The Importance of being ‘Insurance Active’

The importance of having your personal health insurance is widely known, especially after the pandemic, and a good percentage of millennials have considered opting for their own health insurance, it is still widely considered a “Tax-Saving Instrument”. With the large choices available, it is inevitable for anyone to get lost amidst the chaos in the industry. This is where making a good decision is noteworthy. Traditional wisdom says “a work begun is half done” and this is where taking the action of actually opting for the health insurance, instead of procrastinating about it forever is important.

The Government health schemes cater to a specific segment of the society. For others, it is important to have your personal health insurance plan so that it can cover your hospitalisation expenses in a medical eventuality. Medical expenses can neither be postponed nor avoided. Hence planning for the same before the emergency arrives is prudent. This is where Health Insurance comes into play.

Thus, you need to activate your health insurance plan NOW, to battle out medical emergencies without worrying about your financial health. 

Importance of activating your health insurance plan NOW:

Here are some reasons to help you understand the very importance of having an active health insurance plan:

  1. Medical costs are steadily increasing

    This one is a fact. Medical inflation is higher than the often-quoted figure of 8-10% and is as high as 15%. (Source: Business Today)

    This is due to the rise in the cost of medicines, equipment and advancements in treatment. Yes, a healthier lifestyle reduces your risks of falling ill, but it does not completely eliminate the same. Hence to combat the rising costs of treatment, health insurance becomes inevitable.

  2. Illnesses and diseases are on the rise

    According to a 2020 study (Source: Clinical Trials Arena, Sep 2021), India was found to be one of the countries with the highest disease burdens. It forecasted 75.26 million cases of type 2 diabetes and 26,000 cases of endometrial cancer in 2021 and these numbers are expected to increase to 91.72 million and 32,000 cases by 2028.

    Diseases are increasing and if they require medical assistance, you need an active health plan to cover the costs.

  3. You can get comprehensive coverage for your whole family

    Health insurance plans offer comprehensive coverage benefits that are customisable too. You get coverage for most of your medical costs thereby getting financial security. Moreover, by choosing a family floater policy, all your family members can be insured so that their medical needs are also met by the policy.

  4. There are tax benefits too

    Lastly, having an active health insurance policy aids in tax savings too. The premium paid for the policy qualifies as a deduction under Section 80D of the Income Tax Act, 1961. You can claim a deduction of up to Rs.25,000 if you are below 60 and up to Rs.50,000 if you are aged 60 and above.

    Moreover, if you also insure your parents and pay their premiums, you can claim an additional deduction of Rs.25,000 if your parents are below 60 or Rs.50,000 if they are senior citizens.

    So, with a maximum deduction of Rs.1 lakh, you can save up to Rs.30,000 in taxes if you fall in the highest tax bracket of 30%. 

Health insurance plans also allow lifelong renewals so that once bought, you can enjoy the coverage lifelong if you renew the policy regularly. Thus, instead of contemplating which is the best health insurance plan that would suit your and your family’s requirements perfectly, it is a wise idea to opt for a comprehensive plan with benefits that you consider important at this point in your life; and later if the requirements change or other plans come up with more benefits, you can always port your health plan without disrupting the continuity benefits.

So, it’s time to rise and shine and start your health insurance plan today and secure your finances against medical emergencies. Remember, the early bird gets the worm. So “Active Ho Jao” with your health plan.

How has the Life Insurance Industry evolved Post-Pandemic?

Ever since the pandemic has struck, recent timelines have been divided into two distinct phases – the pre-COVID and the post-COVID era. In fact, the pandemic has completely changed lifestyles, finances and even the economy as a whole. The life insurance segment is no different. 

During the pandemic, the importance of a life insurance policy dawned on many and people rushed to insure themselves against the possibility of untimely death. The life insurance industry, thus, witnessed a surge in demand as the premium income increased by 9.74% during the financial year 2020-21 as per the Economic Survey 2021-22. Even the life insurance penetration jumped to 3.2% in 2020 compared to 2.82% in 2019 (where Insurance penetration is measured as the percentage of the total life insurance premium paid in a year to GDP.). (Source: Economic Times

Thus, to meet the demands of the pandemic era and also to adapt to the changing economic scenario, the life insurance industry evolved.

Do you know how?

Well, here are a few changes that have happened in the industry and also those that are still work-in-progress –

  1. Digitised policy issuance

    With the pandemic, most companies were operating online due to lockdowns or with limited employee strength. This worked as a boon for the digital space. Insurance companies were mostly digitally equipped, but this digital awareness gave an impetus to eKYC and online policy issuance.

    The regulator recognised the increasing demand for life insurance policies and the challenge of physical policy issuance. As such, it allowed insurers the facility of issuing their policies online through video KYC or eKYC and digital signatures. This made it easy for both prospective and existing policyholders to buy and renew their plans without having to step out of their homes.

  2. Online customer support

    Another by-product of lockdowns, social distancing and the work from the home model was the dependence on the online medium to solve customer queries and complaints. Insurance companies took additional efforts to make their customer support department online so that customers can choose from AI bots, WhatsApp messages, SMS, emails and live chats to connect with the insurance company. The insurers also reduced their TATs as online assistance enabled them to track their complaints and grievances in real-time.

