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Blockchain in Insurance

Blockchain in insurance

For years, the traditional insurance business model has proven to be rock solid against changes. Many policies are still printed on paper. Consumers are still calling by phone to purchase new policies. However, the insurance sector is now beginning to imbibe the digital revolution. Emerging technologies are changing the way consumers interact with businesses and how products and services are delivered. Blockchain is one of those coveted technologies.

Strategies implemented by companies such as IBM and Enterprise are helping blockchain push the boundaries of multiple industries including Insurance. Blockchain in insurance would automate the underwriting and claims settlement process, thus making it easier, faster, and convenient.

What is blockchain?

Blockchain is essentially a decentralized and distributed system. In this particular system, the records and transactions can be exchanged, verified, and signed without the intervention of a central party. Conducting business through such means paves the way for transparency, trust, and security. Something that couldn’t be attained through the traditional way of working.

How does blockchain work?

Imagine a never-ending network of spreadsheets across computers all over the world. Blockchain is the network that is designed to update this spreadsheet periodically. The various blocks on the blockchain consist of digital pieces of information which exist in three parts.

  • The first is information about transactions like date, time, and amount of purchase.
  • The second is stored information about the participants of the transactions.
  • The third is stored information that differentiates one block from the other.

Whenever any blockchain transaction occurs, the process generally includes these steps-

  1. A new block is created to highlight the transaction.
  2. The block is verified through every participant of the network.
  3. Cryptocurrency or any other “proof of work” signifier is attached to the block.
  4. The block created is added to the existing chain.
  5. The network is updated after the addition of the block and the transaction is finalized.

Blockchain technology can offer a myriad of benefits to not just insurance but other industries too. Automation in document transfers, contract term negotiations, and increased cybersecurity are some of the primary benefits of blockchain technology.

Applications of blockchain technology in insurance


Property & casualty insurance

Property and casualty insurance includes a variety of insurance such as car, bike, commercial, and home insurance. Significant manual entry is required in processing claims for huge amounts which leaves room for human error. Using blockchain technology could make claims processes faster and cheaper. By using smart contracts and shared ledgers to issue insurance policies, the claims and payment processes can be automated.

Detection of fraud and prevention of risks

The outdated methods of the insurance industry contribute significantly towards potential fraud and errors. To combat this, blockchain can help insurance companies store claims information on a ledger. This would help companies communicate and identify suspicious behavior.

Advantages and disadvantages of blockchain in insurance

The introduction of blockchain in the insurance sector can have enormous benefits to both companies and their customers. However, just like any other thing blockchain too has its own set of pros and cons.

Advantages of blockchain in insurance

The advantages of blockchain technology are as follows:

1. Increased efficiency

So many processes in the insurance industry are manual and time-consuming. Blockchain can streamline this process by reducing paperwork and reconciliation for insurance contracts.

2. Enhanced trust

Blockchain uses cryptography in all its transactions. This makes sure that the transactions you make are authenticated, secured, and verifiable, which ensures to protect customer privacy.

3. Claims processing

Blockchain allows to collect essential real-time data and conduct in-depth analysis. This would help to speed up the processing of claims and pay-outs.

4. Smart contracts

Smart contracts are software that will be a very useful tool in the claim approval process. These smart cards will also help in immediate pay-outs to the customers once the claims are approved. This software checks for certain transactions in the network and automatically executes actions if pre-specified conditions are met. These smart contracts will reduce paperwork on the back end and will also be cheap to use.

Disadvantages of blockchain in insurance

The disadvantages of using blockchain technology are as follows:

While blockchain is a hopeful futuristic solution it comes with its own set of obstacles. Here are some of the disadvantages of using blockchain in the insurance sector.

1. Cyberattacks

The increased popularity of blockchain has garnered it some widespread attention. Many new users are embracing this technology every day. But with this increased usage blockchain is becoming more prone to cyber-attacks which ultimately puts customer security at risk.

2. Loss of integrity of data

With millions of transactions made every day, the validity of every blockchain transaction must be considered. This brings into question fraudulent insurance transactions. Therefore, all possible measures would be required to be undertaken in order to protect the integrity of customers’ data.

3. Cost of operations

The increasing popularity of blockchain will result in the technology becoming expensive. Insurance companies might find it difficult to afford this new technology for everyday processes.

4. Privacy

Blockchain is available in the public domain. This means that every blockchain transaction can be traced back to its original block. The information being available to the public can be a potential privacy threat to the customer. Criminals can access this data and exploit it to their advantage.

5. Legal issues

Insurance companies must adhere to the current regulatory and legal hurdles before fully adopting blockchain technology. There are a number of blockchain features that are in violation of current insurance laws. For instance- customer’s personal data and their policy information on the blockchain must comply with existing privacy and data protection regulations.

While blockchain technology looks promising, it is still in its infancy. No one can predict the true power of this technology. Blockchain can provide insurers with better tools and make insurance processes convenient for users.

