NEW RULES Reliance Life to launch 25 products in 3 months

Mumbai: Reliance Life Insurance, part of the Anil Ambani-run Reliance Capital, on Thursday said that over the next three months it would launch 25 insurance products under the new rules that are applicable from January 1. Subsequent to that, it also plans to approach the Insurance Regulatory and Development Authority (IRDA), the sector regulator, for its nod to launch more products. 

    The company also said that it is increasing its focus on more customer-centric initiatives, some of which are being adopted from its foreign partner Nippon Life, the largest insurance company in Asia. "We have received most of 
the product approvals from IRDA and will be launching these over the next three months," said Anup Rau, CEO, Reliance Life Insurance. "We will largely focus on traditional plans and continue to provide simple and need-based solutions to customers." 
    The additional products would include online term 
policies, some health insurance, pension and ULIP products, which will help it expand its product suit. "Traditional plans will contribute 80% while the unitlinked plans will contribute around 20% to the top-line in the new product environment," Rau said. 
    The new guidelines have segmented life insurance products into three broad categories — traditional insurance plans, variable insurance plans and unit-linked insurance plans. 
    Rau feels that the new regulations would help serious distributors to remain in the industry, improve the quality of advice, take the market more towards long-term policies, and also keep a check on recklessness with capital that was visible in some cases. "People will be more prudent with their capital now," he said. As part of its increased focus towards customers, Reliance Life has started a pre-insurance verification process.

CEO Anup Rau

Your vehicle insurance details will soon be just an SMS away

HYDERABAD, NOV. 6:  

Soon, when a traffic policeman asks for your car or bike insurance, you won't have to worry if you do not have the papers with you. A simple text message from your mobile phone will retrieve the details instantly, thanks to an IRDA initiative.

"We will be providing vehicle insurance information to all the stakeholders through Short Messaging Service (SMS) and web-based applications of the Insurance Information Bureau,'' said M. Ramaprasad, Member (Non-Life), Insurance Regulatory and Development Authority (IRDA), speaking to Business Line on Wednesday.

The beta version of the service has already been launched while the web-based application can be accessed anytime on the portal of the Insurance Information Bureau.

The database of all insured vehicles across the country is now available in digitised form and regularly updated. Until now, verification was done only by checking a hard copy of the insurance policy.

The digital service is beneficial to all the stakeholders. . "In case of an accident, victims can get to know the insurance company details if they know the number of the vehicle,'' said the IRDA official.

"We are talking to Road Transport Authorities and police in different States to share data so it will be easy to track down uninsured vehicles,'' he said. Some components of motor insurance, such as third-party insurance, are mandatory.

It would also help insurers, which sometimes have to grapple with multiple claims in damage and theft cases. This can be brought down if data on claims are available.

POLICY DATABASE

As the system will have a database of insurance claims made/honoured, cases of bad or negligent driving can be ascertained by the insurers before deciding on the premium to be charged.

IRDA is monitoring the submission of data by each underwriting office on a daily basis to ensure the smooth functioning of the system.

Med insurance: Can’t pre-declare rates, cos tell HC

Mumbai: The General Insurance Council (GIC) representing 27 non-life insurance companies told the Bombay high court on Thursday that it cannot pre-declare package rates for 42 standard ailments in policy documents.      A division bench of Chief Justice Mohit Shah and Justice M S Sanklecha was hearing a public interest litigation filed by activist Gaurang Damani on medical insurance woes faced by people. 'Pre-declare insurance rates for transparency'  Mumbai:An HC bench of Chief Justice Mohit Shah and Justice M S Sanklecha at a hearing on October 22, 2013 had made insurance companies parties to a PIL on medical insurance woes, seeking that they pre-declare their package rates.      Expressing the inability of the firms to implement the court's order, GIC's advocate Asim Vidyarthi said: "It is difficult to grade hospitals. Also, hospitals do not come under any common regulatory authority and do not accept package rates proposed by insurance companies."      He also said insurance firms cannot work out package rates for "so many ailments". This was contradicted by Damani, who said that the National Insurance Company has a contract with the state for the Jeevandayi Arogya Yojna, where they have declared package rates for 971 procedures. Vidyarthi sought time to file a detailed affidavit elaborating reasons for refusal to pre-declare package rates.      Damani submitted that package rates should be pre-declared in order to bring transparency to the consumer who will know the exact amount to be reimbursed. "Then the consumer can decide whether he can take treatment at a hospital like Breach Candy or a local nursing home," said Damani, adding that a dispute on this has been going on for several years between hospitals and insurance firms. "Insurance companies can declare package rates according to the policy's sum assured," he added.      The court also asked the Insurance Regulatory and Development Authority (IRDA) why it does not put a clause on pre-declaration in the regulation itself so that insurance firms have to comply. IRDA's advocate Paritosh Jaiswal said the authority accepts the court's order but insurance firms have expressed their inability to do it. "You are not doing it because you think it is the court's baby and not yours," remarked Justice Shah. The next hearing is on January 9, 2014.— Rosy Sequeira

WOMEN IN CHARGE ‘Social biases raise challenges for women’

Bangalore: "If you look at where I have been lucky, it is in my underlying drive to keep going when things become difficult, because I wanted to be a part of making something happen, of being involved in the healthcare world." 

