Understand ReAssure benefit in detail
Hi Team Beshak,
I am trying to understand the ReAssure benefit in detail and am not clear on some wordings. Also, was unable to find many examples/illustrations to explain what is not covered. Request your help to understand the following aspect of ReAssure with an example if possible please:
- From Brochure Document: "Single claim under this benefit will be payable up to base sum insured."
- From Policy Wordings Document: "The maximum liability under a single claim under this benefit shall not be more than Base Sum Insured"
How does this work if I have additional cover due to no claim bonus? Thanks, Tarun
I know this can feel confusing most of the times, because these texts are written by lawyers and not marketing folks.
Anyways, any policy pays you upto sum insured in a policy period. You can make any number of claims to get that amount. But in a policy year, you cannot claim more than the sum insured. Example-
- You bought policy on Jan 1st, you have 3L SI, from Jan 1st to Dec 31st. You make claim of 30k once. Perfectly fine.
- You bought policy on Jan 1st, you have 3L SI, from Jan 1st to Dec 31st. You make 3 claims of 40k each, so total claimed 1.2L, works.
- You bought policy on Jan 1st, you have 3L SI, from Jan 1st to Dec 31st. You make claim of 4L on April 15th. You will only get 3L in claim. Next you submit claim on Nov 20th of 10k. Sorry, sum insured exhausted.
- You bought policy on Jan 1st, you have 3L SI, from Jan 1st to Dec 31st. You make 2 claims of 1.2L each, so total claimed 2.4L. Third time in the same period you claim 1L. But now only 60k available in the period. So policy will pay 60k and sum insured exhausts.
In all these cases, sum insured is reinstated upon policy renewal next year on 1st Jan. Mid-year policy renewal or sum insured enhancement is not allowed.
Now coming to your question of No Claim Bonus (NCB).
NCB is earned upon not claiming from policy. So a policy generally gives 5-50% of the SI as bonus, varies from plan to plan. Think of this as an earned SI. And yes, this is part of the claimable amount. Don't get confused by "liability is upto sum insured".
Your policy is like a wallet and every year it has sum insured as the starting balance. If you earn NCB, it also gets added to your annual wallet. When you claim, you spend from this wallet. Use the amount in wallet in any number of transactions. But you can't spend more than the money in the wallet, except in the case where product offers Sum Insured reinstatement.
I hope this clarifies.
Feel free to reach out for any followup queries.
Dear Mr. Anuj,
Thank you for taking time to share a detailed explanation. Appreciate your help on the same. I was referring to the above terms in the context of ReAssure benefit in Max Bupa ReAssure. My apologies since I did not mention the full policy name. How should I read the following in context of ReAssure benefit?
From Brochure Document: "Single claim under this benefit will be payable up to base sum insured."
From Policy Wordings Document: "The maximum liability under a single claim under this benefit shall not be more than Base Sum Insured"
If you could please to share inputs in the context of Sum Insured reinstatement, that will be very helpful.
ReAssure is not a special product, it is like many others. My earlier response is valid for ReAssure also. Don't get confused by the complicated statements in policy wordings or brochure.
Dear Mr. Anuj,
Thank you again. This has been so helpful. I did get confused by my own interpretation. One final question from my end, I promise. I have tried to put forward my understand via an illustration.
Base SI: 50L
Year 1 - No Claim - 50% SI Earned
Year 2 - No Claim - 50% SI Earned
Year 3 - Base SI+Earned SI = 1 Cr at beginning of policy year
Claim 1 made in Year 3: 60L. I understand this will be covered and the 40L will be carry forwarded – is that correct?
Claim 2: ReAssure triggered. Will my overall SI now be 40L+50L or only 50L? What happens if my second claim is of 70L?
Really appreciate all your time and efforts to patiently educate. Thanks, Tarun
As per my understanding, the Base Sum Insured (BSI) for the policy would always be 50 lacs (unless of course, you explicilty opt for an increased BSI in the future).
So, at the starting of Year 3, your Sum Insured (SI) = BSI (50 lacs) + Accumlated Cumulative Bonus (ACB) (50 lacs) = 1 crore.
If you read Section 3.13 in the Policy Wordings for Max Bupa Reassure, it says that the following -
- The maximum liability under a single claim under this benefit shall not be more than Base Sum Insured.
- The sequence of utilization of Sum Insured will be as below:
- Base Sum Insured followed by ...... [B1]
- Sum Insured Safeguard (if applicable) followed by ...... [B2]
- Accumulated Cumulative Bonus under Booster benefit (if any) followed by ....... [B3]
- ReAssure benefit ....... [B4]
So, at the start of Year3, in your case -
- B1 - 50 lacs
- B2 - Ignore for the moment
- B3 - 50 lacs
Now, in Year 3, when you make the first claim of 60 lacs, 50 lacs is deducted from B1 and 10 lacs is deducted from B3. So, B1 becomes 0 (50 - 50) and B3 becomes 40 lacs (50 -10). At this point of time, you have a total cover of 40 lacs still remaining with you.
You say that when you make Claim 2, Reassure will be triggered. That is not necessarily true. Reassure won't be triggered until and unless, the claim being sought by you exceeds your remaning cover (i.e. 40 lacs). So, for any claim amount less than 40 lacs, Reassure won't be triggered for Claim 2.
Let's say that your Claim 2 is 70 lacs. Since this is more than your remaning cover (40 lacs), Reassure will be triggered.
Here's how it would go -
- Firstly, 40 lacs would be used from B3. So, B3 becomes 0 (40 -40).
- Reassure benefit is triggered. So, B1 is reinsated to 50 lacs.
- Remaining 30 lacs (70 - 40) is used from B1. So, B1 becomes 20 lacs (50 - 30).
I hope that makes sense.
P.S. I am not sure about my answer (especially the first line). I would kindly request Mr. Anuj to confirm the same.
Answering your specific questions ----------------------
- Does my 40 lacs get carry forwarded? --------------------
Ans- Remaining Base Sum Insured doesn't get carry forwarded. It is reset to the original value (50 lacs) on policy renewal. It doesn't matter whether you have used 0 lacs, 5 lacs, 45 lacs or the Reassure benefit. What USUALLY gets carried over though is the Cumulative Bonus (CB), hence the name 'Accumalated CUMULATIVE bonus (ACB)'.
Question 2 - What would be your SI when making claim 2? ----------
Ans - Your SI at that time would be 0 (remaining BSI) + 40 lacs (remaining ACB).