Summary: As we grapple with the COVID-19 pandemic, here is a brief overview of existing health insurance, new COVID-19 specific insurance policy and life insurance.
Executive Summary: Third party insurance for two-wheelers is compulsory. There are many policies available in the market issued by private and public insurers. We have given details of three insurance policies here. Most policies offer similar terms and conditions. Choose the one that is the most appropriate and cost effective for you.
Third party insurance for two-wheelers is compulsory in India. It provides financial protection for the owner of the two-wheeler from unfortunate events such as accidents, damages or theft. You can buy it online or offline. There are two types of insurance -
Third Party Two Wheeler Insurance - The third party two-wheeler insurance policy covers loss or damage caused to a third party or their property because of your two-wheeler.
Comprehensive Two Wheeler Insurance – This policy provides coverage against damage for your two wheeler and legal liability.
Let us look at some of the policies available in the market and their features -
The following are details for a new Honda Activa 5G DLX (scooter) purchased in 2019 in Mumbai. The comparison is made for comprehensive insurance policies with Personal Accident cover-
Please check all details with insurance company before buying the policy for most updated information
Some important points to consider while availing of an insurance policy for your two-wheeler -
Executive Summary: The sum assured in an increasing term insurance plan can be periodically increased during the policy term. The premium also increases appropriately. We have compared two policies - SBI Life Smart Shield and Birla Sun Life Protector Plus Plan that provide increasing term insurance.
An increasing term life insurance plan is an insurance policy in which the sum assured can be increased by a specific amount each year.
It caters to the requirements based on the premise that cost of living changes, our lifestyle changes and inflation increases the financial requirements over the years.
The premium of course will increase accordingly each year.
Many companies offer increasing term insurance plans. Let us compare two of them -
An incremental term insurance plan offers the advantage of hedging against inflation. The value of the policy remains more or less intact. The premium payable also increases but if you are earning income, it usually is on an upward curve. When you are younger and have no liability or zero dependents, you may not want a huge sum assured. But as you grow older, your liabilities may increase and you may have dependents. In this case, such a plan is useful as you can continue with the same plan but with increased sum assured. On the other hand, if you have a spouse who earns well and you have a big corpus, you could skip this option.
Executive Summary – Financial Journey is started as soon as one acquires a job or a work where motive is to earn money. Though in first few months’ people tend to spend earnings, however at a later stage the urge of saving money is felt which leads to the search of investment products. This article covers 5 financial products which can help new earners in starting a good financial journey.
“Investment is about laying out money today with the expectation of getting it back with growth in future”. This is the statement of most of the new investors who do not know anything about Investment products or other financial products. They just blindly follow and invest in what their friends, relative or colleague suggests. For such investors rather than choosing investment product, it is more important to understand the financial product first. There are plenty of them available, however, we feel to begin the financial journey one should choose mix of financial products like Insurance, Mutual Fund, Government schemes, Bank schemes, etc. Let’s now look at the details of few such products.
1. PPF –Public Provident Fund is a product offered by Government of India. It offers fixed yearly interest which is revised every year. This is the highest income generating option among the fixed income products with approximately 7.6% interest. The minimum investment amount starts from Rs.500 to a maximum of Rs.1, 50,000. The main advantage over here is that it offers triple benefit to tax payer’s which means there is tax rebate on amount invested and interest & the maturity amount is completely tax free. The product comes with a lock in period of 15 years.
2. Equity Mutual Funds: For a new investor it is very difficult to start investment into direct equity, hence equity mutual fund is ideal product for them. Fund on behalf of investors invest into equity market and generate return for the investors. One should choose this product because it reduces the overall risk of equity investment due to diversification and it also helps in beating inflation in long term. One can start monthly investment with minimum amount of Rs. 500/- or can also invest lumpsum amount into it. This product is suitable for long term investment.
3. Bank Recurring Deposits: Bank RD is a product in which one can deposit fixed amount monthly for a specific period. The period of investment ranges from one to five years. At the end of this fixed tenure the funds are available to the investor. Through these deposits one inculcates a habit of savings .The rate of interest offered over here is equal to that of a fixed deposit and hence this option becomes easy for investors. Minimum amount to be deposited can vary from bank to bank. One can also avail loan against 80 %- 90%of the deposit amount.
4. Health Insurance: Why does one need health insurance if he or she is still young? That’s because life is uncertain and one can get health problems at any point of time. Many people argue as to why to buy health insurance when they can do the same amount of savings for themselves. In this world of inflation and unending expenses majority of the people do not tend to save for these kinds of emergencies. Buying a health insurance ensures a good amount of cover available for unforeseen major medical expenses.
5. Term insurance: Term insurance is a type of life cover which provides coverage for a fixed term. If the insured dies during the term of the policy then death benefit is payable to the nominee. There is no maturity benefit once the policy term expires. Term plans are specifically designed to secure one’s family needs in case of death or uncertainty. Here the premium is the lowest among all types of life insurance policies. The premium is low as there is no investment component and the entire premium goes for covering the risk. One should opt for this policy as soon as earning life is started.
Above discussed are some of the financial products through which one can start their financial journey and ensure safe future. There are other alternatives as well like bank savings account, liquid mutual funds etc. which can be used for keeping idle cash. So what was your first investment or financial product? Do share you financial journey with us.
Executive Summary - Filling a complaint against insurance company is now much easier than before. For the benefit of consumer IRDA started a separate department as Insurance Ombudsman in 1998. This was set up to provide faster and cheaper solution of all the grievances of policy holder against insurance companies. Dispute amounting to Rs. 20 Lakhs are handled by Ombudsman. This article explains how Insurance Ombudsman works and what is the process to file a complaint with Ombudsman.
Naresh bought his dream car last Diwali. He was saving money to get this car from last many years. Everything was going good until one day his car got damaged. Very next day he submitted his car to the showroom for repairing. He was sure that the insurance company will bear the expenses as his policy covered everything and he has paid extra to avail such policy. Soon he was informed by the showroom that insurance company has approved the claim but only 60%. He will have to bear the rest 40% of the total repairing cost. He was surprised to know because during his insurance purchase he was informed that policy will cover all the expenses and each and every part of car is insured. He then approached the insurance company where he was informed that he will only get 60% of claim and they cannot cover the whole claim amount. He felt cheated and decided to approach court. He was informed by his lawyer friend that such cases are first handled by Insurance Ombudsman. If case is still not solved then complainant can approach court.
So what is Insurance Ombudsman? What types of cases are handled and what is the process to file case with Insurance Ombudsman?
