General Insurance: Ajay Bimbhet

Four years ago, I bought a Rs5 lakh health plan from a life insurance company. I recently learnt that life insurers only give benefit plans and not health cover. What is the difference? Should I exit?
General insurance companies offer indemnity health plans that cover medical expenses. Few life insurers offer such policies. They mostly offer benefit plans such as hospital cash plans, which provide daily fixed cash on hospitalisation, irrespective of the bill. Or, critical illness plans where the sum insured is paid in the event of diagnosis of an illness covered under the policy.

Please check your policy document to understand the type of coverage. If it is a benefit plan, continue and take an additional indemnity cover according to your requirements. A combination of benefit and indemnity plans provides better coverage, as the additional compensation received under the benefit policy helps recover the non-medical expenses on hospitalisation.

Recently, I shifted into a new house and bought many expensive items. How should I assess the value of my belongings for a householder’s insurance plan?
There are two kinds of home-content policies. First, where you declare each item to be covered at a value you would like it to be covered. Second, where different types of articles are covered and their sum insured is pre-fixed (pre-underwritten).

In the first case, you should be careful about declaring all items keeping in mind their replacement value. Also, you need to declare addition of assets during the policy period and review the sum insured at the time of renewal. If you opt for a pre-underwritten plan, review the details to ensure the items covered, sum insured, individual sub-limits and coverage meet your requirements.

What is meant by insurable interest?
Insurable interest refers to the financial loss in case of occurrence of the insured event. For example, if your house gets damaged by an earthquake, the value of your house may fall, or you will incur expenses to rebuild the house. Hence, you have an insurable interest to cover your house. The financial institutions also have an insurable interest to the extent of the loan amount.

Do companies cover alternative medicines such as homeopathy or ayurveda? What are the conditions?
Indemnity health plans cover allopathy medical expenses only. However, some insurers cover alternative medicines. Even in such cases, the cover is the percentage of the sum insured.

The writer is managing director, Royal Sundaram Alliance Insurance Company. Send your queries to yourmoney@bsmail.in