POS General Insurance Products Including Health Insurance..

 

TOPICS COVERED

1. POS – GENERAL INSURANCE INCLUDING STAND - ALONE HEALTH INSURANCE

2. POS – CATEGORIES OF POS PRODUCTS AND SALIENT FEATURES OF POS PRODUCTS

 

Guidelines on Point of Sales Person - Non Life and Health Insurers:

In order to facilitate the growth of insurance business in the country and to enhance insurance penetration and insurance density, the IRDAI as part of its developmental agenda issued guidelines on "Point of Sales Person" on 26th October, 2015.

These guidelines apply to point of sales person and those engaging the "Point of Sales Person". Every policy sold through the point of sales person is separately identified and prefixed by the name - POS - (Name of Product). Initially, the Point of Sales Person was authorised to sell the following five (5) pre-underwritten products:

• Motor Comprehensive Insurance Package Policy for Two wheeler, private car and commercial vehicles
• Third Party liability (Act only) Policy for Two-wheeler, private car and commercial vehicles
• Personal Accident Policy
• Travel Insurance Policy
• Home Insurance Policy

Subsequently, the following products have been added to be marketed by the POSP.

• Crop Insurance with a sum insured limit of Rs.1 lakh per acre for all kinds of crops
• Critical illness policy which covers 8-9 critical illnesses with the maximum sum insured limit of Rs.3 lakhs per individual.
• Pradhan Mantri Fasal Bima Yojana (PMFBY)
• Weather Based Crop Insurance Scheme (WBCIS)
• Coconut Palm Insurance Scheme (CPIS)
• Cattle / Live Stock
• Agricultural Pump Set Insurance

(There is no cap on sum insured for item no. 4, 5, 6 Government sponsored Crop Insurance Schemes)

Motor Insurance

Must be taken by a vehicle owner of a vehicle plying on public roads whose vehicle is registered in her / his name with the Regional Transport Authority in India; Under The Motor Vehicles Act, 1988, it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property.

A certificate of Insurance must be carried in the vehicle as a proof of such insurance.

Third - Party Insurance:

An insurance policy purchased for protection against the legal actions of another party. Purchased by the insured (first party) from an insurance company (second party) for protection against another party's claims (third party) for liability arising out of the action of the insured is called "Liability Insurance" as well as two popular and important types of covers:

Act [Liability] Only Policy:

As per Motor Vehicles Act, it is mandatory for any vehicle plying in public place to insure liabilities towards third parties and passengers in Public Service Vehicle for example: bus, taxi etc.

Package Policy/Comprehensive Policy:

Package Policy/Comprehensive Policy: [own damage + third party liability]. The sum insured of a vehicle in a motor policy is referred to as Insured's Declared Value (IDV). Rating / premium calculation depends on factors like the insured's declared value, cubic capacity, geographical zone, age of the vehicle etc.

Personal Accident Insurance

If a person dies or is disabled totally or partially his earnings would completely stop or will reduce to a great extent. This will have adverse effect on insured as well as his family. The policy is available –

For individuals,

For a family consisting of spouse and dependent children only (NOT PARENTS)

When a person meets with an accident and sustain bodily injury may result into death, loss of limbs or disability, P.A. policy provides benefits as given in the table here below:

Benefit description Claim amount – as % of sum insured

1. Death - 100%

2. Loss of 2 limbs, both eyes, 1 limb and 1 eye - 100%

3. Loss of 1 limb or 1 eye - 50%

4. Permanent total disablement - 100%

5. Permanent partial disablement % as per type of loss e.g. little finger 4%, thumb 25%, loss of hearing of 1 ear 30%

6. Temporary total disablement @1% of sum insured per week but not exceeding Rs.5000 per week and for not more than 104 weeks.