Insurance Ombudsman is a government department which was set up by IRDA in 1998. The main purpose of setting up this department was to provide smooth and fast solution of all the grievances of policy holders be it of life or general insurance. It was generally seen that complainant used to approach consumer forum against the insurance company which use to take lot of time. Hence this department was created exclusively for insurance complaints. The ombudsman can deal with cases valued up to Rs. 20 lakh. Cases valuing more than Rs. 20 lakh are not handled by ombudsman. The policyholder has to directly approach a consumer court. The ombudsman only plays a role when the policy holder has not gone to a court or a consumer forum. The Ombudsman also do not charge anything against the complaint lodged.
Types of cases handled by Insurance ombudsman:
Please note: Grievances related to non-individual insurance are not handled by Ombudsman
Steps of filing a complaint to ombudsman (Applicable for both general and life insurance)
How does Insurance Ombudsman work?
What if above process does not solve the case?
Insurance Ombudsman is the cheapest and fastest way to get complaint resolved against insurance companies. Although Insurance Ombudsman was set up as a department 20 years back, still many people don’t know about it. Before approaching to higher court or forum one should register a complaint with ombudsman and if not satisfied by the solution then one can approach to consumer forum. One should remember that it is not necessary for complainant to accept the decision of an ombudsman but at the same time it is compulsory for an insurance company to accept the decision and compensate the complainant. So next time if you feel you are cheated or insurance company has done something wrong with you file a complaint with Insurance Ombudsman.
Executive Summary: Niramaya is a health insurance scheme offered to persons with mental and/or physical disabilities. The benefit payable is a maximum of Rs. 1,00,000. It covers all kinds of treatments for disabilities. The forms are available online too for enrolment and claim processes making it easier to obtain the insurance cover.
Niramaya is a health insurance scheme introduced by the Indian Government for Persons with Disabilities (PwDs). It aims to provide health insurance to people with physical and/ or mental disabilities.
Key Features of the Scheme
Eligibility Criteria for PwD
All PwDs who have at least one of the disabilities under the National Trust Act, 1999 with valid disability certificate are eligible to apply for the scheme.
Complete the Niramaya application form and upload it and relevant scanned documents as required after verification of originals. The form can be downloaded from here.
Pay the fees. For a PwD below poverty line, the enrolment fees is Rs. 250 and for a PwD above poverty line, it is Rs. 500. A PwD with a legal guardian (no natural parents) can get enrolled for free.
Benefits of the Scheme
Claims for settlement under Niramaya have to be submitted to the insurer. Relevant bills and invoices along with Niramaya documentation have to be submitted within 30 days of treatment or discharge from hospital. The claim form can be downloaded from here. The claim form can be submitted to the Third Party Administrator – Raksha TPA Pvt. Ltd. Here is a list with their branch details.
It is an affordable health insurance scheme for the disabled. It would be better if there were options for increasing the sum assured.
Executive Summary: A wedding is an expensive affair these days. Therefore some insurance companies offer wedding insurance. In case of untoward events like illness, death or disasters that lead to cancellation or postponement of weddings, an insurance policy helps to ease the financial burden. But wedding insurance policies are expensive. They may not be always required. It depends on the individual, costs, circumstances and policy coverage.
The wedding is one of the biggest events, if not the biggest event in one's life. People want to go all out with the ceremonies and parties associated with the wedding. Designer outfits, exotic locations, grand themes and many ceremonies make it a lavish affair and expensive affair. While it might be prudent to keep an eye over the expenses, money some of us want to spare no expense for it.
In such a case, if there is an untoward event during the wedding, it will become a very expensive proposition. Untoward events can be any like a fire, caterer going out of business at the last moment or death within the close family pr cancellation of the wedding. Apart from the mental and physical stress, there will be a lot of financial stress in this case. One can acquire of wedding insurance to reduce the financial stress.
Marriages are made in heaven but financed in Earth
Let us look at what is covered by a wedding insurance policy -
ICICI Lombard -
The wedding insurance policy of ICICI Lombard provides insurance against -
Future Generali also provides a wedding insurance policy. It covers -
Should you go for wedding insurance?
The answer depends on various factors. It depends on the personality of the couples and related people and the total costs incurred. If you cannot be at peace of mind over the wedding arrangements, then you will have some solace in having a financial cover. If the wedding is very expensive then it makes sense to have insurance in case any untoward event happens.
In India, people do not typically want to think about negative events related to a wedding and are averse to taking an insurance cover.
Wedding insurance policies are also expensive. Sometimes it is difficult to prove things like stolen jewellery or money and one might no be able to successfully make an insurance claim.
Policies and weddings are also different from each other and therefore one has to be pretty clear as to why one needs a wedding insurance and which policy should one take.
Executive Summary: LIC has launched a new plan – Jeevan Utkarsh Plan 846. It is a single premium policy, It is like an endowment plan that has a tenure of 12 years. It offers different settlement options. This policy is not a substitute for a term plan that provides comprehensive insurance cover. It provides modest returns on the premium and offers other features such as loan facility.
LIC Jeevan Utkarsh Plan 846 is a single premium policy. It is not linked to market products but has an element of savings alongside protection. This plan will be available for sale from September 6, 2017 to March 31, 2018.
Let us look at the key features, eligibility criteria and benefits -
It is a single premium payment plan with a policy term of 12 years. It is a close ended plan.
Death Benefit Payable
If death occurs within 5 years of the date of payment of the premium the nominee will receive the refund of premium paid without interest.
If death occurs between 5 years and 12 years of the date of payment of premium, the nominee will receive the sum assured and loyalty addition (if any). Sum assured is on death is the highest of -
At the time of policy maturity, the sum assured plus the loyalty additions if any is payable. If there are any riders in force, the amount payable for the same will be paid too.
Loyalty additions will accrue if they have been announced by LIC.
The policy is more like an endowment plan. It insures you and at the same time acts like an investment product that gives a return of 5%-7%. If you want life insurance, it is better to buy a term plan. As far as investments are concerned there are other products that can give better returns like PPF, Debt Mutual Funds, Equity Mutual Funds etc. It might be a good option for people who want to save some more tax.
Executive Summary: Investing through SIPs in mutual funds is a smart way to invest regularly and build wealth. Some MF companies like Birla SunLife, ICICI Pru and Reliance offer insurance along with the MF scheme. It is not a great idea to mix MF investments and insurance as they do not serve your best interests.
Systematic Investment Plans (SIPs) are plans offered by Mutual Fund houses wherein the investor can invest a small sum on a regular basis in a MF scheme. Insurance is financial protection against unexpected unfortunate events.
Some mutual fund houses have combined both the concepts and are offering insurance wrapped funds.
