GENERAL INSURANCE BLOG

Telematics in car insurance is used by integrating telecommunications and informatics to understand a driver's risk profile and help create insurance plans in which the premium is charged according to the usage of the car.

Insurance companies consider several factors, such as the distance covered, frequency of vehicle use, average speed, driving style, etc., to arrive at the appropriate premium to charge for the respective customer. Let us understand telematics car insurance in detail.

How does it work?

Once a telematics device is installed in the car, it makes a complete note of the car’s movement and distance covered, when, and how it was driven. The device also tracks acceleration style and habits, braking patterns, average speed maintained, etc. The insurance companies analyse all this data and create the driver's risk profile. They then arrive at the fair premium that a particular person should be charged.

A boon for the insured?

Two cars purchased in the same month or a gap of a few days command the same premium for the regular insurance policies, even if the driver's driving style differs. Some drive cautiously and efficiently, while others may drive rashly and negligently. There is a need for rewarding good driving style. Insurance companies have developed a genius idea of telematics car insurance in which we have to pay the insurance premium according to our driving style.

Usage-based car insurance is a boon for the insured as it motivates the users to drive efficiently. They become aware of their driving habits and realise how they can improve.

Good driving behaviour is rewarded in such car insurance, and car users enjoy lower premiums on their policy. A good driving style will also help to achieve higher fuel efficiency, lesser wear and tear on the car, and lower maintenance costs for the owner. Moreover, a cautious driver is less likely to get into a car accident.

Telematics car insurance is a boon for the insured who use their car less and still have to pay high premiums. This helps them to pay a lesser premium as the premium also depends upon the distance covered under such policy.

A boon for the insurer?

Telematics makes the drivers drive at appropriate speeds and avoid indulging in high-speed and rash driving. This means that car accidents should go down considerably, resulting in a much lesser number of car insurance claims.

Therefore, the insurance company will stand to benefit from such car insurance. Lesser claims mean lesser expenses, resulting in higher profits for them. Also, such insurance will provide a lot of driving data to the insurance companies. They can analyse it and offer customised insurance policies to their clients. This will help them create an improved clientele and increase their market share and profits.

Car owners should consider several questions, such as the frequency of their car usage, driving style, and premium amount compared to their existing car insurance policy.
Such car insurance is a boon for both the insurer and the insured. Time is not far when technology, combined with telecommunications, will take over, and telematics car insurance will become the best choice among all the available options in the market.

*Telematics car insurance is not much prevalent in India as of now. It is just in the introduction stage, and the concept is new to most users. Hence, it will take some time to evolve and spread. Therefore, contact your insurance provider for further details.

Click HERE to buy a reliable car insurance policy.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.

Recent studies indicated a 0.4% penetration rate of health insurance in India in 2022. The true gravity of the situation is not felt when viewed in isolation but when compared to the 4.1% penetration rate in the US. Experts pin this lag on inaccessible insurance products and a general lack of awareness in the country.

Misinformation is undoubtedly the most significant concern that the insurance industry faces. An excellent example of misconceptions leading to losing out on benefits is unawareness regarding the restoration benefit offered under health insurance in India. If you have ever wondered about what happens when you need additional coverage after raising a claim and exhausting the insured sum within the policy period, here are all your answers about the restoration benefit, its advantages, and the types.

What is the restoration benefit?

A restoration benefit may be the most significant inbuilt feature insurers offer when purchasing the best health insurance policy in India. It is a benefit that is of greater significance in the case of family floater policies.

According to widespread misinformation, most policyholders believe they can no longer raise a claim in case of a second instance of hospitalisation against the same policy during the policy period. However, if your health insurance provides restoration benefits, you are insured for a greater sum than the insurance policy states. Your best health insurance in India offers a refill benefit, allowing you to claim up to 100% of the insured sum even after it is exhausted.

And, if your policy does not provide this feature, you can purchase a restoration benefit add-on to act as a security net in case of multiple occurrences of the event you are insured against during the policy tenure.

