March 2020 - Page 3 of 3

IRDAI: Insurance Regulatory And Development Authority Of India

March 4, 2020February 25, 2022 Ankita Sejpal

You must have heard the name of IRDAI in the context of insurance. Many of you have the basic understanding that IRDAI is the insurance regulator but is it all there is to know about it?

While it is true that IRDAI is the regulator of the insurance sector, you should also understand its role, duties and the powers that it has over insurance companies. So, let’s understand the history of IRDAI and its roles and duties.

Establishment of IRDAI

Prior to the year 1999, the insurance segment was solely controlled by the Government of India and Government-owned companies were allowed to sell insurance products. In 1993, the Government formed the Malhotra Committee to recommend reforms in the insurance segment so that the segment can be made more productive. The Committee recommended liberalisation of the insurance sector which would allow private companies to enter the insurance market. However, if private companies would enter the insurance market, it would become necessary for an authorised body to monitor and govern the workings of the insurance companies.

This reason paved the way for the establishment of IRDAI. In the year 1999, the Insurance Regulatory and Development Authority Act was passed which established IRDAI as an autonomous body for governing insurance companies. Later on, in April 2000, the Insurance Regulatory and Development Authority of India (IRDAI) was established as a statutory body for the insurance segment. Today, IRDAI has its headquarters in Hyderabad and is chaired by Mr Subhash Chandra Khuntia.

The objective of establishing IRDAI

The Insurance Regulatory and Development Authority Act was passed to create IRDAI so that –

The interests of policyholders would be protected
The insurance industry can be regulated and promoted
The insurance industry can grow orderly without any ambiguity

Duties and powers of IRDAI

Today, IRDAI is the apex body which governs all aspects of insurance. Though the Insurance Act, 1938 lays down the rules and regulations for insurance companies, IRDAI ensures that insurers follow the rules prescribed under the Act. Moreover, IRDAI also monitors the insurance sector and makes changes in the rules prescribed under the Insurance Act so that the insurance sector can adapt to the changing needs of society.

IRDAI is tasked with various duties, functions and powers under Section 14 of the IRDA Act 1999. These powers and duties are as follows –

Issue and renew certificates of registration to insurance companies so that they can sell insurance. Moreover, IRDAI also has the power to suspend, cancel, withdraw or modify the certificate of registration which it had issued
IRDAI has to protect policyholders’ interests in matters of assignment, nomination, claim settlements, insurable interest, surrender value which they can receive and other terms and conditions of the insurance policy
The eligibility criteria, the requirement of training and examination for insurance agents is fixed by the IRDAI. It also lays down the code of conduct which insurance agents are expected to follow when selling insurance policies to individuals
The IRDAI also specifies the code of conduct which should be followed by loss assessors and surveyors of the insurance company
It is the duty of IRDAI to promote efficient insurance growth
IRDAI inspects, audits and collects relevant information from insurance companies and other organisations which are connected with the business of insurance. This is done for monitoring purposes to ensure that companies and organisations are following the prescribed IRDA regulations in conducting their business
The manner of preparing the books of accounts and financial statements of insurance companies as well as their intermediaries is specified by IRDA
IRDAI has to oversee that insurance companies invest their funds as per the rules prescribed under the Insurance Act, 1938
IRDAI also regulates the solvency margins of insurers. It ensures that insurers maintain the minimum solvency margin as specified in the Insurance Act, 1938. Solvency margin is the rate by which the insurer’s assets exceed the liabilities. A high margin is favourable as it depicts a strong financial standing of the company
The minimum percentage of the insurance business which must come from the rural and social sector is specified by IRDA. Both life and general insurance companies are expected to meet the prescribed minimum business requirement from rural areas by selling micro-insurance policies

Besides these roles and powers, IRDAI is free to exercise any other power as it might see fit for the regulation of the insurance industry.

Unique rights of IRDAI

Though IRDAI performs the above-mentioned duties and has different powers, here are some of the unique rights of IRDAI –

IRDAI also promotes as well as regulates other professional organisations which are connected with the business of insurance or reinsurance. These professional organisations might also receive a percentage of the premium income of the insurance company for promoting and regulating themselves. The IRDAI specifies this percentage which insurance companies have to pay
As per the provisions of Section 64U of the Insurance Act, 1938, most of the rates and terms of general insurance business are regulated or controlled by the Tariff Advisory Committee (TAC). However, if, in certain cases, the TAC cannot control the rates and terms, IRDAI can control and regulate such rates and terms
In case of any disputes between the insurance companies and their intermediaries, the IRDAI can step in as an adjudicator
The functioning of the Tariff Advisory Committee is supervised by the IRDAI.

To sum up

All said it is quite clear that IRDAI is like to principal of the school called the insurance sector. It is tasked with the duty to ensure that the sector functions smoothly without any hitches. Moreover, through amendments and IRDAI regulations, IRDAI continuously makes changes in the insurance rules so that the insurance industry can keep pace with the changing needs of individuals. So, if you are worried about trusting an insurance company, relax. The company is governed by the rules of IRDAI and is genuine. You can also raise any complaints that you have with your insurer with IRDAI and it would help you get your grievances resolved.

Frequently Asked Questions

Can I approach IRDAI for grievance redressal?
You should initially try to redress your grievance through the insurance company’s internal grievance handling department. But if you are dissatisfied, you can approach the IRDAI and it would help solve your disputes.
Are agent licenses given by IRDA?
Yes, the licensing of agents is under the purview of IRDAI’s duties. It issues the licenses to eligible agents who clear the prescribed insurance exam. This duty was incorporated through the IRDA (Licensing of Insurance Agents) Regulations which was passed in the year 2000. These IRDA regulations contain the rules for applying and availing an agent’s license.
Does IRDAI protect the policyholder’s interests?
Yes, it does. IRDA passed a resolution in the year 2002 for the same. This was called IRDA (Protection of Policyholders’ Interest) Regulations 2002. These IRDA regulations lay down the rules which insurance companies and their intermediaries should follow to ensure that the policyholder’s interests are protected at the time of sale of the policy as well as at the time of claims.
How to lodge a complaint through IRDA?
The IRDAI has established the IRDA Grievance Redressal Call Centre (IGCC) which is a channel for lodging your complaints. You can call the toll-free number of the call centre which is 155255 or 1800 4254 732. Alternatively, you can also send an email to complaints.irda.gov.in to register your complaints against insurance companies or their intermediaries.

E-Insurance: Everything You Need to Know

March 4, 2020February 25, 2022 Ankita Sejpal

Technology has made our lives easier. Today you can do everything at the click of a button whether you want to buy, invest, get a loan or connect with your loved ones. Technology has revolutionized the way we live our lives and the world is gradually shifting to a digital age when everything would be accessible online. Even in the case of insurance, the online medium has made buying insurance policies easier and simpler. Today, you can buy all types of insurance plans online through your Smartphones or computers. These online insurance policies are called e-insurance policies and they provide you instant coverage. Moreover, to keep up with the advancing digital age, you can also store your insurance policies online in an e-insurance account. Do you know what it is and how it works?

