How Life and Health Insurance is important for Fmcg salesmans family
Getting your first job is a huge milestone and receiving the first salary gives you a sense of accomplishment. As a student, you lived with limited money but once you start earning, there are so many things you would like to do.
Most people spend their lives chasing dreams rather than realizing them. However, proper financial planning helps you to achieve your dreams. Adopting prudent financial planning at the start of your career ensures you can accumulate a huge corpus through compounding.
There are various ways through which you can plan your finances like opening a recurring account, investing in life insurance etc.
Five tips on how to get your finances in order:
1. Start budgeting
Almost 80% of single adults save less than 10% of their monthly earnings. Unfortunately, increasing expenses and higher living costs (especially in metros) leaves very little for you to save. One way to overcome this limitation is to start budgeting. First, allocate the amount needed for necessities such as groceries, rent, and utility bills. It is recommended to follow the 50/30/20 rule. As per this rule, 50% of post-tax income should be used towards urgent requirements, 30% on wants, and the balance as savings.
2. Build up your savings
At the start of your career, you may likely stay with your parents and avoid paying rent and utility bills. These savings may be used to build up for emergencies. If you have any student loan, it is important to repay it at the earliest.
It is also recommended to open a recurring deposit account that is used to deposit 10%-20% of your monthly income. This helps in developing financial discipline and ensures that you build a larger corpus over the long-term.
3. Understand your financial goals
A common financial planning tip you will read about is to list down all your goals. The next step is to prioritize the important goals and then create a plan to achieve these. You may classify your goals as short-term,medium-term, and long-term.
Short-term goals may be something you want to achieve at the end of the month. Medium-term goals require planning for one or two years. Long-term goals are achieved over five years or longer; these require detailed planning. Once you understand your goals, determine the amount you need to save and choose investment plans that help you achieve these.
4. Make the right investments
An important aspect of financial planning for beginners is to choose the right investment avenues. Begin by understanding the different types of investment options that are available. Some of these include stock markets, fixed deposits, mutual funds, bonds, and insurance.
Insurance is often neglected especially by young adults. However, it is recommended you have ten times your annual income as coverage. A life insurance policy ensures your loved ones do not face financial difficulties in case of an unfortunate event. And it is very simple to even buy life insurance. There are different types of life insurances available in the market. You can compare life insurance online and make an informed decision.
INVEST IN TERM LIFE INSURANCE AND SECURE YOUR LOVED ONES
5. Plan for your retirement
Though retirement may seem a long distance away when you start your career, planning for these years is also important. The first step is to calculate the corpus you would need to sustain your lifestyle post-retirement. Next is to invest in different avenues and build the corpus. When you start early, you will need to save a smaller amount to achieve your goal. Moreover, it provides you with a long time to enjoy the power of compounding.
Budgeting, prioritizing financial goals and investing from your first job ensure you do not have to worry about how to manage finances later in life.
What are the basic features of a life insurance plan?
For starters, let’s reiterate what is meant by a life insurance plan.
Simply put, life insurance is a financial contract which assures to provide the nominee of the policy taker a certain amount of money that has been determined in that individual policy, referred to as the sum assured.
Now, you need to pay a small amount of money to continue the policy, which is known as the premium.
Premiums for an insurance plan depend on the age of an individual primarily.
However, it is important to note here that even individuals of the same age might be charged a different premium because it is calculated on various parameters.
Some of these parameters include your family and medical history, coverage and term, lifestyle habits etc. Apart from giving life cover to the insured, one of the primary features of a life insurance contract is that it also provides you maturity benefits.
What are the different types of life insurance?
There are five main types of life insurance that you must know about before deciding to invest in a policy.
Term Life Insurance:
This policy offers a large sum of money assured to your loved one after your death at the cost of a nominal premium amount. However, this does not have any maturity value.
Endowment Plans:
- This plan offers a lump sum amount of money at the end of the tenure of your plan. Moreover, it gives you a life cover until maturity.
Money Back Plans:
- These plans provide you with an opportunity to enjoy payouts at regular intervals (usually 5 to 10 years). These payouts are a certain percentage of the sum assured under your plan.
Unit Linked Investment Plans:
- This a hybrid product that can be understood as a mutual fund wrapped in a life insurance policy. While offering market-linked incentives, you get the comfort of a life cover.
