Month: April 2023

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Life Insurance

Artificial intelligence in life insurance (The Road Ahead)

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Artificial Intelligence in Life Insurance (The Road Ahead)

Even though we may or may not ever achieve artificial general intelligence (AGI), it is safe to say that artificial intelligence (AI) technology has been moving forward at a breakneck pace in recent times. You may have heard about Open AI’s ChatGPT and Google’s Bard AI.

These are AI systems designed to drastically increase their users’ productivity and capacity. Will similar AI innovations happen in the insurance sector? The answer is an unequivocal yes. In fact, there is rampant AI implementation in the life insurance sector as we speak. Let us look at some of the most important aspects of AI and its synergy with life insurance below:

 

  • Scope of AI in life insurance
  • Life Insurance Companies Incorporating AI
  • A.I. start-ups synergizing with life insurance

Scope of A.I. in life insurance

A.I. systems have massive potential to disrupt the status quo in the life insurance sector in India and worldwide. In fact, it is estimated that AI implementations could increase productivity and reduce expenses by a whopping 40%. Top CIOs have understood this potential and are willing to increase spending on AI technologies to improve their insurance businesses. In fact, even InsuranceLiya.com has leveraged AI to create a robust AI chatbot that can answer insurance related questions.

According to a survey conducted, over 40% of CIOs are willing to increase their expenses on A.I. and related technologies. These are big numbers, and the shift is imminent. Now, let us understand some of the scope of AI and where it will be used in the sector.

  • Risk Assessment: The fundamental task of an insurance company is to assess risk. An insurance company’s profit or loss depends on the quality of its risk assessment; if the quality is high, then the insurance company will likely be profitable; if it is sub-par, then the company will be in troubled waters. How can AI increase the quality of risk assessment? Well, here’s a real-world example of how insurance companies are currently using A.I. and machine learning to assess risk. An insurance company will leverage AI  and ML algorithms to screen through a variety of data that includes credit score data, social media data, and more. They will use this data to crunch the numbers using AI and ML algorithms and come up with a risk assessment score for the client. This score states the likelihood of a client initiating a claim in the future.
  • Insurance Underwriting: Insurance underwriting is similar to risk assessment. Once the risk is assessed, the insurance company may or may not choose to underwrite the insurance policy. This is a critical decision that needs to be taken. AI and ML assist insurance underwriters in making this decision. Gradient AI is a firm that analyses the risk for insurance companies and advises on the underwriting process.
  • Claims Processing: Imagine processing your insurance claim on your insurance company’s website, and an online AI assistant is beside you throughout the claim submission stage. This AI will answer all your queries and help you in your claim submission journey. Once a claim is submitted, similar AI systems will process and analyze this claim submission and give the claim a genuineness score. If the score is above 70/100, then the claim is passed. If it is under 70, then the claim is sent to a scrutiny department for further scrutiny. This system will fast-track authentic and genuine claims by a great deal, leading to greater customer satisfaction.
  • Human Resources: AI systems can be incorporated into H.R., where employees of insurance companies can directly address common H.R.-related questions to the AI and get a relevant response to the same. This can lead to a lot of cost savings for the company.
  • Customer Support: AI customer support systems are already in place, and it is likely that the quality of these systems will only improve as they become more robust. A policyholder can ask a variety of questions to the AI chatbot, and the chatbot will attempt to provide resolution for the same.
  • Customer on-boarding: We feel that this is another major disruption in the insurance sector. The entire customer on-boarding process can largely be handled online through AI systems, as these systems can be highly customizable and tailored to answer specific questions. The need to have an actual person behind the chat will be limited.

Life Insurance Companies Incorporating AI

AI start-ups synergizing with life insurance

AI start-ups have taken the insurance sector by storm. A plethora of AI start-ups are now leveraging AI to build effective synergies with insurance companies. Many of these A.I. start-ups also integrate A.I. solutions with existing insurance companies for effective API integration. Some notable AI start-ups include:

  • Lemonade
  • Insurify
  • Bold Penguin
  • Riskcovry
  • Arya.ai
  • Haptik A.I
  • Artivatic.ai
  • Toffee Insurance

These companies provide services in the areas of AI customer support, sales, customer on-boarding, marketing, risk analysis, underwriting, and more. Looking at the trend, it is inevitable that there will be large-scale adoption of AI and ML systems in the global insurance sector within the next 10–15 years.

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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Building Insurance (A Simple Guide)

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Building Insurance (A Simple Guide)

Cars, two-wheelers, cycles, and even your neighbor’s puppy can be insured, but did you know that entire buildings can also be insured? Yes, entire buildings irrespective of their size can be extended insurance coverage.

This article will attempt to explain the concept of building insurance, and at the same time highlight some of the most important topics concerning building insurance such as importance of building insurance, types, scope, benefits, and more.

We will extensively talk on the following topics:

 

  • What is building insurance? (Meaning)
  • Importance and Benefits of Building Insurance
  • Inclusions and Exclusions in Building Insurance
  • Potential use cases of Building Insurance
  • Types of Building Insurance
  • How is building insurance premium determined?

What is building insurance? (Meaning)

A building insurance policy is a contract between the owner of the building and the insurance company. This contract is for a specific period of time and a specific amount (Premium). A building insurance policy provides coverage to the policyholder in the event that the insured building is damaged during the contract term.