The contingencies 1 to 4 above are called Capital Benefits and in the event of any of these losses the claim is paid inclusive of Cumulative Bonus earned; and policy is called back duly discharged for cancellation. In addition to the above benefits, if death occurs, the insurer provides for the following benefits without charging any extra premium:

Expenses for carriage of dead body for a fixed amount as stated in the policy

Education Fund: If the insured had minor dependent children upto the age of 25 years a sum of Rs. 5000 per child for maximum 2 children as Education Fund is also paid. Medical expense reimbursement can also be taken as an add-on benefit with extra premium. The amount payable will be 25% of the admissible claim amount or 10% of the sum insured or actual whichever is lowest.

Exclusions:

(a) Claim for injury or death due to self injury, suicide or attempted suicide

(b) Under the influence of intoxicating liquor or drugs

(c) Participating in hazardous sports

(d) Travelling as crew in an aircraft or as passenger in unscheduled aircraft

(e) Service in armed forces

(f) By venereal disease or insanity or childbirth or pregnancy

(g) War, civil war and similar situations.

Death/Permanent Total Disability/Permanent Partial Disability must occur within 12 months of accident. The policy is 24x7 and covers accident anywhere in the world; but claim is payable in India in Indian currency. Eligibility:

a) The premium is charged on the basis of the occupation of the proposer and the contingencies opted for.

b) Eligibility age 5 to 70 years depending upon company to company.

c) Policy for a family can also be taken. Family means husband, wife and dependent children. Family discount is given on the premium.

Janata Personal Accident Policy:

The policy is similar to PA above, with following differences:

(a) The minimum sum insured is Rs. 25,000

(b) Maximum Rs, 1,00,000 in multiples of Rs 25,000.

(c) Education Fund and medical expenses are not covered

(d) Cumulative Bonus is not available

(e) The policy can be taken for a maximum of 5 years at a time.

Gramin Personal Accident Policy:

(a) Applicable to all persons residing in rural areas only.

(b) One policy per person. However person having a Gramin Policy may also take one Janata Policy

(c) No medical examination

(d) Age group: 10 to 70 years

Government Schemes:

Sometimes covers are issued by the insurance companies based on schemes drafted by the Government. Pradhan Mantri Suraksha Bima Yojana sum insured Rs.2,00,000. Premium per year Rs. 12 only paid through their bank account. Cover in respect of Death Rs.2,00,000, Loss of 2 limbs, both eyes, 1 limb and 1 eye Rs.2,00,000. Loss of 1 limb or 1 eye Rs.1,00,000. Cover is available for bank account holders. Aadhaar Card is necessary as part of KYC validation. Cover given by nationalized insurance companies and also by other insurance companies who agree to follow applicable rules and regulations for issuance of such covers. Standing instruction could be given to the bank for debiting their account to pay Annual renewal premium.

Overseas Travel Insurance

• The policy is available to persons travelling overseas.
• The cover is for emergency medical treatment that may be needed when on tour.
• Persons between the ages of 5 years to 70 years can be covered. Children from 3 years onward can be covered, if accompanying parents.
• Premium is payable in Rupees but cover is in US dollars. Age and duration of trip are factors deciding the premium.
• The cover given is either worldwide excluding USA and Canada or including USA and Canada.

Coverage:

• Medical expense and Repatriation. An excess of applicable for each and every claim
• Personal Accident US $50000. For children restricted to US $2000. Only death and permanent total disability are covered
• Loss of checked baggage. Excess is applicable for the claim
• Delay of checked baggage. Delay should exceed 12 hours from scheduled date of arrival at final overseas destination (not applicable to return journey home)
• Loss of passport limited amount and subject to an excess for the claim
• Personal Liability able m US $100 is

The journey must commence within 14 days of the date of commencement of the policy. Special Conditions:

As this is a medical and PA cover, the terms of Mediclaim and PA apply with following modifications:

(a) The policy is for emergency medical treatment and not for planned hospitalization

(b) In a medical emergency, the claim settling agency mentioned in the policy is to be contacted immediately and assistance sought for the treatment. All other claims to be filed on return to India.

