Holdings. ICICI prudential was incorporated in the year 2001.
  • ICICI Prudential offers its valuable services in Life insurance and asset management. It offers long-term life insurance policies.
  • ICICI Prudential has an impressive claim settlement ratio of 97.88 % during the year 2018.
  • The company’s total assets accounted for US$22 Billion in 2020 and have made a net income of US$150 million in 2020.

Kotak Mahindra Life Insurance

  • Kotak Mahindra life insurance was established in the year 2001. It is a subsidiary of Kotak Mahindra Bank, a part of the Kotak group founded by Mr. Uday Kotak.
  • Kotak Mahindra Life Insurance company currently caters to more than 20 million customers. It presently has 232 branches in 167 cities with approximately 100,000 agents.
  • Kotak Life Insurance provides a wide range of products ranging from investment plans, rural plans, retirement plans, term plans.
  • The company presently offers 32 products including 9 group products, 10 ULIP plans, and 18 rider options as of 2016.

Aditya Birla Sun Life Insurance

  • Aditya Birla Sun Life Insurance Ltd (formerly known as Birla Sun Life Asset Management Company Limited) was established in the year 2000.
  • It is a joint venture between Aditya Birla Group of India and Sun Life Financial Inc of Canada.
  • It offers various kinds of insurance schemes, endowment plans, debt and equity schemes, and saving schemes.

SBI Life Insurance

  • SBI life insurance company is a joint venture between the State bank of India and BNP Paribas of Cardiff.
  • It was founded in the year 2001.
  • SBI Life Insurance Company caters to millions of families in India with its vast range of insurance, health, savings, pension, and protection solutions.
  • SBI Life insurance company currently operates with 947 offices, approximately 18,000 employees, and a giant network of about 169006 agents, 57 co-operate agents, and more than 28000 partner branches.
  • Their claim settlement ratio was reported at an impressive 96.69% during the year 2016-2017.

Tata AIA Life Insurance 

  • Tata AIA Life Insurance company Ltd was founded by the Tata Group in Mumbai in 2000.
  • It is a joint venture between Tata Sons Pvt Ltd and AIA Group Ltd. It is one of the largest Pan-Asian life insurance companies in the world.
  • Tata AIA offers multiple life insurance plans such as protection plans, wealth plans, group plans, child plans, micro insurance plans, and many more. Its headquartered in Mumbai
  • Tata AIA life insurance presently has a claim settlement ratio of 99.06%.

Exide Life Insurance

  • Exide Life Insurance company is an Indian-owned life insurance company.
  • It is a subsidiary of Exide Industries and was founded in the year 2001.
  • Exide life insurance company caters to more than 15 lakh customers in the country. It provides various life insurance products, long-term protection plans, and savings plans.
  • Exide Life has a claim settlement ratio of 98.15% in FY 2019-2020.

Bajaj Allianz Life Insurance

  • Bajaj Allianz Life Insurance company was founded in 2001 as a joint partnership between Bajaj Finserv Limited and Allianz SE.
  • It received a certificate of registration on 3rd Aug 2001 by Insurance Regulatory and Development Authority (IRDA) to provide Life insurance operations in India.
  • It has 759 branches in India, and its headquarters is in Pune and provides a vast array of insurance schemes.

Percentage of life insurance premiums

As of 2022, LIC still dwarfs all other private life insurance companies when it comes to total premium collection. LIC still collects almost 65% of all life insurance premiums in India. - As per Statista

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Frequently asked questions about insurance companies

  • What is the claim settlement ratio of LIC?

    98.62% (As of 2022)

  • How many general insurance companies are there in India?

    There are a total of 34 general insurance companies in India. (as of 2022)

  • How many life insurance companies are there in India?

    There are a total of 24 life insurance companies in India. (As of 2022)

  • Which is the largest life insurance company in India?

    Life Insurance Corporation of India (LIC)

  • What is the claim settlement ratio of Max Life?

    99.34% (as of 2022)

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    Insurance

    What is proximate cause in insurance? (With Examples)

    What is Proximate Cause in Insurance? (With Examples)

    Have you ever wondered what is a proximate cause in insurance? Wonder no more, this article will explain to you the concept of proximate cause (closest cause) in detail with 2 easy to understand examples.

    Proximate cause is one of the elemental principles of insurance. It deals with finding out what is the closest/first cause of the loss. This principle states that the closest cause for any particular loss will be considered when it comes to making an insurance claim payment.