However, the introduction of the technology would demand the old standards and insurance processes to be optimized to. The insurance industry has high privacy and security concerns and with rapidly growing customers, these concerns are bound to grow.

Insurance companies must provide clear regulations in order to safely utilize blockchain technology. With time and a better understanding of the technology, these changes can be implemented. But once blockchain comes into its own, this technology is sure to transform the insurance industry giving it a new meaning and upgrade.

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Army Group Insurance Fund (AGIF)

Army Group Insurance Fund (AGIF)

The army constantly protects us from any external or internal threats and keeps our country safe. To ensure the safety of the people who protect us, an army group insurance policy was introduced in the year 1860. The army group insurance fund (AGIF) was introduced to fulfill the following objectives-

  • Providing financial help to the families of the army personnel who were martyred during service.
  • Providing maturity benefits as a lump sum at the time of retirement.
  • Providing any other benefits that may be introduced in the policy by the Board of Governors periodically.

In the initial years, AGIF had just two schemes which increased gradually according to the needs of the army jawans and their families. Life insurance cover, disability benefit, maturity benefit, post-retirement extended insurance scheme, etc. are some of the schemes introduced in the AGIF for better financial coverage of the jawans and their families.

The life insurance coverage under this insurance was Rs 30 lakhs for the officers and for the personnel below officer rank (PBORs), it was Rs 15 lakhs. But in April 2011, the life insurance coverage was increased by Rs 10 lakh and Rs 5 lakh for the officers and PBORs respectively.

After this, the annual premium amount payable for jawans was increased to Rs 2000 from Rs 1000. For the Officers, the annual premium amount was increased to Rs 4000 from Rs 2000.

Benefits offered by the Army Group Insurance Fund

Along with providing financial help, the army group insurance fund also provides a variety of additional benefits. They are as follows:

1. Extended insurance scheme

This scheme was introduced under AGIF to provide insurance cover to servicemen after the completion of their service. As of 2014, the revised extended insurance provides coverage of Rs 10 Lakhs and Rs 5 lakhs for officers and the PBORs respectively. The extended insurance is valid for a period of 26 years after retirement or 75 years of age whichever is earlier.

2. Maturity benefits

The maturity benefit is an added bonus paid to the servicemen upon completion of the service. In case of death of the person, the family receives the maturity benefit along with added death benefits.

3. Disability cover

While at service, army personnel are exposed to various risks due to which they might end suffering from an injury or disease. This might make them unfit for service. Under the policy, in case of 100% disability, an amount of Rs 25 lakhs and Rs 12.5 lakhs is paid to the officers and PBORs respectively. The amount paid gets adjusted in other cases depending on the severity of the problems.

4. Scholarship scheme

Scholarship schemes were introduced under AGIF to provide an incentive to the wards of the servicemen. The scholarship scheme provides a sum of Rs 40,000 per annum for the wards of the servicemen. The scheme is applicable for the wards of senior officers, junior commissioned officers, and officers in the army welfare education society.

The soldiers and officers are posted in various locations with the harshest weather and difficult terrains to maintain the security of the country. They often get exposed to dangers that might even lead to death. The Army group insurance fund provides these superheroes of ours a sigh of relief by ensuring their family’s financial security.

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Advantages and disadvantages of insurance

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Advantages and disadvantages of insurance

The insurance sector has experienced immense growth in the past few years. More and more people are realizing the importance of insurance, and taking up policies as per their needs.

But insurance like any other thing along with having numerous advantages has certain disadvantages too. In this article, we will discuss the advantages and disadvantages of insurance. Let’s first look at the advantages of insurance-

Advantages of Insurance

1. Financial protection

The prime function of Insurance is to provide you with financial protection in case of unexpected losses. Your insurance provider charges you with a nominal amount called the premium in exchange for providing this protection. In the case of life insurance, the beneficiaries receive the assured sum on the demise of the policyholder.

Several other insurance policies provide protection against miss-happenings like theft, fire, or natural calamities, etc. The funds received from the insurer help to continue the normal pace of life after the unfortunate events.

2. Risk sharing

We are exposed to various kinds of risks and uncertainties every day. These risks and uncertainties can cause major losses. Insurance acts as a cooperative device that shares your risks providing you with financial coverage for the same.

3. Encourages savings

In the case of life insurance, the premium paid to the insurer can also be considered as a saving, which will help the insured’s family in the future. Regular payment of insurance payment helps you to add discipline to your finances. Also, while you save money for premiums, your unnecessary expenses reduce automatically.

4. Self-sufficient

Damages to assets can lead to a huge financial loss for one, but with insurance, you won’t have to ask for financial support from anyone else. The claims will help you to manage the finances and bring back your financial stability. In case of deaths, the insurance amount can help the individual’s family to be self-sufficient.

