Death Claim Under Micro Insurance Portfolio

KIJECBM/JUL-SEP15/VOL-2/ISS-3/A4 ISSN:2348-4969
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38
KAAV INTERNATIONAL JOURNAL OF ECONOMICS,COMMERCE &
BUSINESS MANAGEMENT
DEATH CLAIM UNDER MICRO INSURANCE PORTFOLIO
Dr. C. Param
Assistant
S.Raj
Ph.D Resea
Periyar EVR Coll
Tiruch
Abstract
Insurance is needed to everyon are available in
different segments and p red by all registered life
insurance companies and nt of the population such
as Janata Personal Acc cy, Cattle or live stock
insuranc micro insurance policies
offered b Micro insurance being a
low pric s mainly on keeping the
transacti scuss the overview of micro insurance
death cla
Key Wo d group category, policy holder
Introdu
P death benefit shall be payable as Death due to any
reason o remium policies “Sum Assured on Death” shall be
payable which is defined as high as 10 times of annualised premium or 105 per cent of all the
premium paid as on date of death or sum assured on maturity or absolute amount assured to be
paid on death where absolute amount assured to be paid on death is sum assured. The premiums
mentioned above exclude taxes and extra premium, if any, for single premium policies. “sum
assured on death” shall be payable which is defined as higher as 125 per cent of single premium
excluding the taxes and extra premium, if any or absolute amount assured to be paid on death
where absolute amount assured to be paid on death is sum assured. If Death is due to accident, an
additional sum equal to sum assured shall also be payable. With this aspect this paper consists of

39
individual and group category of death claim, duration wise settlement of death claim of micro
insurance in India.
Literature Review
Kirti Singh and Vijay Kumar Gangal (2011) noted that Micro insurance is of supreme
importance for protecting poor lives against accidents, threats and other types of risks. This paper
highlights the importance of micro insurance for the upliftment of rural poor focuses on the
initiatives taken by private and public insurance companies in the growth of rural India and also
helps to understand how micro insurance is helpful in alleviation of poverty.
Amrutha Varshini and Suresh B.H (2013) a tool for the
country’s poor people to protect themselves fro ancial risks and
provide optimism to policy holders, helping gencies. Micro-
insurance is considered as an integral output of poor from being
further impoverished as a result of adverse ev s, there will be
increasingly higher standards for quality produc
Premasis Mukherjee (2012) in his art will soon cease
to be influenced by the rural and socia he insurers have
innovated products and distribution bey t business in the
low income segment. However, the reg es of the sector.
Group based policies, alternative micro ovations have to
be brought under the reg rate the growth of micro
insurance in India.
Shweta Mathar (2010) ro insurance in India and
challeng She opined that policy
induced low income people who
form a s social security.
Ramalsk d that there is awareness about micro
insuranc who played a major role in creating
awarene icro insurance policy. The period of
awarene lationship between the socio-economic
factors a e products of life insurance corporation
of India.
Parvath experimented a lot with micro insurance and sector is
still driv insurance provider, seeks government subsidies and
donor fu ial viability in preference to designing market led,
sustainable schemes. Policy induced and institutional innovations are promoting insurance
among the low income people who form a sizable sector of the population and who are mostly
without any social security cover.
Statement of problem
In a country where less than 3 per cent of the population has access to insurance, and
where upwards of 35 million people fall below the poverty line each year because of a single
health event in the family, it is slowly being accepted that “micro health insurance units” that
offer benefit packages and require pre-payment create a rudimentary insurance among

40
marginalized and underserved segments of the population in India. Micro insurance units
represent a high hope for extension of health insurance coverage among the poor. India is a
world leader in the development of this form of low-cost health insurance, but most micro
insurance units in India and elsewhere are managed independently, usually without the skills
required to properly assume the actuarial and organizational consequences of underwriting risks
of their members. Death claims under the micro insurance portfolio is an important aspect of the
effectiveness of insurance. Hence, there is a need to understand the death claim product wise,
Category wise and company wise which help to measure the performance of micro insurance
institutions in the country.
Objective
To evaluate the death claim Micro insura
Methodology
The present paper is quantitative in na hich have been
collected form the report of IRDA, website of i d data have been
arranged according to its needs and ana
Death claim term policy
For Death Claim if the life as the death claim
arises. If the death has taken place with mencement of the policy,
it is called an early death , it is called a non early
death claim. In case of th he duration of the policy,
the claim amount becom f Life Insurance 108 the
nominee st relative shall send an
intimatio fact of death, the date of
death, ca er. Insurer deals with the
death cl he policy. If the policyholder has died
within t .e., acceptance of risk which may be
different s been dated back it is treated as “early
or prem r 2 years of the commencement, it is
treated a
Table No: 1
surance Portfolio- Individual Category
Particul
Total
ntage LIC Percentage Industry
Total
Claims pending at
start of year
1.28 53.33 1.12 46.66 2.4
Claims
intimated/booked
49.82 3.94 1189.05 95.97 1238.87
Claims paid 42.46 3.49 1174.12 96.50 1216.58
Claims repudiated 8.64 39.18 13.41 60.81 22.05
Claims pending at 0.00 0 2.64 100 2.64