Let us compare the SIP cum insurance offers of a few fund houses -
Do Not Mix Insurance and Investment
Mutual fund investment plus insurance seems like a great offer. But there are many things to watch out for. Second and Third holders are not covered by insurance. Only the first holder is covered. Rules regarding missing SIPs are very rigid and you can easily lose the insurance cover. Insurance cover is restricted and may not be adequate for your needs. The AMC is usually never responsible for the claim, you have to deal with the insurance company.
Moreover investment and insurance should never go together. When they say, 'free insurance', it never really is free! For example, when you pay the SIP instalment, a part of it goes towards the insurance premium. Tomorrow if the scheme is not performing well or is not suited to your investment needs, you might want to sell it off. But because of the insurance, you are stuck. You then end up with an irrelevant investment in your portfolio or pay money to get out of it.
Invest in a mutual fund scheme depending on your investment needs and the performance of the scheme. Buy term insurance separately for providing financial protection to near and dear ones. It is better to keep them separate and not fall for such marketing gimmicks.
Executive Summary – Leading a life with all its challenges is not easy. If one is disabled, it becomes a little more tough. Insurance will help one with the finances. Swavlamban Health Insurance Scheme and Nirmaya are health insurance plans for the differently abled.
India has a large population of people with disabilities. As per the census in 2011, there were about 21 million people with some form of disability be it related to movement, hearing, vision, speech or mental illness. Even then, there are not too many health insurance policies for the differently abled. A couple of Government organisations have joined hands with insurance companies and devised health insurance plans. Let us look at them in detail -
It is important to be aware of such schemes and spread the word about them so that even the differently abled know that there are products that can help them.
Executive Summary- A person who has bought an insurance policy can assign the rights and benefits of the policy to another party using the concept of assignment. In absolute assignment the policy rights are completely transferred to the assignee. In conditional assignment, the policy rights are assigned based on fulfilment of certain conditions.
Do you know about absolute and conditional assignment of your insurance policy.
We buy an insurance policy to protect ourselves from unfortunate events. It is important that all aspects of the life insurance are complete and accurate so that when the time comes, it is smooth sailing for the dependents. One important aspect is assignment of policy. Assignment means transfer of rights of a life insurance policy. Let us look at it in detail -
There are two types of assignment - Absolute Assignment and Conditional Assignment
Absolute Assignment of the policy means the policy rights are completely transferred to the beneficiary. For example, Mr. Shah buys a life insurance policy of Rs. 50 lakhs. If he makes an absolute assignment of the policy to his wife, the maturity proceeds or death benefit is directly given to her unconditionally. Here, Mr. Shah is the 'assignor' and Mrs. Shah is the 'assignee'. Liabilities if any, also get transferred to the assignee.
In case of Conditional Assignment, the policy benefits are transferred from the assignor to the assignee based on fulfilment of certain conditions. It can also be a transfer for a certain time frame. For example, I have a life insurance policy which I provide as collateral to a bank to avail of a loan. The bank gets a right on the benefits of the policy till the loan is repaid. Once the loan is repaid, the life insurance policy is transferred in my name again. In case the loan is unpaid, the proceeds of the life insurance will be given to the bank. A company might buy an insurance policy for a newly hired employee who is on probation, but transfer the benefits only after the employee becomes a permanent employee. Such types of policy assignment is conditional assignment.
How to Assign a Policy
The assignment can be made with the policy or separately. If it is made with the policy, it has to be mentioned in the policy bond and endorsed. If it is done separately, an Assignment Deed' has to be made and stamp duty has to be paid. Most insurers have an assignment form that should serve the purpose. It should be attested by the assignor and a witness. The insurer provides an assignment form which has to be completed.
Important Points Regarding Policy Assignment -
Assignment is a useful tool that can be used to provide security to a loved one or avail of loan. Assignment should be done after careful consideration so that no one misuses the policy.
Executive Summary – Insurance products can be surrendered. The surrender value is calculated based on premium, sum assured, number of premiums and bonus. Surrendering an insurance policy has tax implications like reversal of deductions claimed in the earlier years and adding the sum received on surrender to total income and pay tax as per the income tax slab rate under certain conditions.
Many of us purchase Life insurance. We buy life insurance to protect the financial interests of the family or to claim tax deduction. The policy has a sum assured that is given to the policyholder or nominees as per the stipulated terms and conditions. But the policyholder has an option to exit from the policy before maturity.
In this case the insurer pays a sum to the policyholder. The amount paid by the insurer to the policyholder if the insurance policy is terminated before the maturity date is surrender value. In this case, the insurer deducts a surrender charge and gives the remaining amount to the policyholder.
The surrender value can be calculated in two ways -
Guaranteed Surrender Value (GSV) -
GSV = 30% of the premiums paid minus first year premium
This is payable if the policy holder has paid the premium for last 3 years. Additional premium paid for riders etc. is excluded from the calculation.
Special/cash surrender value (SSV) -
SSV=(Sum Assured * (No. of Premiums Paid/Total Number of Premiums Payable) + Bonus)* Surrender Value Factor
The surrender value factor depends on age of policy, bonus and insurer's terms and conditions.
Let us look at the taxation aspect of surrender value in different policies -
Life insurance -
If you surrender the policy before maturity, the taxability would depend on on payment of last 5 premiums on the policy. If you have paid, taxability would be nil. If not, the surrender value will be added to your total income for the year and taxed as per your applicable income tax slab rate
accordingly. If the life insurance policy is surrendered before completion of 5 years, deductions claimed under Section 80C for calculation of income tax in the preceding years will have to be reversed. The total claimed deductions will be added to the income for the year in which surrender value has been paid and taxed as per income tax slab rate.
If it is a single premium policy and the policy is in force for at east 2 years from the date of purchase and then you surrender it, you are not liable to pay any tax.
If you surrender the policy before maturity, the taxability would depend on whether you have paid 5 premiums on the policy or not. If you have paid so, taxability would be nil. Else, the surrender value will be added to your total income for the year and taxed accordingly.
Pension Plans -
In case of PENSION plans, if you surrender before maturity, the entire surrender value is taxable at your current income tax bracket rate. It is also necessary to purchase an annuity with 2/3rd of the surrender value. The premiums that you may have claimed as deduction under section 80C for filing taxes will have to be reversed. They will be added to the current income and you will have to pay tax on it.
It is better to surrender bad insurance products from your portfolio. But be aware of the tax implications of the same.
Process of Surrendering a Policy - Every insurer has its own process of surrendering a policy. Usually the documents to be submitted are the policy surrender form, policy document, self attested copy of ID proof and bank statement/cancelled cheque. For example, if you have a policy from LIC or Aviva, you need to go to a branch to get a surrender form and submit it along with the other documents. For surrendering a policy from ICICI, you need to fill a payout request form that can be downloaded from the website and submit it along with the other required documents.
