Tractor Insurance

India is an agriculture-oriented country where more than 70% of its land is under agriculture. Agriculture, therefore, is the primary source of livelihood for most of the population of India. Tractors are an important component of the agriculture process as they help farmers in the cultivation and harvesting process. That is why tractors are very popular and in-demand among farmers and land-owners who use their lands for cultivation purposes. If the tractor faces damage, the farmers face a considerable financial loss. This is why tractor insurance policies become necessary.

Besides the need to cover financial loss, since tractors are a type of vehicle, they need a valid insurance policy on them due to the provisions of the Motor Vehicles Act. Tractor insurance policies are, therefore, compulsory for tractors. Tractor insurance policies are sold by many insurance companies. These policies fall under the commercial motor insurance policies and they offer coverage for farm or commercial tractors.

What is tractor insurance?

A tractor insurance policy is a commercial motor insurance policy which covers tractors against damages suffered. There is also a third party liability coverage wherein damages caused by tractors are also compensated by the policy.

Top 3 Features of tractor insurance policies

Tractor insurance plans have the following salient features –

  1. Usually, a comprehensive tractor insurance policy is offered by insurance companies as a commercial motor insurance policy
  2. The sum insured of the policy is calculated as the market value of the tractor after deducting appropriate depreciation based on the tractor’s age. The sum insured is called Insured Declared Value (IDV)
  3. The policy is issued for a period of one year

Who can buy tractor insurance?

Tractor insurance policies can be bought by legal owners of a tractor who want to secure the financial losses faced when their tractors are damaged and also fulfil the provisions of the Motor Vehicles Act.

What is covered under tractor insurance plans?

Tractor insurance plans, under commercial motor insurance policy section cover the following instances of damages –

  1. Damages suffered by the tractor due to natural disasters like earthquakes, lightning, road slides or landslides, floods, storms, cyclones, etc.
  2. Damages suffered by the tractor due to man-made causes like fire, burglary, theft, strikes, riots, etc.
  3. Third-party liability faced when the tractor physically hurts another individual or when the tractor damages another individual’s property
  4. Personal accident cover for the owner/driver of the tractor which pays a lump sum benefit in case of accidental death and disablement

Add-ons under tractor insurance plans:

Under some tractor insurance plans, you can also find add-ons or optional coverage features. These add-ons are available at an additional premium. Common add-ons which you can choose include the following –

  1. Personal accident cover for a paid driver
  2. Cover for electrical accessories of the tractor
  3. Legal liability towards paid drivers and employees
  4. Coverage for bi-fuel kit
  5. Return to the invoice where the invoice value of the tractor is paid in case of theft or total loss
  6. Protection of the no claim bonus in case of a claim

What is not covered under tractor insurance plans?
The following instances are commonly excluded from the scope of coverage of most commercial motor insurance policy, especially tractor insurance policies:

  1. Depreciation and normal wear and tear of the tractor and its parts due to usage
  2. Any type of electrical or mechanical breakdowns
  3. Violating the limitations of using the tractor and suffering damage due to such violations
  4. Damages suffered when the tractor is being driven without a valid driving license
  5. Damages suffered when the tractor was driven under the influence of alcohol or drugs or if it was driven outside India
  6. Consequential losses suffered after a damage
  7. Losses incurred due to war, rebellion, mutiny and similar perils

How are premiums for commercial motor insurance policy, i.e. tractor insurance plans calculated?
Premiums of a tractor insurance policy are calculated depending on the following factors –

  1. IDV of the policy
  2. Make, model and variant of the tractor
  3. Fuel type
  4. Modifications are done
  5. Age of the tractor
  6. Place of registration
  7. No claim discount in case no claims have been made and the policy is being renewed

How to make a claim under a tractor insurance policy?
To make a claim under your tractor insurance policy, the following steps should be followed –

  1. You should inform the insurance company immediately after a claim occurs
  2. In case of own damage claims, the insurance company usually arranges for an on-the-spot survey of the damages by sending a surveyor. You should not move your vehicle before the survey has been done
  3. Alternatively, the insurer can ask you to take your vehicle to the nearest networked garage where the survey would be done
  4. After the survey has been done the insurer would approve your claim and you can get cashless repairs done
  5. In the case of third party claims, you have to inform the insurance company and also file a police FIR. The claim would then go to the motor accidents tribunal which would specify the financial liability. The liability would, then, be paid by the insurance company
  6. If the tractor is stolen, you should file a police FIR and inform the insurance company. If the police are not able to trace your tractor, the insurance company would pay the IDV and settled your tractor insurance claim

Documents required for commercial motor insurance policy, i.e. tractor insurance claims:

To make a valid claim under your tractor insurance policy, the following documents need to be submitted:

  1. The claim form which should be filled in and signed by the policyholder
  2. RC book of the tractor
  3. Driving license
  4. FIR copy (in case of a third party or theft claims)
  5. Repairs bills in original
  6. Photographs of the damaged tractor
  7. Subrogation letter
  8. Discharge voucher issued by the garage, etc.

Claim settlement under commercial motor insurance policy, i.e. tractor insurance plans

Tractor insurance claims would be settled on a cashless basis if the tractor is repaired at a garage which is tied-up with the insurance company. However, if the repairs are done at a non-networked garage, then you would have to bear the repair expenses initially. Thereafter, when you submit the original bills and claim form, the costs would be reimbursed by the insurance company within 7-10 days of submission of your claim.

How to buy tractor insurance?

To buy commercial vehicle insurance for your tractor, you can approach any insurance company offering the policy. You can buy the policy through the branch office of the company by submitting all the documents of your tractor like the RC book, PUC certificate, invoice, etc. and your KYC documents. The plan can, alternatively, be bought online from the website of the insurance company. To buy online you would have to fill up the application form and pay the premiums online. Once the premiums are paid, the policy would be issued.

Currently, some of the companies which offer tractor insurance in India include the following –

  1. IFFCO Tokio
  2. HDFC Ergo
  3. SBI General Insurance
  4. Magma HDI

Renewing tractor insurance policies

Renewing your tractor insurance policy is quite easy. You can get the policy renewed from the same company by paying the renewal premium. You can also switch insurers and opt for another policy for your tractor. When renewing, you should utilise any no claim bonus that you have under your policy. No claim bonus is a premium discount which the insurance company allows if you have not made any claims under your policy. The discount is allowed after each claim-free year and if there are consecutive claim-free years, the discount also multiplies. This discount lets you avail a discount on the renewal premium and make it more affordable.

 

So, a tractor insurance policy is a popular commercial insurance policy for tractor-owners which covers the damages caused as well as faced by the tractor. The policy pays the financial loss suffered by the owners of a tractor and gives them financial security. So, if you have a tractor which you use for commercial purposes insure it and protect yourself from possible financial losses in case of a contingency.

 

Frequently Asked Questions:

  1. How do I find out the name of the networked garage for cashless repairs?
    The details of the networked garages in your area can be checked online on the insurance company’s website. You can also call up the claim helpline number of the insurance company and find out the closest networked garage for cashless repairs.
  2. Can my tractor insurance claim be rejected?
    Yes, your tractor insurance claim can be rejected by the insurance company. Rejection of claims usually occurs when your policy has lapsed, when you claim for an excluded cover or when the claim process is not properly followed.
  3. Is renewing tractor insurance compulsory?
    As per the Motor Vehicles Act, you need a valid insurance cover on your tractor. So, buying and renewing a tractor insurance policy is necessary to comply with the traffic laws.
  4. If an individual is killed by the tractor, would the insurance company pay a claim?
    Yes, death of a third party is covered under third party liability coverage which is available under tractor insurance plans. Thus, in case of death of an individual, the insurance company would pay the claim as directed by the motor accidents tribunal.

Mobile Phone Insurance

Mobiles have become the part and parcel of the modern generation. It is no longer just a means to talk with people, mobiles today have become multifaceted which allow you to click pictures, chat through messages and even shop online. In fact, mobiles have become so important that many people have not one but two phones in their possession. Mobiles phones have also evolved with various unique and cutting features which make your user experience more enhanced. However, mobile phones are also prone to lose. Theft or loss of the phone, mishandling, water seepage, screen damage, etc. are some of the common threats which mobile phones face. In fact, mobile phone damage is very common. When the damages occur you face considerable financial loss and repairing the phone is not cheap. Given the high-end models which are available in the market, if the phone is damaged you have to incur substantial costs in getting the phone repaired or replaced. Can you bear these costs easily?

