Save your Health Insurance premium and make your plan more pocket-friendly

Having a health insurance policy with a sufficient sum insured is needed. How else would you be able to meet the expensive treatment costs of a medical emergency?

When you opt for an optimal sum insured level for complete coverage, you cannot overlook the premium associated with it. If a high sum insured is chosen, the premium, invariably, becomes high. In such cases, you have to choose between an optimal coverage and an affordable premium and the choice is not very easy. What if you can make your health insurance premiums affordable?

There are many ways in which you can save on your health insurance premiums. Let’s find out what these ways are –

  • Following a healthy lifestyle

    Your health insurance premium is directly proportional to your health and your lifestyle habits. If you practice healthy living and choose healthy lifestyle habits, your premiums would be lower and vice-versa. So, you should maintain your health as premiums for healthy individuals with no medical complications tend to be lower than premiums for individuals suffering from medical problems. Similarly, if you smoke and/or drink, your health insurance premiums would be high as these habits impact your health negatively. That is why health insurance companies charge lower premiums from non-smokers than smokers.

  • Wellness benefits offered by insurers

    The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to include wellness benefits in their health insurance policies to promote healthy living. These benefits offer premium discounts if you are healthy or if you practice regular exercising and adopt healthy habits. These benefits also offer discounts on medicines and wellness programs at merchants partnered with the insurer. When buying a health insurance plan, look for these wellness benefits available in the policy and use these benefits to reduce your premium amount.

  • Premium discounts

    Health insurance plans also allow different types of premium discounts in the policy for making the policy more pocket-friendly. Some of the commonly available discounts include the following –

    • Family discount for covering 2 or more members under the policy
    • Discount for buying a long term plan for a period of 2 or 3 consecutive years
    • Discount for buying the policy online
    • Discount for choosing voluntary co-payment under the plan

    You can hunt for these discount in the policy and use them to reduce your premium outgoes.

  • Avoiding small claims

    When you don’t make claims in a policy year, you earn a no claim bonus. This bonus either increases the sum insured free of cost or it allows a discount in the renewal premium. So, during the policy year, if you incur small medical expenses, don’t make claims for such expenses. Avoidance of claims would help you avail no claim bonus and either get a higher sum insured at the same premium or a premium discount on renewal.

  • Splitting the premium between spouses

    Health insurance premiums are allowed as a deduction from your taxable income up to INR 25,000 under Section 80D of the Income Tax Act, 1961. If, however, your health insurance premium is more than INR 25,000, you can split the premium with your spouse and claim double tax benefits. This splitting is allowed if the premium of the policy is paid through two bank accounts. In that case, the insurance company might issue two tax certificates allowing you and your spouse to claim a deduction from your respective taxable incomes. For instance, say your aggregate health insurance premium works out to be INR 35,000. In this case, you can pay INR 25,000 from your bank account and ask your spouse to pay the remaining INR 10,000 from his/her bank account. This way, you can claim a deduction of INR 25,000 under Section 80D from your taxable income and your spouse can claim a deduction of INR 10,000 from his/her taxable income. This splitting would, therefore, give you higher tax deductions and reduce your tax liability.

    Premium splitting might or might not be allowed by insurance companies. So, find out from your insurer whether it would allow such splitting and provide you with two tax certificates so that you can claim dual deductions on a single policy. (Source ET article)

  • Choosing a super top-up plan

    To enjoy a high cover at a low premium you can opt for a super top-up health plan. The plan comes with a sum insured and a deductible limit. If the aggregate claims made in a policy year exceed the deductible limit, the excess claims are paid by the super top-up plan. A super top-up policy can act as a supplemental coverage on an existing plan. The deductible of the plan can be taken to match the existing coverage of your policy so that claims up to the deductible get paid by the existing health plan and excess claims get covered by the super top-up plan. A super top-up plan, therefore, is a good choice for increasing your coverage while reducing the premium cost.

Which of these ways would you choose to reduce your health insurance premium?

You can choose one or all of the ways mentioned above but do be smart about buying your health insurance policy. A high sum insured doesn’t always mean a high premium and you can use the above-mentioned steps to reduce the premium effectively. To enhance the sum insured, opt for super top-up plans and get comprehensive coverage which is also light on your pockets.

Watch the below video to find out more ways on how you can lower your health insurance premiums.

IRDAI’s efforts towards a healthier India through wellness benefits in Health Insurance plans

The Insurance Regulatory and Development Authority of India (IRDAI) has always ensured that health insurance plans adapt to the changing trends of the modern society. Gone are the days when health insurance plans offered vanilla coverage benefits against medical costs. Today’s health plans have become multi-dimensional in their scope. They offer new-age coverage benefits as well as value-added services so that policyholders can get something extra from their health insurance plans. IRDAI has also promoted the evolving changes in health insurance plans and one such change, in recent times, is the inclusion of wellness benefits in health plans.

Wellness and preventive healthcare can go a long way in taking care of your health and reducing the probability of health insurance claims for insurers. As such, some insurers offered incentives to policyholders for adopting a healthy lifestyle. Wellness benefits, which were previously offered by few health insurers, have been made universal by the recent IRDAI guidelines. These guidelines are asking insurance companies to include wellness related benefits in their health plans so that India can practice healthy living.

IRDAI guidelines – the talking points

IRDAI issued a set of guidelines for inclusion of wellness benefits in health insurance plans. These guidelines asked insurers to include the following benefits in their health insurance costs –

  • Coverage for preventive healthcare

    To motivate policyholders to track their health on a regular basis, IRDAI asked insurance companies to allow policyholders coverage for preventive healthcare costs. Under preventive healthcare, insurers have been asked to provide coverage for the costs incurred in the following –

    • Health check-ups
    • Pharmaceuticals
    • Outpatient treatments
    • Diagnostic tests

    The coverage can be offered as a part of the policy benefits or insurance companies can offer discounts to policyholders on these costs. The coverage would, however, be provided if such costs are incurred at networked hospitals or empanelled hospitals of the insurance company.