Importance and Benefits of Building Insurance

A building is an expensive asset and should be insured. Uninsured buildings can be a cause of massive financial pain to the owner of the building. Let us highlight some of the most important benefits of building insurance below:

  • Coverage against losses: This is the fundamental benefit of having your building insured. Damage caused to your building during the policy tenure will be covered by the insurance company. This is however subject to the terms and conditions of the policy bond.
  • Coverage for internal items: It is generally a surprise to policyholders that insurance companies even extend coverage to internal items like electric items and lightnings. Even expensive items like jewelry and artwork is covered if you buy a rider along with your base policy.
  • Peace of mind: Peace of mind is everything, and a building insurance policy will provide a good nights sleep to the policyholder, knowing that he is covered against unforeseen difficulties.
  • Loan: Bank’s will generally ask if a building is insured before collateralizing it.

Inclusions and Exclusions in Building Insurance

Inclusions and exclusions depend of the type of building insurance policy as well as the insurance company issuing the policy. That being said, there are certain inclusions and exclusions that are generally shared across policies and insurance companies, they are:

Inclusions

Exclusions

Fires

Damage caused due to willful negligence

Theft / Burglary

Damage caused intentionally

Natural disasters like floods, earthquakes, cyclones and more

Consequential damages

Manmade disasters like terrorist attacks and riots

General wear and tear of the property

Accidental damage caused to the property

Precious items like gold, jewelry, art, etc that is damaged

Electrical fires and other electrical damage

Damage resulting due to war

Alternative accommodation expenses if necessary

Third party construction loss

Keep in mind that actual inclusions and exclusions will need to verified and checked with the insurance company.

Potential use cases of Building Insurance

Building insurance can be bought by the following parties:

1.) Small and large businesses: Both, small as well as large businesses can leverage building insurance to protect themselves against potential losses. It is considered extremely cognizant to ensure that your building is insured and covered.

Businesses that can be covered under building insurance are:

  • Hospitals and medical centers
  • Retail super stores
  • Small and large malls
  • Residential towers
  • Hotels and restaurants
  • Airports and ports
  • Mansions and bungalows
  • Private buildings

2.) Individual Owners: Not only large and small businesses, even individual owners that own buildings need to strongly consider buying building insurance as the costs of servicing substantial damages to a building could be astronomical.

3.) People who rent: Certain insurance companies even sell building insurance policies to renters that rent out entire buildings.

Types of Building Insurance

Insurance companies will generally offer flexible building insurance plans that cover all bases.

  • Coverage for insides: This type of building insurance policy only provides coverage to the insides of the building. Here, only the contents of the building will be covered.
  • Comprehensive coverage: This type of building insurance policy covers the contents of the building as well as the structure itself. It is a comprehensive policy.
  • Comprehensive coverage with rider: This is where a comprehensive policy is extended even further by buying relevant add-ons or riders. A policyholder can buy a number of riders along with the base policy. The rider increase the coverage of the policyholder. There are a variety of riders available in the market.

How is building insurance premium determined?

The policyholder will need a pay a rate of premium to insure his building, but how is this premium calculated? Let us have a closer look at how an insurance company determines the rate of premium.

  • Geographic location: This is one of the most important factors that determine the premium rate. If the building is in an affluent location, the cost of premium will generally be higher compared to buildings situated in less affluent areas.
  • Value of the building: The insurance company will do a valuation check of the building and quote a rate of premium that works for them. The building owner can provide the insurance company with a recent valuation as well.
  • Value of the insides of the building: The value of the insides of a building vary, this ensures that the premium rate also varies. A building may have expensive lighting, electronics, safety system, etc installed within the building premises. An insurance company will take the costs of covering these expensive items and thereby increase the premium.
  • Type of safety systems in place: If a building has adequate safety systems in place like 24×7 security, CCTV cameras, fire safety systems etc installed, then it will have a favorable impact on the premium rate, it will bring the premium down.
  • Age of the structure: This is another very important factor that an insurance company considers. Generally, the older the building the more it costs to insure the structure as the chances of damage increase

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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HDFC ERGO Travel Insurance (A Simple Guide)

HDFC ERGO Travel Insurance (A Simple Guide)

Are you planning to take a trip abroad for work or pleasure? Getting a travel insurance policy is imperative. Certain countries even mandate their visitors travel insurance policies. Want to know about HDFC ERGO travel insurance? Well, you have come to the right place. In this article, we will talk in detail about HDFC ERGO travel insurance, its features, plan benefits, types of travel insurance plans, and much more.

  • What is Travel Insurance?
  • Travel Insurance in India.
  • HDFC ERGO Travel insurance.
  • Features of HDFC ERGO Travel Insurance plans.
  • HDFC ERGO Travel Insurance Plan benefits.
  • Travel Insurance Plans by HDFC ERGO.
  • How to purchase HDFC ERGO Travel Insurance Plans?
  • How to renew HDFC ERGO Travel Insurance Plans?
  • How to file a claim with HDFC ERGO Travel Insurance Plans?
  • Exclusions under HDFC ERGO Travel Insurance Plans.
  • How to file a claim with HDFC ERGO Travel Insurance Plans?

What is Travel Insurance?

Travel insurance is an insurance product that financially compensates the policyholder against various risks while traveling abroad or in the country. In simple terms, the insurance company will indemnify the policyholder in case of any unforeseen events like any medical emergency, loss or theft of baggage, flight cancellations, etc, depending on the terms of the policy.

Travel insurance in India

According to a survey conducted by a leading insurance company travel insurance in the country has skyrocketed post-COVID-19.
As per the survey reports only 50% of international travellers bought a travel insurance policy. Post the COVID-19 outbreak this number has drastically increased to 76%.
Another finding from the survey suggests that awareness of purchasing travel insurance plans has increased up to 90% from 76% post-pandemic.