  3. The impetus to online sales

    Insurers also placed considerable impetus on online sales either through their own websites or through online agents and brokers. This also facilitated the easy sale of the policy with minimal paperwork. Moreover, with the eKYC introduced by the IRDAI, issuance of the policy also became a breeze.

  4. New and innovative policies

    While most of the new demand for policies was due to COVID induced deaths, insurers came up with innovative policies that allowed coverage for COVID as well. While life insurance plans automatically covered COVID-related deaths, insurers communicated the same to their policyholders and prospective customers to raise awareness. Moreover, new policies were also introduced that were available online at affordable premiums to allow instant coverage to those seeking protection against the pandemic’s financial repercussions such as Corona Kavach and Corona Rakshak.

  5. The introduction of API

    This is a relatively newer concept in the life insurance industry which is still in its nascent stages. As mentioned earlier, this is a work-in-progress. API stands for Application Programming Interface. It can act as a plug-in for life insurance policies across other financial assets and transactions. Life insurers can, thus, tie up with financial service providers and sell their plans through API plug-ins to increase demand. This would also enable an increase in life insurance penetration as the purchase process would be simplified.

    A very common example can be found in tour booking apps that offer you additional travel insurance cover at a nominal rate. This is how API works. While you make your travel bookings, you might as well invest in a travel insurance policy to secure the trip at a nominal cost. API plug-ins, thus, help in cross-selling.

    In the life insurance industry, API plug-ins can be used when individuals buy mutual funds, stocks, other investments or even when they buy another type of insurance policy from the company. The API interface has the power to disrupt insurance sales and can go a long way in evolving the life insurance industry to the next level altogether.

The life insurance industry is dynamic. It changes to cater to the changing needs and preferences of consumers so that life insurance, as a product, can stay relevant in changing times. The aforementioned points are some of the changes that the life insurance industry went through during the pandemic. The future is digital and with new innovations and changes, the life insurance industry would also evolve continuously. As the awareness of life insurance has increased, the industry has a long road ahead to make life insurance an indispensable part of an individual’s portfolio.

Everything You Need To Know About Electric Car Insurance

Flaunting an electric vehicle has become a new trend all over the globe. Speaking of India, they are gaining a lot of momentum in the entire market. This is because of the number of benefits it covers. Generally, electric cars are low maintenance, easy to drive, noiseless, and help you save tons considering the increasing prices of fuel. In addition, electric cars are excellent for the environment. However, after purchasing one, what about its insurance? Well, here’s a comprehensive guide that lists an overview of everything you need to know about electric car insurance. 

Electrical Car Insurance 

The demand for EVs is growing at an unprecedented rate. Besides being a green alternative to diesel and petrol vehicles, electric cars can get much cheaper in the long run. However, finding suitable Electric car insurance can be a bit difficult. But once you find it, you enjoy a plethora of benefits. Before diving into the benefits, let’s begin with the basics. 

What is Electric Car Insurance?

To level up with the increasing demand, automobile manufacturers are introducing distinct types of EVs. This is to cater to the difference between different requirements of the buyers. With different models come different insurances. Just like the motor insurance policy for diesel and petrol vehicles, the electric car insurance policy provides outstanding financial protection to your car against all liabilities. By selecting the appropriate cover for your Electric car, you can prevent unwanted expenses. This is exactly what is meant by electric car insurance. 

Types Of Electric Car Insurance Plan 

In India, there are usually two types of insurance policies. These include, 

  1. Third-Party Car Insurance Policy:

    The 1988 Motor Vehicles Act makes it necessary to hold electric car insurance under this policy. Under the third-party policy, you get insurance against all liabilities incurred due to third-party damage or injury or damage to their property due to your EV. Bear in mind that accidental injuries and damages do not come under this policy. 

  2. Comprehensive Car Insurance Policy:

    This is an excellent insurance policy that any individual can opt for. The policy offers both OD (own damage cover) and third-party (TP) cover. In case your vehicle suffers damage due to collisions, floods, accidents, riots, storms, or vandalism, your car will be covered. 

What Are The Advantages Of Electric Car Insurance? 

Here are 5 advantages to ensure your electric car with a Comprehensive Insurance Policy. 

  1. Safeguard against Third-Party Liabilities:

    Your insurance policy covers liabilities in cases where you meet an unfortunate situation. Suppose you are the reason for an injury to the third-party property, your policy covers the costs incurred in repairing.

  2. Prevent Law-Mandated Penalties:

    Because the Comprehensive policy involves the law-mandated liability cover, individuals get protection against non-compliance penalties regarding car insurance. 

  3. Prevent Hefty Repairing Bills:

    As the Comprehensive Cover provides an OD facility, it covers the maximum part of the repair bills. This indicates that individuals don’t require to pay any hefty repairing bills for the cases covered in the plan. 

  4. Obtain Personal Accident cover:

    With the PA (personal accident) cover, you can obtain financial compensation against several uncertainties like bodily injuries, accidental death, total/partial disabilities, etc. due to an accident. Note that this is an add-on and must be purchased separately from the plan you choose. 

