Tuesday, 17 July 2018

Why You Should Consider Cancer Plans

The dreaded C-word is in the d news after actor Sonali Bendre disclosed that she has cancer. Earlier, actor Irrfan Khan had made his fight against the disease public., adding to the awareness about cancer and its treatment. However, the level of preparedness for managing the financial aspect of the treatment remains low. This despite a clutch of life insurers actively promoting policies that offer targeted protection against cancer. Recently, health insurer Star Health also launched a policy aimed at cancer survivors. "The sensitivity towards buying insurance to cover this disease is low. Distributors do not sell these policies as much as they promote policies with a savings element,". 

Cancer is now responsible for almost one in six deaths globally. Though medical advancements have increased the chances of early detection and successful treatment, the treatment costs are huge. This is where cancer policies can play a role. The sum insured can be as high as Rs.60 Lakh. These policies cover  cancer right from the early stages to the advanced ones. Future premiums are waived  off on detection for three to five years depending on the plan to ease the burden on policyholders.

The claim settlement process is simple, as these are fixed benefit policies that handout a pre defined sum on diagnosis. As a regular health insurance cover reimburses only hospitalization costs, the cancer policy payout can be used to meet any recuperation-related expenses as well as to make good any shortfall due to loss of income during treatment. Also on offer are increased sum assured options under premium variants, where the cover increases by 10% for every claim-free year. Income benefit is another feature that can be of help during the recovery phase, Particularly If the health condition is debilitating enough to force a break from employment. Despite the benefits, the policies have met with moderate response. "In  India  a number of cancer products have been launched and uptake of cancer cover over time may increase  with Increasing awareness levels, higher incidence of the disease, improving medical support and higher cost of treatment,".

Unlike life insurers' cancer covers. Star Health's Cancer Care plan extends cover to those who have been diagnosed with cancer (stage 1 or 2). Launched as a pilot, the product covers the risk of recurrence, metastasts, second cancer as well as second malignancy unrelated to first cancer, apart from regular hospitalization expenses.

Beware of the exclusions
Study the exclusions and restrictions before you take a call. Cancer policies from life insurers restrict coverage for early-stage cancers to 20-25% of the sum insured. Later-stage cancer claims will be eligible for the entire sum assured minus claim paid cut, if any, during initial stages.

However, some plans also provide a sum assured of 150% in case of major stage cancer. Check if any particular cancer and recurrent claims of cancer affecting the same organs are excluded. Aegon Life's policy, for instance, does not cover skin cancer.

The policies come with waiting and survival periods of 180 days and seven days respectively.
Standard exclusions like pre-existing  illness apart, Cancer caused by sexually transmitted diseases, HIV, or AIDS or arising out congenital condition and contact with radiation or radioactivity, are not covered under these policies.

Therefore, you will have to make a choice on the basis of your health condition as well as family health history. Also ensure You have a basic health insurance policy in place to cover hospitalization.

Read full articles visit: LifeLine Insurance & Financial Expert

Thursday, 12 July 2018

Get Set to Bank with LIC as Insurer Gets IDBI Stake Nod

The Insurance Regulatory and Development Authority of India (IRDAI) has agreed to the Life Insurance Corporation (LIC) of India's proposal to hike its stake to 51% in IDBI Bank from 10.8% at present. The permission is subject to the corporation bringing clown its holding to 15% in future.

The IRDAI board, which met in Hyderabad on Friday, cleared the proposal put for-ward by the LIC. It will now have to be cleared by the state-owned insurer's board. According to sources, the corporation believes that having a bank within the group will help increase its share of business through the bancassurance route. An official said, "Private life insurers with a bank within the group generate nearly half their business through the bancassurance channel. In the case of LIC, it is less than 3 %." 

LIC, with assets under Management of over Rs 30 lakh crore, has been priding itself as the largest financial institution in the country. The insurer had first made a pitch for a banking licence over 16 years ago when SBI got its life insurance licence. Subsequently its housing finance arm LIC HFL had put in an unsuccessful application for a bank licence. The corporation was a founding investor in Axis Bank in the '90s and had also picked up a 28% strategic stake in Corporation Bank. However none of these investments served the desired purpose.