  • Benefits for wellness and healthy living

    Many individuals practice a healthy lifestyle and maintain their health. Insurance companies have been asked to reward such policyholders through wellness benefits in health insurance plans. This reward can be in the form of gift vouchers which policyholders can redeem on –

    • Health supplements
    • Sports club membership
    • Fitness centre membership
    • Gym membership
    • Yoga membership, etc.

    Furthermore, if policyholders practice healthy living during the policy tenure and fulfil the conditions of a wellness regime stipulated by the insurance company, they can be rewarded at the time of policy renewals. Insurers can offer such policyholders a discount in renewal premium or a free increase in the sum insured. 

    A very common example of this benefit is the ‘Stay Active’ benefit in HDFC Ergo Health plans. Under many of the company’s plans, if the insured takes a specified number of steps during the policy tenure, a premium discount is offered on renewal. 

  • Coverage for excluded hospitalisation costs

    When you are hospitalized, your health insurance policy does not cover all the costs of such hospitalisation. However, IRDAI, in these guidelines, asked insurers to provide coverage against such excluded costs as a part of wellness related benefits.

IRDAI guidelines – the objective 

The primary objective of issuing these guidelines for inclusion of wellness benefits was to promote healthy living. Today, individuals are becoming increasingly conscious of their health and try and maintain a healthy life to keep illnesses away. With the introduction of wellness benefits in all health plans, IRDAI aims to –

  • Increase the collective consciousness about healthy living among policyholders
  • Motivate policyholders to look after their health to gain additional benefits from their health plans
  • Reward those who practice healthy living
  • Make health plans wellness-centric

IRDAI guidelines –the terms and conditions

While the afore-mentioned inclusions would considerably improve the scope of health plans and make wellness important, IRDAI also stated some terms and conditions associated with the coverage. These include the following – 

  • The main objective of the afore-mentioned benefits should be to promote healthy living
  • Insurance companies can set eligibility parameters for providing such wellness benefits. Policyholders would fulfil the parameters would be eligible to avail the wellness coverage benefits offered by the company
  • Providing the wellness benefits would be the choice of the insurance company. The benefits can be inbuilt in the health plan or offered as an add-on
  • Insurers can offer a range of wellness benefits and ask consumers to choose the benefits that they want
  • The details of service providers tied-up with insurance companies to offer wellness benefits should be disclosed by the company on its website
  • In case of family floater health plans, the plan should clearly state the members who can avail wellness benefits
  • Many plans also offer the benefit of carrying forward the unused wellness coverage to the next year. If such a benefit is offered by a health plans, its terms and conditions should be clearly stated

The modern-day mantra is healthy living and IRDAI intends to make this mantra more popular by introducing wellness rewards in health insurance plans. This move would not only enhance the scope of health plans, it would also make them relevant in today’s times when health has become a priority. So, the next time you are on the lookout for a health insurance policy, find out the wellness benefits which different plans have to offer. Change your lifestyle to practice healthy living and get dual benefits – a fitter you and a rewarding health insurance policy.

Return to Invoice Cover in Car Insurance Plans

A car insurance policy is a must if you wish to drive your car in India. The Motor Vehicles Act, 1988 mandates a third party policy on every car which is running on Indian roads. Though the third party policy fulfils the legal requirement, it has a limited scope of coverage. It does not cover the damages suffered by the car itself which also incurs considerable financial costs. This is where a comprehensive car insurance policy comes into the picture. A comprehensive car insurance policy provides an inclusive scope of cover which covers both third party legal liabilities as well as the damages suffered by the car itself. Moreover, comprehensive car insurance plans also have optional add-ons which help in enhancing the scope of coverage further. One such add-on, offered by a comprehensive car insurance policy, is Return to Invoice Cover. Let’s understand what return to invoice is –

What is Return to Invoice cover?

Return to invoice cover is an add-on cover which enhances the claim payable under the car insurance plan if the car is stolen or if it is damaged beyond repair. Under the cover, in case of constructive total loss or theft of the car, the invoice value of the car is paid as claimed. Thus, the return to invoice cover bridges the difference between the Insured Declared Value (IDV) of the car insurance policy and the invoice value of the car and pays a higher claim to policyholders.

How does return to invoice insurance work?

When you buy a car insurance policy and choose the return to invoice cover with the basic comprehensive cover, the add-on becomes effective. Thereafter, if your car suffers a constructive total loss where it is beyond repairs or if the car is stolen, the invoice value of the car is paid as claimed.

Return to invoice vis-à-vis Insured Declared Value (IDV)

After you buy a car, its value starts depreciating as it ages. Thus, under a comprehensive car insurance policy, the coverage limit of the policy is calculated after considering the depreciated value of the car. The coverage level of a car insurance policy is called the Insured Declared Value (IDV) and it is calculated as the ex-showroom price of the car less depreciation. The ex-showroom price of the car does not include the registration charges and road tax that you pay on the car. Moreover, with every passing year, the rate of depreciation on the car increases and the IDV reduces. In case of total loss or theft of the car, the applicable IDV is paid as a claim which is quite lower than the actual price paid for buying the car.

Invoice value of the car, on the other hand, is calculated by adding the ex-showroom price of the car, registration charges and the road tax paid. In other words, it is the on-road price of the car less insurance cost. The invoice value of the car is, therefore, higher than the IDV of the car insurance policy. When you choose the return to invoice cover and the car is completely damaged or stolen, you get the invoice value of the car and not the IDV and thus you get a higher claim in your car insurance policy.