What is an e-insurance account?

An e-insurance account is an online depository account which acts as a vault for your insurance policies. It is also called eIA or Electronic Insurance Account. Your insurance plans can be stored in soft copy in your e-insurance account. You can then access the details of your existing insurance policies by logging into your account and checking them.

What are the e-insurance policies?

The policies which are stored in the e-insurance account are called e-insurance policies.

Features of e-insurance accounts

E-Insurance accounts have the following salient features –

The accounts can be opened easily through any of the approved repositories in India
You can store the insurance policies of your whole family in the account
The account can be used to store any type of insurance that you buy for yourself and your family
You can have only one e-insurance account in your name
There is a unique number allotted to your e-insurance account. This number helps in identification of the account and can be used for any type of correspondence with the insurance company
When you buy a new insurance policy, you can provide the insurance company with your existing e-insurance account number and the company would send a copy of the policy to your account
Your e-insurance account would have a unique user ID and password using which you can log into your account any time that you want to access your insurance policies
Opening of the account is completely free of cost

Top #7 Benefits of an e-insurance account

An e-insurance account is a futuristic way of storing your insurance policies in one place. It provides various benefits which are as follows –

Since the policies are stored in an electronic format in the e-insurance account, they are safe from being lost, damaged or stolen
You would be able to access your e-insurance account anytime, anywhere by simply logging in to it. Thus, the information of your insurance policies would be at your fingertips, literally, as you can check the relevant details whenever you want. This is extremely helpful in case of claims when you require the policy number and policy details to register the claim immediately
Your e-insurance account is opened after your KYC verification has been done. As such, whenever you buy a new insurance policy, you don’t have to submit your KYC documents every time. You can simply quote your e-insurance account number and the insurance company would be able to access your KYC details online. This reduces unnecessary paperwork and helps you buy a policy easily
The e-insurance account is very convenient and flexible as it allows you to store every type of insurance policy that you buy for yourself as well as your family members
Online premium payments can also be done easily through your e-insurance account
You can monitor, review and track all your insurance policies easily and conveniently as they are stored at one place
In case of a change in the contact details or address, you can update your e-insurance account and the change would automatically be recorded in your insurance policies as well

How to open an e-insurance account?

If you want to open an e-insurance account, the process is simple. You would have to approach any one of the approved insurance repositories for opening the account. The Insurance Regulatory and Development Authority of India (IRDAI) has approved four companies to act as insurance repositories for the opening of e-insurance accounts. They are as follows –

Karvy Insurance Repository Limited
CAMS Repository Services Limited
NSDL Database Management Limited
Central Insurance Repository Limited

After you choose the preferred repository, the process to open an e-insurance account is as follows –

Download the form for opening the e-insurance account. This form can be availed from the chosen insurance repository, an insurance company or from an Approved Person.
You would have to fill-up the form and submit it along with the required set of documents
The submission of the form and the documents would have to be done at the nearest office of the chosen repository
Once all the documents are submitted and they are verified, you would be issued a user ID and password with which you can register your e-insurance account

Documents required for opening e-insurance accounts

To open your e-insurance account, you should submit the following documents –

Your recent, coloured, passport-sized photograph
A cancelled cheque of your bank account which contains the details of the bank and your bank account number
Self-attested copy of your identity proof like your Voter’s ID Card, PAN Card, Passport, etc.
Self-attested copy of your address proof like utility bills (not more than six months old), driving license, passport, Aadhar Card, etc.
Self-attested copy of your age proof like Voter’s ID Card, Aadhar Card, Passport, birth certificate, etc.

So, what are you waiting for? Create an e-insurance account and store all your policies in one place. It is convenient, easy and even free of cost. Once stored you would have all your insurance-related details at your disposal without having to search for them. Wouldn’t it be great?

Frequently Asked Questions:

Who is an Approved Person?
An Approved Person is an individual who has been appointed and authorised by the insurance repository to provide services of opening e-insurance accounts to interested individuals.
I don’t have any insurance policy. can I still open an e-insurance account?
Yes, you can. Having an existing insurance policy is not a criterion for opening an e-insurance account. The account can be opened by anyone whether or not they have bought insurance.
Can I store my commercial insurance policies also in the e-insurance account?
Yes, you can store even commercial insurance plans in the e-insurance account as the account does not have any limitations on the types of insurance policies which can be stored in it.
After submitting the documents, how long would it take for the account to be opened?
The e-insurance account would be opened within 7 days of submission of the opening form and the relevant documents.
Can existing policies be converted to e-policies and stored in e-insurance account?
Yes, you can ask the insurance company to convert your existing insurance policies to e-insurance policies and store them in your e-insurance account.
What would happen to the e-insurance account if I die?
When you open an e-insurance account, you would have to appoint an authorized representative who can access your account in case of your death. The name of the representative should be mentioned in the account opening form. If you die, the authorized representative would be able to access your e-insurance account and get the details of your insurance policies.

Business Insurance: Buy & Compare Best Business Insurance Plans

March 4, 2020February 25, 2022 Sidharth Hampanavar

Buying a home is a big affair since you invest a lot of money in buying it. Moreover, additional amounts are spent on decorating, furnishing and buying appliances. As such, in case any damages occur you stand to lose huge amounts of money. If your house is damaged due to a flood or earthquake you would incur substantial financial losses which might prove unaffordable. That is why you need a home insurance policy. Do you know what the policy is all about?

What is home insurance?

A home insurance policy, also called property insurance, is a policy which covers the damages suffered by your home, its contents or both. If there is any damage which is natural or man-made in nature, the policy would pay you for the loss that you incur.

