Managing Insurance Needs

-Which Company ?

Which Policy ?

How Much Cover I need ?

Why Life Insurance ?

Why Insurance

• Life is uncertain

• Protect from uncertainties of life– Protection for your family

– Protection against major medical bills

– Protect what you have

• Decisions– Which risks to cover

– How much cover to take

– Choosing

• The right insurer

• The right policy

• The right agent

Risk Rating Matrix

5B A A A A

Key

4C B A A A

3C C B B A

2D D C B B

1D D D C C

1 2 3 4 5

Risk Quadrants

LIKELIHOOD

IMP

AC

T

A ExtremeB HighC MediumD Low

Risk Response

RISK - KITE

Risk Avoidance

Ris

k Tr

ansf

er

Risk Retention

Risk R

ed

uctio

n

Personal Risk Management

• Risk Avoidance

• Loss prevention

• Loss Mitigation

• Risk assumption

• Risk Transfer/pooling

– Insurance allows individuals to pool risk associated with a

contingency

– Person transferring risk is called insured

– Person assuming risk is insurer

– Small amount contributed by the insured is called premium

– Person designated to receive the insurance proceeds is called the

beneficiary

Insurance

• Life Insurance

• Health Insurance

• Critical Illness

• Permanent disability

Life Insurance

• Why Life Insurance

– To protect your dependents from financial hardship in event of

untimely death

• To meet financial needs of dependents

• To protect what you already have

• To ensure attainment of unfulfilled financial goals

– As an Investment vehicle

• Long Term commitment

• Disciplined investing

• Tax benefits

Basic Principles

• Insurable Interest

– Insured must be in position to lose financially if a loss occurs

– To prevent gambling

– To reduce moral hazards

• Indemnity

– Insurers agrees to pay not more than the actual amount of loss

– Insured should not profit from the loss

Basic Principles

• Subrogation

• Subrogation is the right for an insurer to pursue a third party that

caused an insurance loss to the insured. This is done as a means of

recovering the amount of the claim paid to the insured for the loss.

• Utmost good faith

– A higher degree of honesty is imposed on both parties to an insurance

contract

– Concealment of material information that may have a bearing on the

decision of the insured makes the contract voidable

Need for life insurance

• Who does not need life insurance

– Single with no dependents

– Children

– Non-earning members of family

– Retired with no dependents

• Who needs life insurance

– Any earning member with dependents

• Insurance need keeps on changing with different phases in life

– Should be reviewed periodically

Calculating Insurance Need

• How much insurance you need

• Two Approaches

– Earnings Multiple Approach

– Needs Approach

• Earnings Multiple Approach

– Life cover equivalent to a multiple of your gross annual

income (100-200 times of monthly income)

– You want to replace a stream of annual income that is lost

due to the death of the breadwinner

– The longer you need to replace the income stream, greater

the multiple

– Higher the return you can earn on settlement the lower the

multiple

Calculating Insurance Need

Needs Approach

• Determine the need of the family after the death of the primary breadwinner

• Assessing Needs

– Immediate needs at the time of death

– Debt elimination

– Immediate Transitional funds

– Family Expenses

– Educational Expenses/ Marriage Expenses

• Take stock of available resources

• Needs minus resources

Type of Life Cover

• Term Insurance

– To provide a lump sum amount to the family in the event of untimely

death of the breadwinner

– Pure risk cover, no investment component

• Pure Endowment

– Amount is payable only if the insured survives till the end of selected

period

– Accumulation of saving

Term Policies

• Pure risk cover with no investment component

• Risk cover for a fixed term

• Premium paid goes towards risk cover

• Sum assured payable only in case of death of the insured

during the term

• Nothing payable in case of survival

• Premium paid is significantly lower compared to investment

based policies

• No loan against policies

• Suitable for taking a huge cover at a low cost

Term Policies

• Renewable Clause

– The policy can be renewed by the policy owner without medical examination

– No need to prove continued insurability

– Premium will be adjusted at each renewal

– Restriction in terms of numbers of renewal or age

• Convertible Clause

– Option to convert a term policy into a whole life or endowment policy

– Conversion takes place from the date of commencement of the original policy or from the attained age