HDFC Ergo Travel Insurance

HDFC ERGO offers a plethora of travel insurance plans that provide comprehensive coverage to both domestic and international travelers. The company offers a vast range of travel plans for families, individuals, students, and people who frequently travel due to work.

HDFC ERGO travel plans offers cashless facility in over 1 Lakh hospitals worldwide. Plans offered by the company provide coverage in more than 20 Schengen countries and 18 other countries.

Features of HDFC ERGO Travel Insurance plans

  • Cashless Hospitalization: HDFC ERGO has more than 1 Lakh network hospitals all around the world which will provide cashless facilities to the policyholder in case of any emergency hospitalization while traveling.
  • Countries Covered: Plans offered by the company provide coverage in 25 Schengen countries and various other countries.
  • COVID-19 Coverage: Travel plans by HDFC ERGO provide coverage against COVID-19. In case the policyholder contracts COVID-19 while traveling abroad the hospitalization expenses for the same will be taken care of by the company.
  • Customizable Plans: HDFC ERGO plans are customizable according to the preference and needs of the individual. The policyholder can choose from a range of cover options such as flight cancellations, lost luggage, medical expenses, etc while traveling. Certain policies also allow you to select the sum insured or the coverage limit needed for the trip.
  • 24/7 Customer Support: HDFC ERGO provides 24-hour customer support for quick assistance to its customers in case of any emergency like theft, loss of baggage, etc in all covered countries.
  • In-house Claim Settlement: The company provides in-house claim settlement for its customers which means there’s no involvement of any third-party administrator (TPA). HDFC Ergo has a dedicated team of experts who looks after the claim settlement process providing a smooth experience for its customers.


HDFC ERGO Travel Insurance Plan benefits

Below provided are some general plan benefits of HDFC Ergo travel insurance plans. These benefits may vary from policy to policy.

  • Medical Expenses: HDFC ERGO’s travel plan cover medical expenses like inpatient, and outpatient care, therapies, diagnostic tests, and so on due to any illness or injury suffered while traveling.
  • Accidental Death Cover: Travel plans by HDFC ERGO also provide accidental death coverage in which the company provides financial compensation to the nominee of the policy in case of accidental death of the policyholder.
  • Accidental Disability Cover: The company also provides accidental disability coverage which provides compensation in case of total permanent disablement suffered by the policyholder due to an accident.
  • Emergency Medical Evacuation: HDFC ERGO travel plans offer a unique benefit that provides coverage for an emergency medical crisis such as medical evacuation by air or road to the nearest hospital for treatments.
  • Coverage for Loss of Passport: The plans also offer to cover the cost of a passport and other crucial documents in case of loss or theft.
  • Coverage for Flight Delay: Plans by HDFC ERGO travel insurance also offer reimbursement in case the policyholder’s flight is delayed for more than 12 hours from the scheduled departure time.
  • Worldwide Coverage: Travel plans offered by the company provide comprehensive worldwide coverage that protects you and your loved ones while traveling on vacation or for any work-related purposes.

Travel Insurance Plans by HDFC ERGO

Below provided are the notable plans offered by the company:

1.) Student Travel Insurance Plan

The student travel policy is designed for students who are planning to travel abroad for higher education. This plan will secure a prolonged stay abroad so that the student can solely concentrate on their studies without worrying about the losses caused due to any unforeseen incidents. Any Indian student already residing overseas can also purchase this plan. This plan offers sum insured options starting from $100000 up to $250000.
This plan is available in five variants: Platinum, Gold, Silver, Bronze, and Standard.

Plan Benefits

  1. This plan covers all medical, evacuation, and repatriation expenses of the insured student studying abroad.
  2. Worldwide coverage is provided to the insured student starting from one month up to 2 years.
  3. This plan also covers the risk of theft or loss of a passport.
  4. This plan also provides financial compensation in case of study interruption due to personal reasons such as the death of a family member.
  5. This policy also indemnifies the payment of the bail amount of the student in case of incarceration of the student for any offense.
  6. Medical tests are not mandatory to purchase this policy.

Plan Eligibility

  • Age: From 16 years up-to 35 years.
  • All Indian students studying abroad are eligible to purchase this plan.

2.) HDFC ERGO Family Travel Insurance Plan

This type of travel plan is ideal if you are planning a vacation with your family members. It is an affordable option allowing you to insure all your family members under a single travel policy at an affordable premium. This plan offers a wide range of sum insured options starting from $ 50,000 up to $ 500,000. This policy is available in five variants: Platinum, Gold, Silver, Bronze, and Standard.

Plan Benefits

  1. This plan offers cashless treatment in more than 1 lakh hospitals all around the world in case of a medical emergency.
  2. The policy provides financial compensation in case of any total permanent disability suffered while traveling.
  3. This plan also covers the cost of any accidental dental injury suffered while traveling.
  4. The plan covers the cost of baggage or personal documents lost or stolen up to the sum insured.
  5. The company will provide financial compensation to the nominee of the policy in case of the accidental death of the policyholder.
  6. The plan will also financially compensate in case of hijack of the airplane or train in which the insured has travelled.

Plan Eligibility

  • Single trips: 6 months to 70 years.
  • Multi trips: 18 years up to 70 years.

