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POSTED BY ON April 3, 2012 11:31 am COMMENTS (20)
Few things about me:
My Age – 30
My Spouse age – 30
No Kids
No health issues
I have below requirements in terms of my insurance needs:
– Term plan for me and my spouse from LIC (Since, we already have iProtect from ICICI Pru)
– Accidental Insurance (PA Insurance) for myself, spouse and sister
– Medical Insurance for me and spouse
Recently, I met a broker for my above needs, and this is what he has to say:
1. Don’t go for private players whereby a term insurance is concerned. He is talking in respect of claim ratio. As per him, LIC makes fuss while issuing a term policy, rather than while making claim. Reverse is true with the private players. He showed me a proposal for a term insurance for LIC which was rejected, and said, one hardly see this with a private player.
I am kind of fine with LIC here, since I already have iProtect from ICICI.
2. For PA insurance, he is suggesting me United India. Since, the max SI is 25 lacs, he is suggesting me to buy two policies, one from United and other from Oriental/New India. As per him, they all offer same benefits and premiums are more or less same.
I liked Bajaj Allianz Personal Guard and planning to divide my insurance need of 50 lacs between BA and United India. However, the broker is suggesting against it. He is saying, that he’ll get more commission from private players as compared to govt ones, but still he is suggesting me Oriental and United.
3. For medical insurance, he is suggesting me family floater policy from Apollo Munich. The reason for the suggestion is faster claims and less hassles while availaing the cashless facility. I haven’t done much research on this, and, at the moment, not sure which policy is good. Any suggestions are welcome. Pls. note that we don’t have any existing illness. Also, since I don’t have kids, I would need an insurance which have minimum waiting period in order to include the maternity benefits.
Note – Broker is in business since 17 years and doing a good job by managing some 4000-5000 clients all over NCR.
The reason for this post is to get valuable comments from the experts available here.
I am hoping to see few golden words from Manish too on this post.
JagoInvestor has really awaken me. To make this month, my Action Month, I really need your great inputs on the above points.
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Thanks Bhushan. I think, that answers my question.
So to repeat what I have got, while chosing a PA and/or mediclaim policy, PSUs stand shoulder to shoulder with the private players. It’s just that you need to identify which policy among available suits you best in terms of benefits/features/premium etc.
One question, can we make online payments of premiums for PSUs?
Almost always NO.
Only exception is LIC !
Dear Kapil, for health policy, my take is a bit different. instead of saying this or that co, I w’d ask you to check for the cash less facility of insurers in the hospitals in your city or living area. From the feedback, you may decide to opt your own insurer.
In case of PAP, yes you may divide the sum assured between 2 insurers.
Thanks
Ashal
Bhushan,
As per my broker, in a mediclaim policy, if a PSU thinks twice before approving a claim, then a private player will think atleast 6 times before approving a claim.
I completely agree that, even then, private player will take less time. But then, don’t you think, that the claim ratio will be high in a PSU as compared to a private one. Just want to gather your opinion on this. I don;t like PSUs at all. In fact, before meeting this broker, I didn’t even bothered to check their websites, policies etc.
It’s just that the broker is strongly suggesting me to go with a PSU, inspite of having low commission (as per him). He is recommending PSU for both PA insurance and mediclaim.
@All –
Can someone confirm the commission ratio of a PSU vis-a-vis Private player?
Kapil,
Actually, these days any insurance co. does not do too much in claims settlement, as its outsourced to TPA. These TPAs are registered across many cos. So if you take New India or United or some other co, you might find the same TPA. Some cos like Bajaj have in-house TPA, it has pros and cons.
I am myself an insurance consultant, working with many cos. But I have my mediclaim with Bajaj and am not worried about it. My parents’ have mediclaim with New India because its a very old continuous policy.
Regarding commissions, health premiums are not very high anyway to make commission decisive factor. Nonetheless, there is a max difference of 2-5% between cos, so on a 10k premium, you are talking of a diff of 500 bucks ! Not worth wasting time looking into structure.
I am not saying PSUs are bad. All I am saying is that they are all the same in health and PA. So you must decide based on features and premiums only and not look into claims and commissions.
I feel on a broad note, the advices from broker are good.
In term insurance, claim settlement record should be given more priority than premium comparison. Here LIC is far ahead of the rest. But I would suggest you to wait. You will find reports that LIC is planning to reduce term plan premium and / or launch an online term plan. Surely makes sense to wait a bit.
I don’t see anything wrong with bajaj PA policy. BA as such is a morally good co.
Apollo health plan is good. I think they offer lifetime cover assurance, but just recheck. With Public sector cos, the lifetime renewal assurance is always there. Feel free to call me if required.
Thanks Bhushan for your comment.