Features of a home insurance policy
A home insurance plan has the following features –
- It comes in different variants to suit the different coverage requirements of homeowners
- The premiums are very low and affordable
- The policy is usually issued for one year after which you can renew the plan
- Coverage amount depends on the asset insured and its value
Types of home insurance plans
Home insurance in India comes in the following variants –
- Structure insurance
  This policy covers the structure of your house, i.e. the roofs, walls and floors against damages suffered due to natural or man-made calamities. The policy can also be called a Standard Fire and Special Perils policy as it covers the structure against fire and other natural or man-made calamities.
- Contents insurance
  This policy covers only the contents of the house against damages of loss. Contents of the home include home appliances, jewellery, furniture and fixtures and other contents of the house. This policy is suitable for tenants who face a threat of damage to their belongings if the house is damaged.
- Comprehensive insurance
  This policy covers both structure and contents insurance. It covers the structure of the house as well as its contents against damages or loss due to natural or man-made conditions.
- Public liability insurance
  This policy covers any type of injury suffered by individuals when they are on your property or if your property causes damage to another individual’s property. In such cases, the aggrieved third party might raise a financial liability on you. This liability is covered under the policy.
- Tenant’s insurance
  This insurance policy is designed for tenants who are living in rented houses. The policy is like a contents insurance which covers the belongings of the tenants in the rented house.
What is covered under home insurance ?
A home insurance policy covers the damages suffered due to the following instances –
- Fire
- Riots, strikes or any other malicious acts
- Earthquakes, lightning, floods, cyclones, storms, etc.
- Aircraft damage
- Missile testing operations
- Terrorist acts
- Burglary and theft of the contents of the home
- Explosion or implosion
- Landslides, road slides or subsidence
- Bursting of water tanks or overflowing of pipes
- Leaking from automatic sprinkler systems
- Bush fire
Additional coverage benefits under home insurance
Besides the above-mentioned coverage benefits, add-ons are also available under property insurance plans. These add-ons increase the scope of coverage of the policy and are available at an additional premium. The most popular add-ons available with most home insurance plans include the following:
- Loss of rent
  If, after damage, the house property is unoccupied, the landlord faces the loss of rent for the period the home is under repairs. This add-on covers the loss of rent.
- Rent for an alternate accommodation
  Under this add-on the rent paid for alternate accommodation is covered when your home is damaged and you live elsewhere
- Replacement of lock and key
  The add-on covers the cost of replacing the lock and key of your home.
- Escalation cover
  Under this add-on, the increase in the value of the home due to inflation is covered.
- Terrorism cover
  If the plan does not cover terrorism-related damages you can choose this add-on to include such damages.
What is not covered under home insurance?
Home insurance plans do not cover the following types of damages or losses –

Non-disclosure of important information in the proposal form
Pre-existing defects or damages
Damages due to war, nuclear contamination, mutiny, etc.
Losses due to pollution and contamination
Loss of jewellery, cash, precious stones, etc. unless the same is specifically covered under the plan
Deliberate damage to the property or contents
Consequential losses
Misconduct and wilful negligence
Cost of land
Depreciation and normal wear and tear
Losses suffered when the property is not occupied for more than a specified period
Properties under construction are not covered under home insurance plans

Benefits of home insurance
Home insurance proves very beneficial due to the following reasons –
- The policy gives you financial security if your house and/or its contents are damaged
- The compensation paid by the home insurance policy allows you to rebuild your damaged home or replace the lost contents without feeling a pocket pinch
- Since the premiums are low, you can insure your house under an optimal home insurance policy without worrying about the financial outgo

How to determine the sum insured for home insurance plans

The sum insured of a home insurance policy is calculated on different bases. These bases are as follows:

Agreed Value Basis
This basis is used to calculate the sum insured of a flat or an apartment. The sum insured is calculated by multiplying the total area of the property (in square feet) with the value per square feet. The area of the property would be the area as mentioned in the Registered Sale Deed Agreement. The value per square feet would be the value which is mentioned in the Ready Reckoner for Property Tax and Stamp Duty and which is issued by the Revenue Department of the State Government. The value would be taken for the date on which the proposal for insurance is made. Moreover, if the value is mentioned in the valuation report of a Government Approved Valuer, the same could be considered in the calculation of the sum insured if the insurance company agrees.
Reinstatement Value Basis
Reinstatement Value Basis is used in the calculation of sum insured for insuring a building. The value is considered to be the cost of reconstructing the building to the original state in case of damage. The cost of land would be excluded in the calculation. The cost of reconstruction would be calculated by multiplying the area of the building in square feet with the current cost of construction in the locality where the building is situated.
Indemnity Value Basis
This basis can also be used to determine the sum insured for insuring a building. The calculation is the same as in the reinstatement value basis. However, depreciation of the building, based on its age, would be deducted from the sum insured when it is calculated.
New for Old Basis
This basis is used of insuring contents of the home and to determine their sum insured. Under this basis, the sum insured would be the cost of replacing the damaged contents of the home with new contents of the same value.
Indemnity Basis for contents
Under this basis, the replacement cost of contents is adjusted by the depreciation of the contents due to their age. So, the replacement cost of the damaged contents would be reduced to factor in depreciation.

Popular home insurance plans available in India

Here are some insurance companies in India which offer home insurance coverage –

Name of the company	Types of plans offered	Salient features
Bajaj Allianz Home Insurance Plan	My Home Insurance Policy Householders Insurance Policy Easy Householders Insurance Policy	You can choose continuous coverage for up to 5 years Range of add-on covers are available for making the coverage comprehensive
ICICI Prudential Home Insurance Plan	Home Insurance	Up to 50% premium discounts for buying a comprehensive policy for 5 years Water seepage related damages are covered
HDFC Ergo Home Insurance Plan	Home insurance for tenants Home insurance for owners Housing Society Insurance	Different types of premium discounts are available under the plan The company provides 24*7 support in case of claims
Reliance General Home Insurance Plan	Home insurance – Structure Protection Home Insurance – Contents Protection Householders Package Policy	Multiple types of policies are available Coverage for jewellery and precious items against theft Chain snatching is also covered
Oriental Insurance Home Insurance Plan	Householder Insurance Policy	You can buy different policies for the building and contents The premiums are very low and affordable
Royal Sundaram Home Insurance Plan	Home Building Insurance Household Articles Insurance Home Building and Household Articles Insurance	Up to 50% premium discount is allowed for a comprehensive policy Mobile and jewellery can also be covered
IFFCO Tokio Home Insurance Plan	All in One Home Protector Policy Home Suvidha Policy Home Family protector Policy	A comprehensive scope of coverage is offered Range of add-ons are available under the plan

Tips to choose the best home insurance policy

If you want the best home insurance policy for your home, here are some tips to follow –

Choose the type of policy that you need
There are different types of home insurance plans and buy the best policy you should first know what type of coverage you would need. If you own your home, a comprehensive policy is the best but if you are a tenant, opt for contents insurance
Compare before buying
As you can see, a lot of general insurance companies offer home insurance plans. So, before buying, compare. Compare the available plans on their coverage features and premium rates and then choose the best policy
Opt for required add-ons
Though home insurance plans provide a comprehensive scope of coverage, the coverage can be enhanced with the help of add-ons. The add-ons have been stated earlier and you should find out the add-ons offered by different companies. Once you know the available add-ons, choose the required ones to make your plan all inclusive. For instance, you can opt for loss of rent add-on if you are a landlord and you would lose rent in case of damage to the house. Alternatively, if you are insuring your own home, you can choose the add-on which covers rent for alternate accommodation. So, assess your requirements and choose add-ons for a wider coverage.
Compare the claim settlement ratio of the company
Though there are different insurers, you should compare the companies on their claim settlement ratios too. The ratio helps you determine the probability of claim settlements. The higher the ratio the higher would be the chances that your claims would be settled. So, choose a company which has a high claim settlement ratio
Look for premium discounts
Insurers also offer premium discounts which help in bringing down your home insurance premiums. Look for the policy which offers the maximum discounts so that you can lower your premiums as much as possible.