HDFC Life, ICICI Pru Life and SBI Life are among the private insurers that get a sizeable portion of their business through banc assurance. While LIC will be allowed to take control of the bank, the regulator is not changing its rules and requires the insurer to bring down its holding to 15%. The board has not specified the time frame. The Reserve Bank of India's (RBI's) norms too require that promoters of private banks bring down their shareholding to 15%. However, the RBI also does not have fixed deadlines.

An additional 40.2% stake for IDBI Bank will cost LIC Rs 9,229 crore at the current share price of nearly Rs 55. However, the investment by the corporation will be higher as part of it would go into fresh equity. Earlier, LIC had picked up a 28% strategic stake in Corporation Bank, which is now currently clown to 13% Although this is in the nature of a strategic investment, the money will come from policyholders' funds. LIC has a paid-up capital of only Rs 100 crore. What seems to have swung the decision in favour of IDBI Bank is that there are no major legal changes required fix its acquisition.

On the other hand, the government cannot bring down its stake below 51% in nationalized banks without amending the Bank Nationalisation Act. 

Source: Times of India

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Thursday, 5 July 2018

Transfer Your Risk Using Insurance

If your car had no brakes, most of you would prefer not to risk driving it. Brakes are those  safety  nets that  allow us to peacefully go about  our  business without being overly worried about what would happen to our financial commitments (which We would have ordinarily honoured in our  life time) to our dependents, if we were to pass away unexpectedly.

Since the risk one faces is unlikely to go away, we need to work towards managing or containing the risk so that in the event of a contingency, our lives can proceed with  the least  possible damage. One of the most effective ways to manage risk is to work out how much you can brave and then outsource the remaining part to an insurance company.

Insurance is the most critical decision to be made in money management. It performs the role of reducing the unpredictability of day-to-day life. It provides us with the financial strength of dealing with unforeseen situations.lt acts as a shield to our earning capacity. Buying insurance refers to the  process of transfer of risk to the insurer.

Few commonly bought insurance plans are:

Term Plan- It is the most appropriate product for pure risk cover.

Whole Life Plan - It's  ideal for paying duties and estate taxes payable by the beneficiaries at the time of death of life assured

Endowment plan - It offers life cover for the person insured and investments. It is most widely used for meeting the education needs of children.

Unit linked policies- These provide risk cover and also has an investment component. They offer choice of different asset allocation.

Annuities- It provides lifelong payments to annuitants till  they are  alive  (something like  pension).These are normally taken to supplement income during retirement.

Health insurance:· It ensures that  expenses due to hospitalization (hospital stay as well as medical 
costs) are compensated to a certain extent. It becomes costlier and at times difficult to get as one gets older.

Motor  insurance- It protects from financial costs incurred because of damage to car due to traffic collisions and other reasons and also car theft to a certain extent. The kind of insurance needed and the amount of cover are the key decisions to be taken.

Taking an insurance plan is not mandatory and therefore, it needs to be bought if there's a need. 

For example, an individual with no dependents need not take a life cover. In addition, people who have enough reserves for the dependents to fall back upon, need not take additional cover.
Calculating the right amount of risk cover on a client's life is an exercise in customization. It involves taking stock of one's assets (excluding those deployed for personal use), one's goals and its priorities, one's liabilities, one's lifestyle and the kind of job one does. Also, it involves out-guessing the probabilities of an occurrence at some point in time. Too much of insurance could dent the current cash flows and too little might end up looking inadequate at the time of happening of the event, against which one is trying to safeguard.

Also, planning for a rainy day or contingencies is an extension of risk-cover. At least four to five months of expense need to be set aside for meeting any emergency needs. Keeping money aside for any emergency ensures that the other short, medium and long-term goals are not jeopardized.

Read full articles visit: LifeLine Insurance & Financial Expert

Why You Should Consider Cancer Plans

The dreaded C-word is in the d news after actor Sonali Bendre disclosed that she has cancer. Earlier, actor Irrfan Khan had made his fig...