Career Search

Friday, May 23, 2014

Indemnity Insurance Plans

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

 

The market for ( defined) benefit plans is growing. Gradually, there will be a movement from hospitalisation covers towards these plans,

Benefit plans offer a lump sum amount, as mentioned in the sum insured. While these help take care of ancillary expenses, hospitalisation or indemnity plans reimburse the actual and admissible medical expenses incurred during hospitalisation, and are subject to sub- limits and restrictions, if any. Most hospitalisation reimbursement based plans do not cover miscellaneous expenses such as transportation and food expenses for dependants.

Recently, Bajaj Allianz General Insurance launched the Surgical Protection Plan, Religare Health Insurance launched critical illness and personal accident policies and ICICI Lombard launched an OPD (out- patient department) cover. Other types of benefit plans include hospital cash covers and women- specific critical illness covers.

In  urban areas, predefined benefit policies can be a growth engine, as some customers perceive hospitalisation covers as having restrictive payouts and higher premium rates, he says. Some seek alternatives such as treatment- specific or illness- specific covers. These specific benefit plans are developed keeping in mind the claims data with each insurance company, the growing incidence of lifestyle- related ailments and increasing healthcare costs.

Benefit plans have distinct advantages.

The major advantages of benefit plans are lump sum benefits without deductions; the claim is free from a contribution clause; enhanced coverage compared to hospitalisation plans; they are easy to understand; and the treatment can be planned in advance, as the actual pay out is confirmed. For a hospitalisation policy, it depends on the sub- limit and co- payments.

Also, the premium is comparatively less than that for hospitalisation policies. So, should salaried individuals opt for benefit plans, as they usually have an employer- provided cover, instead of a hospitalisation plan? Yes, this will help one enhance the existing insurance cover under a group cover.

Customers whose basic requirement has been fulfilled by any kind of a health insurance plan — either bought on an individual basis or provided by an employer — should consider buying benefit plans, the main purpose for which is payment for long- term expenses or for financial liabilities such as loans that one might be unable to service due to chronic ailments. An important factor is some of these benefit plans do not offer medical cover and are restrictive in terms of age, he adds.

Most group hospitalisation covers provided by employers are customised and the benefits might vary across employers. Further, an employer, to reduce the premium outgo, might have a cap on certain ailments and room limits, as well as a co- payments clause based on the grades of employees. Such restrictions are not applicable in the case of benefit policies. Also, according to norms, customers with benefit plans can make a claim under his/ her benefit policy, as well as from a hospitalisation policy; they also have an option to save on the sum insured under the hospitalisation policy by claiming the entire amount under the benefit plan.

The flip side is when you aren't employed, you will lose the hospitalisation cover. Therefore, it is advisable to first have a comprehensive indemnity cover and, subsequently, opt for a benefit plan, in case you feel it is needed. Benefit plans are complimentary covers and can be taken along with any other health insurance cover. These are meant to enhance your insurance cover and give a lump sum benefit.

Given benefit policies pay only for a defined set of ailments, you might have to pay out of your pocket on many occasions.

Typically, these products have strict claims norms; for instance, a disease can be claimed for only once in a policy year.

Also, for claims for ailments that aren't critical ( such as open bladder surgery or neck surgery), only a fraction of the sum assured is paid, even if you buy the highest sum assured, experts say.

For Bajaj Allianz's Health Guard individual hospitalisation reimbursement plan, the premium for a sum insured of 10 lakh is 10,913 for a male aged 26- 40. The premium for the Surgical Protection Plan (a benefit product), for the same age bracket and sum insured, is 11,500 for the base plan, including three add- on covers--- for hospital cash, critical illness and personal accidents. These add- on covers are optional; for the base Surgical Protection Plan, the premium for the 26- 30 age group and the same sum insured is 5,639 for men and 5,468 for women. But putting a little more money could give you a better utility comprehensive cover, in case you don't have one. The highest sum insured under a hospitalisation and Surgical Protection Plan is 10 lakh. However, for critical illnesses, it could go up to 50 lakh.

Defined benefit plans won't be prevalent across the country anytime soon, as benefit plans can be availed of only by those who have had an indemnity plan.

And, given the insurance penetration in India, that seems unlikely as of now,. Typically, only up to 20 per cent of the premia for an insurance company come from benefit plans; the rest are accounted for by indemnity plans.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund

2.Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

No comments: