All you need to know about sites comparing insurance products

All you need to know about sites comparing insurance products

General Insurance, IRDA Updates, Life Insurance

You might have come across many websites which are comparing the insurance plans premiums and collecting data about the interested person through their online portals. These sites are called Web Aggregators.

“Web Aggregator” – For the purpose of these guidelines, a web aggregator is a Company registered under Companies Act, 1956 (1 of 1956), approved by the Authority under these guidelines, in whose behalf a website offers information pertaining to insurance products and / or price comparisons of products of different Insurers.-IRDA(Web Aggregators) Regulations, 2013

Do you know that all the sites which are working as Web aggregators have to be registered with IRDA and only after the approval of the IRDA any website can work as Web Aggregators? A Web Aggregator cannot be an insurance agent.

You can find the list of IRDA approved web aggregators at the end of this post, as published by IRDA on 24/08/2016 on its websites.

IRDA has laid down the regulations about the Web Aggregators called as IRDA(WebAggregators) Regulations, 2013; these regulations are about the registration process, lead generations, affiliation with insurers, the number of insurers that an aggregator can work with, sharing of information collected through websites with insurers and many others.

As per the regulations a Web Aggregator has to follow these points:

  1. Web aggregator shall display on the website the premium rates and Key Features of the insurance products of all the Insurers for each class of insurance business.
  1. The price comparisons that are displayed shall be up to date and reflect a true picture of the products.
  1. If you have provided your information on a web aggregators site but didn’t show your interest in any particular insurance product/company, then a web aggregator can share your information with maximum up to 5 insurers in same insurance class (life/nonlife/health). He can also share your information in these case to any insurance broker but not to both.
  1. Web aggregator has to transmit the data of clients to Insurer/Broker:
    1. within five days of the client’s visit to the website.
    2. must be secured from unauthorized access and misuse;
    3. with a reasonable level of suitability, reliability, and correctness;
    4. in compliance with generally accepted security procedures;
  1. Web aggregator can only transmit any leads generated through clients visiting their sites
  2. If a lead was given to an insurer/broker convert into a sale then insurer/broker pay the remuneration to web aggregator which is not more that 25% of the first-year premium.

Obligations of web aggregators

  1. Web aggregator should display the particulars of the validity of approval obtained from the IRDA on its website.
  2. Web aggregator must state clearly and unequivocally that insurance is the subject matter of solicitation.
  3. At no point of time of its functioning, a web aggregator shall have net worth below rupees fifty lakhs
  4. At no point of time of its functioning, a web aggregator shall have the referral arrangement with any Insurer.
  5. Web aggregator shall maintain the records and the reports of its activities under the agreement with insurer / broker, in the manner specified in the agreement entered into between the insurer / broker and the web aggregator.
  6. Web aggregator shall along with its employees (whatever their designation may be) comply with all the provisions of the Act, the IRDA Act, 1999, the rules and regulations framed thereunder and such other directions issued by the IRDA from time to time.

You can find the list of approved Web Aggregator below:

 

Proposal Form: Basis of your insurance contract

Proposal Form: Basis of your insurance contract

General Insurance, Knowledge Hub, Life Insurance

Insurance is a contract between insurance company and the person want to cover future risk on his life, where the insurer is bound to pay a fixed amount on death of the Life Assured to his nominee in return of premium (one time or regular). This contract starts when insurer accepts the proposal from the proposer on the basis of the details furnished by the proposer in the proposal form (A prescribed format for proposing a life insurance contract).

And since the insurance is based on the principle of Utmost good faith, it means that the customer seeking the insurance must disclose all the personal details (health as well as financial or which ever asked in proposal form). Therefore filling the proposal form correctly is very important, otherwise, can lead to the repudiation of your claim.

