Monday, December 2, 2013

The Changes in Oriental Happy Family Floater policy’s guidelines result in increase in premium for many families as high as 86%

Till Nov. 03, 2013 the Oriental Happy Family Floater policy‘spremium calculation was unique & was very popular as in this the premium was calculated based on the age of the proposer. As a result the product was popular among large families comprising of self/spouse/parents/parents in law and even children below 21 years.

The revised calculation method announced by Oriental Insurance Co. Ltd. on Nov. 4, 2013 is:

·        If one generation is covered the primary member would be the person of higher age
·        If two generations are covered i.e. husband, wife & children, primary member would be the person of highest age.

·        If three generations are covered by excluding the senior most generations, the highest age member will be the primary insured.
This has affected the premium amount a lot.
Let us see this with example

Let us take an example- Suppose a family of 4 members, husband (35yrs), wife (33 yrs), mother (60yrs), father (62 yrs) was insured for Rs. 6 Lakhs of sum insured. According to the old rate their premium would be 20490 Rs. But, according to the revised rate its premium will be 38200.

Oriental Happy Family Floater Comparison Rates

Old Rate for Rs. 6 Lakhs
New Rate for Rs. 6 Lakhs

Rs. 7,140
Rs. 1,430
Rs. 1,430
Rs. 1,430
Rs. 7,800
Rs. 31,220
Rs. 4,120

Total Premium

Rs. 20,490
Rs. 38,200
Total Premium after (12.36%)

Rs. 23,023
Rs. 42,922

Due to this high increase in premium rate this product has lost its attraction. Is it good or is it bad for the company – only time will tell. We foresee many families will use the portability clause to switch over to other companies.

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