Thursday, May 12, 2011


Lots to cover in health and life insurance..

Thought of sharing something hilarious, that I heard recently – it goes like this – What's the difference between an insurance company and the mafi a don? The insurance company can tell you how many people died this year and the mafi a don can tell the names of them. This may sound humorous but behind the humour lies a dash of reality on which this $41 billion industry runs. No doubt, that this is one of those few unique industries which thrives on mankind’s biggest insecurity – the fear of death! But with changing times, growing competition, lack of innovative possibilities and with life and assets becoming riskier and unsafe, modern insurance industry offers covers for almost everything under the sun. And some these covers are quite intriguing, to say the least!

With India comfortably finding space among world’s top ten counties in kidnapping, the demand for insurance cover in this area have seen an upsurge. The demand increased after the son of Adobe’s CEO, Naresh Gupta’s was kidnapped (and a ransom of Rs 50 lakhs was paid). As per global estimates, the global market size of this is around $300 million. Today insurance cover for Kidnapping and ransom is being offered by companies like Tata AIG, ICICI Lombard, New India Assurance, United India and HDFC Ergo. The potential for such products are yet to be determined but such offerings have increased the incidence of kidnapping and numerous fake and fabricated issues have also emerged out especially in Uttar Pradesh.

Life insurance plans do take care of family, ergo post after the death of a breadearner. But then the funeral cost of that bread-earner does bring in some amount of pain particularly for the middle class and the lower middle class. No doubt, even funerals too have become an expensive affair. This can be corroborated with the growth that the funeral industry is experiencing. In this light, insurers have started including funeral costs in their policies. Insurance companies charges an extra amount to include funeral expenses in the existing plans.

Moving further to another interesting offering – insurance for pets! Traditionally in India, cattle and dogs are kept as pets. But with time, animal lovers have started keeping exotic breeds of animals as pets ranging from turtles to exotic birds. These pets not only burn ones pocket as they are very expensive but also burns a lot as their maintenance is also expensive. Thus, pet insurance (ranging from Rs 2,000 to Rs 50,000) comes as a rescue to take care of the veterinary costs, death cover, theft and lost. Insurance may not take care of the emotional loss but do compensate the economical loss! For the records, in 2006, the Rajasthan High Court has ordered the New India Assurance Company to pay Rs 5,99,440 to the owner of an elephant who died after being hit by a jeep.

And before you think this is it, there are many similar schemes yet to arrive in India. A few of them include alien abduction policies (provided by Goodfellow Rebecca Ingram Pearson), supernatural insurance policy for damages caused by ghost, vampire and asteroid, weather insurance, body parts insurance (ranging from legs to moustache) and wedding as well. But as I said earlier, in a nation where on account of lack of purchasing power and awareness, a staggering 89 per cent of the population still remain bereft of any health insurance, all such offerings look a little too premature!



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