(c) Existing health conditions are not covered. Travel against medical advice is also not covered.

Health Insurance

The Insurance Laws (Amendment) Act, 2015 defines the “health insurance business as contracts which provide for sickness benefits or medical, surgical or hospital expense benefits, whether inpatient or out-patient, travel cover and personal accident cover.” Each insurance company has designed products of its own to meet the customer demand. Uniformity therein may not be possible, but the coverage and main features are similar.

Hospitalization Insurance Policy:

Popularly known as ‘Mediclaim’, the hospitalization policy covers medical expenses of treatment of in-patients (persons hospitalized for minimum 24 hours) with some additional features. Coverage:

• Room and board charges
• Consultants’, surgeons’, anaesthetists’ fees, including that of nurses etc.
• Blood transfusion, medicines, lab tests and other investigations
• Operation theatre, anaesthesia, artificial limbs etc.
• Ambulance Charges for a specified amount

Special Features of the Policy:

24 hours hospitalization in the Hospital:

To avail the claim, the insured has to stay in a registered nursing home/ hospital for a minimum of 24 hours.

Day Care Treatment:

There are certain diseases like cataract, dialysis, chemotherapy, radiotherapy etc. the treatment of which does not require 24 hours hospitalization. These come under ‘Day care treatment’.

Domiciliary Hospitalization:

According to this feature, the insured can get the claim while being treated at home, provided the following conditions are met;

• The Patient is so critical that he cannot be taken to a hospital
• No bed is available in the hospital where the treating doctor is visiting. However, there is a ‘waiting period’ of 3 days for this feature.

Pre and Post Hospitalization Charges:

• Pre hospitalization expenses could be in the form of tests, medicines, doctors’ fees etc. Such expenses are relevant and pertaining to the hospitalization are covered under the health policies.
• Post hospitalization expenses: After stay in the hospital, in most cases there would be expenses related to recovery and follow-up. Generally 30 days pre hospitalization and 60 days post hospitalization are covered. However, this may vary from company to company.

Cumulative Bonus:

Cumulative Bonus means an increase in the sum assured granted by the insurer without an associated increase in premium. It was the practice to provide incentive to clients to renew the policy for which purpose the insurance company would give additional sum insured of 5% free of cost at the time of claim free renewal upto certain maximum say 30% or 50%.

Health Insurance Regulations 2013 provide that insurers may offer cumulative bonus on indemnity based health insurance policies, which shall be stated explicitly in the Prospectus and the Policy document. If a claim is made in any particular year, the cumulative bonus accrued may be reduced at the same rate at which it is accrued. Cumulative Bonus is not allowed on benefit based policies. Who can take the Policy?

• Individuals
• Members of a family on a floater basis (spouse, two children below the age of 25 years and parents)
• Groups: This policy can also be taken by a group owner provided who could be an employer, an association, a bank’s credit card division, where a single policy covers the entire group of individuals.

Age Limit:

The eligibility varies from insurer to insurer, from as young as 3 months to 80 years and above. Some companies have no limit for age at entry. All companies have to provide lifelong renewals as per IRDA Regulations.

Exclusions:

1.   Pre existing conditions/diseases that the proposer is suffering from even prior to cover being obtained for the first time—(but the exclusion period not to exceed 48 months)

2.   30 days waiting period in general for other than accidents

3.   24 months waiting period for certain specific diseases like cataract, hernia, hydrocele, piles, gout etc.

4.   War and allied perils, nuclear weapon /ionizing radiation

5.   Plastic /cosmetic surgery unless medically recommended

6.   Preventive measures like vaccination inoculation

7.   Cost of spectacles, contact lens, hearing aid

8.   Dental treatment unless requiring hospitalization

9.   Congenital diseases, defects, anomalies

10.                Psychiatric psychosomatic disorders

11.                HIV/AIDS

12.                Participation in hazardous sports

13.                Hospitalisation primarily for diagnostic purposes, lab examinations, unrelated to any illness disease requiring hospitalization

14.                Pregnancy child birth any complications thereof

15.                Naturopathy treatment

This list is only illustrative. Actual exclusions may vary from product to product and company to company.

