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Why accident insurance is a must
Jan 11, 2016
Personal accident insurance policies are must-haves if you are the bread winner of the family.Accidents, be they due to forces of nature or vehicle crashes, are covered under these policies. A health insurance policy pays for your hospitalisation expenses in case of an accident. But God forbid, if you are unable to continue with an active work life due to a serious injury, you need an income supplement.
Accident insurance policies step in here. They pay your family in the case of accidental death, and compensate you for permanent total or partial disability. The sum insured offered, however, is linked to the individual’s income.
Your compensation in accident insurance policies depends on the nature of impairment. A ‘permanent total disablement’ is an injury that prevents the insured from attending to his normal duties for a continuous period of more than 12 months with no hopes of improvement. A ‘permanent partial disablement’ is an injury that results in loss of eyesight, speech, or a hand or foot. If it’s a permanent total disablement, many insurers pay more than 100 per cent of the basic sum insured. With Bharti AXA, for instance, if the basic sum insured (for accidental death) is Rs.10 lakh, for permanent total disablement, a one-time settlement of Rs.15 lakh (150 per cent of basic sum insured) is paid. For permanent partial disablement, up to 75 per cent of the basic sum insured is paid. But here are the other facts you may not know.
Many accident insurance policies cover temporary disablement too. Assume that due to a fracture or injury you are not able to carry on your normal routine for some time. In such cases, insurers provide a daily/weekly benefit.
In Bajaj Allianz’s accident policy, for instance, Rs.5,000 per week for a maximum of up to 100 weeks is given for temporary total disability. In Royal Sundaram’s accident policy, for temporary total disablement, the insured is given Rs.3,000 a week for a maximum of 104 weeks. Like other insurance policies, in accident insurance too, there are a set of disclosures that you need to make while signing up. But there will be no questioning on your medical history.
Set of disclosures
In life or health insurance, the premium for the policy depends on the individual’s age and lifestyle (whether a smoker/non-smoker). But, in case of accident insurance policies, the premium is the same for individuals across age groups.
What however influences the premium is one’s profession. Some insurers do not cover aircraft pilots and crews and those in hazardous occupations under these policies. Some also explicitly exclude injuries caused by risky sports, such as bungee-jumping and para-gliding.
A personal accident insurance policy costs less than a term life insurance cover. Most basic accident policies that cover accidental death and permanent disability are available for a price of Rs.7/8 a day for a sum insured of Rs.20 lakh. This works out to an annual premium of Rs.2,500-3,000.
A term life policy for the same sum insured would cost about Rs.4,000-5,000 a year for an individual of 30 years; the premium is higher for the 40-plus age group.
However, one hitch with accident insurance is that there are few high-value covers on offer. While in life insurance, policies of Rs.1 crore are commonplace today, in accident insurance, most insurers offer up to Rs.10/25 lakh at the most. Those that offer higher sums insured ask for a disproportionately high premium. Royal Sundaram General Insurance offers accident cover for up to Rs.75 lakh. The cost of this policy is Rs.20,942 annually (without taxes). Individuals of 30-40 years of age may get the same sum insured under a life insurance policy for a lower premium of Rs.8,000-10,000.
Tata AIG’s accident insurance policy gives a sum insured of up to Rs.1 crore. The premium on this is Rs.15,140 (inclusive of taxes).
But the sum insured is linked to one’s income. In Tata AIG’s accident policy, for instance, the sum insured given will be only 10 times the annual income for salaried individuals and 20 times the annual income for the self-employed.
Source: The Hindu Business Line
Four public sector insurance companies settles 32% of claims received after flood
Jan 11, 2016
Four public sector insurance companies - United India Insurance Company Ltd, New India Assurance Company Ltd, Oriental Insurance Company Ltd and National Insurance Company Ltd - have so far settled around 32 per cent of the 19,500 claims they received from the flood affected areas of Tamil Nadu, especially Chennai.
There claims are for an estimated amount of Rs 2,518.81 crore and the insurance firms have until January 8, 2016, settled 6,237 claims by paying around Rs 104 crore, according to a senior official from an insurance company.
