10 items to build your car emergency kit

Is car insurance enough to keep your newly bought car safe?

So you just bought a new car. Now all you have to do is get the car insurance with lowest premium and you are good to go. Well, that is what you would like to think.

Now, imagine you are on a road trip,  everything is going fine, but just then your car breakdowns. What do you do? Simple, hitchhike to the nearest gas station, get the mechanic and resume your exciting adventure. Sorry to snap you out of fantasy but this phenomenon is only restricted to ideal and lucky situations. There have been cases when people were stranded for days after car breakdowns.

So, what is the precautionary checklist one has to refer?

To start with, buying car insurance add-ons like roadside assistance is a smart way of getting the most out of your insurance. To get the least premium rates, you need to follow maximum safety measures like ARAI approved anti-theft device, etc.

Next is a car emergency kit which can be used during distress. This will find you a temporary fix to avoid further damage and depreciation. We have noted down a list of essentials for your car emergency kit.

  1. First-aid box
    A comprehensive first aid kit with your prescriptions, pain-killers, sterile dressings, plasters, anti-septic wipes and cream, cotton, tweezers, bandages, a pair of scissors.
  1. Solar-cum-battery gadgets
    These dual-powered gadgets should include flashlights, phone charge and radio along with extra batteries.
  2. Multipurpose utility tool
    A Swiss Knife or a Leatherman Tool have numerous uses, right from opening a can of food to cutting wires and ropes, you name it and these tools have it.
  3. Non-perishable snacks and water
    There have been cases where people were stranded for weeks at a stretch without help. To sustain in such situations, there are protein bars and packaged drinking water products with a shelf-life of up to five years available in the market.
  4. Foam tire sealant
    A quick solution to repair flats until you find the next gas station or roadways help.
  1. Rain Poncho
    Monsoons can get rough, especially in the southern parts of India. A rain poncho can be used to cover not just yourself but anything and is pretty versatile in use.
  2. Mechanical Toolkit
    On purchase, the cars usually come with a mechanical toolkit which has everything you will need, from pliers to screwdrivers, in a case of a mechanical breakdown. Make sure you always have it in the vehicle while travelling.
  3. Fire Extinguisher
    Always carry a small and easy-to-store fire extinguisher in your car. In certain cases, you are unable to claim the insurance benefit on extinguishing the fire yourself. For clarity on the types of fire and other claims covered under a car insurance, you can ask the Turtlemint chatbot.
  4. Cash
    Having cash in lesser denominations is quite practical for emergencies.
  5. Documentation and Contact Cards
    We suggest a copy of your car-related documents in the kit for reference and contacts. Your insurance company and agent can be your helpline in a disaster due to their expertise in handling such cases. Contact numbers of the car insurance company, especially the 1800 number and your insurance agent need to be accessible at such times.

Don’t forget to add miscellaneous stuff like duct tape, match box, rags and tissues and a plastic whistle, that can come handy during a crisis.

If you are a Turtlemint customer, our Roadside Assistance feature is included in every policy, so you can get in touch with us at 1800-266-0101 or even use the Turtlemint chatbot.

Read more about All you need to know about car insurance in India

Read more about Anatomy of car insurance

Read more about Benefits of purchasing car insurance online

Why do you need third party insurance for two wheelers? | Turtlemint Blog

Vehicle insurance is compulsory in India by law for all registered vehicles. This law is also applicable for two wheelers. Non-compliance of rules and regulations can lead to punishments which includes fines and prosecution. Having an insurance policy gives you a sense of security as riding two wheelers are riskier.

Insurance for third party liability of the two wheeler is compulsory. This means that any damage or loss caused to a third party is covered by vehicle insurance. The two most common terms used are Third party and Comprehensive cover. The former only insures third party liability. But, the latter covers third party liability and any damage/loss caused to vehicle.

Read more about Motor Vehicle Act, 1988

Advantages of Third Party Insurance

  • It is also termed as ”Act Only” cover. It meets the legal need of having a cover for third party person/property damages.
  • Premiums are cheap and affordable.
  • Third party insurance can be acquired with less documentation and checks. As, it does not include cover for the insured two wheeler.

