Top #5 ways to get discounts on Bike Insurance in 2021

Sale, discounts, offers – who doesn’t love the sound of these words. It actually makes us alive and kicking. Do you know why? It is because these beautiful words imply cost saving. You can purchase the required essentials and still make your pockets happy. When it comes to bike insurance policies, discounts actually make us smile. Since you cannot dispense with a two-wheeler insurance policy, earning discounts on the premium is the only silver lining. Do you know how? Continue reading “Top #5 ways to get discounts on Bike Insurance in 2021”

Best Car Insurance Companies in India (Updated List)

Cars are no longer considered to be a luxury. Thanks to the lower priced car models available in the market, almost everyone can afford a car in today’s times. The need of comfortable commute has become important and so more and more individuals are investing in a car for themselves and their families.

As the demand for cars is increasing, so is the demand for car insurance policies. The Motor Vehicles Act, 1988 has made it mandatory for car owners to have a valid car insurance policy. If you own a car you need to get it insured as per the provisions of the Motor Vehicles Act, 1988.

Types of car insurance policies in India

Car insurance policies come in two variants. These are as follows –

Third party liability policy

This is the policy which the Act mandates. The policy covers the financial liability that you face in case you cause harm to another individual. The liabilities covered include the following –

  • Liability suffered if an individual is killed by the car
  • Liability suffered if an individual is physically hurt or injured by the car
  • Liability suffered if an individual’s property is damaged by the car

Third-party car insurance allows you to have a financial cushion in case of third party damage during an accident.It is also a mandatory requirement by law.To read more on third party car insurance and compare various plans, click here.

Comprehensive policy

This policy is a packaged policy which covers third party liabilities and also the damages suffered by the car. If the car is damaged and undergoes any type of repairs, the policy pays for the repair costs incurred. The coverage under comprehensive policies include the following –

  • Third party liability suffered if an individual is killed or physically hurt by the car
  • Third party liability suffered if an individual’s property is damaged by the car
  • Damages suffered by the car due to natural or man-made calamities like earthquakes, floods, fire, theft, etc.
  • Damaged suffered when the car is being transported from one place to another

Moreover, both third party and comprehensive coverage plans cover personal accident too. If you suffer from accidental death or disablement, you would get coverage of INR 15 lakhs.

Thus, with comprehensive policy car insurance, you get insurance coverage for not just the damage to the third party but also for the costs involved in repairing your own damages. You can read more about comprehensive policy car insurance here.

Since car insurance policies are mandatory, almost all general insurance companies offer car insurance plans. Both third party and comprehensive policies are offered by general insurance companies. There are 33 general insurance companies in India and 31 of them offer car insurance policies. Among so many insurers, how can you choose the best company?

List of best car insurance companies in India

Here is the list of the best car insurance company in India which qualify on all the above-mentioned parameters –

Privately owned car insurance companies 

Name of the company

Incurred Claims Ratio for the financial year 2018-19

Network of cashless garages

Car insurance policies offered 

HDFC Ergo General Insurance Company Limited

76%

6800+ garages across India

  • Single year comprehensive car insurance
  • Standalone own damage cover – Private Car
  • Third party liability car insurance

TATA AIG General Insurance Company Limited

78%

Major garages across India

  • Auto Secure – Private Car Policy
  • 3 Years Standalone Third Party Long Term Auto Secure – Private Car Package Policy
  • Bundled Auto Secure – Private Car Policy

ICICI Lombard General Insurance Company Limited

75%

7800+ garages across India

  • Private Car Package Policy

Royal Sundaram General Insurance Company Limited

85%

4600+ garages across India

  • Car Shield

Bharti AXA General Insurance Company Limited

77%

4500+ garages across India

  • Third party liability only policy
  • Comprehensive policy

Reliance General Insurance Company Limited

86%

4450+ garages across India

  • Car Own Damage (OD only) policy
  • Car insurance
  • Third party liability insurance

Bajaj Allianz General Insurance Company Limited

69%

4000+ garages across India

  • Four wheeler insurance
  • Third party liability only insurance

IFFCO Tokio General Insurance Company Limited

88%

4300+ garages across India

  • Car insurance

The New India Assurance Company Limited

95.39%

Major garages across India

  • Private car policy
  • Standalone Own Damage cover for Motor Private Car
  • Motor liability only policy

United India Insurance Company Limited

109.40%

Major garages across India

  • Motor package policy
  • Motor liability only policy

Armed with this new information, you should be in a good position to compare and purchase top car insurance plans from the preferred company. We understand that with a variety of options available for car insurance in the Indian market, it is not straightforward to choose a car insurance policy, which is why we have done most of the work for you.
Enter a few required details and let our system hand-pick the most relevant and suitable insurance policies for you!

Benefits of car insurance companies 

Here’s a complete list of the benefits offered by the Best Car Insurance Companies in India

1. HDFC Ergo General Insurance Company Limited

The features and benefits of HDFC Ergo car insurance company are –

  • The company has a large customer base of more than 1 crore policyholders which signifies that the company enjoys great trust.
  • The company offers overnight car repair services where the repairing is done within a night and the car is delivered to your doorsteps
  • The company offers approvals for its claims within 30 minutes through online verification of QR codes making claim settlements easier
  • HDFC Ergo has a wide network of 6,800 garages that provide cashless facility that make repair works hassle-free. The easy application process and multiple policy options also make HDFC Ergo an attractive car insurance option.

2. TATA AIG General Insurance Company Limited

The features and benefits of TATA AIG car insurance company are –

  • The company offers a range of add-ons with its comprehensive car insurance policies which help you to increase the scope of coverage
  • The claim settlement process of the company is quick and hassle-free

TATA AIG car insurance is known for the quick application process, the customer service team is known to be quite prompt and if you have installed anti-theft devices in your vehicle, you can also avail certain discounts. Click on the link below for more details!

3. ICICI Lombard General Insurance Company Limited 

The features and benefits of ICICI Lombard car insurance company are –

  • The company has a high Claim Settlement Ratio. During the financial year 2019 the company has settled 93.14% of its motor insurance claims.
  • The claims are settled within the shortest possible time. The 93.14% claims settled in 2019 were done within 30 minutes of intimation
  • The company has won the ‘Claim Leader – General Insurance’ Award given by Indian Insurance Award

ICICI Lombard car insurance offers a number of benefits including roadside assistance in case of an accident to the policyholders. It is one of the most trusted brands for insurance solutions in India. You can read more about the company’s plans by clicking below.

4. Royal Sundaram General Insurance Company Limited

The features and benefits of Royal Sundaram car insurance company are –

  • The company’s car insurance policy promises 100% refund of the invoice price of the car in case of total loss or theft
  • Free coverage for flat tyre and emergency fuel delivery is available under its car insurance plans
  • A range of extensive add-ons are available for a better coverage scope of your car insurance policy

These are some of the benefits offered by Royal Sundaram car insurance company for the policyholders. You can get detailed information about car insurance plans from Royal Sundaram by clicking below.

5. Bharti AXA General Insurance Company Limited

The features and benefits of Bharti AXA car insurance company are –

  • The company has issued more than 27 million policies ever since it was established
  • More than 1.3 million claims have been settled
  • The company provides you with 24*7 assistance for your car insurance policy

Known for the great no-claim bonuses that are passed on to the policyholder for every zero-claim year, Bharti Axa car insurance company is a great option, especially after taking into account the network of 5000+ cashless garages all over the country that make car repairs hassle free.

6. Reliance General Insurance Company Limited

The features and benefits of Reliance car insurance company are –

  • The company promises hassle-free purchases as the policy is delivered within 10 seconds
  • You get free roadside assistance coverage in your car insurance policy worth up to INR 500
  • The company enjoys ISO 9001:2015 certification which makes it trustworthy

Click the button below to read the complete benefits offered by Reliance car insurance plans.

7. Bajaj Allianz General Insurance Company Limited

The features and benefits of Bajaj Allianz car insurance company are –

  • The company’s car insurance policy can be bought within 3 minutes
  • The Motor On-The-Spot feature in the company’s car insurance plans lets you make instant claims through your Smartphones. Small claims can, therefore, be settled within 20-30 minutes
  • The company has a high claim settlement ratio of 98%

Bajaj Allianz offers a number of insurance plans for car insurance. It is one of the most trusted brands in India and offers a lot of flexibility for the insurance policies. You may read more and browse through their offerening by clicking on the link below.

8. IFFCO Tokio General Insurance Company Limited

The features and benefits of IFFCO Tokio car insurance company are –

  • The company offers completely transparent products and services so that you know what you are buying
  • The claim settlement process of the company is quick and efficient ensuring that you get your claims settled within 4 hours
  • The company has various awards in its name which make it a reputed company

IFFCO Tokio car insurance offers protection from damages arising out of accidents and thefts, the company has a claim settlement ratio of about 79.19% and is known for the quick turnaround time to issue policies with minimal documentation. You can read more about IFFCO Tokio insurance company and browse through their plans below.

Owned by the Government of India 


9. The New India Assurance Company Limited 

The features and benefits of New India Assurance car insurance company are –

  • The company has a strong financial standing as its net worth for the quarter ended 30th June 2019 stood at INR 37,483 crores
  • The company’s solvency ratio is 2.13 which further ensures of the string financial stability of the company

New India Insurance is an expert in the non-life insurance business and has been in the Indian market since long. New India Assurance company offers comprehensive car insurance plans for protection against accidental and theft-related risks along with a number of benefits that you can check below.

United India Insurance Company Limited

The features and benefits of United India car insurance company are –

  • The company is a public limited company which is owned by the Government of India and enjoys immense trust among policyholders
  • There are more than 1 crore policyholders of the company till date

United India car insurance has a claim settlement ratio of about 91.72%, its policies also offer discounts to companies that install anti-theft devices on their cars. Click on the link below to know more about the company.

How to choose the best car insurance company in India?

There are certain factors which should be considered when choosing the best car insurance company in India. These factors include the following –

  1. Authenticity of the company – the first thing which you should check is the authenticity of the insurance company. Every company is registered with the Insurance Regulatory and Development Authority of India (IRDAI) and carries a valid IRDA license. Check the license number of the company to ensure that the company is authentic. Only when the company is authentic can you be assured of the authenticity of its products. A company which is regulated by the IRDAI cannot cheat or dupe its customers.
  2. Financial standing – once the authenticity of the company has been established, look at the company’s financial standing. Check out the company’s solvency ratio to assess whether the company is financially stable or not. The financial records of the company can be checked on the company’s website as all insurers are mandated to publish their financial reports online.
  3. Claim ratios – there are two types of claim ratios that you should check. One is the Claim Settlement Ratio (CSR) which measures the percentage of claims settled by the insurance company. A CSR greater than 90% is recommended as it shows that the insurance company has settled more than 90% of its claims. A high ratio would increase the probability of settlement of your car insurance claims too. The other ratio which you should check is the Incurred Claims Ratio (ICR) of the company. ICR depicts the percentage of premiums utilised by the company in settling its claims. It is calculated as the amount of claim settled against the amount of premiums collected. If the ICR is more than 100%, it shows that the company is paying more in claims than it is earning as premiums. This situation is not financially viable as it shows the company making a loss. A very low ICR below 40% shows that the company is making too much in profits and might have higher premiums. So, look for companies which have an ICR of 50% to 90% which would ensure that the company is profitable and that it is not overcharging premiums.
  4. Claim Turn-Around-Time(TAT) – the claim TAT is also an important consideration when choosing the best car insurance company. Companies which settle their claims at the earliest are the best as you get the benefit of quick claim settlements. So, check the company’s claim TAT and choose the company which takes the minimum time in settling its car insurance claims.
  5. Network of cashless garages – you should also check the network of cashless garages of the insurance company. The wider the network of garages the easier it would be for you to get cashless settlements of your car insurance claims.