LIC vs. Others

Company Name Policy Name Mode Riders AvailablePremium

(1 crore SA)

Aegon Religare iTerm Online Yes 7,300

Bharti Axa e-Protect Online No 7,300

Aviva i-Life Online No 7,368

HDFC Life Click2Protect Online No 10600

Kotak e-Preffered Online No 10825

Edelweiss Tokio Life Protection Plan Online Yes 11,500

Metlife Met-Protect Online No 11,600

ING Vyasa My Term Insurance Offline NA 11,891

ICICI Prudential i-Care Online Yes 13000

DLF Pramerica U-Protect Online Yes 13,400

SBI life Smart Shield Offline Yes 16,798

Bajaj Allianz iSecure Online Yes 18400

Max NewYork Platinum Protect Offline Yes 23,500

IDBI Fedral Termassurance Online No 25,350

LIC Amulya Jeevan Offline No 33,600

InsurerCSR for

2011-12

CSR for

2010-11

CSR for

2009-10Policy Name Premium

LIC 97.42 97.03 96.54 Amulya Jeevan 15169

ICICI Prudential 96.53 94.61 90.17 iCare 7303

HDFC Life 96.17 95.41 91.14 Click2Protect 6067

SBI Life 95.48 82.24 83.27 Smart Shield 8539

Kotak Life 92.1 89.3 86.97 ePreferred Term 5843

Birla Sunlife 90.94 94.66 89.09 Protector Plus 8202

Bajaj Allianz 90.61 88.69 88.19 iSecure 6505

Max Life 89.84 77.96 65.51 Platinum Protect 10281

Aviva 89.55 84.15 87.11 iLife 4707

ING Vysya 88.82 90.49 89.3

Bharti AXA 87.7 87.17 77.8 eProtect 4607

Company

Total Claim

Received

(Pending from

last year+This

year) -2014

Claim Paid-2014 Claim Settled Period

Nos. % Within 30 days 31-90 daysMore than 90

days

LIC 7,50,576 7,33,545 97.73% 6,20,881 60,040 52,624.00

ICICI Prudential

Life14,948 14,393 96.29% 13,736 362 295.00

HDFC Life 6,253 5,988 95.76% 5,338 602 48.00

SBI Life 13,426 12,676 94.41% 11,217 1,379 80.00

Max Life 9,051 8,531 94.25% 7,119 1,252 160.00

Kotak Life 3,089 2,843 92.04% 2,326 398 119.00

Star Union Dai-

lchi738 662 89.70% 246 231 185.00

Bharti Axa 1,046 936 89.48% 654 213 69.00

Bajaj Allianz 27,282 2,4192 88.67% 1,7635 5,175 1,382.00

Canara HSBC 597 528 88.44% 217 187 124.00

Aviva 2,433 2,134 87.71% 1,825 283 26.00

Reliance Life 21,412 18,511 86.45% 13,221 4,731 559.00

Sahara Life 955 809 84.71% 270 299 240.00

Tata AIA 4,884 4,125 84.46% 3,143 706 276.00

ING Life 3,312 2,780 83.94% 2,241 292 247.00

PNB Metlife 2,405 2,017 83.87% 1,747 204 66.00

Birla Sunlife 9,871 8,149 82.55% 6,320 1,457 372.00

IDBI Federal 687 550 80.06% 550 0 0.00

India First 916 654 71.40% 635 19 0.00

Future Generali 1,941 1,369 70.53% 837 434 98.00

Shriram Life 1,602 1,079 67.35% 648 316 115.00

Whole Life Policies

• A variation of term insurance where the term is equal to the life of the insured

• Term insurance for the longest term

• Sum assured is paid to the nominees on the policyholder’s death

• Premium is higher than term policy as every policy eventually would have a claim

