How To Plan Your Health Insurance Premiums Well In Advance?
April 08, 2017, by Margam Ajay
A 40 year-old man buying health insurance for his 35 year-old wife, and two young children has to spend Rs.20,000 annually to ensure a coverage of Rs.7.5 lakhs. Since most health insurance plans have lifetime renewability, he has to keep paying this premium amount, every year, for the foreseeable future.
Unlike term insurance or endowment plans, health insurance does not come with a fixed payment period; therefore, the burden of paying health insurance premium must be looked at as a lifetime commitment.
Therefore, keep your annual health insurance expense in mind when planning your annual budget, so that you do not have to depend on disposable income. If your annual insurance premium is Rs.20,000 and your due date is in August, that means you must have access to that amount in liquid form by the end of July. Suppose your Diwali bonus comes by October, or the Christmas bonus by December - will you have Rs.20,000 to spare in August?
If you keep aside Rs.4000 for 5 months, you will have Rs.20,000 ready by the time your premium payment is due. Timely planning will make sure that the money you had earmarked for a vacation or a wedding gift is not diverted for the sake of your health insurance.
Having an emergency fund is also a good idea, something most wage-earners already practice. This emergency fund should not be used for paying your premium on a daily basis - it should cover a variety of contingencies (the urgent repair of your car, for example).
Financial experts suggest you to keep up to a month’s necessary expenses in a savings account for immediate access. Three to six months of expense can be kept in a savings-cum-fixed account for bigger emergencies.
In case you do not have ready funds when your annual premium payment is due, withdraw from this source and replenish it once you are at ease financially. If all else fails, consider using your credit card to pay your health insurance premium.
TWO BASIC THINGS TO KEEP IN MIND ARE:
- Don’t Buy More Insurance than You can Afford: If your annual income is Rs.3.5 lakhs, then a premium of Rs.20,000 will put too much strain on your budget in the long run.
- Keep a Close Watch on Premium Due Date: Assign a number of alerts, ideally at least two - one a month before your due date, and the other a week before. This will give you a month to get hold of enough funds, and if you are unable to do so you will still have a week to gather emergency funds
FAILING TO PAY HEALTH INSURANCE PREMIUM ON TIME HAS A NUMBER OF UNIQUE AND UNPLEASANT CONSEQUENCES -
- Your policy will enter a grace period, if you fail to pay by the due date - if you pay within this timespan, the policy will continue with all the benefits you had accrued till date. However during this period of 15/30 days, you will not have coverage.
- If premium payment is not made within the grace period, your policy will lapse. Your insurance provider may ask you to get a new policy, which means all diagnoses made within your coverage period can now be considered as pre-existing diseases.
- You will miss out on tax deduction benefits under Section 80D of the Income Tax Act, as well as lifelong renewability benefits as per IRDA regulations. If a 65 year-old man fails to make the payment even during the grace period, after having paid premium regularly for 30 years, the insurance provider may refuse his proposal citing age and pre-existing diseases.
Payment through EMI is a feasible alternative for those who struggle with long-term financial planning. Monthly installments reduce the payment into manageable chunks that put less of a strain on your finances.
"It's very useful for a policyholder for whom say Rs.10,000 is a big pinching amount to pay at one go," said Yashish Dahiya, co-founder and CEO of PolicyBazaar.com.
THINGS TO KEEP IN MIND ABOUT EMI PAYMENTS FOR HEALTH INSURANCE:
- This mode of payment is available only for policies exceeding a certain amount.
- The rates will be up to 5% higher, if your payment mode is per month instead of per year.
- If you make a claim in September, then premium for the last 3 months will be deducted from your claim amount.
Industry experts believe that EMI allows greater flexibility to insurance seekers in terms of higher insurance coverage. In many cases, people planning to buy individual policies can consider investing in a family floater policy as the investment is easily spread over a longer time period.
OVER TO YOU!
We’re sure now you understand how you can easily manage your health insurance premium payments, well in advance, without having to burn midnight oil. Now, it’s time to put the learning into practice. Go ahead! It’s never too late to being your health insurance payments back on track.
Top 5 Points You Should Know About E-Insurance Accounts
How’d it be if you could manage all your insurance policies, including life insurance and health insurance policies, at one place?
Well consider yourself very lucky because now you have E-insurance easily available at your disposal.
You might be wondering:
“WHAT IS AN E-INSURANCE POLICY?”
