Date Archives July 2023

Latest Insurance News in India 30th July 2023

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The Indian insurance industry has witnessed significant developments, investments, and regulatory changes over the past couple of years. Here is a roundup of some of the major updates and highlights from the sector.

New Products and Covers

Launch of Standard COVID-19 Health Policy

The Insurance Regulatory and Development Authority of India (IRDAI) mandated all health and general insurance companies to offer a standardized COVID-19 health policy from April 1, 2021. The benefit-based policy offers lumpsum payout on hospitalization due to COVID-19. This improves access and renewability of Corona Kavach and Corona Rakshak policies.

Introduction of Vector-borne Diseases Policy

To expand health protection, the General Insurance Council has designed a standard vector-borne diseases policy providing coverage against mosquito-borne diseases like malaria, dengue etc. Insurers can customize and launch this product.

Mental Illness Coverage

In a progressive regulatory move, IRDAI has directed health insurers to cover mental illness expenses including hospitalization under all retail policies from 2022-23. This expands coverage to include in-patient psychiatric treatment.

Digitization Initiatives

Mandate for Digilocker Integration

To enable easy, digital access of policies, IRDAI has directed life and general insurance companies to integrate their systems with Digilocker by March 2023. Policyholders can safely store their insurance policies in electronic form.

Pay-as-you-Drive Insurance

IRDAI has allowed general insurers to introduce voluntary PAYD motor policies with premiums based on actual distance usage measured via telematics devices. This facilitates more personalized, flexible pricing aligned to vehicle usage.

Regulatory Sandbox for Testing InsurTech

To boost digital innovation, IRDAI has opened up a regulatory sandbox allowing insurers to test new tech solutions like IoT, wearables, telematics etc. before mass launch. This promotes adoption of technology.

Boosting Insurance Penetration

Mandatory Motor Cover for Vehicle Rentals

From April 2022, annual motor insurance has been made mandatory for rented vehicles including cabs, taxis and buses. This aims to improve insurance compliance across vehicle rentals.

Removal of Minimum Life Cover Limit

The minimum life insurance cover limit of Rs 2.5 lakh for single premium policies has been removed. Insurers can now offer life covers of any amount for one-time lumpsum premium payment policies.

Mission COVID Suraksha Group Insurance

The public sector general insurers have jointly launched a COVID-specific hospitalization cover scheme offering Rs 5 lakh fixed benefit policy from Rs 344 premium. This improves access to COVID protection.

Increasing Foreign Investment

Hike in FDI limit

The government has increased the foreign direct investment (FDI) limit in the insurance sector from 49% to 74%. This reform aims to improve foreign capital inflow for expansion and growth of insurance companies.

Regulations for Insurance Intermediaries

Revised Regulations

IRDAI has revised regulations governing insurance agents, brokers, web aggregators etc. to strengthen competency, conduct and performance standards for better service delivery.

Simplified Claim Settlement Process

IRDAI has streamlined procedures and timelines for health insurance claims processing, settlement and disputes to enhance customers’ service experience through faster resolution.

New Investment Regulations

Relaxed Investment Norms for Insurers

IRDAI has allowed increased investment options for insurers by permitting higher exposure to equities, alternatives like REITs, InvITs etc. This provides investment flexibility and growth opportunities.

Shift to New Accounting Standard

IRDAI has transitioned insurance companies’ accounting practices from generally accepted accounting principles to new Indian accounting standards (Ind-AS). This aligns with global accounting standards.

The vibrant policy developments highlight the insurance sector’s strong growth potential driven by progressive regulations, digitalization and rising insurance demand in India.

How to select motor insurance in India

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Purchasing adequate motor insurance is mandatory for all vehicle owners in India as per the Motor Vehicles Act. With options to buy basic third party liability cover or enhanced protection through comprehensive policies, choosing the right motor insurance can get confusing. This detailed guide will help you select suitable motor insurance cover in India.

Understand Types of Motor Insurance Policies

Third Party Liability Cover – This is the basic mandatory motor insurance cover required by law. It provides protection against legal liabilities arising out of third party death, bodily injury or property damage caused by your vehicle. However, it does not cover any damages to your own vehicle.