Benefits of Third Party Insurance

  • Damages/Loss due to Natural Calamities:

Third Party insurance covers any damage or loss caused due to natural calamities. Such as fires, earthquakes, floods, lightening, storms, tempests, hurricanes, cyclones, typhoons, hailstorms and frost.

  • Damage/Loss due to Man-made Calamities:

Third Party insurance covers any damage or loss caused due to Man-Made disasters. Such as accident, thefts, strikes, burglaries or riots.  It also includes any damage caused in-transit. That is, when two-wheeler is transported by road, railways, air, inland waterways.

  • Personal Accident Cover:

It covers up to ₹1 lakh for injuries caused to the driver or owner during an unforeseen incident. This may result in temporary or personal disabilities, that causes partial or total disability. Also, insurance companies provide personal accident coverage for co-passenger too. Find out more about personal accident cover.

  • Third Party Liability:

This policy covers any injuries occurred to anyone in the surroundings and may lead to death. It may lead to legal loss of money and also protects against any damage caused to third party.

So, there are many advantages and benefits of third party insurance for two-wheelers. But, yet insurance companies do not promote third party insurance products. This is because of the following reasons: Reasons are not logical.

  • This is policy is mandatory by Government of India. It is compulsory for every owner of the vehicle to have this policy as a part of their insurance cover.
  • The price of this policy offered by different insurance companies is almost similar.
  • Even brokers or agents do not promote this policy as they do not get any commission for it.

Things to look out for in Third Party Insurance cover

  • Year of Manufacture:

If your Two-wheeler is old, then Third Party Insurance cover is apt for it. This is because the value of two-wheeler will be less. If we opt for higher plans, it will not be cheap.

  • Limit on third party claim:

The third party damage claim is limited to ₹1,00,000. Also, as per the Motor Vehicles Act, you can also restrict the cover to a minimum of ₹6000.

  • IDV- short for Insured Declared Value:

While opting for Third party insurance cover, IDV has to be calculated. IDV refers to the value of insured vehicle which remains fixed during the term of the policy. Its calculation is based on manufacturer’s listed selling price after adjusting depreciation. Learn what is IDV.

  • Claim processing:

Settlement of claim in case of damage or loss is the most vital part of your plan. For this, you will have to inform your insurer for completing the necessary formalities and settle the claim. In case of third party insurance cover, the insurance company will settle the claim only for loss or damage caused to the third party or property during any unforeseen incident.

  • Geographical Area:

Third Party insurance for two-wheeler are not valid, if any, accident occurs outside geographical area as mentioned in the policy.

Hence, Third Party Insurance for two-wheeler is mandatory by Indian Laws. Though, it does not provide monetary cover for insured two-wheeler and not flexible enough. But failure in following the laws is an offence, thus, punishable. As a result, it is recommended to buy or renew your third party insurance cover online on time.

Read more Everything you should know about two-wheeler insurance policies in India

Feel free to share your comments below

What is subrogation?

Neha just received her motor insurance claim from the insurance company which she made two days back. Her car was badly damaged in an accident involving a drunk driver. Though she did not hassle with the driver, she filed her claim and got her car repaired. She thought she was past the accident when the insurance company informed her that they would be suing the driver for the damages to her car in her name. When she enquired about the company’s action, she was told of the principle of subrogation. Unable to understand what it meant, she researched the concept on the internet. Let us see what she found out.

In health insurance plans and auto insurance plans, there is a concept of subrogation. Subrogation is in conjunction with the principle of indemnity. The principle of indemnity does not allow you to make profits from your insurance policy. After you receive a claim for damages suffered, subrogation transfers your right to sue the responsible third party to the insurance company. This prevents you from availing double compensation for your loss – one from the insurer and one from the third party.

How subrogation works?

Suppose your car is hit by the negligent driving of another person. After you incur a loss due to that person, you can either sue the person for your damages or you can simply raise a claim in your car insurance policy. If you raise a claim and are compensated by the insurance company, you give up your right to sue the third party (the person who hit your car) responsible for the loss. This right then passes on to the insurance company who can sue the third party on your behalf to recover the money the company paid on your claim. This, essentially, is how subrogation works.

