What is Term Insurance?

Term Insurance is the purest and the cheapest type of Insurance. You pay the least for maximum life cover. The sum assured is payable only on the death of the assured. There is no maturity/survival benefit,i.e no return of any amount if you survive.

What is Whole Life Insurance Plan?

Whole life plan is a special type of term insurance. The term of the policy is throughout life. However some of the companies have policies providing survival benefits if the insured lives up to the age 75/80 years. Policies are either with or without bonus.

What is an Endowment Insurance Plan?

Endowment Insurance plans are the most popular insurance plans. They provide insurance for a specific period. The plans have both risk cover and savings part. The insured can get sum assured plus bonus or guaranteed additions either at the end of the period or on death, if earlier.

What is Money Back Plan?

Money back plan is also called Anticipated Endowment plan. In this plan survival benefits are paid at regular intervals say 5 years during the term of the policy. Apart from the survival benefits risk cover is available for the full sum assured during the term of the policy.

What is a ULIP Plan?

Unit linked insurance plan combines insurance with investment and also offers flexibility in investment (fund) options. A ULIP is good option to manage one's money. Part of the premium is used for risk cover and the balance for investment.

What is a Pension Plan?

Pension plan is also called retirement plan. Retirement plan is an insurance that the insured will continue to earn a reasonable level of income and enjoy a comfortable lifestyle. Insurance companies offer Deferred Assurance Plans and Immediate Assurance Plans. Here you invest up to a prefixed age after which the accumulated money is used to buy annuities. There are some Immediate Annuity plans as well for people in higher age group.

What is Children's Insurance?

Children's insurance is a policy that assures a child's financial requirements at regular intervals or at a specified future date. Children's life insurance policies provide risk cover for the child's parent/guardian. Besides, on unfortunate death of the parent not only the child gets sum assured on maturity, but also further premiums are waived off.

What are Riders?

Riders are additional benefits that an assured can purchase with an insurance policy. Riders provide additional cover/benefit to the existing insurance cover. The insured has the option to choose the appropriate rider beneficial to him: Term Rider, Accidental Death Benefit Rider, Critical Illness Rider or a Waiver of Premium Rider.

What are Charges?

The premium paid by the insured includes charges towards mortality, administration charges commission to the agents etc.
In respect of ULIP plans there are a number of charges viz; premium allocation charge, fund management charge, surrender charges, policy administration charges, mortality charges, switching charges, partial withdrawal charges, revival charges and miscellaneous charges.

How do I Claim Maturity/Survival Benefit?

To claim maturity benefit you need to sign the discharge voucher/form/claim form and send it to the company along with the original policy document. You will receive the policy monies by mail or electronically, depending on your choice

Is the Maturity Amount Tax Free?

Yes the policy proceeds are tax free on maturity.

How do I make a Death Claim?

In the event of the death of insured during the term of the life insurance policy the nominee has to intimate to the insurance company. The claim form has to be filled up, signed and submitted to the insurance company along with original policy documents.

Is Death Benefit Taxable?

No the death benefit is tax free paid to the nominee or the legal heirs

What is Nomination?

It is better for the policyholder to specify a nominee at the time of taking a policy so that in the event of policyholder's death, the policy monies can be claimed by the nominee without any hassle

Whether motor insurance is compulsory?

Yes. Any Motor Vehicle plying on public road needs to have 'Act "insurance under Motor Vehicles Act. It is also known as "Third Party" insurance in Trade circles. 'Act' insurance pays against liability arising out of accidents by the insured vehicle causing damage to property or bodily injury to others.

What is the amount of cover under Third Party Motor Policy?

Third Party Property Damage can be covered upto Rs. 7,50,000, but Bodily injury is covered without limit.

What is First Party Insurance?

Comprehensive Insurance covering both Own Damage and Third Party is called First Party insurance in trade circles.

What is Comprehensive insurance?