Insurance is a must in your financial plan. But if the insurance is through a bad product or you are over insured, it might be better to surrender the insurance policy even at a loss. Do make sure that you are insured appropriately.
Executive Summary – Risk management is an integral part of financial planning. You can manage risks by avoidance, transfer, mitigation or acceptance. We face numerous risks related to life, health, property etc. Insurance is an important aspect of risk management. We need to take appropriate steps to manage risk depending on its probability, impact and our tolerance levels.
Risk management is an integral part of business. All businesses have a risk management team that puts together a risk management strategy and provides guidelines and processes for risk management for various teams in the organization. The basic strategy involves -
Risk Management – An integral part of Personal financial management. Insurance is an important tool in Risk Management.
Risk management is an integral part of our personal financial plan as there are many risks in life too. We need to understand them and take steps to manage them. Let us look at some risks and see what kind of risk management strategy we can undertake -
Uncertainty of Life – Death is a certainty but one does not know when it will happen. If you have financial dependants like spouse, children, parents, it is important to protect them from financial effects that accompany your loss of life. The people left behind have to deal with financial burdens such as outstanding debts, planned and unplanned expenses and loss of regular income. Life insurance policies help to ease financial onus and provide peace of mind to the policy holder. A life insurance policy mitigates the financial risk of the death of the insured and at the same time transfers the financial pressure from the policy holder to the insurance company in case the policy holder is not there.
The following may help in mitigating risks to life -
You can mitigate risks by keeping jewellery and other valuable possessions in a bank locker. You should have sufficient security measures in the house. You should not share personal information with strangers.
TATA AIG Private Client Group provides insurance cover for private collections of art, antiques etc. Future Generali provides home insurance that covers fire, natural calamities, losses to electronic goods, burglary etc. It provides add on covers for earthquakes and terrorism too. Bajaj Allianz has a policy – 'My Home Insurance' that provides protection for property, contents like jewellery, works of art, portable equipment in the property etc. against fire, burglary and natural calamities.
You can mitigate risks by keeping jewellery and other valuable possessions in a bank locker. You should have sufficient security measures in the house. You should have a locker in your house to keep valuables as everything cannot be kept in the bank locker. You should change your main door's locks one in a while. Grills and other security measures should be updated in a while. You should not share personal and private information with strangers. Household help should be scrutinized properly before appointing them for work. You should have guidelines for the family regarding information sharing with acquaintances or on the Internet. You can have safety features like fire alarms, burglar alarms installed.
If you live in an area which is not prone to disasters, you may not need insurance add ons related to disasters. If you live in Mumbai in one of its low lying areas, you might accept some risks such as damage due to flooding. So you need to assess whether buying insurance makes sense.
You can avoid risks by staying in places that are residential in nature or have a lower or zero crime rate.
Vehicle insurance has to be taken by people owning a vehicle. It provides insurance for accidents for vehicle owners and for passengers and third party legal liability while the car is being driven. You can have a look here to find out more about car insurance.
You can mitigate driving risks by following all rules of driving, driving cautiously, maintaining an average speed as dictated by law and being attentive to traffic jams, weather conditions and cars and people moving around you.
Health – Health is wealth. But as we age, our body feels the wear and tear. Unfortunate circumstances such as illnesses and accidents can happen. It is important to transfer the financial cost by taking a medical cover. It will cover surgeries, certain diseases, hospitalization etc. You should take a policy as per your lifestyle, possibility of hereditary diseases etc. If you take part in extreme sports or adventure, one wrong move can cause a lot of problems. You should ensure you take appropriate health cover or life insurance.
The other way of managing risk to health is to mitigate the effects of ill effects on health. You should led a healthy lifestyle with balanced diet, exercise and work towards mental well being and good physical health. You should go for regular medical check ups.
Loss of Income – Your business might be hit hard due to unfavourable conditions. You might be one among many who lose their job due to downsizing or technological changes. You should mitigate the effect of such risks or avoid such risks by taking practical steps to make your business successful and your career on the right path. It could be re-skilling, learning continuously and using it to improve your income and returns, adopting appropriate business strategies etc.
You would be investing in different financial products. It is important to invest as per your risk appetite and investment experience. This will help avoidance or mitigation of financial risks. You can mitigate this risk by using the services of a professional financial adviser.
There are other areas where one might encounter risk such as travel or health of pets. Depending on the risk tolerance levels, we should take appropriate steps. Here is a guide on travel insurance.
You can avoid travel risks by not travelling to places that are not tourist friendly. You should avoid going to areas that are conflict prone or disaster prone.
You may accept risk of accidents of flying in an airplane or a train journey depending on your risk appetite.
There are different risks that we might encounter. It is important to be armed with a strategy and have concrete measures to reduce impact and probability of risks with appropriate consideration for our risk tolerance. Depending on our risk tolerance level and the risk impact and probability, we should take proper measures to manage risks. Do share with us your views on how to manage risks that people might encounter in their lifetime with regards to financial status.
Choosing to have a baby is a wonderful albeit a life changing experience. Emotional, Health and Financial aspects of your life will be affected. It is important to ensure that your health is in good shape before and after the delivery of the child and the finances are in order so that the new milestone in your life is smooth sailing.
Insurance companies offer health insurance. Some health insurance policies cover maternity subject to certain terms and conditions. Some insurance companies offer health insurance that is primarily for maternity cover.
Usually a maternity cover should offer -
As you can see, the maternity covers offered are not suitable for all conditions. The Religare Joy Tomorrow Plan has the lowest waiting period but the premium is high compared to the other products. The Star Wedding Gift Insurance covers maternity as well as new born defects. It is available only for married couples and families. The plans from Max Bupa and Apollo are health insurance plans that cover maternity. But there is a long waiting period. Moreover you have to buy the family options and not the individual variants as only the family options have maternity benefits. This does not help single mothers or live-in couples. Moreover all family members are not going to get pregnant.
If you are employed and your employer takes care of pregnancy cover, then you need not go for a separate maternity insurance policy. In most cases of corporate insurance, the waiting period is 9 months. It is important to look at clauses for waiting period, voluntary termination of pregnancy, coverage for new born and vaccinations before making the decision to buy an insurance policy . You should check the cost of delivery in a couple of hospitals in the area where the delivery can happen. Storage of stem cells, ectopic pregnancy are not covered in maternity insurance.
It might be better to plan ahead and buy a health insurance product when you are young that covers all your medical expenses and along the way covers maternity expenses once the waiting period is over. There is not much sense in buying an insurance product with premium that might be almost equal to the maternity cover.
Let us know your experience in buying insurance products covering maternity and whether it was beneficial for you.
Should you take a term cover only for yourself or for your spouse as well?
