Zero premium allocation charge but hefty policy admin charge
Kotak Mahindra Old Mutual Life...
Apollo Munich has launched Optima Restore, a mediclaim with innovative features of restoring sum insured during policy year and giving 50% no-claim-bonus increase in sum insured for couple of years. Will this optimal product restore faith in hapless mediclaim insured?
Apollo Munich Optima Restore takes care of couple of key customer needs. Customers fear exhausting the sum insured (SI) during the policy year and hoping there would not be any more hospitalisation during the remaining policy year, as there isn’t any more insurance until the new policy year. Optima Restore will give additional SI (equal to base SI) without additional premium or paper-work. The only caveat is that the additional SI can be used only for new illnesses. This is applicable for individual and family floater products which can be a boon to customers. E.g. Individual or family floater of Rs3 lakh SI can potentially give Rs6 lakh coverage in a year for the individual or family without additional premium (if Rs3 lakh is exhausted in the policy year), as long as the additional coverage is used for new illnesses.
The other concern customers have is that no-claim-bonus (NCB) usually gives only 5% additional SI subject to maximum of 25% in most mediclaim products. Apollo Munich is offering 50% increase in SI for NCB at no extra premium, subject to maximum of two years. This means if there are no claims in couple of years, your SI can double without any premium for additional SI. The only catch is that if there is claim, your SI drops down to the previous policy year, but you are guaranteed base SI. E.g. Individual or family floater of Rs3 lakh SI will increase to Rs4.5 lakh SI next year if there is no claim. If there is another year of no claims, the SI will increase to Rs6 lakh, but you will pay premium on only Rs3 lakh SI. If there is claim in year, the SI falls to Rs4.5 SI. If there is another year with claim, the SI goes down to Rs3 lakh, but it will not go below Rs3 lakh. If there are claim-free years again, there is potential to increase SI by 50% for couple of years.
The best feature is that the restore feature of SI and NCB multiplier work together. E.g. Individual or family floater of Rs3 lakh SI will increase to Rs6 lakh SI in a couple of years with no claim. If for some reason, Rs6 lakh SI is exhausted in the policy year, the product will give additional Rs3 lakh (base SI) coverage for new illnesses. It means you can be covered for Rs9 lakh during that policy year by paying premium of Rs3 lakh SI.
EPFO may lower the interest rate on deposits to 8.6% to match it with the rate of the public provident fund (PPF) scheme for 2011-12.
Retirement fund body EPFO may lower the interest rate on deposits to 8.6% for over 4.7 crore subscribers for 2011-12 to match it with the rate of public provident fund (PPF) scheme.
The Employees' Provident Fund Organisation (EPFO) had provided 9.5% interest rate to its subscribers for 2010-11 after it found Rs1,731 crore surplus in its books of account.
‘The Labour Ministry will soon be sending a note to the Finance Ministry, recommending 8.6% rate of interest on provident fund deposits to EPFO subscribers for this fiscal as provided under PPF scheme’, a source privy to the development said.
The source said the ministry wants bring the EPFO's rate of return on par with the PPF rate.
According to the EPFO's income projections, if the body provides 8.25% interest for 2011-12, it would leave a deficit of Rs24 lakh. It had further pointed out that an 8.5% rate of return would translate into a deficit of Rs526.44 crore.
But, the Labour Ministry may factor in estimation error, which could spare around Rs400 crore. This amount would be sufficient to pay an additional 0.25% over the projected 8.25% rate of return this fiscal.
Moreover, the source said that about Rs15,000 crore is lying in inoperative accounts which has been invested and is yielding returns. EPFO has not yet decided whether the return on these accounts would be distributed among live accounts.
Inoperative accounts are those accounts that have not received any contribution for 36 months or more. EPFO had stopped payment of interest to such accounts from 1 April 2011.
Last month, EPFO's trustees had failed to decide on the interest rate for the current fiscal following sharp differences among them on the issue and had sought the Finance Ministry's intervention.
While the EPFO had suggested payment of interest at the rate of 8.25% for 2011-12, the trade union members insisted it should be 9.5%. The representatives of employers wanted the interest rate to be fixed at 8.5%.
The EPFO's apex decision making body, Central Board of Trustee (CBT), had sent the three scenarios to Labour Ministry for further recommendation to the Finance Ministry. As per the practice, the CBT takes final call on the issue and seeks Finance Ministry's concurrence on it.