FAQs

In this section you will find answers to frequently asked questions on life, health, travel and home insurance, savings, loans, mortgages and personal finance.

Life Insurance (1)

Insurance policies are a promise for the insurer to pay a compensation “sum assured” to the nominees of the policy holder in the event of death of the life insured. However, the act of giving insurance is dependent on the Insurer who agrees to carry the risk in return for payment of a premium.

In some circumstances, an insurer may refuse to provide an insurance policy – for example due to medical reasons or due to a high risk occupation; or provide a policy subject to certain exclusions.

High risk occupations are those where the individuals, by the nature of their work, carry a risk of death. These could be armed service professions and professions or hobbies that have a high risk of death such as professional sky diving or mountaineering or motor racing.

Most Insurers do not cover the risk of death by suicide in the first year of the policy. In the event that a life insured commits suicide during the first year of the policy, an insurer can deny to pay the claim under the policy terms and conditions. This clause is designed to protect insurers from fraud.

Please check your policy terms and conditions for exclusions.

Category: Life Insurance

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Health Insurance (3)

1. It is always better to start your coverage at an early age.
o With age the risk to our health only increases, consequently making insurance more expensive with age
o What is also an important consideration is that most companies are now providing guaranteed renewals for life once you are issued a health insurance policy and you are most likely to ‘get in’ when young
o Another key factor is the existence of an exclusion period (generally 2-4 years) for certain illnesses or medical conditions. One could, most likely, see through this exclusion period without any complications in the early part of one’s life and be covered for such conditions at a later stage

2. Make sure that you insure yourself and / or your family for an adequate amount of cover.
o While choosing this amount do take into account the costs associated with the treatments on conditions that you want to insure for as well as your premium paying capacity.
o Do not restrict your cover to the nominal amount that may be required to meet your tax exemption limits only
o You could always choose from between Individual Health Plans that provide cover for an individual or Family Floater policies that cover the entire family (usually restricted to self, spouse and children – parents are not covered under such plans). While a family floater may turn out to be cheaper than taking 2 or more individual policies, the associated cover provided is at a family level. For e.g. if you take 2 Individual policies with a Rs. 200,000 Sum Assured each for yourself and your spouse, then both of you are covered for Rs. 200,000 each. However, if you take a family floater with a Rs. 200,000 Sum Assured then this limit applies to the two of you together

3. While you will surely compare premiums associated with various products that you compare, make sure you consider some of these features as well:
o Cashless hospitalisation: a facility in which a person can get the required treatment while the medical expenses are settled by the insurance company directly with the hospital if the hospital comes under its network. You may, therefore, also want to compare the associated network of hospitals of each insurer.
o Cumulative Bonuses or Premium Discount: Some products carry incentives for ‘claim free’ years and offer either an increased Sum Assured for no extra cost or a reduced premium for your Sum Assured
o Exclusions: Do carefully review the exclusion list of each product. Needless to say, for the same amount of cost you would want to go for the product that has the least number of exclusions. Alternately, you may want to be covered for a specific medical condition which may actually be excluded in a given product.
o Maximum age of Renewal: This is the age to which the company would continue to provide you with health insurance on payment of premiums. You may want to go for a product with a higher maximum age of renewal.
o Other benefits: You may also want to compare certain other benefits such as Ambulance charges, coverage for day care procedures (for which hospitalization is not required) etc.

It is always important to carefully review the products’ benefits, terms and conditions and associated features – get complete information on available choices and compare before you buy. As we keep saying Health Insured is Wealth Protected.

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While you will surely compare premiums associated with various products that you compare, make sure you consider some of these features as well:

o Cashless hospitalisation: a facility in which a person can get the required treatment while the medical expenses are settled by the insurance company directly with the hospital if the hospital comes under its network. You may, therefore, also want to compare the associated network of hospitals of each insurer.
o No Claim Bonus or Discount: Some products carry incentives for ‘claim free’ years and offer either an increased Sum Assured for no extra cost or a reduced premium for your Sum Assured
o Exclusions: Do carefully review the exclusion list of each product. Needless to say, for the same amount of cost you would want to go for the product that has the least number of exclusions. Alternately, you may want to be covered for a specific medical condition which may actually be excluded in a given product.
o Maximum age of Renewal: This is the age to which the company would continue to provide you with health insurance on payment of premiums. You may want to go for a product with a higher maximum age of renewal.
Other benefits: You may also want to compare certain other benefits such as Ambulance charges, coverage for day care procedures (for which hospitalization is not required) etc.

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There are various illnesses which are not covered in the policy (commonly known as ‘exclusions’). This is entirely dependent on the type of policy and the insurer. However, the following are almost always excluded:
• Expenses arising from HIV or AIDS and related diseases, use or misuse of liquor, intoxicating substances or drugs as well as intentional self injury
• War, riots, strike, nuclear weapon, induced treatment

It is important to review the exclusions clause of products at the time of comparing health insurance products or at the time of purchasing one to ensure that you know what would be available under your health plan.

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Travel Insurance (1)

Carefully consider the features of the product as well as the Price.