A term cover essentially seeks to compensate for the loss in income in case of death of the insured. Usually pure term cover is not issued to non working people. However, if your spouse is also earning, it is recommended to take a term cover in both your name as well as for your spouse.
Parameters to be considered when purchasing a term policy:
Quantum of cover: The life insurance you take in your name should be sufficient to take care of regular expenses of your family in your absence in addition to taking care of important liabilities and goals for your family. Remember to take into account the inflation factor. Some plans give you an option to increase or decrease the Sum Assured amount based on your needs, which can be quite beneficial. Consider your spouse’s income if any, your liabilities, your dependents and critical financial goals before you decide on the amount of cover you need. You can estimate the life insurance corpus you need by using the Life Insurance Planning Calculator.
Time period and Age of Insured: Generally, you must have insurance till the time you intend to work. It doesn’t make sense to take a policy only for 10-20 years, till you are in your 40s, as those are relatively non-risky years. Insurance companies offer plans for fixed terms of maximum 30 years in most cases. Some plans offer higher terms of 35 and 40 years as well. Companies also specify the maximum age of the insured at the policy expiry, which is generally 70 years. Some companies like Aegon Religare, HDFC Life and ICICI Prudential specify this as 75 years. Higher this age, the better for the insured.
Premium payment term and modes: Companies offer flexible premium payment modes of yearly, half-yearly, quarterly or monthly. In comparison to a yearly payment option, a half-yearly payment option will work out slightly more expensive. For example, for policies by Bharti AXA and DLF Pramerica, half-yearly premiums are 0.52 times the annual premium. Most companies also offer a single payment option. However, this means, your premiums are front loaded, and in case of an early death, the premium for the remaining term goes waste.
Claim Settlement Ratio: This is by far the most important aspect to be considered. Claim Settlement Ratio gives an idea of the past claims settled by the company in relation to the total claims received. Companies like LIC, HDFC Life, ICICI Pru Life, SBI Life, Bajaj Allianz and Kotak Life have high ratios, while DHFL Pramerica, Edelweiss Tokio and Future Generali are among those with lower settlement ratios. Choose a policy with a high settlement ratio. Please note that the settlement ratios given are at the company level and not at the individual plan level.
Which policy should you buy and which should be avoided?
We have analysed pure term insurance policies of 14 companies on the basis of the different parameters. Of the companies analysed, you can consider ICICI Pru Life’s iCare II or iProtect and HDFC Life’s Click 2 Protect Plus policies on the back of low premiums and high settlement ratios. Of these two, HDFC Life’s policy is cheaper. Readers are advised to call the customer call center for more details of the differences in the policies offered by ICICI at the time of purchasing the policy.
Other policies which can be considered on the back of high settlement ratios are Bajaj Allianz and Kotak Life Insurance. You can also consider Aviva Life and Bharti Axa for low premium, although the settlement ratio is not very high. LIC has the highest settlement ratio at 98%. Many people also prefer LIC due to the brand name and the history associated with it. However, this plan is by far the costliest among the policies we have compared.
Plans by Aegon Religare, Birla Sun Life, DHFL Pramerica, Edelweiss Tokio, Future Generali, Reliance Life Insurance and SBI Life can be avoided either due to high premiums or low settlement ratios.
Have you bought your term policy yet?
Most of us plan, plan and plan, but fail to execute the plan. The importance of a term plan cannot be emphasized more, as your family’s needs hold paramount importance in your absence. So have you taken care of this yet? If not, this should be one of the first things you need to do on your ‘To-Do’ list. Open your laptop now to purchase your term policy or call your insurance advisor to help you purchase your term plan.
Please note that we have only considered certain products offered by insurers. The above insurers may have similar or other plans which fall under the ‘pure term plan’ category. A detailed comparison of the different products analysed is available below. If you prefer to download the excel file, please click here. For more details, refer to individual company’s prospectus. Kindly note that this analysis covers offerings from major insurers only & this is not an all-product comprehensive comparison. The current analysis may include additional products or may exclude products from our earlier analysis based on availability of information. The analysis is valid on the date being published.
How should you go about buying a term plan?
A term plan is the simplest and most straight forward form of insurance. However, insurance companies go through different parameters before deciding if you are eligible to purchase the policy or not. Assessing your medical fitness is one of the basic things done before the policy is given to you. Sometimes, a past medical condition, even if it is a decade old can be a cause for refusing the policy to you. Sometimes, you may be working in a country which is considered to be risky by the insurance company, and hence the policy may be refused. In such cases, you can seek the help of an insurance advisor or insurance brokers such as Medimanage or Policy Bazar to help you out.
The popularity of term plans has increased in the recent past, with online channels also gaining importance. Buying an online term plan is not only easy, but can also work out to be cheaper. If you purchase a term plan online, you need to fill in your details, make the premium payment and upload your documents. You will then be asked to do your medical tests. The policy will be issued subject to satisfactory documents and medical test results.
What are the documents needed to purchase a term cover?
Generally insurance companies require an ID proof, address proof, salary slip or IT returns, passport size photographs, cancelled cheque and cheque for the premium amount. The requirement for the documents changes on a case to case basis. If you purchase an online term plan, you can also upload these documents online and make an online payment for the premium.
Insurance Demat - Should you opt for this?
In 2013, IRDA introduced the concept of online insurance policies, where all your policies can be maintained in the demat form. An e-insurance account will need to be opened, and these details should be furnished when you buy a new policy. Insurance demat will not only save time and efforts, but is also a safer option to manage your policies. To know more about the insurance demat, please click here. It is recommended to opt for digitisation of insurance policies.
What are life insurance policies under the Married Women’s Property Act?
Life insurance policies taken under The Married Women’s Property Act or the MWPA can protect your wife and/or children in case of your death, wherein the proceeds of the policy will be used for the intended beneficiaries only and not for anyone else. If you are a businessman, then it is highly recommended to take your insurance policy under the MWPA. To read more about this, please click here.
* Claim Settlement Ratio is for the respective company, and not at the plan level. Source: IRDA Annual Report 2014-15
Disclosure : Kindly note that Directors of the Company are currently associated with ICICI Prudential & HDFC Standard Life as Life Insurance Advisers. We value our integrity & we believe that what we have presented above is a genuine comparison, keeping your interest ahead of ours.
* Source – IRDAI Annual Report 2014-15
If this has to be visualized in actual figures, here is the data -
Premium Received by Insurance companies in 2014-15
Insurance is an important aspect of financial planning for individuals, families and organizations.