Comprehensive Policy – As the name suggests, this policy offers wider and enhanced protection. Along with covering third party liabilities, it also covers damages or loss to your own vehicle due to accidents, theft, floods, fire etc. It allows you to add extra safety net through add-ons.

Standalone Own Damage Cover – This policy variant only covers damages to your own vehicle without third party liability coverage. It is generally availed if you already have third party liability insurance active through another policy.

Align Coverage as per Vehicle Profile

Evaluate your vehicle type and value to determine suitable coverage:

  • For cars and expensive SUVs, it is strongly recommended to avail comprehensive policy. This ensures financial protection for high vehicle costs along with mandatory third party coverage.
  • For budget two-wheelers, basic third party liability insurance suffices to meet legal requirement. You can also opt for comprehensive cover based on your budget and added protection needs.
  • For commercial vehicles like trucks, buses, etc. comprehensive policy along with passenger liability cover provides adequate protection given higher risks and liabilities.

Carefully Assess IDV Based on Vehicle’s Market Value

The Insured Declared Value (IDV) is a key aspect you must carefully consider while purchasing motor insurance. IDV represents the insurer’s maximum liability for own damage or theft claims. Ensure you declare the IDV matching the current market value of your vehicle model after factoring appropriate depreciation. Higher IDV translates to higher claim payment on damage and thus better coverage.

Enhance Coverage with Add-On Covers

Add-on covers allow you to expand the coverage provided by comprehensive motor insurance for some additional premium. Some useful add-ons include:

  • Zero Depreciation Cover – Waives off depreciation deduction on own damage claims thus increasing claim payouts.
  • Engine Protector – Pays repair costs if internal engine parts or gear box are damaged.
  • Key Replacement – Covers cost of replacing vehicle keys that are lost or stolen.
  • Consumable Cover – Pays for oil, lubricants, nuts & bolts etc. required during accident repairs.
  • Roadside Assistance – Provides towing facility, on-spot fuel delivery, flat tyre repair, battery jump start etc. in case of breakdowns.

Evaluate your needs and choose relevant optional add-on covers to enhance your comprehensive motor insurance policy for better financial protection.

Check Claim Settlement Ratio Before Buying

An important parameter to check while purchasing motor insurance is the insurer’s claim settlement ratio. This ratio indicates the percentage of claims settled by the insurer out of the total claims received.

Check and compare the claim settlement ratios of last 3-5 years for shortlisted insurers from the IRDA annual reports. Reputed insurers have settlement ratios of 90% and above. Choose an insurer with higher ratio for assurance of smooth claim settlements.

Buy Long Term Policies to Reduce Costs

Instead of renewing the third party and own damage components annually, you can buy single long term policies:

  • Long term third party liability cover of 3 years
  • Long term own damage cover of 2 or 3 years

Long term policies cost less compared to individual annual policies due to lower servicing charges. Secondly, long term own damage policies also qualify for No Claim Bonus just like annual renewals, enabling significant savings subsequently.

Renew on Time to Enjoy NCB Benefits

One of the biggest advantages of timely motor insurance renewal is accumulation of No Claim Bonus (NCB) on the Own Damage component of comprehensive policies.

Renewing without any lapses or breaks enables you to accumulate NCB at the rate of:

  • 20% NCB for 2 continuous claim-free years
  • 25% NCB for 3 continuous claim-free years
  • 35% NCB for 4 continuous claim-free years
  • 50% NCB for 5 continuous claim-free years

Higher NCB leads to proportionally lower premiums on own damage insurance. Avoid policy lapses to ensure uninterrupted NCB benefits.

Use Online Insurance Marketplaces

Online motor insurance aggregators like Policybazaar, Coverfox, InsuranceDekho etc. allow you to compare insurance quotes, coverage options, add-ons, reviews etc. from multiple insurers at one place.

This simplifies selection of the optimal motor insurance policy as per your coverage needs at the most competitive premium rate. You also enjoy the convenience of purchasing end-to-end online without paperwork along with exclusive web discounts.

Periodically Review IDV and Enhance Coverage

It is advisable to review your motor insurance cover periodically, especially at the time of renewal to ensure adequate protection. If the insured declared value is low compared to vehicle’s market value at renewal time, increase the IDV to get full coverage.

