Month: November 2017

The umpteen benefits of buying car insurance online

Team Turtlemint

A car insurance policy has been mandated by law and so there is no escaping it. Most of you, when buying this compulsory coverage, tend to become ignorant. While the simple grocery items of everyday use are shopped with much consideration, a car insurance policy is, usually, bought in a hurry. You either buy a policy which your car dealer offers you or select one which your neighborhood agent sells. There are other policies available in the market which you conveniently ignore. Is it wise?

No, it’s not. You should compare before buying a car insurance policy. Thanks to the online media, this comparison is available right at your finger-tips. Besides providing a platform for comparison, the online marketplace also offers various other benefits which make your car insurance purchase a wonderful experience. Do you know what these benefits are? Let’s find out –

  • You can opt for the best all-inclusive cover

The best part about comparing and buying a policy online is that you can get a comprehensive coverage. Though the coverage features of all comprehensive car insurance policies are same, there are some unique benefits which are added to different plans. These benefits make all the difference. When you go online and compare you can find out which plan promises which benefit. You can then choose a plan whose benefit structure suits you the most. Thus, you can ensure that you get the best all-inclusive cover from your car insurance policy.

Read more on the types of car insurance cover and their benefits

  • You don’t have to compromise on the IDV

The Insured Declared Value (IDV) of your car represents the maximum liability of the insurance company towards a claim. It is the fair market value of your car after depreciation. Different insurance companies calculate the IDV of your car differently. The IDV affects your premium rate. A higher IDV is always better as you can get a higher claim settlement in case of theft or total loss of your car. When you buy a policy online you can see the different IDVs offered by different plans and choose the highest one for better coverage.

Read more to understand car insurance terminologies

  • You can shop for discounts

Discounts make every deal sweet, don’t they? Car insurance companies also offer various discounts to their customers. You can find out these discounts when you shop online. You can see which plans offer which discounts and what are the discount rates. You can then choose a plan which offers the highest discounts. Cool, isn’t it?

Here are the various car insurance discounts

  • You can customize your plan with different add-ons

Comprehensive car insurance policies offer add-ons which increase the scope of coverage. Some popular add-ons include roadside assistance, zero depreciation, return to invoice, NCB protect, etc. Many policies also have inbuilt add-ons. You can easily find the available add-ons when you shop online. This gives you the flexibility of customizing your plan’s coverage as per your needs.

Read more about car insurance terminologies you should know

  • Online shopping also saves your money

The best is saved for the last! The online marketplace is thriving because it always has a saving element. This is true for car insurance policies too. Different insurance companies sell different car insurance policies which have different IDVs and are, thus, priced differently. Since premium rates differ, you can find the difference when you shop online. You get to see the available policies, their coverage features and their premium rates. After comparison of features vis-à-vis premium you can buy a policy which not only gives you a comprehensive cover, but promises the best premium rates too.

Doesn’t the online medium promise you umpteen benefits? So what are you waiting for? The next time your car insurance policy is up for renewal or you are buying a new car, go online. There are insurance aggregator websites which help you compare between the different car insurance policies available in the market. Visit our car insurance page  compare between the different insurance plans and buy one which is the best. So, be smart, go digital!

Buying car insurance? Make sure to do this 5-point check

Rupanjali Mitra Basu

A car purchase is a well-researched process. You do thorough studies. You compare the various models of a car, look at the features, understand the mileage and engine capacity and finally see if it fits into your budget. After all you are parting with a huge amount of savings to invest in a car! When it comes to car insurance too, a research is necessary. A car insurance policy should be studied carefully before it is bought. If you don’t know what to look for here are 5 of the most important points to get you started –

#1 The Insured Declared Value

The IDV of your car insurance policy is equivalent to its sum insured. This is the maximum amount of claim which you get when your car is either stolen or is damaged beyond repairs. The IDV actually represents the market value of your car after deducting the relevant depreciation. Every insurance company follows a different approach in fixing the IDV. That is why, the IDV of different policies differ. When you are buying a plan you should check its IDV. It is advised to compare between the different plans and choose one which has a high IDV. A high IDV boosts the claim value and so should be considered at the time of purchase.