How to make a claim under home insurance?

To make a claim under your home insurance policy, you should take the following steps –

Inform the insurance company immediately after the claim occurs. You should inform the company within 7-15 days of the loss to get the claim registered
A police FIR might be required in some cases. So, file an FIR and keep it handy
The insurance company would arrange for a survey of the loss
Once the survey is done, the claim amount would be estimated
You should, then, submit your documents to the insurance company
The company would verify your documents and settle your home insurance claims

Documents required for a claim

The following documents would be required to make a successful home insurance claim –

Claim form which should be filled in and signed
Copy of the police FIR
Investigation report issued by the police after they have investigated the damage
Fire brigade’s report in case of fire-related claims
Original invoice of contents for replacement
Court summons
Estimates of repair costs
Any other document as requested by the insurance company

Whether you own a house or you live as a tenant, a home insurance policy can provide you with financial security against losses that you suffer. Having a home insurance plan ensures that you don’t suffer a financial loss if any uncertain event damages your home and/or its contents. It, therefore, saves you lakhs of rupees at very low premiums. So, having a home insurance policy is recommended for your financial protection.

Frequently Asked Questions:

Do home insurance plans pay the full amount of claim?
No, there is a deductible under most home insurance plans. The policies, therefore, pay claims which exceed the deductible limit. The amount of the deductible is to be borne by you.
What is the coverage duration of home insurance plans?
Usually, home insurance plans are offered for a period of one year. However, insurance companies now offer coverage tenures ranging from 1 day to up to 5 years.
What types of premium discounts are available under the plan?
Home insurance plans usually allow premium discounts for buying a comprehensive policy and for opting for long term coverage duration.
What is underinsurance?
If you cover your home and/or its contents for a value which is lower than their actual value, it is called underinsurance. In the case of underinsurance, claims would be settled on the average clause basis.
Can any rented property be insured?
Yes, you can insure a residential property which you have let out for residential purposes.

Information on Third Party Administrator (TPA)

March 4, 2020April 7, 2021 Ankita Sejpal

Medical emergencies may knock the door anytime. Considering the rising healthcare inflation, one needs to be financially well equipped to protect himself/herself from health contingencies. Hence, health insurance has become an important requirement today. When it comes to health insurance, the process of claim settlement plays an important role in deciding how effective the health plan is. In order to make the benefit of insurance available for insured at the right time, almost every health insurance provider today is offering cashless healthcare facility, wherein hospital bills are directly settled by the insurance provider to the network hospital where insured is availing treatment. This is where the concept of ‘Third Party Administrator (TPA) has originated. In this article, let’s learn more about third-party administrators or TPA.

What is TPA (Third Party Administrator)?

In health insurance, TPA or Third Party Administrator is an insurance intermediary company licensed by the Insurance Regulatory and Development Authority of India (IRDAI). TPA plays the role of service integrator between Health Insurance Company, insured and the health service provider. Introduced by IRDAI in the year 2001, Third Party Administrators (TPA) are often independent agencies that assist Health Insurance Company in the claim settlement process. While some of the TPAs may operate as units of health insurance companies. Health insurance TPA’s being the special agencies set up by IRDAI (Insurance Regulatory and Development Authority of India) makes healthcare accessible for insured at the right time by handling the process of claim smoothly.

Why you need a TPA?

Various functions of TPA and acting as a mediator to the insurance company and insured smoothens the entire process of health insurance claim settlement. Having a special agency (TPA) licensed by the Insurance Regulatory and Development Authority of India (IRDAI) helps health insurance industry and the policyholders in various ways. Following are the reasons for which TPA’s need arise.

TPA (Third Party Administrators) deliver the services most efficiently and effectively
Vast knowledge of health care services
Adhering to the turnaround time for settlement of cashless or reimbursement claims
Due diligence and standardized procedures
Improved health insurance penetration
Minimises expenditure as TPA charges no cost for the services
Proper management and investigation of the case

How does TPA work?

Once the health insurance company gives the administration work to TPA, it starts working in the following ways:

All the details of health insurance policies issued will be shared with TPA
Health insurance TPA will issue identity cards or health cards to all policyholders of the insurance company which has to be used during claims at the hospital. Insured needs to show the card to the hospital authorities to seek cashless healthcare facilities
Card will have all the details of TPA and policy. The policyholder needs to place the claim intimation by calling upon TPA’s toll-free number.
After informing the health insurance TPA and placing cashless claim request, the policyholder can seek healthcare services at the network hospital
TPA will review the cashless claim request and issue an authorisation letter to the hospital for treatment. Depending on the policy’s terms and conditions, claim settlement will be done.

Role of Third Party Administrator in health insurance

Health insurance companies outsource many of their administrative work to third party administrators or TPAs. There are various services and day-to-day operations of health insurance companies are handled by TPAs. TPA not just plays a crucial role in approving health insurance claims, but also performs many other functions. Let’s take a look at the functions of third party administrators or TPAs in health insurance.

Processing and settlement of claims which includes
- Accepting claim intimations
- Authorising cashless claim request
- Final settlement of claims
Issuance of health card
Providing a network hospital list
Premium collection
Tracking claim status
24/7 helpline service
Policy database maintenance
Value-added services such as
- Ambulance services
- Wellness programme
- Health facilities during emergencies
- Medicine supplies

List of TPAs (Third Party Administrators) in India:

Name of the TPA

Name of CEO/CAO
and Address

Contact details

United Health Care Parekh Insurance TPA Private Limited

Mr Shiva Belavadi (CEO)

3A Gundecha Enclave, Kherani Road, Saki Naka, Andheri (East), Mumbai – 400 072

Phone: 022-28532400

Fax : 022-2852 7776

Email: shiva.belavadi@uhcpindia.com

Medi Assist Insurance TPA Private Limited

Mr Ganesh K (CAO)

Tower D, 4th Floor, IBC Knowledge Park, 4/1, Bannerghatta Road, Bangalore – 560026

The toll-free number for senior citizens: 1800 419 9493

Toll-Free No.: 1800 425 9449

Email: cao@mediassist.in

Web: www.mediassist.in

MD India Health Insurance TPA Private Limited

Mr. Suresh V. Karandikar (CEO)

Sl.No. 46/1 E-space A-2 Building,3rd Floor, Pune-Nagar Road,Vadgaonsheri, Pune – 411 014

Phone: 020-25300000

Fax: 020-25300003

Email: skarandikar@mdindia.com

Web: www.mdindiaonline.com

Heritage Health Insurance TPA Private Limited

Mr. Manas Chakraborty (CAO)

NICCO HOUSE ( 5th Floor) 2, Hare Street, Kolkata-700001

Phone: 033-22482784/22486430

Fax: 033-22100837/22310287

Toll-free 1088-345-3477

Email: mchakraborty@bajoria.in

Paramount Health Services & Insurance TPA Private Limited

Mr. R D Misra (CAO)