Comparison of a car insurance policy with return to invoice cover and without

The afore-mentioned difference between a return to invoice cover and IDV can be better explained with an example. Let’s assume that a car insurance policy is bought on a new car where the IDV is INR 5 lakhs and the invoice value of the car is INR 7 lakhs. Here’s how the policy would differ if the return to invoice cover is availed in one instance and if the cover is excluded in the other –

Policy with return to invoice cover

Policy without return to invoice cover

IDV of the policy would be INR 6 lakhs

IDV of the policy would be INR 6 lakhs

The premium of the policy would be higher because an additional premium would be paid for choosing the return to invoice cover

The premium of the policy would be lower because the return to invoice cover is not chosen

In case of theft or total loss of the car, IDV would be paid which is INR 5 lakhs after deducting the market value of the car with age-based depreciation

In case of theft or total loss of the car, the invoice value of the car would be paid which is INR 7 lakhs. The depreciation of the car due to its age would not be considered 

The policyholder would suffer a loss of INR 2 lakhs because the cost of the car was higher than the claim received

The policyholder would not suffer any financial loss as he/she would get the cost of the car compensated by the return to invoice cover. The policyholder can, therefore, easily buy a new car to replace the old one

The road tax and registration charges paid on the car would not be compensated by the car insurance policy

The road tax and registration charges paid on the car would be compensated by the return to invoice cover availed with the car insurance policy

Benefits of return to invoice insurance cover

Choosing the return to invoice cover as an add-on with your car insurance policy is beneficial because of the following reasons –

  1. Better scope of coverage 

    If you opt for the return to invoice cover, you get a better scope of coverage in your car insurance policy.

  2. Higher claim payment

    In case of total loss of the car or theft, you get the invoice value of the car paid as claim. This value includes the registration charges paid as well as the road tax thereby enhancing the claim amount that you receive.

  3. Beneficial in case of high-end cars

    If you buy your dream luxury car after saving for it for many years, total loss or theft of the car would be a considerable financial loss. Though your car insurance policy would compensate you for the loss suffered, the IDV paid would be considerably lower than the cost of the car. In such cases, having a return to invoice cover is a blessing. The cover would pay you the invoice value of the car which is much higher than the IDV thereby reducing your financial loss and enabling you to replace the damaged luxury car with a new one.

Applicability of return to invoice add-on

Here are some instances wherein you can choose to buy the return to invoice add-on and where the add-on would work –

  1. The return to invoice add-on would be available for cars which are up to 5 years old. Some insurance companies restrict the coverage for cars up to 3 years old too. So, compare the available car insurance plans to find out the maximum age of the car for which the return to invoice add-on is allowed by the insurance company.
  2. The return to invoice cover works only in cases of theft of the car
  3. If the car suffers total constructive loss which is beyond repair, the return to invoice add-on would be applicable. The car can be damaged in a fire, natural calamity or man-made calamities or accidents.

Non-applicability of return to invoice cover

The return to invoice add-on would not work in the following situations –

  1. If your car is 5 or more years old, the add-on would not be available
  2. If you suffer a partial damage which can be repaired, the return to invoice cover would not be applicable
  3. If the vehicle is stolen but you don’t file a police FIR, the claim would not be admissible. In such cases, the return to invoice add-on would not be applicable
  4. If you suffer a third party claim, return to invoice add-on would not be applicable

Return to invoice vis-à-vis zero depreciation 

When it comes to choosing add-ons, a car insurance policy provides a range of add-ons to choose from. Besides the return to invoice add-on, another popular add-on is the zero depreciation cover which also enhances the claim payable by nullifying the effect of depreciation on the parts of the car. While both return to invoice and zero depreciation are popular add-ons which enhance the scope of coverage, they are quite different from one another. So, let’s understand the similarities and differences between these two add-ons –

  1. Similarities between return to invoice and zero depreciation add-on
    • Both add-ons enhance the claim amount 
    • Both add-ons are available on cars up to 5 years old
    • Both add-ons require an additional premium
  2. Differences between return to invoice and zero depreciation add-on

    The differences between return to invoice and zero depreciation add-ons can be understood from the following table –

    Return to invoice add-on

    Zero depreciation add-on

    It is applicable in case of total loss or theft of the car

    It is applicable in case of damages suffered by the car which are repairable

    The add-on bridges the gap between the invoice value of the car and the IDV of the car insurance policy

    The add-on bridges the gap between the actual cost of a car’s part and its depreciated value 

Cost of return to invoice add-on

Being an optional add-on, the return to invoice cover comes at an additional premium. The actual cost of availing the add-on depends on the insurance company and its pricing policy. However, generally, the return to invoice add-on involves an additional premium of 10%. This means that if the basic comprehensive car insurance policy costs INR 100 without the return to invoice add-on, by choosing the return to invoice add-on you might be required to pay INR 110.

Who should choose return to invoice?

The return to invoice add-on should be chosen by individuals who –

  1. Have bought an expensive car and cannot bear the loss in case of theft or total loss of the car
  2. Live in an area where car thefts are common
  3. Have bought a new car and want a complete protection on it
  4. Live in an area where damages to the car can be severe. For instance, in earthquake prone areas, the car can be damaged severely
  5. Use their cars frequently for long commutes and, therefore, face a higher probability of accidents

The return to invoice insurance cover is a valuable addition to your car insurance policy if you have invested in a brand new car. At a small additional premium you can get comprehensive cover for your car which would compensate you for the cost of buying the car in case your car is damaged beyond repairs or is stolen.

Frequently Asked Questions

  1. How is IDV calculated?

    IDV is calculated by deducting the market value of the car with depreciation based on the car’s age. The rate of depreciation is as follows –

    Age of the car

    Applicable depreciation 

    Up to 6 months

    5%

    More than 6 months but up to one year

    15%

    More than one year but up to 2 years

    20%

    More than 2 years but up to 3 years

    30%

    More than 3 years but up to 4 years

    40%

    More than 4 years but up to 5 years

    50%

    For cars aged 5 years and above, the IDV is decided mutually between the insurance company and the policyholder.