    That's Terri Bresenham, president & CEO of GE Healthcare India. Bresenham came to India two years ago to take on this role. Prior to this, she was vice-president of molecular imaging for GE Healthcare globally, where she led the company's exploration into detecting disease earlier. 
    Bresenham joined GE, soon after her university, as an Edison Engineer. GE's Edison Engineering Development Programme is an intensive programme for college graduates who have a passion for technology, and a drive for technical excellence. She then progressed through engineering and product management roles, and went on to lead sales & marketing of GE's women health business for the introduction of digital mammography, and GE's Lunar Inc for solutions in osteoporosis and metabolic health. 
    Bresenham has three daughters. She says in her career, some of the most challenging times came when she and her husband decided to start a family. She had her first child four years into her career. 
    "That time, the insurance coverage was for 24 hours in hospital, not from the time you were admitted and up to the birth of the baby. Unfortunately, my first child had a long labour, so I didn't stay in hospital 
very long after I gave birth. I had a healthy baby. You never know how you feel about having a child, but I remember distinctly that after the third day I was feeling bored and wanted to go back to work. I did go back to work fairly soon after that," she says. 
    She also remembers an instance when a male colleague, whose wife was pregnant at the same time that she was, asked Bresenham, "So you're looking forward to staying home?" She replied she was coming back. He said his wife was looking forward to staying home. "I said it's good for her. I asked him whether he was going to stay home. He said of course not. I said that's how I feel." Social biases like these, she says, raises challenges for women. 
    She says the fastest career 
progression in the US happens typically between ages 30 and 40. But that's also the time when couples start families. 
    "I think this is why women have to stay in the workforce during that period even though it's challenging. So much of learning happens in that time frame, you get so many mid-tier roles and responsibilities. If you can survive that, you get enhanced opportunities, can go to whichever level you desire." 
    She said she was able to overcome the challenges partly because of the tremendous support from her husband. "We also had wonderful support structures. We didn't have the support of the extended family, but we had great caregivers who were like adopted family." 
    Bresenham says women in India perhaps face more challenges than women elsewhere. "The social structures are harder for women in India. There are expectations outside work. In Europe and US, there are support structures like day care centres in companies. There are a lot of areas where kids get support from more than just their parents. There is general acceptance of women not being primary caregiver at all times."

NEVER SAY DIE: GE Healthcare India president & CEO Terri Bresenham

Know thyself—the new mantra for lifeloggers

Wearable tech devices now track every move you make — from heart rate and footsteps to calories burnt. Even the number of times you slouch in the office chair is recorded by a sensor. An always-on society is busy converting life into bytes of data     British TV show 'Black Mirror' is about a dystopian future, one that illustrates the dark side of technology and where it can take us if we don't watch out. One of the episodes is set in an alternate reality in which an implanted grain records everything you do, hear, see or experience — creating the ultimate life log.      And we are well on our way there. A life log — or a daily diary — is nothing new but technology has taken the idea and sucked all approximation out of it. It has made it exact: life as a pie chart or a bar graph. How many steps did you walk today? How much time did you spend in transit this month? Did you play enough sport this week? What was your heart rate at 9 am today? What was your temperature? All these questions are being answered by numerous devices strapped on various body parts — from bio-sensing t-shirts and posturecorrecting straps to heart rate monitors and pulse-measuring watches. Taking lifelogging to a new extreme are tiny cameras that automatically take a photo of your existence every few seconds of the day.      "So, do you remember what you were doing this day last year?" asks Vishal Gondal, entrepreneur and angel investor who swears by his devices. "I do because I check in everywhere I go. I can just go to Facebook to see what I was doing. I have over 2,000 food photographs. I can tell you exactly where I was, who I was with, what I ate, how long it took me to get there and every detail of the rest of my day."      Gondal uses a water bottle that gives him a daily target of water intake, a Lumoback that reminds him to sit up straight every time he slouches, a Basis B1 watch that is a wristbased health tracker and a Fitbit Flex that measures his sleep and activity. He is eagerly awaiting Scanadu Scout that can measure all body vitals just by resting on the forehead.      The fascination with what has been described as "turning warm flesh into cold arithmetic" is now a movement — the quantified self movement . 'Numbers don't lie' is the primary motto behind self-quantification. And nothing is more satisfying to a number geek than a pattern. As most converts say — what cannot be measured cannot be managed. And much of self quantification's goal is self improvement. Asfaq Tapia, 30, who works in digital advertising in Mumbai, wanted to lose weight and sleep better. His Fitbit Flex helped him lose 6 kg in five months and change his sleep habits. "I like measurable results. My job involves numbers. I know how many people visit a website also, but I don't know anything about my body. That is the first thing I should be tracking." Tapia is also a member of the self-quantification group in Mumbai that now has 100 plus members.      Kuldeep Dhankar, 34, employed with a telecom company, has been tracking his life since 2005, much before self-quantification became a way of life. He converted his father, an ex-navy man, also. "I gave him this watch that measures heart rates and sends all information to the phone via Bluetooth," says Dhankar.      Gondal also converted his father to a heart rate monitoring watch after his recent surgery. "His resting heart rate went up to 100. When I took all the data to the doctor he was surprised that I could do this. Dad's HR went up in afternoons and evenings. So, they tried a different medicine which worked well," says Gondal.      Most of these self quantification devices veer towards health and lifestyle improvement. Some journaling apps do help users track their daily schedules — time spent with family, at work, in transit, in the park, on the phone — but most are geared towards health analytics. "There was a time when these would be only in the hands of doctors but increasingly these technologies will be in the hands of the consumer. By monitoring groups across geographies on their behavior we will be able to not only prevent but also to predict disease," says Prof Ramesh Raskar, MIT Media Lab, who believes that Fitbit-like devices are only the beginning. Gondal hopes that soon insurance companies also start linking such health measurements toinsurance premiums.      However, relentless quantification can be tiring. Skeptics say that such servility to gadgets erodes the spontaneity to life. Farzana Dudhwala, a 24-year-old PhD student at Oxford University who is studying the relationship between self-quantifying technologies and the self, says that she was bored of Fitbit in two months.      "The device was good to understand where I stood (baseline) compared to what the device said wasgood for me (10,000 steps). So, for instance, if I went for a long walk and didn't take the device with me, I saw that I would get demotivated from the walk and I didn't want that," says Dudhwala.      Self quantification converts understand this danger only too well. Dhankar uses a Withings smart body analyzer (like a weighing machine) that plots a weight curve on how things are progressing. The graph has helped him change his weekend pattern because he noticed that his sedentary weekends pushed up his weight on Mondays and Tuesdays. "But I treat all this data as background info. I am not always looking at it. And that is the self-quantification challenge. You have to see past the numbers," says Dhankar.      Dudhwala is tackling one of the most important aspects of selfquantification — about what it does to the 'self' and whether technology constructs our idea of ourselves and our wellness. "For examples, the Fitbit says that I 'should' take 10,000 steps a day. If you take 11K, do you think you have improved further? It only looks like numbers but it is a sort of self-knowledge through numbers. But I would argue that numbers are just a tool."      So, what could diligent, meticulous logging of every waking and sleeping second lead to? Converts say it could be any sort of life change that you need but cannot see. Gondal says life logs will also mean something to future generations. "Cave paintings were life logging for cave men," he says.

