The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I have two unit-linked insurance policies, or Ulips. There have been news reports on service tax being implemented on Ulips. How will this impact existing policies?
As per the Finance?Act,?2008, service tax is now applicable on certain charges of Ulips, including allocation charge, policy administration charge and fund management charge. This will impact all policyholders—existing and new.
Many life insurance companies are also offering health insurance policies these days. What is the benefit of buying a health plan from a life insurance company?
There are many benefits of buying a health plan from a life insurance company. For one, life insurance firms sell long-term health products that don’t have to be renewed every year. Two, they can offer death benefit. These firms can also offer maturity benefit in their products. Moreover, life insurance firms sell fixed benefit products, while general insurers sell indemnity cover health products. Indemnity cover means the claim payment is made on actual health expenses incurred.
And finally, after having an adverse experience year, premium rates cannot be reviewed in a life insurer’s product. But general insurers cannot do this, as they generally sell one-year reviewable products.
Readers are welcome to write in with their queries to firstname.lastname@example.org. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Bert Paterson, managing director and CEO, Aviva India.