Many might not be able to bear the costs easily, so a mobile insurance policy is made available in the market. The policy covers your mobile against possible damages and compensates you for the repair costs that you incur if the mobile is damaged. Let’s understand the policy in details.

What is mobile insurance?

Mobile insurance is an insurance policy which is taken on a mobile phone. The policy covers the loss of phone or the damages suffered by the phone. You can buy a mobile phone insurance policy on your mobile and get covered for the possible damages of the phone.

Features of mobile insurance policies

Mobile insurance plans have the following salient features –

  1. They cover both new and used mobile phones
  2. Smartphones, as well as basic feature phones, can be covered under the policy
  3. Cashless repairs are allowed under many plans
  4. The sum insured is linked to the cost of the phone
  5. The term of the policy can range from 6 months to 12 months

What is covered under mobile insurance?

Mobile insurance policies cover the following types of damages suffered by your mobile phone –

  1. Loss of the phone due to robbery or theft
  2. Any type of accidental damage to the phone
  3. Damages due to liquid seepage
  4. Technical malfunctions in the phone
  5. Screen related damages
  6. Damage because of fire
  7. Replacement or repair of the phone in case of covered damages

Add-ons under mobile insurance

Mobile insurance policies also offer additional coverage benefits which you can select by paying an additional premium. Some commonly available add-ons are as follows –

  • Transit insurance which covers damage to the phone when it is in transit
  • Worldwide coverage which covers the damages suffered anywhere in the world

What is not covered under mobile insurance?

Though a phone insurance policy covers almost all possible damages to the mobile, the following instances of loss or damages would be excluded from coverage –

  • Any type of mysterious loss of the phone
  • Damage to the phone due to climatic changes
  • Theft of the phone when it was left unattended
  • Damages suffered when anyone except the owner was using the phone
  • Pre-existing defects in the phone
  • If you try to deliberately damage the phone
  • Any type of overloaded mobile or an experimental mobile phone

Importance of mobile insurance

Mobile insurance policy becomes useful because of the coverage benefits it provides. Here are some reasons which make mobile insurance an important cover for your phone –

  1. Ease of replacing a lost phone
    When your mobile is stolen or if you lose your phone, which is quite common, you face a considerable financial loss. If your phone was a premium Smartphone, the costs are unimaginable. The insurance policy covers this loss and compensates you financially. This allows you to buy another phone without worrying about your finances.
  2. Coverage for repair costs
    Repair costs can be quite expensive when you drop your phone and damage it or if liquid enters your phone’s internal parts. The costs can go up to tens of thousands which might prove unaffordable. Since a mobile insurance policy covers the repair costs, you don’t have to worry about the financial pinch in case of damages.
  3. Is more comprehensive than warranty
    Mobile phone companies allow you extended warranty which covers damages to the phone. However, these warranties are not operational if you lose your phone or if the phone is stolen. This is where a mobile insurance policy proves beneficial.

These benefits of mobile insurance make the policy important and quite essential in today’s age when dependency on mobile has increased.

Making a claim under mobile insurance

In case your mobile phone suffers any of the covered damages, you can make a claim under your mobile insurance policy. To make a claim, you should follow the below-mentioned steps-

  1. Inform the insurance company immediately of the loss that you suffer. The loss might be damage to the phone or theft of the phone. To inform the company you can call the claim helpline of the company and register your claim. You would be given a claim reference number which you should preserve for the future claim process
  2. Fill up and submit the claim form entering the details of the claim
  3. If your phone has been stolen or if you have lost the phone, file a police FIR with the local police station. The FIR would be necessary for making a theft claim
  4. You might be required to click images of the damages suffered by the phone and send it to the insurance company
  5. The company would then investigate the damage done and the cause of the damage
  6. Based on the inspection of the damage and the claim form, your claim would be approved
  7. If your phone is being repaired, the insurance company might settle the repair costs directly with the mobile service centre if the centre that you selected is an authorized service centre. If not, you would have to pay for the repair costs and get the costs reimbursed from the insurance company
  8. In case of theft or loss of the phone, the insurance company would pay you the sum insured of the mobile insurance policy as a claim

Documents required for mobile insurance claims

To get your mobile insurance claims successfully settled, you would have to submit the following documents to the insurance company –

  1. Filled and signed claim form
  2. Police FIR copy in case of theft or loss of the phone
  3. Invoice of the phone
  4. Policy bond

Companies which offer mobile insurance in India

Mobile insurance policies are offered by a handful of insurance companies in India. These mobile insurance companies and their respective plans are as follows –

Mobile insurance company Name of the plan Salient features 
Go Digit General Insurance Company Mobile Insurance Plan
  • Only screen related damages are covered under the plan
  • The coverage can be taken for 6 months or 12 months
  • Premiums are low and affordable
OneAssist Mobile Protection Plan
  • Original spare parts are used in case of repairs
  • 100% cashless repairs can be availed if you get the phone repaired at an authorized service centre
  • Free pick-up and drop facility for your phone
Bajaj Finserv Mobile Screen Insurance
  • Coverage is allowed for fire-related damages
  • High sum insured can be opted
Home Credit Mobile Protection Plan
  • In case of loss of phone, you get replacement cover wherein you get the same phone
  • Free pick-up and drop facility is allowed under the plan
SyncNScan Mobile Protection Plan
  • Recovery of personal data if the mobile is lost or stolen
  • Facilities of cloud backup, virus protection and finding a lost phone
OneSiteGo Mobile Insurance Plan
  • If the repairs to a damaged phone are not done in time, the company promises free replacement of your damaged phone
  • Different types of plans are available for different coverage needs
Syska Gadhet Secure
  • Three different plans are offered by the company
  • You get coverage for fire and allied perils

Extended warranty vis-à-vis mobile insurance

Many of you feel why invest in a mobile insurance plan when you can buy an extended warranty for your mobile phones. However, the concept of an extended warranty is different from the concept of mobile insurance. Let’s understand how –

Basis of difference  Extended warranty Mobile insurance
Coverage scope The extended warranty only covers damages to the phone. Theft and burglary are not covered Theft and burglary are also covered along with damages to the phone under mobile insurance plans
Coverage for liquid damage An extended warranty might not cover water spillage or seepage Liquid damages are covered under mobile insurance plans
Who offers coverage This is provided by the manufacturer of your mobile phone Insurance policies for phones are offered by insurance companies
Defects in the phone You get coverage for manufacturing defects in the phone Coverage for manufacturing defects or pre-existing defects is not available
Type of phone covered Extended warranties are available only for new phones Second-hand phones can also be covered under mobile insurance plans

How to buy mobile insurance?

You can buy mobile insurance online through the website of insurance companies. The process is simple and quick. You just have to choose the insurer, fill up an online application form and pay the premiums online and the insurance policy would be issued. Alternatively, you can also visit the branch of a mobile insurance company and apply for the policy.

To buy a mobile insurance plan, you would have to submit the following documents –

  1. An application form seeking insurance cover
  2. Invoice of the phone
  3. IMEI number of the phone
  4. Your identity proof

So, secure your mobile phone under a mobile insurance plan and cover yourself against the financial losses suffered when the phone is damaged, lost or stolen. The premiums are very low and you can buy insurance easily without any hassles.

Frequently Asked Questions

  1. I bought the phone from another country. Can I buy mobile insurance in India?
    Yes, you can buy a mobile insurance plan from a company in India even for a phone which was bought in another country. You just need the ownership documents of the phone to buy the policy.
  2. If the mobile phone is completely damaged, would I get covered for the repair costs?
    In case of complete damage of the phone, the insurance company might offer you a replacement phone rather than covering the repair costs.
  3. Can I recover data if my phone is lost?
    Under some insurance policies, there are features of data retrieval from a lost or stolen phone. If you buy such a policy you can recover data from a lost or damaged phone.
  4. Do all companies offer mobile theft insurance?
    No, not all companies offer coverage for theft of the phone. Under some plans, coverage is restricted to screen damages only. You should, therefore, read the coverage details of the policy before buying it.

Medical Travel Insurance

Travelling overseas requires extensive planning irrespective of the travel purpose. Travel medical insurance is an essential part of travelling. Medical emergencies are unexpected and inevitable. Hence, having a financial safety net in the form of travel medical insurance is most crucial to safeguard your journey.

What is travel medical insurance?