• Variations

– Pure Whole Life Insurance –Premium is payable throughout the life

– Limited Payment Whole Life Insurance – Premium is payable for a limited period

Endowment Policies

• Investment based policies

• Dual benefit

– Life cover for a specific tenure

– Wealth accumulation

• Insurance money is payable to the insured/nominee

– In the event of the death of the insured during the endowment period

– In the event of insured surviving till the end of the endowment term

• A combination of Term Insurance and Pure endowment

Endowment Policies

• Money-back policies– A variation of endowment policy

– A part of the sum assured is paid to the insured at regular intervals

• Unit Linked Insurance Plans (ULIP)

– A variation of endowment policy

– Investment as per the choice of the insured e.g.

• Equity

• Balanced

• Debt

ULIP CHARGES

• ULIP’s usually have following charges built into it :

a) Up-front Chargesb) Mortality Charges ( Charges for providing the risk cover for life)c) Administrative Chargesd) Fund Management Charges

• Mutual Fund’s have the following charges :

a) Up-front charges ( Marketing, Advertising, distributors fee etc.)b) Fund Management Charges ( expenses for managing your fund)

Riders

• Additional features

• To customize insurance policy by taking optional features

• Additional cost

• Examples

– Critical illness rider

– Major surgical assistance

– Accidental Death

– Permanent Disability Rider

– Medial benefit rider

Other terms

• With or without Profit

– Insurance company declares bonus every year

– With profit policies are entitled to the bonus

– Premium on without profit policies is lower

• Guaranteed Bonus/addition

– Bonus is guaranteed as certain amount per thousand of sum assured

– Payable at the end of the term or death

• Loyalty Bonus/ addition

– Additional bonus based on the length of the policy

Insurance Policy• Defines rights and obligation of the insured and the insurer

• Identification – Insured

– Beneficiaries/Nominee

– Term of Policy

• Payment of premium– Payable in advance

– Monthly, Quarterly, Half Yearly, Yearly

• Grace period– Extension of time granted for making payment of premium

– Payment can be made without penalty and the policy remains in force

Insurance Policy

• Non forfeiture clause

– Enables termination of policy before maturity

• Get surrender value

• Exchange surrender value for a paid-up policy with a reduced face value

• Exchange surrender value for a paid-up term policy

• Policy reinstatement

– Reviving a policy within a specified period after it has lapsed due to non-payment

– Generally within 5 years from the due date of first unpaid premium

– On a medical basis or non-medical basis

Insurance Policy

• Loan

– Loan permissible against the surrender value

– Rate of interest is generally low compared to commercial rate of interest

• Suicide clause

– Policy is void if the insured commits suicide within the specified time period

• Multiple Indemnity Clause

– Double or triple cover in case of death because of accident

– Double or triple cover in case of death, payment of the face value on maturity

Insurance Policy

• Joint Life Policies

– Joint life insurance for husband and wife

– In case of death of the first life, sum insured is paid to the surviving spouse

– Risk cover continues for the second life, with or without payment of premium

– On maturity or death of second life, sum assured is paid

• Settlement Clause

– Pay in lump sum

– Pay the face value with interest over a fixed period

– Pay as annuity for the rest of life

Buying/Maintaining Life Insurance

• Review need & coverage

• Compare features and costs

• Selection of a company

• Selecting an agent

• Understanding the policy document

• Nomination

• Inform the family about the policy and policy documents

• Keep Insurance company informed about change of address

Some Interesting Questions..

• Suicide cases

• Smokers and non smokers, Drinkers/non

drinkers (How do they know ?)

• Pre existing diseases

• Non disclosures and misrepresentation

• What if I close a policy ?

Exercise

• Sethi and Malik, both age 35 decide that they

should invest some of their savings in a life

insurance policy. Sethi took a term policy for

the cover of 25 Lakhs and Malik took an

endowment policy with a similar cover of 25

Lakhs. The expected cost of these benefits,

based on the risks of the claims helps

determine the premium. Which one will have a

lower premium and why?

Solution

• Term will always have a lower premium, so

Sethi will pay a lesser premium than Malik.