  2. If I add accessories to the car, would their value be covered under the return to invoice cover?

    No, the value of additional accessories is not covered under the return to invoice add-on. Only the invoice value of the car would be covered which excludes the value of accessories.

  3. Are other add-ons available if the return to invoice add-on has been selected?

    Yes, you can opt for as many add-ons as you want even after choosing the return to invoice add-on.

  4. What is the coverage duration of return to invoice?

    The return to invoice add-on is applicable for a period of one year. After the year is completed, you would have to choose the add-on again when renewing the policy.

  5. I am buying third party coverage for my car as I use the car sparingly. Can I buy the return to invoice add-on with the policy?

    No, return to invoice cover is available only with comprehensive car insurance plans. If you are buying only a third party liability policy, you would not get the return to invoice add-on with it.

What is Personal Accident cover in Bike Insurance Plans?

When you buy a bike, you need to buy a valid insurance policy on the bike as well. The Motor Vehicles Act, 1988 governs transportation laws in India and one such rule specified by the Act is the need of a valid third party insurance cover on every vehicle being used on Indian roads. So, when you buy a bike, you need a mandatory third party cover on it as well.

A third party policy protects you against the financial liability that you suffer if any third party is physically injured or killed due to the bike. Moreover, if your bike damages any third party property, the financial loss suffered would also be covered under the policy. However, the third-party policy does not provide coverage for the damages which the bike might suffer itself. This is why you need a comprehensive bike insurance policy which covers both third party liabilities as well as the damages suffered by the bike.

Whether you buy a third party liability plan or a comprehensive one, you are required to opt for a mandatory personal accident cover too. Let’s understand what this cover is all about –

What is personal accident cover in bike insurance?

A personal accident cover is a cover which should be taken with a third party policy or a comprehensive one. It covers the owner or driver of the bike. Under this cover, you get coverage for the following –

  • Accidental death
  • Permanent total disablement suffered due to an accident
  • Permanent partial disablement suffered due to an accident

The sum insured for the personal accident cover is INR 15 lakhs. In the first two instances, i.e. accidental death and permanent total disablement, 100% of the sum insured is paid to the owner or driver who suffers these contingencies. In case of permanent partial disablement, however, a percentage of the sum insured is paid depending on the severity of the disability suffered.

Features of personal accident cover in bike insurance

Here are some salient features of the personal accident cover which is available in a bike insurance policy –

  1. The cover is offered only for the owner or driver of the bike. This means that if any individual, other than the owner, is driving the bike and suffers accidental death and disablement, the claim would be payable
  2. The premium for the personal accident cover can be up to a maximum of INR 750

The rule regarding personal accident cover in bike insurance

While personal accident cover is a mandatory part of your bike insurance policy, you can opt-out of it in the following circumstances –

  1. You have an existing personal accident cover of a minimum of INR 15 lakhs in a car insurance policy
  2. You have an existing personal accident cover of a minimum of INR 15 lakhs in a standalone personal accident policy

This means that if you already have a personal accident cover in your name and the coverage level is a minimum of INR 15 lakhs, you don’t need to opt for a personal accident cover in your bike insurance policy. 

Personal accident cover for the pillion rider

The mandatory personal accident cover in bike insurance plans covers only the owner or driver of the bike. Any rider riding pillion is not covered. Thus, in an accident, if the pillion rider suffers any accidental contingencies, no claim would be paid for him/her. If you usually ride your bike with a pillion rider, insuring the rider against accidental contingencies is a wise choice. To do so, you can opt for the personal accident add-on for the pillion rider. Let’s understand –

What is accident cover in bike insurance for pillion riders?

Comprehensive bike insurance plans allow a personal accident cover for pillion riders through an add-on. You need to opt for this add-on by paying an additional premium. If the add-on is selected, coverage for accidental death and disablement is extended to the pillion rider thereby increasing the scope of coverage of the bike insurance plan.

Personal accident cover for paid riders

Businesses which hire paid riders to drive bikes for commercial purposes are bound by the Workmen’s Compensation Act, 1923 to provide compensation to such riders in case they suffer accidental death or disablements during the period of their employment. As such, businesses can buy a personal accident cover for their bikes covering their paid riders. The cover is optional in nature and when bought, it covers the named riders of the bike against accidental death and disablement.

Exclusions under personal accident cover

The personal accident cover does not pay claims on death or disablements suffered due to –

  1. Suicide or self-inflicted injuries
  2. Driving without a license
  3. Driving under the influence of alcohol and/or drugs
  4. Driving outside the boundaries of India
  5. Criminal activities
  6. Participating in hazardous activities or adventure sports
  7. Mental disorders

Types of accident cover in bike insurance

As is evident from the afore-mentioned accident covers, a bike insurance policy provides different types of accident cover. They can be summarized as follows –

  1. Third party accident cover wherein compensation is paid to the third party if they suffer any accidental injury or death due to the bike. This is a mandatory cover which is available in both third-party and comprehensive bike insurance plans
  2. Personal accident cover for the owner or driver of the bike which is also a mandatory cover under both third party and comprehensive bike insurance plans
  3. Personal accident cover for the pillion rider which is an add-on available under comprehensive bike insurance plans. This add-on covers the pillion rider against accidental death or disablement 
  4. Personal accident cover for the paid rider of a commercial bike. This is an optional cover which can be taken under a third party or comprehensive policy

Why buy a personal accident cover with bike insurance?

First and foremost, a personal accident cover for the owner or driver of the bike is mandatory if you don’t have any other personal accident cover in your name. Thus, you need the cover to fulfil the legal mandate. Secondly, bikes are quite prone to accidents and such accidents usually result in severe injuries and even death. With the fast-paced life that has become a feature of modern times, road accidents have increased considerably. In case of accidental death or disablement, there is an immense financial loss for the rider as well as for the family. To cover this loss, a personal accident cover is a must.