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Annuity/Pension Plans:
This is popular among those investors who want to reap its benefits post-retirement when there is no regular source of income while the expenditure often witnesses an increase.
These plans are of two types – deferred and immediate. In a deferred annuity plan, you start receiving regular income after a few years. On the other hand, immediate annuity plans offer you a regular income immediately after the purchase of the plan.
What’s the difference between life insurance and term insurance?
The primary difference between a term insurance and traditional life insurance plan is that a term insurance plan only provides death benefit in case of demise of the insured within the term period, whereas a life insurance policy offers both death and maturity benefit to the insured.
What are the primary benefits of a life insurance plan?
This policy provides a death benefit in case of your death during the term
You get the flexibility to choose the term
Your premiums are duly returned to you if you outlive the policy tenure
It acts like an automated savings plan which encourages you to add to your savings every month
You can avail loan against your plan in case of a financial emergency
What is meant by ‘riders’ in a life insurance plan?
Riders are additional top-up features in a life insurance plan that widen the scope and benefits of a life insurance policy. For example, in addition to life coverage, you can choose riders like accidental death benefit rider and accidental permanent disability benefit rider.
Can I enjoy tax benefits through my life insurance?
Of course, you can. A salient feature of life insurance plans is the tax benefits they provide. All premiums paid for life insurance plans are eligible for tax exemption under section 80 C of the Income Tax Act. It allows a policyholder to avail a maximum benefit of up to Rs 1.5 lakh, making this one of the key benefits of life insurance. Moreover, the death benefits paid to the nominee are exempt from tax under Section 10 D of the Income Tax Act.
What are underwriters in a life insurance policy?
Underwriters evaluate the risk involved in insurance. The process of risk evaluation starts before the issuance of insurance policy, and ends with settlement of the claim Only after the approval of underwriters can the policy be issued to the policyholder. Moreover, the company pays the claim benefit to the nominee only after clearance from the underwriter.
Can the premium change during the tenure?
No it doesn’t. The premium is determined taking into consideration numerous factors discussed above and once set, the premiums do not change over the entire tenure of the plan.
What happens if I can’t pay the premiums?
If the premiums are due beyond the due date, a grace period is given for paying the premiums. If the premium is still not paid during the grace period, the policy stands lapsed. A lapsed policy has reduced benefits which is known as the paid-up value.
How can I buy a secure life insurance policy?
You can sign up for a life insurance plan both online and offline through numerous financial service providers that offer a variety of life insurance plans. For instance, you can invest in Future Generali Life Insurance Care Plus Plan , which provides guaranteed sum assured in the case of the policyholder’s death. It comes with two options: the classic option, which provides sum assured of less than Rs 25 lakh, and the Premier option, which provides an insurance cover of Rs 25 lakh and above.
What is the “free to look” period?
If you have just purchased a life insurance policy and then changed your mind about it, express this right away to your agent as you may be in your “free to look” period. During this period, you are allowed no less than 10 days from the date a life insurance policy was delivered to review and evaluate the policy. A policy sold by mail order must provide a 30-day review period. Should you elect to return the policy for any reason during the “free to look” period, the insurance company must refund any premium you paid.
How Much Life Insurance Should You Buy?
It’s a basic question that You get all the time. When someone asks someone if they are thinking about buying too much life insurance, that’s normally only a concern if they can’t afford it.There are a variety of thumb rules that you can obey, and perhaps the most famous one is to take ten times your annual pay.
What Is The Distinction Between Life Insurance And Term Insurance?
The main distinction between a term insurance scheme versus a conventional life insurance scheme is that a term insurance scheme only offers a death benefit to the insured if the insured dies within the time limit, while a life insurance policy provides both a death benefit and a maturity benefit to the insured.
What Do ‘Riders’ Mean In A Life Insurance Plan?
Riders are extra provisions of a life insurance contract that expand the breadth and advantages of a life insurance policy. For example, in addition to life coverage, you can select riders such as accidental death benefit riders and accidental permanent disability benefit riders.
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What Happens If I Can’t Afford To Pay The Premiums?
If the premiums are owed after the due date, the collection of the premiums shall be subject to a grace period. If the premium is not yet charged during the waiting period, the scheme will expire. The lapsed agreement has decreased the incentives known as the paid-up value.