Do bear in mind that products with features that you may not require at all will lead to you paying a higher premium for no extra benefit. On the other hand, restricting the benefits may reduce the premium but could turn out to be far costlier in case of occurrence of an event that is not covered.

While considering the product features and pricing for products available in the market, it would be worth your while to also compare the following:

  1. What is the deductible excess against each of these risk covers i.e. what is the amount that you as the insured will have to pay towards a claim before the insurance company picks up the rest.
  2. What are the specific exclusions under each risk category and the general exclusions for a given products.
  3. If you are a frequent traveller, you may want to compare prices for a multi-trip product that provides you ongoing cover for each of your overseas trips during a one year period. These products, however, usually restrict coverage for the duration of each trip during the year to a specific number of days.

While buying a travel insurance policy you should typically consider the following features:

  • Medical Expenses: This provides for the insurance company to bear the costs of any medical expenses that you may need to incur for any immediate medical assistance you require on account of any illness contracted or injury sustained whilst on a trip overseas. The amount that will be compensated is limited to the Sum Assured of this cover which in turn is something you can choose at the time of purchasing the policy. Needless to say, higher the Sum Assured, higher is the premium. One needs to keep in mind, though, that this cover is not available for any medical treatment arising out of pre-existing illnesses or any such treatment that can be deferred till your return back to India. When comparing this feature between products, you may want to consider the following:
  • If there are any sub-limits per illness within the Sum Assured. Some products may have such sub-limits to restrict what will be paid out per illness i.e. even if you take a Sum Assured of, say, USD 200,000 and the sub-limit per illness is only USD 100,000 then the maximum that will be paid out to you in case of contracting one illness would only be USD 100,000. Products with no such sub-limits or higher amounts associated with these sub-limits may be better options.
  • Some products may have separate limits above a certain age; you may want to consider and compare these limits vis-a-vis the associated premium being charged
  • Products that offer cashless hospitalisation will be better for an overseas trip as compared to any that may offer only reimbursements.
  • You may want to choose a product that also allows for a transportation cost back to India, if absolutely essential from a medical viewpoint.
  • Any and all exclusions under each of these plans
  1. Personal Accident: This cover provides for compensation in case of death or disability arising out of an accident whilst on a trip abroad. The amount that is paid out is again limited to the Sum Assured that you choose for this cover. Most companies have a table of benefits associated with this cover that provides details of the proportionate amount of Sum Assured that will be paid out depending upon the degree of disability. 
  2. Personal Liability: Under this benefit, the insurance company will cover any costs associated with a third party liability arising of an incident (during the policy duration and whilst on your trip overseas) that results in death, injury or damage to a third party person or to his/her property – limited to the Sum Assured associated with this benefit
  3. Loss/Delay of Baggage: You can purchase a cover against the risk of loss of baggage or even a delay of checked in baggage. The insurance company will compensate you for the market value of your checked in baggage in case of its complete and total loss subject to the Sum Assured limit. You may want to compare the limits associated with contents that require appropriate proof of ownership. In the case of a delay in transportation of checked in baggage, the insurance company will compensate you for your emergency purchase of clothing, toiletries and medication upto a maximum of the associated Sum Assured provided this delay is more than 12 hours from the actual arrival of your travel carrier (your airline or ship) and there is written proof of delay provided by such carrier.
  1. Loss of Passport / Travel Documents: This benefit will cover the costs associated with obtaining a new passport or related travel documents up to a maximum of the Sum Assured associated with this benefit subject to reasonable care having being taken to prevent such a loss.
  2. Trip Delay / Cancellation / Interruption: A coverage for this benefit ensures that the insurance company will compensate you for any trip cancellation, delays or interruptions caused due to numerous unforeseen reasons including but not limited to:
  • Unforeseen injury, illness or death of the insured or insured’s family member(s)
  • Cancellation of on account of weather conditions
  • A terrorist incident in the destination city listed on the insured’s itinerary within 30 days of the insured’s scheduled arrival; etc.
  • You may want to compare the circumstances under which the benefit is allowed and the specific exclusions of each product for this benefit coverage.
  1. Home Insurance: Most products now also provide you with a Home Insurance to cover for any loss that you may incur due to any damage to your house on account of fire and allied perils as well as a loss related to burglary whilst you are away on your trip. 
  2. Other benefits: You may also want to compare products depending upon availability of other benefits such as ‘Missed connections’, ‘Financial Emergency Assistance’, ‘Hijack distress allowance’, ‘Hospital Cash’ etc.

Always carefully consider the product terms and conditions.

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Home Insurance (1)

Although there can be various inclusions depending on the kind of policy you go for but common exclusions include:
• Deliberate destruction of property
• Loss or damage caused by war, wear and tear, atmospheric conditions etc.
• Losses if home has been unoccupied for more than 30 days (but few insurer do provide cover)
• Loss of cash, bullion, painting, works of art, and antiques
• Loss to the structure and/or contents of home due to acts of terrorism. (can be covered as an add-on)

Category: Home Insurance

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