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78% of Indians say insurance is key to overall financial planning: Survey

Jan 12, 2022

A survey conducted by SBI Life Insurance in tie-up with NielsenIQ (India) has revealed that in the post-covid era, 78% of Indians feel that life insurance is extremely important in the overall financial planning process.

The survey further revealed that realizing this importance, 46% of the respondents purchased health insurance and 44% purchased life insurance for the first time during covid-19.

“Although Indians feel insurance is important, they still seem to be underinsured with as their insurance cover is almost 3.8 times of their annual income which is not even close to recommended 10 times or 25 times of their annual income," SBI Life Insurance said in a report.

These findings are a part of the Financial Immunity Survey 2.0, which was conducted among 5,000 respondents across 28 cities across India. The study provided insights into consumer behaviour towards financial preparedness in the post-covid world.

Against the backdrop of the ongoing pandemic, a vast majority of Indians are confident that the country would tide over the situation or a possible third wave.

As per the insurer, the confidence of being able to navigate through the situation is not surprising when 80% of the Indians strongly feel prepared towards physical immunity on account of taking either a single or double dose of vaccination.

“But 38% of the Indians feel that the situation could worsen over the next three months and their top three worries attributed to (1) Rising medical/ treatment cost (2) Instability of Jobs (3) concerns around Health of family/self," the insurer said.

The survey findings further attempted to decode the behaviour towards the top worries cited by consumers on the account of the impact of income because of the pandemic where 79% of the Indians faced income reduction and 1/3rd are still facing reduced income. 64% of the Indians feel that their key life milestones like accumulating savings, leisure travelling, providing for child education were impacted.

With covid-19 and uncertainty around, the importance of financial immunity has increased and 57% of the Indians relate it to being able to maintain ‘Financial Security and Stability of self/ family’.


IRDAI retains LIC, GIC, New India as D-SIIs

Dec 31, 2021

Life Insurance Corporation of India, General Insurance Corporation of India and New India Assurance remain Domestic Systemically Important Insurers (D-SIIs) and consequently subject to enhanced regulatory supervision.

Insurance regulator IRDAI said this while announcing LIC, GIC Re and New India have been identified, like in 2020-21, as D-SIIs for 2021-22. Given their nature of operations and systemic importance, the three insurers have to carry on efforts to raise the level of corporate governance besides identifying all relevant risks and promoting a sound risk management framework and culture.

“The D-SIIs refer to insurers of such size, market importance and domestic and global inter connectedness, whose distress or failure would cause a significant dislocation in the domestic financial system. The continued functioning of D-SIIs is thus critical for the uninterrupted availability of insurance services to the national economy,” the regulator said on Thursday.

D-SIIs are perceived as insurers ‘too big or too important to fail’. Since this perception and the perceived expectation of government support may amplify risk taking, reduce market discipline, create competitive distortions and increase possibility of distress in future, the D-SIIs should be subjected to additional regulatory measures to deal with the systemic risks and moral hazard issues, IRDAI said.


Intermediaries can maintain current accounts in appropriate number of banks: IRDAI

Dec 29, 2021

Regulator Irdai on Wednesday said insurance intermediaries, including entities sponsored by them, can maintain current accounts in appropriate number of banks for the purpose of meeting regulatory requirements and reinsurance business.

In August 2020, the Reserve Bank of India (RBI) had instructed banks not to open current accounts for customers who have availed credit facilities in the form of cash credit or overdraft from the banking system.

Later, on a review, the RBI permitted banks to open specific accounts that are stipulated under various statutes and instructions of other regulators/ regulatory departments, without any restrictions placed in terms of its August 2020 circular.

In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said it has been observed that the insurance intermediaries maintain multiple current accounts with banks at different operational levels (branch offices, and corporate offices, among others), for regulatory and other purposes.

" is clarified that the respective insurance intermediaries including entities sponsored by them may maintain current accounts in appropriate number of banks for the purpose of meeting regulatory requirements, reinsurance business, etc that are in line with conditions given in regulations, guidelines, circulars issued by the Authority," Irdai said.