Also use any major change in your use of vehicle, claim experience, address etc. as a trigger to re-evaluate your overall coverage and enhance if required by opting for wider add-ons etc.

To summarize, understanding policy types, aligning coverage to vehicle value, checking claim settlement records, availing online discounts and maintaining NCB helps maximize benefits when purchasing motor insurance in India. Invest in adequate motor insurance to enjoy complete financial protection for your prized vehicle’s damages and third-party liabilities.

How to buy Life insurance in India

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Selecting the right life insurance package is a crucial financial decision for anyone living in India. With numerous insurance providers offering an array of policies, it can get overwhelming to determine the ideal coverage for your needs and budget. This comprehensive guide will help you make the right choice when purchasing life insurance in India.

Determine Your Insurance Needs

The first step is to evaluate your specific insurance needs based on your personal circumstances and financial obligations. Consider relevant factors like your age, marital status, number of dependents, income level, existing debts, assets, and future financial goals. This assessment will help you determine the optimum insurance coverage amount, tenure and type of life insurance policy (term, whole life, endowment etc.) that you require.

Younger individuals in their 20s and 30s with several financial dependents typically need substantial coverage equal to 10-15 times their annual income. This provides income replacement and continued financial security to loved ones in case of untimely demise. Older individuals with fewer financial dependents and obligations may need relatively lower coverage just to cover funeral expenses and outstanding liabilities. Make sure you have adequate coverage for your family’s current and future financial needs in your absence.

Understand the Different Types of Life Insurance

Once you decide on the ideal coverage amount, it is important to understand the key features and benefits of different life insurance policy types available in India:

Term Insurance – Offers the highest coverage amount at an affordable premium for a pre-defined policy tenure. Ideal for income replacement needs.

Whole Life Insurance – Provides lifelong insurance coverage. Premiums are charged throughout life while death benefit is paid to beneficiaries. Cash value accumulates over time. Helpful for estate planning needs.

Endowment Plans – Provides dual benefit of maturity payout on survival till end of policy term along with death benefit. Useful for meeting future financial goals like child’s education, wedding, etc.

ULIPs – Offers investment in equity and debt funds to earn market-linked returns along with life cover. Provides flexibility to alter premiums and coverage. Useful for investors seeking insurance cum investment.

Moneyback Plans – Provides periodic survival benefit payouts along with death benefit. Useful as regular income source for meeting expenses like children’s education fees.

Compare Plans on Key Parameters

Once you finalize the type of life insurance policy you need based on your goals, compare plans across insurers to identify the best option. Look at the following key parameters:

Premium Amount: Compare premium rates for similar policy coverage across insurers. Choose a premium you can comfortably afford to pay long-term based on payment frequency – annual, semi-annual, quarterly or monthly.

Policy Term: Longer terms like 20 or 30 years reduce the annual premium amount substantially. However, some future financial needs may warrant a shorter 10-15 year term.

Add-ons/Riders: Additional riders for accidental death, critical illness, disability provide enhanced coverage at marginal extra cost. Opt for relevant riders.

Cash Value: Whole life and ULIPs provide cash value that accumulates over time. Useful for borrowing against cash value in future.

Claim Settlement Process: Insurer with robust claim settlement process ensures smooth claim payouts to beneficiaries.

Policy Flexibility: Ability to modify premium payment schedule or coverage amount provides flexibility. ULIPs allow premium redirection into different fund options.

Evaluate Claim Settlement Ratio

One of the most important parameters while purchasing life insurance is the insurer’s claim settlement ratio. This ratio indicates the percentage of death claims settled by the insurer out of total claims received. Check the claim settlement ratios of shortlisted insurance providers over the past 5 years in IRDA’s annual reports.

Choose established insurers with high claim settlement history of 90% and above. Avoid newer insurers with lower settlement ratios. Reputed nationalized players like LIC and government companies generally have higher settlement ratios given their stringent claim processing and strong asset base to honor claims.

Add Riders for Enhanced Protection

Riders or add-ons help enhance the coverage offered under the base life insurance policy at an affordable additional premium. Some useful riders include:

Critical Illness Rider: Provides lump-sum payment on diagnosis of specified critical illnesses like cancer, heart attack, stroke, kidney failure etc. This serves as financial support for treatment expenses.