Where is subrogation applicable?

Subrogation is applicable in both health and auto insurance policies.

  • Health insurance – if you seek medical treatments due to an accident, you can raise your health insurance claim. The insurer would pay you the relevant medical expenses. If the accident was not your fault, the insurance company would have the right to sue the negligent third party who was responsible for your accident. This right passes to the insurer automatically through subrogation. Subrogation, in health insurance plans, is applicable only in case of accidental claims.
  • Auto insurance – auto insurance plans have two facets of coverage – third party cover and own damage cover. Subrogation is applicable in all instances of claim wherein a third party is responsible for causing damages to your car. After paying you the claim raised, the insurer then sues the third-party for the claims paid. If, however, your car or two-wheeler gets damaged due to a natural calamity (act of God), subrogation is not applicable.

Subrogation is a technical concept but is easily understandable. There are some important points to note about subrogation which are as follows:

  • Even if the insurer sues the third-party for the claims paid, you have no obligations. The whole process is between the insurer and the third-party and you, as the insured, would not be hassled.
  • The insurer might ask your assistance in cases where it is required.
  • The insurer sues the third party on your behalf and in your name even though you are not an active part of the whole action. However, it does not terminate your right to sue the third party completely.

So, this is the concept of subrogation which is applicable in health and auto insurance plans. The next time you read the term ‘subrogation’ in your policy contract, don’t get stumped. It is simple enough and the above-mentioned points would tell you what exactly subrogation is and how it works.

Here is a video to understand the important principle of subrogation:

5 things that impact your car insurance premiums

As you all are aware that Car Insurance is mandatory in Indian Laws as per Motor Vehicle Act. So, while purchasing your Car insurance ensure that your insurance premium is reasonable and provides you with all necessary benefits. There are many factors that affect your car insurance premium. Some factors are beyond anyone’s control. While, some factors are controllable. There are few things that you didn’t know impacted your Car Insurance Premiums:

 #1 IDV, Coverage amount, voluntary deductibles and compulsory deductible

  • IDV: Insured Declared Value is the highest Sum Assured fixed by the insurance company. IDV is given at the time of theft or loss of vehicle. The insurance company will compensate their policy holder if your car undergoes complete loss.
  • Coverage Amount: Coverage amount is the maximum amount paid by the insurance company for the loss of insured vehicle. Every coverage of a policy has its own limit. You can adjust it as per your needs and requirements. The premium amount is based on your coverage amount. Higher the coverage amount, higher will be your premium amount.
  • Voluntary Deductible: Voluntary deductible is usually fixed by policyholder themselves. It plays a significant role in your premium amount. Here, the policyholder will fix a certain amount as their deductible. This amount they will pay during every claim. For example, Mr. Raj has met with a car accident. Their claim sums up to ₹10,000. The policyholder decides to pay ₹3,000 of the claim. This amount is said to be voluntary deductible. The remaining ₹7,000 will be paid by the insurance company. Thus, voluntary deductible provides sufficient percentage of discount on your premium.
  • Compulsory Deductible: Compulsory deductibles is that amount which is fixed by the insurance company on the premium amount. This amount has to be paid to get your damage claim. For example, the policyholder decides to fix their voluntary deductible to be ₹3,000. In that case, policyholder will get a discount of about 20-25% on their insurance premium amount. But, they will have to pay the compulsory deductible amount decided by the insurance company.

 #2 Driving record and geographical boundaries

  • Driving record: Your driving record depends on the company and your recent traffic violation or accident record. Some insurance companies look back for three years of your record. While some of them look back for 5 years or more. So, the company’s quotation and your driving record have a massive impact on your insurance premium amount.
  • Geographical boundaries: Your geographical boundaries, i.e., where you live also have a huge impact on your premium. Some localities are more accident prone. Insurance companies investigate about your crime rates, number of claims made in a year. These insurance companies are more aware about your neighborhood.