Critical Illness Policy:

• The policy covers specified dreaded diseases like cancer, kidney failure, stroke, multiple sclerosis, heart valve replacement etc.
• The special feature being that the sum insured is fully paid if during the currency of the policy insured suffers from one of the covered diseases and survives for 30 days after confirmation of existence of such disease, irrespective of actual amount spent on the treatment of the said disease.
• This cover is also given as an add-on cover under hospitalization policy and is also available separately.
• It is a Benefit Policy and not an indemnity policy.
• The waiting period is 90 days from inception of policy for any benefit.

Hospital Daily Cash Benefit:

• The policy pays at agreed rate per day of hospitalization, say Rs. 500 or 1,000 or 2,000 per day.
• Upto certain specific number of days say 30 or 60 during a policy period.
• Policy is usually issued as a complementary, to the “hospitalization” type of policy, but could be issued independently also. Cashless facility provided and smart card is issued.

Portability:

• Portability means transfer of the credit gained by the insured for pre-existing conditions and time bound exclusions if the policy holder chooses to switch from one insurer to another or from one plan of the same insurer, provided the previous policy has been maintained without any break.
• A break in policy occurs when the premium due on a given policy is not paid on or before the premium renewal date or within 30 days thereof.
• Portability ensures that when a policyholder changes his health insurance policy from one insurance company to another, he does not lose the benefits he has accumulated.

Cashless Facility:

Insurance Companies have tie up arrangements with network of hospitals. If a policyholder takes treatment in any of these hospitals, there is no need for the insured person to pay the hospital bills. The insurance company through its Third Party Administrator (TPA) will arrange direct payment to the hospital.

Health insurance of life insurers:

The product is similar with regard to the cover, exclusions and conditions of the Mediclaim Policy the only exce cash component is provided for surgeries and illnesses basis.

Free Look Period

As per IRDAI Regulations issued in February 2013, all health insurance policies are required to have a Free Look Period Cooling Period of 15 days from the date of receipt of policy document. During this period, if the policyholder has bought a policy and disagrees to any terms and conditions of the policy, he/she can return it and get a refund subject to some deductions for expenses.

Home Insurance Policy

1.   Home/householder's insurance policy provides coverage on losses incurred to the insured's property from hazards or events named in the policy. The perils covered will be clearly spelt out.

2.   Home/Householder's insurance covers the house structure and its contents against fire, riots, bursting of pipes, earthquakes mption being the org etc. apart from the structure, it covers the contents excluding money against burglary, housebreaking, larceny and theft.

3.   Methods of fixing the Sum Insured; Market Value (MV) and Reinstatement Value (RIV) Crop Insurance Agriculture sector is demographically the most significant and broadest economic sector in India. Even a marginal dip in the agricultural production has trickled down effect on the whole economy. The variation in production is directly affected by many unfavourable such as pest attacks, variations in weather conditions such as rainfall, temperature, humidity, etc. Thus, the need of the hour is to secure the yield and yield-based losses.

Who can take this policy?

a.   Farmers

b.   Banks

c.    Financial Institutions / Companies extending credit facility for Agricultural Operations, whose repayments are affected by yield factors.

What is covered under this policy?

a.   This policy covers

b.   Any shortfall in yield resulting due to Natural Fire and lightning, Storm, Hailstorm, cyclone, Typhoon, Tempest, conditions Hurricane, Tornado, Flood, Inundation, Landslide, Drought, Dry spells, Pests/ Diseases, etc.

c.    Any loss due to prevented sowing / planting risk due to deficit rainfall or adverse seasonal conditions

d.   Any post harvest Losses

e.   Premium chargeable depends on various factors such as the type of crop, location, historical yield data, calamity years in the specified area and the indemnity level of yield crop.

f.     Claims are paid for loss of average yield due to the risks covered. Crop insurance does not cover fidelity guarantee.