Travel medical insurance provides coverage against healthcare expenses that may arise due to sudden illness or health issues or meeting with an accident in a foreign land during the travel. The cost of medical services is extremely expensive across the globe. Hence, it’s wise for every traveller flying abroad to have adequate insurance coverage to extend financial support during any medical emergencies.

How is travel medical insurance different from any other types of insurance?

Travel medical insurance holds a special place in every frequent traveller’s mind. There is not much difference between travel medical insurance plans and travel insurance plans. Having provisions for medical emergencies is a priority. Travel medical insurance plans are specifically crafted to address healthcare needs of travellers. Let’s learn how different it is from other travel insurance plans.

  1. The primary difference is, travel medical insurance plan focuses more on providing healthcare coverage than travel-related coverages. Travel insurance plans also cover medical expenses but mainly cover trip related issues such as loss of baggage, trip cancellation, flight delay and loss of documents etc.
  2. Travel medical insurance plans are issued for the tenure longer than that of regular travel insurance plans
  3. Travel medical insurance plans are priced based on the age, medical history and trip duration of the traveller. Regular travel insurance plans that cover many other things like flight cancellation, trip cancellation, delay etc is mainly based on the cost of the trip. Hence, travel medical insurance plans are relatively economical than regular travel insurance plans.

How to avail travel medical insurance?

As travel and health insurance industry are booming in India, there are numerous plans available for travellers. Choosing the right one may take some time. You may need to do research on benefits provides, features included in the policy and compare the cost. After analysing on cost and benefit basis, you can easily purchase travel medical insurance plans online within few clicks. Insurance technology firms provide great platform for comparison of a wide array of travel health plans from various insurance companies. Once you select the right plan to purchase online, your major work is done.

Following are the steps to follow:

  1. Enter your personal details and any other relevant information as required for filling up the insurance application.
  2. Mention the coverage requirement and medical history correctly.
  3. Submit documents, if any required.
  4. Make a payment online and proceed to complete the buying process.

Documents required for buying travel medical insurance

Travel medical insurance plans can be purchased online instantly without any paperwork involved. However, you need to keep your personal details, health history and travel details ready to make an application.

Types of travel medical insurance plans

There are various types of medical travel insurance plans are available in India. Travel medical insurance plans are categorised as follows:

  1. Individual travel medical insurance plan:
    The plan provides coverage to an insured individual for any unforeseen medical emergencies that may arise during the travel period. Travel medical insurance plan issued to an individual will also cover other travel-related risks, however, concentrates primarily on healthcare.
  2. Family travel medical insurance plan:
    In case you are travelling with the family, family travel medical insurance plan can be availed to protect the entire family within a single policy. Basically, it’s a policy that covers all the members of the family with one sum assured which can be utilised by any insured member of the family during health emergencies in the travel period. The plan also covers family against various travel risks.
  3. Annual travel medical insurance plan:
    Annual travel medical insurance plans are specifically designed and suitable for travellers who travel multiple times during the year. Hence, annual policy provides year-round protection against any health contingencies, dental problems, evacuation requirements that may arise during the travel. Other travel-related risks such as delay and cancellation will be included in the policy
  4. Senior citizen travel medical insurance plan:
    Health is a major concern for senior citizen travellers. Travel medical insurance plan exclusively designed for senior citizens provide financial security against various unforeseen health conditions during the travel. The policy will also cover other travel-related risks
  5. Student travel medical insurance plan:
    These plans are designed to address the unique needs of students travelling abroad for studies. The policy covers hospital and medical expenses during the policy period along with other non-medical expenses. When it comes to students, the coverage provided is extensive.

Medical cover provided under travel medical insurance plans

Following are the medical coverage offered under travel medical insurance plans:

  1. Medical expenses cover:
    Hospitalisation/ medical expenses incurred for an illness contracted or injuries sustained on a trip during the period of insurance. Some policies will cover pre and post hospitalisation expenses depending on the terms and conditions of the policy.
  2. Medical evacuation:
    The travel medical insurance policy will cover the cost incurred on evacuation services, transportation expenses or ambulance charges reasonably incurred to take insured to the hospital is covered.
  3. Additional benefits:
    Some of the travel medical insurance policies may include additional benefits such as daily cash allowance for hospitalisation, repatriation of remains and pre-existing illnesses extension etc. Some benefits can be added optionally at an extra cost of the premium.

However, these policies also cover other non-medical expenses such as trip interruption and cancellation, burglary, missed flight, compassionate visit, trip delay and emergency interruption etc.

Best #5 travel medical insurance plans:

There are a variety of travel medical insurance plans available with various unique features and coverage. You can compare and choose the best suitable plan based on your coverage requirement, affordability and benefits requirements. We have listed down some of the best travel medical plans available in the market

Plan Name Coverage Details
  1. Bajaj Allianz Travel Health Insurance Plan
  • Coverage is provided up to 75 years of age
  • No pre-medical check-up is needed
  • The policy covers medical expenses during the travel for injury and illness along with medical evacuation cover.
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and emergency financial assistance etc
  1. Apollo Munich Travel Health Insurance Plan
  • Coverage is provided from 6 months to 70 years
  • No pre-medical check-up is needed
  • The policy provides coverage against unforeseen medical expenses, personal accident cover during travel
  • The policy covers non-medical expenses such as loss/delay of baggage, hijack distress and passport loss etc
  1. Cholamandalam Travel Health Insurance Plan
  • Coverage is provided from 3 months to 80 years
  • Pre-medical check-ups are required for applicants above 65 years of age
  • The policy provides medical coverage for sudden illness, medical evacuation and accidental injury
  • Non-medical coverage includes loss/delay of baggage, hijack distress and passport loss etc
  1. HDFC ERGO Travel Health Insurance Plan
  • Coverage is provided from 3 months to 70 years of age
  • No pre-medical check-up is needed
  • The policy provides medical cover for medical emergencies due to illness, personal accident cover, daily hospital cash, dental treatment and emergency evacuation during the travel
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and hijack distress etc
  1. TATA AIG Travel Health Insurance Plan
  • Coverage is provided up to 70 years of age
  • No pre-medical check-up is needed
  • The policy covers medical expenses during the travel for injury and illness along with personal accident cover and emergency evacuation
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and personal liability, hijack distress etc

Frequently Asked Question (FAQs)

  1. Is travel medical insurance mandatory?
    No. Though travel medical insurance is an important necessity, it’s not mandatory. However, some of the countries such as Australian countries and Schengen countries have made it mandatory for visiting travellers.
  2. Can travel medical insurance plans be extended?
    Yes. Travel medical insurance plans can be extended in case your travel is extended for any reason.
  3. Does travel medical insurance plans cover dental treatment expenses?
    Yes. Dental treatments availed due to an injury or an accident are covered under travel medical insurance plans.
  4. How am I covered under the travel medical insurance plan for accidental injuries/disabilities?
    In case you meet with an accident during travel and that results in injury or disability, your travel medical insurance plan will compensate for the loss and for medical treatments needed up to the limit specified in the policy.
  5. Does travel medical insurance plan offers the cashless facility for medical cover?
    Yes. Medical expenses under the plan for sudden illnesses and injuries are covered in a cashless manner. There are also daily hospital allowances provided under some of the travel medical insurance policies.

Insurance claims Process

Insurance policies promise compensation for the financial loss that you suffer in case of emergencies which are covered under the policy. You buy an insurance policy for this promise and so when the covered contingency occurs, you expect the insurer to fulfil its promise and settle your claims.

What is an insurance claim?

Claim in an insurance policy is when you make a demand on the insurance company for payment of the policy benefits. A claim occurs when the event, which the policy covers, happens and such happening causes a financial loss. If the claim is covered under the insurance policy, the insurer pays the benefits promised under the plan and covers your financial loss.