If you keep these factors in mind, you can find the best car insurance company in India to buy your car insurance policy from.

How to buy the best car insurance policy

Now that you know the best car insurance companies in India, you can buy the best car insurance policy too. However, all the companies offer one or more car insurance policy and so choosing the best policy might prove to be a challenge. You should, therefore, compare the available policies to choose the best one. Compare the car insurance policies offered by the above-mentioned car insurance companies in India and then choose one. To compare, you should consider the following parameters –

  1. Coverage vis-à-vis the premium charged
    When comparing car insurance policies, many individuals look at only the premium amount. This is a mistake. The policy should be compared on the coverage that it offers vis-à-vis the premium that is being charged. The best policy would be the one which has an optimal coverage amount, offers comprehensive coverage features and is yet priced reasonably.
  2. The claim process
    The policy which offers the simplest claim settlement process should be chosen. When the claim settlement process is simple, you can get your claims settled easily.
  3. Premium discounts offered
    Car insurance policies offer a range of premium discounts for different factors. For instance, you can get a discount if you are a member of an approved automobile association or if you install safety devices. Though discounts are offered by all companies, the rates vary. Choose a policy which offers the maximum possible discount so that your premium is reduced.
  4. Add-ons available 
    Add-ons are additional coverage benefits which can be added to a comprehensive car insurance policy to increase the scope of coverage. Look for the variety of add-ons offered by car insurance policies. The best policy would be the one which offers the add-ons that you require and that too at an affordable premium rate.

So, consider these factors, compare the available car insurance policies offered by leading insurance companies and then buy the best plan. Turtlemint is an online platform which allows you to compare and buy the car insurance policy of leading insurance companies. On Turtlemint’s website you can find the list of all the leading car insurance plans available in the market. You can also check the plans’ coverage benefits and premiums and then choose the best policy. Turtlemint’s platform, therefore, gives you an easy mode of comparing and buying the best car insurance policy.

We understand that choosing a car insurance can be quite a daunting task, which is why we have made the job simpler for you, simply click on the link below, enter a few details and allow our system to show the most relevant Car insurance policies to you at competitive prices!

So, if you buy a new car or when your existing car insurance policy is up for renewals, choose the best car insurance policy from the leading car insurers. Compare the plans offered by the leading insurance companies and then buy so that you get the best policy.

FAQs

  1. What is personal accident cover in car insurance policies?
    Personal accident cover in car insurance policies covers accidental death or disablements. If the owner/driver of the car suffers accidental death or becomes fully or partially disabled in an accident, the cover pays a lump sum amount. The sum insured for personal accident cover is INR 15 lakhs and the premium is INR 750.
  2. What are the add-ons available under car insurance plans?
    There are different types of add-ons available under car insurance plans. The popular ones include the following –

    • Roadside assistance – round the clock assistance in case of breakdowns
    • Zero depreciation – no deduction for cost of depreciation from car insurance claims
    • Engine protect – coverage against engine damage due to water seepage
    • NCB protect – protection of the accumulated no claim bonus even after a claim
    • Return to invoice – payment of the invoice value of the car in case of total loss or theft
    • Consumables cover – coverage of the cost of consumables used in repairs of the car like engine oil, lubricants, etc.
    • Personal accident cover for named passenger – extension of personal accident cover for a named passenger, etc.
  3. What is a long term car insurance policy?
    A long term car insurance policy is one which runs for more than a year. As per the latest changes, cars bought on or after 1st September 2018 should have a long term liability cover for three years. In keeping with this mandate, nowadays, long term car insurance plans are available for new cars.
  4. What will happen if the car insurance policy is not renewed?
    If the car insurance policy is not renewed on time, the coverage would lapse. You would be fined if you are found driving without a valid car insurance cover.
  5. How are third party premium calculated?
    The premiums for liability only policies are determined by the IRDA and they depend on the cubic capacity of the car.

Term Insurance Plans And Their Claim Settlement Ratios

A term insurance plan is the simplest form of life insurance. It gives you the promise of payment of a fixed benefit in case of death during the term of the plan. Term insurance provides coverage for premature death of the breadwinner of the family.

When you invest in a term insurance plan, you are secured that if anything happens to you, your family will not suffer financially as the plan would give them a financial corpus to tide over the difficulties. Given the security that term plans give, they are considered to be the most important investment which you can do for your family’s security.

Features of term insurance plans:

Term insurance plans are quite different from other types of life insurance plans. They have some unique features which include the following –

  1. Since term plans are the cheapest, you can choose high levels of coverage without worrying about the premium
  2. There is no limit on the sum assured amount that you can choose.
  3. Term plans offer long coverage durations
  4. There is usually no maturity benefit under term plans
  5. You can opt for different types of term insurance plans as the plans are available in the following variants-
    1. Increasing term insurance – under this variant the sum assured increases every year
    2. Decreasing term insurance – under this variant the sum assured decreases every year
    3. Return of premium plans – under this variant the premiums paid are returned back if the plan matures
    4. Level term insurance – under this variant the sum assured remains the same throughout the policy period
  6. Term insurance plans do not earn a bonus. You get the sum assured only as a death benefit.

Term insurance claim settlement ratio

Before buying a plan you should always check the term insurance claim settlement ratio. The ratio shows the percentage of claims that the insurance company has paid vis-à-vis the total claims which were made upon it. It is calculated as follows –

Claim settlement ratio = Number of claims settled / total number of claims made * 100

The ratio is represented as a percentage and the higher the term insurance claim settlement ratio is, the better would be the plan. This is because a high ratio improves the chances of your term insurance claims being settled. Different insurance companies have different term insurance claim settlement ratios. You should, therefore, compare the ratios when comparing term insurance plans so that you can increase the chances of your claim settlements.

Best term insurance plans in India

There are a number of Term Insurance Plans available in the market and choosing the best plan whose term insurance claim settlement ratio is also high might prove difficult. So, to make your work easier, here is a list of some of the best term insurance plans available in the market which also boast of having a high claim settlement ratio –

  1. LIC’s Jeevan Amar Plan:

    LIC boasts of having the highest claim settlement ratio in the industry and its term insurance plans are among the best. Here are the salient features of Jeevan Amar plan –

    • You can choose either level sum assured or increasing sum assured option under the plan
    • Premiums can be paid at once, for a limited time or regularly
    • You get premium discounts for choosing the high sum assured levels

      Important parameters of LIC’s Jeevan Amar Plan

      Entry age 18 to 65 years
      Plan term 10 to 40 years
      Sum assured INR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 98.04%
  2. Aegon Life iTerm Insurance Plan

    This is an online term plan which is offered by Aegon. The plan has the following salient features –

    • There are three different options for coverage. You can even choose the plan to cover you till 100 years of age
    • Terminal illness benefit is inbuilt in all coverage options
    • There is also an optional rider for better protection

      Important parameters of Aegon Life iTerm Insurance Plan

      Entry age 18 to 65 years
      Plan term 5 to 82 years
      Sum assured INR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 95.67%
  3. HDFC Life Click 2 Protect 3D Plus Plan

    This is quite a comprehensive term insurance plan which has the following salient features –

    • This plan offers you a choice of nine coverage options to choose from
    • Inbuilt riders are available under many coverage options
    • You can choose the premium payment term as per your suitability

      Important parameters of HDFC Life Click 2 Protect 3D Plus Plan

      Entry age 18 to 65 years
      Plan term 5 years to whole life
      Sum assured INR 10,000 onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 97.80%
  4. TATA AIA Life Sampoorna Raksha Plan

    This plan also offers you flexibility in choosing your coverage. It has the following features –

    • There are four death benefit options from which you can choose
    • You can extend the coverage up to 100 years
    • You get attractive premium discounts which make the premiums more affordable

      Important parameters of TATA AIA Life Sampoorna Raksha Plan

      Entry age 18 to 70 years
      Plan term 10 years to whole life
      Sum assured INR 50 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-18 98%
  5. ICICI Pru iProtect Smart Plan

    You can buy this plan online and the plan has the below-mentioned features–

    • The premiums are extremely affordable
    • You can enjoy coverage till 99 years of age
    • Optional critical illness rider is available which covers you against 34 major illnesses

      Important parameters of ICICI Pru iProtect Smart Plan

      Entry age 18 to 65 years
      Plan term 5 years to whole life
      Sum assured Depends on the minimum premium which is INR 2400
      Term insurance claim settlement ratio for Financial Year 2017-18 97.88%

      Here is a complete list of life insurance companies currently operating in India along with their published Claim Settlement Ratios for the financial year 2017-18 –

      Name of the life insurer Claim Settlement Ratio
      Life Insurance Corporation of India 98.04%
      HDFC Life Insurance Company Limited 97.80%
      Max Life Insurance Company Limited 98.26%
      ICICI Prudential Life Insurance Company Limited 97.88%
      Kotak Mahindra Life Insurance Company Limited 93.72%
      Aditya Birla SunLife Insurance Company Limited 96.38%
      TATA AIA Life Insurance Company Limited 98%
      SBI Life Insurance Company Limited 96.76%
      Exide Life Insurance Company Limited 96.81%
      Bajaj Allianz Life Insurance Company Limited 92.04%
      PNB MetLife India Insurance Company Limited 91.12%
      Reliance Nippon Life Insurance Company Limited 95.17%
      Aviva Life Insurance Company Limited 94.45%
      Sahara India Life Insurance Company Limited 82.74%
      Shriram Life Insurance Company Limited 80.23%
      Bharti AXA Life Insurance Company Limited 96.85%
      Future Generali India Life Insurance Company Limited 93.11%
      IDBI Federal Life Insurance Company Limited 91.99%
      Canara HSBC OBC Life Insurance Company Limited 95.22%
      Aegon Life Insurance Company Limited 95.67%
      DHFL Pramerica Life Insurance Company Limited 96.62%
      Star Union Dai-ichi Life Insurance Company Limited 92.26%
      IndiaFirst Life Insurance Company Limited 89.83%
      Edelweiss Tokio Life Insurance Company Limited 95.25%

    (Source: https://www.basunivesh.com/2019/01/18/latest-irda-claim-settlement-ratio-2017-18/)

    You can choose any of the above-mentioned term insurance plans and you would be assured of high claim settlement ratios. While the plan would give you a comprehensive scope of coverage, the high term plan claim settlement ratio would ensure that the claims are settled easily. So, invest in the best term insurance plan and gift financial security to your family.

Frequently Asked Questions:

  1. Is there any benefit that I can get if I surrender my policy?

    No, there is no surrender benefit under term insurance plans.

  1. How can I buy the best term insurance plan?

    To buy the best term insurance plan, you can visit www.turtlemint.com. Turtlemint is an online platform which is tied up with all the leading life insurance companies. You can visit Turtlemint to compare and find the best term insurance plan for your coverage needs which also has a high claim settlement ratio. To buy a term plan through Turtlemint, follow these steps –

    • Visit the website and choose ‘Life’
    • Then choose ‘Term Life Plans’
    • You would then have to provide your details like your gender, marital status, birth date, annual income, smoking preference, the sum assured that you want and your contact details
    • You would then be shown a list of the best term plans
    • You can compare the plans and buy the best one.
  1. What type of premium discounts are allowed under term insurance plans?

    Term plans offer premium discounts if you don’t smoke and if you choose a high sum assured level. Some plans also allow a discount for paying the premiums annually.

Plan Your Retirement Through Pension Plans

You need money at all stages of life. When you are working, you are financially independent and you have various financial responsibilities on your head. After you retire, your financial responsibilities are taken care of but you still need funds to meet your lifestyle expenses. After retirement, you don’t work and don’t have a regular source of income. That is why you need a specific fund which would meet the expenses of your retirement. A retirement fund is, therefore, needed after retirement and you need to plan for the fund when you are working.