3.) HDFC ERGO Multi-trip Travel Plan

This plan is ideal for individuals who have to travel frequently due to work or any other purpose. In this plan, the policyholder can avail of coverage for multiple trips under the same cover. HDFC ERGO‘s Multi-trip plan is available in four variants; Platinum, Gold, Silver, and Asian Region. The plan offers a wide range of coverage options from USD 5,00,000 to USD 25,000.

4.) HDFC ERGO Individual Travel Insurance Plan

This plan is designed for individuals who travel solo offering a wide range of benefits at an affordable premium. HDFC ERGO’s travel plan is available in five variants; Platinum, Gold, Silver, Bronze, and Asian region. The sum insured ranges from USD 5,00,000 to USD 25,000.

Plan Benefits

  1. The policy covers cashless hospitalization in network hospitals worldwide.
  2. This plan provides financial compensation in case of loss or theft of baggage.
  3. This plan covers accidental death while traveling.
  4. Any accidental disability while traveling will be compensated.

How to purchase HDFC ERGO Travel Insurance Plans?

Follow these simple steps laid down by us to purchase a travel insurance policy with HDFC ERGO.

  • Step 1: Visit the official website of the company i.e https://www.hdfcergo.com/
  • Step 2: Click on the “BUY” option at the header of the page and select travel insurance.
  • Step 3: Select the type of travel insurance plan you wish to purchase.
  • Step 4: Fill in all the required details like destination, number of passengers, and so on.
  • Step 5: You will be redirected to the quotes page where you will be offered the right plan for your requirements.
  • Step 6: You can make the payment directly via a debit or credit card. Your policy will be instantly generated or you can also purchase an HDFC Ergo travel plan by visiting the nearest official branch of the company.

How to renew HDFC ERGO Travel Insurance Plans?

Follow these simple steps to renew your travel insurance plan with HDFC ERGO:

  • Step 1: Visit the official website of the insurer and click on the “Renew” option.
  • Step 2: Fill in the requested details like policy number or registered mobile number to log in.
  • Step 3: Verify all the policy details and make the premium online.
  • Step 4: Your policy will be instantly renewed and you will receive a confirmatory email on your registered email address, or you can also renew your travel insurance policy by visiting the nearest branch of HDFC ERGO.

How to file a claim with HDFC ERGO?

As mentioned earlier, HDFC ERGO has a dedicated in-house claim settlement team that looks after providing an efficient claim settlement experience for its policyholders.

Note:

  • You must immediately inform the insurer in case of an emergency on its claim intimation number i.e +91 22 6234 6234/+91 120 6234 6234.
  • You can also contact the insurer on its claim’s intimation India landline number +91-120-4507250.
  • You can also intimate the insurer on an official email address i.e travelclaims@hdfcergo.com.

Follow these simple steps to facilitate a claim with HDFC ERGO Travel Insurance:

  • Step 1: You must immediately inform the insurance company in case of any emergency.
  • Step 2: Please visit travelclaims@hdfcergo.com and get a list of network hospitals to avail treatment.
  • Step 3: The claims team will share the required documents for a cashless claim.
  • Step 4: You can also download the digital claim form available on the official website of the company.
  • Step 5: Send the dully filled digital claim form with all the necessary documents to the company.
  • Step 6: After verification by the company the claim will be approved.

Exclusions under HDFC ERGO Travel Insurance Plans

Following are some general exclusions under HDFC Ergo travel plans. These exclusions may vary from policy to policy.

  • Pre-existing Conditions: Travel plans by HDFC ERGO will not cover any pre-existing conditions suffered by the policyholder before traveling.
  • Self-inflicted Injury: Any self-inflicted harm or injury caused to the policyholder like suicide, etc will not be covered under the policy.
  • Injury due to Adventure Sports: Any injury suffered due to participation in any kind of adventurous sport like rock climbing, scuba diving, paragliding, bungee jumping, etc is not covered under the plan.
  • Cosmetic Procedures: Any cosmetic treatments like botox, lip augmentation, etc will not be covered the plans.
  • Obesity Treatment: Any cost of treatments arising due to an obesity procedure or surgery will not be covered under the plan.
  • Health hazard due to breach of law: Any coverage for health problems that insured individual may experience due to illegal activities on their part like smoking illegal substances or drug abuse will not be covered by the insurer.

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Frequently asked questions about HDFC ERGO Travel Insurance

  • How to decide the best plan for my travel?

    This truly depends on the requirements, preferences, and budget of the individual. For example, If you are traveling with your family, it’s best to choose a family floater plan that covers your entire family in a single policy. Also, you can avoid the irritant of buying travel insurance for every trip by opting for a Multi-trip plan if you are a frequent traveller. If you are traveling abroad for higher studies, then a student plan is the best option for you.

  • What is not covered in travel insurance policies?

    Travel insurance plans generally do not cover any pre-existing conditions, mental illnesses, cosmetic procedures, and so on.

  • What is the maximum age to enter HDFC ERGO’s Travel Insurance plans?

    70 years is the maximum age to buy a travel insurance plan with the company.

  • Can I change the travel dates in my HDFC ERGO travel plan?

    Yes, you can alter the travel dates in your policy before the policy commencement date to a later date.

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    Insurance

    Trade Credit Insurance vs. Bank Guarantee (know the differences)

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    building

    Trade Credit Insurance vs. Bank Guarantee (know the differences)

    Trade credit insurance and bank guarantees are both instruments that are used in business. The scope of both these instruments is similar, although they do have their differences. In the span of this article, you will learn about what both of these instruments mean, as well as the features, benefits, and importance of each of the instruments.

    Lastly, we will cement both concepts in your mind by giving you simple and easy to understand real world examples of the workings of both these instruments. Let’s initiate the topic!

