Insurance Consultancy (New Chapter)

It is quite a new chapter in field of Consultancy and is similar just like any other consultancy service which have already begin in India, although it is just beginning and while comparing it with rest of the World Market. which is quite existing, developed, known and in demand, where it is just flourishing and rising in India. Let us keep focused with our country and for that understanding the need of today's India is important and equally how it can benefit us which is explained below

Understanding Need & Benefits for Insurance Consultancy:

As known, Insurance is basically divided into two section Life & General Insurance, where Health Insurance is one of the categories other than Marine, Vehicle, Home, Business etc and is part of General Insurance. Both LIFE and GENERAL section has their own segment and have their own importance and demand.  India's growing demand in this category have made really big industry houses to launch their services into this field.. As a result good number of companies have already launched them, "Religare & L&T" are the latest among new players into this section, and still there are many more to come as per the information available.

New Launch and growing number of companies rising like this is generating huge level of competition, which is helping consumer to get improved and quality of service then before, however has also made more difficult for person to choose this product.  More over Insurance is always considered as too complex product to understand which is day by day becoming more and more necessary in one’s life in India.

Consultancy service demand was never seen or its demand was in unearthed state, as this service was provided by the particular company’s agents first and now a day’s technology helped to make relevant information available online and did gave comparison option of support required. But still complexity of this product and required satisfaction was a miss and this is what, which have given rise to Insurance Consultancy?

Think of a situation where your loved ones has urgent need of hospitalization and you cannot get the cashless network hospital, just because you choose wrong company which do not have cashless facility in hospital in your nearby area. OR Due to delay in approval in cashless claim, you are required to pay money upfront for getting treatment started, even though you have cashless facilities available in that hospital. Remember “The latest Health Insurance Company to be Launched and seen is L&T whose advertisement say they respond with 6 hour of your request raised” or say in "Apollo Munich advertisement where we see Ganguly making statement we pay all genuine claim"  etc etc Here we see company make service feature as USP. (We do not endorse them with this statement, or put them in front of all the others at all, as there are many company which do response similarly.) But by this, what we are trying to bring your attention why Insurance Consultancy is required or is beneficial and upto what kind of service provided which are generally not know by many and cannot be known online...

Many of us prefer online buying of insurance which have become quite convenient these days and is good even that it saves some of our money and has its own pros and cons, but what majority of us lack is  the knowledge required to purchase online. Let us take the above example once again and compare it, Suppose you took health insurance just by comparing online without checking this ten points and choose the lowest premium one. And you face the above situation wont you regret your decision. Rather you will be frustrated like anything and will curse the company seeing delay in getting the services.

Same thing in regards to Life Insurance, Here the complexity of product is equal to Health Insurance, but its impact is more bad. For Health Insurance you do have option of portability to rectify the mistake you have made but there are no such option in Life Insurance. You have to stick to what you have taken. You will than look for buying one more new policy and will surrender the old policy taken etc etc... Even the feedback says, The major reason of dissatisfaction in Life Insurance is just because of wrong decision taken without doing proper Need Analysis or say misguided by some people.

Hence we recommend always have a proper analysis done and proceed as per your NEED.

It is always beneficial to get the Insurance Consultancy done by professional, Check how to buy Health Insurance and Life Insurance which will clearly demonstrate the level of complexity to consider, not all the people have this proficiency and are not even aware on how to proceed, but we hope once you are aware you still will save your self and other them from taking a wrong decision.

Remember one single, bad or emotional decision which are usually taken by many while considering LIFE & HEALTH Insurance in particular Will impact too much on your financial goals.

What is Financial Planning?

Financial Planning is the process of meeting our life goals through the proper management of our finances we have with us, Life goals can be any-thing let us not assume any scenario, but  let us practically compare with our self NEED. Just for sake of consideration we start from the first stage out of six stage of life divided in pre and post 40’s (Check Fig:1.0)

Different Stage Of Life (click on pics to view enlarge size)

Majority of us will be in first three stages where we have various Financial Goals as explained in (Fig :1.0) Financial Goals can be anything which begins  in a today’s youth life right from getting self higher education, getting married, buying a house, starting new or expanding business, saving for your child's higher education, accumulating wealth for Child’s Wedding & planning for retirement . Besides this there are many small and medium requirements such as Planning for family vacation, Purchasing Dream Car or Sports Bike, Diamond Necklace for Wife & not to forget Pilgrimage for Parents. Together with all this there are lots of social responsibility which we perform anyways....

The Financial Planning is process that helps you take a big picture look at where you currently are and when and where will you reach. This is completely based of facts and calculation which forecast whether you are on right path of saving and investment or you need to do some changes towards it.

Now, Let us consider  to plan for Top Responsibility Goal from mentioned above goals, Majority of all will agree and will start with 1st is to give my children best education, 2nd will be getting Daughter Marriage happily and 3rd getting settled, successfully & happily  after retirement. Hence we have taken Child Education for explaining purpose.  

