Keeping the policy alive and kicking
Package and multi-year policies offer convenience and practicality while buying, maintaining your insurance covers
Some time ago, the Madras High Court ordered all vehicles in the State of Tamil Nadu to be sold only with a ‘five-year, bumper-to-bumper’ cover. That order is now on hold as insurers have asked for time to design such policies and get the required regulatory permissions.
The court’s idea was for a multi-year policy with a bundle of covers. We had explained in Cover Note in the edition dated September 6, how such bundled, or package, policies can serve us better and can offer more efficient pricing.
Multi-year policies have the added advantage of protecting us from our own forgetfulness to keep our insurance renewed!
Let us look at a few package and multi-year policies.
A basic motor-vehicles policy from the point of view of what is mandated is the Third-party (TP) Liability policy. This is packaged with an own-damage cover to make a comprehensive policy and can be further bundled with a menu of other optional covers like personal accident for the occupants, no-depreciation cover, road-side assistance, a cover ensuring a service vehicle while yours is being repaired and so on. The bells and whistles come at an additional cost but have their utility.
Multi-year motor-vehicle policies have also been available. A 10-year TP policy for two-wheelers was introduced in 2014, but hasn’t caught on much. A multi-year cover for cars was introduced in July 2018 and made compulsory for new vehicles including two-wheelers, from June 2020. However, this was withdrawn in August that year.
Health insurance policies have been offered for two and three-year terms for quite some time now. This is attractive because of the premium discount as well as the fact that one is protected against the premium increases that have become significant. Home-insurance policies have been package policies for the longest time. The Householders’ Comprehensive, policy dating back to the nationalised era of general insurance, had ten different covers packaged as one, including even personal-accident cover for household staff and continues to be on offer and many further options are now available, including some multi-year policies.
Package policies and multi-year policies lend a dimension of convenience and practicality to buying and maintaining our portfolio of insurance.
Linking to dates
One more convenient insurance hack that will save our skins when we forget to renew is to fix convenient renewal dates. Life policies are often linked to birthdays or wedding anniversaries which makes it easy for people to remember. If your policy is linked to a tax benefit, more the reason you should meet the March 31 deadline and hence, its renewal date should give you enough breathing room.
You can ask your insurance firm to align all your policies to the same renewal date. They can do this by extending some policies/ cutting short others as a one-time exercise and bringing them all to the target date.
If a single renewal date for all policies is too much of a financial outgo all at once, then spread them out to some on the first date of each quarter or a conveniently remembered trigger date. It could be timed for your Deepavali bonus date or the date of interest on a fixed deposit.
And if you are like a significant number of people who misplace policies, ensure you have registered on your insurance company’s website so that you can access policy details online for reference at the time of renewal, for checking details while filing your I-T returns or indeed, when you are filing a claim.
You can pool all your policies from various insurers, life, health, motor and so on into an e-insurance account and have them all in one place at the click of a mouse. This demat account, available through any insurer and even other financial service entities, will also come in handy for any policy updates such as address change or registered mobile number will be updated across policies and across insurers with one piece of communication.
If you have moved home often, and are missing policy renewal notices, you will know what a blessing that can be!
(The writer is a business journalist specialising in insurance & corporate history)
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