There is always a claim from an endowment

policy irrespective of the person living or dead.

After a specified time, Malik will receive sum

assured plus bonuses. However a term

assurance claim arises only on death during the

term of the policy. So it is purely a risk cover,

Sethi made a smarter choice than Malik.

Health Insurance

Why Health Insurance

• Increasing Life expectancy

• Improved healthcare services

• Increasing cost of healthcare

• Second most important insurance cover after

life

Health Insurance Plans

• Covers medical expenses due to hospitalization from

sudden illness or accident

– Covers pre-hospitalization (30 days) and post-hospitalization (60 days)

– Covers Domiciliary hospitalization

• Age group of 5 to 80 years. Children can be covered from the age of 3

months provided at-least one of the parents is covered

• Benefits

– Reimbursement of medical expenses

– Discount on family package

– No claim bonus

• Increase in policy cover for every no-bonus year

Health Insurance Plans

• Cash Less Facility– Third Party Administrators

• Maintain data-base of policyholders• Issue identity cards to policyholders• Handle claim settlements• Advise as to whether the ailment is covered by the policy

• Exclusions– Hospitalization within 30 days– Certain diseases within the first year– Pre-existing conditions– Pregnancy/child-birth

• Premiums paid are eligible for deduction under section80D of Income tax Act.

Critical Illness Plan• Financial assistance in the event of insured contracting any of the covered

critical illness.

• The policy covers First Heart Attack, bypass surgery (Coronary artery), Stroke, Cancer, Kidney failure, Major organ transplantation, Multiple sclerosis, Aorta graft surgery, Primary pulmonary arterial hypertension, Paralysis.

• Clams to be supported with a certificate from the specialist confirming occurrence of the critical illness

• Premiums paid are eligible for deduction under section 80D of Income tax Act.

• Exclusion

– Illness contracted within 90 days

– Death within 30 days after diagnosis

Critical Illness Plan

• Indicative premium for age 45 years

Cover Premium

1,00,000 800

2,00,000 1600

5,00,000 4000

Hospital Daily Allowance

• Cash benefits in the event of insured persons beinghospitalized due to sickness or accident.

• Age group of 3 months to 60 years.

• Daily allowance for every day of Hospitalization -Rs.500/-,Rs.1000/- or Rs.2000/- per day

• Maximum of 30/60 days of hospitalization per policy period

• Premium paid eligible for Tax benefit u/s 80 D of IT Act

• ICU admission double the scheduled amount (maximum of 7days)

• Indicative Premium for 25-40 years old for Rs.2000 per dayfor 30/60 days - Rs.600/ Rs.1020 per annum

Overseas Travel Cover • Personal Accident - covering death and permanent disablement

• Medical Expenses and repatriation - covering hospitalizationexpenses arising out of illness/sickness and also repatriationexpenses for sending mortal remains to India

• Loss of checked baggage - covering total loss of baggage checkedby an international airline

• Delay of checked baggage - covering cost of emergency purchaseof replacement items

• Loss of passport - covering the actual expenses incurred inobtaining duplicate passport or alternate travel document and

• Hospitalization Allowance - covering daily allowance maximum for30 days applicable only for Corporate Frequent Traveler policyholders

Personal Accident Cover

• Covers death or bodily injury due to accident

• Benefits

– Basic Cover - Death

– Wider Cover

• Death

• Permanent Total Disablement

• Permanent Partial Disablement

– Comprehensive Cover

• Wider Cover plus

• Weekly compensation

Choosing Health Insurance

• What is right for you

• How much insurance

• Cost

• Risk assumption

• Choosing an insurer

– Cost

– Benefits

• Hospitalization/Pre-Hospitalization/Post-Hospitalization

– Coverage

• Attached hospitals /Others

– Services – TPA/ Cash Less Settlement

Health Insurance & Cashless Policies:

• Cashless policies mean that the health insurance company settles the billdirectly with healthcare provider, whether a hospital or a nursing home.