    Example

    For instance, Mr. Rishi has taken a fire insurance policy for his workshop. Let us assume that his workshop caught fire and Mr. Rishi filed a claim with the insurance company.

    Upon investigation, the insurance company found out that the proximate cause (closest cause) of the fire was a minor earthquake in that area which lead to the warehouse ceiling collapsing upon the electric meter, which then caused the fire.

    Under the terms of the fire insurance policy, earthquakes were not covered and the earthquake being the proximate cause of the loss, Mr. Rishi’s claim was rejected.

    Let us understand the concept of proximate cause with another simple example.

    Example 2

    Let us assume that Mr. Shakuni took an accidental insurance policy. While walking on the road, Mr. Shakuni had a heart attack, which caused him to collapse and get hit by a car.

    While making a claim, it was noted that the proximate cause of the loss was a heart attack which lead to the accident. Since heart attack was not covered in Mr. Raj’s accidental policy, the insurance company rejected Mr. Raj’s claim.

    Thus if Mr. Raj would have taken a comprehensive health insurance policy his claim would have been accepted as the proximate cause (closest) of the loss was the heart attack and not an accident.

    Author Bio

    This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.

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    Pradhan Mantri Insurance Schemes (2 most important schemes)

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    Pradhan Mantri Insurance Schemes (2 most important schemes)

    The Central Government has launched two social security schemes under its administration for the welfare and growth of the lower-income groups. In this article, we will cover two such prominent schemes.

    • Pradhan Mantri Jeevan Jyoti Bima Yojana
    • Pradhan Mantri Suraksha Bima Yojana

    Pradhan Mantri Jeevan Jyoti Bima Yojna

    Pradhan Mantri Jeevan Jyoti Bima Yojana is a government-supported life insurance scheme introduced in the 2015 budget speech by the then finance minister, Mr. Arun Jaitley.

    PMJJBY is a renewable term insurance policy that provides life insurance coverage of Rs.2 Lakhs in case of death of the insured individual at a reasonable premium amount of Rs.330 per year. The beneficiaries will be provided the sum assured in case of the death of the policyholder.

    This policy is obtainable by people between the age group of 18years- 50 years.

    Let us go through the features of PMJJBY to understand it better.

    Features of PMJJBY

    Sum assured

    Nominee of the policy will receive 2 Lakhs

    Maturity benefit

    Not applicable

    Premium charge

    Rs.330 per year/per individual

    Policy tenure

    1 year term. Policy can be renewed every year up to the age of 55 years

    Eligibility

    18 years up to 50 years

    Maximum maturity age

    55 years

    payment method

    Premium will be auto debited from policyholders savings bank account. Premium can be paid via a bank account only.

    Tax benefit

    Yes, under Section 80C of The Income Tax Act

    Some Important points to note while opting for Pradhan Mantri Jeevan Bima Yojna (PMJJBY)

    1. Any individual having a savings bank account between the age of 18 years-50 years can avail of this scheme with their respective banks.
    2. You can avail of this scheme with only one savings account in that particular bank, irrespective of how many accounts you have.
    3. It is mandatory to link your Aadhar card to the participatory bank account.
    4. Individuals who want to opt for this scheme after the primary enrolment period ranging from 31st Aug 2015- 30th November 2015 will have to provide a self-attested medication certificate as proof that they do not have any preexisting illness mentioned in the policy declaration form.
    5. The premium will be debited from the linked bank account from the 25th of May to 31 May every year.
    6. If the savings account linked to the plan is closed, the policy shall also be canceled.
    7. If the policy gets terminated due to any mentioned reasons, it can be renewed by paying the total premium along with evidence that proves the healthy medical condition of the individual.

    Pradhan Mantri Suraksha Bima Yojna

    Pradhan Mantri Suraksha Bima Yojna (PMSBY) is a government-supported accidental insurance scheme in India.
    It was introduced in the 2015 budget speech by then Finance Minister Arun Jaitley, and then formally introduced by Prime Minister Narendra Modi.

    PMSBY offers to provide accidental coverage of Rs.2 Lakhs in case of accidental demise, coverage of Rs.1 Lakh in case of permanent partial disability, and Rs.2 Lakhs for total irrecoverable disability.

    Individuals between the age of 18 years to 70 years can apply for this policy.

    With just a premium charge of Rs.12 per annum, it is one of the most ideal and cost-effective insurance policies for the lower-income group.