What Does The Electric Vehicle Comprehensive Policy Cover?

The comprehensive car insurance policy tags a number of benefits with it. The plan covers losses and damages in the following circumstances. 

  • Damages to your vehicle in an accident 
  • Third-Party injury 
  • Damage to third-party property 
  • Damage to the car in case of explosion and fire 
  • Natural calamities include storms, floods, earthquakes, etc. 
  • Injury of the owner and accidental death 
  • Losses incurred due to theft 
  • Man-made disasters like vandalism, riots, etc

Cost Of Electric Vehicle Insurance 

Generally, the cost of electric vehicle insurance is a bit higher as compared to conventional petrol and diesel vehicles. Because the insurance price is entirely based on the price value of the vehicle, electric vehicles have a higher premium as well. This is because of the price with respect to the internal combustion of engine-powered cars. 

Conclusion

Upon conclusion, it is important to know the insurance policy’s other factors, terms, and conditions before opting for it. Bear in mind that different companies offer different insurance benefits, costs, and features. Depending on this, make sure you don’t go for the cheapest premium available. This is because the cheapest premium might not offer the level of policy cover you are seeking for. Cheaper premiums do not cover personal accident cover, breakdown cover, legal cover, level of voluntary excess, etc. Hence, make sure you make well-informed and wise decisions before finalising with an insurance company.

Disadvantages of letting your Car Insurance Lapse in 2022

The New Year brings along new promises, new challenges and new beginnings. It motivates everyone to make better life resolutions. If you are a car owner, make a new year’s resolution in 2022 to not let your car insurance policy lapse at any time. Yes, it’s common to break the New Year’s resolution, but this is one resolution you should earnestly try to stick to. A car insurance cover is very important and there are many disadvantages of letting it lapse. Take a look at why you must keep your car insured at all times and also why it is disadvantageous to let your policy lapse in 2022.

Importance of car insurance 

Let us begin by understanding why car insurance cover is so important. A car insurance cover offers many types of protection such as: it covers the third party liabilities, it pays for own damage and it also covers legal costs. This is why you must get a car insurance plan on priority. However, getting the plan alone is not enough. It is equally vital for you to renew the plan on time and keep the policy from lapsing. 

Disadvantages of letting your car insurance lapse

2020 and 2021 have both been very challenging years for people across the globe. The pandemic hit families and while some people faced death and destruction within their closest circles, others faced financial troubles due to job losses, business failures, etc. 2022 is therefore the dawn of a fresh start and everyone is trying to stay motivated. At such a time, you should also look to start a new and resolve to make the correct financial moves. A good way to do so is by keeping your car insurance plan active at all times. If your car insurance plan lapses, you can face many financial challenges, apart from legal challenges, too. Here are some ways in which allowing a car insurance policy to lapse can be disadvantageous:

  1. Legal trouble

    You can get into serious legal trouble if you do not renew your car insurance policy on time. The law in India makes it compulsory for every car owner to have an active motor insurance policy when he takes the car out on the streets of India. If you are caught driving your car without a valid motor insurance plan, you will be fined heavily and may even be arrested.

  2. No third party cover

    As a responsible motorist, it is your job to take care of any third party who may get injured in an accident involving your vehicle. It is also your job to ensure you pay for the damages incurred to the third party’s vehicle or property. When you have a valid car insurance plan, the insurer compensates the third party on your behalf. However, if it stays lapsed, you have to bear all the third party liability expenses from your own pocket and that can become very expensive.

  3. No own damage cover

    Much in the same way, you won’t get any compensation from the insurer for damages to your own vehicle, too; if your policy is in a lapsed state. Repairing your car can be an expensive thing to do, so avoid having to pay the bills yourself by simply renewing the motor insurance plan on time.

  4. No personal accident cover

     Most motor insurance plans have an in-built personal accident cover. This is important because it offers financial support to your family if anything happens to you. However, the sum assured is not paid out when the policy remains in a lapsed state.

  5. Loss of no claim bonus

    Lastly, if you do not renew your coverage within 90 days of lapse, any accumulated no claim bonus that you might have would become zero. This is especially bad if you have accumulated a considerable bonus, say 30% or 50%, which can give you premium discounts on renewal. 

As you can see, all these factors can lead to you incurring heavy financial losses. A car insurance plan is quite affordable and all you have to do is renew it on time to keep the policy active. By renewing on time you can safeguard your vehicle and your finances in an easy and hassle-free manner.

So, this 2022, ensure that you keep your car insurance coverage active so that you can not only enjoy the coverage but also comply with the traffic rules and avoid possible penalties.

Are Guaranteed Income Plans of Life Insurance Worth it?

Life insurance policies are designed for one thing – to help mitigate the financial risk associated with premature death. To this extent, term insurance plans cover the risk of premature death and provide pure protection against the associated financial risks. However, many policyholders want their life insurance policies to double-up as a savings tool too. This is where guaranteed income plans come into the picture. 

Let’s explore –

What are guaranteed income plans?