    • Meaning of Trade Credit Insurance
    • Meaning of Bank Guarantee
    • Trade Credit Insurance vs. Bank Guarantee
    • Examples of both

    Meaning of Trade Credit Insurance

    A Trade credit insurance is a contract between the insured (generally a business) and the insurance company. The role of a trade credit insurance (TCI) policy is that it provides coverage to the policyholder in the event that the client of the policyholder (a business) does not fulfill its payment obligations. Any losses originating from this are covered by the insurance company. We will explain this concept further with an example.

    Meaning of Bank Guarantee

    A bank guarantee is a written promise made by a bank that, in the event that a client defaults on his payment, the bank will step in and make the payment on behalf of the client. This instrument is important where there is a trust deficit. It increases business transactions because businesses are much more likely to conduct business freely by leveraging bank guarantees.

    Trade Credit Insurance vs Bank Guarantee

     

    Trade Credit Insurance

    Bank Guarantee

    Who are the parties?

    Generally, a TCI will be between the insurance company and a business.

    Generally, a Bank Guarantee will be between a client and a bank. An insurance company is not part of the equation.

    Who bears the risk?

    The risk is borne by the insurance company.

    The risk is borne by the bank.

    Where are they used?

    It has wide applications, and is used across a variety of industries.

    It is also used across a variety of industries.

    Which companies / banks provide this?

    1.       HDFC Ergo

    2.       Tata AIA

    3.       ICICI Lombard

    Just to name a few.

    All major banks provide this facility.

    Examples of TCI and Bank Guarantee

    • Example of TCI: Let us assume that a fictitious manufacturing company called ABC Ltd wants to distribute its products to a new distributor. ABC Ltd is not sure of the creditworthiness of this new distributor. To circumvent this issue, ABC Ltd purchases Trade Credit Insurance that covers itself in the event that the distributor fails to meet his payment obligations.
    • Example of a Bank Guarantee: Let us assume that a fictitious company called XYZ Ltd is in the business of trading. XYZ Ltd wants to export ₹1 crore worth of garments from India to Spain. In this case, it is the first time it has dealt with this new importer, and due to this, there is a deficit in trust. To circumvent this issue, XYZ Ltd has requested that its importer furnish him with a bank guarantee that the importer will pay up.

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    What is The Difference Between Being Bonded and Being Insured?

    What is The Difference Between Being Bonded and Being Insured?

    The difference between being bonded and being insured is a rather small one, but an important one. First, one needs to know the features, characteristics, benefits and drawbacks of a surety bond and an insurance policy. Only then, can a person understand the differences between both these concepts. Later, we will also highlight the differences between an insurance policy and a surety bond.

    Let us first briefly understand the concepts of insurance and then the concept of a surety bond, then we can move forward and highlight the difference between the two, and finally we will give examples for both concepts.

    • Understanding surety bonds and insurance
    • Difference between surety bonds and insurance
    • Examples of surety bonds and insurance

    Understanding surety bonds and insurance

    • Understanding the concept of insurance: An insurance policy is an agreement between the policyholder and the insurance company. This agreement indemnifies the policyholder against pre-specified losses.
    • Understanding the concept of surety bonds: A surety bond in an agreement between two parties. It does not involve an insurance company. A surety agreement states that the bond holder will be indemnified up to a pre-specified amount in the event that the person issuing the bond defaults in their commitments.

    Difference between surety bonds and insurance

    Although similar, there are some notable differences between being bonded and being insured.

     

    Insurance

    Surety Bond

    What are some types?

    • Health Insurance
    • Motor Insurance
    • Life Insurance
    • Term Insurance
    • Reinsurance
    • Contract bonds
    • Janitorial bonds
    • Fidelity bond

    Who are the parties?

    Generally, the parties are an insurance company and an individual.

    Generally, both parties are either individuals or entities.

    What is the extend of the indemnification?

    Up to sum assured

    Up to the amount mentioned on the bond

    Who issues this generally?

    Insurance companies and reinsurance companies

    Contractors, private and public companies, individuals.

    Examples of surety bonds and insurance

    Finally, let us cement the concepts of surety bonds and insurance, and highlight the differences between the two through a couple of easy to understand and simple real world examples.

    • Example 1: Let us assume that Mr. Manohar wants to purchase a life insurance policy to secure his family after his passing. He contacts his financial advisor and the advisor refers him to an insurance agent. Mr. Manohar, now purchases a life insurance policy from a life insurance company. This is an example of an insurance policy, where the agreement is between an individual and an insurance company.
    • Example 2: Let us assume that a Cooperative housing society in Mumbai wants to repair the society roads. They hire a civil contractor for the job but they insist that the contractor furnish the society with a surety bond that states that he will complete the job safely, efficiently, and within the specified time period. If he does not adhere to the commitments written down on the surety bond, the contractor has to compensate the society for any financial damages caused. The terms of the bond and amount specified are variable and need to be agreed upon by both parties.

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    Postal Life Insurance

    What is Rural Postal Life Insurance (RPLI)?

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    What is Rural Postal Life Insurance (RPLI)?

    Rural Postal Life Insurance (RPLI) is effectively the rural life insurance arm of Postal Life Insurance. The plans, features and services are generally the same, the only difference between Postal Life insurance and Rural Postal Life Insurance is that PLI operates in urban areas and RPLI operates in rural areas. RPLI came into existence in 1995 on the back of recommendations made by the noteworthy Malhotra Committee in 1993.