In above Fig 2.0  while planning for Child Education we have considering the Age of the Child to be "0 to 3" Years and assuming after 15 to 18years child would require higher education & Inflation and expected rising cost is taken as 7% although current inflation and recent past rosen education is much much higher, still we have taken this just considering things will improve and over the period of time everything will happen good, but still this much is what will face. Also the same theory of good and better returns are also taken with achievable possibilities on rate of return and not taking too high returns. 

This is however just for illustration purpose,  but if you had some things else than do make best use of online calculator available on our website which will help you to get much better and approx figure with all the different combination you would like to have in planning. (Click Here..)

Now Let us consider 2^nd  & 3^rd goal, with  just some text for below.

Responsibility 2: Child Marriage (After 21 Years from Now)

Assume your child age is 4 years and inflation rate is 7%.

Q. What is the Average Age when a child gets married?

Ans.       25 years

Q. What are the Average Expenses of Marriage Today?

Ans.       Rs. 8 Lacs

Q. How much would your child’s Marriage cost you at maturity?

Ans.       Rs. 35 Lacs is your requirement from 21 years from now.

Responsibility 3: You’re Retirement which is after 32 years

Current Age: 28 years. Retirement Age - 60 yrs. Life Expectancy - 80 yrs.  Assuming inflation @ 7%. Returns on Retirement Corpus is considered 6% as bank interest are seen diminishing

Q. What is an Average Monthly Expense House Hold Expenses of a Middle Class Family ?

Ans.       Rs. 12,000/- p.m.(Just considering basic expenses for food and other necessities)

Q. How much Retirement Corpus would you need at Retirement?

Ans.       Rs. 60 Lacs corpus in Hand  

( The above 60 Lacs is not assumed figure. It is an minimum estimate figure, you will  be surprised to know that 12,000 will be 1 Lac plus  at starting month when you reach age 60 and will go upto 3 Lacs Plus till your expectancy age. For which you will require 60 Lacs, besides this you will also have need to fulfill your other expenses of health etc. this all are taken in consideration.)

Here, where we have considered just THREE TOP GOALS of our life on an average a young couple have to work towards Total Corpus of  1.5 Corer plus as of today, which is taken minimum besides our living place and other things are considered are present 


Below are the indicative Solution which can help you to achieve your goals..
 

As already stated SOLUTION on investment as shown in fig above is only for illustration purpose , Rather in practically field there are lots of solution which can be provided as per your risk taking and repayment or saving capacity. 

Dear Friends, If we consider all the goals the figures all the GOALS and If your have LOANS and repayment etc... The Amount will go much much high... But all this can be achieved by simple method of Investment and Saving Tax.  and that what is called Financial Planning...
 
Financial Planning is just not to get the derived figure you require but also providing you appropriate Financial Investment & Insurance Option which will help you achieve your Life Goals On Time. Do not hesitate to consult a recognized or Certified Financial Planner and get your basic check up done for sure.

How To Buy LIFE INSURANCE? (Conclude Properly)

Let us start by knowing the common example on how Insurance is generally taken by people, with some common question and answer, and than understand why proposed method is an correct way of buying Life Insurance and is proper answer to this most IMPORTANT QUESTION of many.

A) SOME OF COMMON EXAMPLE

1)  Answer is very simple do some research and recommended policy online and then checks on the online comparing website which company gives those policy at cheaper rate we buy it online.

2) Which many of you adopt, where you have your papa’s Insurance Agent and take the Insurance Policy which gives to you as he is trustworthy person who have serviced you’ll genuinely till now.

3) Ask couple of your friend which is the best policy in the industry or which policy he have taken and buy the same type of policy from that same agent or from other person even with knowing how is his after sales service on the same (Does he comes and collect the yearly cheque naa…).

4) Last and common scenario where Insurance Agent or Companies representative  have approached and have informed you that with Insurance you can save your Tax under section 80-C by buying insurance and in-fact truth even where you do get benefited even and you buy the policy.

B) Question & Answer

Q. Why do you buy any product?

A.  Again answer is very simple, we buy it because of our need.

Q Then why don’t people buy LIFE INSURANCE as per their need or any Insurance product as per their need.

A. We came to know quite interesting and  common answer from everybody which is an exact answer to “HOW TO BUY LIFE INSURANCE”

First Thing which everybody never knew was how to conclude or know what their NEED on Insurance IS?, Which is not the case in other product we buy, & Secondly we do not have the knowledge of the product which are available.

"You all would be surprised to know that even IRDA say's same thing that INSURANCE should be sold only after NEED ANALYSIS done. Not sure about it whether there are circular given by IRDA and have made it mandatory but we are sure IRDA have given this in their guidelines that Insurance is sold only after doing NEED ANALYSIS in June 2010 which were published in news paper even, which Insurance Companies do follow but some time you may find Agents not doing it."