When it comes to insurance claims, you are supposed to follow a specific process to get your claim settled. This insurance claim process is different for different types of insurance policies. So, let’s understand the insurance claim process for some of the most popular types of insurance plans –

Insurance claims under motor insurance policies –

Motor insurance policies can be car insurance plans or bike insurance plans. The insurance claim process for both car insurance and bike insurance is the same. Let’s understand what the process is –

Under motor insurance policies, there are two types of claims – third party liability claims or own damage claims. The insurance claim process for both these instances is different. Here’s what is the process under each instance involves –

  1. Third party claims:Third party liability claims occur when any other individual is hurt or killed by your vehicle or if any third party property is damaged. The insurance claim process for third party claims is as follows –
    • You should inform the insurance company immediately of the claim
    • File an FIR with the local police authority
    • The claim would be taken to the motor accidents tribunal which would pass a ruling on the financial liability that you face
    • Depending on the ruling of the tribunal, the insurance company would settle the claim
  2. Own damage claimsOwn damage insurance claim means when your car or bike itself suffers damage. Own damage claims can, further, be subdivided into two types – damages suffered by the vehicle or theft of the vehicle. Here’s the insurance claim process for each –
    • Damages suffered by the car or bike:
      1. Inform the insurance company immediately of the damage
      2. The company would then provide you the details of the nearest preferred garage where you can take your vehicle
      3. Once your vehicle is in the garage, the company’s surveyor would visit and assess the damages. After assessing the damages the claim report would be prepared
      4. Depending on the claim report submitted by the surveyor, the insurance company approves the repairs
      5. Once the repairs are approved, the vehicle is repaired. The company pays the repair costs directly to the garage and the claim is settled on a cashless basis
      6. If, however, you get your car repaired at a non-networked garage, you would have to bear the repair costs and the insurance company would then reimburse the costs to you when you submit all the bills
    • Theft of the car or bike:
      1. If your vehicle is stolen, you should immediately inform the insurance company of the theft
      2. A police FIR is also mandatory
      3. Once the FIR is filed, the police try and locate your vehicle. If they fail, they would issue a non-traceable report to you
      4. You would have to submit this report to the insurance company along with the claim form
      5. The insurance company would then pay you the Insured Declared Value (IDV) of your insurance policy and the claim would be settled

Documents required for vehicle insurance claims

In case of vehicle insurance claims, the following documents would have to be submitted –

  1. The RC book of the vehicle
  2. Driving license
  3. PUC certificate
  4. Claim form which should be duly filled and signed
  5. Police FIR, wherever necessary
  6. Identity proof of the policyholder
  7. Any other documents as required by the insurance company

Insurance claims under health insurance policies

The insurance claim process under health insurance policies is as follows –

  1. To avail a cashless claim you should seek treatment at a hospital which is tied-up with the insurance company. In a cashless claim, the insurer settles your hospital bills directly with the hospital and you don’t have to shoulder the financial burden
  2. You have to get the pre-authorization form, fill it and submit it to get cashless claim settlements. The form is available at the hospital. You should submit the form within 24 hours of emergency hospitalisation and 3-4 days before planned hospitalisation.
  3. The insurance company assesses the pre-authorization claim form and approves cashless claims
  4. The hospital bills are, then, paid by the insurance company directly
  5. After you are discharged, you should fill up a claim form and submit it with the discharge summary and all the medical documents
  6. If you take treatments at a non-networked hospital, you have to bear the medical expenses yourself. You can then submit the claim form and all the medical bills and reports and the insurance company would reimburse you for the expenses incurred

Documents required for health insurance claims

For getting a settlement of your health insurance claim, the following documents would be required:

  1. Claim form which should be completely filled and submitted
  2. Discharge summary from the hospital
  3. Police FIR (in case of accidental claims)
  4. All medical bills and receipts
  5. All medical documents and investigative reports
  6. Identity proof of the insured

How are health insurance claims handled?

Health insurance claims can be handled by either TPAs or the insurance company’s in-house claim settlement team. Let’s understand the difference –

  1. TPAsTPAs mean Third Party Administrators. TPAs are specific companies which help facilitate a health insurance claim between you and the company. You make a claim to the TPA which would assess your claim and then forward it to the insurance company. The insurance company would then reject or settle your insurance claim. TPAs are, therefore, middlemen in the insurance claim process.
  2. In-house claim departmentIn case of in-house claim department, the insurance company does not engage the services of a TPA. Instead, the company creates a dedicated claim handling department itself. You can, therefore, directly report your insurance claim to the insurance company through its in-house claim settlement department. The department would then assess your claim and make a decision on it.
  3. Which is better: TPA or in-house Health Insurance Claim?In-house claim settlement departments are better as your claims get settled within a shorter period of time compared to TPAs. The company might also offer you value-added benefits for your claims through its claim settlement department. In case of TPAs, they are tasked only to act as middlemen. They cannot accept or reject your claim. So, if a large number of claims get piled with TPAs, your insurance claim process would become too long and time-consuming. That is why try and buy a health insurance policy from a company which has an in-house claim settlement department.

Insurance claims under life insurance policies

Under life insurance plans, insurance claims are categorised under the following two heads –

  1. Maturity claimsThis is when the term of the plan comes to an end and you are alive to collect the plan benefits.
    • Insurance claims process for maturity claims:
      1. Maturity claims are initiated by the insurance company itself as the policy approached maturity
      2. You have to submit a maturity discharge form and the policy bond to receive the claim
      3. Once the documents are submitted, the claim would be credited to your bank account
    • Documents required for maturity claims:
      1. Maturity claim form
      2. Policy bond
      3. Your identity proof
      4. Your bank account details for receiving the maturity proceeds
  • Death claimsIn case of death during the policy tenure, death claims occur. Death claims are collected by the nominee whom you appoint in your insurance policy.
    • Insurance claim process for death claims:
      1. The nominee has to inform the insurance company about the death of the insured
      2. A claim form should be filled and submitted and you would also have to submit various relevant documents
      3. The company would verify the claim and the documents submitted
      4. Once verified, the company would pay the claim directly to the nominee’s bank account
    • Documents required for death claims:
      1. Claim form, filled and signed by the nominee
      2. Identity proof of the nominee
      3. Original Policy bond
      4. Death certificate
      5. Police FIR (in case of accidental death)
      6. Medical reports (if available)
      7. Coroner’s report, punchnama, post mortem report, etc. (in case of accidental deaths)

So, these are the insurance claim processes of some of the most popular insurance plans. understand the claim process so that if you face an insurance claim you would know exactly how to get your claims settled and the documents required for the same. Alternatively, you can also contact Turtlemint’s team for your insurance claim settlements. Turtlemint has a dedicated claims handling department which gets your claims settled for you. Turtlemint’s claim department handles the insurance claim process making it convenient for you. Just intimate the claim by calling Turtlemint’s helpline at 1800 266 0101 or by sending an email to claims@turtlemint.com . Then you can relax and Turtlemint would ensure that your claims are settled at the earliest.

Difference Between Sum Assured And Sum Insured

When it comes to the concept of insurance, there are some technicalities which you should understand. These technicalities dictate the terms and conditions of the policy. Until and unless you understand the terms of the policy, understanding the policy benefits might prove to be a challenge. Take for instance the concepts of sum assured and sum insured. Both these terms determine the coverage level of an insurance policy and so you might believe them to be interchangeable. But are they interchangeable?

No, they are not. Sum insured and sum assured are two different concepts which are used in different types of insurance policies. Let’s understand sum insured and sum assured meaning and differences –

What is sum assured?

Sum assured in insurance represents the coverage of a life insurance policy. This is the benefit which is paid in case of death or maturity of the plan.

What is sum insured?

Sum insured, on the other hand, is the level of coverage under general insurance policies. This amount shows the maximum liability undertaken by the insurance company to compensate you in case of a covered eventuality.

Factors to consider when deciding sum assured 

After knowing the sum assured meaning, knowledge of choosing the right sum assured is also important. So, when choosing the sum assured of your life insurance policy, here are some factors which you should consider –

  • Your financial responsibilities

    If you have higher financial responsibilities, the sum assured of your life insurance policy should be high so that it can fulfil such responsibilities. So, when choosing the sum assured, understand your financial needs.

  • Number of dependents

    If your family depends on you for their financial needs, you need a high sum assured so that in your absence their needs can be easily met by the insurance policy. The more the number of dependents that you have, the higher should be the sum assured.

  • Existing assets

    If you have existing investments, the requirement of the sum assured reduces. Your investments also help in fulfilment of your financial goals and so you should consider them when picking the sum assured. 

  • Existing liabilities

    You should have a sufficient coverage in your life insurance plan if you have liabilities to pay off. The higher the liabilities, the higher should be the sum assured.

  • Age

    When you are young, your human live value is more because you are expected to work longer and earn a high amount of income during your lifetime. So, when choosing sum assured, opt for a high amount if you are young.