41
Rs.(Lakhs)
Source: Handbook on Indian Insurance Statistics2010-11
Table No 1 indicates the amount of benefit paid micro insurance portfolio with respect to
individual category. As regards claims pending at start of year, total death claim pending
amounted to Rs.2.4 lakhs of which, 1.28 lakhs were by private sectors and Rs.1.12 lakhs by LIC.
Majority of the death Claim (53.33 percentage) pending belong to private sector micro insurance
in the year 2010-11.
As regards claims intimated and booked, a total of Rs. 1238.87 Lakhs claims were intimated and
booked as total of which, 49.82 were Lakhs by Lakhs by LIC.
Majority of the claims intimated and booked (9 micro insurance
in the year 2010-11
As regards claims paid, a total of Rs.1216.58 ch 42.46 Lakhs
were by private sectors and Rs.1174.12 Lakhs m paid belong to
LIC micro insurance in the year 2010-11
As regards claims repudiated, a total of Rs.22.0 d of which, 8.64
Lakhs were by Private sector and Rs aims repudiated
(13.41) belong to LIC micro insurance
As regards claims pending at the end o is Rs.2.64lakhs
by LIC. Majority of death claim are pen
Death Claims un ividual Category
Particulars P
T
entage Industry
Total
Claims
start of y
12
Claims
intimate
7686
Claims p 44 95.34 7598
Claims r 71.42 84
Claims
end of y
100 16
Source: istics2010-11
Table n claim policies under micro insurance portfolio with
respect t
As regards claims pending at start of year, total number of death claim policies was 12 of which
7 policies were by private sectors and 5 policies by LIC. Majority of the policies (58.33
percentage) belong to private sectors micro insurance in the year 2010-11
As regards claims intimated or booked out of 7686 policies 371 policies were by private sectors
and 7315 policies by LIC. Majority of the policies (95.17 percentage) belong to LIC .Micro
insurance in the year 2010-11
As regards claims paid out of 7598 policies 354 policies were by private sectors and 7244
policies by LIC. Majority of the policies (95.34 percentage) belong to LIC micro insurance in the
year 2010-11
end of year

42
As regards claims repudiated out of a total of 84 policies. 24 policies were by private sectors and
60 policies by LIC. Majority of the policies (71.42 percentage) belong to LIC micro insurance in
the year 2010-11
As regards claims pending at the end of the year, there was a total of 16 death claim policies.
Majority of the death claim policies (100 percentage) belong to LIC micro insurance in the year
2010-11
Table No: 3
Death claims under Micro Insurance Portfolio Group Category
Rs.(Lakhs)
Particulars Private
Total
Percentag Industry
Total
Claims
intimated/booked
1096.48 5.29 20703.03
Claims paid 1028.07 4.98 20635.69
Claims repudiated 42.9 100 42.9
Claims pending at
end of year
26.29 15 94 164.86
Source: Handbook on Indian Insurance
Table no: 3 indicates the amount of be o with respect to
group category.
As regards claims intima s. 1096.48 lakhs was by
private sectors and Rs.1 ms intimated and booked
(94.70 percentage) belon
As rega . 1028.07 lakhs was by
private s paid (95.01 percentage)
belong t
As rega lakhs, Rs. 42.9 lakhs was by private
sectors. ) belong to private sectors
As regar worth lakhs claims were pending with
private s with LIC. Majority of the death claim
(84.05 p ear 2010-11
Table No: 4
D ce Number of Life Policies Group Category
Particul ntage LIC Percentage Industry
Total
Claims pending start
of year
4 0.81 487 99.18 491
Claims
intimated/booked
4495 8.93 45819 91.06 50314
Claims paid 4285 8.52 45965 91.47 50250
Claims repudiated 128 100 0 0 128
Claim pending end
of year
86 20.14 341 79.85 427