In case of the personal accident cover for a pillion rider, the add-on makes sense if a rider rides the bike frequently. In an accident, the pillion rider is also prone to death or disablement and such a contingency would cause a financial loss for the rider as well. Thus, the add-on should be bought to cover the pillion rider so that any possible financial loss can be easily compensated.

How to buy personal accident cover in bike insurance?

You can buy a personal accident cover in bike insurance when buying the policy online. The cover should also be renewed every year for continuous coverage. The personal accident add-on, on the other hand, can be bought either at the time of buying the policy or at the time of renewal. To buy online you can visit https://www.turtlemint.com/two-wheeler-insurance/ and enter in your bike details. Thereafter you would be provided with the premium quotes of leading insurance companies. Choose the personal accident cover and/or add-on cover and the premium would be updated. You can compare and choose a policy offering the best coverage at the lowest premium and then buy the plan online through Turtlemint itself. The process is simple and quick.

How to claim for a personal accident?

In case of accidental death or disablement involving your bike, you should inform the insurance company immediately. A police FIR should also be filed for the accident. An insurer’s surveyor would assess the damages and prepare a report. You would have to fill and submit a claim form along with the relevant documents to get the claim under the policy.

So, choose a personal accident cover for yourself as well as the pillion rider and stay financially secured against accidental contingencies.

Frequently Asked Questions

  1. What documents are needed to make a personal accident claim?

    You need to submit the police FIR, claim form, policy document, RC book of the bike, details of the accident, death certificate (in case of accidental death), disability certificate from a recognized medical practitioner (in case of disability), surveyor’s report, hospital records (if any) and any other document which the insurance company needs.

  2. Are temporary total disabilities covered in the personal accident cover in bike insurance?

    No, temporary total disablements are not covered. Only permanent disablements are covered under the personal accident cover in a bike insurance policy.

  3. Is the pillion rider add-on mandatory?

    No, personal accident cover for pillion riders is an optional add-on which is not mandatory to buy.

  4. Does the personal accident cover provide coverage for accidental hospitalisation?

    No, the personal accident cover does not cover the cost of accidental hospitalisation. It pays a lump sum benefit only on accidental death or permanent disablement.

List of necessary documents for buying Insurance Policies in India as well as claim processing

Buying insurance plans has become quite simple due to the availability of the online platform which allows you to buy a policy from your home or office. Whenever you buy insurance whether online or through insurance agents, you are required to submit a set of documents to the insurance company. An insurance policy is a legal contract and thus, to establish the legality of the contract, insurance documents are needed. After the insurance company verifies the submitted documents, the insurance policy is issued. Moreover, at the time of an insurance claim, a specific set of documents would have to be submitted for claim settlement.

Since documents are important for buying insurance and also for making a claim, let’s have a look at the types of documents needed for insurance.

  1. What are the documents required for buying insurance plans in India?
    Different documents are required to buy different types of insurance plans. So, let’s analyse the documents required to buy different types of insurance plans separately-
    • Life insurance
      To buy a life insurance policy, the following documents would be required-
      1. Life insurance proposal form, duly filled and signed by the proposer and/or the life insured
      2. Photograph of the proposer 
      3. Photograph of the life insured (if different from the proposer)
      4. Age proof of the proposer and/or the life insured 
      5. Identity proof of the proposer and/or the life insured
      6. Address proof of the proposer
      7. Medical examination report of the life insured if required by the policy because of the age and/or the sum assured chosen 
      8. Income proof of the proposer if the sum assured and/or the premium of the policy is high
      9. PAN card of the proposer
    • Health insurance
      For a health insurance plan, the following set of documents would be needed to be submitted –
      1. Health insurance proposal form, duly filled and signed by the proposer
      2. Identity proof of the proposer and the insured members
      3. Age proof of the insured members
      4. Address proof of the proposer and insured members
      5. Medical examination report if pre-entrance medical check-ups are specified by the insurance company due to the age and/or the sum insured chosen 
      6. Income proof of the proposer for very high sum insured levels
    • Motor insurance
      To buy a car or a bike insurance plan, the following insurance documents would be required –
      1. Proposal form for car or bike insurance, duly filled and signed by the vehicle owner
      2. Invoice of the vehicle if a new insurance policy is being bought
      3. RC book of the vehicle
      4. Identity proof of the proposer
      5. Address proof of the proposer
  2. What are the documents required for insurance claim?
    In case of a claim in your insurance policy, the requirement of insurance documents would depend on the type of insurance policy that you have bought and the type of claim suffered. So, here is a look into the claim-related documents which would be needed in different types of insurance claims:
    • Life insurance claims
      Life insurance claims can be maturity claims, money back claims or death claims. The documents needed for maturity and money-back claims are the same while for death claims, the documents are different. Let’s understand how –
      1. Documents needed for maturity or survival claims
        1. Discharge voucher sent by the insurance company, duly filled and signed by the policyholder
        2. Life insurance policy bond
        3. Identity proof of the policyholder, legal heirs or assignee as the case may be
        4. Bank account details of the policyholder, legal heirs or assignee as the case may be
        5. Age proof of the insured member if it was not submitted at the time of buying the policy
      2. Documents needed for death claims
        1. The death claim form, duly filled and signed by the nominee
        2. Life insurance policy bond
        3. Death certificate of the life insured
        4. Identity proof of the nominee, legal heirs or assignee as the case may be
        5. Bank account details of the nominee, legal heirs or assignee as the case may be
        6. Police FIR if death happened due to an accident
        7. Post-mortem report, coroner’s report, police inquest report, panchnama and other relevant records if death happened in an accident
        8. Any other document as needed by the insurance company to settle the claim
    • Health insurance claims
      In the case of health insurance claims, the documents required for insurance claim are as follows –
      1. Pre-authorization claim form for cashless hospitalisation. This form should be filled and submitted within 24 hours of emergency hospitalisation. In case of planned hospitalisation, the form should be submitted at least 3-4 days before hospitalisation
      2. Health card issued by the insurance company
      3. Identity proof of the insured member
      4. The claim form, duly filled and signed by the policyholder
      5. Discharge summary or certificate of the patient
      6. All medical bills and reports in original
      7. Hospital records and investigative reports
      8. Medical prescriptions and cash invoice in original
      9. Police FIR or a Medico-Legal Certificate in case of accidental hospitalisation 
      10. Doctor’s prescription advising hospitalisation
      11. Reports of all attending medical practitioners
      12. Bank details of the policyholder in case of reimbursement claims
      13. Any other document as needed by the insurance company depending on the claim
    • Motor insurance claims
      In case of a car or bike insurance claim, the documents required for insurance claim are as follows –
      1. The claim form, duly filled and signed by the policyholder
      2. Identity proof of the policyholder 
      3. Driving license of the driver using the vehicle at the time of the accident
      4. Copy of the policy bond
      5. RC book of the insured vehicle 
      6. Tax receipt of the vehicle 
      7. Police FIR in case of third party claims or theft of the vehicle 
      8. Non-traceable certificate issued by the police authority in case of theft of the vehicle
      9. Invoice of the vehicle in case of theft or total loss or if required by the insurance company
      10. Surveyor’s report
      11. Bills of repair works issued by the garage and the payment receipts
      12. Bank details of the policyholder in case of reimbursement claims
      13. Any other document as needed by the insurance company for processing and settling the claim

