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Life Insurance Products



AIM: Imparting knowledge about Life Insurance products to the bank employees

Level of the course: Grade Graduates and Computer Literates  Course Delivery Mode: Instructor Led and online support

Support Team: Project manager, Instructional designer, Subject matter expert, Editor, Graphic designers

In the economy liberalization the need for introducing life insurance policies to their customers had become a need for most of the banks.

Banks have the staff those who are trained in day to day banking transactions and other banking business activities. When banks are started introducing life insurance policies the staff doesn’t have the knowledge of Life Insurance Products.

When banks are started introducing life insurance policies the staff doesn’t have the knowledge of Life Insurance Products. Since they have to explain about various products of Life Insurance they need the knowledge and know about of Life Insurance Products.

Bank employees need the knowledge of Life Insurance products and they have to learn about the Life Insurance Products in their convenient time and at their own pace. Hence Instructor led training program has been selected to enrich their knowledge regarding Life Insurance products. So that they can explain about their Life Insurance products to their customers and able to answer to the customer queries as well.

Method of teaching

Gagne’s nine events of learning fit into this e-learning program. Gain attention, Inform learner of Objective, Stimulate recall of prior knowledge, Present the material, Provide guidance for learning, Elicit performance, Provide feedback, Assess performance, and Enhance retention and transfer are the nine events of Gagne Blooms taxonomy has been taken to write objects of the course

Description of course content outline

The course designed into four modules and eight lesson. Each module consist of two lessons

Module one: Introduction to life insurance

Lesson one: Introduction to Life Insurance

Lesson two: Insurance as social security tool

Module two: Life Insurance Products

Lesson one: Traditional and Unit linked plans

Lesson two: Options, guarantees and riders

Module three: Group Insurance

Lesson one: Various Group Insurance schemes

Lesson two: Health related Insurance

Module four: Rural Insurance and claims

Lesson one: Schemes specially designed for rural sector

Lesson two: Claims and procedure

Method of teaching

Gagne’s nine events of learning fit into this e-learning program.

Gain attention, Inform learner of Objective, Stimulate recall of prior knowledge, Present the material, Provide guidance for learning, Elicit performance, Provide feedback, Assess performance, and Enhance retention and transfer are the nine events of Gagne

Blooms taxonomy has been taken to write objects of the course

OBJECTIVES

To understand of life insurance products

To define whole life insurance products

To identify the Group insurance schemes

To define contributory and non-contributory schemes

To distinguish annuities from other plans Differentiate policies with and without profits

To examine products for women, children and the disabled

To understand policy riders and options

To define health related Insurance

To understand group insurance

To distinguish health insurance riders

To Identify med claim hospitalization benefit insurance policies

To list Rural insurance schemes

To describe claims

LIFE INSURANCE: A SOCIAL SECURITY TOOL

Everyone has a right to a standard of living adequate for the health and wellbeing of himself and his family, including food, clothing, housing and medical care and necessary social services and the right to security in the event of unemployment, sickness, disability, widowhood or other lack of livelihood in circumstances beyond his control.” rightly states the United Nations Declaration of Human Rights 1948.

Annuities are practically the same as pensions. They provide regular periodical payments usually every month to employees, who have retired. They are paid as long as the recipient is alive. Sometimes the pension is also paid to the dependents after the pensioner's death.

Annuities are called “reverse of life insurance". In annuity contracts a person agrees to pay to the insurer a specified capital sum in return for a promise from the insurer to make a series of payments to him so long as he lives, while in insurance, the insured pays a series of payments in return for a promise to pay a lump sum on his death.

Theoretically, under a life insurance contract, the insurer starts paying upon the death of insured but under annuity contract, the insurer stops paying upon the death of the annuitant. In actual practice, however, there are many variations. The insured does not have to pay in a lump sum. He can pay in installments. The annuity does not have to stop on death. It can continue beyond.

Practically no underwriting is done in annuities. In fact, annuitants are supposed to exercise self-selection.Therefore, medical examination of annuitants is not insisted upon. The risk, that is to be covered, under annuities, is of living too long.

annuities are paid by insurers in monthly, quarterly, half yearly or annual installments.

Banks taking efforts to spread the awareness of life insurance into the rural masses especially in the backward and remote areas and this endeavour has resulted in a steady all round growth in the life insurance industry.

In spite of Insurance Company’s tremendous effort to cover rural population, the segment has an enormous potential yet to be covered. The entry of private and foreign life insurers into the market kick started the vigorous competitive endeavor to tap the rural life business. The private players are conscious about the available potential and are showing consistent and constant interest in taping the rural market

The entry of private life insurers has changed the basic structure of the life insurance market in India from ‘monarchy market’ to a ‘competitive ground’.