Plot No. A-442, Road No. 28, MIDC Industrial Area, Wagle Estate, Ram Nagar, Near Vitthal Rukhmani Mandir, Thane (W), MS – 400 604

Phone: 022-66444600/66620800

Fax: 022-66444754/755

Email: abhitabh.gupta@paramounttpa.com

Web: www.paramounttpa.com

Family Health Plan Insurance TPA Limited

Ms. G. Bharathamma (CAO)

Ground Floor, F1, Srinilaya, Cyber Spazio, Road No. 02, Banjara Hills, Hyderabad – 500 034

Phone: 040-23556464

Fax: 040-23541400

Email: bharathig@fhpl.net

Focus Health Insurance (TPA) Private Limited

Mr. Sujit Bhattacharya (CAO)

B-127, FIRST FLOOR, SECTOR-2, NOIDA – 201301

Phone: 0120-4881400

Toll free no. 1800 112 999

Email: cao@focustpa.com

Web: www.focustpa.com

Vidal Health Insurance TPA Private Limited

Ms. Sudha Suhas Kulkarni (CAO)

Tower 2, 1st floor, SJR I Park, Plot No. 13,14,15, EPIP Zone, Whitefield, Bangalore – 560 066

Phone: 080-40125678

Fax : 080-28418216/17

Toll free: 1800 345 4051

Email: sudha@vidalhealth.com

Raksha Health Insurance TPA Private Limited

Mr. Pawan Bhalla (CEO)

C/o Escorts Corporate Centre, 15/5, Mathura Road, Faridabad, Haryana – 121 003

Phone: 0129-2564057, 2564083, 2250000

Fax: 0129-4018012/ 2250002

Email: raksha@rakshatpa.com,
pawan@rakshatpa.com

East West Assist Insurance TPA Private Limited

Mr. Neeraj Batra (CEO)

404 & 602 DLF Place, saket, 4th Floor, Mall Office Block, District Centre, Saket, New Delhi – 110017

Phone: 011-47222666

Fax: 011-47222640

Toll free no. 1800-1111-46

Email: assistance@eastwestassist.com
nbatra@eastwestassist.com

Anyuta Insurance TPA In Health Care Private Limited

Ms. Ratna Seetarama (CAO)

No.: 31/18, Main Road, Loyola Layout, Ward No. 111, Shanthala Town, Bangalore – 560 047

Landline / Fax : 080-41128311 / 25364766

Email: anyuta.anyuta@gmail.com,
ravi@anyuta.com

Web: www.anyutatpa.com

Med Save Health Insurance TPA Limited

Mr. Vivek Tiwari (CEO)

F-701A, Lado Sarai, Behind Golf Course, Mehrauli, New Delhi – 110 030

Phone: 011-29521061-66, 39001234

Fax: 29521067/71

Email: vt@medsave.in

Web: www.medsave.in

Alankit Insurance TPA Limited

Mr Bodh Raj Punj (CEO)

Flat Nos.201, Second Floor, Vikas Surya Mall, Sector-3,Rohini, NEW DELHI – 110 085

Phone: 011-49355621 to 49655627

Fax : 011-49355620 & 49355630

Email: alok@alankit.com

Genins India Insurance TPA Limited

Mr. Subhash Chander Khanna (CAO)

D-34, Ground Floor, Sector-2, NOIDA-201301

Phone: 0120- 4144 123

Fax : 0120-2430064

Toll free no.-1600-345-3323

Email: sckhanna@geninsindia.com

Good Health Insurance TPA Limited

Ms. Saigeeta Dikshit (CAO)

8-2-1/8/1, S.V.R. Towers,4th Floor, Srinagar Colony Road, Panjagutta, Hyderabad – 500 082

Phone: 040- 66825001/003, 23735006

Fax : 040-66828081/88 /89

Email: saigeeta@ghpltpa.com

Health India Insurance TPA Services Private Limited

Mr. Kamaljeet Gupta (CAO)

Anand Commercial Co. Compound, 103-B L B S Marg, Gandhi Nagar, Vikhroli, Mumbai-83

Phone: 022-42471900

Fax: 022-42471910/911/946, 25783382

Email: kamaljeetg@healthindiatpa.com

Vipul Medcorp Insurance TPA Private Limited

Mr. Rajan Subramaniam (CEO)

515, Udyog Vihar, Phase V, Gurgaon-122 016

Phone: 0124-2438270-75

Fax: 0124- 2438276

Email: rs@vipulmedcorp.com

Safeway Insurance TPA Private Limited

Mr. Mahesh Sharma (CEO)

815, Vishwasadan, District Centre, Janakpuri, New Delhi-1100058

Phone: 011-45451300

Fax.: 022-66466797

Email: support@safewaytpa.in,
ceo@safewaytpa.in

Web: www.safewaytpa.in

Park Mediclaim Insurance TPA Private Limited

Mr. NK Malhotra (CAO)

702, Vikrant Tower, Rajendra Place, New Delhi-110008

Phone: 4153 9498, 25747454-55

Fax: 41539390-91

Email: park@parkmediclaim.co.in,
cao@parkmediclaim.co.in

Web: www.parkmediclaim.co.in

Anmol Medicare Insurance TPA Limited

Mr P. S. Kshatriya ( CEO)

No. 3, 2nd Floor, NBCC House, Near Shajanand College, Opp. Stock Exchange, Ambavadi, Ahmedabad – 380015, Gujarat

Phone: 079-40009926, 40009936, 40009999

Fax.: 079-40009990

Email: prithvi@anmolmedicare.com

Rothshield Insurance TPA Limited

Ms. Janki M Bhate (CEO)

402 Raheja Chambers, Nariman Point, Mumbai 400 020

Tel: 022- 2202 2147/22048144

Fax: 022-2285 4415/ 39167430

Toll free: 1800 22 8144

Email: janki@rothshield.co.in

Web: www.rothshield.co.in

Grand Insurance TPA Private Limited

Mr. Bibhutosh Chattopadhyay (CAO)

45A, Hindustan Park, P.S.: Gariahat, Kolkata 700 029 West Bengal

Phone: 033- 40274747

Mobile number: 9830063492 / 9051288050

Fax Number 033-400433344

Toll Free number 1800 102 4747

Email: adm.grandtpa@gmail.com,
help.grandtpa@gmail.com

Health Insurance TPA of India Limited

Mr. SK Mehra (CEO)

2nd Floor, Majestic Omnia Building, A-110, Sector-4, Noida, (UP) PIN : 201301

Phone: 0120-4765800

Fax: 0120-4765899

Email: sk.mehra@hitpa.co.in, pawan.choube@hitpa.co.in

Ericson Insurance TPA Private Limited

Dr. Krishna P. Jaiswal, MD

11-C, Corporate park, ST Road, Chembur, Mumbai – 400 071 (MH)