Read more Understanding IDV amount you can claim for vehicle damage

#2 The premium rate

Just because a car insurance policy is mandatory it doesn’t mean that you should not check the premium rate. You are paying the premium from your hard-earned money and so it should be considered at the time of buying the policy. You should understand how the premium is being charged. In a comprehensive plan there is a premium break-up for the different covers opted. You should understand the break-up. Moreover, just as in case of the IDV, you should compare the premium rates of different plans before buying.

Read more Car insurance terminologies you should know

#3 The coverage features

A comprehensive car insurance policy provides three basic coverage features. One is the mandatory third party liability cover which takes care of your financial liability towards third parties. Two is the coverage for damages suffered by your car. Three is a personal accident cover for the owner/driver of the car. These three areas are covered by all policies. However, there are some features which are added to make the policy one of a kind. For instance, many car insurance plans have an inbuilt roadside assistance cover for breakdowns. Some give you coverage for towing your car in case of a major damage, etc. When buying a policy you should check for the coverage features. Find out exactly what is being covered by the policy and what is not.

#4 The add-on covers

Add-on covers are optional coverage features which are available at an additional premium. These features enhance the scope of coverage of a policy. For instance, a roadside assistance cover is helpful in case your car breaks down in the middle of the road. Similarly, a zero depreciation add-on increases your claim amount by nullifying the effect of depreciation. An engine protect add-on covers the damage sustained by your engine due to water-logging. These add-ons are beneficial and you should choose one or two based on your requirements. While buying a policy find out if any add-ons are added to it. If they are, analyze whether the add-ons are suitable to your requirements or not. If there are no add-ons choose some yourself.

#5 The discounts available

Did you know that there are different types of discounts in a car insurance policy? Exciting, isn’t it? Insurers allow various forms of discounts on the car insurance premium. While buying the policy you should check out these discounts so that you can save on the premium cost. There are discounts for buying the policy online, for accumulated No Claim Bonus in an existing policy, for installing safety devices in your car, for being a member of Automobiles Association of India or any other recognized group and for choosing a voluntary deductible among others. You can find the available discounts only when you are careful when buying a policy. Wouldn’t you like saving money?

Read more about Discounts on car insurance you did not know

So, don’t make the mistake of buying a policy without proper consideration. Look for the above-mentioned points and then invest in a car insurance plan. You would not only get the best coverage, there would be savings on the premiums too.

Also, check the below video before buying car insurance

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Should one buy a life insurance or health insurance or both and when?

Ankita Sejpal

Life Insurance and Health Insurance are the two major requirements in everyone’s life. Both provide financial security against unavoidable contingencies. While life insurance provides security in event of death, a health insurance policy secures your finances in a medical emergency. Since both death and illness are unavoidable contingencies, a life and a health insurance plan should feature prominently in your financial portfolio.

Yet not convinced? Here are the major reasons why life and health insurance policies are a must:

Top #3 Reasons to buy Life Insurance

  • Financial security

A life insurance plan pays your family a lump sum amount in the event of your death. This corpus helps in securing your family’s financial obligations even when you, the breadwinner, are not around and thus provides financial security.

  • Fulfilment of life’s financial goals

All of us have several life goals. We want to secure our family’s financial future in case of an emergency, secure our child’s future, build our assets and plan for our retirement. Life insurance plans, besides fulfilling the primary need of creating an emergency fund, also help in fulfilling our other life goals. We can secure our child’s future through a child plan, create assets through savings and unit-linked insurance plans and also build a retirement fund through pension plans. Thus, life insurance provides us an all-around solution for planning our life’s financial goals.

  • Tax saving

Yes, this is another reason which might prompt you to buy a life insurance policy. The premiums paid for your life insurance plan are exempt up to Rs.1.5 lakhs under Section 80C of the Income Tax Act. Moreover, the benefits you receive from your life insurance policy, whether on death or on plan maturity, are also tax-free. Isn’t it great?