Can I Take Advantage Of My Life Insurance Tax Benefits?
Of course, you can do that. The tax incentives they offer are a core aspect of life insurance policies. Both premiums charged for life insurance schemes are eligible for a tax deduction under Section 80C of the Income Tax Act. It helps the policyholder to benefit from the full benefit of up to Rs 1.5 Lakh, making this one of the main advantages of life insurance. In addition,the death benefits paid to the nominee are excluded from tax under Section 10(10D) of the Income Tax Act.
How Hard Is It To Pass A Medical Exam To Get Qualified For Purchasing Life Insurance?
If you’re in good shape, you shouldn’t think about it. Make sure you drink lots of water a couple days before the medical exam and obey the nurse’s orders, particularly if they advise you not to eat in the morning. If you simply can’t go for it, then there’s still no medical test protocol.You will pay more for this than if you apply under regular underwriting, but the procedure is quicker and can be a nice choice for the right person.
Who Are The Underwriters Of A Life Insurance Policy?
Underwriters measure the risk involved with insurance. The risk assessment process begins before the issuing of the insurance policy and ends with the resolution of the lawsuit Only after the consent of the underwriters will the policy be given to the policyholder. In addition, the organisation pays the claim profit to the nominee only after the underwriter has cleared it.
Would The Premium Change During The Tenure?
No, it’s not. The premium shall be calculated taking into account the many considerations discussed above and, if set, the premiums shall not adjust for the entire length of the plan.
How Do You Decide The Term Of Your Life Insurance?
When you are in the mid-30s or earlier, you can buy a 30 Year contract life policy at the bare minimum. Some may say that you only need it for as long as you have a home mortgage, and if you pay off your house early, life insurance is a needless cost.
Where Are You Going To Buy Your Life Insurance From?
There are so many different ways to buy the term life insurance right now. A lot of customers buy directly from their life insurance company. Some people are buying it online. The one piece of advice is to make sure you check around. Every insurance provider is different, and every company is going to give you dramatically different prices.
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What Happens If You Lie On A Life Insurance?
Let’s get to the point. Lying on your life insurance application is fraud.
But, the lie needs to be intentional to be considered fraud, known as “material misrepresentation.” Simply mis-remembering a date, guessing at your weight or forgetting a diagnosis doesn’t mean insurance fraud. So don’t worry about that.
But if you try to intentionally deceive a life insurance company, you could have your application canceled, render yourself uninsurable and leave your family unprotected.
Why lies on life insurance applications get caught
Not only is lying on your insurance application fraud, it’s also almost impossible to get away with. That’s because the information that you give to the insurance company on your application isn’t the only information they use to evaluate you.
Insurance companies evaluate your motor vehicle report, prescription history, the results of the life insurance medical exam, statements and records from your doctors
Insure More… Take More…
These are just some of the common life insurance questions that people may have when they purchase it. If you have any concerns about purchasing life insurance, make sure to chat to a qualified life insurance provider before you purchase it. Be vigilant and be sure to take care of your loved ones.
1. What is “Insurance Coverage?”
Ans: Insurance coverage is the amount of liability covered for an entity or an individual through insurance services, Insurance coverage such as life insurance or auto insurance is issued by the insurer in case of unforeseen incidents.
2. What are the Various Kinds of Insurance Coverage?
Ans: Insurance policies are of two kinds:
- General or non-life insurance
- Life insurance
3. What is Meant by Beneficiary?
Ans: The beneficiary is the person who gets nominated for the insured amount in case the policyholder dies.
4. What do you Mean by ‘Insured’ and ‘Insurer’?
Ans: The insurer is the party in the insurance contract undertaking to pay compensation. The insured is the one who holds the policy and the insurer covers the same.
5. What is the Difference Between ‘Irrevocable Beneficiary’ and ‘Revocable Beneficiary’?
Ans: ‘Irrevocable beneficiary’ is a designation in which the policyholder must take the beneficiary’s consent before changing the beneficiary’s name. On the other hand, a revocable beneficiary allows the policyholder to change the beneficiary name without getting the named beneficiary’s consent.
6. What do you Mean by the Contestable Period in an Insurance Policy?
Ans: Contestable period refers to the duration in which the insurance company holds all the right to investigate the required policy and determine whether they should pay or not pay the insured. This period usually lasts for a year or two.
Challenging Life Insurance Questions You Must Know
7. What is a ‘Deductible’?
Ans: Deductible is among the clauses an insurance company uses as a threshold for the policy payment for travel or health insurance. It is a decided amount that you must pay from your pocket when you claim the insurance. For example, if the deductible is INR 25,000 and you have insurance coverage of INR 1,00,000, you would have to pay INR 25,000 out of your pocket and the insurance company will cover the rest of the INR 75,000.
8. What is a No-Claim Bonus?
Ans: No-claim bonus refers to a benefit insurance companies offer to those who haven’t claimed insurance during the preceding year of cover. It lowers the premium for the following year.
9. What do you Mean by Co-Insurance?
Ans: Co-insurance is a policy usually offered by health insurance companies. In this policy, you share the coverage with the insurance policy in a percentage of the policy value after the deductible. Usually, the split is 80%/20% where the policyholder has to pay 20% while the insurance company pays the 80% of the covered amount.
Suppose you have claimed health insurance for INR 20,000 and it requires a deductible of INR 10,000. After paying the deduction, the remaining amount is INR 10,000 and the co-insurance is 80/20. Now you’d have to pay INR 2,000 out of your pocket and insurance will pay INR 8,000.
10. What is a Loss Payee?
Ans: Loss payee is an institution or person that receives the insurance payment for the loss of a vehicle or property you own. In the event of payment being made under the policy in relation to the insured, it would go to the third party rather than to the beneficiary of the same. For example, if you had auto insurance of a car you bought on loan and the car crashed within the loan’s payment duration, the money would go to the lender rather than you.
11. What do you Mean by Surrender Value?
Ans: Surrender value, also known as cash value or cash surrender value is the monetary amount the policyholder gets from the life insurance company if they decide to exit the same before it reaches the maturity date. A common premium policy would acquire surrender value if the policyholder has paid its premium for three years continually. The policy ceases as soon as the policyholder withdraws the amount and they might lose all the returns on the policy.
12. How do you Claim an Insurance Policy?
Ans: To claim an insurance policy, you first have to fill up the claim form and contact the financial advisor from whom you purchased the policy. After completing these steps, you have to provide the required documents such as the payment receipt. When everything is verified and deemed fine, you would get your insurance claim within seven days of your claiming date.
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13. What do you Mean by Paid Value?
Ans: The paid value is the reduced assured amount the insurance company pays if the policyholder stops paying premiums after a specific duration. In simple terms, when a person stops paying premiums after a specific duration, the policy remains but with a lower assured amount, this low amount is called paid value or paid-up value.
The amount the insurance company assures to pay reduces if the person claims the paid-up value. The reduction depends on how soon before the maturity period has the person requested the paid value.
14. What Happens If a Person Doesn’t Pay Premium Payments?
Ans: In normal cases, if a person stops paying premiums, the insurance company gives them 10-15 days as a grace period after the due date. However, if the person doesn’t pay even in the grace period, their policy lapses. After that duration, the person would have to pay the due premium along with interest charged on the premium since the due date to revive the policy.
On the other hand, if the person paid premium payments for a substantial duration (2-3 years minimum) and then they stop paying the premium, the Insurance company will deduct the premium from the accumulated sum. This is particularly common with permanent life insurance policies. It continues until the accumulated funds deplete after which the company terminates the policy.
FAQ Life Insurance Questions
15. Can you Differentiate Between a Participating Policy and a Non-Participating Policy?
Ans: In a participating policy, the insurance company shares its generating profit with the policyholder and gives them dividends while in a non-participating policy, the company doesn’t give any profits to the policyholder.
16. Can a Beneficiary Claim the Policy if the Policyholder has been Missing for Multiple Years?
Ans: Yes, a beneficiary can claim the policy but there are a few conditions they must meet. First, they must have a court declaration stating that the policyholder has been missing or announced legally dead. Second, the person must have been missing for more than seven years.
17. Can a Person Limit the Premium Payments for a Smaller Amount of Years than the Policy’s Duration?
Ans: Some insurance companies offer the option where the person has to pay premium payments in three, five, seven, or ten years according to their income and receive the whole coverage they would have received with the usual duration.
