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Standard health insurance policies used to be cheaper but capping on daily room rent, ICU charges etc causes problems for policy holders. On the other hand, premium products don’t contain most of the constraints and are more user friendly, but are expensive.

However, after the policies are being standardised as per the directive of the Insurance Regulatory and Development Authority of India (IRDAI), policyholders are getting renewal notices with higher premium even if there are no changes in age slab or the sum insured.

IRDAI introduced modified guidelines to Standardise the Health Insurance Contracts which aimed at introducing standard wordings for common clauses and exclusions across health insurance indemnity policies to benefit the policyholders by bringing in uniformity in the Policy terms and conditions, help in simplification and ease in understanding the policies.

With this standardisation there were certain conditions which were excluded earlier are now offered to the policyholders like coverage for Procedures such as Robotic Surgery, Oral chemotherapy, High Intensity Focussed Ultrasound, Balloon Sinuplasty, Deep Brain Simulation, Developmental problems & learning difficulties like dyslexia and Treatment for ARMD (Age related macular degeneration).

Certain clauses like Disclosure of Information, Claim Settlement (provision for Penal Interest), Complete Discharge, Multiple Policies, Fraud, Cancellation, Migration, Portability, Renewal of Policy, withdrawal of Policy, Free look period, Redressal of Grievance, Nomination etc are now Standardised.

During 2020, with a view to simplifying Health Insurance products, IRDAI issued guidelines to standardise some terms and conditions for Health policies such as disclosure of information, claim settlement terms, cancellation, and renewal of a policies etc. Much earlier they had mandated portability of health policies. They also asked insurers to clearly declare norms of Associate Medical Expenses and allowance for Disability and HIV etc.

We think this standardisation of terms and products across insurers will go a long way in increasing the penetration of Health Insurance among large masses. The simplified policy terms will be competitive and drive lower premiums. The result was there to see with an amazing take up of Covid policies. Large corporates as well as Individual customers subscribe to these policies in large numbers.

But how much is the average increase in premium after the standardisation?
With standardisation of health insurance, insurance cover for policyholders is now more exhaustive and is available with no change in the premium for the majority of the products and a marginal increase in a couple of products.

Although health insurance players are reluctant to reveal the quantum of rise in premium, holders of even policies with even premium features have witnessed a rise in renewal premium.

The quantum of rise in renewal premium, however, varies from insurer to insure and product to product.
For example, the holder of the basic version of a premium health insurance product has witnessed 19.45 per cent increase in renewal premium, while the holder of the higher version of the same product has reported nearly 16 per cent increase in renewal premium.

So, along with standardisation of features of the health insurance policies, the insurance regulator should consider standardisation of premium as well.
The insurance sector is poised for a digital transformation in marketing, underwriting and processing of claims. More and more policies are being sold online. Services are being made available in self-service mode on customer portals. Payments of renewal premiums are also being made via digital medium in increasing numbers. This is not just because of a pandemic situation forcing people to opt for digital channels. This is primarily because digital channels are keeping operational costs of insurers low and customer experience high. After all, it is the experience that matters more than just “insurance cover”. Under such circumstances, the question is what the role of insurance agents can be in this digital era.

Customer acquisition
Insurance agents can still play a very crucial role both in the area of customer acquisition and customer retention. Insurance in general and life insurance, in particular, is not properly understood by most Indians even now. Digital marketing, insuretech and artificial intelligence (AI) can go a long way in increasing insurance penetration. But these alone cannot cut the ice. In life insurance, one-on-one interaction is still an integral part of the sales process in India even in the simplest of products like term assurance and guaranteed return plans.
Insurance agents can play an important role in improving insurance penetration of the country by increasing the persistency level. In fact, 61-month persistency ratios for almost all insurers are languishing well below 50% while the global benchmark in 65%. This is a sad commentary on the state of the industry.

AI and Machine Learning (ML) enabled Retention Analytics can help insurers in getting many warning signals before policies actually lapse or get surrendered.
Most agents have a habit of keeping contact only with the customers they consider “valuable”. The fact is all customers are valuable and the values increase with the increase in the age of customers, because life insurance needs manifest properly only when a person is clear about the financial responsibilities he has to shoulder in life. Agents should spend more time catering to the localised needs. Many policies lapse because their agents have been terminated or have even left the industry. Some customers have unresolved issues with their agents.

