Chapter 7:- Personal and Retail Insurance

In this chapter we will learn about
A. Personal Accident Insurance
B. Health Insurance
C. Overseas Travel Insurance
D. Householder‟s insurance
E. Shopkeeper‟s Insurance
F. Motor Insurance

*Personal Accident Insurance or P.A. :- Accident usually denotes a sudden, unforeseen and an unexpected event caused by external, violent and visible means (but does not include any illness or disease), which results in physical bodily injury but does not include mental, nervous or emotional disorders, depression or anxiety.

*Genrally Personal Accident Policy (P.A.) includes following things:-
i. Death arising out of accident
ii. Permanent total disability
iii. Permanent partial disability
iv. Temporary total disability

*1. Permanent Total Disability (PTD): means totally disabled for lifetime viz paralysis of all four limbs, comatose condition, loss of both eyes/both hands/both limbs or one hand and one eye and one leg or one hand and one leg.
2. Permanent Partial Disability (PPD): means partially disable for lifetime e.g. loss of fingers, toes, phalanges etc.
3. Temporary Total Disability (TTD): means totally disable for temporary period of time. This section of cover is intended to cover the loss of income during the disability period.

*Common Exclusions (What is not covered?)
Disablement arising from:
i. Self injury or suicide;
ii. Accident while under influence of alcohol or drugs;
iii. War and allied perils
iv. Whilst committing any breach of law with criminal intent

*Some provisions which clarify the intent of the policy:
i. If the same accident results in loss of hand as well as loss of life, the insurer will pay for the loss of life and not for loss of hand.
ii. If an accident causes a Temporary Total Disablement (TTD) as well as a Permanent Partial Disablement (PPD), the insurer will pay for the higher of the two benefits and not for both.
iii. Even if payment of compensation is possible under more than one claim involving different accidents under the same policy, the company‟s total liability is restricted to the sum insured.
iv. In respect of temporary total disablement, after the claim is admitted, the amount is usually paid in one lumpsum, rather than every week


*Health Insurance:- Health insurance can simply be defined as a contract between the insurer and the insured wherein insurer agrees to pay hospitalisation expenses to the extent of an agreed sum assured in the event of any medical treatment arising out of an illness or an injury.

*The expenses covered usually include:
 Cost of room / bed
 Boarding expenses
 Nursing expenses
 Doctor‟s fees
 Diagnostic tests
 Operation theatre charges and
 Expenses related to surgical appliances and the like

*What is Not Covered:- Health insurance policies in India normally provide a comprehensive health cover, covering nearly all illnesses and injuries requiring minimum 24 hours of hospitalization, subject to a few exclusions namely AIDS, STDs, mental disorders, congenital defects. Typical health insurance policy does not cover medical expenses that are routine in nature or incurred for routine health check-ups, cosmetic surgery, plastic surgery, dental treatment, aesthetic treatment, etc.

*CLAIM PAYMENTS
Scenario 1: Cashless facility
i. The insured has to approach a network hospital and get the treatment done
ii. The card issued either by the insurer or by a Third Party Administrator has to be presented to the network hospital.
iii. Either based on the smart card or after getting pre-authorization from the insurer or from the TPA, the hospital would give admission.
iv. Some insurance companies are required to be notified 48 hours before hospitalization.
v. The insurer/ TPA will process the cashless settlement after verification of policy details.
Scenario 2: Claims Reimbursement
If insured does not opt for cashless settlement, she / he has to pay directly to the hospital. The bills have then to be submitted to the insurer/ TPA and the claims will be reimbursed.

*Overseas Travel Insurance

*Some of the perils covered are:
 Accidental death / disability,
 Emergency hospitalisation,
 Repatriation,
 Hijack cover,
 Emergency dental relief,
 Delay or loss of checked baggage,
 Delay or cancellation of trip,
 Loss of passport and documents,
 Third party liability for property and personal damages etc.

*Corporate frequent traveller‟s plans
This is an annual policy whereby a corporate /employer takes individual policies for its executives who frequently make trips outside India. This cover can also be taken by individuals who fly overseas multiple times during a year. There are limits on the maximum duration of each trip and also the maximum number of trips that can be availed in a year.