5. Loan facility

Various insurance policies provide this facility or availing loans against the insurance policy. This loan can be obtained from your insurance company or any other financial institution. This provision can help you when you need money in an emergency.

6. Employment opportunities

Insurance has become a new age business while engaging hundreds of insurers and thousands of employees. The development of the insurance and finance sector has created many opportunities for those who have the qualification and caliber to excel in this industry.

7. Encourages foreign trade

Insurance is a device that reduces or eliminates the risk of financial losses in case of mishaps. This helps exporters and industrialists focus on the development of their business, allowing them to undertake risks and promote foreign trade.

8. Reduces inflation

An increase in prices of commodities is referred to as inflation. Reduction in the volume of money is necessary to control inflation. Money that you pay as a premium to the insurer helps reduce the market volume of money. Hence this helps control inflation in the country.

9. Develops our economy

A major part of the premium that is collected by the insurance companies is invested in sectors such as trade and industry. Such investments promote the growth of the economy as a whole.

Disadvantages of Insurance

Here are some of the disadvantages of insurance:

1. Not all losses are compensated

The insurance may not compensate for all types of losses that occur to the insured. In such cases, the insured might have to pay for the excluded losses from his own pocket.

2. Lengthy formalities

The insurance claims usually have lengthy legal formalities. This might lead to a delay in receiving the financial compensation.

3. Insurance is a business

At the end of the day, insurance companies are running a business. The companies may try to compensate as little as possible to the insured. There’s a possibility that the insurance companies may try to maximize their profits rather than the compensation amount for you.

4. Possibility of a crime

The benefits provided by insurance might tempt someone to commit crimes. This might sound disturbing, but there have been cases where frauds and scams were conducted to get the insurance claim.

5. Less ROI

Insurance policies do not offer much ROI as compared to other financial tools like shares and mutual funds.

 

Every financial decision you take has its set of pros and cons, even insurance. Choose wisely before opting for an insurance policy by considering your need, purpose and the advantages and disadvantages of insurance. You can immensely benefit from an insurance policy provided that you clearly understand its terms and conditions.

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How to start an insurance company in India?

How to start an insurance company in India?

India is among those countries that have very strict laws when it comes to giving out permissions for financial institutions, funds and insurance companies. This is why it becomes crucial for an aspiring insurance-entrepreneur to to understand the insurance related regulations and rules of India.

This is one of those businesses where you have to first think about all the legal requirements and thoroughly analyze every regulation that is there for starting an insurance company. You also need to consult a lawyer or an expert in this aspect.

Here, we are going to tell you about the steps that you need to follow that will answer your question ‘how to start an insurance company in India?’.

Steps to start an insurance company in India

1. Permission from IRDA

The insurance regulatory and development authority (IRDA) is the supreme authority from whom you have to obtain the certificate of authority to become eligible for applying for insurance. The point to be noted here is that you need to have a different certificate for each category of businesses and you can at no point join other businesses with the insurance business. All the entities have to remain separated from this business.

2. Documentation

An entity that wants to apply for an insurance license needs to apply to IRDA through IRDAI and IRDA/R1. This is the first step towards obtaining the insurance license. The documents that you need to furnish for this are-

  • Show proof that you are a valid company under the Companies Act 2013.
  • Details of directors, board members and investors.
  • A five-year business plan that has been approved by the board.
  • Memorandum of Association and Articles of association. Both need to be drafted as per the regulation of the government and IRDA.
  • Physical copy of the partnership agreement between partners/investors/board members. It should be certified, notarized and registered.
  • Annual report of financial accounting of all the members.

3. Application for registration

After the application under IRDA/1, if the authority gives a go-ahead for you to apply for an insurance license, then you have to fill an application under IRDA/2. This is the first formidable step for applying for a license. The previous two are just preliminary steps. They are just preparation for application.

There are many more documents that you will need to produce in front of the authority while completing the application. Recognition of your IRDA/1 is sent to you and then you are given a list of documents and proofs that you need to produce in front of the authority to obtain your license. Some of the prominent ones are-

  • Your capital proofs. The point to be noted here is that there are different thresholds for each category of insurance type when it comes to business capital. For example- You need to have at least ₹100 crores as capital for being eligible for life insurance.
  • Affidavits of Indian and foreign promoters, shareholding percentages, executive positions, letters of appointment, FIPB and FDI regulations completion proof and many other documents.

This is the step where you need to understand that the process can take some time since it is very elaborate. Well, starting an insurance company in India is not easy as it seems.

IRDA owns all the rights regarding the acceptance and rejection of your license. It may reject your application for non-compliance on any grounds. It reserves the right to do so. Their intimidation regarding acceptance or rejection will be communicated to you in 30 days.

4. Commencing your business

If you are able to get your license then the guideline laid down by IRDA says that you have to commence your business within 12 months of obtaining the insurance company license. This is a very strict guideline and is given a lot of importance by the authorities. Several businesses were ineligible to compete and don’t own a license because of non-compliance with this guideline.