Phone: 022 – 25280280

Toll Free Fax: 022-25270200

Toll Free line: 1800222034

Email: krishna@ericsontpa.com

Web: www.ericsontpa.com

E-Meditek Insurance TPA Limited

Mr B S Kaintura (CAO)

577, Udyog Vihar, Phase – V Gurgaon – 122016 (Haryana)

Phone: 0124-4466600 Fax : 0124-4466677

Email: bskaintura@emeditek.com,
customercare@emeditek.com

Vision E-Medi Solutions Insurance TPA Private Limited

Mr. Narender Anand (CAO)

Tower House, 2A, Chowringhee Square, 5th Floor, Kolkata 700 069, India

Phone: +91 33 4004 0409

Toll free no: 1800-419-9982

Fax: +91 33 2290 1918

Email:info@visionemedi.com

Web: www.visionemedi.com

Frequently Asked Questions

What are the benefits of health insurance TPA to a policyholder?
Health insurance TPA helps a policyholder to experience smooth claim settlement process by extending help in every step such as providing the health card, giving details of network hospitals or through 24/7 helpline facility. The policyholder can benefit from value-added services offered by TPA such as ambulance services, wellbeing programmes and special consultation etc.

What do you mean by network hospitalisation?
There are many hospitals empanelled with health insurance TPAs to provide cashless facility to the policyholders. Those hospitals are referred to as network hospitals. If the policyholder is choosing his/her preferred hospital for treatment from the list of network hospitals, he/she can avail cashless hospitalization facility.

What is the cashless facility?
Cashless facility refers to claiming the benefits of health insurance for availing services at the TPA’s empanelled network hospital. That means TPA will process the claim and the settlement of claim will be directly made to the hospital without the insured having to spend out of his pocket for hospitalisation.

What are the benefits of health card issued by health insurance TPA?
Health card is issued as an identity card which carries the information of policy, plan type, TPA address, contact details etc. Carrying a health card helps you and your family to seek cashless hospitalisation facility anytime anywhere. You just need to produce health card to the hospital authorities at any TPA’s empanelled network hospitals and place requisition for cashless facility. TPA help desk counter at the network hospital will review and verify your requisition and then provide approval for cashless facility

What are the details to be provided at the time of placing claim intimation with health insurance TPA?

Following are the details to be provided at the time of placing claim intimation with health insurance TPA:
1. Health insurance policy number
2. Policyholder name
3. Nature of injury/illness
4. Name and address of the hospital
5. Date of admission to the hospital
6. Any other information asked by TPA
How is TPA different from health insurance companies?
TPA is an intermediary who facilitates the health insurance claim settlement. However, the decision of rejecting or accepting the claim will be taken by the provider of health insurance solutions that is the health insurance company.

Can TPA issue policies?
No. Policy will be issued by the health insurance provider that is the health insurance company. TPA is appointed by the health insurance company for facilitating the administrative work.

What is the difference between health card offered by TPA and health insurance companies?
Health card offered by both TPA and health insurance companies are the identity cards that can be produced at the network hospitals for availing cashless treatment facility. The card will carry necessary information regarding the policy, the insurance company and the TPA.

Home Insurance – Buy and Renew Best Home Insurance Plans

March 4, 2020February 25, 2022 Rupanjali Mitra Basu

What is home insurance?

Features of a home insurance policy
A home insurance plan has the following features –
- It comes in different variants to suit the different coverage requirements of homeowners
- The premiums are very low and affordable
- The policy is usually issued for one year after which you can renew the plan
- Coverage amount depends on the asset insured and its value
Types of home insurance plans
Home insurance in India comes in the following variants –
- Structure insurance
  This policy covers the structure of your house, i.e. the roofs, walls and floors against damages suffered due to natural or man-made calamities. The policy can also be called a Standard Fire and Special Perils policy as it covers the structure against fire and other natural or man-made calamities
- Contents insurance
  This policy covers only the contents of the house against damages of loss. Contents of the home include home appliances, jewellery, furniture and fixtures and other contents of the house. This policy is suitable for tenants who face a threat of damage to their belongings if the house is damaged.
- Comprehensive insurance
  This policy covers both structure and contents insurance. It covers the structure of the house as well as its contents against damages or loss due to natural or man-made conditions.
- Public liability insurance
  This policy covers any type of injury suffered by individuals when they are on your property or if your property causes damage to another individual’s property. In such cases, the aggrieved third party might raise a financial liability on you. This liability is covered under the policy.
- Tenant’s insurance
  This insurance policy is designed for tenants who are living in rented houses. The policy is like a contents insurance which covers the belongings of the tenants in the rented house.
What is covered under home insurance?
A home insurance policy covers the damages suffered due to the following instances –
- Fire
- Riots, strikes or any other malicious acts
- Earthquakes, lightning, floods, cyclones, storms, etc.
- Aircraft damage
- Missile testing operations
- Terrorist acts
- Burglary and theft of the contents of the home
- Explosion or implosion
- Landslides, road slides or subsidence
- Bursting of water tanks or overflowing of pipes
- Leaking from automatic sprinkler systems
- Bush fire
Additional coverage benefits under home insurance
Besides the above-mentioned coverage benefits, add-ons are also available under property insurance plans. These add-ons increase the scope of coverage of the policy and are available at an additional premium.
The most popular add-ons available with most home insurance plans include the following:
- Loss of rent
  If, after damage, the house property is unoccupied, the landlord faces the loss of rent for the period the home is under repairs. This add-on covers the loss of rent.
- Rent for an alternate accommodation
  Under this add-on the rent paid for alternate accommodation is covered when your home is damaged and you live elsewhere
- Replacement of lock and key
  The add-on covers the cost of replacing the lock and key of your home.
- Escalation cover
  Under this add-on, the increase in the value of the home due to inflation is covered.
- Terrorism cover
  If the plan does not cover terrorism-related damages you can choose this add-on to include such damages.
What is not covered under home insurance?
Home insurance plans do not cover the following types of damages or losses

Non-disclosure of important information in the proposal form
Pre-existing defects or damages
Damages due to war, nuclear contamination, mutiny, etc.
Losses due to pollution and contamination
Loss of jewellery, cash, precious stones, etc. unless the same is specifically covered under the plan
Deliberate damage to the property or contents
Consequential losses
Misconduct and wilful negligence
Cost of land
Depreciation and normal wear and tear
Losses suffered when the property is not occupied for more than a specified period
Properties under construction are not covered under home insurance plans

Benefits of home insurance
Home insurance proves very beneficial due to the following reasons –
- The policy gives you financial security if your house and/or its contents are damaged
- The compensation paid by the home insurance policy allows you to rebuild your damaged home or replace the lost contents without feeling a pocket pinch
- Since the premiums are low, you can insure your house under an optimal home insurance policy without worrying about the financial outgo

How to determine the sum insured for home insurance plans

The sum insured of a home insurance policy is calculated on different bases. These bases are as follows:

Agreed Value Basis
This basis is used to calculate the sum insured of a flat or an apartment. The sum insured is calculated by multiplying the total area of the property (in square feet) with the value per square feet. The area of the property would be the area as mentioned in the Registered Sale Deed Agreement. The value per square feet would be the value which is mentioned in the Ready Reckoner for Property Tax and Stamp Duty and which is issued by the Revenue Department of the State Government. The value would be taken for the date on which the proposal for insurance is made. Moreover, if the value is mentioned in the valuation report of a Government Approved Valuer, the same could be considered in the calculation of the sum insured if the insurance company agrees.
Reinstatement Value Basis
Reinstatement Value Basis is used in the calculation of sum insured for insuring a building. The value is considered to be the cost of reconstructing the building to the original state in case of damage. The cost of land would be excluded in the calculation. The cost of reconstruction would be calculated by multiplying the area of the building in square feet with the current cost of construction in the locality where the building is situated.
Indemnity Value Basis
This basis can also be used to determine the sum insured for insuring a building. The calculation is the same as in the reinstatement value basis. However, depreciation of the building, based on its age, would be deducted from the sum insured when it is calculated.
New for Old Basis
This basis is used of insuring contents of the home and to determine their sum insured. Under this basis, the sum insured would be the cost of replacing the damaged contents of the home with new contents of the same value.
Indemnity Basis for contents
Under this basis, the replacement cost of contents is adjusted by the depreciation of the contents due to their age. So, the replacement cost of the damaged contents would be reduced to factor in depreciation.

Popular home insurance plans available in India

Here are some insurance companies in India which offer home insurance coverage –

Name of the company	Types of plans offered	Salient features
Bajaj Allianz Home Insurance Plan	My Home Insurance Policy Householders Insurance Policy Easy Householders Insurance Policy	You can choose continuous coverage for up to 5 years Range of add-on covers are available for making the coverage comprehensive
ICICI Prudential Home Insurance Plan	Home Insurance	Up to 50% premium discounts for buying a comprehensive policy for 5 years Water seepage related damages are covered
HDFC Ergo Home Insurance Plan	Home insurance for tenants Home insurance for owners Housing Society Insurance	Different types of premium discounts are available under the plan The company provides 24*7 support in case of claims
Reliance General Home Insurance Plan	Home insurance – Structure Protection Home Insurance – Contents Protection Householders Package Policy	Multiple types of policies are available Coverage for jewellery and precious items against theft Chain snatching is also covered
Oriental Insurance Home Insurance Plan	Householder Insurance Policy	You can buy different policies for the building and contents The premiums are very low and affordable
Royal Sundaram Home Insurance Plan	Home Building Insurance Household Articles Insurance Home Building and Household Articles Insurance	Up to 50% premium discount is allowed for a comprehensive policy Mobile and jewellery can also be covered
IFFCO Tokio Home Insurance Plan	All in One Home Protector Policy Home Suvidha Policy Home Family protector Policy	A comprehensive scope of coverage is offered Range of add-ons are available under the plan

Tips to choose the best home insurance policy

If you want the best home insurance policy for your home, here are some tips to follow –

Choose the type of policy that you need
There are different types of home insurance plans and buy the best policy you should first know what type of coverage you would need. If you own your home, a comprehensive policy is the best but if you are a tenant, opt for contents insurance
Compare before buying
As you can see, a lot of general insurance companies offer home insurance plans. So, before buying, compare. Compare the available plans on their coverage features and premium rates and then choose the best policy
Opt for required add-ons
Though home insurance plans provide a comprehensive scope of coverage, the coverage can be enhanced with the help of add-ons. The add-ons have been stated earlier and you should find out the add-ons offered by different companies. Once you know the available add-ons, choose the required ones to make your plan all inclusive. For instance, you can opt for loss of rent add-on if you are a landlord and you would lose rent in case of damage to the house. Alternatively, if you are insuring your own home, you can choose the add-on which covers rent for alternate accommodation. So, assess your requirements and choose add-ons for a wider coverage.
Compare the claim settlement ratio of the company
Though there are different insurers, you should compare the companies on their claim settlement ratios too. The ratio helps you determine the probability of claim settlements. The higher the ratio the higher would be the chances that your claims would be settled. So, choose a company which has a high claim settlement ratio
Look for premium discounts
Insurers also offer premium discounts which help in bringing down your home insurance premiums. Look for the policy which offers the maximum discounts so that you can lower your premiums as much as possible.

How to make a claim under home insurance?

To make a claim under your home insurance policy, you should take the following steps –

Inform the insurance company immediately after the claim occurs. You should inform the company within 7-15 days of the loss to get the claim registered
A police FIR might be required in some cases. So, file an FIR and keep it handy
The insurance company would arrange for a survey of the loss
Once the survey is done, the claim amount would be estimated
You should, then, submit your documents to the insurance company
The company would verify your documents and settle your home insurance claims

Documents required for a claim

The following documents would be required to make a successful home insurance claim –

Claim form which should be filled in and signed
Copy of the police FIR
Investigation report issued by the police after they have investigated the damage
Fire brigade’s report in case of fire-related claims
Original invoice of contents for replacement
Court summons
Estimates of repair costs
Any other document as requested by the insurance company

Frequently Asked Questions:

Do home insurance plans pay the full amount of claim?
No, there is a deductible under most home insurance plans. The policies, therefore, pay claims which exceed the deductible limit. The amount of the deductible is to be borne by you.
What is the coverage duration of home insurance plans?
Usually, home insurance plans are offered for a period of one year. However, insurance companies now offer coverage tenures ranging from 1 day to up to 5 years.
What types of premium discounts are available under the plan?
Home insurance plans usually allow premium discounts for buying a comprehensive policy and for opting for long term coverage duration.
What is underinsurance?
If you cover your home and/or its contents for a value which is lower than their actual value, it is called underinsurance. In the case of underinsurance, claims would be settled on the average clause basis.
Can any rented property be insured?
Yes, you can insure a residential property which you have let out for residential purposes.

ULIP vs. SIP: Choose the Better Investment Option for Better Returns

March 4, 2020February 25, 2022 Ankita Sejpal

Investments are a must if you want to create wealth and multiply your savings. Investments also help you meet your future goals as what you invest today accumulates into a corpus in future. that is why almost everyone invests their savings into different investment avenues which suit their risk appetite and investment strategy. If you don’t mind taking risks and want to invest in avenues which give you returns linked to the market, there are two investment options which are quite popular – ULIPs and Mutual fund SIPs. Many investors believe that both these avenues are the same. Alternatively, many investors know that these avenues are different but the differences are not very well known. So, let’s study the concept of ULIPs and SIPs, understand their differences and find out which one to choose –

What is ULIP?