Image Source: brasil.co.uk

Important information to be furnished in Proposal Form

There are some fixed points which are included in the proposal form of all the insurance companies which has to be filled very carefully and which are as follows:
  • Name: It’s obvious, isn’t it? Always right your name by yourself (Agent can misspell your name) and keep it in BLOCK letter so that it can be read easily. Though proposal form will also ask your father’s name in a separate column but write it with your name. Be sure that you give the exact name as it is in your bank account. Avoid any over writing at any place, especially in your name and if it happens any how just change the proposal form and use fresh one (Don’t hesitate to ask for new proposal form from you agent) to avoid any future problems.
  • Address: Normally you will have to give both current and permanent address, but people give their current residential address and write “same as current address” in permanent address column even if it is not. Make sure to provide both addresses if different. Provide full address with pin code so that all the correspondence from your insurer reaches you in time.
  • Contact No. and Email ID:  These are the fastest way of communication these days, so if you are in a transferable job then provide one permanent contact number which you will use always even if transferred, but also provide your email id because they will not change even if your shift abroad (May be I am wrong, reader’s discretion needed).
  • Date of birth (DOB): Your insurance premium will be based on your age, so write your DOB correctly with supporting documents. Always try to give your School certificate or passport or birth certificate (if life assured is child) as your supporting document as these are considered standard age proof, other documents can also be use as your age proof but with restrictions in Sum assured and term like driving license, PAN card, some age proof like voter card, Adhar card, and  self-declaration will attract extra premium.
  • Nationality: Its very important because many insurers don’t provide life cover to NRI’s (in Indian perspective) living in specific countries, so be sure to provide correct information, and don’t hide that you are an NRI just to take insurance because it can lead to repudiation of your claim to your nominee if any thing happens to you outside India, But don’t panic if you are a resident, then you can roam anywhere without hesitation.
  • Plan and term: Its the scheme you wanted to take, write plan name  and term carefully, without over writing, and thoroughly go through the condition of the plan you want to take before proposing the same.
  • Nominee: Nominee is the person or persons who will receive the claim amount after you. Choose the right nominee in your insurance contract. Write correct and full name of your nominee as in his/her bank account. Write the name in BLOCK letter to avoid any misreading. Give correct age and relation. If in any case your nominee is minor then your have to provide the name of an appointee who is a major person who will take the claim amount of behalf of nominee until he/she is minor, else nominee will receive the claim if he/she became major. Though you are free to make anyone your nominee but making the nominee other than your legal heirs and blood relative could be seen as a Moral Hazard by your insurer and can deny you the insurance( Depend on upon the underwriting principles and guidelines of insurance company). It must be kept in mind that making anyone nominee doesn’t mean that money is for him/her, at any point of time legal heir of the Life assured can claim their right over that money.
  • Occupation, Income, and Education: The maximum life cover you can have to depend on upon your Income, so give right income. You have to give supporting of your income(ITR or CA certificate) with your PAN card no. if your annual premium is higher than 50K (Again in Indian perspective). Insurance cover also depends upon the nature of your occupation, if its too hazardous like aviation, army,  police or other force jobs, mining (Under ground work) etc. then they will attract some extra loading on your premium (Purely depend on the underwriting criteria decided by the insurer). Always give the correct name of your employer if employed/salaried, because insurance companies give quite high risk cover to persons employed in Govt/PSU or reputed firms (where leave details are maintained by employer) without any medical examination. Provide correct details of education level, its very important in the case of female proposer because in India for females, different education level means different risk criteria.

  • Heath details: Now these are the details which should be written carefully without any overwriting and only after reading the question asked, I have seen agents filling the form by themselves without asking anything from customer, so if it happens to you, just read the questions and their answers before signing the proposal form (But take a little headache and fill the form by yourself). Companies provide the insurance even if you are suffering some specific diseases/health problems, but only after medical examination and with some extra premium. So don’t hide anything related to your health or details related to any admission in the hospital for treatment, because you won’t suffer, it will be your spouse and children after your demise if your insurer rejects the claim based on your past health history. If the proposer is a female then provide correct details of your last menstrual date and last delivery date if asked in the proposal form.
  • Family History: Details about the age and health status of your parents, siblings, spouse and children. Give correct age and their health status and if anyone had already died then give the exact reason of death, because many diseases are hereditary. Two or more early deaths(especially by disease or suicide) in your family can be seen as a higher risk on your life
  • Other policy details: Provide all your other policy details with the same or other insurer, policy details from same insurer will help the insurer to estimate their own risk on your life since policy taken within two-year are added with your proposed risk and medical examination and any special reports  and underwriting decision will depend upon the cumulative risk in all the policies taken from same insurer within two year. Policies from other insurer are required for financial underwriting, means are you capable of depositing the cumulative premium in all policies from your given income? If the proposer is a female and if married then provide policy details of your husband too. If life assured is a child then provide all policy details of parents in the proposal form.
  • Signature and date: Sign the proposal form at the appropriate place after carefully filling the proposal form and if filled by other person or agent then read all the details carefully before signing it. Give place of signing and date on which you are signing the proposal form. Since insurance, a long-term contract so use the sign which you use always in future. Many companies provide the scanned image of your proposal form with policy bond, ask your agent about it and if not provide keep on a photocopy of your proposal form with you.
So its a legal document read it carefully, fill it clearly and sign it sensibly because it will always be your basis of the contract with an insurer, and you don’t want that your nominee will be denied for any claim in future.
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Increase in service tax on insurance premium from 01/06/2015

Increase in service tax on insurance premium from 01/06/2015

General Insurance, Insurance in News, Life Insurance

It was proposed in in Union Budget 2015 to increase the service tax from 12.36% to 14%. After the Notification No. 14/2015-Service tax dated 19/05/2015 by the government, new servic tax will be effective from 01/06/2015. All the Service including the insurance premium will be dearer from 01/06/2015. The special rates for life insurance service as per rule 6(7A) has been changed. The rate ofservice tax for FY 2015-16 are as under:

Recent Updates: Increase in Service tax on Insurance premium to 15%

New Service Tax rates

S. No.ParticularsExisting rates (Upto 31/05/2015)Revised rates (From 01/06/2015)
A)On gross premium less amount is alloted for investment/savings, if such amount is intimated to the policy holder12.36%14%
B)Where the entire paid for risk cover12.36%14%
C)For all policies not covered under A) and B)
On First year premium3.09%3.50%
On subsequent premium1.55%1.75%

Life insurance service provided under Varishtha Pension Bima Yojana scheme has be exempted wef 01/04/2015.