Here are some figures to give you a true picture of insurance -
The amount paid as insurance in India and the world has increased slightly -
* Source – IRDAI Annual Report 2014-15
People have to be aware of insurance and know the right information on insurance. The Insurance Regulatory and Development Authority of India (IRDAI) holds a series of consumer awareness initiatives to educate the people on insurance and to protect the interests of policyholders. In 2014-15, these include
- Mandating all insurers to have Board approved Insurance Awareness Policy.
- Release of handbooks such as “Introduction to Insurance”, “A Handbook on Insurance” and “CropInsurance” to make people understand about insurance the previous year and continuing them in 2014-15.
As a policyholder or a person interested in buying insurance, one would be interested in parameters that help us decide which insurance company to buy a policy from such as claim settlement figures etc.
Death Claims for 2014-2015 -
The life insurance companies settled 8.51 lakh claims on individual policies, with a total claim amount payment of Rs. 11,788.67 crore. The number of claims repudiated/rejected was 18,231. These amounted to Rs. 701.69 crore. The number of claims pending at the end of the year was 7,061 and the amount involved was Rs. 453.15 crore.
Claim settlement ratio is the the total number of death claims settled by an insurance company compared to the total number of death claims received by the company.
CLAIM SETTLEMENT RATIO FOR INDIVIDUALS
* Source – IRDAI Annual Report 2014-15
CLAIM SETTLEMENT RATIO FOR GROUP CLAIMS
* Source – IRDAI Annual Report 2014-15
During the FY 2014-15, the non-life insurance sector settled 92.36 lakh number of health insurance claims that amounted to Rs. 18,223 crore towards health insurance claims.
The number of claims pending at the end of the year at 6.50 lakh is much lower than the number of claims pending at the beginning of the year at 10.07 lakh indicating improvement in claims service of insurers.
65% of the claims were settled via the cashless mode. The remaining 35% were settled through reimbursements.
Now let us look at insurer level details which can give you some direction in choosing an insurer -
CLAIM SETTLEMENT AND CLAIM REJECTION -
Here is data on the private life insurance companies and the how they have handled the claims -
* Source – IRDAI Annual Report 2014-15
* The numbers may not add up to 100% as there might be claims pending.
* It is possible that newer companies have a higher rejection rate as they will have more early claims.
Term Insurance Plans are the best to cover risk. They have a low premium but a high risk cover.
Here are details on companies numbers for term insurance -
Term Insurance Claim Data -2013-14
Source – IRDAI Annual Report 2013-14
Data on non-life insurance companies' incurred claim ratio – Incurred claim ratio is the ratio of claims paid by the company to the premium collected. As a policyholder, the higher the incurred claim ratio, the better for you as it means premium collected is being used to pay for claims. But the number does not indicate how soon or delayed the claims are settled.
Incurred Claims Ratio for Non-Life Insurance (2014-15)
Source IRDAI Report 2014-15
Net Premium earned in Fire, Motor, Marine, Health and Others' Insurance
* Apollo Munich -Only Health Insurance
One can report a grievance to the insurance company if he/she has a complaint and if unhappy with the resolution can raise a grievance to IRDAI. Here is some data on the status of grievances for life insurance companies and non-life insurance companies which can help you understand how the company treats its customers and their issues -
Life Insurers – Grievances Data (2013-14)
Non- Life Insurers – Grievances Data (2013-14)
Source – IRDAI Annual Report 2013-14
Key Takeaways from the Report -
When you are planning to buy insurance, do not only take a look at the sum assured and the premium. You should focus on factors such as claim settlement ratio, number of rejections, time taken to resolve complaints and time taken to pay the claim amount. This report by IRDAI helps you identify some of these factors for the insurance companies that you are considering. You should take a look at the report before you buy the insurance policy. It will help you in having better insurance.
Benjamin Franklin said, "Beware of little expenses. A small leak will sink a great ship”. Most of us underestimate the effect of saving a few thousand rupees regularly over a period of time. That’s right - we are talking about insurance premiums. When you buy a term policy or a health policy, it is usually for several years. Reducing the premium you pay on such policies can help you save a sizeable amount over the entire tenure of your policy. Here are some common and not-so-common ways of reducing your insurance costs:
(1) Compare before you buy:
As in the case of any other product purchase, it makes sense to compare different insurance plans and then make your decision. Shopping around not only helps in reducing premium, but also helps in comparing benefits offered. Use third party websites to understand features before buying. However, remember that the cheapest plan need not always be the best one. Always balance the cost of policy and the benefits offered.
(2) Evaluate online policies:
With the popularity of the internet, almost all insurance products are available with the click of a button. Many a time, such online policies work out to be much cheaper than traditional offline policies taken through your agent.
(3) Premium payment frequency:
It is common practice to opt for monthly, quarterly or half yearly premium payment modes to ease cash flows. However, did you know that these payment modes result in a higher premium when compared to annual payment frequency? Opting for annual payment can reduce premiums.
(4) Buy early:
Life and health insurance always come at a lower cost when you purchase them at a younger age. This is because the risk increases with age and therefore premiums also increase. Buy insurance at an early age to reduce premium costs.
(5) Insure the right amount:
It is not always possible to arrive at the correct amount of insurance required. However, you can broadly estimate how much life cover you require by considering your goals, dependents and liabilities. While you should definitely not purchase insufficient insurance, it also does not make financial sense to over - insure unnecessarily. Balance the coverage amount required and the cost of insurance.
(6) Lead a healthy life:
The existence of lifestyle diseases can increase your premium. Although not all lifestyle diseases lead to a higher cost, the existence of one implies that you are a high risk customer to the insurer. Further, if you are a tobacco consumer, the premium will definitely be higher than a non tobacco consuming customer. Eat healthy; avoid tobacco and exercise regularly to reduce the potential of a potential increase in premium.
(7) Check features of the policy:
It is important to check the benefits and features of the policy before choosing it. Features such as no claim bonus or a discount in next year’s premium if there are no claims in any year can lead to an overall reduction in insurance costs.
(8) Family floater policy:
In many insurance categories, especially health insurance, there is an option to purchase a family floater policy which covers all the members in your family. This is usually cheaper than individual policies taken for each family member. Remember to compare the cost of a family floater policy vis-à-vis individual policies for your family members.
(9) Top up plans: Another way of reducing your premium cost for an increase in coverage amount is to buy top up health insurance plans. A top up policy is an additional health insurance cover, which gets triggered beyond a certain pre-determined limit. Such policies are usually cheaper than buying a new health policy for the same coverage amount. However, remember to check the features and conditions before buying a top up or super top up plan.
(10) Choose riders wisely:
Add on covers and riders are specific insurance covers which cost an additional premium, over and above the basic policy premium. These are usually offered as an extension to the base policy. For example, a health insurance policy can have a critical illness rider or a term insurance policy can have a personal accident rider. Many a time, it may make sense to buy standalone policies or opt for cheaper alternatives, rather than choose a rider. Analyse the actual need for a rider instead of blindly agreeing to purchase one.