Types of restoration benefit.

1. Partial exhaustion:
As the name suggests, upon partial exhaustion of the insured sum, the restoration feature comes into play, renewing the insured sum to the maximum amount stated in the policy. If you have to purchase the add-on feature, it is preferred to have this type of restoration benefit.

2. Complete exhaustion:
The restoration feature only activates upon using the entire insured sum. Commonly, health insurance providers offer this type of benefit to policyholders since it minimises their exposure to risk by making restoration only applicable after the whole insured sum is exhausted.

Critical attributes of restoration benefit.

While the feature offers excellent benefits, you must not blindly purchase it or rely upon it without being aware of some of its essential characteristics:

1. The restored insured sum is not eligible for utilisation in the renewed policy period, irrespective of whether or not it is used in the relevant period.

2. Depending on your policy’s fine print, the restored amount may be up to 100-150% of the insured sum, depending on the cause for raising a claim.

3. The benefit does not apply to the first claim during the policy period but becomes applicable from the second claim onwards.

4. In the case of individual or family floater plans, multiple policyholders cannot enjoy the benefit of the restored insured sum simultaneously.

5. While it provides a backup in emergencies, it does not suffice as a replacement for increasing the insured sum in case of critical diseases or high-risk family members covered under the policy.

While purchasing the best health insurance policy in India, it is essential to check if the policy offers restoration benefits within the policy framework. Although it may not be a substitute for the need to increase your insured sum in your individual or family floater plan, it certainly provides a backup option to rely on in case of emergencies to cover insurance claims.

Click HERE to buy the best health insurance policy in India.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.

Most investments are made to reap future benefits or protect yourself from contingent liabilities that may arise. Buying health insurance is one investment you must make to protect yourself financially in the present times. Even though several online health insurance companies deliver their services to your doorstep, buying health insurance has never been simpler. Surprisingly, about 30% of Indian households still do not have any health insurance coverage.

Experts believe that mass misinformation, complex policy wording, and the rising cost of premiums are to blame for the low figures. This requires the intervention of online health insurance companies to clarify and spread awareness among the public.

However, if the increasing cost of health insurance makes you think before purchasing or renewing your policy, read on to learn about the factors influencing the premium rates and whether you can manage them.

1. Inflation:
Unless you have been living under a rock, there is no way you could have missed out on the discussions regarding the skyrocketing rates of medical inflation globally.
The increased prices of healthcare services and consumables and an imbalance in demand and supply of equipment and professionals are also responsible for the rising costs of hospitalisation. This has directly increased premiums to minimise the risk online health insurance companies bear. But this trend is unlikely to settle, making premiums inevitably pricier each year.

2. Claim history:
Suppose you have raised frequent claims over the years. In that case, you are classified as a high-risk policyholder since renewing your policy will likely result in more significant payouts for the insurer. However, this does not apply to all online health insurance companies. Ensure you check the fine print of alternative policies and choose one that does not include a clause of increasing your premium with each claim you raise.

3. Age:
With age, one’s immunity weakens, making one susceptible to illnesses. Older people are at greater risk of diseases and hospitalisation, making them high-risk clients for health insurance companies, which is why they are charged higher premiums. Paying a higher premium means better coverage and a greater insured sum. Do not compromise on protecting your future by skimping on the premium, and ensure your policy provides comprehensive coverage against various illnesses and a sizable insured sum.

4. Policyholder’s medical history:
Online health insurance companies ask for a complete medical record of potential policyholders to assess the risk of insuring them. A health check-up before approving your policy informs them of general well-being and any pre-existing conditions that may lead to frequent hospitalisation, making you a high-risk client.

5. Add-on covers:
Depending on your age and medical history, you may purchase add-on covers that protect you against specific conditions or events. While they make your policy more comprehensive, they inevitably make it pricier.
However, it is best not to compromise your health needs and skimp on your health insurance coverage. Ensure you check your policy wording to purchase an add-on only when necessary.

