RETIRED LIC CLASS I OFFICERS` ASSOCIATION
HYDERABAD
( REGD NO: 934 /2014)
President: S S R Murthy Vice-President: CH Mahadevan Secretary: M V Ramana
(9703442103) (9349314013) (9848590636)
DT: 12.03.2022
The Chairperson
Central Office
LIC of India
MUMBAI
Dear Sir
Re: Mediclaim – Enhanced Coverage vide CO circular dated 8/3/2022
We thank you very much for providing an option to be exercised for enhancement of insurance coverage on floater basis subject to a maximum of Rs 75 lacs and also providing an option for Independent children (married or unmarried) up to 45 years of age to be included in the scheme vide circular ref: CO/Per/ ER-A/286/2022 Dt: 08.03.2022.
On going through the circular, we find that there is a steep increase in premium to the extent of about 25% at all levels. Though these are indicative provisional rates, the actual premium rates- as stated in the circular- will depend on claim experience and premium quotation to be submitted by L1 bidder on renewal of policy . This means, based on our past experience, the rates may be higher than indicated.
Further, once the option is exercised, it is irrevocable as per rules in vogue and there is no provision to opt for reduction in sum insured in future except on exit of one of the members. Keeping in view of this irrevocability under the rules, the pensioners retired prior to August, 2017- especially the older generations of pensioners - and who are getting the amount of pension remaining static without upgradation will find the increased premiums huge burdensome and will not be in a position to opt for higher coverage as provided in the circular immediately.
The last date to exercise the option to enhance the coverage as well as to include independent children has been fixed as 25.03.2022. When the revised premiums are only tentative and indicative pending fixation of final premiums for the ensuing year, it would be only proper that last date for exercising the option is kept at a date suitably after the final revised premiums are communicated to the pensioners.
Besides, we have observed considerable inconsistency between the premiums payable by retirees and the premiums payable by family pensioners on the exit by death of the retiree in present context of non-enhancement of the rate of family pension. The following illustration will prove this inconsistency:
ILLUSTRATION
Cadre of retired officer: Executive Director Age 76yrs
Date of Retirement: July 2000
Date of Death (assumed): 3/5/2022
Gross Pension received by the retired officer for April 2022(with DR as at Feb 2022); Rs 55260
Sum Insured under Group Mediclaim Scheme: Rs 50 lks
Gross Monthly Family Pension payable from May 2022 to spouse (with present DR) : Rs 16621
Age of spouse/family pensioner as on the date of death of retired officer; 75
Reduced Sum Insured on death of retired officer: Rs 25 lks
Contd…2
-2-
Scenario A
Revised Premium payable for the retired officer alone after permissible subsidy: Rs 29116.50
Percentage of Mediclaim Premium to total annual gross pension=29116.50/ (55260*12) *100=4.39%
Scenario B
Revised Premium for retired officer & Spouse taken together (after permissible subsidy) =
Rs 29116.50(Table A) +
Rs 7189.50(Table B)
Total Rs 36306.00
Percentage of combined premium payable to gross yearly pension =36306/(55260*12)* 100=5.48%
Scenario C
Premium payable by spouse-family pensioner on death of retiree for reduced Sum Insured of Rs 25 lks under Table A after permissible subsidy= Rs 17211.25
Percentage of premium to gross annual family pension at present rates=
17211.25/ (16621*12) *100=8.62%
Scenario D
In the event of the spouse predeceasing the retired officer on 31/3/2022, the premium payable by the surviving retired officer will be Rs 22322.50 on reduced sum insured of Rs 25 lks.
Then the percentage to total gross pension will be 3.4%.
Thus, on death of the retired officer, the spouse - family pensioner not only loses her life partner, but also suffers from substantially reduced pension income together with a huge burden of Mediclaim premium for less cover.
This necessitates a serious thinking by the Corporation to consider whether the spouse-family pensioners should be migrated to Table A for determining their Mediclaim premium on the death of the retiree subjecting them to enormous financial burden.
As a corollary, it is imperative that the matter of enhancement of the rate of family pension to 30% of the last drawn pay is pursued vigorously with the Central Government as the anachronistic low family pension is contributing to anomalies both in Pension and Mediclaim.
While on this, we would also like to reiterate our request to you to consider providing one more option for Mediclaim for those who skipped opting for the same earlier, as inclusion of those retirees and their family members will enlarge the group of insured members which in our opinion will actuarially benefit the Corporation in smoothening the claims experience and optimising the cost.
Considering our above submissions, we humbly request you to fix the last date to exercise option to enhance insurance coverage after finalization of actual premiums and also take steps to resolve the other issues raised above.
Thanking you and with regards.
Yours faithfully
SECRETARY
(M V RAMANA)
…………………………………………………………………………………………………………………………………………
E-mail; m.ramana1956@gmail.com
Address: H.NO: 16-2-836/A/16, LIC Colony, Saidabad, Hyderabad 500059
No comments:
Post a Comment