18. Can a Person Pay the Premium Through an Insurance Agent? If so, is it Safe to do So?
Ans: Yes, a person can pay the premium through their agent if they make the payment through cheques to their Insurance company and receive all the receipts for such payments.
19. What is a General Insurance Policy and What Does it Cover?
Ans: General insurance policies are also known as non-life insurance policies and offer payments based on the loss from a specific financial event. They are generally defined as any insurance that is not a life insurance policy. Some of the things it covers are legal liabilities, travel, personal property (house or car), accident, health, machinery breakdown, theft, etc.
20. Can a Person Take Two Life Insurance Policies and Claim For Both?
Ans: Yes, a person can take two life insurance policies and claim for both of them.
Life insurance is an important component of your financial plan. It provides financial stability to your loved ones in case of an unfortunate event. Several insurers offer different types of plans. This makes life insurance confusing.
Here are some frequently asked questions (FAQs) associated with life insurance to help you get better clarity about the same:
1. What is life insurance?
This is the basic life insurance FAQ. Life insurance is a contract between you and the insurance company. The insurer agrees to pay the policy benefits to your nominees in case of
2. Why is life insurance useful?
Life cover is useful to ensure the financial stability of your family in case you are unable to earn due to an accident or illness. The policy also pays the benefits to your beneficiaries in case of an untoward event. Procuring such coverage ensures that your family can to meet their expenses and sustain their lifestyles even in your absence.
3. Is life insurance necessary?
One of the things to know about life insurance is that while it is not necessary, purchasing a policy is a smart investment decision. This is especially if you have dependents such as spouse, parents, and children. The life plan will provide financial security to your family if you are not around. Moreover, life policies offer several benefits and are a flexible instrument. Some of these include the flexibility of adding riders for greater coverage or withdrawing part of the accumulated corpus to meet expenses such as children’s education or wedding.
4. How do I decide on the amount of life insurance cover I need?
The maturity benefits primarily depend on the premium you pay during the policy term. This amount depends on several factors such as your lifestyle, spending habits, income, expenses, and debt obligations. It is recommended you procure coverage that is approximately between eight-ten times of your annual income.
5. How much does life insurance cost?
The insurance cost depends on the type of policy chosen. In addition, factors like the sum assured, premium amount, age, and coverage influence the insurance cost. The total insurance costs include mortality charges, administrative charges, and investment fees. To know all about life insurance costs, you must read the policy document.
Yes, insurers provide several options for premium payment. You may choose monthly, quarterly, semi-annually, or annual payment options. Some policies are available with a one-time premium.
7. What are the consequences if I do not pay the premium on time?
A grace period of up to 30 days is available from the premium due date. If you do not pay the same within this period, the policy becomes defunct and all benefits are lost. You need to pay the revival premium when you want to restart the coverage.
8. How can I calculate term life insurance?
One of the common questions is about term insurance and how it is different from regular life policies. The former is a pure life cover and offers only death benefits to your nominees. If you survive the policy duration, there are no maturity benefits available. It is an affordable and convenient way to avail of higher coverage.
Here are 5 things to keep in mind.
We are pleased that you have put your trust in us. Let’s take a look at some essential steps to take once you receive the policy document in your hand. If there is something amiss with it, you can take immediate corrective actions and save yourself trouble down the road.
Check the policy for errors, omissions and exclusions:
Always read the fine print of the policy document. Check all your personal information, bank details, contact details and nominee details correctly. Also review the policy benefits, sum assured, policy term, and the premium amount.
Inform your loved ones about the policy:
It is a good practice to inform and maintain a written record about details of the policy and leave simple instructions that can be accessed by your dependents when you are not around to guide them.
Keep the policy document safe:
Your original policy bond is an important document that ought to be kept safely. It’s a good practice to keep digital records for your review.
Set a reminder for the next premium to be paid
If you have several insurance policies, keeping a track of their due dates will be exhausting. You can save yourself the hassle by automating your premium payments via your bank or credit card.
Educate the dependents on the claim process
It’s important to inform your nominee about the claim settlement process. In case of an unforeseen event, they should be able to claim without facing any difficulty.