Customer satisfaction
Insurers should give top priority in taking care of such customers, at least in the near term. Insurers should devote as much time in retaining customers as they devote in acquiring customers. Better persistency means better solvency ratio and availability of much higher investable money for investment. That can fetch better returns for the customers. Although life insurance is not the right vehicle to make profits on “investments”, in our country, people will continue to look for returns for some more time. Better engagement is required to convey the message of life insurance.

That cannot happen only through digital channels. Insurance agents can play a critical role in positioning life insurance properly in the financial market. For that, a new brand of agents may have to be developed. The agents are supposed to review the life insurance needs from time to time on the basis of the changing profiles of customers.

AI based technology can identify people who can be true representatives of the insurers. The insurers have to pick them up from the market and groom them well. These youths can be the insurance agents of tomorrow. New generation youths will probably have multiple careers at a time. Some of them are sure to find passion in selling insurance. These agents will be more proficient in acquiring customers, retaining them and meeting their various insurance needs during the entire life cycle of the policies.

The plan would protect your finances and ensure that your journey does not get side-tracked or that you don’t have to take any detours along the way.

Financial planning is an essential activity that lets you plan for your life’s goals effectively. With the help of financial planning you can chalk out your financial goals and make provisions for them. However, when creating an effective financial plan, you need to plan for medical emergencies as they have the potential of derailing a well-defined financial strategy.

In Asia Health 2020 conference organised by the CII, it was mentioned that about 50-60 million Indians are pushed into poverty every year due to their inability to finance out-of-pocket healthcare expenses. India has one of the highest out-of-pocket expenditure (OOPE) in healthcare where 70% of the health care expenses are borne by customers. Out of this healthcare expenses about 95% of it is funded by pocket expenses and 5% by health insurance. This results in the additional 7% of people being pushed into poverty every year.

Out-of-pocket expenses on health eat into your savings and can derail your financial planning journey. If you want to avoid these expenses, there is only one solution – invest in a health insurance plan. You cannot change the OOPE in India, but you can surely increase the insurance portion of it!

Health insurance plans have become a necessity in today’s times. The medical expenses are rising, this is no secret. Along with this, diseases are also on the rise. Today the world is grappling with the COVID pandemic, who knows what disease would befall in the common years. Moreover, if you are covered under a health insurance plan, you can protect against lifestyle illnesses, hereditary diseases and even accidental injuries.

Here are some common ways how health insurance keeps your financial planning on track –

1. It prevents a financial crisis
If you check the coverage benefits of health insurance plans, you would find that the plan covers almost all types of medical expenses that you might incur. As such, when there is a medical contingency which results in a hospitalisation, you can get coverage for most of the medical expenses that you incur. When your medical costs are covered, you can avoid a strain on your finances. Takeaway: Thus, health insurance plans help you prevent a financial crisis. They cover your costs and prevent your savings from being drained. You can, therefore, plan your financial goals without worrying about a medical crisis from wiping out your savings. Your financial goals are, therefore, protected.

2. It helps you plan for rainy days
Do emergencies announce when they are going to strike?
They don’t. However, if you plan right, you can meet them whenever they strike. Most of the emergencies require you to be financially prepared and so, one pillar of financial planning is emergency planning.

Takeaway: Health insurance plans help you plan for medical emergencies. They help you ensure that if any untoward medical contingency occurs, you would be prepared to face them, without derailing your financial plan.

3. They allow coverage for the whole family
Health insurance plans are available as family floater plans that cover all the members of your family. Moreover, if your parents are quite old, you can even invest in senior citizen policies that cover their medical needs.

Takeaway: When all your family members are insured under health insurance plans, no member’s medical needs would impact your financial planning. You would be able to meet the medical expenses easily, without breaking into a sweat.

4. There are different types of health insurance plans
Did you know health insurance plans extend beyond the scope of normal hospitalisation?
There are different types of health insurance plans allowing you a complete scope of protection against any medical emergency, whether it involves hospitalisation or not. For example, critical illness plans cover major dreaded illnesses and medical procedures. They pay a lump sum benefit so that you can meet your financial obligations if you suffer from any covered illness. Thus, if you have a debt whose repayment becomes a burden due to a critical illness, the benefit that you receive can be used to pay it off. Similarly, there are COVID specific health plans that help you battle the financial implication of the current pandemic.
Takeaway: You can opt for these different types of health insurance plans for a complete financial arsenal at your disposal. Whatever medical attack that you face, you can wield a health plan and protect your finances.