Guaranteed income plans are life insurance solutions that provide insurance cover and savings under the same policy. These plans come as endowment plans or money back plans with a death cover during the policy tenure. If the insured dies during the term, a guaranteed death benefit is paid. On the other hand, if the life insured survives the policy tenure, guaranteed income plans pay a maturity benefit.

Usually, the benefits payable under these plans are fixed or guaranteed. That is why they are called ‘guaranteed income plans’.

Should you invest in guaranteed income plans?

Guaranteed income plans are suitable for investors looking for insurance protection and guaranteed savings from a single instrument. Here are some pros and cons of these plans which you should consider before investing in them –

Advantages of guaranteed income plans

Guaranteed income plans score on various fronts. Have a look –

  1. Guaranteed returns

    Firstly, as the name suggests, guaranteed income plans give you guaranteed returns either on premature death or on maturity. Moreover, many plans offer additional returns in the form of bonus additions, guaranteed additions, boosters, loyalty additions, etc. These additional returns enhance the benefits and give you better returns, that too, guaranteed.

  2. Long-term savings

    Guaranteed income plans are, usually, long-term life insurance plans which help you save in a disciplined manner. Thus, if you opt for these plans, you can create a long-term savings corpus for your financial needs.

  3. Help in fulfilling financial goals

    Guaranteed income plans help you fulfil your financial goals, even when you are not around. The death benefit paid under these plans provides your family with a financial corpus to meet their needs. On the other hand, the maturity benefit gives you an accumulated corpus which you can use for the different financial goals that you have, like child’s education, retirement planning, buying a home, etc.

    There are specialised child and pension plans too that are offered as guaranteed income plans. These plans are so designed that they cater to specific financial goals and help you fulfil them easily.

  4. No investment risks

    Guaranteed return plans do not invest in the equity market which is highly prone to volatility risks. Instead, they guarantee the returns and protect your investment from any type of market risk.

  5. Insurance protection

    These being life insurance plans, guaranteed income plans offer much-needed insurance protection. This insurance cover provides financial security to you and your family as it promises a benefit in the case of premature death.

  6. Tax benefits

    Lastly, guaranteed income plans help in saving tax. The premiums paid for these plans are allowed as a deduction from your taxable income. Premiums up to 10% of the sum assured, subject to a limit of INR 1.5 lakhs, are allowed as a deduction under Section 80C. Moreover, the returns that you earn from the policy and the maturity benefit received are completely tax-free under Section 10(10D) if the premium was up to 10% of the sum assured.

    In the case of death too, the death benefit is completely tax-free allowing your family the facility to use the full benefit paid on death. 

Disadvantages of guaranteed income plans

When it comes to the disadvantages, there is only one aspect that works against guaranteed income plans. This aspect is the sufficiency of returns. There is a risk of inflation-beating the returns generated from these plans. After the long-term saving, if the returns do not keep pace with inflation, you might not be able to create a sufficient corpus for your financial goals.

What should you do?

Other than the one disadvantage that guaranteed income plans have, there is no other drawback. So, if you are risk-averse and want to create a risk-free corpus for your financial goals, you can opt for guaranteed income plans. The tax angle gives additional benefits and helps you create a tax-efficient corpus too. So, understand what guaranteed income plans are all about and then choose one if it matches your needs.

Tips to Save Motor Insurance Premium

A motor insurance policy is a must for every Indian citizen if they have a vehicle in their name. So, if you own a bike or a car, invest in a motor insurance policy for your vehicle to comply with the legal formalities. 

Buying a motor insurance policy means paying a premium for the coverage. The premium of the policy depends on a lot of factors like the make, model, and variant, age of the vehicle, registration location, etc. However, there are a lot of ways in which you can save on the motor insurance cost. Do you know how?

Here are some tips to save motor insurance premiums –

  1. Utilise the NCB to the full

    For every claim-free year that you experience in your motor insurance policy, you get a no claim bonus (NCB). This bonus allows you to claim a discount at the time of renewing the policy. The NCB starts at 20% and goes up to 50%. You can accumulate the NCB if you don’t make claims in successive years. However, even a single claim reduces the accumulated no claim bonus to zero. So, while renewing, utilise the no claim bonus to the fullest. Also, try and avoid making small claims as they would nullify the NCB.

  2. Choose a voluntary deductible, if economical

    A voluntary deductible is when you undertake to pay a part of the claim yourself. Though this involves an out-of-pocket expense on claims, it allows you a premium discount. So, if you are a good driver and your claim experience is low, opt for a voluntary deductible. Weigh in the deductible amount and the premium saving and if the deductible proves economical, opt for it to reduce the premium.

  3. Install safety devices in the vehicle

    Safety devices bring down the chances of accidents and provide a layer of safety. This also leads to lower claims for the insurance company and so, the company offers a premium discount. So, safety devices not only lead to safe driving, but also help in premium savings.

    For example, if your vehicle has an anti-theft device, your insurance premium would be lesser than a vehicle without one.

  4. Buy online

    Many insurers offer discounts if you buy the policy online. So, if you buy the policy online and there is a discount for the same, you can reduce the premium that you pay. Since online plans do not have any third-party intervention, they are usually cheaper than their offline counterparts.