Frequently Asked Questions About Health Insurance
Health insurance is the one type of insurance which has now become a necessity. With time, costs of medical care have gone up drastically which has prevented many people from getting access to quality healthcare. With health insurance, you can preserve your savings which are likely to be spent on medical treatment at times of a medical emergency. However, when it comes to purchasing medical insurance, there are a lot of questions which possible buyers can have. If you are looking to purchase a health insurance plan but have a lot of unanswered questions regarding the whole affair, this article will help shed some light on the topic.
What is the Cashless Claim Settlement Facility?
The cashless claim facility can be availed by a policyholder at any of the insurer’s network hospital which offers this facility. Under the cashless, the policyholder can avail treatment at the network hospital, the bill for which will directly be settled between the insurer and the hospital. The policyholder will only have to pay for expenses which are not covered under the cashless facility or under the policy.
Will My Health Insurance Policy Cover me Across India?
Whether your policy covers you across the country or only within specified boundaries is something which you must clarify with your insurer before buying the policy. Typically, a health insurance policy will provide cover across India. Unless it is specified, the policy may not provide coverage for claims which arise outside the geographical boundaries of India.
Do Health Insurance Policies Provide Cover for Pre-existing Diseases?
Health insurance policies may or may not provide over for pre-existing diseases. Most often, if the policy does provide cover for a pre-existing condition, there will be a certain waiting period applicable on the coverage. Before taking the policy, do clarify the same with your insurer.
At the Time of an Emergency Hospitalization, Who Should I Call?
At the time of a medical emergency, the focus must be on getting the patient to a medical care facility. The first thing one must do is locate the closest network hospital to admit the patient. Only after the patient has been hospitalised, their family members must contact the insurer or TPA to inform them about the hospitalization. They will then be guided through the claim settlement process.
Overview of Cashless Health Insurance:
To understand cashless health insurance an understanding of health insurance in general is necessary. Health insurance is an instrument that can be used to ensure that, in case of a medical emergency, policyholders are able to provide their families with the best medical help possible. There are times when this medical help might be too expensive for some people and that is where a health insurance policy steps in to help pay the bills. The cashless mediclaim policy is a type of insurance where policyholders can be hospitalised, get the relevant treatment and be discharged without having to pay anything from their pockets.
What is Maternity Health Insurance?
Maternity insurance provides cover for maternity-related expenses. According to latest reports, the average age of women becoming mothers has risen to 32 to 33 years in India. There is a view that women who have their first child in their early 30s are more likely to have complicated pregnancies. Significantly, the ratio of caesareans to normal deliveries stood at 65:35 in metropolitan cities, according to a study done in the recent past. Several women are, therefore, increasingly opting for health insurance plans which offer maternity expenses as well. Typically, maternity insurance plans come with high premiums and long waiting periods.
Senior Citizen Health Insurance
Old age brings with itself several ailments that are expensive to treat and care for. Health insurance for Senior Citizens is offered by various insurance companies, specifically for people who are aged 65 years and above. These health insurance schemes readily cover any kind of medical expenses incurred by customers.
The older we get, the more our physical and mental stress over finances and the ability to afford good healthcare. A senior citizen health insurance plan is designed to offer financial aid for medical treatments to individuals over 60 years of age in their hour of need. Senior citizen health insurance plans offer critical illness cover, cashless hospitalisation, pre-existing disease cover, and a higher sum assured.
Understanding Critical Illness Insurance:
Can I change the sum assured during policy tenure?
The sum assured may be enhanced or reduced subject to approval from the insurer. In general, such changes, if allowed, can be done at the time of policy renewal.
Can I substitute my health insurance policy with this plan?
No, critical illness insurance is meant for providing cover for specific ailments only, and claims pertaining to unrelated health expenses will be rejected.
Where can I use the lump sum payment?
The lump sum is generally paid out one month after the first diagnosis. This amount can be used for any purpose by the insured.
What types of critical illness are covered under this plan?
The types of diseases covered depend on the provider. In general, policy documents will outline a list of 10 or 20 specific illnesses that are covered under this plan. Also, the claim amount in most cases can only be used once.
Can this policy be proposed to family members?
Direct relations such as parents, children, spouse, and siblings can be covered under critical illness plans depending on the policy terms offered by the insurance provider.