5. Let’s not forget the tax angle
Okay, so this one is not so much about preventing a derailment but more about increasing the mileage of your financial plan. Health insurance plans help in tax saving. The premium you pay earns you a deduction under Section 80D. You can claim deductions up to INR 1 lakh and save up to INR 45, 000 in taxes (considering you are in the 30% bracket). Imagine what you can do with these savings!

Takeaway: You can invest this saving towards various avenues and supplement your investments. This tax saving would bolster your financial plan and help you accumulate a larger corpus for your goals.

In your quest for financial independence, make health insurance your travelling companion. The plan would protect your finances and ensure that your journey does not get side-tracked or that you don’t have to take any detours along the way.

What if anyone said you would be rewarded for staying fit, consuming nutritious and fresh food, and adopting a healthy lifestyle? Isn’t that amazing?

As per the recent guidelines by the IRDAI on preventive and wellness feature, the insurers are asked to incentivize the insured who is eligible for the reward points and fits well with the wellness criteria.

Insurers are rewarding the policyholders with a range of services that are simply a value-addition to the health insurance coverage offered at no additional expense, referred to as wellness benefits.

Even though there are several other applications or software tools that can keep track of one’s health status, however, it becomes quite challenging with the busy work schedule to keep up to maintaining a proper routine. That is where this wellness benefit ensures optimum utilization as policyholders are motivated to take their health seriously and in return offered some exciting rewards or benefits.

Here are some of the wellness benefits in health insurance offered by the insurers:

Reward Points that incentivizes Health Behavior
These reward points can provide discounts or concessions on different medical check-up programs like diagnostic centres, network hospitals for healthcare facilities, pharmacy bills, etc. Insurers keep track of how well you manage your well-being with various smartphone applications that come with the tracking feature. This is basically done to incentivize health behaviour and promote a healthy lifestyle. The insured can use these reward points by redeeming this into various fitness activities like gym, marathon, cyclotron, yoga centres, daily workout training etc.

A Wellness Coach that helps you do it right
There are some insurers that provide a wellness coach/mentor under the wellness program. This is done to provide guidance to the policyholder regarding the appropriate intake of diet, acquainting with the proper exercise routine, providing the right nutritional advice, ceasing smoking habits, managing the correct body weight, and many more.

These wellness mentors associated with the insurers offer extended support to the policyholder to help them live a healthy and better lifestyle.

On achieving the target set for the insured during this mentoring process, the policyholders are rewarded with points or other benefits. The insured can later redeem these points or use the benefits for various health-related services.

Second Medical Opinion
There are certain health insurance plans that provide you with specialist guidance and second medical opinion benefits for specified diseases or surgeries that have already been scheduled. However, the insured must notify the insurer that he is seeking the second medical opinion’s benefit.

The normal practice is first to request a properly filed claim form, including a copy of all medical records and the investigation report or the current medications (if any). However, the insurers would not be responsible for any mistakes or omissions resulting from e-opinions under the insurance plans.

Exciting Discounts on Renewal
This kind of wellness benefits acts as a motivating factor for the policyholders to take care of their health and monitor it. This drives the insurers to provide discounts during the renewal period. However, as per the recent guidelines by IRDAI, the insurance providers should not offer any payments on any third-party services other than the monetized value of the reward points. The discount price can be centred on the premium amount of the insurance, pharmaceuticals or consultation services.

Conclusion
The type of well-being benefits offered depends on the insurer, so it is recommended that you closely read all information pertaining to the health insurance plan and its value additions to prevent any potential misconceptions.

It is essential never to get swept up with the reward systems and benefits available by your insurance coverage under the wellness services. Not all insurance plans will provide you with relatively homogenous benefits.

Wellness benefits related terms and conditions differ from insurer-to-insurer depending on the wellness services covered by the health insurance plans. Before taking a final call, it is highly suggested to review the insurer’s policy wordings and check the online reviews well in advance to avoid any unpleasant surprises during the claim process.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.