Regarding mediclaim, when I told the broker that I already have a group term mediclaim policy by our (me and my spouse) employer, he suggested me to take the mediclaim from Oriental insurance, considering our good health and age. This way, he said, we’ll be able to save on premium and may plan to buy a top-up policy later on in my life.
Dear Kapil,
Neither is it compulsory for the employer to continuously renew its group mediclaim policy, nor will you be with the same employer forever. Having a personal mediclaim policy is extremely important. At a later stage in your life, you may not get a chance to buy one. Get a 3 Lac cover for family, from apollo / bajaj on floater basis for now and buy top up from Star (when you do not have group cover).
So, you mean, I should go with private players, than PSUs like Oriental, whereby mediclaim policy is concerned.
If that’s the case, then may I know the reason behind it?
For claims, I believe, since I have broker in between, there should not be much hassles with a PSU insurer. Wat say?
In life insurance, claim settlement is a key factor, because there is a vast difference in it.
In mediclaim, all companies are equally bad. (Note my words, not equally good!)
All companies first look out for way to reject your claim, if unsuccessful, they will pass it!
At least, pvt players are faster in decision making.
Having a broker, would help. He commands respect in pvt cos. But in PSUs, they actually do not bother about any one.
If you do like PSUs, all 4 are same, no point in shortlisting.
Forgot to mention that my home loan is insured
Dear Kapil, do your job or your wife’s job or sister’s involves a lot of travelling? Be it in city or out of city?
Thanks
Ashal
Dear Ashal,
Yes, our job involves almost 100kms of travelling each day except weekends.
And, I should say, Delhi traffic is pretty bad.
Also, occasionally, we take road-trips of 4-6hrs to hill stations, etc around our city.
Dear Kapil, keeping in mind your daily travelling as well as weekend trips & hill station journeys, my take ‘ll be to opt for PAP (Personal Accident Plan of at least 20-25L Rs. for yourself & wife, for Sister, please check the risk involved & decide sum assured accordingly.
For Term plan, your own basic sum assured should be around 1 crore Rs. at 10-11 times multiple of your income. Similarly for your wife it should be around 60L Rs. or so. Why I’m recommending such high cover for both of you? The reason is simple, both of you are near zero on assets & investments.
Please update with your views till this point.
Thanks
Ashal
Ashal,
Thanks for your suggestions.
From this post, I am actually looking for a comment on what my broker has suggested.
With regard to buying the policies from PSUs/Private. Whether a mediclaim is suggested from PSU? Whether PA insurance is suggested to divide b/w the two (private and PSU), the way it has been suggested for Term Plan.
It’ll be great if you can provide your comments on above mentioned points.
Ashal,
Can you also tell me that how did you reach to a figure of 25 lacs for PAP?
Dear Kapil, In case you met with an accident & there is PTD or TTD, I do feel the SA of 20-25L ‘ll be enough for you, for the income provided to you from this cover.
Thanks
Ashal
Dear Kapil. you may also check how much income ‘ll you receive against this 20-25L Rs. cover, if you feel, you are falling short, you may please increase your cover.
Thanks
Ashal
Dear Ashal,
Pls. find my answers:
1. how much SA you are already covered from I-Protect & how much you are seeking from LIC?
– Me – 30 Lacs SA from iProtect + 40 Lacs that I seek from LIC
– Spouse – 20 Lacs from iProtect + 30 Lacs that we seek from LIC
2. What’s the salary of you & your spouse?
– 9+6 Lacs p.a.
3. What are your current assets & investments?
– No assets.
– I am currently working on investments. Thought, to first finalize with the Term, PA and mediclaim insurance. I am looking to invest roughly 15k per month in the coming months.
– No real investment except PPF of 50k which I started last year + ICICI Life Stage Pension Plan of 20k per annum which was started 3 years back.
The above data that I have presented is combined of me and my spouse.
4. 50L PA, do you really need that much PA?
– I am not sure. Pls. suggest how to calculate the ideal required figure. I am looking to buy PA for me and spouse. Is there a single policy which can cover both? Is individual suggested?
5. When are you planning to have your first child?
– in a year or so….
6. After birth of your child, ‘ll your spouse continue the work or ‘ll take partial or full off from official duties & become 100% home maker?
– she’ll continue to work
7. Any loan liabilities as on date?
– a home loan of 15 lacs. Current outstanding is 13.5 lacs after paying 1.30 lacs as partial payment.
I have dependent parents.
I am running a ICICI Lombard health insurance policy for my parents for which I pay approx 14k as premium.
Dear Kapil, how much SA you are already covered from I-Protect & how much you are seeking from LIC? What’s the salary of you & your spouse? What are your current assets & investments? 50L PA, do you really need that much PA? When are you planning to have your first child? After birth of your child, ‘ll your spouse continue the work or ‘ll take partial or full off from official duties & become 100% home maker? Any loan liabilities as on date? ……………..
Thanks
Ashal