  • Affordability 

    A high sum assured in insurance leads to a high premium. So, you should ensure that the sum assured of the policy is optimal enough to cover your financial responsibilities and affordable enough on your pockets.

Factors to consider when deciding the sum insured

When choosing the sum insured in a general insurance policy, the following factors should be considered –

  • The value of the asset being insured

    If you are insuring an asset under the policy, the sum insured should be equal to the value of the asset so that in case of loss or damage, you get compensated for the actual loss suffered. For instance, if you are buying insurance for your car, the sum insured of the policy should be closest to the market value of your car so that you would be optimally compensated in case of claims.

  • The expected amount of loss

    In case of health insurance plans, assessing the value of the asset is not possible since your health risks are insured. In such cases, you should ascertain the expected medical expenses which you would incur in an emergency. The sum insured should be sufficient enough to cover the expensive medical treatments and costs.

  • Number of members covered under the policy

    If you are buying a family floater health plan, the sum insured should be sufficient enough to provide optimal coverage to every insured family member. So, in family floater plans, a high sum insured should be availed.

  • Inflation

    Inflation increases the cost of goods and services and when choosing the sum insured, this inflationary trend should be kept in mind. The sum insured should be sufficient enough to cover the loss which has increased due to inflation.

  • Affordability

    The sum insured directly impacts the premium of the general insurance policy. Thus, while a high sum insured is needed, you should ensure that the sum insured is also affordable on your pockets.

How sum assured affects premium amount

The sum assured has a direct impact on the amount of premium which you have to pay for your life insurance policy. If you opt for a high sum assured, the premium amount would also increase. Premium rates for life insurance plans, except unit linked plans, are expressed per INR 1000 of the sum assured. So, if the premium is INR 40 per INR 1000 sum assured, if you choose a sum assured of INR 1 lakh the premium would be INR 4,000 and if the sum assured is increased to INR 10 lakhs, the premium would become INR 40, 000. Moreover, under many plans, you can avail a premium discount if you choose a high level of sum assured. Thus, depending on the sum assured chosen, the premium discount is allowed.

In case of unit linked plans, however, the amount of premium that you pay determines the sum assured. The sum assured, in such plans, is expressed as a multiple of the premium amount. Usually, the multiple is expressed as 10 times the premium paid. So, if you pay an annual premium of INR 10, 000, the sum assured would become INR 1 lakh.

Thus, the sum assured and premium of a life insurance policy are interconnected.

How sum insured affects the premium amount?

Just like in life insurance plans, general insurance plan premiums are also directly impacted by the sum insured that you choose. The higher the sum insured, the higher is the premium charged. Moreover, there is no discount based on the level of the sum insured chosen in general insurance plans. 

Thus, when you invest in a general insurance policy, know that the amount of sum insured that you choose would directly impact your premium. Be careful when choosing the sum insured and ensure that the sum insured that you have chosen covers you completely and also proves to be light on your pockets.

Top 3 differences between sum assured and sum insured

Now that you know what is sum assured and what is sum insured you should know how they differ from one another. The difference between sum insured and sum assured meaning can be analysed in the following table –

Points of difference

Sum assured

Sum insured 

Application 

The term is used in life insurance policies 

The term is used in general insurance policies

Nature 

Sum assured in insurance represents a pre-determined benefit which is fixed. In case of death or maturity, a life insurance policy pays the promised sum assured irrespective of the loss suffered

Sum insured implies that the principle of indemnity would apply in case of a claim. The principle of indemnity pays the actual loss which the policyholder suffers. This loss might be lower than the sum insured of the plan

Relevance 

The concept of sum assured in insurance becomes relevant because the economic value of human life cannot be measured. Thus, in case of death, the cost of loss of life cannot be ascertained. The policy, therefore, pays the coverage amount which the policyholder chose when buying the policy

General insurance policies are taken on assets or to cover financial loss suffered in certain events. The value of the asset or the extent of loss suffered can be easily ascertained. That is why general insurance policies follow the principle of indemnity and use the concept of sum insured.

Illustration:

In a life insurance policy, if the cover is bought for INR 10 lakhs and the insured dies during the policy tenure, the death benefit would be INR 10 lakhs which is the sum assured of the policy.

In case of general insurance policies, say health insurance, let’s assume the coverage level to be INR 5 lakhs. When the insured is hospitalised, the medical bills amount to INR 3 lakhs. In this case, though the sum insured is INR 5 lakhs, the claim payable would only be limited to INR 3 lakhs which is the actual loss suffered. However, if the hospital bills amount to INR 6 lakhs, the claim would be INR 5 lakhs which is the maximum liability insured by the insurance company.

So, the concepts of sum insured and sum assured in insurance are different. Understand what is sum assured and what is sum insured and their relative differences so that you know what your insurance policy would pay in a claim.

Frequently Asked Questions

  1. Why sum assured is less than total premium?

    The sum assured represents the coverage amount and the premium represents the cost of insuring your mortality risk. The probability of death and/or maturity is what determines the premium and since this probability is a small number, the premium is always less than the sum assured.

  2. What is minimum sum assured in term insurance?

    The minimum amount of sum assured in term insurance plans varies across insurance companies and the term insurance plans that they offer. Some companies might offer a minimum sum assured starting from INR 25, 000 or INR 50, 000 while under some plans the minimum sum assured can start from INR 25 lakhs. So, the minimum value varies across plans and you should check your term plan to know the minimum available amount of sum assured.

  3. How is maturity sum assured calculated?

    Under most plans the maturity sum assured is the sum assured which you choose when buying the policy. Some plans offer maturity sum assured depending on the amount of premium that you have paid and the policy tenure. Under unit linked plans, however, there is no concept of maturity sum assured. You get the available fund value when the plan matures.

ULIP vs ELSS: Which one is for you?

When it comes to investing your hard-earned money most of you look for avenues which promise the best returns. This is where the capital market holds attraction as it allows you to avail good returns which are inflation-adjusted to fulfil your financial goals. Besides the attraction of good returns, capital market instruments also gives you flexibility in managing your investments. Given these benefits, many of you invest in different types of investment avenues which are market-linked.

Capital Market is a portion of the financial system that usually deals with the equity market, stocks, bonds as well as other long-term investments.

Two of the most popular market-linked investment avenues are Unit Linked Insurance Plans (ULIPs) and Equity Linked Savings Schemes (ELSS). While ULIPs are offered by life insurance companies, ELSS schemes are mutual fund schemes which are offered by mutual fund houses. Both these avenues work in a similar manner wherein the money that you invest is invested in market-linked funds which give you market-linked returns. But does this similarity make ULIPs and ELSS same?

No, it does not. ULIPs and ELSS are completely different from one another even though they are both market-linked investment tools. Let’s understand how –

 What are ULIPs?

ULIPs are a type of life insurance plan offered by life insurers. Under this plan, the premium that you pay is invested in a fund that you choose. There are different funds with different risk profiles and you can choose any fund as per your investment needs. The funds, in turn, invest their portfolio in different securities of the capital market. After you buy a ULIP, your invested premiums grow as per the performance of the market. In case of death during the policy tenure, you get higher of the sum assured or the fund value. If, on the other hand, you survive the policy tenure, you get the maturity benefit which is the fund value.

Salient features of ULIPs

ULIPs have the following salient features –

  1. They provide both market-linked returns as well as insurance cover
  2. You can withdraw from the policy partially after the first five years have been completed
  3. You can also change the investment funds whenever you want through the switching facility available under the policy
  4. Premiums can be paid at once, for a limited period or for the entire policy tenure
  5. You can also pay additional premiums through top-ups
  6. You can decide the amount of premium that you want to pay, the policy term and the investment tenure. The sum assured is decided based on your age and premium amount
  7. On maturity, you can choose to receive the maturity benefit in instalments over a period of 5 years
  8. Different types of ULIPs are available for different financial needs like child ULIPs, pension ULIPs, savings ULIPs, etc.
  9. The premium that you invest in ULIPs is allowed as a deduction under Section 80C of the Income Tax Act up to INR 1.5 lakhs
  10. The maturity or death benefit received is also allowed as a tax-free income. The full income is exempted from tax under Section 10 (10D)

What is ELSS?

ELSS schemes are mutual fund schemes which also invest in the capital market. They are equity-oriented funds wherein at least 65% of the fund portfolio is invested in equities. The objective of the scheme is to yield equity-oriented returns and also give a tax advantage.

