Skip to main content

Health Insurance Claim Loading

Invest Mutual Funds Online

Download Mutual Fund Application Forms

In the recent past, health insurers like Apollo Munich, Tata-AIG General and Max Bupa have launched health insurance products without the claim loading clause. The clause allows insurance companies to hike premiums after the policyholder makes a claim. Needless to say, insurance customers often felt cheated by the clause, as most insurance companies used the clause to hike premiums on renewal after a person made a claim on the policy. So, a typical policy, which is supposed to help a person in future when he develops a health problem, can become very expensive with the loading, especially since premiums increase with age. If you are looking to buy a health cover, you should first check out these products without the claim loading clause.


Typically, a health insurance policy – at least the indemnity-based ones from general insurers – has to be renewed every year. Many insurers – state-owned as well as private – incorporate a claim loading clause in their policy, which allows for an increase in premium following a claim made in the previous year.


However, insurers do not follow a standard format for the purpose for loading of premium and it varies with each insurer. That is why you should go through the policy wordings to understand the calculations at the time of buying the policy itself. This is because the insurance company can't change the structure described in the policy during the course of the contract. However, don't confuse claim loading with the loading of premium. That comes into the picture if there is any adverse medical history.


Claim loading gets triggered either on individual claim or the company's overall claim ratio (premium earned versus claims paid out during the year) going haywire. It could also be linked to the type of the claim —that is, if it is chronic or otherwise — and the average usage of the total sum insured.


Besides, companies can choose to increase the rates for their overall portfolio or a particular segment, citing medical inflation. Then, of course, there is the regular rise in premiums in accordance with the advancing age of the policyholder.


Claim loading may not seem like an important parameter while buying a policy, especially at a young age, as the tendency then is to focus on cheaper premiums. However, remember that health insurance, although renewable annually, is a long-term contract. Given that the loading in case of some companies can go up to 200%, it could wreak havoc on your finances, especially in your silver years. One should not buy a policy which has claim loading clause as it can have a compounding effect, making your policy prohibitive for you in times of need.


If a policy's wordings are not upfront about loading, ensure that you enquire about the same. Also, factor in other elements. As part of long-term financial planning, there is no doubt that one should look for zero loading as one of the features, apart from lifetime renewal, lifetime zero co-pay ratio, no limits on surgeries and room rents, and the claim settlement track-record.


Now, first-time buyers have several policies to choose from and thus, can avoid the ones with unacceptable claim loading structures. But, how do those who have been paying premiums for a long period of time deal with the situation?


Being aware of the policy's terms and conditions, competitor's offerings and the regulatory scenario could be a possible solution.


The first option is to go through the claim loading clause in your policy document and question the insurance company if it has not adhered to it completely. Also, the Insurance Regulatory and Development Authority (Irda) has issued guidelines related to loading on premiums for senior citizens, which bar companies from increasing the premiums by more than 50-75%.


Secondly, thanks to the health insurance portability mechanism, implemented since last October, such policyholders have the option of switching to an insurer who offers better terms.


The flipside is that since accepting or rejecting the proposal to port is left to the new insurer, those having made claims, particularly senior citizens, in the past may not stand a great chance.


One can only hope that with increasing competition, companies will make efforts in future to retain their customers.

-------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...
Read more

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...
Read more

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...
Read more

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
Read more

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now