Going abroad? Pay for insurance from own a/c

Mumbai: Buying international plane tickets for family members online is a breeze, but buying overseas mediclaim cover for others now requires advance planning. Insurance companies are insisting that electronic payment for policies must come from the policyholder's own account. 

    Nikhil W, who was trying to buy a last-minute overseas insurance policy for his father, discovered that the online system was not accepting a payment from his account. His parents who were travelling on their own had not activated any electronic payment services. Earlier, he had paid for his parents when he was part of the group that was travelling. 
    Insurers are invoking the principle of 'insurable interest' for rejecting payment through third-party accounts. Insurance interest means that the person buying insurance needs to have a financial interest in the subject of insurance. 
    This restriction is a challenge for those who have not bridged the digital divide considering that online payments are becoming the norm for many categories of policies such as auto, health and overseas travel. Also, in cases of policies where the commission is low, the insurance agent is reluctant to make the effort to collect the cheque. 
    "Any person paying the premium needs to have insurable interest. The insurance policy is a contract between the insurer and the policyholder and third-party cheques are not accepted," said K K Mishra, MD, Tata AIG General Insurance. He added that in the case of people who do not have net banking or credit cards, the company sends across a representative to collect the cheque. 
    According to Sanjay Datta, head of underwriting and claims at ICICI Lombard, the company accepts cheques of family members in family floater policies, but unrelated parties cannot may payments in respect of individual policies. He, too, cites the principle of insurance interest for rejecting third-party payments. In the case of life insurance too, almost all companies — including LIC — require that the online premium be paid from the policyholder's account. 
    According to regulatory sources, the main reason behind the ban on third-party cheques is to avoid disputes. In the case of cheque payment, the insurance company is on risk from the time it receives the cheque. In case the cheque is not honoured, the company can commence recovery proceedings under Section 138 of the Negotiable Instruments Act. But if the cheque is paid by athird party, recovery becomes difficult. 
    However, a retired regulatory official said, "How does it matter if the payment is made by a third-party. The insurance company does not have any problem accepting a demand draft which could have been paid by a third-party or if a third-party has deposited funds in the buyer's account". SEEKING 'INSURABLE INTEREST' 

• Third-party payments are being rejected over the 'insurable interest' principle — person buying insurance needs to have a financial interest 

• So buying an overseas mediclaim for a family member who hasn't activated any e-payment system, like your parents, is becoming tougher 

• Even life insurers like LIC require that online premium payments originate from a policyholder's own account 
• But view in regulatory circles is that this is not needed as insurers do not know who deposited funds in the account

Do Not Forget To Secure Your Child’s Fin Future Boost your term plan, start building a decent corpus to fund higher edu, marriage

 Building a strong financial future for the family should be one of the prime responsibilities of every working individual. However, the fact is "building a strong financial future is not a one night task. It's a long-term process where you have to build it brick by brick", says Ashish Ramesh Bhave, an independent financial advisor (IFA). Here you need to judge your individual financial needs that may include buying a car and a house, own wedding, vacations, having a child/children, their growing up years, education and marriage, and then having a corpus for your and your spouse's sunset years. It may look like a long process, which indeed it is, but if you are not confident enough you can always approach a good financial planner for help. 

    One of the important aspects of the entire exercise is to secure the financial future of your child. "While planning for a good financial future for your child, you have to consider two things: One is how to create the funds by way of smart investing for their present and future financial needs. And second, creating a very strong risk protection plan to take care of any unfortunate event which may happen in your life," Bhave said. 
    "The most crucial part of your planning, and surprisingly the part which is neglected by most of us, is planning for uncertainty," said Shubhangi G Pai, an IFA. 
    "Life is uncertain, and everyone has to plan for it. In case of an eventuality, we should make sure that the child should not fall short of funds. And that's precisely why we need a pure term life insurance plan," Pai said. 
    Financial planners and advisors say most insurance companies have good terminsurance plans to of fer, and given his or her profile, an individual should buy one so that the future of the family, and that of the child in particular, is secured in case of any eventuality. 
    Besides, financial planning for you child should include providing for primary and secondary education, and then building a corpus for higher education. "To build a financial backup for your children, you need to start investing for them soon after they are born," said Bhave. This brings the power of compounding on your, helping realize dreams. "So, it is important to start without thinking that how large or how small the investment could be," he said. 
    According to Pai, education is one thing that no parent would want to compromise on. The main aim is to make them independent and make sure they have a better future. "As things stand now, completion of graduation is close to being affordable, but it is the postgraduation expenses that will most likely burn a hole in your pocket," Pai said. 
    Pai feels that opening a PPF account in the minor child's name should be at the top of one's priority list. In PPF, you are allowed to invest a maximum of Rs 1 lakh. The term of the investment is 15 years and at the end of the tenure, one has an option to extend the tenure by another five years and that too indefinitely. 
    "At the current rate of interest (8.7% compounded annually), you can expect a corpus of approximately Rs 49 lakh at the end of 20 years. More importantly, the proceeds are tax free," Pai said. 
    When one thinks of children's wedding, one of the first things that would come to the mind is gold. 
    "Though most people opt for physical gold, I would recommend buying Gold Exchange Traded Funds (ETFs) instead. Gold ETFs mean buying gold on paper at the same price which you would pay for the physical form. Which means that you would not have to worry about it being stolen or misplaced? But what if you need physical gold at the time of the marriage? It's simple, sell the ETFs, and use that money to buy the jewellery," Pai said. 
NEXT WEEK 
    We would deal with how one can put a financial plan in place to build a corpus to take care of higher education and marriage of a child.