Also, even after granting you a license to commence as an insurance company; IRDA can ask you for additional information. It can also conduct a proper inquiry if it wishes to. This isn’t done with the purpose of finding frauds but can be done as a precautionary measure. They cannot leave anything for a chance.

What you need to do is to create a proper plan way beforehand and you should always be in a position to start your insurance business as soon as you get the green light. Also, you need to keep in mind that you cannot start advertising and attaining clients before getting your license. This is a criminal offence that can land the promoters in jail and face fraud charges.

Eligibility criteria

There are proper eligibility criteria laid down by the authorities which have to be adhered to before even applying under IRDA/1. There are multiple grounds on which the application can be rejected in the initial step. You need to properly and thoroughly research the guidelines of the authorities to understand your eligibility.

In order to function, an insurance company is required to obtain a license. The registration and license issuance of an insurance company is regulated under the Insurance Regulatory and Development Authority Regulation, 2016. Following factors standards are used to define the eligibility for an Insurance company license:

  • The company must be recognized by IRDAI.
  • The company must be registered under the LLP Act of 2008.
  • The minimum net worth of the firm must be 10 lakhs [INR].
  • Under the LLP Act, the company registration name must have the words “Insurance Marketing Firm”.

The Bottom Line

With the help of the above points, you can have a basic understanding of how to start an insurance company in India. Some special corporate lawyers just operate in this segment and are highly specialized in making an application. Apart from that the chartered accountants are also trained professionals who are familiar with the guidelines of the IRDA. Consulting with them can also help you acquire better knowledge.
Another thing that needs to be understood as well is that these guidelines keep changing continuously. The above-mentioned steps are not completely exhaustive and are subject to changes and development. The best thing for you is to always be updated through the websites of the authorities and governments.

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Laptop Insurance in India

Laptop Insurance in India

One of the most important devices that many people use regularly is a laptop. Laptops are essential not only for official purposes, but also necessary for educational, and other online activities. Especially with the new practice of working from home and online education and training, a laptop has become one of the most essential devices in our daily routine.

It is important to take Laptop Insurance as technological devices always remain at risk of damage. Some laptops have a definite lifetime and some may get damaged due to negligent usage. It is not only about the physical damage but many internal faults may appear as well due to loose handling and lack of care. It is very hard to tell how long the laptop would serve and when a problem may appear. To minimize these losses and damages, you must consider buying laptop insurance.

Laptop insurance in India is one of the least discussed and known about insurance. So, here’s a detailed overview that’ll highlight all the important aspects of this insurance.

What is covered in laptop insurance?

The very first concern is what laptop insurance would cover. So let us check out the coverage facilities that you may receive under laptop insurance.

  • Most insurance companies would cover all brands of laptops starting from Apple to Asus.
  • Any breakage, crack, or damage to your laptop screen would be covered under a laptop insurance policy.
  • Any electrical breakage or damage would be covered.
  • Mechanical damage and faults would be covered under a laptop insurance policy.
  • If your laptop gets lost or if it is a case of theft or burglary, the insurance company would provide coverage.
  • If there is an accident that caused damage to the laptop, it is also covered under the policy.

Remember that these coverages would vary from insurer to insurer. You must collect adequate information about the coverage from an insurer before buying so that the policy meets your requirements.

What is not covered in a laptop insurance policy?

It is also necessary to know what would not be included in a laptop insurance policy. Again, remember that inclusion and exclusion of coverages would vary from one insurer to the other.

Let us check out the possible exclusions in laptop insurance.

  • Any previous damage or fault of the laptop before buying the insurance policy would not be covered under the policy.
  • Any intentionally done damage or damage incurred due to careless handling of the user would not come under the coverage of the policy.
  • Damage to the laptop due to war or terrorist activities is not covered under the policy.
  • Normal scratch, or damage due to rough usage, and gradual damage due to weather and long-time usage would not receive coverage from the policy.
  • Insurance companies don’t provide coverage for the maintenance of the laptop.

What are the advantages of buying laptop insurance?

Now that you know what is covered and what is not covered by laptop insurance, let us explore the benefits of buying laptop insurance.

  • It is a better version of your laptop warranty. While a laptop warranty covers only the basic facilities for a very short period of time, a laptop insurance policy would provide a broader range of facilities and coverages.
  • You would receive a lot of discounts, membership facilities, and offers during the policy renewal and rewards depending on your claim records. This eventually aids in saving money.
  • You would receive immediate responses and assistance in case of any sudden damage to your laptops and emergency services.
  • Most laptop insurance companies provide door-to-door pickup and delivery services. This means you would just need to inform your insurance company about the damage and a surveyor and agent would visit you to look into the matter.
  • You can save up a lot of money by buying a laptop insurance policy. This is the biggest facility for which buying laptop insurance in India is recommended. The company would compensate for the financial loss and help you throughout the repairing process.