Comprehensive Insurance covers loss or damage to a vehicle due to 'own damage' apart from the third party insurance. Loss or damage to a vehicle is included in the 'Own damage' part of insurance when it is caused by the following perils.
i. Accidental external means
ii. Fire, Explosion, Self-ignition, Lightning, Burglary, House Breaking or Theft or by malicous acts.
iii. Transit by road, rail, inland waterway, air, lift or elevator.
iv. Act of terrorism
v. Riot and strike, earthquakes, flood & storm.
vi. Landslide & rockslide. But the own damage cover does not include
i. Wear and tear and depreciation
ii. Mechanical or electrical breakdowns,failures or breakages
iii. Theft of accessories if the vehicle itself is not stolen and
iv. Consequential loss
Additional protection on payment of extra premium is available against:
i. Extra fittings like tape recorders,air-conditioners,fans etc.,
ii. Personal accident benefits to passengers.
iii. Wider Legal Liability under Common Law for employees engaged in operation of vehicles such as paid driver and cleaner as also six coolies/bonafide employees carried in/on good trucks.

Who is a Third Party?

Any person not connected with you in any manner. Employees are not third parties. Courts have expanded the definition from time to time to make its application much broader-to e.g. to include even friends.

What are the different types of motor insurance coverage?

There are five options for a Motor Policy:
i. 'Act' Cover (Third Party Only),
ii. Comprehensive cover,
iii. Fire and Act cover,
iv. Theft and Act cover
v. Fire, Theft and Act cover.
Act or third party insurance covers you against the damage you may cause to any third party person or their property. Any third party is the one which is not connected with you in any way.

What is no claims bonus and how does it operate?

If there are no claims on a policy in a year, the insurance company rewards you for being careful by allowing a 'No Claims bonus' which reduces your future premium payments.Moreover, if you have a policy eligible for a noclaims bonus and you are buying a new or a more expensive car,then the same old policy can be transferred,with all the accrued benefits .

What is the claim procedure in case of a vehicle purchased under a hire purchase scheme?

Legally, Hire Purchase Company is the owner of the vehicle and the registered owner is the hirer. By an endorsement made on the policy any money payable under the policy (except the Repairers bill) are to be paid only to the financiers and their discharge is final. However in practice, the financiers interest is limited to his financial committment to the vehicle and he will receive the entire claim amount as a trustee only. Naturally the financiers will have to refund balance if any after adjusting his outstanding amount to the hirer.

When a claim is not payable?

An illustrative list of circumstances is given below:
i. Use of vehicle outside geographical area ie India,
ii. Person driving is under influence of liquor or drugs,
iii. Driving without an effective and valid license,
iv. Loss or damage by nuclear or allied perils,
v. Loss or Damage due to war and allied perils,
vi. Carrying of persons or goods more than the permitted capacity by R.T.O.
vii. Violating conditions of carriage as allowed by permit.
viii. Wear and tear: consequential loss, depreciation, wear and tear, mechanical or electrical breakdowns failure or breakdowns.

Can I lend my car to my friend? Will be he covered under my motor policy?

Yes, In India it is allowed provided the friend holds a valid licence to drive

What is a Mediclaim?

"Mediclaim" is the brand name of Health insurance policies issued by Government Insurance Companies. But now it has become a 'generic' term and is used for policies covering Health, issued by any Insurance company.

My friend had a mediclaim policy and he was treated in hospital without payment. Which company provides this cashless service?

All Insurance Companies offer cashless settlement facility through TPA. Pre hospitalisation (30 Days) and Post Hospitalisation (60 Days) Bills are to be submitted separately to TPAs.

I would like to have insurance cover of Rs10, 00,000. Which insurance company will grant it?

Most of the insurance companies issue policies unto Rs. 5,00,000. Now a days a couple of companies like Cholamandalam issue Mediclaim policy of Rs. 10,00,000 subject to certain conditions. In view of the escalating treatment costs, many other Insurance Companies are considering to increase the sum assured to Rs 10,00,000. In near future, you can expect to be be covered upwards of Rs.5,00,000.

What is the difference between various TPAs?

All TPAs are approved by IRDA. Insurance Companies select their TPAs to service the policies issued by them.

Can we select our own TPA?

In Individual Policies, the insurance company will allot its selected TPA. However, in large group policies, the insurance company may agree to the choice of TPA, if the TPA meets their selection criteria.

I am covered under my employer's group policy. Can I get cover after I retire at age 58?

Besides the employer's policy, it is better to take an individual policy at a younger age. Most of the Policies restrict the entry age from 45 - 50. The diseases already contracted will not be covered by a new policy at a higher age, besides restricting the sum insured.