  5. Opt for third party plans if feasible

    The Motor Vehicles Act, 1988, the Act that governs Indian traffic rules, stipulates the need for a third party policy on every vehicle. This policy protects you against third party liabilities if your vehicle causes a financial loss to any individual or property. However, if the vehicle itself suffers any damage, no claim is paid.

    Third-party plans have restricted coverage and are not usually recommended. However, if you have a very old vehicle or if you use your vehicle sparingly, you can make do with a third party policy whose premium is very low.

  6. Try the new ‘Pay-as-you-go’ policy

    A new policy has been introduced in the motor insurance market called the ‘Pay-as-you-use/go’ policy. Under this policy, you have the flexibility to switch your coverage on or off depending on the usage of the vehicle. When you are using the vehicle, you can turn the coverage on and when you are not using the vehicle, you can turn the cover off. So, rather than paying the premium for using the vehicle throughout the year, you can pay the premium for the actual time that you use the vehicle and save on motor insurance costs.

  7. Use your membership to your advantage

    If you are a member of a reputed automobile association, you become eligible for a premium discount. So, use your membership to claim a discount and lower the premium cost.

  8. Compare and buy

    Last, but definitely not least, compare before buying motor insurance plans. More than a dozen insurers offer motor insurance policies and the pricing of each insurer is different. When you compare, you can check the premium charged by different insurers and then select a policy that charges the lowest premium without compromising on the coverage. It would, thus, help you reduce the premium cost and save.

Which of these tips would you use?

You can use a combination of these tips to bring down the premium of your motor insurance policy. All you need is a little knowledge and a look into the policies available in the market. Compare the available plans and look for the best deal. Then buy the best motor insurance policy which offers the most suitable coverage without charging a bomb.

Buying Term Insurance Cover? Remember to Consider these Things in Addition to Low Premiums!

Term insurance is one of the first steps to personal financial planning. However, most people procrastinate and hence delay the process of opting for one. So, if you are planning to opt for a term insurance plan, we will try and simplify the process for you.

A term insurance plan needs to be taken only after carefully evaluating your family’s financial goals. Here are the top 6 things to consider whilst buying a term cover. 

  1. Calculate your total life insurance coverage based on your needs

    The amount for which you need to be insured is one of the most critical aspects, many individuals avail themselves of a term cover as a multiple of their annual income. There are many free online tools that will enable you to ascertain the right amount of term cover that you need to avail yourself. Although this is a thumb rule followed across the industry, it may not be the correct way ahead to calculate such an important aspect of your life!

    Arriving at the term insurance requirement needs you to assess your financial goals including children’s education, retirement, etc. evaluate household requirements after factoring in inflation and provisioning your liabilities. You would have to deduct the corpus from existing investments. The amount would actually be the term cover you would require.
    Tip: Everyone with similar income levels might not have similar life insurance requirements. It is a factor of many other aspects, which need to be incorporated to accurately estimate your life insurance requirement.

    So, Term Insurance Coverage can be calculated as
    Insurance Need = Long Term Needs + Short Term Needs + Maintenance Requirements + Outstanding Liabilities – Assets – Existing Insurance Coverage.

    Remember, being underinsured is as big a risk as no insurance at all!

  2. Ascertain the tenure of the plan

    Term insurance need not be taken for a very long tenure. In fact, it is a function of your financial milestones. Thus, you can opt for tenure for your term plan as long as you are financially responsible for anyone, i.e. you actively participate in contributing to the family’s income to run the same. Thus, you can take it till your retirement.

    Alternately, your term plan tenure needs to be taken till such time your financial goals are not fulfilled and there are no further financial obligations and your current net worth is sufficient to provide your family’s future expenses.

    Tip: The easiest way to calculate this is to opt for a term plan till retirement or till your dependents (especially children) are financially independent and there are no outstanding debts.

  3. Premium

    You need to know how much premium you need to pay for the entire policy tenure so that it is budgeted in advance. If the premium for a term insurance plan is not paid on time, it would lapse and your life insurance coverage would cease to exist.
    Also, the premiums are held constant over the predetermined tenure of the policy. Thus, the earlier you buy the plan, the better it is. However, most individuals only realize the importance of term insurance at a much higher age, when there could be a substantial rise in the premium.

    Further, the premiums could rise if the policyholder develops a life-threatening habit (drinking/smoking) or physical condition (illness/disability/obesity). This could also lead to difficulty in getting the policy issued.

    Tip: It is extremely important to go through the nuances before signing on the dotted line. Also, remember to declare EVERY POSSIBLE detail at the time of filling up the proposal form yourself, such as your family history, past illnesses of yourself and your entire family, BMI details, smoking and drinking habits, past insurance plans, etc. even if that results in a rise in premium so that there are no complications at the time of claim!

  4. Choice of add-ons

    Although add-ons may seem like unwanted frills, they will be worth every penny in the event where you may have to spend on one such unfortunate incident.