Do you know the “7 Things you absolutely need to know about Life Insurance ?”

Top #3 Reasons to buy Health Insurance

  • Combating large medical expenses

Medical expenses are becoming very expensive. As an average middle-class individual, it becomes difficult for us to handle these high expenses. A health insurance policy pays our medical bills and thus helps us in combating large medical expenses.

  • Safeguarding our finances

In case of any medical emergency when the hospital bills rack up to huge amounts, we turn to our savings to pay them. High medical expenses put a strain on our savings and threaten to wipe them out. Having a health insurance plan helps us safeguard our savings from such medical expenses as the health policy itself pays for such expenses.

  • Tax saving

Like life insurance premiums, health insurance premiums are too exempted from tax under Section 80D. The maximum exemption you can claim is as high as Rs.60, 000 annually if you are a senior citizen and also cover your senior citizen parents under a health insurance plan.

Now we know that both life insurance and health insurance are important. But, do we know when should these plans be bought? Though both life and health insurance plans should be bought at the earliest, here’s a look at their applicability at different stages of our life.

To get a clarification on the above mentioned points, you may also read 4 Reasons Why Health Insurance is an Important Investment

Best time to buy Life and Health Insurance:

  • In your 20’s

This is the age when we set our life goals and experiment new things in life. As we are young, we tend to avoid insurance. But an early start can be of more significant value. We should have a term insurance plan for creating a contingency fund and also invest in a basic health insurance policy.

For instance, Manisha, 25, working in a leading Finance company is a young individual with limited responsibilities.  Given her limited income, she should first opt for a term insurance plan. This is because a term insurance is the cheapest amongst the life insurance plans and also the premium would be lowest if purchased early.

Then, she should buy a health plan with a smaller cover which would be affordable and also sufficient if her employer already covers her in a group health plan. She should look for a health coverage with Maternity Benefit so that the basic waiting period is over well before she plans a family!

  • In your 30’s

At this age you not only have responsibilities of your parents but also of your wife and kids. While earlier a term plan was enough, a child plan comes into the picture in your 30s if you have kids and want to secure their future. In case of health insurance, you should increase the coverage amount as more members would be covered in your family floater plan.

As said in previous case, Manisha, when she is in her 30’s should add a child plan to her term plan. Moreover, if the coverage under term plan is not sufficient, she should increase the same.

In case of health insurance, she should opt for a Family Floater plan covering herself, spouse and her children. It will be beneficial for her as well for her family. She can also convert her existing health plan to a family floater one and either increase the coverage or opt for a Top-Up Plan for additional health coverage.

  • In your 40’s

At this age you should focus on creating assets. A term plan is a must and should be continued (if bought before) or bought anew. You may also opt for an endowment plan for creating sufficient savings. Retirement planning should also start from early 40s and so, a pension plan is also advised.

In case of health insurance, your Family Floater Plan is good enough but you can increase the coverage amount by a top-up health plan due to rising medical expenses and inflation. Furthermore, you can take an add-on cover for Critical illness as to protect against the rising probability of such illnesses.

So, Manisha in her 40’s can choose to buy an endowment Plan for wealth creation along with insurance protection, buy a pension plan for her retirement as well as choose a Critical Illness Plan.

  • In Your 50’s

Now, the time has come to think about your spouse and your future after retirement. In your 50’s, you must have a pension plan to ensure that you receive monthly income after your retirement.

Also, you should still continue your existing comprehensive health insurance plan that covers any medical emergency.

So, Manisha can proactively continue her insurance plans and if she had not opted for a pension plan earlier, it is high time to buy the same.

  • In Your 60’s

At this age, it is usually difficult to buy a new insurance policy, as your income would soon dry up.  However, you should still consider buying a term insurance or continue your existing term plan cover for uncertain death.

In case of health insurance, you can opt for senior citizen health insurance plan. If you already have a health insurance plan, renew it religiously for comprehensive health coverage.

