Say yes to cashless policies

Aniruddha Banerjee was having a party at his home, when suddenly his wife collapsed from a mild heart-attack. It was well past 11 pm, when Aniruddha rushed his wife to the nearby hospital, where she was advised to be under observation in the ICU for a few days. Unfortunately, Aniruddha did not have any cash at home, but that did not stop him from getting his wife in the ICU. Aniruddha did not have to pay anything neither upfront, nor at the time of discharge. Aniruddha was glad he had listened to his friend who had insisted on opting for a medical insurance policy that provides cashless admission to a hospital during any medical emergencies.

Whether it is health insurance or motor insurance, cashless policies are indeed a blessing in times of crises. Especially during times like now when there is a cash crunch, such policies are of immense help to policy holders. Cashless policies come in handy not just in India, but abroad too when you opt for a travel insurance policy.

For cashless policies, the insurance companies or third-party administrators (TPAs) have tie-ups with hospitals (in case of medical/health insurance) and with garages for motor/vehicle insurance. For a medical emergency while travelling, it is possible for the travel insurance policy holder to make claims under travel insurance via the insurer's local cashless network, as most insurance companies have hospital tie-ups internationally too.

In the case of motor insurance, insurance companies have negotiated and fixed the rates with the garages for tasks such as painting, denting and replacing spare parts. This robust understanding with the motor garages ensures that the policy holders is provided genuine parts & service, because the policy cannot be used in un-authorised garages or any roadside ones.

Insurance companies have made buying of cashless health policies available to customers through various channels. While the online purchase of insurance policies is on the rise, thanks to the increasing penetration of internet in the country, policies are available offline too through the Banc-assurance (tie-ups with banks to offer insurance policies), Common Service Centres (these are part of the National e-Governance Plan).

Thought insurance companies have enhances their distribution network in the country, the growth if non-life policies is not very substantial. There is increased availability of general insurance products in the marker, but the need to buy general insurance policies has not been felt. As the country is on the verge of embracing cashless economy, it is time for people to look at such Cashless Insurance options too, as they minimize the need to have cash or liquidity at all time. Cashless policies help bring in a lot more transparency too. They key benefit of cashless insurance is its fast and hassle-free process where the policy holder has to bear a very small part as non-medical expenses.

The current cash crunch is just a reminder of life's uncertainties. It is only wise that consumers go in for cashless policies so that they are not caught on the wrong foot ever again. As the accent on less cash economy and cashless transactions gain pace, the non-availability of cash should not come in the way of one fixing his/her health, a family member's health or fixing the vehicle.

While cashless insurance policies are popular in the West, in India it is still in a nascent stage. But going forward, it could become the order of the day. It is therefore prudent to opt for cashless policies to tide over any eventuality without much hassle.

The writer is managing director & chief executive officer, Universal Sompo General Insurance Company Ltd.