"We had some camps organised in the select cities and advertised in newspapers. Surveyors have been asked to give the report within five days. Once they gave the report the claim was settled within two to three days. The small claims are settled within 10 days, while major claims may require more time," said M P Jairam, deputy general manager, United India Insurance Co Ltd.
Of the total claims, around 6,573 claims for a total of estimated Rs 1,358.09 crore were received by United India Insurance, out of which the company has settled 2,287 claims for Rs 47.39 crore. The second largest number of claims were to New India Assurance, which received 5,192 claims for Rs 542.74 crore, of which 1,593 claims worth Rs 30.63 crore have been settled.
National Insurance has seen 4,825 claims for a total estimated Rs 263.43 crore, out of which the company has settled 1,691 claims for Rs 11.73 crore. The second largest in terms of amount of claims is for Oriental Insurance, which received 2,910 claims for an estimated Rs 354.55 crore, out of which 666 claims have been settled for Rs 14.51 crore. The numbers include individual and company claims.
A large number of claims were for two- and four-wheelers and some commercial vehicles, he said.
Meanwhile, various industrial associtions complained that several banks and insurance agencies are not properly extending their support to the micro, small and medium level companies to revive their business from the disaster. They alleged that many of the surveyors do not understand the technical requirements and while the critical machines are completely damaged, the claims are settled only by calculating the depreciation, which is affecting the revival plans. They also alleged that the number of claims settled are high considering the priority was on settling smaller claims such as that of two- and four-wheelers while the larger claims from the industry are still pending.
A group of micro and small units have formed a consortium and are planning to conduct a massive protest in Chennai. The micro, small and medium entrepreneurs are asking support including waiver or moratorium for various taxes, moratorium for various loans and financial support from banks, apart from addressing issues with electricity board and other government authorities related to settling the bills.
Source: Business Standard
Drones to assess crop loss under new insurance policy
Jan 11, 2016
A new agriculture insurance scheme for farmers -to be known as New Crop Insurance Scheme (NCIS) -expected to be approved by the Cabinet next week, will see drones being deployed to access crop damage figures.
The feed sent by drones will be collated with satellite imaging and remote sensing technology to assist insurance companies in adequate disbursals calculated on the basis of actual damage to crops in a particular area.Smart phones and online transmission of data will also be used in cutting down time taken to finalise the yield data.
The new scheme also aims to keep the premium rate low as compared to the existing insurance scheme where the av erage premium rate for farmers has been kept at 5.5%. The agriculture ministry in its Cabinet note proposes maximum premium up to 1.5% for wheat, 2.5% for paddy , 2% for oilseeds and 2-2.5% for other crops. Maximum premium or horticultural crops is proposed at 5%, unlike the exist ng schemes where the premium in certain cases goes up to 40%. The Cabinet, chaired by Prime Minister Narendra Modi, may even further lower the proposed premiums for all types of crops.
"We have identified discrepancies in the existing scheme of Modified National Agricultural Insurance Scheme (MNAIS) and will come out with a new crop insurance scheme, set to be implemented from 2016-17," agriculture minister Radha Mohan Singh said.
Besides the MNAIS, another scheme -Weather Based Crop Insurance Scheme (WBCIS) -has also been in operation in many parts of the country since 2007. The ministry's proposal to the Cabinet noted that though the government has been providing premium subsidy up of 75% and 50% under the MNAIS and the WBCIS respectively on actuarial premium rate, it was observed that the "premium paid by the farmers is quite high as the actuarial (exchanging risk with certainty) premium may exceed even 60%".
In order to make the NCIS scheme known to farmers in all districts, the ministry has proposed to allocate districtarea to one insurance company for a longer period of time, allowing them to build infrastructure and create a rapport with farmers of the area. Under the new scheme, the farmers will also get damages of their "post-harvest product" destroyed by cyclone or unseasonal rains up to a maximum of two weeks on "individual loss assessment basis".