 #3 Whether your car has any anti-theft device

Due to increase in number of car thefts in our country, people prefer installing an anti-theft device for the security of their cars. Installing anti-theft device not only provides you security but also lowers your premium amount by offering discounts. This is because there will be less chances of your car being stolen, thus less claims will be made. Therefore, insurance companies encourage people to install an anti-theft device.

 #4 Discount for membership of any recognized automobile associations

If you are a member of Automobile Association of India, you can get discount on car insurance premium amount.

 #5 Discount for vintage car

In case of any vintage or classic car, ensure that while availing an insurance policy, the coverage should be as per car owner’s own requirement. For example, your vintage car is taken for rallies or to events on frequent basis. Then, the policy should cover any damages caused during the events. So, the insurance company provides coverage for damages caused due to restoration of the car or for public events. It also offers flexible premiums depending on the mileage of vintage car.


Thus, no insurance company will offer low rates to everyone. But there are some insurance companies who will offer low rates only to you. You need to search for them. So, look out for insurance companies who offer low rates of premium, discounts and claims on time.

7 things you absolutely need to know about life insurance

According to Maslow’s Hierarchy of needs, Life Insurance or Protection should be one’s primary importance. Theoretically, everyone knows about it, but rarely do we understand the real importance of the same.

Recently my neighbor, Mr. Agarwal, age 45, working in an MNC as a software engineer encountered with a massive heart attack and died before he could be even admitted to the hospital! He had been living a luxurious life with his wife and two children in a beautiful house. Renu, his wife was totally unaware of her husband’s financial conditions and was stressed, both emotionally and financially! The family was going tough times after his death. They had no idea of how to handle the situation.

At that moment, an insurance agent came with some documents to the family. Renu had no clue that her husband had taken a life insurance for himself and made her a nominee. Even their house was insured for the home loan that Mr. Agarwal had availed. All this was such a relief, when Renu received Rs 1 crore cheque from the insurance company for the life insurance policy of Mr. Agarwal. Her emotional stress due to her husband’s absence could never be fulfilled but at least her financial problems were well handled!

This was an eye opener for me and thereon I started to evaluate Life Insurance Policies with more seriousness. Based on my research, I have concluded that these are the top 7 things to know if you are planning to buy a Life Insurance policy.

What is Life Insurance?

Life insurance is a safeguard against financial deficiency at the time of insured Individual’s death. Practically, life insurance grants you and your family the financial security. It also provides you assurance to deal with any unforeseen events. Life insurance is preferred according to the needs and goals of the insured.

Read more about Reason to buy life insurance now

Things you absolutely need to know about Life Insurance Policy.

  1. Insurance is NOT an investment

This is the first thing you need to acknowledge and accept that insurance should never be considered as an investment. Insurance is a vital part of financial planning. But a lot of people consider it as an investment.

This is primarily because there are some life insurance plans in India that double up as investments.  For example, Endowment Policies have a lump-sum maturity benefit, Money Back Plans have regular payments during the entire policy tenure as pre-defined schedule and Unit Linked Insurance Plans have an opportunity to choose your investments even in equity! But what you need to keep in mind while choosing your Life Insurance Policy is the coverage amount you wish to purchase for your family. Insurance is synonymous to protection and that is the primary and most important objective of ANY life insurance product. They should not be evaluated on the basis of their return, bonus, etc.

  1. Required Coverage amount

The required coverage amount for your insurance policy is the most important aspect of choosing a plan. It depends on your lifestyle and priorities. You have to consider your standard of living, inflation, needs, liabilities etc. Then, accordingly, decide your coverage amount which would be sufficient for your family.

For instance, if your family’s monthly expenses are say ₹50,000. You need to opt for a Life Insurance coverage of at least ₹ 1 crore so that a post-tax interest earning is enough to provide for the family’s regular monthly expenses!

So, ensure that your coverage amount is sufficient to meet the monthly expense of your family in your absence.