Planning for retirement:

Retirement planning should be done starting from an early age. This is because of the following reasons:

  1. Longer investment horizon
    When you are young you have longer investment tenure to invest before you retire. The longer the investment tenure is the higher the corpus that you can accumulate for retirement. Moreover, when the investment tenure is high, you also earn higher compound interest because the interest grows exponentially if the tenure is high. Both these factors of a longer investment period and higher returns ensure you have a good retirement corpus.
  2. Smaller investment required
    When you start from an early age, you can invest smaller amounts to build up a larger corpus. You can set aside small, affordable amounts every month regularly and build up a large corpus over time because your investments would attract compound interest and grow substantially if they are given time.Both these reasons stress on creating a substantial retirement corpus which would be sufficient to cover your expenses for two or three decades down the line. A substantial retirement corpus is needed because after you retire the cost of goods and services would have increased manifold due to the effect of inflation. As such, if your corpus is small it would not be sufficient to cover your expenses fully. So, you should start saving early so that you can create a good corpus through affordable investments.

Top #5 Retirement planning tools

Since retirement planning is important, there are different types of retirement plans in India which help you create a retirement fund. Some of the popular investment avenues include the following –

  1. Fixed deposits
    Fixed deposits are where you invest a lump sum amount for a specific period of time. Your deposit, thereafter, earns a guaranteed rate of return and the deposited amount along with the returns earned is refunded when the deposit matures. Fixed deposits are good for investors who are looking for fixed returns from their investments.
  2. Mutual funds
    Mutual funds are another popular investment option which promises market-linked returns. You can invest small amounts in a chosen fund regularly through Systematic Investment Plans (SIPs) and then earn market-linked returns on your investments. There are different types of funds to choose from but you should know that mutual funds are exposed to market risks and returns are not guaranteed.
  3. Real estate
    Many investors also consider real estate investments for their retirement. They invest in a plot of land or property and then sell the property to get gains. Real estate investments, however, involve huge sums of money and are not suitable for small investors.
  4. Public Provident Fund
    Public Provident Fund (PPF) is a fixed interest investment avenue wherein you can make investments regularly or in a lump sum. PPF gives you guaranteed returns which are also tax-free in nature and you can also choose a long investment period to grow your retirement corpus substantially.
  5. Life insurance pension plans
    Life insurance pension plans are specifically designed retirement oriented life insurance plans which help you create a retirement corpus. Pension plans promise you the payment of annuities after you retire. These annuities are a series of payment which gives you a regular income for your lifetime.Among the above-mentioned retirement planning tools, pension plans offered by life insurance companies are the best and the most suited tool for your retirement. Do you know why? Let’s understand the concept of these plans and why they are ideal for retirement planning –

What are pension plans in India?

Pension plans are a type of life insurance plans where the insurance company promises to pay a lifelong income to you through annuities. Under pension plans, you can invest in building a retirement corpus. Thereafter, when you retire, the plan promises the payment of annuities throughout your life.

Types of pension plans in India

Retirement plans in India come in two variants – deferred annuity and immediate annuity. Let’s understand these variants in details –

  1. Deferred annuity plans
    Deferred annuity plans are those wherein you can choose the investment tenure to create a retirement fund and annuities are paid after the investment tenure is over. Under deferred annuity plans, you buy a plan with a chosen term. During the term, you can pay premiums which are accumulated to create a retirement corpus. Thereafter, when the plan tenure is over, you can use the accumulated corpus to receive annuities. Moreover, in case of death during the plan tenure, deferred annuity plans also promise a death benefit. Thus, deferred annuity plans provide insurance coverage as well as the promise of annuity payments for your life.
    Features of deferred annuity plans
    Deferred pension plans in India have the following salient features –

    1. The plan can be offered as a traditional insurance plan with guaranteed returns or as unit-linked insurance plans with market-linked returns
    2. When the plan matures, you can withdraw 1/3rd of the corpus in cash. This withdrawal is called commutation of pension and it is tax-free. From the remaining corpus, you would have to receive annuity payments. The remaining corpus is utilised to buy an immediate annuity from the company to provide annuity to the annuitant.
    3. In traditional deferred annuity plans, you can earn bonuses
    4. Premiums can be paid in one lump sum, for a limited period or over the entire duration of the plan
    5. Under deferred plans, there is an accumulation phase, deferment phase and a pension phase. The accumulation phase is when you pay premiums to create a corpus. Deferment phase is when the corpus grows. Pension phase is when you receive pension payments from the accumulated and grown corpus.
  2. Immediate Annuity Plans

    Immediate annuity plans are those which promise you immediate annuity payments without any waiting period. The age of entry for Annuity Plan depends from company to company so that pension can start immediately waiting. –

    The annuity payments are promised for as long as you live and depending on the annuity option chosen, the purchase price –

    Features of immediate annuity plans

    1. You can choose the annuity payment frequency. It can be annually, half-yearly, quarterly or monthly
    2. There are different types of annuity payment options and you have to select one option as per your requirement. Common examples of options include increasing annuity, the annuity payable for a joint-life annuity payable for life and return of purchase price, etc.
    3. Immediate annuity plans are traditional life insurance plans which promise a guaranteed rate of annuity
    4. Premiums are payable only one as a single premium. This premium is also called the purchase price

Benefits of pension plans in India
Pension plans are said to be the best retirement planning tools because of the following benefits which these plans give –

  1. Pension plans in India promise a lifelong income. This income ensures that your retired life is led comfortably without any financial hiccups
  2. Immediate annuity plans allow you to receive annuities on a joint life basis. This means that you can add your spouse as the secondary annuitant and in case of your death, the annuity payments won’t stop. They would continue for as long as your spouse is alive. This feature allows you to ensure a source of income for your spouse too in your absence thus giving them financial security in their old age
  3. Premiums paid for pension plans in India are allowed as a tax deduction under Section 80CCC of the Income Tax Act. Thus, by investing in pension plans, you can also lower your tax liability while building your retirement corpus
  4. The commuted pension that you receive is tax-free and allows you to meet any financial responsibilities that you might have
  5. These pension plans in India create a certain amount of corpus solely for your retirement and allows the corpus from being used on other financial needs
  6. You can create a substantial retirement corpus through unit-linked deferred annuity plans which promise you market-linked returns on your investments
    Given these benefits, there is no doubt that pension plans in India are the best way to create a retirement fund for your golden years.

Top #4 pension plans in India

If you are looking to invest in a life insurance pension plan, here are some of the best pension plans in India which you can choose from –

  1. LIC’s Jeevan Shanti Plan
    When it comes to best pension plans in India, LIC has some of the best options to offer and its Jeevan Shanti policy is a very popular plan. Here are the salient features of the plan –

    • The plan can be taken as an immediate annuity plan or a deferred annuity plan
    • Premiums are payable only once
    • You get a choice of nine types of annuity payment options to choose from
    • If you opt for a deferred annuity plan, you also get guaranteed additions during the deferment phase to build up your corpus
    • The loan is allowed under the policyEligibility parameters
      Entry age 30 to 85 years
      Deferment period 1 to 20 years
      Premium Minimum- INR 1.5 lakhs
      Maximum – no limit
      Annuity amount Minimum – INR 12,000/year
      Maximum – depends on the premium paid
  2. LIC’s New Jeevan Nidhi Plan

    Another plan offered by LIC, Jeevan Nidhi Plan is a traditional deferred annuity plan which has the following salient features –

    • The plan promises bonuses as well as guaranteed additions during the policy tenure
    • LIC’s Accidental Death and Disability Benefit Rider is available as an optional coverage benefit which you can choose at an additional premium
    • Premiums can be paid at once or regularly throughout the policy tenure
    • You get premium discounts for choosing a high sum assured and also for paying the premiums annually or half-yearly

      Eligibility parameters

      Entry age 20 to 60 years
      Deferment period 5 to 35 years
      Sum assured Minimum – INR 1 lakh
      Maximum – no limit
      Premium Depends on the sum assured chosen
  3. ICICI Pru Immediate Annuity Plan
    This is an immediate annuity plan offered by one of the leading life insurance companies in India. The salient features of the plan are as follows –

    • You get a choice of 12 annuity options under the plan
    • Premium is payable only once to buy the plan
    • You can get higher rates of annuities if the purchase price is high
    • If you are a National Pension Scheme investor, you get a discount of 0.5%

      Eligibility parameters

      Entry age 30 to 100 years
      Premium Depends on the annuity that you want
      Annuity amount Minimum – INR 12,000/year
      Maximum – depends on the premium paid
  4. HDFC Life Click 2 Retire Plan
    HDFC Life’s Click 2 Retire is a unit-linked deferred pension plan which has the following salient features –

    • The plan has minimal charges which ensure that you can get maximum growth for your fund value
    • The vesting benefit is guaranteed even if the market is volatile
    • Premiums can be paid at once or for a limited period

      Eligibility parameters

      Entry age 18 to 65 years
      Deferment period 10 to 35 years
      Premium Minimum- INR 24,000
      Maximum – no limit
      Annuity amount Depends on the premium and fund value

Buying pension plans in India – what you should know?

Before you invest in a pension plan for your retirement needs, there are some factors which you should keep in mind. These factors include the following –

  1. Type of plan
    Choose the type of plan based on the need of receiving annuities. If retirement is a long way off and you have started investing early, choose a deferred annuity plan to build up a retirement corpus. If, on the other hand, you are retired and want to invest your corpus for regular incomes, immediate annuity plans are ideal. So, choose a plan based on your needs.
  2. Sum assured and premium
    In case of deferred annuity plans, choose a sum assured which would be sufficient to cover your family’s financial needs in case of your absence. However, along with the sum assured ensure that the premiums are affordable so that you don’t feel a pocket pinch while saving for retirement.
  3. Vesting age
    Vesting age is the age at which you start receiving annuities. Choose the vesting age wisely. The higher the vesting age is the higher would be the annuity amount. So, choose an age from which you would need annuity income to fund your retirement.
  4. Annuity amount
    The annuity amount depends on the premium that you have paid and the vesting age selected. You can calculate the annuity amount beforehand through annuity calculators. Ensure that the annuity amount is sufficient to cover your retirement expenses.
  5. Compare before buying
    The last factor to keep in mind is comparing the available pension plans in India. There are a lot of plans available in the market and when you compare you can find the best plan. So, go online and compare the pension plans in India to choose the most suitable one.

How to buy pension plans in India?

Buying pension plans in India has been simplified due to the online mode which allows you seamless processes and hassle-free buying. You can buy online pension plans in India through Turtlemint which is an online platform giving you the chance to compare the available plans before buying. You can find both deferred and immediate annuity plans online and then buy them as per your needs. To buy through Turtlemint, you have to follow a simple process which is as follows –

  1. Visit https://www.turtlemint.com/life-insurance which is Turtlemint’s life insurance home page
  2. Choose ‘Pension/Retirement’ pension plans in India
  3. Provide your details which include your gender, date of birth, annual income, smoking habit, expected age of retirement, investment tenure, investment amount and frequency and your contact information
  4. You can then check the available pension plans in India which offer some of the best features
  5. Compare the available plans and choose one for your needs
  6. Fill up an application form for the chosen plan, pay the premiums online and you can buy the policy instantly online through Turtlemint
    Easy, isn’t it?
    You need a retirement plan in place if you want to lead an independent retired life which is dependent on no one. So, invest in pension plans in India and create a retirement corpus for yourself and your spouse. If you start early you can even leave behind a legacy for your children besides funding your retirement. So, don’t delay. Start retirement planning at the earliest so that you can amass a good corpus by the time you retire.