• This is to reduce the direct financial burden on insured individual at the timeof hospitalization. Therefore, whatever bill is raised by the healthcareprovider, Insurance company settles it directly through a Third PartyAdministrator.

• The TPA acts as a mediator between hospitals and insurance company andsettles the medical bills of the insured. It is readily essential for the insuredto understand the role of hospitals while availing the cashless mediclaimfacility.

• You can avail of the cashless facility at any of the hospitals in the insurancecompany’s network by presenting valid documentation on admission.Cashless facility can be availed in case of planned and emergencyhospitalisation and thus help you with your medical services

How does insurance health cashless facility work?

• To avail the insurance health cashless facility one needs to approach thehospital which is under the PPN (Preferred Provider Network) of yourinsurance company.

• The health insurance companies have tie ups with various hospital and toavail the cashless facility you have to get admitted in one of the hospitalswith which your insurance company has a tie up with. While you purchasehealth insurance you need to keep a check if your hospital falls under thepreferred provider network of your insurance company.

• Once you need to avail this facility all you will have to do is fill a formwhile getting admitted to the hospital. The completed form is sent to theTPA, depending upon the terms of the policy the TPA, will issue anauthorisation or a denial letter to the hospital and also spell out the expenselimit.

• Once this is done the hospital will immediately start treatment and all yourclaims up to the admissible limits will be processed by the company incoordination with the third party administrator

Advantages of insurance health cashless facility

• Cashless health insurance is of great advantage duringmedical emergencies

• Cashless health insurance facility reduces a customer’sfinancial burden and helps him recover with peace of mind.

• It helps customers who do not have immediate liquid moneyfor pay for their hospitalisation expenses.

• Thus while you purchase health insurance policy alwaysconsider your overall limits under the plan, the depth ofcoverage and the hospitals so that you avail excellent healthcare facilities

What you need to keep in mind while you purchase

health insurance with cashless facility?

• Cashless facility are only available in selecthospitals

• There is always a risk of delayed response fromthe TPA as the insurers mostly outsource thisfunction

• Poor liaison between TPA and hospitals can causeunnecessary delays in treatment or discharge.

How to choose the best cover?

• A good mediclaim policy allows you and your familycovered under the policy to take benefits duringmedical crisis.

• The two options available are individual and floaterpolicy. Most insurance companies may not coverdental and pregnancy related issues.

• It’s important to know the insurance guidelines beforeapplying for a health insurance policy.

• Over all it is very important that you should invest in ahealth insurance plan to protect yourself from the risingmedical costs.

Some Other Features • Maximum renewable age:

– Beyond this age your health insurance cover will be discontinued. Therefore it is advisable to opt for a policy with a higher renewable age.

• Sum Insured:– It is the total annual liability under the policy, you should look at a plan that gives you the maximum coverage in your

budget

• Copayment:– It means you claim amount will be divided amongst you and your insurance company by a certain percentage. It is wise

to check for this option beforehand.

• Limits on specific treatments:– Insurers put limits on certain specific treatments such as cataract or cardiac treatments. Make sure that you are ok with

these limits.

• Waiting period:– Check the policy conditions for the various policies and get a clear picture of the waiting periods of specific diseases.

• Hospital room rent &Maternity cover:– Keep in mind the upper limits here and see if this covers the costs in the hospital of your choice. Check for various sub-

limits.

• Empanelled Hospitals:– Check if your hospital is empanelled under the insurer. This would make life easier while availing cashless facility.

• Day Care Treatments:– Compare the list of day care procedures covered and choose the best for you