The main strategy of private players to participate in the rural market is to offer small life covers with low premium and this strategy will give rich dividend to them by scoring the active participation of the rural mass.

Nevertheless, these rural branches specially cater the need of rural populace only and customize their products. Amar Suraksha, Jan Suraksha are the products offered by it with low premium.

The astounding statistics is that life insurance in rural India is expanding almost five times faster than the urban demand. Efficient distribution channels and suitable products are the needs to cater the rural demand.

Undoubtedly, the private insurers are making good attempt to tap the potential market. Since they are profit centered they have to minimise their cost and they prefer ‘go to market’ model structure for products.

The insurers ought to understand that marketing in rural sector is totally different with urban sector. The agents must be trained accordingly to educate rural Indians regarding the concept of insurance and make them aware of various kinds of policies and their implication.

In this regard, ‘segmental marketing’ concept may be adopted in which the marketer analysis the concerned segment in regard to its nature of population, their social belief, educational background, their awareness to their products, suitable products to fit the potential consumers, strategies of marketing and so on.

Insurance companies settle survival benefit/maturity claims on or before the due date.

Policyholder is intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured.

In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number.

Survival Benefit payment up to Rs.60,000 are settled without insisting for Policy Bond and Discharge Voucher.

Death Claims

If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars

The Number of the policies The name of the policyholder Death Certificate issued by concerned Authority The date of death The cause of death and Claimant’s relationship with the deceased

On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant.

The claims which have arisen after a period of three years are treated as non-early claims and settled within 30 days from the date of receipt of all requirements.

The claims that have arisen within a period of two years from the date of commencement of the policy, are treated as early claims and investigation is compulsory in such cases.

The claim is usually payable to the nominee or assignee or the legal heirs, as the case may be. However, if the deceased policyholder has not nominated/assigned the policy or if he or she has not made a suitable provision regarding the policy moneys by way of a Will, the claim is payable to the holder of a Succession Certificate or some such evidence of title from a Court of Law.

The insurance company grants claims concessions under certain Plans whereby payment of full sum assured is made, subject to the deduction of unpaid premiums with interest till the date of death and unpaid premiums falling due before the next anniversary of the policy, in the event of the death of the life assured within a period of six months or one year from the date of the first unpaid premium, provided premiums have been paid for at least three years and five years respectively.

Claim Review Committee

Insurance companies settle a large number of Death Claims every year. Only in case of fraudulent suppression of material information is the liability repudiated. This is to ensure that claims are not paid to fraudulent persons at the cost of honest policyholders. The number of Death Claims repudiated is, however, very small.

Even in these cases, an opportunity is given to the claimant to make a representation for consideration by the Review Committees of the Zonal office and the Central Office. As a result of such review, depending on the merits of each case, appropriate decisions are taken.

The Claims Review Committees of the Central and Zonal Offices have among their Members, a retired High Court or District Court Judge.

This has helped providing transparency and confidence in our operations and has resulted in greater satisfaction among claimants, policyholders and public.

Insurance Ombudsman

The Grievance Redressal Machinery has been further expanded with the appointment of Insurance Ombudsman at different centers by the Government of India.

At present there are 12 centres operating all over the country.

Following type of complaints fall within the purview of the Ombdusman

any partial or total repudiation of claims by an insurer any dispute in regard to premiums paid if payable in terms of the policy any dispute on the legal construction of the policies in so far as such disputes relate to claims delay in settlement of claims

non issue of any insurance document to customers after receipt of premium. Policyholder can approach the Insurance Ombudsman for the redressal of their complaints free of cost.

Initiatives In Policy Servicing Areas

All 2048 Branches of LIC are fully computerized covering all policy servicing aspects to give prompt computerized services from new policy introduction, acceptance of renewal premium, revivals, loans, etc to final claims settlement.

Green Channel facility has been introduced for the speedy completion of proposals.

Payment of premiums can be made through internet through service providers, HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.

Grievance Redressal Machinery

Machinery for redressal of policyholders grievances exist in the insurance companies. These are headed by designated Officers who are available at their respective Offices. Policyholder can approach these officers to get their grievances redressed.

Nature of the Scheme

Group (term) Insurance Scheme is meant to provide life insurance protection to groups of people. Administration of the scheme is on group basis and cost is low. Under Group (Term) Insurance Scheme, life insurance cover is allowed to all the members of a group subject to some simple insurability conditions without insisting upon any medical evidence. Scheme offers covers only on death and there is no maturity value at the end of the term.