  1. Policy Tenure

The tenure of Life insurance policies depends on the type of plan you opt for. You can choose any tenure that you think is necessary for you and your family. However, the best way to select an apt tenure for your insurance policy is as long as you are earning and providing for your family. This is typically till the age of 60 or 65 years post which your children will definitely start earning and so your financial dependence will gradually reduce!

  1. Type of Life Insurance best suited for you

There are varieties of plans offered and available in the market. It all depends on your needs as to which plan you opt for. Some of the insurance plans are:

  • Term Insurance
  • Whole life insurance plans
  • Endowment Assurance Plans
  • Money-Back Plans
  • Child Plans
  • Pension Plans
  • Unit Linked Insurance Plan

Out of the above-stated plans, Term Plan is the basic and the purest form of life Insurance. It is the cheapest plan. This plan covers only the death risk and has no maturity benefit. The payment is made in lump-sum amount if the insured person dies during the tenure of the plan.

Read more about Why is term insurance is an absolute buy

So, if you need a high coverage at a low cost, term plan is the best choice!

  1. Claim Procedure:

You and your nominee should be completely aware of the claim procedure so as to expedite the claim as and when the requirement occurs.

  1. Benefit Offered: Death and Maturity Benefit

There are two types of benefits in life insurance plans.

  • One is Death Benefit, where the beneficiaries will receive a lump-sum amount if the life insured dies within the policy tenure.
  • The other one is Maturity Benefit, where the claim arises when the policy is matured. It is paid only when all premiums are paid on time.

Maturity Benefit is payable to all life insurance policies except term plans. Endowment Plans are a type of Life Insurance with maturity benefit. Even ULIPs have maturity benefits. These kinds of policies are relatively quite expensive compared to term insurance, but it protects your family with a coverage amount in case the insured dies within the policy tenure. Alongside, these policies have a maturity benefit payable to the policyholder, if you happen to outlive the entire tenure. Hence, the money is not completely foregone in case you survive past the policy term; as is the case with term plans!

  1. Tax Advantages

Life Insurance plans, apart from providing funds, also save taxes. Under Section 80C of Income Tax Act, 1961, premium amount contributed to life insurance plans are eligible for tax rebate. The limit for premium contribution is up to ₹1,50,000. Also, under Section 10(10D) of Income Tax Act, 1961, amount of sum insured paid on maturity or death or surrender of policy is completely tax-free. So, life insurance is preferred by many as it protects your family and is also tax efficient.


Life Insurance is an important requirement of your financial life. The main aim of life insurance is to protect your family from uncertainties of life in your absence. Therefore, you need to opt for your life insurance plan as soon as you can, as your premium will depend on your age at entry and does not increase thereafter!

However, do keep in mind that Insurance should be your Plan B against financial contingencies in case of untimely demise and hence, should be purchased at the earliest for the safety and security of your family.

Read more about What is insurance and how does it work?

Read more about Common terms in life insurance policies

Read more about Life insurance policy in India – How does it works?

Feel free to share your comments below.

Understanding tax benefits of life insurance policy

Rishabh was filing his income tax returns for the first time on his own. He was thus confused about the treatment of his life insurance policies. He had a term insurance plan of Rs 1 crore for which he paid a premium of Rs 12,000 every year. Moreover, he had also invested in a child insurance plan this year when he became a proud daddy as well as an endowment plan for which he paid a premium of Rs 24,000 and Rs 33,000 annually respectively. He also took a health insurance plan for himself, spouse and children for Rs 5 lakhs of coverage and paid a premium of Rs 15,000 annually. Thus, his total premium outgo for the year approximated to about Rs.84, 000 and he wasn’t sure about its tax treatment. One of his Unit Linked Policies of Rs 5 lakhs sum assured also matured this year for which he used to pay an annual premium of Rs 50,000. Though the proceeds were not subject to any tax deduction, he didn’t know whether he should include it in his taxable income. Confused, he went to his financial advisor who sorted out his dilemma. Let’s see what his advisor advised.