These documents are necessary to buy an insurance policy or make a claim in it. You should, therefore, keep the documents handy in both these instances so that you can buy an insurance policy easily and also get the settlement of your insurance claims without any hassles.

All about Restoration Benefit in Health Insurance Plans

Health insurance plans have become quite innovative in recent times as they are providing better and more inclusive coverage benefits. They are increasing the scope of coverage so that they can cover all possible types of medical expenses and the policyholders can enjoy complete coverage. One such coverage benefit, which is available in many health insurance plans, is the restoration of the sum insured. Let’s understand what this coverage benefit is all about –

What is the restore benefit in health insurance?

Restore benefit in health insurance is a coverage benefit which restores or refills the sum insured if it is exhausted on a previous claim. If in a policy year, you make a claim in your health insurance policy and use up the sum insured, the sum insured would be restored through the restore benefit so that in case of future claims the medical costs can be covered under the policy. For instance, if the policy has a sum insured of INR 5 lakhs and the coverage is used upon a claim, if there is another claim within the same policy year, the restoration benefit would restore the sum insured back to INR 5 lakhs. Thereafter, the restored sum insured can be used to meet subsequent claims which occur within the same policy year.

What are the types of restore benefit in health insurance?

Restore benefits in health insurance can come in two types. They are as follows –

  1. Restoration on complete exhaustion of sum insured 

    If the health insurance policy provides a restore benefit in case of complete exhaustion of the sum insured, the restore benefit would work only if the sum insured is exhausted. If it is not, the restore benefit would not be applicable. For instance, say a health plan has a sum insured of INR 5 lakhs and a claim of INR 4 lakhs is made. After the claim is paid, the remaining sum insured is INR 1 lakh. If there is any further claim of INR 2 lakhs within the policy year, the restore benefit would not be applicable. INR 1 lakh would be paid by the remaining sum insured and the remaining INR 1 lakh would have to be paid by the policyholder.

  2. Restoration on partial exhaustion of sum insured

    In a health insurance policy providing restore benefit on partial exhaustion of sum insured, there would be no need for the sum insured to be fully exhausted for the restore benefit to apply. The sum insured would be restored for future claims. For instance, in the above example, after the claim of INR 4 lakhs, INR 1 lakh sum insured would be left. The restore benefit would apply and the sum insured would be restored to INR 5 lakhs. For the future claim of INR 2 lakhs, the sum insured would be available to pay off the claim.

Benefits of restore benefit in sum insured

The restore benefit in health insurance is quite beneficial as it provides additional coverage. Here are some of the benefits of restore benefit –

  1. Restore benefit increases the coverage available in your health insurance policy. You can enjoy additional sum insured under the policy through restore benefit
  2. Many health insurance plans have an inbuilt restore benefit under the policy’s coverage benefits. Therefore, you are not required to pay an additional premium for availing the coverage
  3. The restore benefit ensures that your health insurance policy would not fall short in meeting your health insurance claims
  4. If you have a family floater health plan, the restore benefit is very beneficial. In such policies, the restore benefit ensures that the sum insured sufficiently covers all the members of your family. If the sum insured is used up by one member, the restored sum insured would ensure that the plan covers the medical expenses of another member if required.

Who should opt to restore benefit in health insurance?

Restore benefit is universally beneficial for all health insurance policyholders. It becomes especially relevant when you are buying a family floater policy to ensure optimal coverage for all members of the family. You can even opt for this coverage in case of individual health insurance plans for higher coverage. Moreover, if you have an existing illness and/or you are prone to illnesses and/or accidents, you should opt for the restore benefit so that in case of frequent claims, your sum insured would not fall short in covering your medical expenses.

Things to keep in mind about restore benefit in health insurance

Here are some important aspects of the sum insured restoration benefit which you should keep in mind if you are opting for this coverage benefit in your health insurance plan –

  1. Availability 

    Under many health insurance plans, sum insured restoration features are inbuilt in the scope of coverage. It forms a part of the coverage benefits of the policy and you don’t have to opt for the coverage separately. However, under some health insurance plans, restoration benefit is available as an optional add-on. You are required to opt for this benefit by paying an additional coverage. So, when buying health insurance check out whether the restore benefit is inbuilt or optional.