Premium Chargeable

Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term assurance plan (OYRGTA). Every year on Annual Renewal date the insurance company charges the premium depending upon the changes in size and age distribution of the age group.

Different Schemes

Group (term) Insurance Scheme has a number of varieties. The Scheme may provide for a uniform cover to all members of the group or graded covers for different categories of members, cover for all amounts of outstanding housing loans or vehicle advances, or some other benefits (e.g., life cover to supplement pension or PF benefits in case of death). The schemes may have add-ons like Double Accident Benefit, Critical Illness Benefit, Disability benefit etc.

General Features of various Group Insurance Schemes

PREMIUM

The premium under such scheme may be wholly paid by the employer or the Nodal Agency. However, the scheme may be contributory i.e. the members may also contribute.

DOUBLE ACCIDENT BENEFIT

Double Accident Benefit, i.e. payment of double the sum assured on death due to accident (without permanent disability benefit), may be allowed under Group Insurance Schemes for an extra premium.

ELIGIBILITY

For Group Insurance Scheme in lieu of EDLIS the insurability condition is that should be a member of the Provident Fund Scheme of the employer. For other GI Schemes of employer-employee groups the insurability condition is that the member should not be absent on ground of sickness on the entry date. For all non-employer-employee Group Schemes the basic insurability condition is that the member should be in good health on the date of entry.

ADMINISTRATION OF THE SCHEME

At the commencement and thereafter on each Annual Renewal Date, the Group Policyholder will have to send all the member's data (and particulars of the new entrants from time to time) to the Insurance company. Detailed OYRGTA premium calculation will be made on each Annual Renewal Date.

When a claim arises, the particulars of the respective member are to be intimated together with the claim form and death certificate.

Health Insurance provides risk coverage against unforeseen health expenditure that may result in financial hardship.

The Government of India liberalized the Insurance Sector in 2002 permitting both Indian and Foreign Insurance firms to carry out activities as insurance brokers in India.

This has opened up new business avenues and created tremendous business opportunity in this field. Foreign Insurance Companies and Foreign Insurance Brokers have entered into joint ventures with reputed Indian Insurance companies and insurance brokers operating in India.

The escalating cost of medical treatment today is beyond the reach of a common man. In case of a medical emergency, cost of hospital room rent, the doctor's fees, medicines and related health services can work out to be a huge sum. In such times, health insurance provides the much needed financial relief.

An investment in health insurance scheme would be a judicious decision. The health insurance scheme could either be a personal scheme or a group scheme sponsored by an employer.

Some of the existing health insurance schemes currently available are individual, family, group insurance schemes, senior citizens insurance schemes, long-term health care and insurance cover for specific diseases. There are two major insurance companies in India namely:

The Life Insurance Corporation (LIC) offers

The Asha Deep Plan

It provides cover for cancer, paralytic stroke resulting in permanent disability, renal failure and coronary artery disease where by-pass surgery has been done. It caters to people between 18 to 65 years.

Jeevan Asha

The Jeevan Asha policy is the other healthcare product offered by LIC. It is an open-ended scheme covering many surgical procedures.

While LIC deals with insurance for life coverage only, the GIC deals with the other aspects of insurance, including health. Following are the main health policies offered by the Indian Insurance Companies. These policies are regulated by the General Insurance Corporation and are marketed by the four big insurance companies: United India Insurance Co Lt., New India Assurance Co Ltd., Oriental Insurance Co Ltd. and National Insurance Co Ltd.

The insurance policies offered by GIC are

 Mediclaim

Insures against any hospitalisation expenses that may arise in future. This policy is designed to prevent the insured from paying for any hospitalisation expenses owing to illness or injury suffered by the insured, whether the hospitalisation is domiciliary or otherwise.

It covers the expenses incurred on the following

Room boarding expenses by the hospital nursing home Nursing expenses Operation theatre expenses

Surgeon, anaesthetist, medical practitioner, consultants, specialist’s fees Also for any cost of equipment like pacemaker, artificial limbs and charges paid for anaesthesia, blood, oxygen, operation charge, surgical appliances, medicines and drugs, diagnostic material and x-rays, dialysis and chemotherapy, radiotherapy, and cost of organs etc.

Jan Arogya Bima Policy

It insures hospitalisation or domiciliary hospitalisation expenses incurred on medical or surgical treatment for any illness or disease (contracted after 30 days from the commencement of the policy) or injury. Any person in the age group of three months to 70 years can be insured under this. The risk insured include sudden illnesses like heart attack, jaundice, pneumonia, appendicitis, paralytic attack, food poisoning or accidents that require hospitalisation. This insurance policy was designed for the lower income group of society and the common masses. The entire idea was to protect them from high costs of hospitalisation.

Overseas Mediclaim Policy

Any person going abroad on holiday, business, study or employment can avail this policy. Coverage under the medical expense section of this insurance is intended for use by the Insured person in the event of a sudden and unexpected sickness or accident arising when the Insured is outside the Republic of India.

Personal Accident Policy

The policy compensates an individual against death, loss of limbs, loss of eyesight, permanent total disablement, permanent partial disablement and temporary total disablement, solely and directly resulting from accidental injuries.

Critical Illness Policy

Critical Illness Policy is an exclusive benefit policy for individuals in the age group 20-65 years covering coronary artery surgery, cancer, renal failure, stroke, multiple sclerosis and major organ transplants like kidney, lung, pancreas or bone marrow.

New India Assurance Bhavishya Arogya

This caters to persons between 3 to 50 years. This policy is essentially to take care of medical expenses needs of persons in their old age. The policy provides for expenses in respect of hospitalisation and domiciliary hospitalisation during the period commencing from the Policy Retirement Age selected till survival. This is selected by the insured for the purpose of commencement of benefits in the policy.

Life insurance is very important for any one who will care their family when they are not there tomorrow. The importance of life insurance is growing fast in modern life. Due to economic liberalization, there are many players in life insurance in the present day market.

Welcome to the topic Introduction to Life Insurance. after the completion of the this course

you will able to understand what life insurance is.

The business of life insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it.

The benefit may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the product generated by is sold and income generated. In the case of a motor car, it provide comfort and convenience in transportation. There is no direct income.

The human being is an income generating asset. One's manual labour, professional skills and business acumen are the assets. This asset also can be lost through unexpectedly early death or through sickness and disabilities caused by accidents.

Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of one's retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it not in place, there can be losses to the person and dependents. Insurance is necessary to help those dependent on the income.

A person, who may have made arrangements for his needs after his retirement, also would need insurance. This is because the arrangements would have been made on the basis of some expectations like, likely to live for another fifteen years, or that children will look after him. If any of these expectations do not become true, the original arrangement would become inadequate and there could be difficulties.

Living too long can be as much a problem as dying too young. Both are risks, which need to be safeguarded against. Insurance take care.

After the completion of this topic, you will be able to

To understand the importance of Life Insurance as Social Security Tool

Everyone has a right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care and necessary social services and the right to security in the event of unemployment, sickness, disability, widowhood or other lack of livelihood in circumstances beyond his control.” rightly states the United Nations Declaration of Human Rights 1948.

When the bread winner dies, to that extent, the family's income dies. The economic condition of the family is affected, unless other arrangements come into being to restore the situation.

Life insurance provides such as alternate arrangement. If this did not happen, another family would be pushed into the lower strata of society.

The lower strata creates a cost on society. Poor people cost the nation by way of subsidies and doles and so on.

Poor people also cost by way of larger growth in population. Poor education and vagaries in behavior of children. Life insurance tends to reduce such costs. In this sense, the life insurance business is complimentary to the State's efforts in social management.

In India, social security finds a place in our constitution. Article 41 requires the State, within the limits of it's economic capacity and development to make effective provision for securing right to work to education and to provide public assistance in case of unemployment, old age, sickness and disablement and in other cases of undeserved want. Part of the State's obligations to the poorer sections are met through the mechanism of life insurance.

As part of the law and the directions of the regulatory authorities, insurance companies in India are obliged to extend insurance benefits to economically weaker sections of the society in the unorganized sector.

Welcome to this lesson Traditional and Unit Linked Plans. After the completion of this topic, you will be able to:

Define Traditional products

Identify the advantage of Unit linked plans

There are two types of Life Insurance Policies available in Indian Insurance market.

Traditional policies includes, Term Insurance, Endowment, whole life insurance policies.

Unit-Linked Life Insurance policies which are called modern policies, where the investment risk borne by the policy holder

Life insurance is an appropriate financial tool for managing and mitigating the financial risk associated with untimely death. However, Life Insurance decisions are often complex.

The choice of a life insurance product for an Indian Consumer is now a problem of plenty, even when confined to only traditional life insurance products–term insurance and cash value policies (i.e., whole life and endowment insurance).

For any given product, we can choose from amongst several competing insurance companies. Depending only on a policy illustration provided by an insurance company can be a big mistake.

While comparing life insurance decisions, the concern of many financial planners is the quantitative assessment of the cost of protection against untimely death and the return on the savings component of the premium paid.

Such an analysis can give a rational basis for comparing different Insurance Policies. In this paper, we perform such a comparison of traditional life insurance products.

Term Insurance

A term insurance policy is a pure insurance product with no savings element. Term insurance provides financial protection against death within a specified period of time, paying a benefit only if you die during the term.