So, Manisha in her 60’s should continue her existing health and life insurance plans lifelong. If she finds her health coverage is inadequate or not purchased earlier, she can opt for Senior Citizen health plans with pre-existing ailment coverage as well.

Conclusion

Life and health insurance plans are important for us. You may also read the Reasons to buy a Life Insurance Now.

They have unparalleled benefits and demand a place on our portfolio. Though buying young is ideal, life insurance and health insurance plans are also governed by your life stage. So, understand which life stage you are in and then buy the plans.

Read also An anatomy of an health insurance plan

Read more about Dejargonizing health insurance terms

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Term plans are evolving. Here’s what’s new – The new age term plans

Rupanjali Mitra Basu

Term plans have become popular amongst individuals nowadays. The unparalleled benefits endowed by the plans are the driving USP behind its popularity. People are increasingly becoming aware that they need to ensure the replacement of their income for their family in case of their premature demise. This replacement is provided by term plans at very marginal costs making them popular. Even insurance companies have acknowledged this popularity and have made revolutionary changes in their term products. As such, today, you can find a newer and improved version of your beloved term plans which promise much more. Do you know what is new?

You might not and so here is a list of new evolved features which come inbuilt in current term insurance plans:

Different types of payout options

Gone are the days when term plans promised only lump sum payouts. Today, you can find plans where the payouts are of different types. Some common payout options include the following:

  • Lump sum payout – this is the traditional payout option which has been present ever since term plans were introduced. This option pays the Sum Assured in lump sum. If you know that your nominee is investment savvy and would be able to invest the lump sum benefit in good investment avenues after your demise, you can choose this payout option. If you buy Aegon’s iTerm Plan for a Sum Assured of Rs.50 lakhs, a lump sum benefit of Rs.50 lakhs is paid on death.
  • Monthly payouts – this new addition to a term plan is where the death benefit is paid in monthly instalments for a specified period of time. The duration for which monthly payouts would continue is mentioned beforehand. Moreover, in many term plans, the monthly payouts also increase on an annual or monthly basis. You can choose this payout benefit if you want your family to receive regular incomes in your absence. For instance, ICICI Prudential’s iProtect Smart Life Plan with Sum Assured Rs.50 lakhs pays Rs.41, 700 every month for 120 months.
  • Combination of lump sum and monthly instalments – as the name suggests, under this payout option, the death benefit is paid partly in lump sum and partly in instalments. For instance, Aegon’s iTerm Plan also has the option of taking the benefit partly in lump sum and partly in instalments.

You have the freedom to choose a term plan depending on its payout option and your suitability.

Inbuilt riders

Riders are additional coverage options which can be selected for an enhanced coverage experience. Earlier, term plans gave you a list of riders to choose from. However, today, you can also find inbuilt riders in the plan benefits. These inbuilt riders pay an additional benefit in case you face the contingency covered by the rider. Some common inbuilt rider benefits which you can find in term plans include the following:

  • Accidental Death and Disability Benefit – in this benefit you get an additional Sum Assured in case you suffer an accidental death during the plan tenure. Even in case of accidental disability you get an additional Sum Assured which is usually paid in instalments.
  • Terminal illness or Critical Illness Benefit – this benefit covers a list of terminal or critical illnesses. If you are diagnosed with any covered illness during the term of the plan the benefit pays the Sum Assured.
  • Premium Waiver Benefit – under this benefit, the future premiums get waived off in case of an accidental disability. The plan continues as the company pays your premium on your behalf.
  • Waiver of premium on critical illness – if you get disabled in case of any critical illness your premium is also waived.

Terminal Illness benefit is inbuilt in AEGON’s iTerm Plan. ICICI Prudential iProtect Smart Life Plan has inbuilt riders of Waiver of Premium in case of Accidental Disability and Terminal Illness. If you opt for Smart Life Plus plan, you get an additional inbuilt rider of Accidental Death Benefit. Aegon’s iTerm Plus plan waives the premium in case you are diagnosed with a critical illness.