The regulator had received representations from the intermediaries in regards to maintaining current accounts with banks.

The ciruclar has been issued to avoid hardships, if any, faced by the insurance intermediaries.

Irdai, however, asked the insurance intermediaries to review annually the need for having multiple current accounts and rationalisation.


SC: Insurer can’t refuse medical claim citing existing condition

Dec 29, 2021

An insurer cannot repudiate a claim by citing an existing medical condition that was disclosed by the insured in the proposal form, once the policy has been issued, the Supreme Court has said. A bench of justices D Y Chandrachud and B V Nagarathna also said a proposer is under a duty to disclose to the insurer all material facts within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance, it added.

While the proposer can only disclose what is known to him, the proposer’s duty of disclosure is not confined to his actual knowledge, it also extends to those material facts which, in the ordinary course of business, he ought to know, the court said. “Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition, which was disclosed by the insured in the proposal form and which condition has led to a particular risk in respect of which the claim has been made by the insured,” the bench said in a judgment.

The top court was hearing an appeal filed by Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), rejecting his plea seeking a claim for medical expenses incurred in the US. Nanda had bought an Overseas Mediclaim Business and Holiday Policy as he intended to travel to the US. On reaching the San Francisco airport, he suffered a heart attack and was admitted to a hospital, where angioplasty was performed on him and three stents were inserted to remove the blockage from the heart vessels.

Subsequently, the appellant claimed the treatment expenses from the insurer, which was repudiated by the latter stating that the appellant had a history of hyperlipidaemia and diabetes, which was not disclosed while buying the insurance policy. The NCDRC had concluded that since the complainant had been under statin medication, which was not disclosed while buying the mediclaim policy, he failed to comply with his duty to make a complete disclosure of his health conditions.

The apex court said the repudiation of the policy by the United India Insurance company was illegal and not in accordance with law. It said the object of buying a policy is to seek indemnification in respect of a sudden illness or sickness that is not expected or imminent and that may occur overseas.


Difference between a comprehensive and regular health plan

Nov 23, 2021

After the pandemic outbreak, having a well-covered health insurance plan has been inevitable than ever before. However, buyers ask whether they should opt for a regular health plan or go with a comprehensive health plan.

Both plans cover basic hospitalization expenses required for the treatment during medical emergencies. However, regular plans might not cover certain conditions and have a limited sum insured.

Rakesh Goyal, director, Probus Insurance Brokers Pvt. Ltd, said, “The benefits of having a comprehensive health insurance plan is that it covers the cost of regular health checkups, critical illness, known and unknown diseases, such as covid-19. It also includes benefits of cashless treatment in network hospitals, coverage for an ambulance, daycare procedures, alternative treatment options, consumable expenses, and pre and post-hospitalization."

“Moreover, most comprehensive health insurance plans cover outpatient department (OPD) expenses and come with certain add-on covers and few riders. It also provides coverage for pre-existing diseases after a specific waiting period," he added.

Some insurers also provide limited cover for physiotherapy, homoeopathy, acupuncture and osteopathy.

On the other side, a regular health insurance plan comes with limited coverage. It covers the medical expenses incurred for pre- and post- hospitalization and other medical expenses if the insured is admitted for more than 24 hours, including diagnostic fees, medicine costs, doctor consultation fees, room rent, etc. It also covers ambulance costs, daycare procedures, pre-existing diseases (with certain waiting periods), medical checkups, etc.

Indraneel Chatterjee, co-founder, RenewBuy, said, “The most common form of health insurance is the regular or standard health insurance policy, where the insurance company provides a standard plan cover between ₹1 lakh (minimum) and ₹5 lakh (maximum). Of late, the standard health insurance formulated by the Insurance Regulatory and Development Authority of India (IRDAI) has mandated 29 health and general insurers to offer health insurance coverage to take care of the basic needs of policyholders."


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