*Exclusions
Travel insurance generally excludes pre-existing ailments, travel against the advice of the physician or for the purpose of obtaining medical treatment. It also excludes claims arising out of suicide, illness / injury due to abuse of drugs or alcoholic drink and for participation in hazardous sports / events. However, insurers may cover trips involving any kind of sporting activities, subject to prior declaration and specific approval with premium loading.

*Retail Insurance Products
There are some insurance products that are purchased for individuals for covering certain interests. Though small commercial or business interests could be there for such insurances, these are generally sold to individuals. In some markets these are called „small ticket‟ policies or „retail policies‟ or „retail products‟. Insurances of the home, motor cars, two-wheelers, small businesses like shops etc. fall under this category. These products are usually sold by the same agents / distribution channels that deal with personal lines of insurance as the buyers also are essentially from the same consumer segment.

*Householder.s Insurance
„Named Perils Insurance Policy‟
i. A householder‟s insurance policy only provides coverage on losses incurred to the insured‟s property from hazards or events named in the policy. The perils covered will be clearly spelt out.
ii. Named peril policies may be purchased as a less expensive alternative to a comprehensive coverage or broad

*Shopkeeper's Policy
It Covers
i. Burglary and Housebreaking: Cover for housebreaking, theft, and larceny of office content
ii. Machinery Breakdown: Cover for breakdown of electrical / mechanical appliances
iii. Electronic Equipment and Appliances:
 Provides all-risk cover for electronic appliances
 Cover for loss of electronic installations
iv. Money Insurance: Provides coverage against loss of money due to an accident while it is in:
 Transit from the business premises to bank and vice versa
 A safe at the business premises
 A till (box/drawer/ counter) at the business premises
v. Baggage: Compensates for loss of baggage while on travel for official purposes
vi. Fixed Plate Glass and Sanitary Fittings covers accidental loss of damage to:
 Fixed plate glass
 Sanitary fittings
 Neon Sign / Glow Sign / Hoarding
vii. Personal Accident
viii. Infidelity / Dishonesty of employees: Covers loss or damage caused by dishonest acts of employees
ix. Legal Liability:
 Compensation for accidents arising out of and in the course of employment
 Provides cover for legal liability to third parties

*Moter Insurance:- Spending so much of money on a brand new car, and what if someone crash it down and dosent have enough money to pay your expenses, thats where law comes in for Moter Insurance and makes Third Party Insurance Mandatory

*Mandatory Third Party Insurance
As per the Motor Vehicles Act, 1988, it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property. A Certificate of Insurance must be carried in the vehicle as a proof of such insurance.

*Motor Insurance covers all types of vehicles plying on public roads such as:
 Scooters and motorcycles
 Private cars
 All types of commercial vehicles: Goods carrying and passenger carrying
 Miscellaneous type of vehicles e.g. cranes,
 Motor Trade (Vehicles in Showrooms and Garages)


*Exclusions
Some of the important exclusions under the policies are wear and tear, breakdowns, consequential loss, and loss due to driving with invalid driving license or under the influence of alcohol. Use of vehicle not in accordance with `limitations as to use ' (e.g. private car being used as a taxi) is not covered.

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Summery 
a) Generally personal accident (P.A.) policies cover:

• Death arising out of accident
• Permanent total disability
• Permanent partial disability
• Temporary total disability 