Read more to understand life insurance terminologies

Understand the basics of term insurance plans by watching the below video

Online term plans

The online medium has redefined the way we transact. You can compare and buy a term insurance plan online. These plans have lower premiums since they are sold directly by the insurance company. Moreover, the underwriting rules are less stringent. You are simply required to fill an online application form, pay the premium and the policy is, usually, issued in an instant. No more elaborate paperwork and unending wait for the commencement of insurance cover.

Higher coverage tenures

Even the coverage tenures have been increased in new term plans. You can easily get coverage till 85 years of age under many plans. Moreover, some plans also allow you to convert your term plan into a whole life pan which runs till you reach 99 or 100 years or age.

Lower premiums

Finally, here’s the sweetest deal for the last point. Term insurance premiums have become cheaper than they were before. Increased competition in the insurance market and improvement in the mortality rates have lowered the premiums considerably. Sweet, isn’t it?

Change is the only constant and term plans have embraced this motto. They have evolved and become more customer-friendly. So, if you have not bought a term plan till now, don’t wait. Buy a term plan at the earliest and enjoy the new benefits.

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

Read more about Top 5 insurance myths you need to know

Read more about Common terms in life insurance policies

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Why is an on-time renewal of car insurance policy important?

Ronit Khopkar

My friend Vinay was a very methodical person. He always did his things on time without fail. That is why when it came to renewing his car insurance policy, I was surprised to find that he had a procrastinating nature. Over a cup of coffee one day, he mentioned how he was on a business trip overseas when his car insurance policy lapsed. He had a harrowing time getting the policy renewed. I heard him narrate his experience when a thought struck me. How many of us do timely renewals of our car insurance policies?

A car insurance plan is a quintessential part of our car as it is mandated by law. All car insurance policies come with a term of one year after which they require renewals. It is at the time of renewals that most of us dilly-dally. This dilly-dallying is not wise. On-time renewal of car insurance policies is important. Here’s why:

  • Expired car insurance policy is a legal offence

The Motor Vehicles Act, 1988 has mandated every vehicle to have an active insurance cover if it is being driven on Indian roads. As such, when your car insurance policy expires, the cover becomes inactive. Driving a car without a valid insurance cover is a legal offence. If you are caught violating the law you would face heavy penalties. So, to avoid being entangled in legal violations, your car should have a valid insurance cover at all times.

  • You shoulder the financial risk of any damages caused or suffered

Your car insurance policy covers you against any financial liability you incur when your car causes bodily injury to any third party or damages any third party property. Moreover, any injuries suffered by you or any damages faced by your car are also covered under a comprehensive car insurance plan. Thus, you are free from any financial obligation which might arise out of possible accidents and mishaps. If your car insurance policy expires, the coverage ceases. In that case, you would be financially liable to pay for any damages caused to third parties or any damages suffered by you. These financial liabilities are considerable. So, to protect your pockets from such heavy financial liabilities, on-time renewals are insisted upon.

Read more 5 consequences of driving without car insurance

  • You have to take the hassle of getting the vehicle inspected

In case of renewal of expired car insurance policies, insurance companies insist on inspection of the vehicle before the new policy is issued. This inspection involves a surveyor visiting your place, carrying out your car’s inspection, submitting the inspection report, scrutiny of the report and issuance of a fresh policy if the report is satisfactory. All this inspection not only takes time, it is also inconvenient. Inspection can, thus, be avoided if you continue the insurance cover without a break.

  • The subsequent premiums might be higher

Whenever you renew your car insurance policy, you are always asked whether your earlier policy has expired or not. This question is asked to determine your premium. Policies which are renewed timely have lower premiums than policies which are not. That is why, when you mention that your existing policy has lapsed, you might be required to part with higher premiums.