Steps to get your laptop insured

So how does the whole procedure go? What factor would influence your buying decision? How would you report and claim your insurance? Let us look into the steps.

Decide the coverage

For organizational and even individual purposes, count the number of laptops being used and measure the potential risk factors. Think if you need an insurance policy or not.

Compare and decide

Now think of what coverages you require. There are multiple companies offering different deals. Also, take into account the budget for buying the policy. Now compare the companies, check ratings, and see which company would meet your organizational demands and fulfill your requirements.

Fill the proposal form and purchase

Once you choose the right company, you are required to fill a proposal form, submit documents that the company would ask for, make payment, and buy a laptop insurance policy. Make sure to go through the terms and conditions before purchasing.

Laptop insurance Claim process

Here are the steps you need to follow to get your claim:

  1. If it is a case of theft or burglary, you need to report it to the police first. An FIR copy is a must for the process.
  2. Next, you have to submit the FIR to the insurance company and fill the claim form.
  3. If it is about mechanical or accidental damage, you can inform your insurance company and file a claim.
  4. You may require to submit several documents to process the claim. Make sure to submit them all. Remember that you have to file a claim immediately after facing an issue. Don’t be late.
  5. Now that you have submitted a claim, you have to wait for the insurance company to verify and check the eligibility. Then the company would either accept or reject (only happens if it is not genuine) your claim.
  6. Once the claim is accepted, you would get the reimbursement in the time period mentioned in your policy.

Therefore, to minimize the financial loss and damage to your laptop, you must consider buying a laptop insurance policy from a trusted and reliable company.

Compare, analyze, and always select a company that meets your demands and requirements. Reputed companies usually prove to be more reliable and offer a hassle-free claim process.

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Cyber Insurance in India

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Cyber Insurance in India

We live in an era where virtual is the new way of life. From individuals to business firms, everything has shifted to the online world for most of their operations. Entertainment to shopping, communication to banking every other sector and service is now available online. Although the internet revolution has eased up our lives to a great extent. We need to understand the threats it brings along.

In India, the past decade has witnessed the introduction of digitization in all facets of life. Every corporation has adopted online technology. This makes it necessary for everyone to understand the importance of cyber insurance in India.

What is cyber insurance?

Cyber insurance ensures that your organization gets financial assistance in case of a data infringement or cybersecurity violation that has caused financial loss to your organization. Not only that. It also covers the costs and expenses needed for a legal procedure to get justice against the cyber attack. It acts as your personal arsenal against the malicious activities of the cyber attackers.

Cyber threats can be crucially dangerous for organizations. Organizational confidentiality can be threatened if cybersecurity is not ensured. However, even after taking every necessary step, there are still chances that the data may be leaked and misused. This may lead to huge losses for the company. In such a situation, cyber insurance comes to the rescue.

Features of cyber insurance

The features of cyber insurance are as follows:

  • Cyber insurance policies usually have a tenure of a year which can be extended upon renewal.
  • People that are above the age bracket of 18 years can avail cyber insurance policies.
  • The total sum insured starts from 1 lakh. It can extend further to 1cr- 5cr and can be increased or decreased as per the need of the organization.
  • Affordable premium plans that start from 700 rupees.
  • Restoration expenses are reimbursed during specific malware attacks.

Benefits of cyber insurance

Potential threats that cyber insurance can help you to overcome

You may wonder what possible cyber threats are there that can damage an organization’s confidentiality and dignity. Let us look into some common cyber threats that are prevalent in India.

Data infringement– This is a huge threat to the privacy of the organization as well as its employees. The data relating to the organization’s activities, strategies, plans, employee information, etc. can be breached.

Ransomware– In this cyber threat, malware, which is malicious software, is injected into a system to corrupt the computer system. The malware would block the organization’s access to some files and data. The hacker then demands a ransom to give the access back to the owner, hence the name ransomware.

Personal negligence– The cyber-world is becoming confusing and difficult to understand. Thus, many employees unknowingly invite cyber threats. Their lack of knowledge and expertise can lead to severe security threats to the organization.

What would be covered under cyber insurance?

Coverage varies from one insurer to the other. But there is a range of facilities that are covered by insurers. You should choose the one that provides maximum coverage for your organization.

Let us see what are the overages that you can avail from the best insurer.

  • Most insurers offer coverage for identity theft.
  • Insurers cover malware attacks.
  • They cover social media attacks and vulnerabilities.
  • IT theft is also covered by insurers.
  • Cyber-stalking is covered by many insurers.
  • Phishing is covered under most insurance policies.
  • Email spoofing coverage is commonly offered.
  • Cyber extortion coverage is common as well.
  • Some insurers offer cyber-bullying coverage.
  • Privacy and data breach coverage are provided by most insurers.
  • Many insurers offer coverage for legal procedures regarding a cyber-attack.