Besides being an important tool of financial protection and security, life insurance also has tax-related benefits. Thus, it is considered to be an effective long-term tax planning tool as it is entitled to tax benefits under Income Tax Act, 1961. Rishabh’s premiums and also the benefits he received were tax-free. While the premiums acted as deductions from the taxable income, benefits received were exemptions which did not attract tax. Let’s find out how:

Tax Benefits under Life Insurance Policy

  1. Deductions for Premium Payment:
  • What is Section 80C?
  • Under Section 80C of the Income Tax Act, you will be eligible for the deduction, from your taxable income on the premiums paid towards all your Life Insurance policies till a maximum limit of Rs. 1,50,000.
  • The benefit of this deduction is available to self, spouse, dependent children and any member of HUF (Hindu Undivided Family).
  • While the maximum limit under Section 80C is Rs. 1.5 lakhs, there is also a maximum limit on the premium amount vis-à-vis the Sum Assured. This limit depends on the date of the policy issuance. Here are the rules of the limit:

tax benefits
Thus, the total premium paid for Rishabh’s policies were exempt from income tax under section 80C since it was less than
Rs. 1,50,000.

  • What is Section 80D?
    • Under Section 80D of the Income Tax Act, you will be eligible for the deduction, from your taxable income on the premium paid towards all your Health Insurance policies till a maximum limit of:
      • ₹25,000 for self, spouse and children.
      • An additional amount of ₹25,000 for premium paid towards parents.
    • However, an increased deduction of ₹30,000/- shall be allowed in case any of the person mentioned above is a senior citizen.
    • The above mentioned limits include ₹5,000 for preventive health check-up.

Thus, the total premium paid for Rishabh’s health policies or additional health riders in life insurance policies like personal accident, critical illness, etc. will be exempt from income tax under section 80D till ₹25,000. If he had an additional plan for this parents, he would have got an additional exemption of ₹25,000.

  • Section 80DD:

Although Rishabh did not need this deduction but under this section, the premium paid for disabled people who are dependent for their medical treatment is allowed as a deduction. The quantum of deduction for such disability is ₹75,000 every year. An increased deduction of ₹1,25,000 shall be allowed in the case of severe disability.

  1. Exemptions for Maturity Benefit:
  • What is Section 10(10D)?
  • Any amount received at maturity or surrender of policy of insured shall be exempt from income tax under section 10(10) D provided the terms and conditions are fulfilled. This includes the sum given in the form of bonus on such policy. However, there are 2 conditions for this tax exemption:
    • The premium should be at max 1/10th of the sum assured in all the years.
    • The policy is not surrendered within the first 5 years.
  • However, the rule does not apply in case of death benefits. Death benefits, irrespective of the premium paid, would be completely tax-free.

Rishabh’s Tax Treatment:

tax benefits


The entire premium for all Rishabh’s Life Insurance Plans totaled to Rs 1,19,000 till last year but since the ULIP has matured this year, his total Life Insurance Plan Premium would be Rs 69,000 and the entire amount is deducted for income tax under section 10(10)D since it is less than Rs 1.5 lakhs per annum!

Thus, Rishabh’s maturity benefit from the Unit Linked Plan would be tax free as the sum assured was not more than 10 times the premium for all the years. All his other life insurance plans would also have tax-free maturity benefit but he should calculate the same only when the policies mature!

In a synopsis:

tax benefits


Rishabh was duly educated on the tax benefits of his life insurance premiums and benefits. He was overjoyed to know that both his premium and the benefit he received from his Unit Linked Plan were tax-free. This is the beauty of a life insurance plan. It not only provides you financial security, it also helps in saving taxes. So, know the tax benefits and enjoy your life insurance policy to its fullest. You can compare and buy your life insurance policy online.

Read more about What is insurance and how does it work?

Read more about Common terms in life insurance policies

Read more about Life insurance policy in India – How does it works?

Feel free to share your comments below.

Benefits of a critical illness policy

Mr. Vyas always believed himself to be a savvy financial planner. He had a diversified investment portfolio, had substantial life insurance coverage and also had a health plan. The coverage was decent (as per his belief) and he made sure to include each family member under the health plan. Then suddenly Mrs. Vyas was diagnosed with cancer. Mr. Vyas was sad but believed that his health plan would cover the cost of the treatment. It couldn’t. Then Mr. Vyas learned about a Critical illness plan and lamented his ignorance.