Salient features of ELSS schemes

ELSS schemes have the following salient features –

  1. There is a lock-in period of 3 years from the date of investment. You cannot redeem your investment within this lock-in period
  2. The money invested in ELSS schemes is allowed as a deduction under Section 80C up to INR 1.5 lakhs
  3. You can invest in ELSS schemes through a lump sum investment or through regular monthly investments in the form of Systematic Investment Plans (SIPs)
  4. The returns that you earn are exempted from tax if they are up to INR 1 lakh per annum. For returns exceeding INR 1 lakh a flat tax of 10% if charged on the excess.
    This basically means, if you redeem your investments in a particular financial year where the returns are upto INR 1 lakh, then you do not need to pay any tax. However, if your returns (i.e. capital gain over investment) is more than INR 1 lakh, in that particular year, then you need to pay 10% on the amount over INR 1 lakh.
    For example, your investment amount is INR 5 lakhs and when you want to redeem the same, the amount is INR 6.5 lakhs. So, INR 1.5 lakhs is considered as “returns” and if you redeem the entire amount, then you would have to pay 10% of INR 50,000 (excess of INR 1 lakh).
    However, if you redeem the amount is 2 financial years, i.e. INR 75000 of returns in 1 year and the remaining INR 75000 in the next, then you would not have to pay any taxes.

ULIPs vs ELSS – the tax perspective

Though ULIPs and ELSS are very different, the one thing that truly sets them apart is their individual tax implication. Let’s understand how –

    1. ULIPs vs ELSS – tax implication on investmentWhen it comes to investments, both ULIPs and ELSS schemes allow deduction under Section 80C. So, in both cases, your investment amount would be considered as a tax deduction U/C 80C upto INR 1.5 lakhs a year.This is the primary reason why many investors choose these two investment options to reduce their tax outgoes.
    2. ULIPs vs ELSS – tax implication on returnsThis is where the difference is marked. While ULIPs allow you completely tax-free returns, ELSS schemes don’t. As per the latest changes made in the Union Budget of 2018, returns exceeding INR 1 lakh would be taxed at 10% for equity-oriented investment schemes. Since ELSS schemes are equity-linked, if your returns are more than INR 1 lakh, you would have to pay tax on the returns exceeding INR 1 lakh. So, if you earn a return of INR 1.5 lakhs on your ULIP investments, no tax would be payable on it. However, the same return under ELSS schemes would result in a tax of INR 5000 (10% of INR 50,000).

This tax implication tilts the scales in favour of ULIPs.

    1. ULIPs vs ELSS – tax implication on partial withdrawals and surrendersULIPs allow partial withdrawals and surrenders after the first five years of the plan are over. These partial withdrawals and surrenders are also tax-free in your hands.Under ELSS schemes, however, any partial withdrawal or surrender that you do is treated as redemption. This redemption would be taxable if the returns exceed INR 1 lakh, the same rule which is applicable on the returns earned from ELSS schemes.
    2. ULIPs vs ELSS – tax implication on switchingUnder ULIPs you can change the investment fund if the market is volatile. You would not have to pay any type of tax on the amount that you switch between funds.Under ELSS schemes, switching is also treated as redemption. If you are withdrawing from one scheme and investing into another, the amount withdrawn will be taxed if the returns are in excess of INR 1 lakh.

      So, while ULIPs and ELSS schemes give the same tax benefits on investments, it is in other scenarios when ULIPs prove to be a better investment option that ELSS schemes.

      ULIPs vs ELSS – other differences 

      Besides the all-too-important tax angle, ULIPs and ELSS schemes have other differences too. These include the following –

      Basis of difference ULIPs ELSS
      Type of funds ULIPs offer all types of investment funds – equity, debt, balanced, money market, etc. You can choose any one fund or a combination of funds as per your risk appetite. ULIPs are, therefore, suitable for all types of investors ELSS is an equity-linked fund which is suitable for the risk-loving investors. You cannot invest in debt instruments when you choose ELSS schemes and so the scheme is not ideal for risk-averse investors 
      Lock-in duration 5 years 3 years
      Financial needs met ULIPs can be issued as child ULIPS wherein they secure the financial future of the child even in the absence of the parent. There are also pension ULIPs which create a series of regular income after retirement. Thus, different types of ULIPs are available for fulfilling different types of financial needs ELSS investments are not linked to specific needs. You can invest in ELSS funds and use the returns for meeting any type of financial need that you have
      Charges  ULIPs include a range of charges like premium allocation charge, policy administration charge, fund management charge, mortality charge, etc. Only entry load and exit loads are applicable in case of ELSS funds
      Insurance coverage ULIPs provide insurance coverage  Insurance coverage is not provided under ELSS schemes
      Regulated by ULIPs are offered by insurance companies which are regulated by the IRDA ELSS are offered by mutual fund houses which are regulated by SEBI
      Risk  Risk depends on the type of investment fund selected and how the fund is managed through switching Risk is high since ELSS invests primarily in equity oriented securities

ULIPs vs ELSS – which one to choose?

Now you know the meaning and features of ULIPs and ELSS and also the points on which they differ. To choose you should assess your investment requirements. You can choose ELSS schemes when –

  1. You have a short-term investment horizon
  2. You don’t mind taking risks
  3. You want lower charges to be deducted from your investment
  4. You don’t need insurance coverage

ULIPs, on the other hand, prove suitable when – 

  • You need an insurance cover
  • You have a long-term investment horizon
  • You want to manage your investments as per the market movements
  • You want to save the maximum possible tax

So, assess these factors and then make your choice between ULIPs and ELSS. Both of these investment avenues give market-linked returns but they are quite different from one another. Understand their differences and see which avenue suits your investment strategy and then choose the best alternative.

Frequently Asked Questions

  1. Is there any charge on partial withdrawal?Partial withdrawals, up to a specified limit, are usually free under most unit linked plans. However, under some plans there might be a charge applicable. You should check the charges before making a withdrawal
  2. Can I surrender a ULIP before the completion of five years?No, ULIPs can be surrendered only after the completion of the first 5 years. If you surrender beforehand, the fund value would be transferred to a discontinued policy fund where it would remain till five years are over. Once the plan completes five years, you would get the fund value available in the discontinued policy fund.
  3. Are only ELSS returns taxed at 10% if they exceed INR 1 lakh?No, the aggregate return which you earn in a financial year from equity oriented investments like equity mutual funds, ELSS, equity shares, etc. are subject to a tax of 10% if they exceed INR 1 lakh.
  4. What are the entry and exit loads?Entry load is the charge which is deducted from your investment when you invest in a mutual fund scheme. Exit load is the charge which is deducted from your fund value when you redeem your mutual fund scheme.

Title insurance in india

Buying your dream home? You may need to consider title insurance for protecting yourself from financial loss that may trigger due to ownership issues. Real estate is one of the fastest-growing sectors in India. The RERA (Real Estate Regulation and Development Act), 2016 makes it mandatory for every developer to have title insurance for all the projects in order to protect the property buyers. In this article, let’s learn about title insurance and its importance.

What is title insurance?

Title insurance is indemnity insurance that protects the holder of the title from financial downfall sustained from the defective title of the land or property. Basically, the title insurance policy provides protection to mortgage lenders and property buyers. During the sale transaction, if the title disputes arise, the title insurance company will be responsible for financial losses and legal damages caused. 

How do title insurance works?

‘Title’ in real estate refers to legal ownership to the property. All titles are not ‘clean’. When you apply for title insurance as a seller or as a lender, the title insurance company first verifies whether the title is clean or not. The title insurance company ensures there are no undisclosed heirs to the property or land, no pending legal actions, no unpaid taxes and no fraud related to the title of the property. After verification, title insurance company contracts with an underwriting firm to issue a title insurance policy that will pay for your financial losses in case anyone challenges your title and the policy compensates you for your equity if you lose.

Coverage offered under a title insurance

For a one-time premium, the title insurance policy provides coverage for the following:

  • Title defects that prevent one from having ‘clean’ ownership of the property
  • Existing lawsuits or liens on the property’s title
  • Forgery of documents and fraud related to the title
  • Errors in public records and surveys
  • Encroachment issues

Types of title insurance

Title insurance can be purchased for both commercial and residential property. Basically, there are two types of title insurance policies:

  • Lender’s title insurance: Lender’s title insurance is purchased by the lender (such as banks and financial institution) to avail financial protection against any losses that may arise due to the property’s title related issue
  • Owner’s title insurance: Owner’s title insurance is bought by the owner of the property to have protection against financial losses that may arise due to invalid property mortgage

Cost of title insurance

Cost or premium for title insurance may vary depending on the insurance company chosen by you and on the basis of your property valuation. 