Sub-limits and exclusions

Often, the clauses in the cyber insurance policies have sub-limits. These sub-limits define the exact coverage of the policy. For example, claims related to e-mail spoofing and phishing are only covered up to a certain limit. This limit is per-determined. If the loss exceeds this limit. The insurer will have to bear the losses.

Physical damage to the assets or humans is not covered under this policy. Also, any claims that can be linked or traced back to some fraudulent conduct are immediately excluded. The insurer can also impose a fine on the insured for such faulty practices.

What are the consequences of cyber-attacks?

Now comes the question of how cyber-attacks can harm the business and why cyber insurance is important to help you out. Let us first talk about the dire consequences that cyber-attacks generally lead to.

  • Financial loss– Business information and bank links can be leaked as a result of a cyber-attack. Therefore, the attacker may withdraw money or ask for ransoms resulting in an economic loss. Also, if you go for legal procedures, you would face financial losses.
  • Interrupt’s workflow– Naturally, a data breach or intrusion in the computer system would hamper the overall workflow of the organization. Employees won’t be able to work efficiently and use the systems properly.
  • Decreases trust– Customer information can be hacked as well. This means customers may lose trust in the company. You may lose customers as a result of breaking trust.
  • Tarnishes reputation– When the overall performance degrades and customers lose trust in the company, it tarnishes the reputation of the company in the market.

These are the consequences that can severely affect your business and downgrade the reputation of the company in the market as a result of a cyber-attack.

Final Overview

Data breaches and cyber-attacks are increasing day by day. In such a situation, it would be wise to buy cyber insurance in India. Cyber insurance ensures technological security and minimizes the financial loss that you may face due to a cyber-attack.

As organizations are increasingly using technology to conduct their activities, it is important to ensure maximum security as important details and data are involved. However, with the advancement of technology, cyber attackers have also evolved. Thus, taking precautions is the best solution.

And, undoubtedly, cyber insurance can help you out in case of a cyber-attack. You would be able to maintain the reputation and dignity of the organization. The company would also take liabilities for the damages thus minimizing the losses.

Thus select a cyber insurance policy that would fulfill your requirements and meet your organizational demands.

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Structure of commissions for insurance agents

Structure of commissions for insurance agents

The commission obtained by an insurance agent varies depending on the norms and regulations of insurance companies.

However, there is a specific commission structure followed in India that helps insurance agents avail remunerations effectively without any confusion. Let us now dive into the subject, commissions for insurance agents to understand the concept in a better way.

Understanding the concept of insurance commission

Insurance agents depend on commissions and fees that are paid to them by the insurance company. These commissions and fees depend upon the kind of policies sold to the people. The commissions vary from policy to policy.

Another factor affecting the commissions paid to the insurance agent is the insurance premium. For policies sold with higher premium value, the commission paid is more. The insurance premium amount is an annual sum that is paid by the insured [be it an individual or business firm] for availing the benefits of the insurance policy. These policies can be in the form of automobiles, life, dental, medical insurance, etc.

The premium acts as a direct income for the insurance company out of which a specific percentage is awarded to the insurance agent for securing the plan. Let us now go through the various insurance commission structures present in the domestic Indian market.

The commission structure

General insurance commission structure

This is the category of insurance that safeguards individuals and organizations from some loss-triggering event like fire etc. The below-mentioned commission doesn’t include auto-insurances.

  • For the fire retail insurance, the agent gets a 15% commission on the policy.
  • For fire corporate risk the agent can receive a 10% commission.
  • For marine cargo, the fixed commission is 15%.
  • Marine hull insurance will help the agent get a commission of 10%.
  • For other different and corporate general insurance, the agent can get a commission ranging from 10%-15%

Health insurance commission structure

Insurance agents also avail commissions for selling health insurance policies. Following is a breakdown of commissions received by insurance agents through health insurance plans:

  • For individual health insurance, the agent’s commission can be up to 15%.
  • For the group health insurance provided by corporate agencies, the agent gets a commission of 7.5% of the total amount of insurance.
  • For family health insurance the agent gets a 15% commission.

The health policies vary a lot from company to company. Plus, the IRDA guidelines regarding the commission are a bit flexible as well. So, the amount may vary a bit depending on the company offering the insurance.

Life insurance (single payment) commission structure

This is probably one of the most purchased categories of insurance in the market. The commission received by an insurance agent on Life Insurances are:

  • All life insurance except terms plans fetches a commission of 2% for the agent.
  • The term plans get a 7.5% commission for the agents.
  • Renewable terms group plan will attract a 5% commission to the agent or ₹10 lakh whichever is less.
  • A group term plan in a single payment will include a 5% agent commission.

Life insurance for regular premium products commission structure

The below-mentioned commissions for insurance agents are the percentages of commissions that agents get for a life insurance policy that includes the payments of premium for regular products. The insurance premium can be paid monthly or yearly.