Frequently Asked Questions:

  1. Can I buy more than one pension plan?
    Yes, you can buy as many pension plans as you like. There is no restriction on the number of plans that you can buy provided you can afford the premium.
  2. Is annuity income tax free?
    No, the annuity income that you receive from pension plans is taxable in your hands. The annuity would be considered as your income and it would be taxed at your income tax slab rates.
  3. Can I defer the vesting age if I want?
    Yes, many deferred annuity plans offer you the option to defer the vesting age and receive annuities from a later date. If you do so, you can get a higher annuity rate by staying invested for a longer period.
  4. Do immediate annuity plans have any death benefit?
    The death benefit under immediate annuity plans depends on the annuity payment option that you choose. Usually, under life annuity option, the annuity payments stop after your death and there is no death benefit. However, if you have chosen the return of the purchase price, the premium that you paid would be refunded back on your death. Moreover, in the case of joint life annuities, in case of your death, the annuity continues if your spouse is alive and stops on the death of the spouse.

Immediate Annuity Plan – Definition, Features & Best Options (Complete Guide)

Retirement is that period of your life when your regular income stops. However, your lifestyle and medical expenses continue irrespective of your income. In this situation you need to arrange for a source of income to fund your lifestyle expenses. This is where retirement oriented life insurance plans come into the picture. These plans are called pension or annuity plans and an immediate annuity plan helps you substitute your income even in your retired years. Do you know who? Let’s explore –

What is an immediate annuity policy?

Immediate annuity is a type of life insurance pension plan. Under this plan, you are promised a series of annuity payments for as long as you live. Moreover, there are joint life immediate annuity plans as well which promise annuity payments for the lifetime of your spouse as well.

Features of immediate annuity plans

Immediate annuity plans have the following salient features –

  1. Single premium is payable under the policy which is called the purchase price
  2. You can choose the annuity payment frequency which can be monthly, half-yearly, quarterly or annually
  3. The person on whose life the annuity is paid is called the annuitant
  4. There are different annuity payment options and you can choose any option
  5. Annuity can be chosen to be received on a single life or joint life. In case of joint life annuities, the spouse can be covered. The policyholder would be called the primary annuitant and the spouse would be the secondary annuitant
  6. The annuity stops on death of the annuitant

Annuity payment options

As stated earlier, there are a lot of annuity payment options under an immediate annuity plan. These options include the following –

Annuity option Meaning 
Annuity for life Annuity is paid till the lifetime of the annuitant
Annuity certain Annuity is paid for a certain guaranteed period which can be 5, 10, 15 or 20 years whether the annuitant survives this period or not. If, however, the annuitant survives the guaranteed period, annuity is then paid for his/her lifetime
Annuity for life and return of purchase price Annuity is paid till the lifetime of the annuitant. When the annuitant dies, the purchase price is refunded back to the nominee
Joint life annuity Annuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant
Joint life annuity with return of purchase price Annuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant. When the secondary annuitant also dies, the purchase price is refunded back to the nominee
Increasing annuity Annuity is paid till the lifetime of the annuitant. This annuity increases every year at simple or compound rate of interest. The rate of interest depends on the plan and ranges between 3% to 10%

How does immediate annuity plan work?

When you buy an immediate annuity policy, here’s how the plan would work –

  1. You buy the policy by paying a lump sum amount premium at once.
  2. You have to choose the annuity payment option that you like. There are different annuity payment options and you can choose any one as per your requirement
  3. You also have to choose the annuity payment frequency.
  4. Once you have bought the policy and chosen the annuity payment option and frequency, you would start receiving annuity pay-outs immediately from the next frequency. For instance, if you buy the policy on 1st January and choose monthly payment frequency, annuity payments would commence from 1st February
  5. The amount of the annuity is fixed and is specified beforehand
  6. The annuity payment would continue for as long as you are alive. In case of joint life annuities, annuity payments continue till the lifetime of the last survivor
  7. On death, the payments would stop and the policy would be terminated. The availability of death benefit would depend on the annuity payment option that you have selected

Benefits of immediate annuity policies

By buying immediate annuity plans, you get the following benefits –

  • You get a regular stream of income which are guaranteed throughout your lifetime
  • You can ensure financial security for your spouse by choosing joint life annuity wherein your spouse would get annuity if you predeceased him/her
  • If you choose the annuity option which returns the purchase price, you can leave behind a legacy for your family after your demise
  • Immediate annuity plan ensures that you remain financially independent even after you retire

Drawbacks of immediate annuity policies

Though immediate annuity insurance promises the above-mentioned benefits, there are one or two drawbacks which you cannot overlook. These include the following –

  1. If you choose an annuity for life and then you die after a few years, the insurance company would be left with a large part of your retirement corpus which would be retained by them
  2. Once started, you cannot cancel the annuity payments. This might prove to be a problem if you invest all your retirement funds in an immediate annuity plan and then face a financial contingency which requires funds

Barring these drawbacks, immediate annuity plans provide a lot of benefits and should be chosen if you need regular income after you retire.

Tax implication of immediate annuity plans

Annuity plans have different tax implications compared to other life insurance plans. These implications are as follows –

  • Tax implication of the premium paid

The premium paid for the plan is allowed as a deduction under Section 80CCC. The maximum limit of deduction is INR 1.5 lakhs which also includes deductions under Section 80C.

  • Tax implication on annuity received

Annuity payments qualify as income in your hands. They are added to your total income and are taxed at your relevant tax slab rates.

Companies offering immediate annuity plans

Though immediate annuity policies are offered by almost all life insurance companies, here are the best plans for you to buy –

  1. LIC’s Jeevan Shanti PlanThis plan combines immediate and deferred annuity benefits and has the following features:
      • You can choose to receive annuities immediately or after a specified period
      • There are nine annuity options offered by the plan
      • If you choose the deferred annuity option, you get guaranteed additions added to your corpus during the deferment period
      • You can take a joint life annuity with spouse, siblings, grandparents, grandchildren, parents or children

    Plan parameters 

    Entry age 30-85 years
    Purchase price Minimum – INR 1.5 lakhs

    Maximum – No limit

    Annual annuity rate Minimum – INR 12,000

    Maximum – no limit. Depends on the purchase price paid

  2. ICICI Pru Immediate Annuity Plan This plan is also quite popular which has the following salient features:
      • There are 12 annuity options offered by the plan
      • You can choose to get a refund of the purchase price on death, critical illness or accidental permanent disability
      • You can choose deferred annuity payments and receive annuities from a later date
      • National Pension Scheme subscribers can claim a discount of 0.5% on the purchase price
      • You are promised higher annuity rates if you choose to defer your annuity incomes or if you pay higher levels of purchase price
      • You can top-up your annuity amount by paying an additional purchase price

    Plan parameters 

    Entry age 30 years onwards
    Purchase price Depends on the annuity income that you want to receive and the entry age
    Annual annuity rate Minimum – INR 12,000

    Maximum – no limit. Depends on the purchase price paid

  3. HDFC Life New Immediate Annuity Plan HDFC is a leading name in the life insurance industry and its immediate annuity plan also comes with all the benefits. The features of the plan are as follows:
      • 11 annuity pay-out options are available under the plan
      • The annuity rates are higher if you pay a higher purchase price

    Plan parameters 

    Entry age 20-80 years
    Purchase price Depends on the annuity income that you want to receive and the entry age
    Annual annuity rate Minimum – INR 10,000

    Maximum – no limit. Depends on the purchase price paid

Buying immediate annuity policies:

You can buy immediate annuity plans online through Turtlemint. Turtlemint gives you the following advantages of buying an immediate annuity plan from its platform –

  • A choice of the best immediate annuity plans available in the market
  • The facility to compare and buy the best plan which offers the highest rate of annuity
  • Complete guidance in buying the policy by solving all your product related queries
  • Dedicated claim assistance department which helps you in getting your claims settled easily and conveniently

To enjoy these benefits and to buy immediate annuity coverage from Turtlemint, here are the steps which you should take –

    • Visit Turtlemint’s life insurance page at https://www.turtlemint.com/life-insurance
    • Choose the coverage need ‘Pension/Retirement’
    • Fill in your personal profile wherein the following details would be required –
      • Your gender
      • Date of birth
      • Annual income level
      • Smoking preference
      • Retirement age
      • Preferred investment tenure
      • Mode of investment and amount of investment
      • Your name, phone number and email ID
    • In the next page you would be able to see handpicked plans as per your coverage requirements
    • You can select the most suitable policy and buy it by paying the premiums online

When you buy an immediate annuity plan, you would have to submit the following documents –

      • Your photographs
      • Age proof
      • Identity proof
      • Address proof
      • Any other documents as required by the insurance company

Once the required documents are submitted, the insurance company verifies your proposal and issues you the policy.

Immediate annuity plans are the best way to substitute your income after you retire. These incomes would continue till you live. You can also ensure annuity incomes for your spouse in your absence creating financial security for your family. So, if you are nearing retirement and you have a retirement corpus in your hands, invest in an immediate annuity plan and get assured income even without having to work.

Frequently Asked Questions

    1. What is the meaning of vesting age?Vesting age is the age from which you start receiving annuity payments.
    2. Do immediate annuity plans offer any discounts?No, there are no discounts under immediate annuity plans. However, many immediate annuity plans offer higher annuity rates if the purchase price is high.
    3. What would happen if the secondary annuitant dies before the primary annuitant?If the secondary annuitant dies before the primary annuitant, the annuity payments would stop after the death of the primary annuitant.
    4. On what factors do annuity rates depend?Annuity rates depend on the following factors –
      • Vesting age of the annuitant – annuity rates are higher at higher ages
      • Type of annuity payment option selected – rates are lower under joint life annuities than under single life annuities
      • Amount of purchase price – higher the purchase price higher would be the annuity rate
      • Annuity payment frequency – the lower the payment frequency the higher would be the annuity rate
    5. Can I change the annuity payment frequency after buying the immediate annuity policy?No, once the policy is bought, the annuity payment frequency cannot be changed.

All you need to know about immediate annuity plans

Retirement is that period of your life when your regular income stops. However, your lifestyle and medical expenses continue irrespective of your income. In this situation you need to arrange for a source of income to fund your lifestyle expenses. This is where retirement oriented life insurance plans come into the picture. These plans are called pension or annuity plans and an immediate annuity plan helps you substitute your income even in your retired years. Do you know who? Let’s explore –

What is an immediate annuity policy?

Immediate annuity is a type of life insurance pension plan. Under this plan, you are promised a series of annuity payments for as long as you live. Moreover, there are joint life immediate annuity plans as well which promise annuity payments for the lifetime of your spouse as well.

Features of immediate annuity plans

Immediate annuity plans have the following salient features –

  1. Single premium is payable under the policy which is called the purchase price
  2. You can choose the annuity payment frequency which can be monthly, half-yearly, quarterly or annually
  3. The person on whose life the annuity is paid is called the annuitant
  4. There are different annuity payment options and you can choose any option
  5. Annuity can be chosen to be received on a single life or joint life. In case of joint life annuities, the spouse can be covered. The policyholder would be called the primary annuitant and the spouse would be the secondary annuitant
  6. The annuity stops on death of the annuitant

Annuity payment options

As stated earlier, there are a lot of annuity payment options under an immediate annuity plan. These options include the following –

Annuity option Meaning
Annuity for life Annuity is paid till the lifetime of the annuitant
Annuity certain Annuity is paid for a certain guaranteed period which can be 5, 10, 15 or 20 years whether the annuitant survives this period or not. If, however, the annuitant survives the guaranteed period, annuity is then paid for his/her lifetime
Annuity for life and return of purchase price Annuity is paid till the lifetime of the annuitant. When the annuitant dies, the purchase price is refunded back to the nominee
Joint life annuity Annuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant
Joint life annuity with return of purchase price Annuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant. When the secondary annuitant also dies, the purchase price is refunded back to the nominee
Increasing annuity Annuity is paid till the lifetime of the annuitant. This annuity increases every year at simple or compound rate of interest. The rate of interest depends on the plan and ranges between 3% to 10%

How does immediate annuity plan work?