Term policies will charge a lower premium than other types of insurance. This may be suitable for young people or for families on a limited budget that need a large amount of life insurance protection. For them, the affordability of the premium is likely to be an important consideration.

An easy way to compare the term policies in the market is to find out the policy charging the cheapest premium for a given amount of protection and term. Since term insurance is almost a commodity-type product, the cheapest is often the best

Welcome to the lesson Annuities and Riders. After the completion of this lesson, you will be able to:  Define Annuities and Riders

It is very interesting to know about Annuities and Riders in this lesson. At first we will learn what annuities are.

Annuities are practically the same as pensions. They provide regular periodical payments usually every month to employees, who have retired. They are paid as long as the recipient is alive. Sometimes the pension is also paid to the dependents after the pensioner's death.

Annuities are called reverse of life insurance. In annuity contracts a person agrees to pay to the insurer a specified capital sum in return for a promise from the insurer to make a series of payments to him so long as he lives, while in insurance, the insured pays a series of payments in return for a promise to pay a lump sum on his death.

Theoretically, under a life insurance contract, the insurer starts paying upon the death of insured but under annuity contract, the insurer stops paying upon the death of the annuitant.

In actual practice, however, there are many variations. The insured does not have to pay in a lump sum. He can pay in installments. The annuity does not have to stop on death. It can continue beyond.

Practically no underwriting is done in annuities. In fact, annuitants are supposed to exercise self-selection.Therefore, medical examination of annuitants is not insisted upon. The risk, that is to be covered, under annuities, is of living too long.

annuities are paid by insurers in monthly, quarterly, half yearly or annual installments.

RIDERS

A rider is a clause or condition that is added on to a basic policy providing an additional benefit, at the choice of the proposer.

For example, a provision that in the event of death of the life assured by accident, the sum assured would be double, can be added on to a policy under any plan. The option to participate in valuation surplus can also be offered as a rider. The additional premium for other rider of Double Accident Benefit is a constant figure, not depending on age or the underwriter's decision. But that is not so with regard to all riders.

Insurers find it convenient to have a small number of basic plans, with riders being offered as options, so that effectively the prospect has a number of options to choose riders. 5 basic plans and 7 riders can be added or removed at the will of the policyholders, thus allowing the policyholder a lot of flexibility. Such options enable customization of the product.

Some of the riders being offered by insurers in India

Increased death benefit, being twice or even more the survival benefit.

Accident benefit allowing double the sum assured if death happens due to accident.

Permanent disability benefits, covering loss of limbs eyesight, hearing, speech, etc.

Premium waiver, which would be useful in the case of children's assurances, if the parent dies before vesting date or in the case of permanent disability and sickness.

Dreaded disease cover, providing additional payments (in lump or in installments, if the life insured requires medical attention because of specified conditions like cancer, cardiac or cardiovascular surgeries, stroke, kidney failure, major organ transplants, major burns, total blindness caused by illness or accident, etc.

Guaranteed increases in cover at specified periods or annually.

Cover to continue beyond maturity age for same sum assured or higher sum assured.

Option to increase cover within specified limits or dates.

Welcome to the lesson on Group Insurance. After completion of the lesson, you will be able to

Identify advantages of Group Insurance

Employees these days are constantly on the prowl for "better opportunities". How then do you get them to focus on your job and stay committed for long tenures? Human Resource experts agree that employees work with utmost dedication when they believe their organization truly cares about their well being.

One way of showing your concern for your employees is to shoulder the two responsibilities they worry about most: Security of and Savings for their families. Group Insurance Plans enable you to effortlessly provide your employees with both, savings and security, so they can pass on the benefits to their loved ones. Your kind gesture to safeguard their family's future will undoubtedly serve as great encouragement for your employees, and they will gladly offer you their whole-hearted commitment.

Nature of the Scheme

Group (term) Insurance Scheme is meant to provide life insurance protection to groups of people. Administration of the scheme is on group basis and cost is low. Under Group (Term) Insurance Scheme, life insurance cover is allowed to all the members of a group subject to some simple insurability conditions without insisting upon any medical evidence. Scheme offers covers only on death and there is no maturity value at the end of the term.

Premium Chargeable

Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term assurance plan (OYRGTA). Every year on Annual Renewal date the insurance company charges the premium depending upon the changes in size and age distribution of the age group.

Premium Chargeable

Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term assurance plan (OYRGTA). Every year on Annual Renewal date the insurance company charges the premium depending upon the changes in size and age distribution of the age group.