Is hospitalisation due to maternity covered?

It depends on the policy coverage. Usually, Individual policies do not cover maternity. A couple of New Policies cover this under family floater after a waiting period of 4 years. The premium is much higher and there is limitation of Sum Insured on this account. Practical utility of such a cover in individual policies is to be assessed in terms of premium paid over the years and sum insured available at the time of maternity claim. Group policies can cover maternity for a limited sum insured.

Is day surgery payable?

Insurance companies consider Day surgery depending upon the case. Not all surgeries qualify for Payment in all insurance companies.

What is the Hospital Cash Benefit in Mediclaim?

Some of the policies include this benefit at an extra cost. If you admitted for a treatment, you will be eligible for an amount of say Rs.500. per day for seven days or the like.

My Credit card gives me medical policy at a heavy discount. Why should I buy a separate policy?

The Credit Card linked policy is a group policy and the following should be kept in mind:
i. The policy may not be renewed every year
ii. Administration cost is charged by the credit company
iii. You may change the Credit card Company.
iv. Your card may be cancelled or stopped by the credit card company.
v. There is entry age restriction for individual policies and you may not get a separate policy after you cross the entry age
vi. In the long run, it is better to have one's own policy.

Can I get reimbursement of Medical check up after 4 claim free years?

Yes, most of the individual policies allow this up to a limit. Usually group policies do not have facility.

I am having Health Prima (or any other ) policy of ABC Life Insurance Company covering hospitalisation. Why should I buy a separate Mediclaim Policy? I have a Critical Illness Policy issued by XYZ Company. I do not need a separate Mediclaim Policy.

1.There are many variants of policies in the market and coverage varies from company to company.
2.Health Prima is a product of ABC Life Insurance Company covering the following 12 ( varies from company to company ) critical illnesses only:
i. Stroke
ii. First Heart Attack
iii. Cancer
iv. Major Organ Transplant
v. Coronary Bypass Surgery
vi. Chronic Renal Failure
vii. Alzheimer's Disease
viii. Benign Brain Tumor
ix. Heart Valve Surgery Paralysis
x. Parkinson's Disease
xi. Total Blindness
xii. Aorta Surgery
xiii. Heath Prima or Critical Illness does not cover other diseases or accident. Therefore, having a separate Mediclaim policy from a non life insurance company in addition to Health Prima is a better option.

Whether treatment at Home for fever, malaria, etc. is covered?

Treatment at Home is not covered unless it is due to the critical state of the patient that he can not be shifted to hospital or there is lack of bed space in hospitals. Practically, it is very difficult to satisfy such conditions and obtain proof to justify claim under this section. It is rarely invoked.

Whether treatment as outpatient is covered in Individual Policies ?

No, as a general rule, it is not payable, as policy requires minimum 24 hours hospitalization except in such cases as Tonsillectomy, radiation treatment etc .

What is a Personal Accident Insurance?

This policy covers you against Accidental bodily injury or death caused by external, violent and visible means.

What is the coverage in personal Accident?

Your policy can cover either all or a combination of the following
i. Death
ii. Permanent total Disablement
iii. Permanent Partial Disablement - e.g. loss of fingers/ toes etc.
iv. Loss of Eyes/ Limbs
v. Temporary total disablement

Can medical expenses also be covered?

This policy can be extended to include expenses incurred, due to the accident.

How premium is determined?

The premium is based on the nature of occupation and sum insured. Each insurer has his own classification of occupation: Usually following classification is adopted-
i. Normal risk - Persons not engaged in hazardous occupations as mentioned in heavy risk.
ii. Heavy Risk: those who are engaged in hazardous occupations such as working in mines, electrical installations, circus personnel, mountaineers etc.

Under what conditions claim is not payable?

Each company specifies exclusions under which claims are not payable. However some of the common exclusions are:
i. Intentional self injury, suicide, or attempted suicide
ii. While under the influence of intoxicating liquors or drugs
iii. Child birth or pregnancy or in consequence thereof
iv. Breach of law or criminal intent etc
v. Traveling in an aircraft other than as a fare paying passenger. E.g. flying an aircraft, motor rallies.
vi. Injuries as a result of war or warlike operations etc