Ask us: On investment

All eggs in one basket

Q. I am a 41-year-old from Chennai and have bought a medical insurance policy named iHealth for myself recently from ICICI Lombard General Insurance Company Ltd. In addition to my health insurance, I have also taken two-wheeler and accident insurance policies from ICICI Lombard.

Likewise, I am paying premium for two unit-linked insurance policies with SBI Life Insurance Company for the past three years (one is a pension policy and the other, a life insurance policy) and also have selected SBI as the fund manager in Tier I of my NPS account.

I would like to know what the advantages and disadvantages of enrolling with a single insurer for various insurance products are?

SETHURAMAN H

A. Congratulations on being a believer in insurance for so many of your needs and for your several and diversified investment options.

The core decision you have to make when buying insurance is whether a product suits your requirements, about which you should have clarity.

The choice of an insurance company should be a natural progression of this. Having said this, if you have several policies with the same insurer for whatever reason, you become a priority customer and the relationship gets stronger to your benefit.

Administration of policies becomes easier in case of change of address, for example, as you have to get in touch only with one person in the organisation, usually. Across life and general insurance, this synergy will work if you have gone through the same intermediary because the entities, even if they belong to the same business group, are entirely different. Of course, the intermediary can simply be the bank that also belongs to the same group!

Coming to the disadvantages, should the business group face difficulties, then all your products will also be at risk and administrative and procedural issues can get bogged down and complicated.

But your benefits and rights as a policyholder will be safeguarded even if your insurer fails because Indian insurance regulations ensure that another insurer will be given the responsibility.

Starting health insurance policy

Q. My father is 60 years old. Is it possible to start a new health insurance policy with full claim from now?

T. K. P. THAMARA

A. The short answer to that is ‘No.’ There will be a blanket 30-day waiting period for any claim under a new policy except hospitalisation because of an accident.

At his age, a pre-underwriting medical examination will be necessary and all hospitalisation policies exclude pre-existing conditions for three or four years.

In addition, some treatments and procedures will be payable after two years and this differs from policy to policy.

(The writer is a business journalist specialising in insurance & corporate history)