(11) Stay loyal:
As far as possible, it is recommended not to switch insurers. Although health insurance has portability feature, porting a policy requires efforts on your parts. In some cases, you may lose out on No-Claim Bonuses or discounts in premiums. When you shift your term policy, you will have to shell out a higher premium due to an increase in age. Unless the reasons are very compelling or your product has poor features, try to stay with your insurer.
High insurance premium certainly does not make financial sense. While in some cases this cannot be avoided, in many cases financial prudence can help in reducing insurance costs. Check your policy today to evaluate if you are paying a high premium!
Getting married is about two people celebrating that day when they decided to commit their life to each other. Financial matters for the married couples are important today as staying with one another may force one to make a lot of changes in their personal as well in their financial area too. Hence, determining that how one’s current insurance policies are stacked up and what all variations can be done on those as couple is one important discussion that has to be done. Lack of proper insurance protection may lead a couple into financial crisis. If already one has a disability or life insurance policy then it is inevitable to determine whether the existing coverage will be suitable or add up to the list of beneficiaries. One should also consider pooling existing policies with spouse under one company so that discounts or lower policy rates can be received.
Here is the list of few must have polices for newly married couple:
Having a grievance or complaint with your insurance company is not new. This can either be before buying the policy with respect to agents or delivery of the policy document or it can be after you buy the policy relating to policy servicing or claim settlement. In recent times, it is seen that there are increasing number of grievances being lodged with insurance companies. IRDA, the insurance regulator has viewed customer grievances quite severely and has specified the steps to raise a grievance in this respect. As a customer, here's what you should do if you wish to raise an insurance grievance:
Although there are various stages of grievance redressal mechanisms which are available, as a policy holder, you must be proactively alert while dealing with your insurance policy. For example, understand policy terms, charges and other conditions before taking the policy. Do not hesitate to enquire with your insurer or the agent if you have any clarifications. Check the credentials of the agent before you engage one. Make all necessary disclosures before taking the policy. Get written communication on promises made by the insurer or agent. Check your policy statements regularly. Inform the insurer immediately if there is a claim and submit the documents relating to this promptly in order to avoid delays. And the most important thing to be kept in mind is to maintain evidence for all your correspondence with the insurer. Taking small efforts can go a long way in getting your grievances addressed promptly and avoiding one if possible
Our Prime Minister Narendra Modi recently launched three social security schemes in West Bengal. The aim of these schemes is to
1. Make financial facilities like insurance and pension available to the poor and needy.
2. Financial inclusion of the poor in the development story of India.
3. Ensure that the poor have 'Shakti' and not 'Sahara'.
The three schemes introduced are -
These schemes were launched simultaneously in more than 100 locations all across the country with the aim to reach the entire population and provide them social security.
1. Exclusion - The promotional and marketing material will always tell what is included in the policy but exclusions are never properly highlighted. You should read the policy document thoroughly to ensure what is excluded. You should keep the policy document safely. You should keep relevant hospitalization bills, prescriptions and reports properly so that the claim process will be easy.
2. Sub-limits – Insurance policies cover the room rent but up to a limit. Many times, the limit is not just on the room rent but on all other expenses incurred. So if you go for a room that’s higher than the limit in your policy, there can be a huge deduction in your claim amount. Again, IRDA wants no such sub limits to be applied by insurance companies. We have seen that the top players have already introduced products that comply with this requirement. So it’s better to buy a policy without any sub-limits to avoid unpleasant surprises.
3. Cashless Hospitalisation – Many insurance companies provide the facility of cashless hospitalisation. But you cannot claim this if treatment details are unclear or the hospital does not allow cashless facility. Ensure that you know the regulations of the insurance provider and the hospital policies.
4. Premium Loading – Some insurance policies are very cheap when we buy. This is a marketing ploy. Once we make a claim, the renewal premium becomes high because of the clause of loading premium. Of course, today there is portability and lot of choice for the customer. But one has to check if this condition is applicable and how and to what extent it is applicable. If you are older, the portability won’t be very easy nor will all insurance companies be ready to provide you medical insurance. Keep in mind that the IRDA regulation prohibits insurers to apply claim loading at individual policy level.
5. Co-payment – It means a part of the claim amount needs to be paid by the insured. This clause is present in some insurance policies like if the policy is for a person who is 65 years or older. You should be aware if your policy has this condition. This can be avoided sometimes by paying a higher premium amount.
6. Accidental Insurance – Many health covers offer accident insurance for a slightly higher premium. You should check the accident cover and clauses attached to this feature. Many times, the cover is not sufficient if there is a hospitalisation due to accident. In most cases, this does not include protection for partial disability, permanent disability and temporary total disability. If required, you should take a different policy for accidents.
7. Domiciliary Hospitalisation – Sometimes the patient is unable to go to the healthcare facility and the healthcare facilities are brought home and the patient is given treatment for many days continuously. It is important to confirm with the insurance provider if this will be considered as hospitalisation for claim purposes.
It is important to have a health cover policy for yourself and your family. But before you buy one, read all conditions thoroughly and get all your questions/ doubts answered so that the claim process becomes easier.
The author can be reached at firstname.lastname@example.org
What should you choose - Max Bupa’s Health Companion, Apollo Munich’s Optima Restore or Religare’s Care?
Executive Summary: The restore/refill/recharge benefit and the no claim bonus/ multiplier benefit are unique features of some of the existing health insurance plans today. Max Bupa’s Health Companion plan, Apollo Munich’s Optima Restore plan and Religare’s Care Health Insurance plan are some such health insurance options which have been compared in this article. Each of the plans also has certain benefits over the other. One’s individual needs and situation would determine which of the three policies to opt for.
The market today is flushed with options for health insurance. It is often witnessed that clients are confused as to which plan to choose, as the features are more or less the same across plans. While claim settlement and premium charged are important factors to be considered, it is sometimes the additional / unique features which distinguish a health plan. Three such health insurance plans have been compared - Max Bupa’s Health Companion plan, Apollo Munich’s Optima Restore plan and Religare’s Care Health Insurance plan. The following are the features of these three plans:
* Option to include parents and extended family under the Family First option
Which plan should be opted for? As seen in the above table, the policies have their own unique features. To briefly state the benefits of one plan over the other, Max Bupa’s Health Companion plan has a larger option for Sum Insured, has no maximum age for entry and renewal, has a top up option, covers alternative medicine, has a higher frequency of complimentary health checks, gives a higher discount if the policy is taken for 2 years and offers hospital cash irrespective of type of accommodation. Apollo Munich’s Optima Restore plan has a higher time period for covering pre and post hospitalization expenses, offers free second opinion for critical illnesses, offers discount at Apollo pharmacies and gives one access to online health tools and newsletters. Religare’s Care plan has no maximum entry age, has a high no claim bonus option (for a Super No Claim plan) and offers a higher frequency of complimentary health check up. As regards the premium, it is slightly lower for the Care plan compared to the other two plans for the same Sum Insured. All the plans offer Restore Benefit and a No Claim benefit (although known by different terminologies). However, the multiplier benefit is higher in the case of Optima Restore. On the other hand, for the Health Companion plan, the accumulated bonus does not get reduced even if there is a claim, unlike the Optima Restore plan. If one opts for the Super No Claim Bonus option of the Religare Care plan, the bonus component is high in this case as well. However, in this plan, co-payment is sometimes applicable depending on the age of the insured and the sum insured option.
