There are some financial products like the savings account, ATM card, fixed deposits and also other consumer durable products like mobile phones, LPG, home appliances etc. that offers an insurance coverage which is either inbuilt or is given at a very cheap price.
By inbuilt insurance cover, it is meant that you as a customer will not have to pay any extra premium for the insurance that comes available with the product. The company manufacturing the product provides the service for free or provides the insurance as an add-on to the feature to the product. At times even dealers selling the product pay the premium for the insurance.
Financial Instruments
1. Deposits and Savings at the Bank
The Deposit Insurance and Credit Guarantee Corporation (DICGC) provide coverage to the fixed deposits made by individuals at the banks, be it a public sector bank, a co-operative bank, a private sector bank, regional rural bank, a foreign bank or any scheduled or non-scheduled bank in India. As per this coverage, every deposit holder is eligible to get a maximum sum of INR 1,00,000 in case the bank faces cancellation of license or a merger and cannot pay the customer the promised sum. The maximum amount mentioned includes both the interest and principal amount. DICGC protects the investment of the customer in the fixed deposit, recurring deposit, saving account and current account under this coverage. The premium for this insurance is paid by the bank and no extra amount is charged from you, or deducted from the principal for the same.
But if the individual holder has some dues to be paid to the bank then, in that case, DICGC would first deduct the dues and then pay the leftover amount to the customer.
2. Credit Card Coverage
Credit cards provide insurance coverage to the credit card holder for unauthorised transactions after the card has been reported lost or stolen. However, if there has been a fraudulent transaction without the involvement of the account holder, like OTP sharing etc. then also the transactions are insured.
Also, some credit cards also provide a term and accidental insurance coverage to its credit cardholders, provided there has been active transactions in the card within the last 3 months or so.
3. Zero Liability Card
Unauthorised transactions on a debit or credit card, provided by Visa or Mastercard are protected by the Zero Liability Cover provided by the banks. Under this protection, when a credit card is reported to be stolen or lost then the customer does not need to pay for any further transactions done on that card. And as for the debit card, the amount that has been deducted from the account post the reporting of the loss is reversed back to the account. The extra amount that needs to be paid as a premium to cover the liability is borne by the bank.
4. Pradhan Mantri Jan Dhan Yojna
Pradhan Mantri Jan Dhan Yojna is an initiative by the government to provide an account to all citizens of the country. This enables every individual to have an account with any bank in India without the requirement of having to maintain a minimum balance in the account. This is a zero balance account and thus can be opened by any citizen who has an Aadhar Card and his income is irrelevant in such case. But what most account holders are unaware of is the inbuilt insurance coverage that comes along with it.
This account provides a RuPay Debit Card which gives a coverage of INR 1,00,000 and INR 30,000 of Personal Accidental Insurance and Life Insurance respectively.
5. RuPay Debit Card
Just like Visa or Mastercard, RuPay is an Indian payment service provider. This Rupay Card is provided with the Jan Dhan Yojna Account and can be used at any ATM to withdraw money or at any merchant outlet, or online websites to purchase products. This Rupay Card also comes with an inbuilt personal accident and permanent disability coverage up to INR 2,00,000.
6. EDLI- Employee Deposit Linked Insurance
Every individual who is a member of the Employee Provident Fund (EPF) has an eligibility to obtain the Employee Deposit Linked Insurance of INR 6,00,000. This is a coverage that comes inbuilt with the EPF and 0.5% of the total contribution of the employer goes towards the premium of the insurance and the individual does not need to pay any extra amount for the same. This is an initiative to provide for the financial loss of the family in case of the loss of life of the individual.
7. Mutual Funds Cover
Few fund houses namely ICICI Prudential Asset Management Company, Birla Sun Life Mutual Fund, Reliance Mutual Fund provide life insurance coverage to their investors. In this coverage, the Fund House keeps paying the premium towards the Systematic Investment Plan (SIP) in case of the demise of the investor till the end of the term, where forth the maturity is paid back to the nominee. This coverage is inbuilt in the SIP and is given free of cost to the investors.
Non-financial Instruments
8. Train Journey Insurance
On booking e-tickets (that is tickets booked online) the person travelling receives insurance coverage to protect the value of his baggage. This coverage is provided by Indian Railway Catering and Tourism Corporation Ltd.
Thus in case of theft or loss of the baggage, the passenger is entitled to get a certain amount as the coverage from IRCTC. Valuable items like laptops and mobiles can also be claimed for, in case of loss.
9. LPG Insurance Coverage
Every LPG gas consumer along with their family is covered against any accident that could take place due to the LPG cylinder. If any such occurrences happen, the accident first needs to be reported at the local police station. The gas distributor too needs to be officially informed in a properly written letter that can be documented by them.
There are two major clauses to get such a claim. The first clause is that the accessories that were used along with the LPG Gas cylinder need to be ISI certified. If the lighter, gas pipe, burner etc. is not ISI certified then the claim would not be granted. And the second clause is that the LPG cylinder should have been used at the registered address. Like in case the accident due to the LPG cylinder happens in any other house or building other than the address that is on records for the use of that cylinder then the claimant will not get his claim.
10. Coverage on Home Appliances and Mobile Phones
Insurance coverage is given against the mechanical breakdown of electrical home appliances such as television, refrigerator, washing machines and so on. This coverage is provided on and above the warranty that comes with the product. The manufacturing company provides this as an add on facility to survive the competition but the small value of the premium for the cost of the insurance is included in the price of the appliance. Thus in a way, it is the customer who lands up paying for the facility.
Companies manufacturing mobile phones as well as network providers offer coverage for the loss or damage of the smartphones. This coverage is provided when there is loss or damage due to some theft, burglary, accidents or even riot. To provide such coverage the mobile manufacturing company generally comes in collaboration with an life insurance company.
Even network service providers are launching insurance coverage. One such example is Airtel.
These are some of the most common insurance coverages which come in-built with some of the products and services we avail. However, these insurance facilities are very seldom utilized as most people are either unaware of its existence or do not know how to avail the same. Thus, this article is targeted towards educating you on your rights and apprise you of the benefits that you can avail.