    There are 3 major riders that are available across all term cover plans – 

    1. Cover for death due to accident:

      In addition to the base sum assured, the additional cover earmarked under this add-on will be paid to the beneficiary in the event of death due to an accident.

    2. Critical illness cover:

      Medical expenses on critical illness have been escalating at a rate much higher than that of inflation. Infact, medical expenses are the fastest growing expenses, in the event where you may have to face a critical illness, there is a high possibility that it could deplete your savings substantially. The premiums for this add-on cover are higher as compared to the other riders.

      The amount of coverage that you opt for under this add–on will be paid out to the policyholder in the event of being diagnosed with one of the diseases which is covered under the critical illness category in the policy issued by the insurance company.

    3. A premium waiver on critical illness or disability:

      In the event of the policyholder becoming permanently disabled or being diagnosed with a critical illness, the future premiums will be waived off. However, the cover will remain active throughout the predetermined tenure of the policy. These add-ons are relatively low cost as compared to the others.

      Tip: Although most term covers offer similar riders, it is important to read the fine print, there may be minute differences across insurance companies. Hence, it is important that you read through the brochure and do your research before you commit to a term cover. 

  5. Compare the benefits and service offerings

    Term cover is a long-term commitment, it is only sensible to do thorough research and avail a plan which offers the most competitive premiums, best service in terms of reminders. You need to leverage the platform with an in-depth comparison before opting for the plan which best suits your needs.

    Tip: In this digital world, it is not advisable not to compare the benefits of the term insurance plan before opting for the one which best suits your needs!

  6. Claim settlement ratio (CSR)

    Lower premiums may be a great attraction, but the claims settlement ratio is probably one of the most important criteria while choosing the right term cover. You should look out for insurance companies that have a high claim settlement ratio, if a company mentions 99% as its claim settlement ratio, it essentially means that out of every 100 claims submitted to the insurer, 99 have been settled.

    Tip: CSR cannot be the sole criteria for decision making, but could be one of the criteria for shortlisting options. All these 7 aspects need to be considered before opting for the term plan!

  7. Necessary information on Proposal Form + Documents

    There are quite a few documents that need to be submitted at the time of applying for a term insurance plan such as identity and address proof of the policyholder, duly filled proposal form with all health and family history details, income declaration/proof of the policyholder, as may be needed by the underwriter along with an age proof of the insured.

    Tip: Remember to fill the proposal form yourself with accurate details of yourself, family, medical history as well as previous life insurance policy details, so that there is no confusion at the time of claim if needed. Put in your nominee details as well.

    The most prevalent reason for claim rejection is “non-disclosure” or “misrepresentation” of material facts, as specified by the IRDAI, i.e. if any information is not given or is incorrect, then it may lead to a claim repudiation. Hence filling up the proposal form with accurate details and genuine documentation is the crux of opting for a term insurance plan.

Choosing a term cover is a long-term commitment, it is in the best interest of you and your loved ones that you make the right choice based on the above considerations.

LIC Jeevan Saral: Maturity Calculator, Benefits & Features

The Life Insurance Corporation of India (LIC) offers a range of life insurance plans which promise attractive benefits. Both traditional, as well as market-linked insurance plans, are offered by LIC. One such policy is LIC’s Jeevan Saral policy which was quite popular among individuals when it was offered. The policy, however, has been withdrawn by the company. However, the company offers several life insurance plans, some of them combined with attractive investment options that make for a great overall package. The list of plans along with their briefly explained features can be found here. We at Turtlemint also offer a number of life insurance plans combined with investment options suited to your personal needs. Click the link below to browse the most relevant plans at attractive premiums

LIC Jeevan Saral is a traditional life insurance plan promising guaranteed death and maturity benefits. The plan promised a secured corpus which was why many individuals invested in it. Let’s understand how –

What is LIC’s Jeevan Saral Plan?

LIC’s Jeevan Saral Plan is a traditional endowment plan which has a guaranteed death or maturity benefit. The plan requires you to pay a premium depending on which the death and maturity benefits are calculated.

Salient features of LIC’s Jeevan Saral Plan

  • You could choose the amount of premium that you wanted to pay and the premium payment mode
  • This is a participating endowment plan wherein you get loyalty additions when the plan matures or in case of death
  • The death benefit is 250 times the monthly premium that you pay along with the loyalty additions
  • There are riders under the plan which you could choose as per your coverage requirements

Benefits of LIC’s Jeevan Saral Plan

LIC’s Jeevan Saral Plan gives you the following benefits –

  • You can get the guarantee of death benefit throughout the policy tenure. Thus, the plan provides financial security
  • Loyalty additions enhance the corpus and give you additional returns
  • Since you can choose the premium you have the flexibility of choosing the amount that you want to invest under the plan
  • The plan can be surrendered if you have paid at least three full years’ premium. The surrender benefit is guaranteed and depends on the number of premiums that you have paid

Being the largest life insurer in India, LIC has a variety of plans that combine the unique benefits of the Jeevan Saral Plan and other important features of life insurance that can easily be compared for their pros and cons here.