Advantages of Critical Illness Riders:
Critical illness health insurance policies are your best bet against life-threatening diseases or ailments. With the extensive cover provided under this plan, even treatments lasting for months can be potentially compensated in full if the sum assured is sufficient. Key advantages are:
- Tax benefits under Section 80(D) of the Income Tax Act.
- Lumpsum amount to be paid at the end of waiting period, which may be used any way the insured wants to.
- Easy documentation for making claims.
- Wide range of options for sum assured, premium, and policy tenure.
- Additional riders can be bought as per company policy.
- Hassle-free claim settlements once all documents are received by the insurer.
- Pre-hospitalization expenses covered up to 30 days before getting admitted in a hospitalization.
Who should buy this plan?
Indian citizens above 18 years of age and less than 65 years can avail critical insurance health policies. Applicants more than 45 years may have to go through pre-policy medical checkup. As a rule, plans under the health insurance segment should be bought when you are young and healthy, as this directly affects the premium asked by the insurer.
Family members can also be covered under a single plan as per policy documents. If more than one person is covered under a single critical illness policy, each member stands to receive cover once during the policy tenure.
Exclusions under Critical Illness Plans:
Critical insurance policies come with certain exclusions such as:
- No coverage for 60 days (30 in some cases) after the policy is purchased. However, policy renewals are exempt from this exclusion.
- Pre-existing diseases as specified by the insurer.
- Overseas treatments (depending on the provider).
- Treatments such as dental treatment, birth control, sex change, hernia, cataract, gastric etc. are exempted from coverage.
What is Co-Pay in Health Insurance?
So you’ve taken a health insurance policy and unfortunately the time has come to claim it. You go the hospital, get checked up, treated and are presented with a bill. Typically, the health insurance company will take care of the entire expense as per the terms of your policy, and you will walk out healthier, and just as rich as you were when you were admitted in the hospital. But this isn’t the case with co-pay.
What is Health Insurance Co-Pay?
If your insurance coverage has a co-pay provision, you will be required to contribute a portion of the cost of the medical care, with the remainder being covered by the insurer. Co-pay provisions are included in the policies of many insurance companies today, including United India Insurance Company, New India Insurance Company, SBI General Insurance, and others. Depending on the type of therapy or prescription needed, the co-pay is often a set price for various services and medications.
For instance, if your insurance policy contains a 10% co-pay (or co-insurance) clause and your total medical costs are Rs.50,000, you will be responsible for paying Rs.5,000 out of pocket, and the insurer would pay the remaining Rs.40,000.
If I Have to Seek Treatment at a Non-Network Hospital, How Do I Make a Claim?
At the time of an emergency, it is often possible that the insured may end up getting hospitalised at a non-network hospital. In this case, they can file for a reimbursement claim after their treatment is over. A reimbursement claim is meant for times when the insured may not be able to get to a network hospital for getting emergency treatment. In this case, they can get treated, pay for the treatment and then file for a reimbursement claim. Such a claim will cover all expenses which are covered under the policy overage, except the ones which are not. To make a reimbursement claim, ask your insurer about the documents you need to submit.
What are the Documents Usually Required for Filing a Health Insurance Claim?
When it comes to health insurance, one question that many policyholders want to know the answer to is what documents they need to submit at the time of making a claim on their health insurance policy. It is helpful if the policyholder knows about this before they have to make a claim. Most health insurance providers will require the policyholder to submit the ID proof of the insured, health card issued by the insurer, and receipts/bills for the treatment taken. n case of cashless hospitalization, the insured will also be required to submit a pre-authorization form to the TPA. The insurer should ideally inform you in case additional documents are needed to process the claim.
What is the Claim Settlement Process Followed by Health Insurance Companies?
When it comes to health insurance, or any other type of insurance, the claim settlement process can make or break an insurer’s reputation. Before you purchase a health insurance policy, you must find out the details of the claim settlement process that the insurer has for claim filing. Usually, most insurers will require you to inform them about the claim as soon as possible. In case of cashless claims, the insured will submit a pre-authorization form to the TPA or the insurer, as the case may be. In case of a reimbursement claim, the insured must submit all bills/receipts pertaining to the treatment taken to the insurer. The insurer will bear all expenses which are covered under the policy, while the ones which aren’t’ will have to be borne by the insured.
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