  • Individual term insurance will attract a hefty 40% commission in the first year of the plan. And with the subsequent renewals, the commission will be 10%.

The following table highlights the entire commission standard:

Insurance Plan Tenure

Commission Percentage

5 years

15%

6 years

18%

7 years

21%

8 years

24%

9 years

27%

10 years

30%

11 years

33%

12 years [or more]

35%

As already highlighted in the table above, insurance agents can avail of a commission of 15% with a renewal commission depending upon the kind of life insurance policy is sold to an individual. The renewal rate of commission at 40% for a 5-year policy is the highest return an insurance agent can receive.


The highest commission rate obtained stands at a life insurance policy that has a tenure of more than 12 calendar years. However, the subsequent renewal commission rate stands at 10% which is standard for most life insurance plans. On the other hand, the commission percentage on selling Individual Term Insurance stands at 35% which, by far, is the highest commission rate established.

Factors affecting commissions

There are specific guidelines laid down by the Insurance Regulatory and Development Authority (IRDA) about the commission payments to the agents. The companies seeking an insurance license are informed about these guidelines beforehand.

It is the amount that the company pays to the agent to get customers. The agents are given a commission as per the time of the policy. The longer the policy term is, the higher will be the agents’ commission. The agent receives a commission on a policy-to-policy basis.

Another aspect that affects the commission is the type of policy being sold. There are specific percentages fixed for each type of policy being sold by the agents. The insurance companies have to give commission as per these guidelines. Although the companies sometimes give bonuses as well to provide external motivation to their agents.

Companies might even offer other benefits like international tours, to their agents as an appreciation for their work.

There is a certain bit of flexibility in giving the commissions for insurance agents. The IRDA has relaxed certain guidelines about the minimum and the maximum number of commissions that can be paid. You can know all about it from their website.

Conclusion

There are several categories of commissions for insurance agents that seem like they are too much of an amount to be paid to a mediator. However, it is important to understand that the commission offers a significant opportunity as an incentive in the life of an agent. In addition to the above-given information, if you wish to dive deeper then it is advisable to get in touch with an expert or an experienced insurance agent to gather more information about the commission standards.

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Decoding the life of an insurance agent

Decoding the Life of an Insurance Agent

You may wonder about the opportunities as an insurance agent. You may think to pursue a career as an insurance agent or maybe you are interested in knowing what an insurance agent does. No matter what the question is, let us see how the life of an insurance agent is.

Roles and responsibilities of an insurance agent

So, the very first question is what does an agent do? An insurance agent sells the relevant insurance policies to the clients which fulfill the needs of the client. They bargain, negotiate and work to sell out insurance. An insurance agent has the freedom to choose if he wishes to work under an insurance company or function as an independent broker.

Apart from dealing with clients, they do a lot of other activities. Here are a few tasks that an insurance agent undertakes:

  • An agent helps clients in doing the paperwork and goes through the procedure after convincing them to buy insurance.
  • He/She monitors the amount to be paid and facilitates payment methods.
  • He/She attends meetings with the company to learn about new policies.
  • He/She organizes meetings with organizations to convince them.
  • An agent notes down the day-to-day progress of his or her work.
  • He/She makes sure to learn about customers’ problems and solve them to maximize customer satisfaction.
  • He/She checks on the property, asset, or any other object that is to be insured and determines the insurance risk.
  • He/She may even customize the policies to fulfill customer’s demands.
  • He/She looks after the insurance claims.
  • An agent assists clients to process the claims and get the reimbursements on time.

Essential skills of an insurance agent

  • An insurance agent has subtle yet powerful convincing skills. The approach is delicate and polite but the words are often enough to convince clients.
  • An insurance agent possesses the skill to speak fluently and confidently. Put up logic on why clients should buy insurance. A clear and confident communication compels people to purchase insurance. Communication plays a vital role as it helps to inform potential customers about the plans and schemes that can help them in the long run.
  • An Insurance agent works hard to satisfy his/her clients through customizing policies, helping them, learning about their demands, and indulging to enhance customer service quality.

The life of an insurance agent is subject to various payment opportunities based on the market conditions and the determined commission rates. Therefore, an insurance agent ensures to understand the requirement of a client perfectly such that the best plan can be pitched and sold and also satisfies the customer’s requirement.

An insurance agent also acts as a counselor and an advisor to all his/her clients. An insurance agent, for example, life insurance agent may not just be confined to selling only a life insurance policy. He or she may also offer other policies such as health insurance, theft insurance, disability insurance, financial packages [including mutual funds, and other securities], etc. depending upon the need of the customer.

The above mentioned are some of the foremost responsibilities, skills, and challenges that the Life of an insurance agent is full of. They need to master all of them in order to deliver excellent performance and succeed in their career.