S.NO Name of TPA/ Licence Number/ Expiry Date

1 United Healthcare Parekh TPA Pvt. Ltd.

2 Medi Assist India TPA Pvt. Ltd.

3 MD India Healthcare (TPA) Services (Pvt.) Ltd.

4 Paramount Health Services (TPA) Pvt. Ltd.

5 E Meditek (TPA) Services Ltd.

6 Heritage Health TPA Pvt. Ltd.

7 Focus Healthservices TPA Pvt. Ltd.

8 Medicare TPA Services (I) Pvt. Ltd.

9 Family Health Plan (TPA) Ltd.

10 Raksha TPA Pvt. Ltd.

11 Vidal Health TPA Private Limited

12 Anyuta TPA in Healthcare Pvt. Ltd.

Select List of TPAs

Using Health Insurance

• Read & understand the policy document

• Keep a list and phone number of the TPA and network

hospitals

• Keep the card issued by the TPA handy

• In case of need of hospitalization get is touch with the TPA and

obtain prior-approval

• Inform the hospital about your policy and TPA

• Bill would be settled directly by the TPA

• Amounts not admitted by the Insurance company would have

to be paid by the insured

Dos and Don'ts for Health InsuranceDos

When you buy a health insurance policy you

should:

• Know that there are restrictions on coverage

• Pay special attention to terms and

conditions in the policy like:

– The clause excluding pre-existing diseases

– Waiting period before certain diseases can be

covered

– Restrictions or limits on various expenses relating to

hospitalisation

– Co-payment, which means you have to share a part

of the claim

– Pre-conditions for renewal

– Upper limits for age at entry and for renewal

• Disclose details of all pre-existing health

problems including

– Major ailments

– Conditions like high blood pressure or diabetes

• The company may want medical test reports depending on age at entry, you should comply with all procedures and documentation requirements– Check where and how the medical tests

will be carried out

– Check who should bear the cost for the tests

– Pay the premium only after the insurer accepts your proposal

– Renew the policy meticulously for the rest of your life

Don’ts

• Conceal facts or you could face a dispute at the time of a claim

• Allow a gap of even one day in your policy renewal or your cover may be insufficient or useless

Property Insurance

Basics

• Covers losses to real and personal property

caused by perils such as fire, theft, accidents

etc.

Home Insurance

Fire

• Covers loss or damage to Building and its contents due to Fire,Lightning, riot, strike, malicious and terrorist damage, Storm,cyclone, tempest, hurricane, tornado, flood and inundation.Earthquake, subsidence and landslide including rockslide,

• Sum insured can be on market value or re-instatement valuebasis.

Burglary

• This section covers the property against housebreaking andtheft.

• The sum insured should be the market value of the property

• The jewelry, electronic equipment/TV that one wishes to coverunder the respective section need not be insured under thissection.

Home Insurance

Jewellery And/Or Precious Stones All Risks• Under this section, Jewellery and/or Precious stones can be covered

against all risks.

Plate Glass• Fixed plate glass can be covered against accidental breakage.

Domestic Appliances• Domestic appliances like air conditioners, refrigerators can be covered

against accidental electrical or mechanical breakdown.

• The value should be on reinstatement value basis.

• Losses, which can be repaired, will be settled by paying the repair cost without applying any depreciation.

Home Insurance

• Electronic Equipments

• Electronic Equipments like Computer, TV, and VCR can be covered against all risks of damage and breakdown.

• Sum insured is to be on reinstatement value basis

• Losses, which can be repaired, will be settled by paying the repair cost without applying any depreciation.

• Pedal Cycles

• Pedal cycles can be insured against all risks

• Third party liability arising out of the use of pedal cycle is also covered.

Buying home insurance

• Make an inventory of the property

• Identify perils

• Stand alone policies vs. comprehensive policy

• Shop around

• Jewelry – kept in lockers/ home

• Review insurance cover

• Exclusions

• No claim bonus

Claim Settlement

• Were necessary steps to minimize the loss/damage were taken?

• In case of fire, was the fire brigade informed promptly?

• In case of theft, was the police informed and provided with a list of items stolen?

• Was the insurance company informed promptly?

• Exclusion e.g. if the house remains unoccupied for more than 60 days.

Long Term Home Insurance-SBI

• SBI General's Long Term Home Insurance Policyprovides a comprehensive solution for protectingyour Home against any unpleasant surprises that lifemay throw at you.

• It covers you against, the losses to the structure of thehouse due to any natural and man-made calamities

• On additional payment, coverage against Terrorismcan be opted

Long Term Home Insurance-SBI

• SBI General's Long term Home Insurance Policyis designed for covering loss or damage caused tothe building used as residential homes due to fireand special perils.