Different Schemes

Group (term) Insurance Scheme has a number of varieties. The Scheme may provide for a uniform cover to all members of the group or graded covers for different categories of members, cover for all amounts of outstanding housing loans or vehicle advances, or some other benefits (e.g., life cover to supplement pension or PF benefits in case of death). The schemes may have add-ons like Double Accident Benefit, Critical Illness Benefit, Disability benefit etc.

General Features of various Group Insurance Schemes

 PREMIUM:

The premium under such scheme may be wholly paid by the employer or the Nodal Agency. However, the scheme may be contributory i.e. the members may also contribute.

DOUBLE ACCIDENT BENEFIT

Double Accident Benefit, i.e. payment of double the sum assured on death due to accident (without permanent disability benefit), may be allowed under Group Insurance Schemes for an extra premium.

ELIGIBILITY

For Group Insurance Scheme in lieu of EDLIS the insurability condition is that should be a member of the Provident Fund Scheme of the employer. For other GI Schemes of employer-employee groups the insurability condition is that the member should not be absent on ground of sickness on the entry date. For all non-employer-employee Group Schemes the basic insurability condition is that the member should be in good health on the date of entry.

ADMINISTRATION OF THE SCHEME

At the commencement and thereafter on each Annual Renewal Date, the Group Policyholder will have to send all the member's data (and particulars of the new entrants from time to time) to the Insurance company. Detailed OYRGTA premium calculation will be made on each Annual Renewal Date.

When a claim arises, the particulars of the respective member are to be intimated together with the claim form and death certificate.

Welcome to this lesson Health related Insurance. After completion of this lesson you will able to

View several features of Health related Insurance

Health Insurance provides risk coverage against unforeseen health expenditure that may result in financial hardship.

Health Insurance, is according to the laws of India, part of non-life business. Therefore, life insurers will not be catering to the insurance needs relating to sickness, except to a limited extent as riders to individual life insurance policies.

It cannot become the subject matter of a group insurance policy. However, if the law changes in conformity with the provisions in other countries, life insurers will find a very big scope for a new line of business, both in individual and group policies.

The Government of India liberalized the Insurance Sector in 2002 permitting both Indian and Foreign Insurance firms to carry out activities as insurance brokers in India.

This has opened up new business avenues and created tremendous business opportunity in this field. Foreign Insurance Companies and Foreign Insurance Brokers have entered into joint ventures with reputed Indian Insurance companies and insurance brokers operating in India.

The Life Insurance Corporation (LIC) offers:

- The Asha Deep Plan: It provides cover for cancer, paralytic stroke resulting in permanent disability, renal failure and coronary artery disease where by-pass surgery has been done. It caters to people between 18 - 65 years.

- Jeevan Asha: The Jeevan Asha policy is the other healthcare product offered by LIC. It is an open-ended scheme covering many surgical procedures.

While LIC deals with insurance for life coverage only, the GIC deals with the other aspects of insurance, including health. Following are the main health policies offered by the Indian Insurance Companies. These policies are regulated by the General Insurance Corporation and are marketed by the four big insurance companies: United India Insurance Co Ltd., New India Assurance Co Ltd., Oriental Insurance Co Ltd. and National Insurance Co Ltd.

The insurance policies offered by GIC are

Mediclaim

Insures against any hospitalisation expenses that may arise in future. This policy is designed to prevent the insured from paying for any hospitalisation expenses owing to illness or injury suffered by the insured, whether the hospitalisation is domiciliary or otherwise.

It covers the expenses incurred on the following:

• Room boarding expenses by the hospital nursing home • Nursing expenses • Operation theatre expenses • Surgeon, anaesthetist, medical practitioner, consultants, specialist’s fees

• Also for any cost of equipment like pacemaker, artificial limbs and charges paid for anaesthesia, blood, oxygen, operation charge, surgical appliances, medicines and drugs, diagnostic material and x-rays, dialysis and chemotherapy, radiotherapy, and cost of organs etc.

Jan Arogya Bima Policy

It insures hospitalisation or domiciliary hospitalisation expenses incurred on medical or surgical treatment for any illness or disease (contracted after 30 days from the commencement of the policy) or injury. Any person in the age group of three months to 70 years can be insured under this. The risk insured include sudden illnesses like heart attack, jaundice, pneumonia, appendicitis, paralytic attack, food poisoning or accidents that require hospitalisation. This insurance policy was designed for the lower income group of society and the common masses. The entire idea was to protect them from high costs of hospitalisation.

Overseas Mediclaim Policy

Any person going abroad on holiday, business, study or employment can avail this policy. Coverage under the medical expense section of this insurance is intended for use by the Insured person in the event of a sudden and unexpected sickness or accident arising when the Insured is outside the Republic of India.