    What is covered under Pradhan Mantri Suraksha Bima Yojana(PMSBY)

    • PMSBY provides a sum insured of Rs.2 Lakhs in case of accidental death.
    • PMSBY provides a sum insured of Rs.1 Lakh in case of partial disability.
    • PMSBY provides a sum insured of Rs.2 lakhs in case of total irrecoverable disability or loss of both eyes, loss of both hands and feet, paralysis, etc.

    Features of PMSBY

    Features of PMSBY

    		 

    Sum assured in case of accidental death

    2 Lakhs given to the nominee

    Sum assured in case pf partial disability

    1 Lakh

    Sum assured in case of total disability

    2 Lakh

    Eligibility

    18 years-70 years

    Tenure

    One year, can be renewed annually

    Payment method

    Premium will be auto debited from policyholders savings bank account. Premium can be paid via a bank account only.

    Tax benefit

    Yes, under Section 80D of The I.T Act, and sum insured of Rs 1 Lakh is non-taxable under Section 10  (10D) of The Income Tax Act.

    Premium charges

    Rs.12 per year.

    Major exclusion under the Pradhan Mantri Suraksha Bima Yojna (PMSBY)

    1. Suicide or attempted suicide
    2. Murder

    Important Point to note

    • You can avail of this scheme with only one savings account in that particular bank, irrespective of how many accounts you have.
    • The policyholders can avail of the benefits of the policy up till all the annual premiums are paid until attaining 70 years of age as on the annual renewal date.
    • In the case of a joint account, all holders can avail of the scheme.
    • The renewal premium of the policy will be debited from the saving bank account from 25th May to 31st of May every year.
    • In case you wish to discontinue the policy, a cancellation form must be submitted to the bank before the 30th of April of the year.

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    Life Insurance

    Post Office Life Insurance vs LIC (Understand the key differences)

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    Post Office Life Insurance vs LIC (Understand the key differences)

    When you think about a government-backed life insurance scheme for yourself, LIC and Post Office Life Insurance schemes stand out immediately.

    Both LIC and PLI offer a wide range of insurance products to choose from. You may be wondering if you should opt for a LIC policy or a PLI policy. This article will give you clarity by highlighting the benefits, features, and distinctions between LIC and PLI policies. So, let us begin.

    Lets us check out a few investigative differences between Post office Life insurance vs LIC schemes

    Differences between Post Office Life Insurance vs LIC schemes

    Postal Life Insurance (PLI)Life Insurance Corporation of India (LIC)
    Plan TypesPLI offers conventional life insurance schemes that provide assured sum + accrued bonus.LIC offers all kinds of insurance products and schemes, including market linked investment plans as well as retirement oriented plans and schemes.
    EligibilityAll Indians are eligible for their plans.Provides policies to each and every citizen of India.
    Maximum age limit for people opting for PLI’s policies is 55 years.Maximum age limit for people opting for LIC policies is 75 years.
    Age limit
    Health plansPLI does not provide health insurance plans.LIC offers various health insurance plans to its customers.
    Plans such as LIC’s Cancer cover and Jeevan Arogya are just 2 of LIC’s many health plans.
    Sum assuredPLI offers a maximum sum assured up to Rs 50 LakhsThere is no Limitation to the assured sum. The policyholder can decide on the coverage according to his needs.
    Coverage customizationPLI do not have additional ridders that can customize a person’s insurance plan.LIC offers a vast range of optional add-on riders that can help you expand your coverage accordingly
    Lic’s New Critical Illness Rider.
    LIC’s Accidental Benefit Rider.
    LIC’s Accidental Death and Disability
    LIC’s New Term Assurance Rider
    BonusAvailableAvailable
    PremiumThe premium cost of PLI’s policies are lower when compared to LIC.The premium cost of LIC is slightly higher compared to PLI.
    You also get a discount of 2% if you pay advance premium of 12 months
    How to avail policy?You can only purchase the policies by visiting the post office branch directly.LIC policies can be bought by visiting their branches, online as well as through agents.
    Premium payment modePremium payment can be done by visiting the Postal Office branch only.Premium payment can be done through visiting s LIC branch, LIC collection centers, and even online on their website.

    Now, let us quickly dive into the plans and schemes offered by Postal Life Insurance (PLI) And Life Corporation of India (LIC).