• Covers destruction of or loss/ damage to theinsured property by any of the following perils :– Fire

– Lightning

– Explosion / Implosion (excluding boilers ,economizers, pressure vessels)

– Aircraft Damage

Exclusions• Willful acts or gross negligence

• Destruction/Damage by own fermentation, natural heating or spontaneous

combustion

• Explosion/Implosion damage to boilers, damage caused by centrifugal

forces

• Forest fire

• War and nuclear group of perils

• Unspecified precious stones, cheques, currency, documents, etc. unless

specifically declared

• Consequential losses

• Theft during/after operation of peril

• Pollution and contamination

• Volcanic eruption or other convulsions of nature

• Burning of Property by Public Authority

• Electrical and Mechanical Breakdown

ICICI Lombard Home Insurance

Key Benefits

• Comprehensive cover available, which covers bothstructure and / or contents of your home

• Coverage up to 10 years for only structure, 5 years foronly contents and 5 years for structure & content

• Cover against Fire and allied perils, Burglary & Theftand Optional cover for Terrorism and Additionalexpenses of rent for alternative accommodation.

Sum Insured and Coverage• What is covered

You can choose to buy insurance for only the building (structure) of your

home, or only the contents (belongings) or both. The policy covers the losses

to the structure and contents of your home due to any natural and man-made

calamities.

The calamities covered are:

Fire, Lightning, Impact Damage, Aircraft damage, Explosion / implosion, Storm,

Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation, Riots,

Strike, Malicious and Terrorism Damage(optional), Subsidence and Landslide

including Rockslide, Bursting and/or overflowing of water tanks, apparatus and

pipes, Missile testing operations, Leakage from automatic sprinkler installations,

Bush Fire, Earthquake. The contents of your home are also covered against loss due

to burglary or an attempted burglary / housebreaking including theft. It also covers

loss of jewellery, silver articles and precious stones kept under lock and key, up to

25% of the total content sum insured or Rs. 1 Lac, whichever is lower.

What is not covered

• Willful destruction of property.

• Loss, damage and destruction caused by war,

wear and tear etc.

• Losses if your home has been unoccupied for

more than 30 days, without prior notice to the

company.

• Cash, bullion, painting, works of art and

antiques

How to calculate the Sum Insured

• The home insurance policy insures the structureof your home for its reconstruction value (and notfor market value).

• Reconstruction value is defined as the costincurred to reconstruct the home if it is damaged.

• On the other hand, market value is a combinationof cost of land, demand & supply scenario, etc.

How to calculate the Sum Insured

• Sum insured is calculated by multiplying the built up area of your homewith the construction rate per sq. feet, e.g. if your built up area of yourhome is 1000 sq. feet and the construction rate is Rs 800 per sq. feet, thesum insured for your home structure is Rs 8 Lakh.

• We recommend the rate of construction for few major cities when you arebuying online. However, this value can be revised appropriately ifexpensive material - like marble flooring, etc. - has been used inconstruction. If your home has lawn / garden surrounded by a perimeterwall, the construction rate can be revised to include the cost of constructionof this wall in home structure sum insured.

Home Contents:

• The contents of your home - furniture, durables, clothes, utensils, jewellery,etc. - are to be valued on market value basis i.e. the current market value ofsimilar items after depreciation.

