Page 25 - Insurance Times May 2024

Implications & Considerations insurance industry, with far-reaching implications for
individuals, insurers, and society at large. By harnessing the
Addressing Privacy Concerns: Transparency and ethical use
power of technology, data, and behavioural insights,
of personal health data are paramount. Insurers must
wellness-linked underwriting has the potential to
ensure robust data security measures and provide individuals
revolutionize the way health risks are managed, and
with control over their data.
insurance products are designed and delivered. As the
momentum towards a more holistic and preventive
Ongoing Innovation and Collaboration: Refinement of approach to healthcare continues to grow, wellness-linked
methodologies for assessing and incentivizing wellness underwriting is poised to play a central role in shaping the
requires collaboration across stakeholders. This involves future of insurance in India.
developing sophisticated algorithms, designing engaging
wellness programs, and fostering partnerships with relevant The vision of insurance companies reaching out proactively,
entities. perhaps even sending ambulances before a health
emergency occurs, is not as far-fetched as it once seemed.
The evolution of wellness-linked insurance underwriting With wellness-linked underwriting at the helm, insurers are
represents a significant paradigm shift in the Indian not just protecting lives but actively enhancing them.

Health plans: Is it wise to opt for monthly payments?

Insurers have started promoting monthly and quarterly says Siddharth Singhal, business head-health insurance,
premium payment modes in an effort to make health plans Policybazaar.com.
affordable for all. Besides, they are also offering zero cost
Also be aware that you might end up paying higher on an
EMI (equated monthly instalment) options now. The idea aggregate basis, "The overall premium outgo in the monthly
seems to be appealing for many. Data obtained from
or quarterly option could be 3-4% higher than the annual
insurance distributor Policybazaar shows that 33% of young
option, but some insurance companies do not charge extra,"
salaried individuals (aged 26 to 35) prefer the monthly
says Singhal.
payment mode when purchasing such a policy for the first
time. Interestingly, the trend is more pronounced in tier-III How hospitalization works Consider a scenario where you
regions, where 44% of individuals have opted for monthly have paid four monthly premiums. In case you are
payments, compared to 31% in tier-2 cities and only 23% in hospitalized in the fifth month, the insurer will deduct the
metros. premiums for the remaining 8 months from the approved
claims amount before settling the claim. What if the claims
While monthly and quarterly payment options help people in
amount is lower than accumulated premiums so far? You
managing their cash flows, financial advisers have warned of will still have to pay residual premiums before the claim is
the risks involved. Swapnil Satish S., senior insurance advisor
settled.
at Ditto Insurance, relates the experience of one of his clients,
who opted for the monthly option for his parents' insurance "One of my clients had outstanding premiums that was
policy. The premium amount was to be auto debited from his greater than the claim amount. The insurer denied the claim
debit card every month. "Due to some strictures issued by for this reason. They had to pay the balance amount from
the bank regulator on card payments, the auto-debit failed. their pockets," said Nisha Sanghavi, founder of Promore
My client realized this 25 days after the due date. The policy, Fintech. "Most of my clients come and say they want to buy
however, could not be revived and he had to buy a new the monthly plan but aren't sure of the caveats"
policy. In the process, his parents lost all continuity benefits If you are indeed going for the monthly option, here are two
available on the earlier policy," he says. things to keep in mind. "Link your payments with your main
To be sure, insurance companies offer a grace period of 15 bank account and not credit or debit cards because in case
days from the payment due date during which you can make your card expires, you may miss the payment. Secondly,
the payment. Once the grace period is over, your policy will ensure that your own phone number is registered with the
lapse and you will have to buy a fresh policy altogether. "In insurance company because you will miss reminders from
case you get hospitalized during the grace period, the the insurance company," says Mahavir Chopra, founder,
insurance company will not be liable to accept your claim," Beshak.org. (Refer to Mint)

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