    Plans offered by PLI

    Type of plan

    Name of the plan

    Whole life insurance plan

    • PLI Suvidha (convertible whole Life plan)
    • PLI Suraksha

    Money back insurance plan

    PLI Sumangal

    Endowment insurance plan

    PLI Santosh

    Joint life insurance plan

    PLI Yugal Suraksha

    Child insurance plan

    PLI Bal Jeevan Bima

    Plans offered by LIC

    Type of plan

    Name of the plan

    Whole insurance plan

    LIC Jeevan Umang

    Term life insurance plan

    • LIC Anmol Jeevan
    • LIC  Jeevan Amar

    Endowment insurance plan

    • LIC Single Premium Endowment Plan
    • LIC Jeevan Rakshak
    • LIC Limited Premium Endowment Plan
    • LIC Jeevan Lakshya
    • LIC Jeevan Pragati
    • LIC Jeevan Labh
    • LIC Aadhar Shila
    • LIC Aadhar Stambh

    Unit linked plan

    LIC New Endowment Plan

    Pension plans

    •  LIC New Jeevan Nidhi
    • Pradhan Mantri Vaya Vandana Yojana

    Money back insurance plan

    • LIC New Money Back Plan – 20 years
    • LIC New Money Back Plan – 25 years
    • LIC New Children’s Money Back Plan
    • LIC Jeevan Tarun
    • LIC Bima Shree
    • LIC Jeevan Shiromani

    What should you opt for?

    The plan that would be best suitable for you would ultimately depend on your requirements and needs. However, we could give you some suggestions.

    • If you are eligible for Postal Life Insurance Plan and wish to opt for good coverage at nominal rates, you can opt for a PLI policy.
    • If you are interested in investing in a unit-linked plan, retirement, or a term insurance plan then LIC may be a prudent choice.
    • Further, If you want a policy that provides the highest coverage, you may consider a LIC policy, as the maximum coverage via PLI is Rs.50 Lakhs.
    • If you want a health plan, LIC also has you covered.

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    Oldest insurance companies in India

    Oldest insurance companies in India (From 1818-1938)

    The history of insurance can be traced back to ancient times. The first forms of insurance were of Indian and Babylonian origin. Insurance has come a long way from the Babylonian bottomry contracts to the sophisticated insurance companies of the modern age.

    That being said, have you ever wondered about the oldest insurance companies in India? Well, in this article we will take you back in time and talk about the oldest insurance companies in India.

    The Oriental Life Insurance Company (1818)

    Formal insurance in India was birthed during the British ruled era. The Oriental Life Insurance Company was the first insurance company formed in India. It was started by Europeans in Calcutta.

    The company was established to cater to the needs of the Europeans only, and the Indian natives were insured by the company.

    Initially, all the insurance companies established in that period were only formulated with the intention of covering only European natives. However, after the distinguished efforts of Shri. Babu Muttylal Seal and many others, insurance companies started insuring Indian lives.

    However, heavy premium charges were levied if the policyholder was an Indian, making it unfair.

    Bombay Mutual Life Assurance Society (1871)

    Bombay Mutual Life Assurance Society was the first Indian life insurance company formed in India with the objective of covering Indian lives at normal standard rates.

    Postal Life Insurance (PLI)

    Postal Life Insurance was introduced by the government on 1st February 1884. Its objective was to provide welfare schemes to benefit the postal employees and later the plan also extended to the employees of the telegraph department. In 1894, Post life insurance also provided life insurance coverage to the female employees of the P&T department.

    National Insurance Company (1906)

    National Insurance Company is the oldest existing general insurance company in India. It was incorporated in Kolkata on 5th December 1906 by Gordhandas Dutia and Jeevan Das Dutia. After its nationalization in 1972, NICL operates as a subsidiary under The General Insurance Corporation of India (GIC)

    Indian Mercantile insurance Company (1919)

    The Indian Mercantile insurance company was formed on 21 August 1919. It is currently in business for the last 102 years and many of its operations are active.
    It is registered In Mumbai and its registered office is at Indian Mercantile Chambers, Nicol Road, Ballard Estate, Mumbai- 400001.

    United India Insurance company (1938)

    United India is a leading general insurance company formed In 1938 and was nationalized in 1972. It is wholly owned by the government of India and its headquarters is in Chennai.

    Hindustan Co-operatives (1907)

    Hindustan co-operatives was incorporated in the house of world-renowned poet Shri Rabindranath Tagore in 1907, in Calcutta.

    Other Old Insurance Companies

    Other Insurance companies incorporated in the pre-independence era are as follows

    • Bharat Insurance Company (1896)
    • Co-operative Assurance (1906)
    • Swadeshi Life (later Bombay Life)
    • Sahyadri Insurance (Merged into LIC, 1986)

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