Pradhan Mantri Fasal Bima Yojana (PMFBY): (Launched 13th January 2016)

This scheme is implemented in association with respective State Governments. The scheme is administered under the Ministry of Agriculture and Farmers Welfare, Government of India.

a.   There is a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid is only 5%.

b.   The premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss in any natural calamities.

c.    There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.

d.   Earlier, there was a provision of capping the premium rate which is low claims being paid to farmers. Now this is removed and farmers will get claim against full sum insured without any reduction.

e.   The use of technology will be encouraged to a great extent. Smart phones, Remote sensing drone and GPS technologies will be used to capture and upload data of crop cutting to reduce the delays in the claim payment

f.     Allocation of the scheme presented in budget 2016-2017 is Rs.5,550 crores.

g.   The insurance plan will be handled under s single insurance company, Agriculture Insurance Company of India (AIC).

h.   PMFBY is a replacement scheme of National Agriculture Insurance Scheme (NAIS) and Modified National Agriculture Insurance Scheme (MNAIS) and hence exempted from the service tax.

Objectives of the Scheme:

     i.        to provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests and diseases;

    ii.        to stabiles the income of farmers to ensure their continuous process in farming;

   iii.        to encourage farmers to adopt innovative and modern agricultural practices;

  iv.        to ensure flow of credit to the agriculture sector.

Coverage of Risk:

Following states of the crop and risks leading to crop loss are covered under the scheme.

a.   Prevented Sowing / Planting Risk: insured area is prevented from sowing planting due to deficit rainfall or adverse seasonal conditions;

b.   Standing Crop (Sowing to Harvesting): comprehensive risk insurance is provided to cover yield losses due to nonpreventable risks, viz. drought, dry spells, flood, inundation, pests and diseases, landslides, natural fire and lightening, storm, hailstorm, cyclone, typhoon, tempest, hurricane and tornado.

c.    Post-Harvest Losses: coverage is available only up to amaximum period of two weeks from harvesting for those crops which are allowed to dry in cut and spread condition in the field after harvesting against specific perils of cyclone and cyclonic rains and unseasonal rains.

d.   Localized Calamities: Loss/damage resulting from occurrence of identified localized risks of hailstorm,

e.   Landslide and inundation affecting isolated farms in the notified area.

Area Approach Basis:

The scheme shall be implemented on an "Area Approach Basis" (i.e. defined areas) for each notified crop for widespread calamities. The assumption that all the insured farmers, in a Unit of Insurance, should be defined as "Notified Area" for a crop, face similar risk exposures, incur to a large extent, identical cost of production per hectare, earn comparable farm income per hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the notified area. The unit of insurance can be demographically mapped with region having homogenous risk profile for the notified crop. For risks of localized calamities and post-harvest losses on account of defined peril, the unit of insurance for loss assessment shall be the affected insured field of the individual farmer.

Weather Based Crop Insurance Scheme (WBCIS): Who can take this policy?

a.   Farmers

b.   Banks

c.    Financial institutions / companies extending credit facility for agricultural/ non agricultural seasonal operations, whose repayments are affected by weather conditions

What is covered under this policy? Policy covers

a.   Cost of input - Covers the diminished agricultural output/yield resulting due to deviation from optimum weather requirement of a crop within a specific geo graphical location and specified time period

b.   Increased operational costs of agricultural or nonagricultural economic activity resulting from deviation of Observed Weather index from Strike index

c.    Premium chargeable depends on various factors such as the type of crop, location, historical weather data, cost of cultivation in the specified area and the acreage under Cultivation

Documents required:

     i.        Land record document (for the standing crop against which insurance is taken)

    ii.        Photo ID proof Coconut Palm Insurance Scheme (CPIS):

1.   In collaboration with Coconut Development Board, a comprehensive coconut life insurance product.

2.   Insurance based on Named perils leading to death / permanent damage to coconut palm

3.   Maximum liability is based on age of coconut palm and discounted future value

Coconut Palm Insurance Scheme is a mechanism for providing effective risk management aid to those growers who are likely to be impacted by non-preventable natural factors, pests & diseases, etc.