Insurance buyers are advised to be alert and responsible while investing in health insurance. The rising premium is a concern, but a little alertness and awareness today can help in the long run. Here are a few key takeaways for managing rising health insurance premiums in India:

• Choose a comprehensive health insurance plan.

• Compare policies and opt for the best online insurance companies with the required features.

• Maintain a healthy lifestyle and use cashless facilities.

• Review coverage annually and look for discounts and special offers.

• Seek advice from a financial advisor.

Health insurance is an essential investment for your physical and financial well-being. While renewals may get pricier annually, a prudent policyholder can always get the most significant value from his premium payment by doing due diligence. Ensure that you initiate the policy renewal process before it is slated to lapse. Review the offerings of multiple online health insurance companies before choosing to renew or porting it.

Click HERE to buy the best health insurance plan with an attractive premium.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.

Tobacco has been killing people for centuries, but people still don't consider it one of the biggest public health dangers the world has ever faced. Smokers are susceptible to various chronic and fatal diseases such as lung cancer, respiratory diseases, asthma, heart diseases and stroke, chronic obstructive pulmonary disease (COPD), and osteoporosis. Moreover, female smokers may also face complications in pregnancy.

Hence, it is imperative that smokers should opt for the best online health insurance to ensure the right coverage during an emergency. Here's all you need to know about health insurance for smokers.

1. Need and importance:
India has a large population of around 120 million people that smokes. Moreover, smoking kills over 8 million people every year. They are also prone to various fatal diseases that need expensive long-term treatment.
Therefore, smokers should opt for a good health insurance policy. It will help them protect their hard-earned money and prepare them financially for the enormous hospital expenses they may incur because of illnesses caused due to their smoking habit.

2. Premium:
Health insurance policies for smokers usually command around 30%-40% higher premiums than other regular health insurance policies. This is because a smoker is more susceptible to diseases and gets hospitalised than a non-smoker. Many risks are involved in providing a health insurance policy to a smoker. Insurance companies offset this risk by charging a higher premium for covering a smoker's health.
The premium also varies according to the number of cigarettes a person smokes in a day or a week. A smoker who smokes more will have to pay a higher premium than a smoker who smokes fewer cigarettes in a day. Also, insurance companies increase the premium on a smoker's policy if he suffers health problems later on due to smoking.

3. Disclosure requirements:
A smoker must disclose his smoking habits and the number of cigarettes he smokes in a day when he buys the health insurance policy. Even if a person smokes just one cigarette daily, he should disclose it to the insurance company. An insurance company can reject the claim on the grounds that vital information relating to health was wilfully non-disclosed at the time of buying the online health insurance policy. They can also declare the policy null and void.
If a person turns a smoker after buying a health insurance policy, he should inform the insurance company about the same. This will make his claim settlement process hassle-free. The insurance company may modify and increase the premium and ask for a medical test too.

4. Benefits:
A health insurance policy for a smoker has numerous advantages. Smokers can need expensive treatments as they can catch diseases fatal to life, such as cancer. The policy will keep them financially protected and cover their hospital bills in such a situation. Moreover, they can enjoy cashless treatment benefits with their policy. Such policies also come with tax benefits on a smoker's premium under Section 80D of the Income Tax Act, 1961.

A health insurance policy should be purchased as a shield by any smoker as there are high chances of them being diagnosed with life-threatening diseases of the lungs, chest, and even cancer at some stage of their life. Smoking kills people, and the policy can provide financial support to smokers in times of medical emergencies.

It is always good for smokers to become aware of the dangers of tobacco and quit smoking. In addition, they should do adequate research and opt for the best online health insurance policy. They should go through minute clauses and details of their policy that may be affected due to their smoking habit. This will ensure financial protection, stability, and hassle-free claim settlement at a later date.

Click HERE to buy an online health insurance policy.

Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.