Importance of title insurance

Every time a property is sold, there is a change in the title also. During this process of transmission, issues related to the title may arise at any point. Defective titles can give rise to financial downfalls for parties involved. This is where title insurance policy’s role comes into play. Title insurance is necessary for the following reasons:

  • Title insurance protects the investment in the real estate market and provides financial protection against losses arising out of the defective title.
  • Title insurance reduces the risk involved in real estate transactions
  • Real estate investment will be accelerated with clear process and protection offered by the title insurance
  • Legal damages and costs are covered by title insurance

How to purchase title insurance?

An escrow company or a closing agent initiates the process of title insurance on completion of the property purchase agreement. In India, there are only a few companies offering title insurance as it’s a one of its kind product in the insurance market.

Frequently Asked Questions (FAQs)

  1. How much title insurance coverage do I need?Amount of coverage needed under title insurance may depend on property value and the party buying the cover. In case of owner’s title insurance, coverage is provided against frauds, undisclosed heirs, forgery and errors. In case of lender’s title insurance, coverage is taken on the property or mortgage.
  2. What is Escrow?Escrow Company is a neutral third party that takes all the securities measures in a real estate transaction and ensures the transaction take place smoothly. Basically, it protects seller, buyer and lender involved in real estate transaction.
  3. What is the time period of title insurance?Title insurance coverage lasts as long as the owner or the heir owns the land or until the loan is paid off. 
  4. Is title insurance a renewable policy?You have to make one-time premium payment to avail title insurance cover and there is no renewal for the policy. Only if the additional cover is needed later, the premium needs to be paid.

80D Tax Benefits

Tax is a compulsory liability for any income-earning citizen of the country. System of taxation in India dates back to ancient times. There are two types of taxes levied in India –direct and indirect tax. System of taxation is based on the theory of maximum social welfare. In India, levying, administration, collection and recovery of tax is regulated by the Income Tax Act, 1961 which was passed in consultation with the Ministry of Law. Income Tax Act has provided various provisions for levying income tax for both incomes received and yet to be received.

Income arising to any person is classified under various headers for the purpose of taxation and treated differently as per the provisions of the Income Tax Act, 1961. There are also provisions for taxpayers to an avail tax deduction to bring down the total taxable income and reduce the payment of tax. In this article, let’s learn about tax benefits available under Section 80D of the Income Tax Act, 1961.

Applicability of Section 80D

Section 80D of the Income Tax Act, 1961 provides for the deduction of tax from total taxable income for the payment of medical insurance premium paid by an individual or a Hindu Undivided Family (HUF). The tax deduction under Section 80D is over and above the limit of deduction under Section 80C/CCC/CCD of the IT Act. For individuals, tax deduction under Section 80D can be availed for the medical insurance premium paid for insuring self, spouse, dependent children and parents. For HUF, tax deduction under Section 80D can be availed for the medical insurance premium paid for any member of the Hindu Undivided Family.

Quantum of tax deduction allowed under Section 80D of the Income Tax Act, 1961

Tax deductions allowed under Section 80D varies for each category. Let’s take a look

    • For individual: An individual can avail tax benefit under Section 80D of the Income Tax Act for the payment of medical insurance premium for self, spouse, dependent children and for parents. Up to INR 25,000 can claim for the medical insurance of self, spouse and dependent children. For insuring parents, an additional benefit of up to INR 25,000 can be availed if parents are aged below 60 years. In case, parents are above 60 years of age, the limit is INR 50,000.
    • For HUF: HUF members can avail tax benefit under Section 80D of the Income Tax Act for the payment of medical insurance premium of up to INR 25,000

Below table indicates the benefits available for each category in different scenarios.

Scenarios The maximum premium for self, spouse and dependent children Maximum premium for parents (dependent/non-dependent) Total deductions available under Section 80D of the IT Act
All members of the family(self, spouse, children and parents) < 60 years of age INR 25,000 INR 25,000 INR 50,000
Self, spouse and children < 60 years age

Either of the parents > 60 years age

INR 25,000 INR 50,000 INR 75,000
Self > 60 years age

Spouse and children < 60 years of age

Parents > 60 years age

INR 50,000 INR 50,000 INR 1,00,000
Members of Hindu Undivided Family INR 25,000 INR 25,000

Let us understand this with an example:

Rahul is 37 years old:

Health Insurance Premium Paid Tax eligibility U/S 80D Rahul’s Tax Exemption
Premium for self/spouse/children INR 32000 INR 25000 INR 25000 (Upto the 80D limit)
Premium for his father (66 years) INR 37000 INR 50000 INR 37000 (Total premium paid since premium paid<80D limit)
Total INR 69000 INR 75000 INR 62000

The tax deduction limit provided under Section 80D of the Income Tax Act, 1961 includes some more things mentioned below.

  • Preventive health check-up:
    Deduction of INR. 5,000 is allowed under the section for payments towards preventive health check-up. This includes the preventive health check-up expenses incurred for the individual himself or to his spouse, dependent children or for parents. However, the deduction of INR. 5,000 is within the overall limits of INR 25,000 or INR. 50,000 for senior citizens
  • Single premium health insurance policies: You can avail tax deduction benefits for single premium health insurance policies that provide long-term cover with a lump sum payment of premium. In this case, the appropriate fraction of the total premium paid is considered for the year for a tax deduction. Again, the limit applicable is same here also, which is INR 25,000 / INR. 50,000 depending on the age

Things to keep in mind before investing in medical insurance policies

With the tax perspective, below are certainly important things to keep in mind before investing in medical insurance policies:

    • To avail the tax benefit, payment of premium can be made in any mode other than cash
    • Premiums paid for insuring the health of grandparents, siblings, working children or any other relatives is not eligible for tax deduction under Section 80D of the Income Tax Act, 1961 Premiums paid for insuring self, spouse, dependent children and parents are only considered for tax deduction under Section 80D of IT Act
    • Tax deduction of INR. 50,000 limit is applicable for senior citizens who are 60 years and above and are residents in India
    • Service tax and cess portion of the premium are not considered for tax deduction
    • Employer sponsored health insurance schemes are not eligible for this deduction under Section 80D of the Income Tax Act, 1961

Tax deductions are allowed on various investment products under various sections of the Income Tax Act, 1961. Let’s take a look at some of the important investments that can qualify for tax deductions:

Section Investments eligible for deduction Maximum limit (FY 2018-19)
80C Investment in Public Provident Fund, Life insurance, Sukanya Samriddhi Yojana, Five year bank deposit, Equity linked savings schemes, Senior citizen savings scheme, National savings certificate, home loan principal payment, Notified NABARD bonds and children’s tuition fees INR 1,50,000
80CCC For amount deposited in pension plans or annuity plan of LIC or any other insurer
80CCD(1) Employee’s contribution to NPS account
80CCD(2) Employer’s contribution to NPS account Maximum up to 10% of salary
80CCD(1B) Additional contribution to NPS INR 50,000
80CCG Rajiv Gandhi Equity Scheme for investments in Equities Lower of INR 25,000 or 50% of invested amount in equity shares
80E Interest on education loan Interest paid for a period of 8 years
80EE Interest on home loan for first time home owners INR 50,000
80D Medical Insurance – Self, spouse, children > 60 years age INR 25,000
Medical Insurance – Parents more than 60 years of age INR 50,000

To claim a tax deduction, it’s important to produce the documentary proofs at the time of filing income tax along with other ITR filing documents.