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How to Launch a Complaint with the Insurance Ombudsman?

complaint

How to Launch a Complaint with the Insurance Ombudsman?

Insurance is important to ensure the financial security of our family, property, car, etc. in case of unforeseen circumstances. This is why we turn to insurance companies to get these facilities. But what if you don’t receive the amount you are owed? What if the payment is getting delayed? What would you do if the company doesn’t provide the facilities as promised?

In case of any inconvenience and difficulty, you are required to file a complaint and one of the ways to do so is via an ombudsman. Insurance Ombudsman is an initiative directed by the Government of India that allows individuals to effectively sort out complications related to a specific insurance policy outside the court of law. But how to launch a complaint with the insurance ombudsman is something not everyone is aware of.

You may not know how exactly you can reach out to the company for help. Nothing to worry about. We are here to tell you every step of how you can launch a complaint regarding your insurance difficulties.

How can you launch a complaint with the insurance ombudsman?

There are easy steps to file a complaint. But sometimes the easy methods may not work if not followed in a pattern. Hence, it is imperative to know and follow the correct sequence to launch a complaint.

So here, we will start from the simplest solution and see to what extent we may need to go to solve the issue.

Know when to file the complaint:

It is advisable to file a complaint under the insurance ombudsman when an adequate response from the concerned insurance firm has not been received within a time frame of 30 working days [from the date of the official complaint].

Contact the ombudsman office:

Contact the ombudsman office present in your jurisdiction. For an instance, if your insurance company is based in Delhi and you live in Mumbai. You must contact the ombudsman Mumbai office to file the complaint.

Filing the complaint:

The complaint can be filed by sending a letter to the insurance ombudsman. You can also file the complaint through fax or email. Although, if you file the complaint over an email, you will have to send a hard copy later.

What must your letter include:

All the necessary details and documents related to the matter, including your policy number, must be included. The documents required may vary depending upon your grievance. It is advisable to confirm everything with the ombudsman’s office and only then post the letter.

Visiting the ombudsman office:

If you visit the ombudsman office, you must fill the P-II and P-III forms. They will revert back to you asking you to fill these forms if you send your documents through the post.

Fixing of the date:

After the documents have been submitted and other formalities have been fulfilled, a date for the hearing will be fixed by the insurance ombudsman.

These were the basic steps you may take to file a complaint. It is important to note that the complaint needs to be filed within a year after your last conversation with the insurance company regarding your grievance. You must also note that the same complaint should not be pending before the consumer forum or the court, as these two institutions are the last resort for any grievances.

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How do I download an Insurance Copy? – A Brief Explanation

How do I download an Insurance Copy? – A Brief Explanation

The motor vehicle laws and regulations make it mandatory for you to carry the insurance copies with you every time. The rules regarding these have been developed after insurance was made mandatory. This is why it becomes crucial for you to know the answer to the question “how do I download an insurance copy?”

There are a few simple steps that need to be followed for downloading the insurance copy. Apart from following the steps, you are required to submit certain documents to get your insurance copy.

If you ever lose your policy or require a copy, here is a list of steps that will help you get your insurance copy.

Online method

Visit the service provider’s/company’s website

The first step is to visit your insurance company’s website. You will have to search the website URL on the search engine if you’re not aware of that. The website will direct you to their homepage.

Select the type of policy

After visiting the website select the category of policy you have purchased. It will be easier for you to navigate and enter details about your policy number.

Enter your details

Enter the details regarding your policy number, your id. Number, phone number, etc. This will make it easier for the portal to generate your copy.

Verification

Most of the service providers will ask you for verification. It can either be verification via email id or using the OTP verification methods.

Policy copy

A copy of your policy will be generated as soon as the verification is completed. (these procedures may vary a bit as per the companies’ websites)

Offline method

In addition to the online method of downloading an insurance copy, people can also resort to the offline procedure of obtaining a copy. This method can be initiated when the insured has misplaced or lost the documents of the insurance. The process to avail it is as follows:

Inform your insurance company

The very first step that you need to follow in order to get your copy is to inform your insurance company or agent. This will initiate the process of copy recovery in an offline manner.

Launch a police complaint

It is one of the legal requirements of offline copy generation. You have to launch a police complaint that you have either lost or misplaced the insurance copy. It will also safeguard your policy in case it has been stolen.

Indemnity bond

On a non-judicial stamp paper, you will need to sign an indemnity bond in order to get a copy of the insurance. This is also essential legal compliance that you need to follow to generate your offline copy. The conditions of the bond may vary from company to company. Talk to your agent and lawyer before completing this legality.

Advertisement

Give a legal notice and ad in one of the prominent newspapers. This should contain the details like your contact number and name. It is information to the public that you have lost your policy and in case anyone claims this policy as theirs, they are not legally entitled to do so. There is a clear guideline regarding this as well. Research before you give out a public advertisement.

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