An E-Insurance is like a repository where you can manage all your life insurance, health insurance policy and other insurance policies, at one place. All the policies that are stored in e-insurance accounts are referred to e-insurance policies.
Having an e-insurance policy saves you from the unnecessary paperwork. It safeguards you against policy loss or theft.
THE BEST PART?
You can access your policy anytime, anywhere you want, and in a matter of a few seconds and a few clicks.
We’re sure you’re all excited to know more about e-insurance policies. So brace yourself, for we’re going to pull back the curtain and share the features and benefits of e-insurance with you.
Bonus: You are also going to learn how to open an e-insurance account here.
FEATURES OF AN E-INSURANCE ACCOUNT:
- An individual can only have one E-insurance account in his/her name.
- One can keep all their electronic insurance policies including life, pension, general or health insurance policies, even from multiple insurers, in the same account.
- Every e-insurance account is assigned a unique account number that can be used for all correspondence.
- When buying an online insurance policy, one can simply insert his/her unique e-insurance account number in their proposal form and send it with a request to issue the policy in electronic format.
- As KYC documents are already verified by one’s insurance repository, one does not need to fill the KYC form and submit the documents again.
- A unique login ID and password is provided to every account holder to provide access to their e-insurance accounts.
Now:
We’re sure you’re looking to know the benefits of e-insurance accounts.
We’re bringing the noise.
5 BENEFITS OF E-INSURANCE ACCOUNTS
There are several benefits of having an e-insurance account. Here are just 5 of the many benefits:
1. Safety and Security
Having an online insurance policy has its own perks. It safeguards your insurance policy from theft and loss. Since it is in an electronic form, you can access your insurance policy anywhere, anytime you want because it is just a click away.
2. One Time KYC Submission
Thanks to your e-insurance account number, you don’t have to submit KYC documents every time you buy a fresh insurance policy. All you need is to mention your online insurance account number and it’s done.
3. Convenience
One single online insurance account is adequate to buy various insurance plans from a variety of insurers, how convenient is that?
4. Easy Premium Payments
When your online insurance account is opened and its status is active, you can make payment for your Insurance premium Online with the help of your account. You don’t have to wait and waste your time in the long queues to pay the premium of your insurance through cash or cheques.
5. Easy Tracking of Your Policies
The insurance repository sends the insured person a yearly statement of his account with the details of all the insurance policies held by him/her. It makes it easier for the insured person to monitor his/her insurance policies.
Now that you know the benefits of e-insurance, it’s almost time to open an e-insurance account.
Before you do, make sure to read the step-by-step instructions below to open an e-insurance account…
HOW TO OPEN E-INSURANCE ACCOUNT?
Opening an e-insurance account is a simple and easy process. All you need to do is to tackle the step-by-step guide below:
Step 1: Download E-Insurance Account opening form of your preferred Insurance Repository.
Step 2: Fill the form and attach self-attested copy of KYC documents.
Step 3: Submit the forms along with self-attested documents to your preferred insurance repository.
KYC DOCUMENTS REQUIRED FOR OPENING AN E-INSURANCE ACCOUNT
In order to open an online insurance account, all you need is to submit the following documents.
- Your Latest Passport Size Photo
- A Cancelled Cheque
- Any one of the following KYC (Know Your Customer) documents:
- Identity Proof- Voter Identity Card, PAN Card or Aadhaar Card.
- Address Proof- Ration Card, Driving License, Aadhaar Card etc.
- Date of Birth Document- Ration card, PAN Card, Domicile Certificate, etc.
Once your submitted application is accepted, an account number along with the login id and password will be allotted to you. With your credentials, your online insurance account is one click away.
NOW IT’S YOUR TURN…
You’ve just seen how beneficial is having an e-insurance account…
Now it’s time to put this learning into practice. Remember, a lot of people are already reaping the multiple benefits of e-insurance and now, it’s your turn.
We’d love to hear from you. What do you think of E-Insurance? Or maybe you have a question about something your read?
Either way, leave a comment quick below. Our insurance experts are around to reply to comments and answer your questions.
Group Personal Accident Insurance
As the name suggests, Group Personal Accident Insurance is a policy issued to a group of people by an institution or organization. Perhaps the most important purpose of group personal accident insurance is to provide comprehensive financial protection against hefty expenses incurred due to disablement or death resulting from accidental injury.