b) Any individual residing in India can take personal accident policy for herself / himself and dependent family members
c) The premium calculation for a personal accident policy may depend on various factors like age, number of family members and occupation of the insured which may be classified as risk levels 1, 2 or 3 by the insurers depending on the hazard involved.
d) Personal accident policies are also issued to large groups that are already in existence for a common purpose, which is other than insurance.
e) Under a health insurance policy, the insurer agrees to pay hospitalization expenses to the extent of an agreed sum assured in the event of any medical treatment arising out of an illness or an injury.
f) In a family floater health insurance policy, the sum insured floats among the family members, usually a husband, wife and two children.
g) Health insurance policies offer cashless facility or reimburse the insured where cashless facility is not available.
 h) Travel insurance policies envisage all kinds of exigencies one is likely to face whilst travelling overseas.
i) Corporate frequent travellers plan is an annual policy whereby a corporate / employer takes individual policies for its executives who frequently make trips outside India.
j) A householder‟s insurance policy only provides coverage on losses incurred to an insured property from hazards or events named in the policy. The perils covered will be clearly spelt out.
k) Householder‟s insurance covers the structure and its contents against fire, riots, bursting of pipes, earthquakes etc. Apart from the structure, it covers the contents against burglary, housebreaking, larceny and theft.
l) Package or umbrella covers give, under a single document, a combination of covers.
m) For a householder‟s insurance policy generally there are two methods of fixing the sum insured: Market Value (MV) and Reinstatement Value (RIV).
n) Shopkeeper‟s insurance usually covers damage to the shop structure and contents due to fire, earthquake, flooding or malicious damage; and burglary. Shop insurance can also include business interruption protection.
o) Motor insurance covers the loss of vehicles and the damages to them due to accidents and some other reasons. Motor insurance also covers the legal liability of vehicle owners to compensate the victims of the accidents caused by their vehicles.

KEY WORDS
a) Personal accident insurance
b) Group policy
c) Health insurance
d) Family cover
e) Travel insurance policy
f) Householder‟s insurance
g) Shopkeeper‟s insurance
h) Motor insurance

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Question 1
The following is not covered in Personal Accident
I. Death
II. Suicide
III. Permanent disability
IV. Loss of one hand

Question 2
Personal accident cover is only
I. Whilst travelling abroad
II. Whilst travelling in India
III. For travelling both in India and abroad
IV. Whilst travelling in India and neighboring countries

Question 3
Health insurance usually covers
I. Pre-hospitalization treatment
II. Post-hospitalization treatment
III. Domiciliary treatment
IV. All of the above

Question 4
Travel insurance covers
I. Delay in baggage
II. Emergency hospitalization
III. Loss of checked baggage
IV. All the above

Question 5
For Travel insurance the sum insured depends on
I. Age
II. Number of days of trip
III. Countries to be visited
IV. All the above

Question 6
In householder‟s insurance
I. Gold and silver ornaments are covered
II. Content‟s of one‟s shop is covered
III. Cars owned by the family are covered
IV. Parcels sent by post are covered during transit.

Question 7
Householder‟s insurance covers
I. Only the structure of the home
II. Only the Contents of the home
III. Both the structure and contents
IV. Both Structure and contents only when insured is not at home

Question 8
In shop keeper‟s insurance, which of the following are not covered?
I. Machinery breakdown
II. Malicious damage
III. Business interruption
IV. Willful destruction by insured

Question 9
In shop keeper‟s insurance which of the following are usually not covered
I. Money in till/counter at business premises
II. Money in transit from bank to business premises
III. Money in safe at business premises
IV. Money carried by customer to business premises.

Question 10
Shop insurance covers
I. Dishonest acts of employees
II. Dishonest acts of insured
III. Dishonest acts of customers
IV. Dishonest acts of money lenders


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Answers

Answer 1
The correct option is II.
Suicide is not covered in Personal Accident.

Answer 2
The correct option is III.
Personal accident cover is only for travelling both in India and abroad

Answer 3
The correct option is IV.
Health insurance covers all of the above: pre-hospitalisation treatment, post-hospitalisation treatment, domiciliary treatment.

Answer 4
The correct option is IV.
Travel insurance covers all of the above: delay in baggage, emergency hospitalisation and loss of checked baggage.

Answer 5
The correct option is IV.
For travel insurance the sum insured depends on all of the above: age, number of days of trip, countries to be visited.

Answer 6
The correct option is I.
In householder‟s insurance gold and silver ornaments are covered.

Answer 7
The correct option is III.
Householder‟s insurance covers both the structure and contents.

Answer 8
The correct option is IV.
In shopkeeper‟s insurance, willful destruction by insured is not covered.

Answer 9
The correct option is IV.
In shopkeeper‟s insurance money carried by customer to business premises is usually not covered.

Answer 10
The correct option is I.
Shop insurance covers dishonest act of employees.

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