Accidental Death Benefit: Pays an additional amount if death occurs due to an accident. Useful supplement to main policy.

Premium Waiver Rider: Waives off future premium payments in case of permanent disability due to illness or accident. Ensures policy continuity without premium burden.

Based on your health and family history, opt for relevant riders to expand your policy coverage in a cost-effective manner.

Buy Early to Save on Premiums

One of the biggest advantages of purchasing life insurance at a younger age is the significant savings on premiums. When you buy in your 20s, the premium rates are lowest as the perceived risk of claim for the insurer is lower for a young insured person in good health.

Buying adequate life cover early in life ensures financial safety for dependents at a lower locked-in premium rate which remains fixed for the policy tenure. As health risks increase with age, premium rates also rise substantially for people purchasing insurance after crossing 40 or 50 years of age.

Balancing Coverage and Affordability

The primary objective of life insurance is to provide financial protection to your family in case of your unexpected demise. So the first step is determining the optimum coverage amount you need as per your income, expenses, liabilities, and dependents.

At the same time, ensure your premium payments align with your budget without stretching finances. Balance coverage and costs by:

  • Choosing a longer policy tenure like 30 years which reduces annual premium payouts
  • Paying premiums annually instead of monthly to reduce administrative charges that increase premium amount
  • Opting for moneyback plan which gives periodic survival benefit payouts to policyholder along with insurance cover
  • Structuring premiums based on income flow – higher premiums when income is peak, lower premiums post-retirement

Review and Upgrade Coverage

Review your life insurance coverage at least every 5 years or when you experience a major life event. As income and expenses rise over time, your existing coverage may become inadequate. Childbirth, mortgage, marriage, new debts also increase the required coverage amount. Use these milestone occasions to upgrade and enhance your life insurance.

Some examples of events that necessitate an insurance coverage review and upgrade:

  • Birth of a child
  • Buying a house requiring mortgage payment
  • Increase in cost of living and inflation
  • Marriage or divorce
  • Taking an education loan for higher studies
  • Death of primary breadwinner in family
  • Rise in household expenses

Take advantage of your higher earnings potential in your 30s and 40s to increase your coverage by reinvesting policy bonuses or purchasing additional insurance plans. Maintaining adequate life insurance ensures continued financial security for your family.

Choosing the Right Insurer

While identifying the optimum life insurance policy, make sure you buy from a trusted nationalized insurer like LIC or government companies for assurance of claim settlement. Avoid obscure new insurers with poor financials. Reputed insurers have robust claim processing systems and high settlement ratios of 95% and above.

You can also purchase from reliable private insurance companies like HDFC Life, ICICI Prudential, Max Life Insurance that offer innovative product features and good service standards. Compare plans across insurers and choose one that best meets your requirements.

To summarize, evaluating life insurance needs based on income, dependents, liabilities and goals helps determine adequate coverage amount and tenure. Comparing premium costs, policy features, claim settlement record and choosing nationalized insurers ensures you select the most appropriate life insurance package in India. Review and upgrade coverage periodically to ensure continued protection. Investing in suitable life insurance safeguards your family’s financial future.

Vedanta Limited Appoints New CEO and Explores Growth Opportunities through Strategic Bauxite Block Investment

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Vedanta Limited, a leading global natural resources company, has made significant strides in positioning itself for growth with the appointment of a new CEO and its strategic investment in a bauxite block. The company’s recent developments are set to enhance its operational efficiency, expand its business horizons, and capitalize on growth opportunities in the natural resources sector.

New CEO Appointment:

On 22nd July, Vedanta Limited announced the appointment of Arun Mishra as its new Chief Executive Officer (CEO). Arun Mishra brings a wealth of experience and expertise in the industry, having served in various leadership roles in the natural resources sector. With this strategic appointment, Vedanta aims to leverage [New CEO’s Name]’s vision and leadership to drive the company’s growth and sustainability in a dynamic market landscape.

Bauxite Block Investment:

In line with its growth strategy, Vedanta Limited has made a strategic investment in a bauxite block to strengthen its position in the aluminum industry. The bauxite block, located in [Location], holds significant potential in terms of high-quality reserves and sustainable mining practices. This investment is poised to bolster Vedanta’s supply chain and reinforce its commitment to responsible and eco-friendly operations.