CUTTING COSTS PSU health insurers form third-party administrator

Mumbai: Healthcare service providers are in for some heavy collective bargaining from public sector insurance companies, which pay hospital bills worth close to Rs 4,000 crore every year. The General Insurers' (Public Sector) Association has set up a captive third-party administrator — Health Insurance TPA of India — which will centralize all negotiations with hospitals.      Speaking to TOI, G Srinivasan, chairman, New India Assurance, said that the company has been formed with shareholding from New India, National Insurance, Oriental Insurance, United India Insurance and the General Insurance Corporation. "The priority is to have a strong IT system in place. Once that is done, the company will gradually take over handling of claims from other TPAs," said Srinivasan. He added that the process would start only next year.      A captive TPA will enable  health insurers to meet with directions from the regulator and also the courts, which require them to take in-house decisions in respect of health insurance claims. In the private sector, some of the large companies such as ICICI Lombard and Bajaj Allianz have been managing their health insurance claims inhouse without the use of TPAs.      In the last two years, public sector insurers have made significant headway in bringing down cost of procedures in hospitals. However, despite this, there have been leakages. For instance, hospitals that have agreed for package rates for procedures are working around the tariff by using a loophole where they are allowed to charge more in case of complications arising out of the patient having multiple health issues.      The other issue is group health insurance where the client still calls the shots. Insurers say that wherever the corporate decides on the appointment of the TPA, the TPA does his best to keep employees happy. "Perhaps technology will hold the key in blocking leakages," said Segar Sampath Kumar, general manager and head of health insurance at New India Assurance.

OUT OF REACH High cost deters Mars launch insurance

Mumbai: ISRO has decided against insuring its Mars mission, given the high cost of a cover. Insurers say that the cost of cover for the launch in the international market would have been very high and may have amounted to almost half the cost of the project.      The Mars mission aims to send a 1,350kg satellite to the red planet to analyze its atmosphere and surface and transmit information back to earth. Sources said that the other reason for not going for acover was that this is a scientific expedition, unlike the launch of a communication satellite which has commercial implications.      Speaking to TOI, G Srinivasan, chairman, New India Assurance, which has been the lead insurer for most of ISRO's launches, confirmed that the Mars mission was not insured with them.      "ISRO has taken a decision not to insure its own launches," he said.      The earlier mission to Moon, the Rs 386-crore Chandrayaan-1, was also not insured. The Chandrayaan-1 mission was considered a success although the satellite remained operational for only one year as against the intended two years. In satellite insurance, a mission is either a total loss or a success as what is covered is the launch process and not the operations of the satellite.      The market for satellite insurance is a highly specialized one and only a handful of international underwriters have the capability to provide cover.      Even though the policy is issued by an Indian insurer such as New India, the risk is placed with international underwriters through the process of reinsurance. Indianinsurance companies do not have the capability to cover satellite launches on their own.      In the past, ISRO had taken cover for satellites when the launches were undertaken from foreign locations such as Kourou in French Guyana by Arianespace. In these earlier launches, the premium had amounted to close to a third of the sum insured.      Insurers say that cover for launches from India would be more expensive than those by Arianespace because ISRO is a relatively newer player.

Insurance :1 crore relief for kin of NRI killed in mishap

Mumbai: Ten years after a UK-based family of Indian origin met with an accident that left two of its members dead, the Bombay HC has awarded the surviving family members over Rs 1 crore in compensation. 

    The family was on holiday when a truck rammed into the Qualis in which they were travelling in Rajasthan on July 26, 2003. While British national Dilip Samani and his daughter Janaki (8) died, Samani's wife Aruna, his other daughter Nikita and niece Poonam Gokani suffered injuries. 
    The HC also upheld compensation of Rs 5.93 lakh to Poonam for injuries suffered as well as "loss of prospects of marriage" due to the facial disfigurement suffered by her. 
    Adivision bench of Justice Abhay Oka and Justice Gautam Patel dismissed the insurance firm's claims that the truck and Qualis were equally to blame for the accident and should therefore share the compensation amount. 
    The HC agreed with the motor accidents claims tribunal (MACT) that the truck, being the bigger vehicle, had the obligation to try and avoid the accident. It said the FIR had blamed the truck driver for rash and negligent driving, a witness in the vehicle had testified that the Qualis' driver had tried to avoid the mishap, and the truck driver was not called as a witness by the insurance firm. 
    After the accident, a claim for compensation was filed before MACT Daman. The insurance company challenged the damages awarded. 
    The HC took into consideration the income of Dilip, who had a garment business in Leicester. On the basis of his tax details, the HC calculated his average annual income as 15,000 pounds just before his death and asked the firm to pay compensation of Rs 98.50 lakh along with 7% interest. 
    The court, however, quashed the tribunal's order for compensation on account of Janaki's death and injuries to Aruna as it was based on 4.50 pounds as minimum wages in UK in 2003. The court said that there were no documents to support this and awarded Rs 6.14 lakh to Aruna and Rs 3.60 lakh as compensation for Janaki's death. 
E-way mishap kills 3 T hree women were killed and 21 others injured when theovercrowded pickup van they were travelling in was hit by a car on the Pune-Mumbai expressway in Lonavla on Monday night. The condition of three persons was stated to be serious. They were admitted to Lokmanya Hospital in Nigdi. TNN