A Unit Linked Insurance Plan, ULIP, is a plan of insurance which provides life insurance cover as well as investment returns. When you invest in ULIPs, the premiums paid are invested in different types of funds. these funds, in turn, invest their corpus in different types of market-linked securities. thereafter, as the market performs your fund value changes. In case of death during the term of the policy, the higher of the fund value or the sum assured is paid. this ensures optimal insurance coverage even if your investments are not enough. When the plan matures, however, the available fund value is paid. ULIPs, therefore, give insurance coverage over the policy tenure as well as investment returns on maturity.

What is SIP?

SIP stands for Systematic Investment Plan. SIPs are a type of mutual fund investments where you invest your money in a chosen mutual fund scheme regularly at specified intervals. You can invest small amounts monthly or after any period and create a good corpus. the investment of different investors is created into a pool using which the scheme invests in different securities of the capital market. thereafter, as the value of the invested securities changes the value of your investments also changes. When you redeem the investment you get the value applicable on the date of redemption.

ULIP vs SIP – the similarities

ULIPs and SIPs are often considered to be the same because of the following similarities –

Both invest in market-oriented securities giving you market-linked returns
While SIPs mean investing in small amounts at regular intervals, under ULIPs too you can choose to invest regularly in small amounts over the policy tenure
Both investment avenues pool together the investments from different investors and then invest in different securities based on the asset allocation of the fund
You can get attractive returns from both the schemes
Investments into ULIPs and ELSS SIPs both qualify for deduction up to INR 1.5 lakhs under Section 80C
Switching facility is available under both schemes where you can change the investment funds
You can also withdraw partially from the funds of both ULIPs and SIPs

ULIPs vs SIP – the concept of NAV

Both ULIPs and SIPs invest your money in chosen funds based on the Net Asset Value (NAV) of the fund. NAV depicts the per unit cost of the fund. It is calculated using the following formula –

NAV = (market value of the portfolio – existing liabilities) / total number of securities held

the money pooled from different investors is invested in different securities having different values. When the aggregate value of the securities purchased are added, it gives the market value of the portfolio. the liabilities are then deducted from the value to arrive at the net value of the portfolio. this value is divided by the number of securities which was bought using the pooled investments. this gives you the Net Asset Value of the fund. As the market value of securities changes every day, NAV also changes and it is dynamic in nature.

ULIPs vs SIP – the differences

Now that you know the similarities, let’s look at the differences between these two investment avenues which completely sets them apart from each other –

Basis of difference	ULIPs	SIPs
Benefits provided	Life insurance cover + investment returns	Only investment returns
Investment funds	A single unit-linked plan offers you different types of investment funds like equity, debt, mixed, etc. You can, therefore, invest in different types of funds based on your risk appetite with a single investment in ULIPs	In case of SIPs, you would have to choose different mutual fund schemes for different investment funds. For each scheme you would need an independent SIP
Investment tenure	Investment in ULIPs can be done through single premiums, limited premiums or regular premiums. the premium would be payable for the premium payment term that you select. the maximum investment tenure would be the term of the insurance plan	there is no fixed tenure for SIPs. You can invest for as long as you want
Tax implication on returns	the returns that you earn from ULIPs are completely exempted from tax under Section 10 (10D)	Long term equity-oriented returns earned from SIPs would be taxed @ 10% if the returns are more than INR 1 lakh. For short term equity returns, 15% tax is charged on the entire return. In case of debt SIPs, short term returns are taxed at your income tax slab rate while long term returns are taxed @20% after indexation
Tax implication on investments	Premiums paid towards a ULIP are tax-free under Section 80C up to INR 1.5 lakhs	Only investment into ELSS SIPs is allowed as a deduction under Section 80C. For any other SIP that you buy, the investment would be taxable in your hands
Switching	You can easily switch between the available fund options within the ULIP that you have bought. Switching would not affect your plan and would be completely tax-free	To switch SIPs, you would have to redeem your existing SIP and invest in another. the redemption would be subject to tax as it would be treated as returns.
Charges	ULIPs involve multiple charges like premium allocation charge, fund management charge, administrative charge and mortality charge among others	Under SIPs, there are limited charges. Only entry loads and exit loads are applicable and that too in limited cases
Liquidity	ULIPs allow partial withdrawals only after the completion of 5 years	Under SIPs, liquidity is not a problem. You can withdraw anytime that you want. However, in the case of ELSS schemes, there is a lock-in period of 3 years
Regulator	ULIPs are regulated by the Insurance Regulatory and Development Authority of India (IRDAI)	SIPs are regulated by the Securities Exchange Board of India (SEBI)

ULIPs vs SIPs – Which one should you choose?

Now that you know the differences between ULIPs and SIPs, which one do you think would be better for you?

Both ULIPs and SIPs have their respective pros and cons. To choose the best avenue you should understand your investment requirements and then make a choice. What is ideal for one investor might not be good for another. So, assess your needs and then make a choice.

ULIPs would be a good choice if-
- Your investment horizon is long term
- You need to fulfil specific financial goals which can be fulfilled with your ULIP portfolio
- Tax efficiency is extremely important for your financial portfolio
- You can manage your investment portfolio by actively switching from one fund to another depending on your financial goals and market conditions
- You need a life insurance cover also
So, for example, if you want to
1. Create a corpus for your child’s future education when your child is just a toddler, ULIP would be an ideal investment avenue
2. Save taxes on your investments and the corpus that you have created would also be tax-free for your child’s financial needs.
3. in case of your death during the policy tenure, the plan would still continue undisturbed.
4. The insurance company would pay the premium till the remaining duration of the policy and promise a maturity benefit after the term is over.
This way, you can be ensured that the life cover available under child ULIP would create a good corpus for your child whether you are around or not.
On the other hand, SIPs make sense if-You want liquidity in your investment portfolio
You want the charges to be the lowest
You know your risk appetite and favour one type of investment fund
You already have life cover through another insurance plan and you need only investment returns
You want a pure investment portfolio, even if you need to pay taxes on the same

For instance, if you want to buy a car in the near future and want to invest for a shorter duration, mutual fund SIPs would be good. You can invest regularly to create a good corpus which would help make the down payment of your car. Moreover, if you like taking risks, you can invest in equity mutual funds for attractive returns.

So, weigh both investment avenues on their respective needs and then choose the one which suits your requirements perfectly.

FAQs

What is the term of ULIPs?
ULIPs are available for terms ranging from 5 years to up to 30 or 35 years. In fact, there is whole life ULIP as well which gives you coverage till 99 or 100 of age.
What charges are deducted from SIP investments?
An entry load might be deducted from the amount that you invest in SIPs.
Are SIPs and mutual funds different?
No, SIPs and mutual funds are the same. SIP is a way of investing in mutual fund schemes wherein, instead of a lump sum investment, you pay periodically.
Can ULIPs be bought online?
Yes, you can buy ULIPs online through Turtlemint. Turtlemint gives you a platform to compare ULIPs of different insurance companies and then buy the best plan as per your coverage needs. You can buy ULIPs through Turtlemint within minutes by filling out an application form and paying the premiums online.