Group personal accident insurance comes in handy for employers who are constantly in a lookout for ways to safeguard their employees against certain risks that can cause death or permanent disablement. The product is available for both the employees and board or owner of a company. The broad spectrum of benefits offered by Group Personal Accident plans play a very important role in any salaried individual’s life.
LET’S NOW CHECK SOME PROMINENT BENEFITS OF GROUP PERSONAL ACCIDENT INSURANCE
The key benefit offered under group accident insurance policy is that it protects you against any financial liability arising due to death or disability due to accident. Remember, every bread winner has a family that is financially and emotionally dependent on them. And it perhaps remains a priority of every bread winner to secure their future and their interest. Besides this, there is a host of other benefits that group personal accident insurance has to offer.
GROUP PERSONAL ACCIDENT INSURANCE - IMPORTANCE
Let’s talk about some of the key importance of Group Personal Accident Insurance in greater details:
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Group Personal Accident Insurance understands that employees are the most important asset of the any organization and therefore it offers protection against several types of unfortunate events that can cause death or permanent disablement to the insured. It is a basic responsibility of any business organization to protect its employers against any unfortunate events.
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Group Personal Accident policy assures that the claim gets settled quickly, in case any employee dies or injured and suffers a permanent disablement, temporary total disability or any other medical expenses. The claim of the policy is paid to the policyholder or his/her nominee. It helps employers to avoid the burden of liability, as this policy bears the total expenses incurred in case the any employee meets any unfortunate events, such as accident.
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This insurance policy is also very beneficial for organization’s repo as it makes a good image amongst worker that the organization is concerned about its employees and has certain measure to short out such problem arising out of any unfortunate events like accident. It is the complete solution that is perfect to protect the employees against any kind of accident that may incur extra expenses to the organization.
GROUP PERSONAL ACCIDENT INSURANCE - KEY HIGHLIGHTS
Now that you know the importance of group personal accident insurance, let’s talk about some of the key highlights of Group Personal Accident Insurance: .
- Group Personal Accident Insurance provides a comprehensive coverage for all expenses associated with accidents.
- In case of the accidental death of the insured, 100% of sum insured is paid to the nominee.
- 100% of the sum insured is paid in case the insured losses vital limbs.
- Half of the sum assured is paid out to the insured in case of partial disablement.
- A certain percentage of the sum assured will be paid to the insured in case of temporary complete disability.
- It also offers coverage for the Insured’s broken bone due to an accident,
- This policy provides protection against insured’s burns arising due to an accident.
- Some group personal accident insurance policies also provide coverage for heart attack & stroke.
LET’S NOW DISCUSS THE KEY HIGHLIGHTS OF GROUP INSURANCE PLAN IN GREATER DETAILS
Accidental Death- In case an employee meets with an accident that results in his/her death, the nominees are paid the principal sum as the accidental death benefit.
Permanent Total Disability- In the event where an employee meets an accident that results in a permanent disability for a period of 12 months in continuity, the insurer will pay the sum assured as compensation to the employee.
Permanent Partial Disability- In case an employee meets an accident that causes a permanent partial disability for a period of 12 months in continuity, the policy would cover between 2% and 60% of the Principal Sum according to the level of disability (listed in the policy coverage).
Ambulance Charges- The policy offers reimbursement for ambulance charges incurred in case the employee meets any accident.
Mortal Remains Transportation- The insurer issuing group personal accident insurance bears the expenses arising due to moving the mortal remains from the accident site to residence, hospital or cremation ground.
Broken Bones- A lump sum amount is compensated for broken bones of an employee, covered under group personal accident insurance plan, caused by an accident, as listed in the policy coverage.
Medical Reimbursement- This policy also provides reimbursement for the cost of hospitalization for the treatment of injury. The compensation offered under this benefit is generally a certain percentage of the actual medical cost incurred.
Changes in Lifestyle- Permanent Total Disability arising out of an accident often demand a change in lifestyle. To meet the increase in lifestyle expenses due to the change, the employee might need financial assistance. For example, modify an existing vehicle or shifting to ground floor or change in staircase. This is where Comprehensive Group Personal Accident policies come in handy. These policies provide a financial assistance to meet such expenses arising due to any such requirements.
IN THE END!
Group personal accident policy is a complete package in itself that can be bought by employers to provide extensive coverage to a large number of employees. A fairly large number of insurance companies also provide options to customize group personal accident covers to suit the requisites, needs and wants to the group of employees.