43
Table No:4 indicates the number of lives policies under micro insurance port folio with respect
to group category.
As regards claims pending at the start of the year out of the life policies 4791, 4 policies are at
private sectors and 487 number of life policies at LIC. Majority of the death claims life policies
(99.18) pending belong to LIC micro insurance in the year 2010-11
As regards claims intimated and booked out of 50314 numbers of life policies, 4495 policies
were by private sectors and 45819 policies by LIC. Majority of the number of policies (91.06
percentage) belong to LIC micro insurance in th
As regards claims paid out of 50250 life policie vate sectors and
45965 policies by LIC. Majority of the polici ) belong to LIC
micro insurance in the year 2010-11
As regards claims repudiated out of 128 life private sectors.
Majority of the claims repudiated (100 percenta cro insurance in
the year 2010-11
As regards claims pending at the end ere with private
sectors and 341 with LIC. Majority g to LIC micro
insurance in the year 2010-11
Duration of Settlement
As per the regul ) Regulations, 2002 the
insurer i i d all documents including
clarifica y can set a practice of
settling ation, the insurer has to
complete the written intimation of claim.
urance Individual Category
Rs.(Lakhs)
Particul Percentage Industry
Total
Within 1 1173.62 76.37 1536.64
Within 1 0.50 18.58 2.69
Within 3 0.00 0 0.11
Within 6-12 Months 0.00 0 0.00 0 0.00
More than 12 Months 0.00 0 0.00 0 0.00
TotalClaims Settled 365.32 23.73 1174.12 76.26 1539.44
Table no: 5 Duration wise settlement of micro insurance during the year 2010-11 was as follows

44
There was a sum of Rs.1536.64 lakhs within a month as duration for settlement of claim of
which, Rs.363.02 lakhs were by private sectors and Rs.1173.62 lakhs by LIC. A maximum
(76.37 percentage) settlement claim within a month was by LIC during the year 2010-11
There was a sum of Rs.2.69 lakhs within one to three months as duration for settlement of claim
of which, Rs.2.19 lakhs was by private sectors and Rs.0.50 lakhs by LIC. A maximum (18.58
percentage) settlement claim within one to three month was by LIC during the year 2010-11
There was a sum of Rs.0.11 lakhs within three to six months as duration for settlement of claim
of which, Rs.0.11 lakhs was by private sectors and a maximum (100 percentage) settlement
claim was done within a month by LIC during the year 2010-11
Table
Duration wise settlement of clai y
Particulars Private
Total
Percentage e Industry
Total
Within 1 Month 7242 6.11 118456
Within 1-3 Months 2 3.50 57
Within 3 -6 Months 0 0 13
Within 6-12 Months 2 66 3
Total Claims Settled 7244 39 18527
Source: Handbook on Indian Insurance
Table no: 6 Duration w policies during the year
2010-11 was as follows
There were 118456 polic of claim of which, 7242
policies mum (93.88 percentage)
settleme 11
There w ment of claim of which, 2
policies IC. A maximum (96.49 percentage)
settleme he year 2010-11
There w ation for settlement of claim of which,
13 polic settlement claim was done within three
to six mo
Conclus
I nd time consist financial services with unique nature
of featur varies from one year to unlimited time particularly in
micro insurance. Therefore maturity period and claim of the policy will be a major role in
designing the insurance products by insurance companies. Death claim is one of the major parts
of the insurance products. In a normal death claim, that is if the life assured has died after two
years of the commencement of risk, the insurer, on being intimated about the death of the
policyholder, calls for the age proof, if not earlier admitted, the original policy document and
proof of death. The proof of death can be a certificate from the municipal authorities under
which cremation has taken place or other local body like death registry. Hence, the present
article concludes that the death claim of micro insurance products in the country is playing a key

45
role in deciding the insurance business. Claim pending leads to inefficiency of the insurance
company which fails to settle their claim in a time specified; less claim settlement periods show
the efficiency of insurance companies.
Reference
Amrutha varshini.V and Suresh.B.H (2013) penetration of micro insurance study.Global
research analysis.
Hemant Bhargava ED Micro insurance affordable insurance the “Micro” way
IRDA (2005), Insurance regulatory and development authority obligations of insurers to rural
social sector.
Kalyanasundaram.M.K, Micro insurance nges, the Indian
Banker Vol.VIII No.8
Kirtisingh and vijaykumargangal(2011) iftment of rural
india. Excel international journal of multidiscip pp.131-145
Parvathi.G (2012), “Mciro insurance of Research in
Mamagement, Economic and Commerce vol.2 p
Premasis Mukherjee (2010), Trends of micro ins e.net
Ramalskshmi and Ramalingam Micro Insurance
with special reference to LIC of India v
Shweeta Mathur (2010), “Micr er power” vol.2.
pp.17-19
IRDA Annual Report 2010-201
Handbook on Ind
Website
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