Unlocking Growth Opportunities:

The appointment of a new CEO and the strategic bauxite block investment signify Vedanta Limited’s determination to unlock growth opportunities in the natural resources sector. The company’s focus on sustainable mining practices, coupled with a visionary leadership approach, will enable it to navigate challenges and seize emerging opportunities.

Enhancing Operational Efficiency:

With the new leadership in place, Vedanta is keen on optimizing its operational efficiency. The company aims to streamline its processes, enhance productivity, and reduce operational costs while maintaining its commitment to environmental stewardship and social responsibility.

Commitment to Sustainability:

Vedanta Limited has consistently prioritized sustainable development and corporate responsibility. The company’s investment in a bauxite block aligns with its commitment to responsible mining practices, community welfare, and environmental protection. This strategic approach ensures a balanced growth trajectory while positively impacting the lives of local communities and preserving natural ecosystems.

Navigating the Insurance Claim Process After Flood Damage: A Comprehensive Guide

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Natural disasters, such as floods, can be incredibly devastating for car owners. With the monsoon season prevailing in India, several cities are prone to waterlogging and flood-like situations, leaving many vehicles stranded in basement parkings or water-logged streets. If you find yourself facing such a situation, it can be overwhelming and distressing. However, if your car insurance policy covers flood damage, there’s hope. In this comprehensive guide, we will walk you through the step-by-step process of claiming insurance for flood-damaged cars, helping you navigate through the aftermath of the disaster with confidence.

  1. Assess the Damage: As soon as it is safe to do so, assess the extent of the damage to your car. Take photographs and make notes of all visible damages caused by the floodwaters. Documenting the damage will be crucial when filing an insurance claim.
  2. Contact Your Insurance Company: Reach out to your insurance company promptly to report the flood damage. Inform them about the situation and provide details about the incident. Be ready to provide your policy number, vehicle details, and the date and location of the incident.
  3. Follow the Claim Filing Process: Your insurance company will guide you through the claim filing process. They may require you to fill out a claim form and submit the necessary documents, such as photographs, vehicle registration details, and a copy of the insurance policy. Ensure you provide all the information accurately and promptly to expedite the claim process.
  4. Schedule a Vehicle Inspection: In many cases, the insurance company will appoint a surveyor to inspect your flood-damaged car. The surveyor will assess the extent of the damage and verify the claim details. Cooperate with the surveyor and provide access to your vehicle for a thorough inspection.
  5. Review Your Policy Coverage: Understand your insurance policy’s coverage for flood damage. Some policies may have specific exclusions or limitations related to natural disasters like floods. Review your policy documents carefully to ensure that flood damage is covered and to understand any deductibles or sub-limits that may apply.
  6. Obtain Repair Estimates: Obtain repair estimates from authorized garages or workshops for the flood damage repair. Submit these estimates to your insurance company as part of the claim documentation. Ensure that the estimates align with the surveyor’s assessment.
  7. Follow Up on the Claim: Stay in regular contact with your insurance company to check the status of your claim. If there are any delays or issues, follow up promptly to address them. Having open communication can help in expediting the claim settlement process.
  8. Claim Settlement: Once the claim is approved, the insurance company will initiate the settlement process. Depending on the policy terms and the extent of the damage, the settlement may involve cashless repairs at network garages or reimbursement of repair expenses.
  9. Avail Towing Assistance: If your car is not in a drivable condition due to flood damage, check if your insurance policy includes towing assistance. This can help you transport your car to a workshop for repairs without incurring additional expenses.

Conclusion: Flood damage to your car can be distressing, but with the right insurance coverage and understanding of the claim process, you can navigate through the aftermath with confidence. Assess the damage, promptly contact your insurance company, follow the claim filing process diligently, and provide all the necessary documentation. Review your policy coverage, cooperate with the surveyor, and obtain repair estimates to facilitate the claim settlement process. Remember to communicate with your insurance company regularly to stay informed about the status of your claim. By following these steps, you can ensure a smoother and more efficient claim settlement experience for your flood-damaged car.