  2. Cost 

    Health insurance plans which have the restore benefit in their coverage features would cost more than plans which don’t. So, if you are buying a health plan with restore benefit, the premiums would be higher compared to a plan without restore benefit. The actual cost of the benefit depends on the insurance company and it is not very high.

  3. Extent of restoration

    This is another important condition which you should check if your health plan has restored benefit. Under many plans, the restore benefit restores 100% of the base sum insured. Under some plans, however, restoration is allowed for up to 50% of the sum insured only. Additionally, there are plans which allow the sum insured to be restored by 200% through the accelerated restoration feature which is available as an add-on. For instance, if the sum insured is INR 5 lakhs and the restore benefit restores 100% of the sum insured, the sum insured would be restored by INR 5 lakhs upon exhaustion. In the case of 50% restore benefit, the restoration would be by INR 2.5 lakhs and in the case of 200%, the restoration would be by INR 10 lakhs. So, while the first plan would give you total coverage of INR 10 lakhs, the second one would give coverage of INR 7.5 lakhs and the third one INR 15 lakhs.

  4. Application of restoration 

    There are some terms and conditions based on which the restore benefit applies. These include the following –

    • The restore benefit is not applicable to the first claim in a policy year. It becomes applicable to claims subsequent to the first claim. So, if you have a health plan of INR 5 lakhs and your first claim is INR 5.5 lakhs, the restore benefit would not give you an additional sum insured. In that case, you would have to pay INR 50,000 from your pockets. Thereafter, for any subsequent claim, the restore benefit would restore the sum insured and you would get a cover of INR 5 lakhs
    • Under many plans, the restore benefit might work only once in a policy year. Once it is used, it becomes invalid even if there are multiple claims thereafter. However, in some plans, the restore benefit can work a multiple number of times within the same policy year.
    • The restore benefit is allowed on unrelated illnesses. This means that the subsequent claim in the policy should be for a different illness or injury than the first wherein the sum insured was used up. If the subsequent claim is for the same illness or injury, the restore benefit might not apply.
  5. Carry forward of the benefit

    If you do not use the restore benefit feature of your health insurance plan, it cannot be carried forward to the next policy year. 

The sum insured restoration benefit has become a common coverage feature of many new-age health insurance policies. It proves beneficial as it allows sufficient coverage in case of multiple claims. So, look for health plans with the restoration benefit feature for optimal coverage.

Frequently Asked Questions

  1. What is the coverage duration of restore benefit?

    The restore benefit has the same coverage duration as that of the main policy. If the benefit is inbuilt in the coverage features, it would continue every year that the policy is renewed. If, however, you have opted for the benefit as an add-on, you would have to opt for the add-on every time the policy is renewed to enjoy continued coverage lifelong.

  2. In a family floater health plan, one member makes a claim for heart attack and exhausts the sum insured. Would the restore benefit work if another member suffers a heart attack and makes a claim?

    The restore benefit works on subsequent claims and not on the first claim. Thus, if one member has made a first claim under the policy, the second member can make a subsequent claim under the policy and the restore benefit would work. Even if the claim is made for the same illness, the restore benefit would work provided that the second member makes a claim after the first claim has been made and settled.

  3. My existing policy does not offer restore benefit. How can I avail coverage for restore benefit?

    You can buy an additional health insurance policy with restore benefit to get coverage for restore benefit if your existing plan does not offer such coverage. Alternatively, you can switch your current health insurance policy to another health insurance policy which offers coverage for restore benefit. This switching is called porting and this is available at the time of renewals.

  4. Is the no claim bonus taken into consideration when restore benefit is applied?

    Yes, the no claim bonus is taken into consideration when restore benefit is applied. The restore benefit is applicable when the sum insured and the no claim bonus thereon is used upon a previous claim.

  5. I suffer an accident and use up the sum insured in the first instance of a claim. Thereafter, I am hospitalised for an appendectomy. Would the restore benefit apply?

    Yes, the restore benefit would apply since the subsequent claim is for an unrelated illness. Your sum insured would be restored and the health insurance policy would cover the cost of appendectomy.

Now PUC Certificate is a must for Motor Insurance renewals

Pollution has been a grave concern all over the world and especially in the National Capital Region (NCR), the problem is quite intense. The levels of air pollution in the NCR have been so high that the Government introduced the odd-even system for vehicles on the roads. Even the Supreme Court of India had issued directives that insurance companies should not allow motor insurance renewals without a valid PUC certificate but the practice was seldom followed. So, the Insurance Regulatory and Development Authority of India (IRDAI) issued a circular on 20th August 2020 mandating insurance companies follow the Supreme Court Directive. While the IRDAI guideline is meant for renewals across India, special emphasis has been put on the NCR region of Delhi given the high pollution levels in the area.

What does the IRDAII circular state?

The Supreme Court of India, in the case of MC Mehta v/s the Union of India in July 2018, asked insurance companies to ensure that a vehicle which does not have a valid PUC certificate is not insured on renewals. 

The Central Pollution Control Board (CPCB) raised a concern that the Supreme Court mandate of having a valid PUC certificate at renewals was not properly followed by insurance companies. Following this concern IRDAI issued its circular asking insurance companies to follow the Supreme Court directive without fail.. 

The concept of PUC Certificate

PUC (Pollution Under Control) Certificate is a certificate which verifies that the emissions coming out from the vehicle meets the norms prescribed in the pollution control standards. This ensures that the vehicle is not polluting the surrounding air when it is being used. The certificate issued is valid for a stipulated tenure which depends on the type of vehicle being used. Once the tenure expires, a new PUC certificate should be availed instantly. If the vehicle does not have a valid PUC Certificate, you are liable for fines if caught by the authorities. For new vehicles, the requirement of PUC certificate is after a year of registration of the vehicle.