Eligibility Criteria For LIC Jeevan Saral Policy:

Entry age 

12 years

Maturity Age 

60 years

Premium payment term- 

Minimum – 10 years

Maximum – 35 years

Policy Term 

Minimum – 10 years

Maximum – 35 years

Minimum monthly premium

(a) For 12 to 49 years- INR 250, 

(b) For 50 to 60 years- INR 400

Maximum monthly premium

INR 10,000

LIC Jeevan Saral Calculator

LIC’s Jeevan Saral is a beneficial plan which gives a lot of benefits to policyholders. Let’s understand how the death and maturity benefits of the plan are calculated.

Jeevan Saral calculator – death benefit

The death benefit under the plan is calculated using the following formula-

Death benefit = (250 * monthly premium paid) + Loyalty Additions paid on death

Jeevan Saral calculator – maturity benefit

The maturity sum assured is calculated based on your entry age and the premium that you have paid. It also depends on the policy tenure. On maturity, the benefit paid would be calculated as follows –

Maturity benefit = maturity sum assured + loyalty additions

Let’s understand the working of the plan with the help of an illustration –

Illustration 

Suppose a 35-year-old male buys the plan for a term of 25 years. The premium is paid yearly and the amount of annual premium is INR 4704. Given these details, let’s check the maturity and death benefit promised by the plan –

Jeevan Saral Calculator

Policy year Annual premium Cumulative premium Loyalty Additions* Guaranteed Death Benefit
Case 1 Case 2 Case 1 Case 2
Year 1 INR 4704 INR 4704 NA NA INR 100,000 INR 100,000
Year 5 INR 4704 INR 23,520 NA NA INR 119,200 INR 119,200
Year 10 INR 4704 INR 47,040 INR 7000 INR 18,000 INR 150,200 INR 161,200
Year 15 INR 4704 INR 70,560 INR 13,000 INR 41,000 INR 180,200 INR 208,200
Year 20 INR 4704 INR 94,080 INR 30,000 INR 100,000 INR 221,200 INR 291,200
Year 25 INR 4704 INR 117,600 INR 65,000 INR 211,000 INR 280,200 INR 426,200

(*Loyalty additions are not guaranteed. That is why they have been calculated at an assumed rate for calculation purposes.)

When the policy matures after 25 years, you get the guaranteed benefit of INR 280,200 or INR 426,200 depending on the loyalty addition added under the policy.

Since the policy has been withdrawn, you cannot apply for a fresh plan. However, if you have already invested in the plan when it was sold, you can check your maturity value and death benefit using the Jeevan Saral Calculator. Moreover, you have two options for managing your policy. You can either continue the coverage by paying the premium or you can surrender the plan and apply for a new endowment policy offered by LIC as well as other leading life insurance companies. When you surrender the Jeevan Saral plan, you get a surrender value if you have paid at least the first three years’ premiums. Do you know how the surrender value is calculated?

Jeevan Saral calculator – surrender benefit

If you have paid three full years’ premiums, you can surrender the plan. On surrender, the policy pays the surrender benefit. This benefit is calculated to be higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV). Special Surrender Value is applicable when premiums for more than three years have been paid. The values are calculated as follows –

GSV = 30% of total premiums paid – first-year premium

SSV depends on the number of premiums paid and is calculated as follows –

  • 80% of the maturity sum assured if premiums for more than 3 years but less than 4 years have been paid
  • 90% of the maturity sum assured if premiums for more than 4 years but less than 5 years have been paid
  • 100% of the maturity sum assured if premiums for more than 5 years have been paid

So, if the above illustration is considered, here are the surrender values which you can expect from the policy –

LIC Jeevan Saral Calculator – calculation of surrender benefit

Policy year Annual premium Cumulative premium Loyalty Additions* Guaranteed Surrender Value
Case 1 Case 2 Case 1 Case 2
Year 3 INR 4704 INR 14,112 NA NA INR 8099 INR 8099
Year 5 INR 4704 INR 23,520 NA NA INR 18,660 INR 18,660
Year 10 INR 4704 INR 47,040 INR 7000 INR 18,000 INR 50,360 INR 61,360
Year 15 INR 4704 INR 70,560 INR 13,000 INR 41,000 INR 88,200 INR 116,200
Year 20 INR 4704 INR 94,080 INR 30,000 INR 100,000 INR 136,124 INR 206,124
Year 25 INR 4704 INR 117,600 INR 65,000 INR 211,000 INR 200,296 INR 346,296

(*Loyalty additions are not guaranteed. That is why they have been calculated at an assumed rate for calculation purposes.)

Claiming the maturity benefits of LIC Jeevan Saral Plan 

If you do not surrender but continue the plan to term, you get the maturity benefit when the term comes to an end. To avail the maturity benefit you would have to fill up a Maturity Discharge Form and submit the same to LIC. You would also have to submit the original policy document for the claim process to be properly completed. In case you have lost the original policy bond you would have to file a police FIR and fill up an indemnity bond. Your claim would then be processed based on the FIR and the indemnity bond and the maturity amount would be credited to your bank account.