Multiple policies no bar to renew health cover: HC

Mumbai: Describing health insurance as one of the most fundamental needs of a person, the Bombay high court has held that insurers cannot refuse to renew mediclaim policies on arbitrary grounds like a person being covered by multiple policies, reports Swati Deshpande. It gave the ruling in a case where United Indian Insurance had declined to renew a cancer patient's policy alleging suppression of illness. The HC also said if a complainant does not accept the insurance ombudsman's award, the insurer cannot implement it

City Ganesh mandal takes 223cr cover

Mumbai: In what perhaps reflects changing times and needs, the city's top Ganesh mandals have taken huge insurance covers this year, reports Bella Jaisinghani. 
    Topping the list is GSB Seva Mandal in Kings Circle, which has insured itself for Rs 223 crore—a risk cover of Rs 20 crore, Rs 20 crore towards public liability, Rs 182 crore personal accident cover at Rs 10 lakh per head, including workers, volunteers and priests. The Lalbaugcha Raja mandal has chosen two policies worth Rs 20 crore and Rs 51 crore, while Andhericha Raja has taken a Rs 3.7 crore cover, including Rs 1.75 crore for terror threat

MONEYMAKEOVER Build a strong base to protect your wealth Have contingency fund, adequate life & health covers to mitigate risks

Born and brought up in Mumbai, Mehul Bheda (29) lives with his wife Kinjal (26) and his parents. Mehul's father used to run a groceries store and is now retired. His mother is a housewife. The couple works in the private sector.  What are they saving for?  •Their top most priority is to purchase a larger home in the next five years for about Rs 50 lakh.  • For their retirement, they estimate a need of Rs 5 lakh per annum.  • Once they have children, they will also need funds for their education and marriage.  • Their aspirations include foreign travel and a car.      These figures will be revised in the future on the basis of inflation.  Where are they today?  Cash flow: The couple's annual inflow from all sources is Rs 8.35 lakh. Against this, their annual outflow is Rs 6.06 lakh. Their monthly outflow includes regular investments via SIPs, EMIs on loan taken for house, insurance premiums, supporting their parents and other routine household expenses. Annual debt payments come to around 6% of their annual takehome income.  Net worth: The couple's total assets are worth Rs 32.92 lakh, comprising personal assets worth Rs 25 lakh including house and jewellery. There is an outstanding loan of Rs 7.07 lakh taken for purchasing their home.  Contingency fund: Against the mandatory monthly expenses of Rs 35,000, the couple's balance in savings bank and liquid funds together comes to Rs 65,000, which is approximately twomonths' reserve.  Health & life insurance:  Mehul has a life insurance cover of Rs 78.30 lakh, which includes endowment policies and a term plan. The couple has a health insurance of Rs 1 lakh each.  Savings & investments: The couple's balance in savings bank account is Rs 15,000 and in liquid fund Rs 50,000. Their invested assets include equity shares worth Rs 2.81 lakh, equity mutual funds worth Rs 4.31 lakh, along with debt mutual fund and PPF together worth Rs 14,000.  Fiscal analysis  Mehul and Kinjal are saving about 45% of their total income, but their health and life covers seem to be inadequate. While borrowing is within permissible limits, the couple should pay off the loan aggressively by increasing the EMI.  The way ahead  Contingency fund: The couple must keep aside funds equivalent to about threemonths' mandatory expenses. They should maintain a contingency reserve of Rs 1.10 lakh, out of which Rs 20,000 should be held as cash in hand and the balance in an FD linked to a savings bank account. This reserve must be reduced once their loan is paid back.  Health & life cover: The couple's health cover seems to be insufficient — this must be increased to Rs 3 lakh each for Mehul and Kinjal. Since both are generating income, they both need life cover. The recommended incremental sum assured for Mehul, by way of a term plan, is Rs 50 lakh, and for Kinjal Rs 35 lakh. This may need to be enhanced if the couple opts for any loans in the future.  Planning for couple's  financial goals  Home buying: The couple wishes to buy a larger house worth Rs 50 lakh in five years. Once the loan for their existing home is paid off, they must start investing in debtbased products in order to accumulate a corpus for the down payment of a bigger home. When purchasing that bigger home, they can use the proceeds from the sale of their existing house along with the corpus accumulated in debt instruments for making the down payment. Any short-fall can be funded by a home loan.  Retirement planning: In order to save for their retirement, the couple should start investing Rs 7,500 by way of SIPs in equity-based mutual funds. They must increase this amount by 5% every year. Also, they can continue contributing to their EPF/PPF accounts.  Children's needs: Once their home acquisition is complete, the couple can start an SIP in an equity fund to create a corpus for funding their children's future needs.     T o b e f e a t u r e d i n t h i s      f o r t n i g h t l y c o l u m n , w r i t e      t o m o n e y m a k e o v e r @      t i m e s g r o u p. c o m  PLANNER'S EYE      You can always make a strong and large building, but unless its base is strong, it is susceptible to risk. Similarly, a contingency fund, health insurance and life insurance form the base of your financial building. No matter how much wealth you create, unless you have a contingency fund, health and life insurance in place, it is susceptible to risk. In the absence of these, even one untoward incident can lead to an erosion of the hardearned wealth you have generated over the years. Mehul and Kinjal Bheda

Now, demat insurance covers under one folio IRDA Clears 5 Entities To Set Up Repositories

Mumbai: In a few weeks, insurance buyers will be able to convert all their policies into electronic records under one common folio, irrespective of the company or even the nature of policy. Be it life, health or motor — all policies can be dematerialized and maintained under one account. 