Hence, True answer to our post question is, know your NEED and derive the amount of Insurance you require at that point of time. It is said that if Insurance Product is bought as per the NEED and Correct product is selected it give maximum satisfaction and This is explained in below points for better understanding.

1)   One should first know HUMAN LIFE VALUE of the person which is based on certain calculation and buy only that much amount of Life Cover for him/herself.

2)   Generally It is said that Life Insurance must be at-least 8 to 10 Times of your yearly income which gives approx figure (though it may differ from person to person and stages of life) but still is help for person.

3)   Get the NEED ANALYSIS Process of the person done with some professional and buy the CORRECT INSURANCE POLICY as appropriate product (Selecting a product such as Term, Whole Life, Endowment Policy, etc is most important) 

4) Last but not the least, One should also take care that person slowly and gradually reaches the Life Insurance Amount and must check his premium paying capacity in longer prospective.

At Times you may find some Insurance People/Agents doing your NEED ANALYSIS even but product comparison is not within their limitation. For which CFP and Similar kind of Service provider are better choice who may charge you some money. But this money spend will help you to get maximum satisfaction and peace of mind and will ultimately save your money over a period of time. 

It better to pay and ensure you get the CORRECT POLICY of your NEED and do not regret later by paying much much more in comparison on your decision taken.

KNOW TOP TEN THING'S (Before Buying Health Insurance)

Most IMPORTANT things which person must check in before buying Health Insurance 

Health Insurance is product on which every person have there own views, Many of the people will agree with all the point mentioned in, But may not agree with the Order in which we represent it. However we recommend to come to correct conclusion one should follow  this checkup in which it is mentioned below.

 

Network Hospital : Always First check are the Network Hospital of your area of reach in companies List of Hospital, If none of the hospital of your reachable area are in their list you may find difficult to have cashless facilities and in such cases you may have to pay the amount and then claim by manual processing the claim process, which can be painful in high claim amount and followups to get the amount back.

Company Performance : Performance is most important for Health Insurance Company, Always check from how many years is company into this business,  this is very minor point but at times we have noted big companies have started Health Insurance but not fulfilling the promises to which they stand for and ultimately happened to be nightmare for policy holder in getting the services.

TPA Service /In House Support. : Many of the company generally have TPA (Third Party Administrator) Companies who takes care of authorization and settling the claim  request received, How ever now a days Health Insurance company themselves do all this work and have this administration done by their dedicated team called as In House support. Hence, At times In house Support give better service and are preferred by majority of person.

Premium : Most important which every one of you do check on comparing the premium with Sum Insured and is a criteria on which every person does make their decision. This stand fourth in our views although it is number one for many. One more thing to be checked in this is not only compare the current Premium but also check the Premium Slab and their increased charges too (ie. 0-35, 36-45, 46-55.. or it is 0-35, 36-40, 41-45, and so forth) Hope you get what we mean.

Claim Settlement Ratio : This is second criteria for many but we rate this at number five as there are many point to be checked based on which Claim Settlement Ratio is derived. As Fraud and rejected claim reason play a vital role. Still 90% near by ratio is considered to be acceptable.

Renewal-ability : Always check this point however this should not be point of worry for much days as news are there and also there has be growing demand with IRDA which will ensure all policy are made life long renewal. But until this is made officially let us all consider this for always that the policy is life long renewable.

Bonus & Discount : Almost all the company give some Bonus or Discount for every free claim period which is accumulated in policy or group discount are given on premium paid which ultimately help you to save money.

Recharge Facility : This is one of the most common feature introduced by new companies in Floater policy and act toward giving competition for other companies where in case a person occupies whole amount in one claim period and is left with nothing to be claimed, still company provides the same amount of recharge in same policy period without any premium charged and is called as Auto Recharge feature which can be claimed for other instance or any other person

Exclusion : Those who have ever taken Policy before or had inquired about policy you would have noted there are certain hospitalization which are excluded permanently and some hospitalization have  wait period upto 48 months, generally this is seen in case of (Pre Existing Diseases) however certain companies differ with exclusion and their waiting period and are quite justified too, but this need to be checked for sure while taking a policy.

Co-Pay & Capping: Co-pay means particular amount would be paid by insurer and rest to be paid by insured, which generally happen in case of fresh policy taken for senior citizen and capping means there are limitation with room rent charges, doctor fees charges, ICU Charges etc etc which differs form policy to policy and there sum insured. 

We know many of you will have lost of question on couple of question but all this point cannot be explained in full details in single post. as it will difficult for us and will equally be boring for you to read it. Hence do check our up coming post with latest update on each of the point in details.

Beside this there are many things which also do need to be considered which differs from case to case, But however we are confident that if any one takes care on all this TOP TEN POINT while deciding for the policy in comparison  there are hardly any chance you will regret on your decision taken while deciding on HEALTH INSURANCE and getting proper after sales services on the same

Do share this Article with all whom you know now and help in educating all