    The Malhotra committee also made a host of other important observations and recommendations in 1993, some of them were; allowing the entry of private companies in the insurance sector, advising towards the formation of the IRDAI, and making other important insurance recommendations. The Department of Posts took the recommendations of the Malhotra committee pertaining to increasing the penetration of insurance in rural areas in India and began operations in 1995. As of 2021, RPLI has been immensely successful, having issued policies worth ₹1.27 Lakh Crores, and selling over 2.18 Crore policies.

    Let us now talk about some of the noteworthy aspects of RPLI, such as:

    • Importance of RPLI
    • Features and benefits of RPLI
    • Schemes under RPLI
    • Eligibility and Documents required

    Importance of RPLI

    • Increasing rural insurance penetration: RPLI has been instrumental in increasing life insurance penetration in India through its extensive efforts to push the life insurance product in rural India. The insurance penetration in rural India was relatively low in the early 90s, now as of 2023 every one out of five rural persons has a life insurance coverage.
    • Low premiums: The premium structure and rates under RPLI are designed to be extremely affordable, with the intention to bring every rural person under the umbrella of life insurance.
    • Increase in employment: As RPLI was pushed to rural areas of the nation, this led to an increase in the requirement for staff, which resulted in many employment opportunities for the rural population.

    Features and benefits of RPLI

    • Loan against policies: RPLI provides policyholders with the ability to mortgage their life insurance policy and get a loan against it. This feature could really assist the policyholder during times of cash crunch.
    • Nomination: A Nomination facility is provided under every RPLI policy. Further, a policyholder can change or modify his nomination by filling up a fresh nomination form.
    • No need for a medical test: Policyholders do not need to undergo a medical test in order to purchase an RPLI policy.
    • Tax benefits under 80C: Up to ₹1.5 Lakhs worth of premiums paid per year is eligible for tax deduction under Section 80C of the I.T Act.
    • Policy switching: Certain RPLI policies have the added benefit and ability to be switched from one RPLI policy to another. This switching is generally eligible for only certain types of policies and after a certain period has passed.
    • Flexible premium payments: Under RPLI, the policyholder has the option to pay his premium as per his convenience, he can either chose a monthly, quarterly, half yearly, or even yearly premium payment terms.

    Schemes under RPLI

    RPLI currently offers 6 policies, they are:

    • Whole Life Assurance (Gram Suraksha)
    • 10 Year RPLI (Gram Priya)
    • Anticipated Endowment Assurance (Gram Sumangal)
    • Children Policy (Bal Jeevan Bima)
    • Endowment Assurance (Gram Santosh)
    • Convertible Whole Life Assurance (Gram Suvidha)

    We will briefly talk about the most important aspects and features of each of the above policies.

    • 1.) Whole Life Assurance (Gram Suraksha): Under this policy, the policyholder or his beneficiary will be paid the sum assured along with the bonus accrued when the policyholder reaches the age of 80. If the policyholder passes away before the age of 80, the policy beneficiary will be eligible to receive the policy benefits. The maximum sum assured under this policy is ₹10 Lakhs.
    • 2.) 10 Year RPLI (Gram Priya): The Gram Priya RPLI policy is an endowment policy where the policyholder is provided with a life cover as well as regular survival bonus payments which are paid to him after 4 years.
    • 3.) Anticipated Endowment Assurance (Gram Sumangal): This is a relatively long term policy where the survival benefits are paid to the policyholder periodically. This policy may seem attractive for someone looking for regular income inflow from their life insurance policy.
    • 4.) Children Policy (Bal Jeevan Bima): Under this policy, up to 2 children of the policyholder are covered against the death of the policyholder. For insurance, if the policyholder dies, PLI will disburse the policy benefits to the children of the policyholder.
    • 5.) Endowment Assurance (Gram Santosh): The Gram Santosh RPLI policy is also a kind of endowment policy where the policyholder will to paid regular policy benefits when he or she attains the following age; 35 years, 40 years, 45 years, 50 years, 55 years, 58 years & 60 years of age. If the policyholder passes away before maturity, the policy beneficiary/nominee will receive the policy benefits along with any accrued bonus.
    • 6.) Convertible Whole Life Assurance (Gram Suvidha): This policy has the flexibility to get converted from a whole life assurance policy to an endowment policy after 5 years. This policy can be surrendered after 3 years, and a loan can be taken on this policy after 4 years.

    You can read more about RPLI and their plans here.

    Eligibility and Documents required

    The eligibility criteria for buying an RPLI policy is rather straight forward. Any person living under what would constitute as a rural area is eligible towards RPLI. Documents required to purchase a Rural Postal Life Insurance policy would be photo ID and address proof, such as:

    • Aadhar Card
    • Passport
    • Driving License
    • Ration Card
    • Voter ID

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    Categories
    Motor Insurance

    What is Zero Depreciation in Bike Insurance? (Meaning Explained)

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    chopper

    What is Zero Depreciation in Bike Insurance? (Meaning Explained)

    Are you planning to scoot around the city and have a good time? Be sure to get your bike insured first. That being said, all insurance policies and riders are not the same. You will do yourself a disservice if you do not know about the concept and meaning of Zero Depreciation in bike insurance. This article will explain to you the following:

    • Meaning of Zero Depreciation in Bike Insurance
    • How does Zero Depreciation work?
    • Example of Zero Depreciation in Bike Insurance
    • Companies offering Zero Depreciation riders

    Meaning of Zero Depreciation in Bike Insurance

    Depreciation affects everything, your car, two-wheeler, other non appreciating assets and more. It is the loss of value of an asset as the years move forward. Your two-wheeler is also a victim of this. Imagine this, you buy a brand new motor bike, and it works perfectly for the first couple of years. Then as the years move forward, it starts giving minor issues, and then major ones. Now, you want to sell your bike. Prospective buyers will keep in mind the wear and tear of your bike and quote you an offer price. This price will be much lower compared to the price you paid to buy the brand new bike, this is essentially a real world example of depreciation in bike insurance.