Frequently Asked Questions (FAQs)

  1. How income is classified for tax payment purposes?Income is classified under below mentioned header for tax payment purposes:
    • Salaries
    • Income from house property
    • Profit and gains of profession or business
    • Capital gains
    • Income from other sources
  2. Who can avail tax deductions under Section 80C of the Income Tax Act, 1961?Individuals and Hindu Undivided Family (HUF) can avail tax deductions on various investments under Section 80C of the Income Tax Act, 1961.
  3. I am paying INR 40,000 for mediclaim premium for the floater policy covering myself, spouse and school going child. I am also paying 30,000 premium each for my parents aged 64 and 61 years. How much mediclaimdeductions I can avail under Section 80D of the Income Tax Act, 1961?You can avail mediclaimdeductions of 25,000 for self and family and INR. 50,000 for your parent’s mediclaim policy. Total mediclaim deduction that you can avail under Section 80D of the Income Tax Act, 1961 is INR 75,000 (25,000+50,000) in this case.
  4. What does Section 80DDB of the Income Tax Act, 1961 cover?Section 80DDB of the Income Tax Act provides for the tax deduction of medical expenditure incurred on self and dependent relatives for specified illnesses (in Rule 11DD). The limit of deduction for less than 60 years old is INR 40,000 or actual expenses incurred, whichever is lower. The limit of deduction for more than 60 years old is INR 1, 00,000 or actual expenses incurred, whichever is lower.
  5. What are the income tax provisions under Section 80DD of the Income Tax Act, 1961?Section 80DD of the Income Tax Act, 1961 provides for the tax deduction on medical treatment expenses for handicapped dependent or amount paid to specified scheme for maintenance of handicapped dependent. In case disability is 40% or more but less than 80%, the amount eligible for deduction is INR 75,000. In case disability is more than 80% then amount eligible for deduction is INR 1, 25,000.

Rashtriya Swasthya Bima Yojana (RSBY) – Overview

Government of India has been introducing social security schemes for the well-being of citizens, specifically for the uninsured population of the country. With the medical cost rising, the Government has introduced a scheme to address the lack of healthcare access to the people below poverty line (BPL). In 2008, the Ministry of Labour and Employment came up with a health insurance programme called Rashtriya Swasthya Bima Yojana for the below poverty line population of India. The scheme is extended for the workers in an unorganised sector. In this article, let’s learn about Rashtriya Swasthya Bima Yojana in detail.

The objective of Rashtriya Swasthya Bima Yojana

The primary objective of RSBY scheme (Rashtriya Swasthya Bima Yojana) is to provide financial protection to Indian poor families from healthcare expenses.

Eligibility criteria for Rashtriya Swasthya Bima Yojana

Individuals working in unorganised sector belonging to BPL (below the poverty line) category and their families are eligible for benefits under the RSBY scheme. Five members of the family irrespective of their age are covered.
The eligibility of the workers of the unorganised sector and his family will be verified by the implementing officer. The beneficiaries will be issued a smart card – RSBY card for the purpose of identification.

Features and benefits offered by Rashtriya Swasthya Bima Yojana

Following are the features and benefits offered by the RSBY scheme:

  • Coverage:

    Total cover of INR 30,000 is given for the family on family floater basis for a year. Hospitalisation and in-patient care for most common illnesses are covered. The policy covers transportation charges of up to INR 1,000 for the policy period. INR 100 will be paid as transportation cost for each hospitalisation.

  • Cashless facility:

    Cashless medical treatment facility can be availed at any empanelled hospitals across the nation by using RSBY card (smart card) issued under the RSBY scheme

  • The network of hospitals:

    There are public and private hospitals are empanelled under the RSBY scheme which gives BPL populations to access the healthcare facility through RSBY card (smart card) anywhere in the country

  • Pre-existing illness:

    All pre-existing illnesses are covered

  • Safe and secure:

    As the biometric-based smart card is used for availing the cashless facility, fraud claims are easily avoided. As the benefits reach out to the right hands, the RSBY scheme is safe and secure

  • No paperwork:

    At the time of claim, manual paperwork is not involved. Claim settlements are done electronically

  • Premium/cost:

    The beneficiary is required to pay INR 30 per annum as a registration or renewal fee. Out of estimated annual premium of INR 750, 75% of the premium (maximum of up to INR 565 per family per annum) along with the cost of the smart card is borne by the Central Government. The remaining 25% of the premium + additional premium, if any + administrative charges will be borne by the State Government

How to enrol for Rashtriya Swasthya Bima Yojana

Here is how the enrolment is done into Rashtriya Swasthya Bima Yojana

  • List of BPL households is provided to the insurance provider in an electronic format based on the data from Union Planning Commission
  • The insurance company will then prepare an enrolment schedule for each village with the help of the district level officials
  • The scheduled list will be posted at enrolment station and prominent places of each village. However, date and location for enrolment will be published in advance
  • Mobile enrolment centres will be set up in each village with stations being equipped to collect biometric information and photographs of the members of the eligible families
  • Centres are also equipped with printing machines to print the RSBY cards
  • Government officer called FKO –Field Key Officer needs to be present at the enrolment station for the process of verification of the legitimacy of enrolment. Insurance company representative and smart card agency official also need to be present at the time of enrolment. Data related to enrolled households will be maintained by the state nodal agency and also maintained centrally by the Government
  • A beneficiary can make payment of registration fees INR 30 and avail the card within 10 minutes

List of both public and private hospitals empanelled with insurance provider under the RSBY scheme will be provided at the time of enrolment. Along with this, smart card (RSBY card) will carry details of helpline numbers. Particularly, the state nodal agency plays an important role by monitoring, implementing and supervising of the RSBY scheme (Rashtriya Swasthya Bima Yojana). State nodal agency also coordinates with all the parties involved in the scheme such as district authorities, insurance companies and hospitals etc

Claim settlement process in Rashtriya Swasthya Bima Yojana

Claim settlement process under the RSBY scheme (Rashtriya Swasthya Bima Yojana) is hassle-free and simple. Here is the process to follow:

  • The beneficiary needs to produce RSBY card (smart card) at the network hospital while availing the healthcare services
  • After providing healthcare services, hospitals need to send an electronic report to Third Party Administrator or to the Insurance provider.
  • After verifying the information and records provided by the hospital, Third Party Administrator or the Insurance provider will settle the claims by making direct payment to the hospital within the specified time limit.
  • That’s it! It reduces the burden of out of pocket cost for the BPL population who has availed benefit under the RSBY scheme.

Rashtriya Swasthya Bima Yojana is definitely unique and cost-effective healthcare insurance made available for Indian poor families. 

Frequently Asked Questions (FAQs)

  1. What is referred to as ‘hospitalisation’ in RSBY scheme?

    Hospitalisation refers to seeking healthcare treatment at the hospital by being admitted for more than 24 hours.

  1. What are the exclusions applicable under the RSBY scheme (Rashtriya Swasthya Bima Yojana)?

    RSBY scheme does not the following expenses:

    • OPD (outpatient department) expenses. 
    • Any dental treatment or surgery unless arising out of an injury or disease
    • Congenital external diseases
    • War and nuclear perils
    • Alcohol and drug abuse
    • Fertility related treatment expenses
    • Intentional self-injury and suicide
  1. Does Rashtriya Swasthya Bima Yojana cover maternity benefits?

    Yes. Maternity benefits are covered under the RSBY scheme in case of RSBY cards issued after 1st April 2009.

  1. Does Rashtriya Swasthya Bima Yojana cover new-born member of the family?

    Yes. A newborn baby is automatically covered under Rashtriya Swasthya Bima Yojana since birth for the remaining period of the health insurance policy. To continue the cover, the head of the family can include the baby at the time of renewal.

  1. If the family has only three members, will the coverage amount change?

    No. coverage amount of INR 30,000 will remain the same irrespective of the number of members in the family as the coverage is issued on family floater basis. Family floater refers to a single cover for the entire family. This means coverage amount can be utilised by any member or all members of the family.

  1. What if the head of the family and dependants are staying in two different places for work purposes? Who can keep the RSBY card?

    If the head of the family is travelling to another district for any purpose, the dependent beneficiary can get a split card for using the same scheme at different places. Family can decide the splitting amount for the cards depending on their requirements. However, the beneficiary may have to bear the cost of issuance of the split card.

  1. What if one member of the family dies during the policy period? Can changes be made into the policy?

    If the insured member dies during the policy period, the family can provide details of another member if his/her name is included in the BPL list.

  1. What is the difference between RSBY and Ayushman Bharat?

    RSBY offers coverage up to INR 30,000 while under Ayushman Bharat scheme coverage is offered for up to INR 5 lakhs. Moreover, Ayushman Bharat scheme is supposed to absorb RSBY and offer one insurance cover for the BPL families and workers in the unorganized sector.

  1. Who is eligible for RSBY?

    Anyone in the BPL family is eligible to apply for the RSBY Scheme. If the family is registered by the State Government as a BPL family, he is eligible to apply for RSBY from the enrollment centre wherein the head of the family’s identity would be confirmed.