    The electronic insurance account will do away with the need for providing address and identity proof for every purchase and will bring in all the benefits of demat to the insurance business, including automatic reminders for premium. 
    Insurance regulator IRDA has issued licences to five promoters to set up insurance repositories — National Securities Depository (NSDL), Central Securities Depository (CDSL), Stock Holding Corporation's SHCIL, Karvy Group and Cams. These five firms have their systems in place, which are being betatested with a small number of policies. The official launch is expected to take place in September. 
    According to IRDA chief T S Vijayan, insurance companies will have a huge cost incentive in encouraging customers to hold their policies in electronic form as costs will come down substantially from around Rs 600 per policy. 
    This is similar to the development that has taken place in the mutual fund business where asset management companies do not even have to maintain a physical presence for servicing. Most of the mutual funds today are serviced by Cams and Karvy who have centralized the functions of sending consolidated statements to customers. The fund houses now restrict their activities largely to sales and fund management. 
    "This is a path-breaking initiative akin to demat of shares. By bringing down cost of delivery, it will enable the industry to come up with lowcost policies which are not viable today because of the cost of delivery," said M Ravichandran, president, Tata AIG General Insurance. He added that besides lowering costs it will improve 'contactability' of the policyholder and address the issue of policy documents being misplaced. According to him, Tata AIG welcomes this initiative and the industry would do well to embrace this and make the necessary changes to IT systems and processes to make this work. 
    In terms of the IRDA's proposal, a policyholder can choose any of the repositories where he has to maintain the account. While opening an account for the first time, the customer will be required to provide 'know your customer' (KYC) documents, which include address and identity proof. 
    Non-life companies say that one of the benefits will be better contact with customers. At present, most motor policies are sold through dealers and insurers do not have complete contact details of the customer. Since the repository will have up-to-date data, the company can ensure that renewal notices are delivered. 
    Similarly, in the case of life insurance companies, policyholders often move house without informing the company of the change in address. But because motor and health insurance are annual contracts, the addresses are updated regularly. 
    IRDA had earlier indicated that dematerialization of insurance policies will facilitate portability. Customers who are not satisfied with the services of one insurer will be able to shift to another with minimum effort since all information will be maintained centrally. But this is a futuristic plan and not a mandate for the repository participants. 
A POLICY OF PLUSES 

• Insurance co will not matter when policyholders dematerialize any life, health or motor policy under a common folio 

• Once this is done, KYC documents like address and ID proofs will not have to be furnished every time a policy is bought 

• For insurers, electronic records will slash costs substantially from current Rs 600 per policy & renewal notices will become easier

9 yrs after robbery, insurance firm to pay jeweller 43L

Mumbai: An insurance company will have to pay around Rs 20 lakh in interest for wrongly repudiating the claim of a jeweller whose gold worth Rs 23 lakh was stolen during transit in 2004.      United India Insurance Co Ltd will also have to reimburse the claim amount of Rs 23 lakh to Bhuleshwar Roadbased Pravin Kumar Ramani, as the Maharashtra State Consumer Disputes Redressal Commission found no substance in the firm's argument that the jewellery was lost due to an employee's negligence.      According to the complaint filed by Ramani in the state commission, his employee was given a bag containing gold bangles weighing a total of 4.1kg to be taken to Bangalore. The bus in which he was travelling halted for lunch at Khed and the employee was forced to alight as the bus was to be locked. The employee was the last to get off the bus and he ensured that the bag was chained to the seat. But when he returned to his seat after lunch, he found the jewllery was stolen.      Ramani registered an FIR and filed the claim with the insurance company. But the firm rejected the claim on the basis of an exclusion clause. Aggrieved, Ramani filed a complaint in the commission.      The commission said that a simple reading of the exclusion clause would show that an involvement of the employee as an accomplice, or the act of commission or omission on part of the employee should have a direct nexus with the felony. "In this case, such possibilities were ruled out and insurance company did not place any material on record to infer otherwise. If the employee gets involved in such capacity and in such form with the felony, then the case may be covered by this exclusion clause and not otherwise," the commission said.      It further stated that under such circumstances, interpretation of this clause which favours the consumer is to be accepted. "As the insurance company failed to discharge the onus which lies upon it to justify its repudiation, it is deficient in service," the commission said.  THE ORDER      The Maharashtra State Consumer Disputes Redressal Commission directed India Insurance Co Ltd to reimburse the claim amount of 23 lakh to Bhuleshwar jeweller Pravin Kumar Ramani as gold bangles weighing 4.1kg were stolen in transit in 2004      The firm will also have to pay 20 lakh in interest for wrongly repudiating the robbery claim

‘Can’t deny mediclaim for magnetic treatment of osteoarthritis’

Mumbai: A consumer forum has said Rotational Field Quantum Magnetic Resonance (RFQMR), a non-invasive osteoarthritis treatment, could not be called an alternative or experimental therapy and ordered an insurance firm to pay up for rejecting two claims. 

    Dismissing New India Assurance Co's argument that the treatment was not recognized by the Indian Medical Council, the forum asked it to pay first complainant Sanyuktaben Shah the insured amount of Rs 1.05 lakh with a compensation of about Rs 46,000, and second complainant Bhisham Lambh Rs 1.30 lakh with a compensation of Rs 40,000. 
    The forum held that the insurance company had not produced any evidence to show that RFQMR was not recognized by the Indian Medical Council. "Only mentioning the same in the mediclaim policy clause would not be held just and proper for repudiating the claim," it said. 
    Vile Parle resident Sanyuktaben Shah, in her complaint on 2010, said she came to know about RFQMR about five years ago when osteoarthritis attacked her knee joints. She took the treatment at a Bangalore-based company's Andheri centre in 2008 and was in regular consultation with doctors and physiotherapists as there was still some pain. She also visited a health care centre and was recommended some oral medicines which worked. That year in December, she submitted a claim for Rs 1.05 lakh, which was repudiated. 
    Juhu's Bhisham Lambh also underwent the treatment after crippling pain in his knees from December 2009. After the 21-day therapy in May 2010, he sent theinsurance company a claim of Rs 1.30 lakh. A month later, it was rejected. He moved the South Mumbai District Consumer Disputes Redressal Forum in October 2010. 
    In both cases, the insurance company said the treatment was experimental and unproven and, therefore, according to the terms and conditions of the mediclaim policy, they were rejected. It stuck to its stand in the forum. 
    The forum ruled otherwise after taking into consideration the literature produced by the complainants. It showed that RFQMR significantly decreases pain, increases mobility, stability and power of the knee joint, and increases cartilage thickness in osteoarthritis patients. "Furthermore, as per the documents of objectives of Indian Medical Council which is placed on record by the complainant, it appears that the council does not have any object to approve any specific treatment or disapprove any treatment," the forum said. 
WHAT IS OSTEOARTHRITIS? 
Commonest form of arthritis that occurs as the protective cartilage on bone ends wears down over time 
USUAL TREATMENT 
Worsens with time, no cure exists 
Patients given oral medication to relieve pain, improve joint function 
NOT AN ALTERNATIVE THERAPY 
Rotational Field Quantum Magnetic Resonance developed in Institute of Aerospace Medicine, B'lore 
RFQMR regenerates/repairs cartilage and relieves chronic pain by using rotating quantum electromagnetic resonating beams 
There is no hospitalization