CITY RATE (RS.) STATE

Mumbai 2,000 Maharashtra

New Delhi 2,000 Delhi

Jaipur 1,800 Rajasthan

Chennai 1,800 Tamil Nadu

Kolkata 1,800 West Bengal

Hyderabad 1,800 Andhra Pradesh

Ghaziabad 1,800 Uttar Pradesh

Noida 1,800 Uttar Pradesh

Gurgaon 1,800 Haryana

Faridabad 1,800 Haryana

Kolhapur 1,500 Maharashtra

Bangalore 1,500 Karnataka

Mysore 1,500 Karnataka

Ahmedabad 1,500 Gujarat

Pune 1,500 Maharashtra

Baroda 1,500 Gujarat

Lucknow 1,500 Uttar Pradesh

Ludhiana 1,500 Punjab

Nagpur 1,500 Maharashtra

Trivendrum 1,500 Kerala

Kanpur 1,200 Uttar Pradesh

Vizag 1,000 Andhra Pradesh

Rest Of India 1,000 Rest Of India

Section I - Premium for Fire & Special Perils Cover

(a) Building

(in lakhs)5 7.5 10 12.5 15 17.5 20 22.5 25 27.5 30 35 40 45 47.5 50

Premium I (a)

(in rupees)382 573 764 955 1146 1337 1528 1719 1910 2101 2292 2674 3056 3438 3629 3820

(b) Contents

(in lakhs)1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8

Premium I (b)

(in rupees)76 115 153 191 229 267 306 344 382 420 458 497 535 573 611

Section II - Premium for Buglary and Theft Cover

Buglary and Theft

(in lakhs)1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8

Premium II (in

rupees)270 404 539 675 809 944 1079 1213 1348 1483 1618 1753 1888 2022 215

Motor Insurance

• Type A – Third party liability

– Compulsory

• Type B – Comprehensive Cover

– Type A plus loss/damage to the vehicle

Motor Insurance

• Liability policy

• Liability policy covers risks required to be covered under the MotorVehicles Act. It is mandatory that every car owner be covered againstAct Risks under Section 146 of Motor Vehicles Act 1988

• The scope of cover is to pay compensation for death of or bodilyinjuries to third parties and damage to the property of third parties.

• While the insured is treated as the first party and the InsuranceCompany second party, all others would be third parties

• This policy provides personal accident cover of Rs.2,00,000 to ownerdriver.

• While the compensation for the personal injuries to third parties isunlimited, property damage is limited to Rs.7,50,000.

Package Policy (Comprehensive)

• This policy covers all the risks of Liability policy as well as the loss of or damage to insured's vehicle also

• The perils covered are:

– Damage to vehicle by accidental external means, fire, lightning, explosion, self-ignition, Burglary. Housebreaking

– Riot & strike, malicious acts and terrorist acts

– Earth quake

– Flood, cyclone etc

– Landslide/ rockslide while in transit by rail, road, air, inland waterways, lift or elevator

Motor Insurance• Package policy can be restricted to loss or damage due to fire or theft

or both fire & theft in combination with policy A

• The geographical limits for use of the vehicle is India but the limitscan be extended to Bangladesh, Bhutan, Pakistan, Nepal, Sri Lankaand Maldives by charging an extra premium

• Policies can be issued for periods less than one year. In such cases,short period scales are charged, which are higher than pro-rata rates.

• No claim Discount: For every claim free year, the insured isrewarded with discounts in premium

• In case of a claim in any year, bonus earned till that year is wipedout.

Motor Insurance

• Exclusions

– Accident outside geographical area

– Consequential loss

– Normal wear & tear

– Driving without a valid driving license

– Driving under the influence of liquor/drugs

– Vehicle not being used as per regulations

Dos and Don’t ; Motor InsuranceDos

• Fill the proposal form yourself even if the

vehicle dealer is arranging for the insurance

• Fill the proposal form carefully and factually

and thoroughly

• Keep a copy of the completed proposal for your

records

• Read the policy brochure/ prospectus carefully

to know what is covered and what is not

• Ask for information about add-on covers that

may be available and choose what suits you

• Give documents such as RC Book, Permit and

Driving Licence to the insurance company for

verification

• Ensure that you keep these documents updated

from the authorities concerned

•

Don’ts

• Don’t let anyone else fillyour proposal form

• Don’t leave any columnblank

• Don’t forget to renew yourpolicy without any break

• Don’t forget to ask for thecorrect procedure when youbuy a used car that alreadyhas insurance.

• Don’t make falsedeclarations about the actualuse of the vehicle you areinsuring

End of Session!