Source: The Economic Times
All you need to know about the new Crop Insurance Scheme
Jan 08, 2016
Agriculture Minister Radha Mohan Singh made a presentation to Prime Minister Narendra Modi on Wednesday on the proposed new Crop Insurance Scheme. Besides premium rate, the discrepancies in the existing scheme were discussed.
The meeting was attended by Finance Minister Arun Jaitley, Home Minister Rajnath Singh, External Affairs Minister Sushma Swaraj, Food Minister Ram Vilas Paswan, Urban Development Minister Venkaiah Naidu and Road Minister Nitin Gadkari. Rural Development Minister Chaudhary Birender Singh, Tribal Affairs Minister Jual Oram, Social Justice Minister Thaawar Chand Gehlot, Chief Economic Advisor Arvind Subramanian, Niti Aayog chief among other senior officials from Finance and Agriculture Ministries were also present.
Here is all you need to know about the proposed new Crop Insurance Scheme:
The Agriculture Ministry has proposed an average premium of upto 2.5 per cent for foodgrain and oilseeds crops and 5 per cent for horticulture crops. However, some sections within the Cabinet want a uniform premium of 1-1.5 per cent for all crops.
The Centre would incur an expenditure of Rs 8,000 crore annually if a premium for farmers was fixed at 2.5 to 5 per cent depending on the risky crops and if 50 per cent of the total crop area of 194 million hectare was insured.
But fixing a uniform premium rate of 1.5 per cent for all crops for 100 per cent coverage would increase the Centre's financial burden to Rs 11,000 crore, which the Finance Ministry officials said was a major concern. The government intends to implement the scheme from the forthcoming kharif season from June.
The proposal on the new crop insurance scheme, moved by the Agriculture Ministry, was once discussed in a Cabinet meeting last year, but the decision was deferred in the wake of differences over the premium rate. In the existing Modified National Agricultural Insurance Scheme (MNAIS), the average premium rate for farmers has been kept at 5.5 per cent, though the premium rate for high risky crops is as high as 40 per cent. Last year, only 27 per cent of the crop area was insured which cost Rs 3,150 crore to the national exchequer.
Besides lower premium rate, the proposed Crop Insurance Scheme aims to settle insurance claims faster by assessing the crop damage using modern technologies like remote sensor. The Agriculture Ministry has already launched a portal on crop insurance and a mobile app as part of the digital India campaign.
Source: Business Today
Insurance companies see drop in growth for engineering segment; may see uptick in 2016
Jan 08, 2016
Engineering segment for insurance companies has seen a drop in growth owing to very few number of projects taking off. According to industry experts, there had been a 10-12 per cent drop in the premiums under fire and engineering policies. However, insurers expect an uptick in 2016.
K G Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance said, "The stalled infrastructure projects would finally kick off in 2016, thereby boosting the engineering insurance sector as well."
Overall, industrial production numbers are also seeing positive signs now. Insurers have also been offering heavy discounts in insurance premium rates for the fire and engineering segment.
This segment largely covers manufacturing plants and large-scale industrial projects from fire and other risks associated with construction and maintenance. Other than manufacturing, fire and engineering policies are offered to sectors such as auto, oil & gas, power, and infrastructure.
"Since not many new projects were not coming up, there was tough competition to retain existing customers and attract those from other insurers. Now, there are signs of green shoots emergingt," said the underwriting head of a private general insurer.
According to industry insiders, after the fire and engineering segment was de-tariffed (price control was removed) in 2007, earlier in some areas there were instances of 60-70 per cent drop in rates, making the businesses un-viable.
Industrial output grew at its fastest pace in five years at 9.8 per cent in October on robust festival demand, official data showed on Friday. A four-and-a-half month high in double-digit growth in manufacturing, particularly consumer durables and capital goods, fuelled industrial production.
Industrial production, as measured by the Index of Industrial Production (IIP), grew 3.6 per cent in September and had contracted 2.6 per cent in October 2014, so the October expansion was on a low base. But, economists warned October could turn out to be a statistical aberration.
Source: Business Standard
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