    Even though it is not generally possible to protect your bike against the loss of value caused by depreciation, you can at least protect yourself against the evil head of depreciation in your bike insurance policy. How so? Well, you buy a Zero Depreciation rider along with your bike insurance policy.

    How does Zero Depreciation work?

    If you buy a Zero Depreciation rider or add-on along with your bike insurance policy, it will protect you against depreciation whenever you decide to apply for a motor insurance claim. Like we previously said, every part of your bike depreciates, and the insurance company knows about this. That is why they incorporate the concept of depreciation whenever they sell a motor insurance policy.

    For instance, if your motor insurance company provides 100% coverage if there is any damage to the headlight of the bike within the first year, they may reduce the coverage to 80% in the second year, and 50% in the 3rd year. So, if a policyholder damages his bike’s headlight in the 3rd year and files a claim, the insurance company will only pay him 50% of the claim amount, the balance will need to be paid by the owner himself.

    You can extrapolate this example to other parts of your bike. The concept remains the same. So how does a Zero Depreciation rider benefit a policyholder? Well, It acts as a shield against depreciation so the insurance company is obligated to not factor in depreciation while disbursing the claim amount.

    Example of Zero Depreciation in Bike Insurance

    Let us understand this concept with two simple to understand examples.

    Example 1: Mr. Shyam bought a new two-wheeler and consequently bought comprehensive motor insurance for the same. After a couple of years, Mr. Shyam met with a minor accident damaging his bike’s headlight. Upon making the claim, the motor insurance company only disbursed 70% of Mr. Shyam’s claim application amount, citing a 30% depreciation component. Thus, Mr. Shyam had to pay the balance 30% for repairs out of pocket.

    Example 2: Mr. Dinesh bought a new bike, and like Mr. Shyam he too bought comprehensive motor insurance, the only difference was that he bought a Zero Depreciation add-on along with the policy by paying a little extra. After 5 years, Mr. Dinesh also met with a minor accident damaging his headlight. Since he bought a Zero Depreciation rider/add-on, the insurance company disbursed him the entire claim amount.

    Companies offering Zero Depreciation riders

    Now that you have understood the benefits and features of Zero Depreciation. Let us have a look at the top bike insurance companies that offer Zero Depreciation riders:

    • Bajaj Allianz
    • HDFC ERGO
    • Digit Insurance
    • Future Generali
    • Kotak Mahindra Insurance
    • Acko Insurance
    • SBI General Insurance
    • Royal Sundaram
    • Tata AIG
    • IFFCO TOKIO

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    Categories
    Postal Life Insurance

    How to calculate maturity value of your PLI policy?

    calculator
    calculator

    How to calculate maturity value of your PLI policy? (maturity calculator)

    Do you have a Postal Life Insurance policy? Is it due for maturity? Or are you just wanting to calculate the maturity amount of your PLI policy? Well, this article tells you how you can calculate the maturity value of your PLI policy in simple steps. Let’s begin.

    Further, we would like to point out that there is no official PLI maturity calculator tool by the India Post, you as a policyholder will also have to be cognizant of this. Accurately calculating your PLI maturity value is a manual process that you will need to undergo. We will show you how below.

    Step 1.) Identify your PLI policy

    Postal Life Insurance offers a variety of life insurance plans like Whole Life Assurance (Suraksha), Anticipated Endowment Assurance (Sumangal), Joint Life Assurance (Yugal Suraksha), Endowment Assurance (Santosh), Children Policy (Bal Jeevan Bima), and Convertible Whole Life Assurance (Suvidha). Find out which is your policy.

    Step 2.) Break-up of maturity value

    Now, you will need to get a break-up of all of the aspects of your maturity value. For instance, if you have a Santosh PLI policy (Endowment Assurance), you will have to get the following details:

    • Fixed policy maturity value (This is the fixed maturity value of your policy). If you have taken a Santosh PLI policy for 5 Lakhs, then this would be your fixed maturity value.
    • Next, calculate the bonus amount on your PLI policy. This is the yearly bonus that accrues in your policy. The bonus amount may fluctuate from year to year based on the type of policy taken and the performance of the policy. You will have to take to your agent or officer to get clarity on the bonus rate. The bonus rate is generally announced at the start of the financial year by the Department of Posts.
      In 2023, The Directorate of Postal Life Insurance announced the bonus rate for FY 24 as ₹76/- per thousand of sum assured for the Endowment Assurance policy. You can get the bonus rates for 2023 of other policies here.

    Step 3.) Calculation of your PLI policy maturity value

    Now, let us show you how to calculate the final maturity value of your policy.

    For this use case, we will take the example of a hypothetical PLI policy that a person named Mr. Singh has taken. Let us assume that Mr. Singh has taken his policy in 2013 for 10 years. His policy is nearing maturation in 2023, and he wants to calculate the final maturity figure.