Which of the three policies one chooses depends on his/her individual needs and situation. If one needs a higher sum insured or a top up option, he can opt for the Health Companion plan. On the other hand, if one views the benefits of Optima Restore plan or Care plan as useful, then these can be opted for.
The author can be reached at email@example.com
Executive Summary: There are different types of life insurance policies such as Pure Term Insurance, Whole Life Policy, Endowment Policy, Money Back Policy, ULIP and Annuity Plan. If insuring your family is your aim, it is better to opt for a pure online term policy which charges a lower premium. Other plans which have an investment component may be expensive.
A life insurance policy should be taken primarily to protect your family and provide for them in case of your death. Traditionally, this has been the purpose and meaning of purchasing a life insurance policy. However, over the years, insurance companies have come with several products under the life insurance category, some of which combine the investment angle as well. But are these different types of life insurance policies suitable for you? Let us first understand the various types of life insurance policies:
Pure Term Insurance Policy: This is a pure risk cover policy, which has no investment component. The policy holder pays a regular premium for a specified term. During the term of the policy, if the policy holder dies, the beneficiary gets the Sum Assured amount. However, if the policy holder survives the term of the policy, the premium is not returned, i.e. there is no survival benefit. The premium paid in this type of policy is the lowest in the life insurance category for the same amount of life cover.
Whole Life Policy: As the name suggest, a Whole Life Policy covers the life of the insured throughout his life term. This means there is no specific policy term. When the policy holder dies, the amount of Sum Assured is paid to the beneficiary. Premiums are paid on a regular basis till death. In some plans, if you reach the age of 100, the Sum Assured is paid to you.
Endowment Policy: In an Endowment Policy, the policy holder pays a regular premium for a specific term. At the end of the term, a lumpsum amount is paid to the policy holder if he survives. This includes any accumulated bonus under the plan. If on the other hand, the policy holder dies during the term of the policy, the beneficiary receives the Sum Assured amount. In addition to the basic endowment, some endowment policies give benefits such as double endowment, critical illness endowment or marriage/education endowment.
Money Back Policy: A Money Back policy pays back a regular amount in periodic intervals to the policy holder during the term of the policy. This is a percentage of the Sum Assured amount. At the end of the term, if the policy holder is alive, the remaining amount of Sum Assured is paid out. However, in case of death during the policy term, the full Sum Assured amount is paid to the beneficiary.
ULIP: A Unit Linked Insurance Plan is an investment cum insurance plan, wherein the premium paid is invested in different securities. The residual premium (net of charges) can be invested in all equity, all debt or hybrid funds. The returns of the policy vary depending on the option chosen. Since this is insurance cum investment plan, the premium charged is comparatively higher for the same life cover under a pure term insurance plan. Moreover, generally, this type of policy entails high fees and charges during the initial years in the form of premium allocation charges, mortality charges, fund management charges, etc. On maturity, the units accumulated can be redeemed at the prevailing NAVs. In case of death during the policy term, the beneficiary receives the Sum Assured amount.
Annuity Plan or Pension Policy: In this form of insurance, the policy holder purchases an annuity plan by paying a lumpsum or paying regular premiums till retirement. On retirement, the policy holder receives a fixed annuity amount. There are different types of pension plans. The annuity payable differs depending on the type chosen.
You can buy insurance plans offline or online. Pure Term Plans bought online are comparatively cheaper. Similarly, one can choose regular yearly premium option or upfront single premium option.
Which Life Insurance Policy should you buy?
If insuring your loved ones is your goal, it is always recommended to opt for an online pure term insurance as the premium is comparatively lower. A Whole Life policy also works on the same lines, but the premium may be higher. The other options which include a survival benefit have an investment component. These plans usually charge higher premiums, have higher fees and charges and hence normally include lower Sum Assured, comparatively. Moreover, the returns delivered by these policies may be low due to high charges. If investing for your goals is your purpose, then you should first take an online term plan to meet your family’s financial needs in your absence. Post this you can start a long term Systematic Investment Plan in a diversified equity mutual fund (depending on your risk profile). This is likely to generate higher returns for you.
This article was originally published on Moneycontrol
The author can be reached at firstname.lastname@example.org
Executive Summary – HDFC LifeClick2Invest is a Unit Linked Plan that offers insurance and acts as an investment product. It is unique, as it has no allocation, distribution and administration charges. It is one of the cheapest options among ULIPs. It has other attractive features like switching and discontinuance. Experts feel that insurance and investment should be kept separate and when investing in such a product, one has to understand it completely and track its performance to make sure the investor gets the promised returns.
HDFC Life Click2Invest - ULIP is an online Unit Linked Insurance Plan. It offers market-linked returns. It is a little different from other plans as it charges only for mortality risk and fund management. Other Unit Linked plans have allocation charges; administration charges and discontinuation charges. HDFC Life Click2Invest - ULIP does not have any of these charges. It does not charge or distribution as it can be purchased online. It also does not have any discontinuation charges.
Here is a snapshot of the Plan Performance versus the Benchmark as of October 31st, 2014 –
Have you invested in this product? What is your view on it?
The author can be reached at email@example.com
When you buy a car, it is mandatory to buy car insurance. Car Insurance deals with the insurance cover for damage to an automobile/ automobile parts or loss of the automobile/ automobile parts either due to natural causes or man-made issues. Accident cover is generally provided for the vehicle owner while driving and passengers. It provides for legal liability on damage of property, and injury to third party. Premium is calculated on the basis of the Model, Make, fuel type, Cubic capacity etc. of the car; location; Vehicle owner claims and driver credentials.
We compare the car insurance covers available in the market today -
* The premiums are indicative. Please contact the insurance provider for all terms and conditions.
There are different plans available in the market. Choose one that suits your insurance requirements. Let us know your experience in dealing with car insurance at the time of purchase and/ or claim.