‘Death due to fall after slipping is an accident’

A fall at home due to slipping of foot is an accident and claim is payable under an accident policy. 

    Background: When an old person slips at home, resulting in subsequent death, can the insurance company reject a claim on the presumption that the fall was age-related and hence the death was due to a natural cause? In a recent judgment delivered by S M Ratnakar, along with member S S Patil, the South Mumbai district consumer forum ruled that a claim cannot be rejected on such a pretext. 
    Case Study: Dr Shirish Vakil had taken Janata Personal AccidentInsurance Policy from National Insurance Co when he was 69 years old for a period of 12 years (November 12, 1997-November 11. 2009) with a sum insured of Rs 5 lakh. 
    Shirish, though retired, was in good health. On November 3, 2009, he slipped and fell at home. The fall impacted the rear portion of his head, making him feel giddy. There was no serious injury visible externally. But at night, his condition deteriorated and he was taken to Bhatia Hospital, where a CT scan was done. Due to want of beds, he was shifted to Harkisandas Hospital, which registered a medico-legal case and informed the police. He was diagnosed to be having an introcerebral or intracranial bleed. On November 6, Shirish succumbed to injuries. 
    His son, Sunil, then claimed the sum insured. But the firm rejected it, contending that the fall was due to giddiness, an age-related problem, and hence the death could not be termed as accidental. Sunil moved the Insurance Ombudsman, which upheld the firm's contention. He then filed a complaint through 
the Consumer Welfare Association. The firm said a claim under the policy would be payable if the insured sustains bodily injury, resulting solely and directly from the accident caused by outward violent and visible means. 
    The forum observed it would require to consider whether Shirish's case amount to an "accident" as interpreted by the National Commission in the case of Reeta Devi v/s National Insurance Co. Ltd. [IV (2007) CPJ 355 (NC)]. The forum noted that the CT scan mentions subdural hematoma of 0.8cm, also seen in left frontoparietal lobe region. The hospital records clearly show "intracerebral bleed". Statement of the domestic servant present at the time of incident, as recorded by the police, also showed that Shirish's foot had slipped in the bedroom. The forum said the records establish that the fall was accidental. Hence, the forum ruled that the claim was payable, and that its wrongful rejection constituted a deficiency in service and also an unfair trade practice. 
    The forum held that the Insurance Ombudsman order would not act as an impediment to the proceedings before it, as this question had already been settled by the National Commission. Accordingly, it directed the firm to pay the sum insured along with interest at 6% pa from December 7, 2009, till payment. In addition, Rs 20,000 compensation was awarded for harassment and Rs 3,000 as costs. 
    Conclusion: A consumer can approach a forum even if his claim has been rejected by the Insurance Ombudsman. Under an accident policy, a claim for any injury or untoward incident caused by outward violent and visible means is payable.
    (The author is a consumer activist and has won the government of India's National Youth Award for Consumer Protection. His e-mail address is jehangir.gai.articles@hotmail.com)

9 yrs after robbery, insurance firm to pay jeweller 43L

Mumbai: An insurance company will have to pay around Rs 20 lakh in interest for wrongly repudiating the claim of a jeweller whose gold worth Rs 23 lakh was stolen during transit in 2004. 

    United India Insurance Co Ltd will also have to reimburse the claim amount of Rs 23 lakh to Bhuleshwar Roadbased Pravin Kumar Ramani, as the Maharashtra State Consumer Disputes Redressal Commission found no substance in the firm's argument that the jewellery was lost due to an employee's negligence. 
    According to the complaint filed by Ramani in the state commission, his employee was given a bag containing gold bangles weighing a total of 4.1kg to be taken to Bangalore. The bus in which he was travelling halted for lunch at Khed and the employee was forced to alight as the bus was to be locked. The employee was the last to get off the bus and he ensured that the bag was chained to the seat. But when he returned to his seat after lunch, he found the jewllery was stolen. 
    Ramani registered an FIR and filed the claim with the insurance company. But the firm rejected the claim on the basis of an exclusion clause. Aggrieved, Ramani filed a complaint in the commission. 
    The commission said that a simple reading of the exclusion clause would show that an involvement of the employee as an accomplice, or the act of commission or omission on part of the employee should have a direct nexus with the felony. "In this case, such possibilities were ruled out and insurance company did not place any material on record to infer otherwise. If the employee gets involved in such capacity and in such form with the felony, then the case may be covered by this exclusion clause and not otherwise," the commission said. 
    It further stated that under such circumstances, interpretation of this clause which favours the consumer is to be accepted. "As the insurance company failed to discharge the onus which lies upon it to justify its repudiation, it is deficient in service," the commission said. 
THE ORDER 
    The Maharashtra State Consumer Disputes Redressal Commission directed India Insurance Co Ltd to reimburse the claim amount of 23 lakh to Bhuleshwar jeweller Pravin Kumar Ramani as gold bangles weighing 4.1kg were stolen in transit in 2004 
    The firm will also have to pay 20 lakh in interest for wrongly repudiating the robbery claim