When you buy an immediate annuity policy, here’s how the plan would work –

  1. You buy the policy by paying a lump sum amount premium at once.
  2. You have to choose the annuity payment option that you like. There are different annuity payment options and you can choose any one as per your requirement
  3. You also have to choose the annuity payment frequency.
  4. Once you have bought the policy and chosen the annuity payment option and frequency, you would start receiving annuity pay-outs immediately from the next frequency. For instance, if you buy the policy on 1st January and choose monthly payment frequency, annuity payments would commence from 1st February
  5. The amount of the annuity is fixed and is specified beforehand
  6. The annuity payment would continue for as long as you are alive. In case of joint life annuities, annuity payments continue till the lifetime of the last survivor
  7. On death, the payments would stop and the policy would be terminated. The availability of death benefit would depend on the annuity payment option that you have selected

Benefits of immediate annuity policies

By buying immediate annuity plans, you get the following benefits –

  • You get a regular stream of income which are guaranteed throughout your lifetime
  • You can ensure financial security for your spouse by choosing joint life annuity wherein your spouse would get annuity if you predeceased him/her
  • If you choose the annuity option which returns the purchase price, you can leave behind a legacy for your family after your demise
  • Immediate annuity plan ensures that you remain financially independent even after you retire

Drawbacks of immediate annuity policies

Though immediate annuity insurance promises the above-mentioned benefits, there are one or two drawbacks which you cannot overlook. These include the following –

  1. If you choose an annuity for life and then you die after a few years, the insurance company would be left with a large part of your retirement corpus which would be retained by them
  2. Once started, you cannot cancel the annuity payments. This might prove to be a problem if you invest all your retirement funds in an immediate annuity plan and then face a financial contingency which requires funds

Barring these drawbacks, immediate annuity plans provide a lot of benefits and should be chosen if you need regular income after you retire.

Tax implication of immediate annuity plans

Annuity plans have different tax implications compared to other life insurance plans. These implications are as follows –

  • Tax implication of the premium paidThe premium paid for the plan is allowed as a deduction under Section 80CCC. The maximum limit of deduction is INR 1.5 lakhs which also includes deductions under Section 80C.
  • Tax implication on annuity receivedAnnuity payments qualify as income in your hands. They are added to your total income and are taxed at your relevant tax slab rates.

Companies offering immediate annuity plans

Though immediate annuity policies are offered by almost all life insurance companies, here are the best plans for you to buy –

  1. LIC’s Jeevan Shanti PlanThis plan combines immediate and deferred annuity benefits and has the following features:
    1. You can choose to receive annuities immediately or after a specified period
    2. There are nine annuity options offered by the plan
    3. If you choose the deferred annuity option, you get guaranteed additions added to your corpus during the deferment period
    4. You can take a joint life annuity with spouse, siblings, grandparents, grandchildren, parents or children

    Plan parameters

    Entry age 30-85 years
    Purchase price Minimum – INR 1.5 lakhs
    Maximum – No limit
    Annual annuity rate Minimum – INR 12,000
    Maximum – no limit. Depends on the purchase price paid
  1. ICICI Pru Immediate Annuity PlanThis plan is also quite popular which has the following salient features:
    1. There are 12 annuity options offered by the plan
    2. You can choose to get a refund of the purchase price on death, critical illness or accidental permanent disability
    3. You can choose deferred annuity payments and receive annuities from a later date
    4. National Pension Scheme subscribers can claim a discount of 0.5% on the purchase price
    5. You are promised higher annuity rates if you choose to defer your annuity incomes or if you pay higher levels of purchase price
    6. You can top-up your annuity amount by paying an additional purchase price

    Plan parameters

    Entry age 30 years onwards
    Purchase price Depends on the annuity income that you want to receive and the entry age
    Annual annuity rate Minimum – INR 12,000
    Maximum – no limit. Depends on the purchase price paid
  1. HDFC Life New Immediate Annuity PlanHDFC is a leading name in the life insurance industry and its immediate annuity plan also comes with all the benefits. The features of the plan are as follows:
    1. 11 annuity pay-out options are available under the plan
    2. The annuity rates are higher if you pay a higher purchase price

    Plan parameters

    Entry age 20-80 years
    Purchase price Depends on the annuity income that you want to receive and the entry age
    Annual annuity rate Minimum – INR 10,000
    Maximum – no limit. Depends on the purchase price paid

Buying immediate annuity policies:

You can buy immediate annuity plans online through Turtlemint. Turtlemint gives you the following advantages of buying an immediate annuity plan from its platform –

  • A choice of the best immediate annuity plans available in the market
  • The facility to compare and buy the best plan which offers the highest rate of annuity
  • Complete guidance in buying the policy by solving all your product related queries
  • Dedicated claim assistance department which helps you in getting your claims settled easily and conveniently

To enjoy these benefits and to buy immediate annuity coverage from Turtlemint, here are the steps which you should take –

  • Visit Turtlemint’s life insurance page at https://www.turtlemint.com/life-insurance
  • Choose the coverage need ‘Pension/Retirement’
  • Fill in your personal profile wherein the following details would be required –
    • Your gender
    • Date of birth
    • Annual income level
    • Smoking preference
    • Retirement age
    • Preferred investment tenure
    • Mode of investment and amount of investment
    • Your name, phone number and email ID
  • In the next page you would be able to see handpicked plans as per your coverage requirements
  • You can select the most suitable policy and buy it by paying the premiums online

When you buy an immediate annuity plan, you would have to submit the following documents –

  • Your photographs
  • Age proof
  • Identity proof
  • Address proof
  • Any other documents as required by the insurance company

Once the required documents are submitted, the insurance company verifies your proposal and issues you the policy.

Immediate annuity plans are the best way to substitute your income after you retire. These incomes would continue till you live. You can also ensure annuity incomes for your spouse in your absence creating financial security for your family. So, if you are nearing retirement and you have a retirement corpus in your hands, invest in an immediate annuity plan and get assured income even without having to work.

Frequently Asked Questions

  1. What is the meaning of vesting age?Vesting age is the age from which you start receiving annuity payments.
  1. Do immediate annuity plans offer any discounts?No, there are no discounts under immediate annuity plans. However, many immediate annuity plans offer higher annuity rates if the purchase price is high.
  1. What would happen if the secondary annuitant dies before the primary annuitant?If the secondary annuitant dies before the primary annuitant, the annuity payments would stop after the death of the primary annuitant.
  1. On what factors do annuity rates depend?Annuity rates depend on the following factors –
    • Vesting age of the annuitant – annuity rates are higher at higher ages
    • Type of annuity payment option selected – rates are lower under joint life annuities than under single life annuities
    • Amount of purchase price – higher the purchase price higher would be the annuity rate
    • Annuity payment frequency – the lower the payment frequency the higher would be the annuity rate
  1. Can I change the annuity payment frequency after buying the immediate annuity policy?No, once the policy is bought, the annuity payment frequency cannot be changed.

10 best investment options in India for 2021

One of the most difficult things about money is not saving it but investing it wisely. While all of you would be aware about the myriad investment options available to you, the number of possibilities makes it impossible to make the correct investment choice. Many a times, you spend so much time analysing the investment options that you end up not investing at all. And when it finally needs to be invested, it might be done for all the wrong reasons. However, in order to make your hard-earned money earn for you and become a passive source of income it is important that you invest it wisely.

The most important reason for investment is the goal for which you need to invest. For example, an investment for retirement is differently planned than one for wealth accumulation or child education or buying a house. Once the purpose for investment is decided, choosing the product becomes rather easy.

How to choose the best investment product, once the goals are decided:

Broadly, investments can be made in financial assets like ULIPs, equities, mutual funds, bank deposits and non-financial assets like gold, real estate etc.

The top 10 investment options in India for 2019 include:

Unit linked Insurance plan (ULIPs)

Unit linked insurance plan (ULIP) offered by life insurance companies are excellent insurance-cum-investment plans which serve dual purpose of providing a life cover and also an opportunity for wealth creation over the long-term.

Read more about Types of life insurance

Working of a ULIP:

The premium paid toward a ULIP is invested in the market, thus, allowing the investor to earn market-linked returns and at the same time there is a fixed sum assured in the event of death. Policy holder can choose to invest in equities or debt funds as per his own risk appetite. Aggressive investors with high risk taking capacity can opt for equity funds and conservative investors can invest primarily in debt funds or even a combination of the two. One can also move from one fund to another as and when desired.

The Tax edge of ULIPs:

ULIPs also are advantageous from taxation point of view as premium paid up to Rs. 1,50,000 is exempt from tax under Section 80C. Unlike traditional investments like Public Provident Fund or PPF which have long lock-in periods, ULIPs have a lock-in period of 5 years only. Also, the entire amount received on maturity is exempt from tax just like PPF.
Investments in ULIP can be switched from equity to debt and vice-versa without any short-term or long-term tax impact, unlike mutual funds.

Though there are many tax saving options like PPF, tax saving Mutual Funds called Equity Linked Saving Scheme or ELSS, insurance policies, etc. which are available for investment but investments in ULIPs stand to gain the most as it is a comprehensive plan which provides all the advantages of a tax savings and at the same time provide the opportunity to earn market-linked returns.

Other than ULIPs, ELSS is the only option which earns market returns but again they do not have the advantage of switching between the funds and are restricted to equity schemes only. In a ULIP both equity and debt funds enjoy tax-free returns, unlike ELSS.

Thus, ULIP is an excellent combination investment option for investors looking for market-linked returns along with tax benefits and a life cover.

Read more about 5 best ULIP plans to invest in 2018

Read more about Different types of ULIP’s before you buy one

PPF (Public Provident Fund)

PPF offered by the Government of India is one of the safest and oldest investment options and can be opened at any nationalised or private banks and even at the post offices. PPF account can be opened with a minimum amount of Rs. 500 and investments upto Rs. 1.5 lakh are exempt from tax each year. The interest rate offered on PPF accounts are compounded annually and this rate is revised each year by the government. The current rate of interest is 7.6%.

Tax advantage:

PPF investments enjoy the triple Exempt-Exempt-Exempt or EEE benefit and the entire corpus of PPF is exempt from tax on maturity as PPF, like ULIPs. However, one of the biggest disadvantages of PPF is that the lock-in period is 15 years, though partial withdrawals are permitted from 6th year.

Conservative investors looking for long-term investment option with no risk can look at investing in PPF.

Direct Equity

Equity investments are purchasing shares of a company directly thus indicating part ownership in that company.

Direct equity investments have the potential to generate huge returns but these investments carry potentially higher risks as direct equity investments can be extremely volatile. Since the returns are marked to the market, i.e. it rises and falls with the market performance, this type of investment is volatile and best suited for people with higher risk appetite or some proficiency in investing.

Historically, the returns generated by equities have outperformed the returns of all asset classes and have huge earning potential, but there is no guarantee of returns and there is always the risk of losing your capital too. Picking the right stock, time of entry and exit, market conditions all such factors play a significant role in determining the returns generated in direct equities.

Taxation in Equity Investment:

Investments in equities are extremely liquid and such investments can be withdrawn in part or full anytime.

However, unlike before, returns in excess of Rs. 1 lakh at the time of sale of such investments will attract Long-Term Capital Gain or LTCG tax of 10%. This has been recently introduced by the last budget. If the investment is liquidated before a period of 12 months, then the returns will attract a flat Short-Term Capital Gain or STCG tax of 15%.

Aggressive investors who are willing to take fairly higher risks for higher returns can look at investing in direct equities. Equity investments can be done by opening a DEMAT account with SEBI registered stockbrokers.

Equity Mutual Funds

The mutual fund industry has grown manifold in the last two decades. Equity mutual fund schemes are very popular investment choices amongst investors who want to invest in equities as these funds invest in equity stocks of various companies.