Read more to understand car insurance terminologies

  • There is a fear of losing out on the accumulated NCB discount

Each year, when you do not make any claim in your car insurance plan, you get a No Claim Bonus discount in the next year’s renewal premium. This discount is cumulative in nature. It increases every consecutive year if no claim is made. After the first claim-free year you get a discount of 20%. After the second year it increases to 25%, then to 35% and so on. If you do not make a claim for 5 successive years you get a discount of 50%. This discount can be earned if your policy is renewed on time. In case your policy has expired and you do not renew it within 90 days from the date of expiry, you lose the entire accumulated NCB discount. As such, you not only pay a higher premium for renewing a lapsed policy, you also lose out on the discount.

Read more about No claim bonus in car insurance

On-time renewals, therefore, are necessary both from the legal and financial point of view. They are legally necessary and financially rewarding too. So, be punctual. Don’t let your car insurance policy lapse. Renew it on time and enjoy the benefits. Here are some tips on car insurance renewals.

Feel free to share your comments below:

Common mistakes to avoid when buying a term plan

Rupanjali Mitra Basu

A term insurance plan is a popular life insurance product because of the unmatched benefits it endows. It promises your family a lump sum benefit in the event of your untimely demise and that too at very marginal premiums. Which other investment instrument promises you this?

Don’t scratch your heads. No other investment does. That is why term plans have become popular. The benefits promised the low premiums and also the payouts structure have made term plans the part and parcel of everyone’s financial portfolio. However, when buying a term plan, individuals are not careful. They commit some very common mistakes because of lack of knowledge or because of their ignorance. Some common mistakes made include the following:

Find out why term insurance is a must buy

Choosing a low Sum Assured level to save on premiums

The USP of term plans is that they promise a high coverage at very low premiums. Thus, these plans are the only life insurance plans which let you afford a very high coverage level. However, when you buy a term plan you often skimp on the amount of the Sum Assured for saving few hundreds on the premium outgo. This is a mistake. The Sum Assured should be selected based on your lifestyle requirement. It should be sufficient enough to provide for all your financial obligations in case you are not around. If you are not sure about selecting the correct coverage amount there are online term insurance calculators which help. They let you calculate your ideal Sum Assured level based on your financial profile. So, when buying a term plan, choose the optimal level of coverage to ensure financial freedom.

  • Choosing a lower term

Term plans promise to pay the benefit only if death occurs during the selected term of the plan. If you survive the chosen plan tenure there is, usually, no maturity payout. People usually tend to choose a lower tenure which gives them coverage for a lower period. If you are to enjoy maximum coverage under your term plan go for the highest possible tenure. A higher tenure would cover you till a longer age which increases the probability of the plan benefits being paid.

  • Not filling or verifying the proposal form

Very often, when you buy a term plan from an agent or broker, all you do is sign the form without bothering with the details mentioned therein. Even if you do fill your proposal form, you lie about certain details asked in the form. This is a mistake. The proposal form forms the basis of insurance contract based on which your policy is issued. If you do not verify the details or misrepresent any important fact your claim might get jeopardized. Your policy might become null and void if any important fact is not informed to the insurance company. So, whenever buying a term plan, make sure to fill in the proposal form yourself and verify that all the information mentioned therein is true and correct.

  • Buying without comparing

Do you know how many term insurance plans are there in the market? Too many to even count! Every plan, though similar in nature, has different features and benefit structure. Even the premium rates differ across different plans. So, if you buy a term insurance plan without comparing the different plans you are bound to make mistakes. Either you would buy a plan with lesser features or end up paying a higher premium. So, always compare the different term insurance plans before you buy one. If you need help you can find assistance at Turtlemint.com. You can enter your details and find out not only the ideal Sum Assured but also the different premium quotes. You can compare the different premium quotes against the plan’s features and buy the best plan for your needs.

Buying a term plan, though commendable on your part, should be done only after careful consideration. You should avoid making these mistakes if you want the best term insurance experience. Just a little knowledge, some extra effort towards plan comparisons and you can buy the best term insurance plan. The plan would not only give you adequate coverage for an adequate tenure, it would be reasonable on your pockets too.

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

 

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