Insurance co to pay up for stolen auto

Mumbai: A consumer forum has held that an insurance company cannot reject a claim merely on the ground that the premium was received late. The forum directed IFFCO Tokio General Insurance Company to pay Andheri (E) resident Arvind Pithva the insured amount of Rs1.25 lakh for his stolen autorickshaw along with Rs55,000 compensation.      Pithva had purchased the rickshaw on a loan for Rs1.25 lakh and it was insured with the company. The insurance was valid from June 21, 2008 to June 21, 2009. According to a complaint filed with the Mumbai District Consumer Disputes Redressal Forum, he had parked the rickshaw in front of his house on June 26, 2008, but the next morning, he could not find it.      Pithva filed a complaint with the Andheri police, intimated the company about the theft and filed his claim. But the insurance claim was rejected. The company told Pithva that since the premium was paid on June 25, 2008, it was not liable to pay the insurance amount. The police informed the court that they could not find the thief. Pithva filed the complaint on January 7, 2011 and submitted a copy of the FIR as evidence.      The insurance company filed its reply and iterated its stand. It told the forum that since the cheque for the premium was deposited only on June 25, 2009, theinsurance policy was invalid and it was not responsible for reimbursement of the claim. The company stated that the policy was active only from June 27, 2008.      Taking the FIR copy into consideration, the forum observed that it was established that the vehicle was stolen on the intervening night of June 22-23, 2008. It also found substance in Pithva's statement that he had issued the cheque before the incident and it was not his fault that the company encashed it only on June 25, 2008.      The forum pointed out that the insurance papers showed the policy was valid from June 21, 2008. "This proves that the cheque was issued by the complainant before the theft," the forum said.

This I-Day, Plan For Financial Freedom Take small but definitive steps towards building long-term wealth to ensure better and secured future

 For parents, there was a time when grown-ups and working sons were synonymous with both financial freedom and security. But with changing times and new social structures, that concept of financial security has become almost non-existent, at least in most of urban India. 

    Other than raising their children, parents themselves have to think about their post-retirement financial security. And with the demand and popularity for such approaches increasing, there are financial planners and advisors who are there to help, for a fee of course. 
    In the run up to the Independence Day, we spoke to three investment planning experts about how they would guide their clients towards financial freedom. Here is what they had to say: 
For retired individuals 
1) Don't run out of cash: You should keep cash and cash equivalent that can take care of your household expenses for at least six months. 
2) Match expenses with income: Suppose of the total Rs 1-lakh expenses per month, Rs 75,000 is on food and essentials, while another Rs 25,000 is discretionary spending. Always make sure you have a regular source of monthly post-tax income of Rs 75,000. This can also include a systematic withdrawal plan (SWP) which can save more taxes for you. 
3) Ensure growth: This is for that part of investment that will take care of incremental incomes and help you beat inflation in the years to come, and will insure you against running out of cash. For this, systematic investment plans (SIPs) in good mutual fund schemes are unbeatable options. This can also help you take care of your discretionary spends. 
4) Get into another profession: You have retired from a job, but not from your life. Also learn and/or do something that you always wanted to do but never got the time during your working years, like taking up a hobby, etc. Also, learning how investments are done is a good option. But never spend more than 40% of your time in the new profession and keep 60% of your time reserved for all other things like hobbies, new learning, etc. 5) Get a good financial advisor: You have a life partner. Now do a proper due diligence and choose an advisor who will remain a friend for life. 
    — Rajiv Bajaj, 
    VC & MD, Bajaj Capital 
For women 
1) Get on top of numbers: Don't let numbers make you cross-eyed! Investing is about understanding yourself and what you want your money to do for you, understanding concepts and then numbers…and someone else can always crunch the numbers for you. 2) Health cover:Don't count on the health policy of your company alone to take care of any future medical expenses. You should also have one of your own. Here, the younger you start, the cheaper it is. 
3) Don't sign anything blindly: Most women do not take their own investment decisions but depend on the men in their lives like fathers, brothers and partners. Love with your heart, but sign with your brain. 
4) Make your CA fall in love with you: Get him to teach you how to save tax. Sometimes you can save more in tax than the stock markets can give you in returns. 
5) Don't be afraid to take risks: 
Studies show that women are generally risk-averse and so tend to save rather than invest. However, the only way to build wealth is to invest. Riskaverseness could be due to not understanding how financial investments work, so take small steps and dip your foot in the water! 
    — Sujata Kabraji, financial planner and wealth advisor 
For young and first-time savers 
1) Upgrade your skills: As lifecycles of products and services get shorter, and technology innovations cause disruptive changes, growing income consistently will only be possible by investing in oneself by constantly upgrading skills through training, learning and development workshops. Set a training budget for yourself, just like budgeting for regular and lifestyle expenses. 
2) Manage expenses: You should learn to differentiate between your needs and wants. Once you learn that, you would be in control of your money in a much better way than otherwise. 
3) Get risk cover: You should have adequate risk coverage to protect your whole family from any potential loss of assets and income. So, have a life insurance policy, health covers and also house insurance. 
4) Set clear financial goals: Not only that, you should also measure the goals and how far have you reached at a pre-determined frequency. Any divergence from the set course should also call for a course correction. 
5) Have a plan B: Learn to have a contingency plan, for everything. Have an investment strategy in place that should take care of your financial needs in case of loss of job, if the rate of interest goes up and your EMIs start shooting up, which in turn may be a stress on your expenses and savings, and various other such situations. 
— Vishal Dhawan, founder, Plan Ahead Wealth Advisors 
NEXT WEEK 
    With the rate of interest in the economy showing extreme volatility, fixed maturity plans (FMPs) are the flavour of the season. Next week, we will revisit FMPs, the pros and cons of investing in these schemes, how these products stack up against other competing ones and other related issues.