As per Securities and Exchange Board of India (SEBI) guidelines any scheme to qualify as equity scheme must invest minimum 65% of its total corpus in equities and related instruments. Equity mutual funds can be managed actively or passively depending upon the scheme. The minimum investment in a mutual fund scheme can be as low as Rs 500.

Tax Treatment of Equity Mutual Funds:

The tax treatment on the returns generated by equity funds is same as that of direct equity with the only exception being ELSS schemes. ELSS is a type of equity mutual fund and investments in ELSS upto Rs. 1.5 lakh is exempt from tax and even the returns generated are tax-free. However, ELSS, unlike other equity schemes, have a minimum lock-in period of 3 years.

As these funds are professionally managed, equity mutual funds are good option for investors who are looking to invest in the stock market but do not have the expertise for the same.

Debt Mutual Funds

Apart from equity mutual funds investors can also look at investing in mutual funds through debt funds. Debt funds invest most of their corpus in fixed-interest securities such as bonds, government securities, treasury bills, commercial paper and money market instruments.

One can safely look at investing in debt funds without having to take the risk of equity funds and enjoy the safety of traditional debt instruments at higher returns.

To know more about mutual funds visit site https://www.mutualfundssahihai.com/en

Find the difference between ULIPS & Mutual fund with the help of below video

Gold

Gold is considered as one of the safest investment option in times of economic uncertainties. Gold, as an investment, has been one of the most favoured assets amongst Indians also because of the ornamental value attached to it.  However, gold is also one of the most volatile assets and investing in physical gold risk is considerably risky and storage is also a concern. Apart from this, gold in the form of jewellery involves high making charges with lower the overall returns. ETFs of gold and sovereign gold bonds are a cost-effective solution to make investments in gold.

Real Estate

Real estate has always been considered as one of the most lucrative investment option as the  Investments in real estate fetch returns in two ways as rental income and by way of capital appreciation at the time of sale. The location of the property and development around its vicinity are important factors that determine the returns on real estate.
However, real estate is an extremely capital intensive investment and real estate as an asset class is extremely illiquid. More and more people are realising this fact and with the evolution of financial markets in the last two decades not too many people opt for real estate as an investment.

It is ideal for investors who have surplus funds and have no requirement for such funds for a long-term.

National Pension Scheme

NPS is a voluntary long term retirement scheme which is managed by the Pension Regulatory and Development Authority (PFRDA). Investments in NPS can be made in funds in various asset classes such as equities, real estate, G-secs, etc. depending upon the risk appetite of the investor. Investments made up to Rs. 1,50,000  lakh are exempt from tax under Section 80C. Additionally, investments of Rs. 50,000 are exempt from tax under Section 80CCD thus taking the overall exemption to Rs. 2,00,000.  Pre-mature withdrawals from NPS are not permitted and withdrawals are partially taxable on maturity.

NPS is a good long-term investment for retirement planning.

Bank Fixed Deposits

Investing in Bank FD is still the most prevalent investment option in India. Investing in Bank FDs are considered as safe and most convenient investment option. Bank FDs come with a fixed tenure and premature withdrawal results in penalty. The interest rate offered by Bank FDs is nominal and varies from bank to bank. 5 year Bank FDs do get 80C benefit on investment but the interest income is fully taxable and added to the total taxable income of the investor.

Conservative investors looking to invest their savings for some returns and want complete capital protection can invest in Bank FDs.

Fixed Deposits made with private companies instead of Banks, are called Company Deposits and functionally they perform the same way as Bank FDs. The only difference is that there is no 80C benefit even for 5 year deposits and the rate of interest is usually a little higher than Bank FDs.

Tax free bonds

Tax free bonds are long term investment options primarily offered by government backed entities with minimal default risk. These bonds come with investment tenures ranging from 10, 15 to 20 years and pay a fixed coupon on the investment amount. The interest income received from these bonds is completely exempt from tax and there is no upper limit for investment in these bonds. However, the interest received on such bonds is very nominal.

Tax-free bonds are good for conservative investors looking for a fixed interest income over a long-term.

The choice of above investments should be made after taking into consideration of some important factors such as:

  • Tenure: The duration for which you want to invest your money. For example, the ideal choice of investment for an investor looking to invest for a year viz-a-viz someone looking to invest for 10 years or more will be very different.
  • Financial Goal: You should be clear about the future goal or goals you wish to achieve through your investments. Goals can be anything from wanting to build a corpus for child’s education or marriage, buying a house, planning for retirement etc.
  • Liquidity: Liquidity is another aspect to consider while making investments. Some assets like real estate may provide higher returns, but, not suitable if you are looking to invest for a short period of time, as real estate is most illiquid asset.
  • Risk taking capacity: The return generated by any investment is directly proportionate to the amount risk associated with such investments. The choice of investment should match your risk bearing capability. A conservative investor would not be comfortable investing majority of his surplus in high risk investment options.
  • Taxation: Certain types of investments such as PPF, ULIPs etc. are extremely tax-efficient. However, investments in such instruments should be a part of your overall financial planning and not the entire financial planning in it.

 Here is an overview on these investments on the above parameters

 

Things to Know About Cashless Health Insurance

With the dramatic rise in healthcare costs, medical emergencies can make a big hole in your pocket. Hence, it has become imperative for everyone to buy health insurance plans in India. While buying health insurance plans, people consider various things such as coverage offered, premium and additional benefits etc. But, the most important thing one must consider in any health insurance plan is the ‘’cashless facility’’ offered to avail the quality medical care services at the right time.

Overview of cashless health insurance

Cashless health insurance is a health insurance policy that comes with a cashless claim facility. As the name implies, in cashless health insurance plans, you don’t have to face the hassles of paying cash during medical emergencies and then getting it reimbursed from insurers. In this, your insurer will directly settle the medical bills to the network hospital where you avail healthcare treatments. Hence, in order to avail the quality healthcare treatment at the rightly needed time, it’s important to have an ideal health insurance plan that is supplemented by the cashless facility. With a cashless health insurance policy, you can get the timely treatment even without having a contingency fund for medical emergencies

Features of cashless health insurance

Today, health insurance policies come with wide array of features cover each and every aspect of healthcare emergency. There are plans to suit the healthcare requirements of individuals, families, senior citizens, women and group of people etc. Almost every insurer today is offering cashless health insurance policies. Features of these policies are designed by the insurance companies. Let’s take a look at some of the standard features offered by cashless health insurance plans.

Following are the features of a cashless health insurance policy:

  • In-patient hospitalisation expenses
  • Pre and post hospitalisation expenses
  • Day care procedures
  • Domiciliary treatments
  • Daily hospital cash allowance
  • Emergency ambulance cost cover
  • Value added services
  • Pre-existing illness cover
  • Free health check-ups
  • No claim bonus
  • Organ donor cover
  • Critical illness cover, etc.

Top #4 Advantages of cashless health insurance

An ideal cashless health insurance plan is the one that offers you unending benefits in the time of need. Let’s take a look at the major benefits offered by cashless health insurance.

  1. Extensive coverage:

    Cashless health policies provide comprehensive coverage for all health issues including in-patient care, pre hospitalisation and post hospitalisation, domiciliary hospitalisation, day care procedures, health check-ups and ambulance coverage etc. Many policies provide additional coverage such as critical illness cover, parental care, maternity expenses and new born child cover etc. to make the coverage extensive.

  1. Convenience of instant cashless treatment:

    Cashless health plans are the quickest with the convenience of an immediate treatment facility at network hospitals without having to pay the cash. The best part is hospital network is widely spread across the country in almost all the insurance companies. Hence, cashless medical treatment can be availed by you conveniently even when you are travelling.

  1. Worry-free access to funds:

    If you have cashless medical insurance, you can avail treatment in the time of need without any worry irrespective of your financial condition at the moment. Cashless insurance offers a sense of security as there is no worry of depleting savings or liquidating assets. You will be in a better position to handle the unforeseen situation with the financial security offered by cashless health plans.

  1. Saves tax:

    Along with all the financial protection and convenience benefits, a cashless health insurance policy also offers tax benefits.

Premiums paid towards health insurance plans taken for self, spouse, children and parents can be claimed under Section 80D of the Income Tax Act for tax deduction.

Following are the details –

Description All members of the family below 60 years of age Self, spouse and children  below 60 years age
Either of the parents above 60 years age
Self- 60 years above Spouse and children below 60 years of age
Parents above 60 years age
Maximum premium for self, spouse and dependent children INR. 25,000 INR. 25,000 INR. 50,000
Maximum premium for parents (dependent/non-dependent) INR. 25,000 INR. 50,000 INR. 75,000
Total deductions available INR. 50,000 INR. 50,000 INR. 1,00,000

 

Types of cashless health insurance policies in India:

There are various types of health insurance policies offered in India with cashless facility. Following are the types of cashless health insurance policies available in India:

  1. Cashless individual health insurance:

    Cashless individual health insurance policies provide coverage to an individual against various unforeseen medical events depending on the terms and conditions of the policy.

  1. Cashless family health insurance:

    Cashless family health insurance provides coverage to an entire family in a single policy against various unforeseen medical events as per the terms and conditions of the policy.

  1. Cashless senior citizen health insurance:

    Cashless senior citizen health plans provide healthcare coverage to senior citizens with many exclusive features like coverage for pre-existing illness, day care and critical illness etc.

  1. Cashless mediclaim/group health insurance:

    Cashless mediclaim insurance policies provide coverage to the group members. These are the employee sponsored health insurance plans providing coverage against various unforeseen medical events.

Top #5 best cashless health insurance plans

There are a wide variety of cashless health insurance policies available in the market. The best cashless health insurance plan out of these plans may vary depending on each individual’s requirement. However, here we have tried to list out five best cashless health insurance plans available in the market.

Following are the details:

 

Plan name Plan type Entry age Renewability Waiting period for pre-existing illness Sum insured (in INR) Premium
Apollo Munich Optima Restore Plan Individual/ Family floater 91 days to 65 years Lifelong 36 months INR 3 lakhs to INR 50 lakhs INR 7,971
Star Family Health Optima Plan Family floater 16 days to 65 years Lifelong 24 months INR 2 lakhs to 15 lakhs INR 10,608
HDFC ERGO Health Suraksha Policy Individual/ Family floater 3 months to no limit Lifelong 48 months Up to INR 10 lakhs INR 8,044
Religare Care Policy Individual/ Family floater 91 days to no limit Lifelong 48 months INR 2 lakhs to INR 60 lakhs INR 6,318
ManipalCigna ProHealth plan Individual/ Family floater 91 days to no limit Lifelong 48 months INR 2.5 lakhs to INR 100 lakhs INR 6,996

(Premium is taken for a 30-year-old healthy male for INR. 5 lakhs sum insured. Star family Health optima plan premium is for a 30-year male + a 28-year-old spouse, as the plan is family floater)

Apollo Munich Optima Restore Plan

Apollo Munich Health Insurance is one of the leading private health insurers in India with a wide gamut of health plans in its product offering. The company offers best in class services with 4500+ network hospitals across the nation. Let’s take a look at some of the amazing features offered by optima restore health plan.

Following are the key features/facilities offered by the plan:

  1. The plan offers comprehensive coverage for various expenses that include hospitalisation, daycare, pre hospitalisation and post hospitalisation, organ donor expenses and daily hospitalisation allowance etc.
  2. The policy offers no-claim benefit for each claim-free year which is up to 50% along with multiplier benefit that can double the NCB benefit up to 100% of sum insured.
  3. The plan comes with an automatic sum insured restoration benefit
  4. The policy offers you portability benefit which helps you get all the previous transferable benefits under the policy
  5. You can stay active and earn up to 8% renewal discount by using stay active mobile application
  6. Complimentary health check-up at the block of every two years
  7. Policy comes with an optional add-on cover called ‘critical advantage rider’ that covers eight major illnesses for up to INR. 10 lakhs. Policy also offers e-opinion facility post-diagnosis of critical illness
  8. Policy requires no pre-medicals for a person aged below 45 years and for sum insured below INR 15 lakhs

Star Family Health Optima Plan

India’s first standalone insurance company, Star Health Insurance Company offers various uniquely crafted health insurance plans for you and your family. With its largest network of 9600+ hospitals, the company displays excellent service quality. Star family health optima is one of the best plans offered by the company to secure your entire family under one umbrella. Let’s take a look at the key features and facilities offered by the plan.

