Frequently Asked Questions-Insurance

This blog provides answers for Insurance-FAQs

What is Insurance

Insurance is a compensation payment agreement or guarantee provided by a company to an individual/group in case of loss, damage, illness or death in return of premiums paid by individual/group.

Why we need Insurance

I have explained all the main reasons why we need Insurance in my other Blog, Why insurance is Important

In summary I personally believe the reasons Ensure security for our loved ones by buying Insurance and Reduced stress in life by buying insurance are more important than any other reasons in this list. After all these are the two things, we all look for in our life.When is the best time to buy Insurance

If you are 18 years of age and you have steady income to pay the regular premiums, then you are ready to buy insurance.

Basically, taking insurance plan means you are transferring the risk to your insurance company.

What are the different types of insurances

Health Insurance, Conventional Life Insurance, Motor Insurance, Property Insurance, Travel Insurance

How much Insurance should we buy

Normally it is advised to buy a life cover of 10 times of your annual salary. That is the minimum advised amount. But the ideal amount is 20 times.

For example your annual salary is 1 Lac. Then it is ideal to by life cover for 20 lac.

Who Controls insurance companies in India

IRDAI – Insurance Regulatory And Development Authority Of India

They set the rules, regulations and guidelines for insurance companies. And, they monitor the activities that happen within insurance industry in India.

Their main interest is to secure fair treatment to policyholders.

http://www.policyholder.gov.in/Faqlist.aspx?CategoryId=81

What do insurance companies do with the collected premium money

I think some of us have this doubt that where is this money go that the insurance providers collect from the buyers,

They invest in low risk Bonds, also in stocks.

What is group cover insurance

You probably heard this from your employer that you are covered in group or the company you work for took a group cover insurance.

That means your employer is paying a lump sum amount as premium against the risk of all their employees and when something bad happens to one of their employees then it will be covered from that group insurance.

But normally these group insurances provide limited benefits when compare to individual policies.

What to look for when buying a policy in India

The insurance provider must be registered with IRDAI , here is more information about IRDAI https://ainsuranceplace.com/about-irda/

What is the claim clearance rate of that insurance provider?

Benefits covered by different companies

Premium amounts comparison.

Where to complain when we have issue with Insurance company

Insurance- Ombudsman

Below is the link to names and addresses. There are 17 Ombudsman Centres, all over the country,

http://ecoi.co.in/ombudsman.html

If there is a complaint against insurance companies, you can write an email to complaints@irda.gov.in

What happens if we give incorrect information when buying insurance

If anyone advised, you to give wrong/ incorrect information during buying an insurance policy to save premium amount please avoid that suggestion.

The reason is simple you will pay the lower premiums because of the incorrect information you provided but when it comes to claims the insurance companies cross check your status again while paying your claims then it is obvious that your claim application gets rejected.

Who are Insurance aggregators, Insurance Agents, Insurance Brokers and Third-party Administrators

Insurance aggregators: The companies or Individuals who provide data to the insurance buyers by comparing the plans/premiums/benefits of different insurance providers. Example : Policybazar.com

Insurance Agents: They sell only one company policies to their buyers. And they represent insurance companies.

 Insurance Brokers : They buy insurance policies for their clients. They represent the insurance buyers. Example : Mahindra Insurance Brokers

Here is the full list of registered insurance brokers with IRDAI https://www.irdai.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo2120&mid=9.3.7

Third party Administrators: These are the companies who administrate the insurance policies/plans for the insurance companies. So here the actual insurance companies are the clients to these Administrators.

Is low premium means good insurance product

No, the premiums are always set based on the risk that is covered. So low premium does not mean it is a good insurance product and the buyers should not buy it just by looking at the premium.

Is it compulsory to take life Insurance to get home loan

No, but it is good for the borrowers to take insurance to relieve their family from this loan when something unexpected thing happens to the borrower.

What is Insurance premium

Insurance premium is the amount that an individual pay to insurance company to get insured for a risk.

The premiums are paid monthly/quarterly/yearly based on the agreement between insurance buyer and the insurance company.

Is it safe to buy insurance online

Yes, all the insurance companies these days allowing the insurance buyers to buy online. And it is a very simple and easy way. If you have any questions during the purchase of the insurance, they also provide online support.

If you buy insurance online from reputed companies then it is safe. Based on the insurance type Health, Life, Motor the process will be different. For example, the health check-up may be required for health insurance.

Is it safe to pay premium money online

Yes, premium money can be paid online. All the insurance companies provide secured payment gateways, so we do not need to worry about the security of the payment.

Can we cancel existing Insurance policy

Yes, one can cancel the policy within 15 days from the date of the receipt of the policy document.

What is Insurance repository

Insurance repository is electronic /digital storage of insurance policies , nothing but a databases of insurance policies. This allows the insurance holders revision that is renewal easily.

Below are the insurance repository entities in india

  • CDSL Insurance Repository Limited (CDSL IR)[4]
  • Karvy Insurance Repository Limited[5]
  • National Insurance-policy Repository[6] by NSDL Database Management Limited
  • CAMS Insurance Repository Services Limited[7]

What is Insurance Underwriting

Insurance underwriters calculate the risks of clients and they decide how much the coverage the client should be receiving in case of a damage. They also decide how much premiums should be paid for a certain coverage.

What is Insurance surveyor / What an insurance surveyor does?

Insurance Surveyor estimates the loss incurred due to a damage and suggests how much insurance can be paid to the insured for that loss.

I am a certified insurance broker. I am a passionate blogger mainly focusing on insurance. I intend to create or increase the awareness of importance of insurance in India by writing useful blog posts. Also i write my blog posts in a simple language so that the readers do not overwhelmed by the terminology that is being used in insurance sector.

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