Did you know that cancer is becoming a trending illness? Increasing number of people are being diagnosed with one or the other form of the ailment. Other ailments like heart attack, stroke, paralysis, kidney failure, etc. are also becoming a very common occurrence. Do you know the emotional, physiological and financial stress these ailments cause? While the emotional and physiological stress has to be borne by you, the financial strain can be transferred to a health insurance plan. Health insurers offer specially designed critical illness plans to cater to the financial strain of critical illnesses. Before going into the plan, let’s understand what exactly a critical illness is:

Critical Illness

An illness is termed critical or terminal if it has severe physiological effects. Such illnesses can be fatal and require intensive treatments. Moreover, the financial cost of treating such illnesses is also high. Some common critical illnesses include the following:

  • Cancer
  • Kidney failure which results in dialysis
  • Aplastic Anemia
  • End stage Liver failure
  • Coma
  • Open chest CABG
  • Permanent paralysis of limbs
  • Stroke which causes permanent symptoms
  • Multiple sclerosis
  • First heart attack
  • Aorta graft surgery
  • Open heart replacement or heart valve repair, etc.

Critical illness health plan

A critical illness health plan is a health plan which solely covers specified critical illnesses. The plan is also called a fixed benefit plan as it pays a lump sum amount (the Sum Insured) when the insured (policyholder) is diagnosed with any of the covered critical illnesses. Some common features of the plan are as follows:

  • Every critical illness plan covers a specified list of illnesses. If you suffer from any one of the illnesses which are covered by the plan only then the plan would pay the benefit.
  • The benefit is paid solely on diagnosis of any covered illness. The insured (policyholder) might or might not seek treatment for the same.
  • The insured (policyholder) must survive a specified tenure after being diagnosed of the illness to become eligible for the benefit. This tenure is usually of 30 or 60 days post diagnosis.
  • The benefit received can be used either for availing treatment or for any other personal purposes.

Difference between a Critical Illness and a normal health insurance plan

A critical illness plan is different from a health insurance plan. The table below highlights such differences between the two plans:

critical illness


Do you know what your health plan covers?

Critical Illness Rider

An alternative to buying a separate critical illness plan is adding a critical illness rider to a new health insurance plan.

  • What is it?

A rider is an additional clause which can be added to an insurance plan to increase the scope of coverage. By adding a critical illness rider to your health plan you ensure an additional coverage (Sum Insured) in case you suffer from a Critical Illness.

  • What is included in the rider?

The critical illness rider essentially acts like a critical illness plan but with a lower premium outgo. A specific list of illnesses is covered under the rider. If you are diagnosed with any one, an additional Sum Assured is paid.

  • What is the benefit of a rider?

The only benefit of a critical illness rider is that it involves lower premium outgoes compared to standalone critical illness plans. Otherwise, standalone plans are better as they provide additional benefits.

Critical illnesses have a substantial price tag attached to them and a critical illness plan or a critical illness rider helps. So, understand the meaning of a critical illness plan and buy one for enhanced protection against those deadly ailments.

Read more about Difference between health insurance and critical illness

Read more about Difference between Critical illness and life insurance policy

Also, check our video below to understand which is more beneficial cancer cover or critical illness cover?

Feel free to leave your thoughts, queries or comments below

Anatomy of a car insurance plan

Just as you health needs a cover in form of insurance, your car needs one too. You can easily avoid the expense of an uncalled breakdown if you choose the right plan. Let us understand the components of a car insurance plan.

Anatomy of Car Insurance - Explained


Be a smart guy like Rahul. To know more about CAR INSURANCE call our Car Expert at 1800-266-0101
or visit our website at: https://www.turtlemint.com/car-insurance

Also read about Car insurance terminologies you should know

Read about Know what to look for in a car insurance  

Read about Benefits of purchasing a car insurance online

What is cumulative bonus and no claim bonus?