  1. Policy offers extensive coverage for the whole family at reasonable cost of premium. Coverage mainly includes, hospitalisation, pre hospitalisation and post hospitalisation, 405 day care procedures, organ donor expenses, domiciliary hospitalisation and newborn cover etc.
  2. 100% automatic restoration of sum insured benefit
  3. Policy offers no claim bonus of up to 35% of the sum insured
  4. Recharge benefit to enhance the sum insured up to 30%
  5. Health check-up benefit of up to 1% of the sum insured
  6. Policy offers you portability benefit which helps you get all the previous transferable benefits under the policy
  7. Policy requires no pre-medicals for person aged below 50 years

HDFC ERGO Health Suraksha Policy

HDFC ERGO General Insurance Company offers a diversified range of health insurance plans to suit various healthcare needs of its customers. With a wider network of 9500+ hospitals, the company endures your healthcare needs are addressed effortlessly. Health Suraksha plan of HDFC ERGO comes with various amazing benefits and features. Let’s take a look at the features of the plan.

  1. Policy offers wider coverage that includes in-patient care, day care treatments, organ donor cover, pre hospitalisation as well as post hospitalisation and non-allopathic treatments, emergency ambulance charges etc.
  2. Policy offers optional add-ons like maternity cover, critical illness benefit and convalescence benefit etc.
  3. Policy offers family discount of up to 10% on premium for covering two or more family members
  4. Policy offers 5% cumulative bonus for each claim free year
  5. Automatic sum insured restoration benefit
  6. Health check-up allowance of up to 1% of the sum insured
  7. Policy requires no pre-medicals for person aged below 46 years

Religare Care Policy

Religare Health Insurance is one of the most trusted brands that offers a wide range of health insurance plans. With 4700+ network hospitals, Religare makes global healthcare treatment easily available for you. Religare Care is one of the best plans offered by the company with various valuable features. Let’s take a look at the facilities offered by Religare Care policy.

  1. Policy comes with complete package of wide coverage that includes in-patient care, pre hospitalisation and post hospitalisation, day care treatments, organ donor expenses, outpatient cover, daily hospitalisation allowance, ambulance charges and domiciliary hospitalisation etc.
  2. Sum insured restoration benefit of up to 100% is offered
  3. No claim bonus of 10% on each claim free year up to a maximum of 50% is offered. The plan also comes with additional no-claim bonus of 50% making the total to 100%
  4. Complimentary health check-up once a year
  5. Policy offers discount on choosing longer policy term
  6. Policy requires no pre-medicals for person aged below 46 years. However, the requirement may depend on sum insured chosen and health history

ManipalCigna ProHealth Plan

ManipalCigna Health Insurance Company formerly known as Cigna TTK Health Insurance Company offers a wide range of health insurance solutions. ProHealth plan is one of the best products offered by the company to secure you and your family. Let’s take a look at amazing facilities offered by the plan.

  1. ProHealth policy offers flexibility in choosing the plan based on your healthcare requirements – plans available are Protect, Plus, Preferred and Premie.
  2. Policy comes with comprehensive coverage that includes in-patient hospitalisation cover, day care treatments, organ donor expenses and pre and post hospitalisation cover etc.
  3. Policy offers up to 10% of long tenure discount and family discount on premium
  4. Restoration benefit of up to 100% of sum insured
  5. No claim benefit of 5% to 10% (depending on the plan chosen) is offered which can be accumulated up to a maximum of 100% of sum insured
  6. Policy comes with voluntary deductible of INR. 1 lakh, INR. 2 lakhs and INR. 3 lakhs which can help you reduce your premium to a certain extent
  7. Complimentary health check-up for every three years
  8. Policy provides you an option to earn healthy rewards that can reduce your premium
  9. Policy provides maternity cover and worldwide emergency benefit
  10. Policy comes with optional add-ons – critical illness cover and waiver of copay.

11 most important points to consider before buying a cashless health insurance policy

To buy the best cashless health insurance plan, certain important points are to be considered. Following are the important points to consider while buying:

  1. Coverage:

    Coverage offered by the policy needs to be given utmost importance at the time of buying. It’s important to have adequate coverage in case of an unfortunate event. Not just the amount of sum insured, coverage offered needs to be comprehensive in terms of features and benefits also. Consider wider coverage policies that can cover almost every medical situation. There are policies that come with restoration features, wherein sum insured gets reinstated when it’s exhausted. Consider policies with such features.

  1. Exclusions:

    It is important to consider what is not covered in the policy before you buy it. Cashless health claims also can get rejected if you are not aware of the limitations. Being aware of exclusions helps you make a rational decision

  1. Claim settlement ratio:

    The claim settlement ratio or incurred claim ratio of the health insurance company is an important consideration while buying your cashless health insurance policy. As the ratio signifies a company’s potential to pay claims, it’s ideal to go with cashless health plans of insurers with a high claim settlement ratio.

  1. Co-payment:

    Co-payment refers to the portion of medical expenses that needs to be paid by you as an insured before placing the claims with the insurance company. Hence, it’s important to look for policies that have no co-pay clause.

  1. Network hospitals:

    Cashless facilities can be availed only at network hospitals of the insurance company. Hence, to avail treatment without any hassles anytime, it’s good to go with an insurer having a wider hospital network.

  1. No claim benefits:

    No claim benefit is one of the common features in any cashless health insurance. Basically, you can avail this benefit for being healthy and not making any claim during policy year. Benefit for each claim-free year can be accumulated up to a maximum of 50% by most of the policies.

  1. Lifetime renewal:

    With the rising age, it’s difficult to get comprehensive medical cover. Hence, it’s important to consider policies that are renewable for lifetime in order to avoid coverage hassles and high premium.

  1. Waiting period:

    Almost every cashless health insurance plan comes with a waiting period, after which financial benefits can be claimed for specific treatments, illnesses and procedures. Policies with less waiting period can help you get financial aid without much waiting. Choose the best cashless health insurance policies based on your requirement.

  1. Portability:

    If you have to switch from one insurer to another for any reason, portable cashless health plans transfer all your earned benefits to the new plan. Hence, portability is an important consideration.

  1. Additional benefits:

    Health insurance policies do come with additional benefits like critical illness cover and accidental cover etc. which can enhance your healthcare cover. Consider such features while buying the best cashless health insurance plan

  1. Cost:

    Though, the cost of the policy is not the primary consideration, it’s important to avail all the required benefits at an affordable cost. You can compare the quotes of various cashless health plans online on side by side basis.

How to buy cashless health insurance plans?

As most of the best cashless health insurance plans are available on an online platform, buying is more convenient. Plans of your choice can be bought anytime, anywhere within a few clicks online. You can buy the best cashless health insurance plans through Turtlemint through following steps:

  1. Go to Turtlemint and choose the category of insurance as ‘health’
  2. Click on ‘buy new policy’ and select your profile details such as gender, members to be insured, age, health history and contact details etc.
  3. Compare the plans available and select the cashless health plan based on your need
  4. Provide necessary coverage details
  5. Make the payment online. That completes the buying process!

Documents required for buying cashless health insurance plans

Following are the documents required for buying cashless medical insurance plans:

  1. PAN card is mandatory
  2. Age proof – Birth certificate/SSLC mark sheet/Voter ID/Passport etc.
  3. Identity proof – PAN card/ driving license/voter’s ID/ passport/aadhaar card, etc
  4. Proof of address – Driving license/passport/latest electricity bill/ telephone bill etc.
  5. Photographs

Requirement of pre-medical check-ups may vary depending on the policy’s terms and conditions.

What is the process of cashless health insurance claim?

Usually, in cashless medical insurance policies, TPA (third party administrators) work like a bridge between the insurance company and the network hospitals that helps to speed up the claim process. Some insurance companies will have their in-house claim processing team which makes the process even quicker. Generally, TPAs or insurers will have their help desk set up in their network hospitals to help the claimant.

Cashless health insurance claim process may vary depending on whether it is emergency hospitalisation or planned hospitalisation. Let’s take a look at the process.

  • Cashless emergency hospitalisation

    During medical emergencies, if the insured gets admitted at any network hospital, following is the process to be followed for cashless claim:

    • Once the insured is admitted to the hospital, insured needs to show health card issued by his/her insurance company. Health card will have all the vital details such as name of the insurer, policy number and plan type etc
    • Insured needs to contact TPA/insurance desk and initiate the cashless claim by filling up pre-authorisation request usually within 24 hours of hospitalisation
    • Third party administrator/insurance company will review all the initial documents submitted
    • Once the cashless request is approved by the insurance company further documents are to be produced by the hospital to expedite the claim process
    • Once final set documents submitted by hospital are verified, claim amount will be directly settled with the network hospital
  • Cashless planned hospitalisation

    In case of planned hospitalisation at the network hospital for any treatment/procedures, following is the process to be followed:

    • You can go through the insurance company’s website to take a look at the list of network hospitals available for treatment or can seek this information by contacting the customer support team of the insurance company
    • Once you choose your preferred network hospital to get treated, you need to fill-up pre-authorisation cashless request form which can be downloaded online on TPA website or can be obtained from insurance desk at the hospital
    • It’s important to submit this pre-authorisation from within specified time limit prior to hospitalisation. Time limit may vary from insurer to insurer
    • Hospital authorities or an attending physician will also go through your request form, verify the details and sign
    • The submitted request form will then be checked by TPA/insurance desk for eligibility and authenticity
    • Post verification by insurance desk or TPA, approval will be sent to network hospital for cashless treatment
    • On producing the final documents by hospital, payment of claim will be directly made to the hospital

Documents required for cashless claim settlement

Requirement of documents may vary on claim to claim basis. However, there are certain common documents that are needed for cashless medical insurance claims. Following are the documents required:

  1. Claim form duly filled and signed
  2. Doctor’s advice for hospitalisation
  3. Discharge summary of the hospital
  4. Doctors’ prescription, treatment details along with original medical bills and receipts given by hospitals, diagnostic centres, doctors and pharmacies
  5. Diagnosis reports (ECG/Scan/X-ray, Lab test reports etc)
  6. Police FIR copy for accident cases
  7. Health card copy, etc.

Exclusions under cashless health insurance

Though cashless health insurance policies provide comprehensive coverage against most of the medical emergencies and health conditions, there are certain exclusions applicable under these plans. Some of the exclusions come with waiting periods, thus temporary in nature. Some of the medical costs are permanently excluded from the policies. Let’s take a look at exclusions under cashless medical insurance.

  • Temporary exclusions
    • Medical expenses incurred during the first 30 days (initial waiting period) of the policy
    • Specific medical illnesses/treatments – usually come with the waiting period of 12 -24 months
    • Pre-existing illnesses – usually come with the waiting period of 24 -48 months
    • Maternity expenses – Generally come with the waiting period of 9 months to 6 years
  • Permanent exclusions

    Following are some of the general exclusions under cashless medical insurance:

    • Non-medical expenses
    • Pregnancy and childbirth
    • Fertility treatments
    • Sexually transmitted diseases
    • AIDS/HIV
    • Self-medication/treatment
    • Unproven and experimental treatments
    • Congenital illnesses
    • Mental disorders/illnesses
    • Cosmetic treatments
    • Treatments received outside geographical limits
    • Self-inflicted injury
    • Breach of law
    • War and nuclear perils
    • Alcohol and drug abuse

    To conclude, cashless health insurance plans give you peace of mind and sense of complete financial security against various health issues and emergencies without having to worry about personal financial condition. With a wide variety of plans available for purchase online, compare them on a cost-benefit basis and secure your health!

