Tag: coverage

Niva Bupa aims ₹5,000 cr gross written premium by 2023-24

Banking & Finance

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Niva Bupa Health Insurance Company Ltd (Niva Bupa), a standalone health insurer, on Monday said it aims to achieve a gross written premium (GWP) of ₹5,000 crore by 2023-24.

This timeline is now one year ahead of the FY 24-25 period earlier indicated – for achieving the ₹5,000 crore GWP milestone – by the senior management in an interaction with BusinessLine in July this year.

Given the strong growth seen in the last 24 months, the company is now looking to close the current fiscal with GWP of ₹2,700 crore against the earlier projected level of ₹2,500 crore.

Niva Bupa, which was formerly known as Max Bupa Health Insurance, also said on Monday that it wants to bring as many as 10 million people of the country under the ambit of health insurance by the end of FY23-24.

Targets covering more people

This standalone health insurer’s MD & CEO, Krishnan Ramachandran, had in July indicated to bring 10 million people under health insurance by 2024-25.

Niva Bupa, which is currently having a presence in 350 cities, will further increase its presence to over 600 cities by FY23-24, it said on Monday.

“We are overwhelmed with the growth seen in the last 24 months. We are aggressively expanding our direct and digital partnership with massive regional expansion helping us to maintain rapid growth. We are fully committed to accelerating the adoption of health insurance across the country, making quality healthcare more accessible to the people,” Krishnan Ramachandran, MD&CEO, Niva Bupa said.

Niva Bupa is a joint venture between Fettle Tone LLP (an affiliate of True North Fund VI LLP), a private equity firm, and the Bupa Group, an international healthcare company. True North owns 55 per cent shareholding in Niva Bupa, while Bupa owns 44 per cent equity stake. This standalone health insurer is increasing its footprint pan India through its bancassurance partnerships with 15 banks.

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How Saral Jeevan Bima fares among term plans

Personal Finance

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Term plans are supposed to be simple products in the life insurance space. But life insurers add different features, pay-out options and other conditions, making the selection of a term plan difficult, prompting the regulator, IRDAI, to come up with Saral Jeevan Bima.

The objective of this standard term policy is to offer simple basic life cover for policyholders across income categories. With a few insurers introducing the standard term policy in their menu, we discuss their offerings.

Cost of the cover

Saral Jeevan Bima is a plain vanilla term cover that pays the sum assured (SA) in lump sum to the nominee in case of death of the policyholder during the policy term. The policy is offered for a minimum SA of ₹50,000, up to a maximum of ₹25 lakh.

According to industry experts, the underwriting process is one of the main factors influencing the pricing of these standard products, given that the coverage is the same across insurers. For instance, Saral Jeevan Bima offered by SBI Life would cost a 30-year old individual — with a sum assured of ₹25 lakh — a premium of ₹12,479 per year. SBI Life requires an individual to undertake a physical medical check-up.

On the other hand, PNB Met Life’s premium for the same cover works out to ₹6,278 per year and doesn’t require any medical assessment. Some insurers offer tele medical facility. For instance, ICICI Pru Life, for the same ₹25-lakh cover (30-year individual), conducts a tele medical check-up before issuing the policy and the premium works to ₹9,428 per year. While medical assessment benefits the policyholder (by reducing the chance of rejection of claim in the future on medical grounds), it bumps up the premium.

The pricing of the policy is not only based on medical assessment but also depends on the income category (whether salaried or self-employed), profession and age. The higher your age, the higher will be your premium.

However, if you compare Saral Jeevan Bima with other term plans in the market, the premium seems high. For instance, the premium for Edelweiss Tokio Life’s term plan Zindagi Plus is ₹4,434 for a ₹25-lakh cover (30-year individual), while that for Saral Jeevan Bima under the same insurer works out to ₹8,259.

According to Indraneel Chatterjee, Co-Founder and Principal Officer, RenewBuy, “The premium for the standard product appears relatively high because the other term planscater to individuals usually in higher income brackets, for whom insurers will be in a position to absorb the underwriting costs and risks, given the higher coverage.” The minimum cover offered by most term policies in the market is over ₹25 lakh whereas for the standard product, the maximum coverage is itself only ₹25 lakh. For instance, in SBI Life’s eShield plan, the minimum cover is ₹35 lakh, with no limit for maximum cover.

Chatterjee further adds, “ Saral Jeevan Bima caters to those in the low and mid-income category, mostly self-employed, which explains the stark difference in the premium, though the on-boarding process is simple.”

 

Our take

You can consider this standard term plan for basic protection if you are self-employed or belong to a lower income category.(say, earning less than ₹5 lakh a year)

Though most insurers offer term plan for a minimum cover of ₹30 lakh, a few do offer SA starting at ₹25 lakh, including Max Life, PNB Met Life, Kotak Life and Aegon Life. Then in such cases, it makes sense to compare premium offered by other term plans by the insurer for more or less the same or additional cover.

But remember, as a general rule, it is good to have a cover that is at least 10-25 times your annual income. This should also be reviewed periodically, as and when your income and liabilities increase.

Although two riders — accident death and permanent disability benefit — can be offered with the standard cover, so far, no insurers have offered these.

So, all things considered, do compare the coverage, riders and other features of different offers before signing up a term policy.

For a detailed analysis of Saral Jeevan Bima, look up All you wanted to know about Saral Jeevan Bima (https://tinyurl.com/Saralbima)

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What does standard insurance policy mean

Personal Finance

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Two neighbours’ daily routine of watering plants leads to an interesting conversation.

Sindu: Each plant is unique and has its own requirements in terms of sunlight, water and nutrients.

Bindu: Yes. There is no standard procedure to follow when it comes to plant care.

Sindu: I agree. I think that’s why gardening is an art. But in other matters, standardisation might work for the better, like in insurance.

Bindu: Yes, you are right. It is so difficult to understand every insurance product and its features, what it covers, what it doesn’t, and finally make a choice.

Sindu: That’s true. In recent months, the insurance regulator IRDAI has introduced guidelines for standard insurance policies to be launched by insurance companies. These products will help overcome the challenge you just mentioned.

Bindu: By standard policies you mean those where the coverage is the same across insurers, right?

Sindu: Yes. They are same not only in terms of coverage, but also other features, including riders, policy distribution methods and policy names.

Bindu: Ok. What are the standard products that we have?

Sindu: So far, the regulator has introduced Arogya Sanjeevani (standard health policy), Saral Jeevan Bima (standard term insurance), Saral Pension (annuity product) and other products such as personal accident cover and home insurance. IRDAI has even laid down the guidelines for standard Covid-19 policies Corona Kavach and Corona Rakshak. Standard cyber insurance cover too is likely to be launched.

Bindu: Okay. If it is the same features and coverage across insurers, it doesn’t matter which insurer we choose, does it?

Sindu: May be not! While IRDAI has laid down the guidelines for coverageand features, the premiumto be charged for the policy is left to the discretion of the insurer. Hence, you can select an insurer based on the premium charged.

Bindu: Oh! I didn’t know that the premium could be different with each insurer.

Sindu: There is a stark difference in premium among the insurers for the same policy. This can be due to the difference in factors such as the on-boarding process, medical check-up, network hospitals and claim settlement processes followed by each insurer.

Bindu: But whatever said, these standard policies come in handy for those who don’t have any basic policy and for those who don’t have any clue on insurance policies or selection.

Sindu: That is so true. Basic insurance is better than nothing at all.

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