Ramesh had bought a health insurance plan two years back. Last year he found out that the Sum Insured under his plan had increased by 10% due to No Claim Bonus (a term he didn’t completely understand). This year, again, his Sum Insured was poised to increase by another 10% (No Claim Bonus) when he decided to find out about the concept. Furthermore, on renewing his car insurance plan, he availed a premium discount of 25%, compared to last year’s discount of 20%. Though he was delighted of the discount, he wanted to know how and why the discount is increasing. He talked to his friend who then gave him a detailed lesson on the concepts of No Claim Bonus and cumulative bonus. Let us see what the lesson was.

A health and a motor insurance policy has become a quintessential requirement in modern times. While the latter is legally mandatory, the former is helpful in a medical crisis. Both these insurance plans are one-year renewable contracts where benefits are paid only if a claim is made in the year. If there is no claim in any policy year, no benefit is paid. However, to ensure that you do not lose out in the absence of a claim, a No Claim Bonus is paid in both health and car insurance plans. This bonus also accumulates for every consecutive claim-free year and is called a cumulative bonus. Let us understand the two different concepts with the help of some examples.

Example 1

Suppose a health insurance policy provides a No Claim Bonus of 10% increase in the Sum Insured (SI) for each claim-free year. If you buy a policy of Rs.5 lakhs SI and there is no claim in the first year, the Sum Insured would increase by Rs.50, 000. Again in the next year, if you do not make a claim in your policy, the Sum Insured would further increase by 10% becoming Rs.6 lakhs. After 3 claim-free years, the Sum Insured would increase to Rs.6.5 lakhs after having increased Rs.50, 000 in that year. So, the No Claim Bonus was Rs.50, 000 which was allowed every year while the cumulative bonus amounted to Rs.1.5 lakhs within 3 claim-free years.

Example 2

Auto insurance plans provide a premium discount for the subsequent year if no claim is made in the current year. The rate of this discount in the first year is 20% and it increases for each subsequent claim-free year. For two consecutive years, this No Claim Bonus becomes 25%, for three claim-free years it is 35% then 45% and finally a maximum of 50% discount in premium. This increase in the rate of No Claim Bonus is due to the cumulative effect of claim-free years. If in any year the claim is made, there would be no discount in next year’s premium. In later years, the discount would again begin from 20%.

So, while No Claim Bonus allows a bonus for each claim-free year, Cumulative Bonus is the aggregated bonus which accumulates after a spell of claim-free years.Find out a quick guide to common terms here

Check out our video which simplifies the term cumulative bonus


Types of No-Claim Bonus

Insurers offer different types of No Claim Bonus to customers. Here are the three types of No Claim Bonus offered in a typical health or auto insurance plan:

  • Increase in Sum Assured – as explained earlier, the most popular form of No Claim Bonus is an increase in the Sum Assured. The premium remains the same while the Sum Assured increases every claim-free year by a specified percentage. The rate of increase differs between different health plans. This increase in the Sum Assured is allowed as a No Claim Bonus only in health insurance plans.
  • Decrease in premium – auto insurance plans and few health insurance plans allow this form of No Claim Bonus. In this option, the premium payable for the subsequent year is discounted by a certain percentage. The rate of premium discount is cumulative in nature and increases every year if a claim is not made (in auto insurance plans). In health plans, the discount rate is a flat rate and does not increase for subsequent claim-free years.
  • Discount vouchers – this type of No Claim Bonus is usually found in few health insurance plans. In this variant, health insurers allow you discount vouchers and other health and wellness related benefits. The Sum Assured does not increase and neither is the premium discounted. The vouchers granted can be redeemed at merchant outlets for attractive discounts or gifts.

Do check our video below to know the very basics of No-Claim Bonus

A No Claim Bonus and the cumulative bonus is a feature of every health and car insurance plan. Though the type of No Claim Bonus allowed might differ, the bonus would be surely granted for each claim-free year. So, if you feel that your health or car insurance plan does not pay except in case of a claim, think again. The No Claim Bonus allowed under such plans is a truly rewarding benefit.

Read more about What is insurance and how does it work?

Read more about All you need to know about car insurance

Read more about How to choose a health insurance plan?