Cashless health insurance – FAQs 

  1. What is the meaning of TPA?

    TPA stands for Third Party Administrator. TPA is a company which is tied-up with the insurance company to help its customers with a cashless claim. In case of a claim the customer should contact with the TPA of the insurance company which, in turn, would contact the company on the customer’s behalf. Thus, TPA is the intermediary between the insurance company and the customer at the time of claims.

  2. What is the meaning of PPN?

    PPN stands for Preferred Provider Network. PPN is the hospital which is tied-up with the insurance company for allowing cashless claim settlements to the company’s customers. Thus, when you get admitted at a PPN, your claims would be handled on a cashless basis.

  3. Are pre and post-hospitalization claims settled on a cashless basis?

    No, usually, pre and post-hospitalization claims are settled on a reimbursement basis while your inpatient hospitalization expenses are settled on a cashless basis.

  4. How can I find the list of networked hospitals for cashless claim?

    The list of networked hospitals is available on the insurance company’s website. You can visit the website of your insurer and find the list of networked hospitals in your city. Alternatively, you can contact the claim helpline number of your cashless health insurance policy and ask the helpline department to locate the nearest networked hospital. The claim department would also be able to provide the details of the hospitals in your city at which you can avail cashless claims.

  5. What is a health card?

    A health card is a card which is issued with your cashless health insurance policy. This card contains your name, policy number and customer ID. When you are getting admitted in a networked hospital you need to present this health card for availing cashless claims. The card helps the hospital identify you as the insured member and the number contained on the card is used to process your cashless claims.

Know everything about Health Insurance premium calculator

Illnesses and diseases are rising alarmingly. Nowadays, the majority of individuals suffer from common ailments like diabetes, hypertension, heart-related problems, etc. These and other illnesses require frequent medical attention. Medicine, on the other hand, is progressing quite tremendously. Now you can find cures and treatments for illnesses which never existing before. Medical procedures have become less invasive and cutting edge. However, medical costs have risen tremendously. In recent times, a basic instance of hospitalisation tends to cost tens of thousands. Imagine if you suffer from a serious contingency. The costs would be prohibitive.

To tackle the rising medical costs as well as the rising need for medical attention, health insurance plans become a must. These plans cover the medical bills which you incur if you are hospitalised and need treatments. Since health insurance plans cover medical treatments, your finances are protected.

When buying health insurance plans, it is always recommended that you opt for an optimal sum insured. If the coverage is small, the plan would not be able to cover all your medical expenses. This would defeat the whole purpose of buying health insurance. An optimal sum insured is, therefore, necessary especially when medical costs are high. What about the medical insurance premium though? Would you be able to afford it at the high sum insured levels?

What is a health insurance premium?

The health insurance premium is the amount that you need to pay to avail health insurance coverage. The insurance company issues you a policy and promises to cover your medical risks. You are required to pay a consideration for this promise undertaken by the insurance company. This consideration is the medical insurance premium. Based on the agreement of the insurance company to cover your medical risks and the consideration that you pay for the agreement, a health insurance policy becomes a legal contract.

How is health insurance premium calculated?

There are different factors which determine the medical insurance premium that you have to pay. These factors include the following – 

Following are the features of cashless health insurance:

  1. Your age –

    The older you are the higher would be the chances of facing a medical contingency. Premiums are, therefore, higher at higher age and vice-versa

  1. Your medical condition –

    If you suffer from existing medical ailments, they would affect the health insurance premium rates. If you have chronic ailments, the premiums would be increased to balance the high risk which the insurance company is taking

  1. A number of members being covered –

    If you are opting for a family floater health insurance plan and covering your family members, the premiums would be high. The more members are covered under the plan the higher would be the premium which you would have to pay

  1. Age of covered members –

    The age of the members who are covered under the plan would affect the premium rates. The older members are the higher would be their respective premiums. This would, therefore, increase the total premium payable under the policy

  1. Gender –

    Females are considered to be healthier than males. That is why health insurance premiums for females are lower than for males

  1. Coverage features offered –

    If the health insurance plan offers a range of coverage benefits, it would be expensive. The more the coverage benefits in a plan, the higher would be the premium rate

  1. Riders selected –

    There are additional coverage benefits offered with health insurance plans. These benefits enhance the cover and come at an additional premium. So, if you choose the available riders, the policy premium would increase

  1. Discounts available –

    There is a range of premium discounts which can be availed under health insurance plans. Thus, the available discounts help in bringing down the premium rate.

Other factors affecting health insurance premium calculations

Besides the above-mentioned primary factors which help in calculating the medical insurance premium, there are other factors too. These factors determine the premiums that the company charges. These include the following –

  1. The expenses incurred by the insurance company –

    The insurance companies incur expenses on marketing and distributing their insurance policies. These expenses are, in turn, recovered from the customers in the form of expenses which are added when calculating the premium rate. The higher the expenses incurred by the insurer the higher would be the premiums

  1. Underwriting practices of the insurer –

    Once you apply for a health insurance plan, the insurance company’s underwriting team assesses the risk in your proposal. If the underwriter finds a higher amount of risk, the premium can be increased

  1. Claim experience of the insurer –

    If, in any financial year, the insurance company incurs very high claims which exceed its premium collections, the company suffers a loss. To make up for this loss, the premiums might be increased

  1. Returns earned from the company’s investments –

    The premium which the insurance company collects is invested in various fixed-income investment avenues. These avenues yield returns which increase the value of the insurer’s assets. This would lead the insurer to fix lower premiums

Now that you know the factors which determine your health insurance premium, can you ascertain its affordability?

Actually, you can. There are health insurance premium calculators which help you calculate the premiums payable for a health insurance policy before you actually buy it. Let’s understand what these calculators are and how they work –

What is a health insurance premium calculator?

A health insurance premium calculator is an online calculator which is designed to calculate health insurance premiums. You would have to enter your coverage details into the health insurance calculator and the calculator would give you the medical insurance premium which you would have to pay. Thus, the calculator helps you assess your health insurance premium and judge its affordability.

How does the mediclaim premium calculator work?

To use the health insurance premium calculator, you would have to enter the following details which affect premium calculations –

  1. Your age
  2. The type of policy which you want to buy – individual or family floater
  3. The number and age of the members who are being covered under the plan (if you opt for a family floater policy)
  4. The sum insured that you want
  5. The policy tenure
  6. Whether you have any pre-existing illnesses or not
  7. Gender
  8. Area of residence

Based on these factors, the medical insurance premium would be calculated.

How you can save money by using health insurance premium calculator?

Besides telling you the premium payable, the mediclaim policy premium calculator also allows you to save money. Here’s how you can save money by using a health insurance calculator –

  1. You can calculate the medical insurance premium of different plans. Thereafter, you can compare the premium rates vis-à-vis the coverage benefits offered. After you compare, you can buy the best plan which offers the most inclusive coverage benefits at the lowest premium rates. As you find a plan with the lowest premium rate, you can save money
  2. The mediclaim premium calculator shows you the premium break-up of the basic coverage and any optional riders that you have selected. When you know the premium break-up, you can opt-out of riders which you do not need with your health insurance plan. As you opt-out of riders, the additional premiums payable for the same would be saved
  3. The health insurance premium calculator also shows you the discounts available under different policies. You can compare the discount rates and choose the policy with the maximum discounts to save on the premium cost

Benefits of health insurance premium calculator

It is a good practice to use the mediclaim policy premium calculator to calculate the premiums because the calculator gives you the following benefits –.

  • The health insurance premium calculator is dynamic. You can change the details were entered into the calculator and the premium rates would change. The health insurance calculator, therefore, allows you to try different combinations of the sum insured and policy tenure options to arrive at the most affordable medical insurance premium
  • You can ascertain the premium cost of your health insurance policy before you actually buy the policy. When you know the expected health insurance premium, you can make provisions in your annual budget for the same. Paying the premium for the policy would, then, become easier
  • The health insurance premium calculator helps you to judge the affordability of your health insurance policy
  • If you use the mediclaim policy premium calculator of an insurance technology firm, like Turtlemint, you can compare the premium rates of different policies. You can then compare the available health insurance policies and choose the policy with the best premium rates.

Given these benefits, using a health insurance premium calculator is a must before you buy health insurance.

How to reduce health insurance premiums?

Though the health insurance premium calculator shows you the premiums that you want to pay, there are ways to reduce your medical insurance premium. These ways are as follows –

  • Try and buy the policy at a younger age
  • Choose a policy which has the coverage benefits that you need. The higher the cover features the higher would be the premium. So, choose only those coverage benefits which are required and cut down on unnecessary premiums
  • Choose only those riders which you need
  • Go for long term policy tenure. When you choose a term of two or three consecutive years, the insurance company offers a premium discount which lowers your premium
  • Some policies offer premium discounts if no claims are made in a policy year. If you have such a policy which offers the no claim discount, utilise it
  • You can avail a premium discount if you add family members to the plan’s coverage
  • Compare and buy so that you get the plan which offers good coverage benefits at lowest premium rates
  • Lead a healthy lifestyle as your health would affect your premiums

Tax benefits of health insurance plans

The premium that you pay for a health insurance policy qualifies as a deductible expense under Section 80D of the Income Tax Act. You can claim the premium as a deduction from your taxable income and lower your tax liability.

The deduction which is allowed is as follows –

  1. If you are below 60 years of age and you buy a health plan for yourself, spouse and/or children – up to INR 25,000
  2. If you are 60 years and above and you buy a health plan for yourself, spouse and/or children – up to INR 50,000
  3. If you are below 60 years of age and you buy a health plan for yourself, spouse and/or children + a health insurance plan for your dependent parents – up to INR 25,000 + up to INR 25,000 for parents’ policy
  4. If you are below 60 years of age and you buy a health plan for yourself, spouse and/or children + a health insurance plan for your dependent senior citizen parents – up to INR 25,000 + up to INR 50,000 for parents’ policy
  5. If you are 60 years and above and you buy a health plan for yourself, spouse and/or children + a health insurance plan for your dependent senior citizen parents – up to INR 50,000 + up to INR 50,000 for parents’ policy

So, you can claim up to INR 1 lakh as a deduction by paying medical insurance premiums for yourself, your family and your dependent parents.

Calculating health insurance premiums through Turtlemint

Turtlemint is an online website which allows you to calculate your medical insurance premiums, compare the available policies and buy the best plan. At Turtlemint you can ensure that you get the best coverage benefits at the best premium rates. Turtlemint offers you the following facilities –

  • Calculation of your health insurance premiums
  • Facility to compare the health insurance policies of leading health insurance companies with respect to their coverage benefits and premiums
  • Personalised assistance to buy the best policy
  • A one-stop platform to compare and buy the best health insurance plan
  • Assistance at the time of claims

You can, therefore, calculate your premiums on Turtlemint’s health insurance premium calculator. To do so, the process is as follows –

  • Visit www.turtlemint.com and choose ‘Health’
  • Choose any one option from the following –
    • Buy new policy
    • Top-up existing policy
    • Change insurer
  • Provide your details which include the following –
    • Gender
    • Members to be covered
    • Age of the members
    • Whether or not you are planning to have a child
    • Whether or not you have pre-existing illnesses
    • Area PIN code
    • Income level
    • Your contact details
  • Once all the information is provided, you can check the different health insurance policies, their coverage benefits and respective premiums
  • You can then compare the premium rates and buy the best policy directly from Turtlemint’s website.

A health insurance policy is a must in today’s age when medical costs are rising unchecked. So, invest in a good health insurance policy for yourself and your family. However, before you invest, don’t forget to use the health insurance premium calculator to calculate your premiums and ascertain their affordability. Only if the premiums are affordable, buy the plan and enjoy lifelong coverage.