M7: OTHER KEYFINANCIAL PRODUCTS
Ø Other financial needs
o Other reasons for buying insurance
§ Living too long
§ Vulnerable to illness
o Health insurance plan pays individual and their family expenses incurred in event of
§ Hospitalization,
§ Critical illness
§ Post hospitalization care
o Health insurance plans are annually renewable policies.
o The cost increase as the person gets older.
o Insurance riders bring additional benefits at nominal costs.
o Riders help in the customi9zation of an insurance policy
o Retirement plans help the individual maintain a similar lifestyle post-retirement.
Ø Features and benefits of other key products
o Health plans: four main types of health insurance plan:
§ Individual health plans
§ Family floater health plans
§ Group health insurance plans
§ Daily hospitalization cash benefit plans.
o A family floater is different from an individual health plan.
§ Individual
§ Spouse
§ Children
§ Parents
§ Insurance company can specify number of people that can be covered
§ Group health insurance provides health cover to employees of a company.
§ in some group health policy even the families of the employees.
§ Daily hospitalization plan fixes an amount on a daily basis in event of hospitalization the plan fixes an amount at the time when the policy is taken.
§ Amount is paid of the number of days insured is hospitalized.
§ Amount is irrespective of actual amount spent in hospitalization
§ Amount is additional amount paid apart from lump sum that maybe paid of surgery and/or critical illness.
§ Policy terms and condition specify total number of days in year it covers.
Ø Features and benefits of health plans:
o Premium pricing in health insurance depends on
§ Age
§ Fitness
§ Habits
§ Family medical history
o The plan requires the insured to go through medical examinations.
o Premium paid at younger ages is not very significant.
o Premium increase as the policyholder gets holder.
o Health policies cover pre-existing illness after specified time period called waiting period.
o Health products of insurance companies offer a no claim bonus – discounts.
o Health insurance plans often have some permanent exclusions.
o Health plans offer treatment immediately.
o Some health plans offer cash less facility.
o Cashless facility plans require photo identity cards it allows the insured to admit in network hospitals.
o It allows the insured to admit in network hospitals.
o While treatment is going on approval is given by insurer to healthcare service provider
o In case of admission to a non-network hospital, insured settle hospital bill themselves and later reimbursed by insurance company
o From company to company exclusion in such polices vary.
Ø Riders
o Riders help enhance the quality and extent of cover. Common types of riders are
§ Accident death benefit rider,
§ Term rider,
§ Critical illness rider
o Accident death benefit rider provides additional amount over and above sum assured.
§ If death happens due to accident, additional amount is paid apart from policy sum assured.
o Accidental death is defined as ‘death as a result of external, violent, unforeseeable, & visible means”
o Term rider is used to enhance death cover amount in a policy at a nominal cost.
§ If death happens, additional amount is paid apart from policy sum assured.
o Critical illness rider provides payment of specified amount on diagnosis of a critical illness as lump sum.
o The illnesses cover is a list of CI’s given by insurance company in the policy.
No comments:
Post a Comment