Personal Accident Policy

The policy compensates an individual against death, loss of limbs, loss of eyesight, permanent total disablement, permanent partial disablement and temporary total disablement, solely and directly resulting from accidental injuries.

Critical Illness Policy

Critical Illness Policy is an exclusive benefit policy for individuals in the age group 20-65 years covering coronary artery surgery, cancer, renal failure, stroke, multiple sclerosis and major organ transplants like kidney, lung, pancreas or bone marrow.

New India Assurance Bhavishya Arogya

This caters to persons between 3 to 50 years. This policy is essentially to take care of medical expenses needs of persons in their old age. The policy provides for expenses in respect of hospitalisation and domiciliary hospitalisation during the period commencing from the Policy Retirement Age selected till survival. This is selected by the insured for the purpose of commencement of benefits in the policy.

Welcome to this lesson Schemes specially designed for Rural Sector. After completion of this lesson you will be able to

Identify schemes specially designed for Rural Sector

There are more than 5 lakhs villages in India with a total population of over 100 crores. This represents a vast potential. But nearly 25% of them are below poverty line.

Banks taking efforts to spread the awareness of life insurance into the rural masses especially in the backward and remote areas and this endeavour has resulted in a steady all round growth in the life insurance industry.

In spite of Insurance Company’s tremendous effort to cover rural population, the segment has an enormous potential yet to be covered. The entry of private and foreign life insurers into the market kick started the vigorous competitive endeavor to tap the rural life business. The private players are conscious about the available potential and are showing consistent and constant interest in taping the rural market

The entry of private life insurers has changed the basic structure of the life insurance market in India from monarchy market to a ‘competitive ground’.

The main strategy of private players to participate in the rural market is to offer small life covers with low premium and this strategy will give rich dividend to them by scoring the active participation of the rural mass.

Nevertheless, these rural branches specially cater the need of rural populace only and customize their products. Amar Suraksha, Jan Suraksha are the products offered by it with low premium.

The astounding statistics is that life insurance in rural India is expanding almost five times faster than the urban demand. Efficient distribution channels and suitable products are the needs to cater the rural demand.

Undoubtedly, the private insurers are making good attempt to tap the potential market. Since they are profit centered they have to minimise their cost and they prefer go to market model structure for products.

The insurers ought to understand that marketing in rural sector is totally different with urban sector. The agents must be trained accordingly to educate rural Indians regarding the concept of insurance and make them aware of various kinds of policies and their implication.

In this regard, segmental marketing concept may be adopted in which the marketer analysis the concerned segment in regard to its nature of population, their social belief, educational background, their awareness to their products, suitable products to fit the potential consumers, strategies of marketing and so on.

People who take life insurance sometimes worry about lengthy and complicated claims procedures.

Machinery for redressal of policyholders grievances exist in the insurance companies. These are headed by designated Officers who are available at their respective Offices. Policyholder can approach these officers to get their grievances redressed.

Survival Benefit/Maturity Claims

Insurance companies settle survival benefit/maturity claims on or before the due date.

Policyholder is intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured.

In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number.

Survival Benefit payment up to Rs.60,000/- are settled without insisting for Policy Bond and Discharge Voucher.

Death Claims

If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars:

The numbers of the policies The name of the policyholder Death Certificate issued by concerned Authority The date of death The cause of death and Claimant’s relationship with the deceased

On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant.

The claims which have arisen after a period of three years are treated as non-early claims and settled within 30 days from the date of receipt of all requirements.

The claims that have arisen within a period of two years from the date of commencement of the policy, are treated as early claims and investigation is compulsory in such cases.

The claim is usually payable to the nominee/assignee or the legal heirs, as the case may be. However, if the deceased policyholder has not nominated/assigned the policy or if he/she has not made a suitable provision regarding the policy moneys by way of a Will, the claim is payable to the holder of a Succession Certificate or some such evidence of title from a Court of Law.

The insurance company grants claims concessions under certain Plans whereby payment of full sum assured is made, subject to the deduction of unpaid premiums with interest till the date of death and unpaid premiums falling due before the next anniversary of the policy, in the event of the death of the life assured within a period of six months or one year from the date of the first unpaid premium, provided premiums have been paid for at least three years and five years respectively.

Claim Review Committee

Insurance companies settle a large number of Death Claims every year. Only in case of fraudulent suppression of material information is the liability repudiated.

This is to ensure that claims are not paid to fraudulent persons at the cost of honest policyholders. The number of Death Claims repudiated is, however, very small.

Even in these cases, an opportunity is given to the claimant to make a representation for consideration by the Review Committees of the Zonal office and the Central Office.