Coverage:

The insurance cover shall cover damage / losses to coconut palm and / or nut yield arising out of non-preventable natural factors.

Insurance of Nut Yield:

The insurance compensates the insured against the likelihood of diminished nut output/ yield resulting from non-preventable natural factors, such as Natural Fire & Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, Inundation, Landslide and Pests/Diseases etc.

Insurance of Coconut Palm

The insurance compensates the insured in the event of total loss of the individual palm/tree in the insured plantation from the 4th year to the 60th year. In the first year, a waiting period of three months from the date of transplanting shall apply. The insurance coverage and claim assessment shall be on individual tree basis.

The insurance is against perils like Storm, Hail storm, Cyclone, Typhoon, Tornado, Heavy rains, Flood, Inundation, severe Drought, Fire, Lightning, Earthquake, Landslide, Riot, Strike and Pests & Diseases of widespread incidence.

Sum Insured: For section – 1 (nut yield), Sum insured shall vary from Block to Block and is determined by the Guaranteed Yield of the Block multiplied by the previous year’s average nut price in the respective district.

For section – 2, Sum insured is based on the average input cost of the plantation according to the age of the plantation.

Premium:

The premium is determined on the basis of variability in the historical Block level nut yield and age of the palm.

Cattle / Live Stock:

The term ‘Livestock’ refers to the domesticated animals raised in an agricultural setting to produce commodities such as food, fibre and labour. ‘Livestock Insurance’ includes ins cattle, poultry and fisheries etc. Insurance of animals covered on the similar lines are cattle, sheep & goat, hen, rabbits, camels, horses, elephants etc.

Cattle Insurance:

The word “Cattle” refers to:

a.   Milch cows and buffaloes (2 to 12 years)

b.   Calves / Heifers

c.    Stud Bulls

d.   Bullocks [castrated bulls] and castrated male buffaloes, whether indigenous, exotic or cross-bred

Explanation:-

1.   Exotic animal means an animal with both parents of foreign breed. This includes animals born in India as well as born abroad.

2.   Cross-bred animal means an animal with one parent of foreign breed.

Coverage: Only Death of the animal is covered due to Act of God (AOG) Perils (natural calamities), Disease occurring during the Policy period, Surgical operations & Riot and Strike. Theft of the animal is not covered. There is a waiting period of 15 days under the Cattle Policy.

Poultry Insurance:

Poultry means birds like chicken, hen etc. they are categorized as [a] layers [b] broilers [c] parent stock (hatchery). Under Poultry insurance, ‘Good Features’ discount of 5% is allowed for farms having good features like having own veterinary officer, dead birth disposal system and sophisticated equipments etc. The insurance is on flock/lot basis and not single bird basis. No identification of individual bird is required. Insurance is similar to cattle insurance i.e. death is covered due to accident or diseases only. Exclusions include transport by any means, natural mortality or unknown causes, improper management or overcrowding.

Agricultural Pumpset Insurance

The insurance is for centrifugal pump sets of upto 25 HP (electrical or diesel) of approved makes used for agricultural purpose. The policy covers loss due to unforeseen and sudden physical damage by the perils of: fire, lightning, riot strike, malicious damage, terrorism, mechanical or electrical breakdown, burglary [by violent forcible entry and provided the pump set is kept in a locked enclosure]

a.   Claim intimation letter to insurer

b.   Repair estimate on bills ( in case of damage)

c.    Police Report ( in case of burglary)

d.   Survey report