    • First, he will have to check his policy bond and get the fixed maturity value figure. For our example, let us say the fixed maturity value figure was ₹10 Lakhs.
    • Next, Mr. Singh will have to calculate the bonus figures for each year. Here, generally the updated bonus figures will be sent to him via email to the registered email ID. In case these figures are not sent, Mr. Singh will have to trace down the bonus amount announced by Postal Life Insurance for each year from 2013-2023. Remember, that the bonus amount may be different for every year.  For example, let us say PLI announced a bonus of as ₹50/- per thousand of sum assured for the Endowment Assurance policy for 2014. Next, they announced ₹46/- per thousand of sum assured for 2015, so on and so forth.
    • Mr. Singh will have to trace all of his bonus amounts from 2013-23. Now let us assume that the total bonus accrued between 2013-2023 is ₹5 Lakhs. That means, he will then have to add his primary maturity value (₹10 Lakhs) + total accrued bonus amount (₹5 Lakhs) = Final maturity value of ₹15 Lakhs.

    Note that this is just an example maturity amount, the actual maturity amount may be higher or lower based on your actual PLI policy bonus figures. You can calculate the maturity value of your own PLI policy following the above framework.

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    Categories
    Ayushman Bharat Yojana

    Ayushman Bharat hospital list in Ahmedabad

    hospital building
    hospital building

    Ayushman Bharat hospital list in Ahmedabad

    Are you a benefactor of the Ayushman Bharat Yojana, and are looking to find out which are the empaneled hospitals under the Ayushman Bharat Yojana in Ahmedabad? You can find out the updated list of all of the network / empaneled hospitals under this scheme in simple steps. Let us begin.

    Step 1.) Visit the official Ayushman Bharat (PMJAY) website

    You can visit the official website directly or by searching for ‘Ayushman Bharat Yojana’ on your preferred search engine and then navigate to the website.

    Step 2.) Navigate to the ‘Find Hospitals’ section on the top right hand side

    Ayushman Bharat homepage
    Ayushman Bharat homepage

    Once you navigate to ‘Find Hospitals’, kindly click on it. This is where you will get redirected to the PMJAY hospitals page.

    Step 3.) Enter the details

    hospital list form
    PMJAY hospital list form

    Here, you will now need to enter the following; Gujarat as your state and Ahmedabad as your district. Once entered, click on ‘Search’

    Step 4.) Get a list of all empaneled hospitals in Ahmedabad

    PMJAY hospital list in Ahemadabad
    PMJAY hospital list in Ahemadabad

    Now, you will get a list of all of the empaneled hospitals under the Ayushman Bharat Yojana. As of 2023, there are 325 network hospitals that are empaneled under the scheme. It is likely that by the time you initiate a search the number of hospitals may have increased or decreased. Also keep an eye on the ‘Suspended Hospitals List’ and ensure that your hospital is not in this list.

    By following the steps mentioned above anyone can get an updated list of all empaneled hospitals under the PMJAY scheme in Ahmedabad, Gujarat. The reader can also download the entire list in excel format if required, the website provides the functionality to do so.
    And finally, as always stay safe. We wish you and your family a healthy future.

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    Categories
    Life Insurance

    All India National Life Insurance Employees Federation (Explained)

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    professional building

    All India National Life Insurance Employees Federation (AINLIEF) – Explained

    Are you looking to learn about the All India National Life Insurance Employees Federation (AINLIEF)? Well, we will attempt to make you understand the following important aspects of the AINLIEF, such as:

    • What is AINLIEF?
    • What is the role of AINLIEF?
    • How to login to your AINLIEF account?
    • Historic AINLIEF protest and Supreme Court order

    What is AINLIEF?

    All India National Life Insurance Employees Federation (AINLIEF) is a registered trade union that works to provide solutions and resolutions to terminated as well as temporary workers of Life Insurance Corporation of India (LIC). Their registration code is NGP5422. They have their registered office at Plot No 82, Nimbalkar Bhawan, Hanuman Nagar, Nagpur – 44009.

    What is the role of AINLIEF?

    Let us look at some of the primary roles of AINLIEF:

    • To act as a forum and listen to the grievances of temporary and terminated workers of LIC.
    • Provide resolution to aggrieved temporary and terminated workers of LIC of India.
    • Act as a benevolent agent between the LIC worker and the company. You can read about the LIC and AINLIEF supreme court matter below to get a better understanding of this point.

    How to login to your AINLIEF account?

    To login to your AINLIEF account, you will have to follow these steps:

    Step 1.) Visit the official AINLIEF website

    Step 2.) Navigate to the ‘Login’ page at the top right hand side

    login button
    Login button on the top right hand side

    Step 3.) Register or login to your AINLIEF account

    login box
    Login box

    Historic AINLIEF protest and Supreme Court order

    • In a matter that dates back over 30 years to 1991, AINLIEF demanded that LIC permanently absorb 8000+ temporary employees and make them permanent employees. This petition was filed in the Labour Court. The Labour Court ruled in favor of AINLIEF, but the order by the court was not executed.
    • In 2007, AINLIEF approached the Supreme Court of India for the same matter and the Supreme Court passed an order in 2015, in favor of permanent absorption of temporary LIC workers and make them permanent employees of LIC. Further, pending dues (50 per cent back wages to temporary 3 and 4 grade employees,) of these works must also be paid to them.
    • In 2018, hundreds of LIC workmen protested on the iconic Azad Maidan of Mumbai City, demanding that the Supreme Court order of 2015 be implemented by LIC of India. In an expression of solidarity, the General Secretary of AINLIEF stated “We demand an immediate implementation of the Supreme Court’s order. This is a united effort to express solidarity with our fellow workers and we will ensure that they get their rightful dues and means of livelihood.”

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