As a result of such review, depending on the merits of each case, appropriate decisions are taken. The Claims Review Committees of the Central and Zonal Offices have among their Members, a retired High Court/District Court Judge.

This has helped providing transparency and confidence in our operations and has resulted in greater satisfaction among claimants, policyholders and public.

Insurance Ombudsman

The Grievance Redressal Machinery has been further expanded with the appointment of Insurance Ombudsman at different centers by the Government of India. At present there are 12 centres operating all over the country.

Following type of complaints fall within the purview of the Ombdusman

Any partial or total repudiation of claims by an insurer

Any dispute in regard to premiums paid if payable in terms of the policy

Any dispute on the legal construction of the policies in so far as such disputes relate to claims

Delay in settlement of claims

Non-issue of any insurance document to customers after receipt of premium.

There are more than 5 lakhs villages in India with a total population of over 100 crores. This represents a vast potential. But nearly 25% of them are below poverty line compared to only about 7% in the urban areas. They are scattered and not contiguous as in the urban areas. Therefore, to contact people one has to travel long distances along roads that are not well constructed. Only 60% of the villages are connected by all-weather roads. There may not be the convenient places for visitors to stay or to eat food. Agents may find it more profitable to spend their efforts in the urban areas. That is why there would be tendencies to avoid the rural market, unless compelled by the law or the the IRDA through regulations.

Banks taking efforts to spread the awareness of life insurance into the rural masses especially in the backward and remote areas and this endeavour has resulted in a steady all round growth in the life insurance industry.

In spite of Insurance Company’s tremendous effort to cover rural population, the segment has an enormous potential yet to be covered. The entry of private and foreign life insurers into the market kick started the vigorous competitive endeavor to tap the rural life business. The private players are conscious about the available potential and are showing consistent and constant interest in taping the rural market.

The entry of private life insurers has changed the basic structure of the life insurance market in India from ‘monarchy market’ to a ‘competitive ground’.

The main strategy of private players to participate in the rural market is to offer small life covers with low premium and this strategy will give rich dividend to them by scoring the active participation of the rural mass.

Nevertheless, these rural branches specially cater the need of rural populace only and customize their products. Amar Suraksha, Jan Suraksha are the products offered by it with low premium.

The astounding statistics is that life insurance in rural India is expanding almost five times faster than the urban demand. Efficient distribution channels and suitable products are the needs to cater the rural demand.

Undoubtedly, the private insurers are making good attempt to tap the potential market. Since they are profit centered they have to minimise their cost and they prefer ‘go to market’ model structure for products.

The insurers ought to understand that marketing in rural sector is totally different with urban sector. The agents must be trained accordingly to educate rural Indians regarding the concept of insurance and make them aware of various kinds of policies and their implication.

In this regard, ‘segmental marketing’ concept may be adopted in which the marketer analysis the concerned segment in regard to its nature of population, their social belief, educational background, their awareness to their products, suitable products to fit the potential consumers, strategies of marketing and so on.

A thorough segmental marketing analysis will make the life insurers to develop the right product for them through their effective channels of distribution.

The role of agent alone is not suffice to popularize life insurance products in the rural sector. So the companies have to select the right distributors, who could serve as a trusted business associate for insurance companies and good financial advisor to rural clients.

Bancassurance, Post offices, and Panchayats are the right channels of distribution for the rural populace. Furthermore, life insurance companies can also rope the village co-operatives, in the marketing channel.

One can’t under weigh the role of center of influence like village school masters, market committee heads and heads of local bodies, who are very close to the potential rural policyholders and could convince them by their intimacy towards them and make them to come. Policyholder can approach the Insurance Ombudsman for the redressal of their complaints free of cost.

People who take life insurance sometimes worry about lengthy and complicated claims procedures.

Death Claim In case of unfortunate event of the death of the Life Insured the following standard documents need to be submitted to the Claims Department

Duly filled Claim Intimation Form[please ensure all the fields are completely filled up]. Original policy document.

Original Death certificate issued by the requisite authority.

Last Attending Physician's Certificate in original.

Past & Present Hospitalisation / Medical Documents.

Cremation or Burial Certificate.

From the Beneficiary

Photo ID with Date of Birth with relationship with the Insured.

Proof of legal title to the claim proceeds e.g. legal succession paper, assignment deed

Reason for delay in intimation, if any

If the death has occurred due to any Unnatural cause, in addition to the above, the following documents should also be submitted :

Duly Certified Police Report

Duly Certified Police Inquest Report or Panchnama Report

Duly Certified Post Mortem Report

Duly Certified Chemical Analysis Viscera report, if any.

Newspaper Cuttings with the photograph of the Accident, if available