The impact of the guidelines

The new guidelines issued by the IRDAI would have an impact on you, the vehicle owner, and also the insurance company. Let’s understand –

  • For you

    You would have to ensure that your PUC certificate is up-to-date every time your motor insurance policy is up for renewals. This would allow you to do your part for the environment and also avoid traffic penalties for being caught without a valid PUC.

  • For the insurance company

    Motor insurance renewals would become a bit complex for insurers as the PUC certificate would have to be verified by them before allowing renewals. This might take some time in verification of the validity of the PUC Certificate and insurance companies would have to come up with solutions to seamlessly integrate the verification in the renewal process.

The IRDAI circular stresses on the adoption of the Supreme Court directive specifically for cars being renewed in Delhi where pollution is notoriously severe. The guideline is, therefore, considered to be beneficial for the environment of Delhi and aims to reduce the pollution levels in the area. How it impacts the air quality in Delhi is yet to be seen. Moreover, the guideline would be implemented pan India so that pollution levels of the whole country come down. The IRDAI guideline is, therefore, a welcome move which is essential in these times when pollution levels are becoming toxic.

October 2020 would make health plans pro-customers. Here’s how

The Insurance Regulatory and Development Authority of India (IRDAII) continuously proposes changes in health insurance plans. These changes serve two purposes – 

  • They help health insurance policies to adapt with the changing times
  • They make health insurance plans more customer-friendly 

When COVID struck, IRDAI issued a series of guidelines to insurance companies to make COVID related claims as hassle-free as possible. Now, when health insurance plans have been offering complete help for COVID, IRDAI has proposed a series of new changes which would make health insurance plans more customer friendly. These changes should be incorporated by health insurance companies in the policies that they offer from October 2020. Let’s have a look at what these changes are –

Change#1 – Standardization of policy clauses

Insurance plans are technical in nature and the clauses mentioned in the policy document might prove confusing for many. Keeping this view in mind, IRDAI has asked health insurance companies to make their policy clauses standardized so that customers can understand them easily. These policies clauses should be stated in the wordings as provided by the IRDAI across all insurance companies.

What it means for you?

As policy clauses are standardized, they would become uniform across all health insurance plans. You would, therefore, be able to compare different plans easily without wondering if the plan that you choose has some hidden clauses which you should know. So, policy clauses like disclosure of important facts, grace period, health insurance portability, renewal, grievance redressal, policy cancellation, etc. would have the same definition across all health insurance plans. This would help you understand the policy better and compare different plans on their clauses easily.

Change#2 – Coverage for Telemedicine

Telemedicine means getting medical assistance from a distance using different modes of telecommunication. Under telemedicine, the doctor and the patient do not meet physically. Instead, they meet virtually. The concept of telemedicine gained popularity with the Coronavirus pandemic when visiting doctors and clinics for medical assistance became challenging due to lockdowns and social distancing norms. In today’s developing times, telemedicine has become a popular mode of availing medical assistance. With this development, IRDAI has also proposed that health insurance plans should cover the cost of telemedicine if the health plan provides coverage for normal consultations.

What it means for you?

The inclusion of telemedicine in your health insurance policy would increase the scope of coverage of the policy. It would eliminate your out-of-pocket expenses on telemedicine as the policy would cover such costs thereby making the health plan comprehensive and suitable for the current COVID crisis.

Change# 3 – To make proportionate deductions on room rent sub-limits more reasonable

The concept of proportionate deduction is applicable in case of room rent limits. If a health insurance plan has sub-limits on room rent, you are expected to choose a hospital room within the specified sub-limit for getting complete coverage under the policy. However, if you choose a room whose rent is higher than the prescribed limit, the total cost incurred on inpatient hospitalisation is reduced by the percentage by which the actual room rent exceeds the covered room rent.

For example, suppose the room rent sub-limit in your health insurance policy is Rs.4000. On hospitalisation, you choose a room with a rent of Rs.6000. This rent is 50% higher than the covered room rent. Thus, in this case, your inpatient hospitalisation bills would be reduced by 50% to calculate the admissible claim amount. This bill would include your room rent, doctor’s fee, surgeon’s fee, anaesthetist’s fee, cost of medical devices, medicines, etc. which are called ‘associate medical expenses’. So, if your bill amounts to Rs.2 lakhs, the insurance company would pay only Rs.1 lakh.

IRDAI has specified changes in this regard. It has asked insurance companies to define the meaning of ‘associate medical expenses’ clearly in their health insurance plans. The expenses, those fall under ‘associate medical expenses’ should be clearly stated in the policy. Moreover, IRDAI has asked insurance companies to exclude the following costs from the list of ‘associate medical expenses’ – 

  • Diagnostics 
  • Medical devices and implants used in the treatment
  • Consumables
  • Pharmacy

IRDAI has also asked insurers to remove proportionate deduction in case of hospitals which do not have different pricing policies for different categories of rooms and also for ICU admissions.

What is means for you?

This change is meaningful if you have room rent limits in your existing plan or you would buy a policy with such sub-limits. With the expenses clearly listed under ‘associate medical expenses’ you can easily understand which expenses would be impacted by the proportionate deduction in case the room rent limit is exceeded. Moreover, with the afore-mentioned exclusions from ‘associate medical expenses’, the scope of coverage of your health plan would increase. The proportionate deduction would be on a lower amount allowing you to get a higher amount of claim.

All these changes would be effective from 1st October 2020 on new policies. For existing policies, the changes would be applicable at the time of renewal provided that the renewal date is on or after 1st April 2021. 

These changes would make health insurance plans more comprehensive and favourable for policyholders and also increase the penetration of health insurance in India. So, be prepared to get enhanced benefits from health insurance plans starting this October. Happy insuring!