LIC’s Jeevan Saral Policy pays guaranteed benefits and lets you decide on the premium that you want to invest. So, understand the policy benefits before you invest in the plan. Use LIC Jeevan Saral calculator to calculate the plan benefits so that you know the benefits which you can receive in case of death, early surrender or maturity. LIC Jeevan Saral calculator helps you to quantify the benefits giving you an estimate of the funds which you can create with the plan. However, the plan has been withdrawn and so if you are looking for other endowment plans which give a guaranteed benefit, here are some of the best options –

LIC’s Jeevan Labh

  • It is a participating endowment plan which offers simple reversionary bonuses throughout the policy tenure
  • There are two optional riders if you want to increase the scope of coverage under the plan
  • You get premium discounts if you pay premiums yearly or half-yearly and also if the chosen sum assured is INR 5 lakhs and above

Plan parameters 

Entry age 8 years to 59 years
Sum assured INR 2 lakh onwards
Premium Depends on the coverage, age and term selected
Policy term 16, 21 or 25 years
Premium payment mode Limited pay

HDFC Life Sanchay Plus 

  • There are four coverage options to choose from
  • Two additional riders are available under the plan
  • The plan promises guaranteed incomes till 99 years of age if you choose Lifelong income coverage option

Plan parameters 

Entry age 5 years to 60 years
Sum assured Depends on age, term, premium amount and the coverage option selected
Premium Minimum – INR 30,000/year

Maximum – no limit

Policy term 6 years to 20 years
Premium payment mode Limited pay

HDFC Life offers a number of plans that closely compete with LICs insurance plans. These plans seek to provide the assurance of a secure financial future to the customers. It offers plans with multiple benefits and flexible modes of payments, which can be found here.

ICICI Pru Life Cash Advantage Plan 

  • The plan offers guaranteed incomes every year for 10 years during the term of the plan
  • Premiums are payable for a limited tenure after which the guaranteed incomes start
  • A guaranteed maturity benefit is paid when the plan matures

Plan parameters 

Entry age 0 years to 60 years
Sum assured 7 or 10 times the annual premium depending on the age
Premium Minimum – INR 12,000/year

Maximum – no limit

Policy term 15, 17 or 20 years
Premium payment mode Limited pay

Bajaj Allianz POS Goal Suraksha

  • The policy offers guaranteed additions which help in enhancing the corpus
  • On maturity, the benefit payable is guaranteed
  • You can avail a policy loan for financial needs
  • You can choose to change the premium payment mode during the policy tenure

Plan parameters

Entry age 18 years to 55 years
Sum assured Minimum – INR 30,000

Maximum – INR 10 lakhs

Premium Minimum – INR 3000/year

Maximum – depends on the maximum sum assured, age and term

Policy term 10 or 15 years
Premium payment mode Limited pay

Bajaj Allianz is counted among India’s leading insurance companies. Its POS Goal Suraksha plan has additional features to benefit the customer. Along with it, the company offers other diverse variety of plans for life insurance which can be found here.

Still confused about which life insurance linked investment option to choose from? Choose the best investment plan from a wide variety of insurance providers & compare them for the best features suitable to you at Turtlemint’s investment comparison portal.

You can choose from these top endowment plans and create a good maturity corpus. To buy any of these plans you can choose Turtlemint which allows you to buy the policy online through some simple steps. Visit Turtlemint and compare the available endowment plans. Choose the best plan as per your coverage requirements and you can buy the plan with some simple clicks of the mouse. It’s as simple as that!

Things to remember before buying LIC Jeevan Saral Policy

While buying a LIC Jeevan Saral Policy, you need to keep certain points in mind-

  • The maturity benefit and death benefit amount mentioned in the policy are only applicable for non-smokers, both males, and females. One’s medical certificate, occupation, and lifestyle will be considered checkpoints.
  • The loyalty benefits are subject to the prospective benefits and are not guaranteed.
  • At the end of the year, the maturity benefits become equal to the amount assured.
  • A lump sum amount is paid to the family of the policyholder as long as the policy is continued. 

Exclusions under LIC Jeevan Saral Policy

  • The policy will be termed void if the policyholder dies by committing suicide
  • The policy will be nullified if the person commits suicide after the risk under the policy has started but within one year of the risk acceptance during the policy term

Documents required for LIC Jeevan Saral Policy

To apply for the LIC Jeevan Saral Policy, the person needs to submit a number of documents. They are as follows-

  • An filled up application form.
  • Accurate medical details.
  • Address proof
  • KYC details
  • Medical test reports might be needed in specific cases, depending upon sum assured and age assured

What happens if you stop making the payment of the premium?

The policy can be surrendered only after it has been active for at least 3 years. If you stop making the payment of the premium, a paid-up value will be acquired for a Reduced Sum Assured by the policy. 

What happens if you want to avail of a loan against the policy?

You can avail loan against the Jeevan Saral Policy if you wish to. But it is only available after you have paid premiums for 3 years. The maximum loan value you can get is a specified percentage of the Surrender Value. This amount is calculated based on the policy values at the time of making premiums.

“We are Flag Bearers of Digitization” – Dhirendra Mahyavanshi on Asia Insuretech Podcast

Hey All! 

Listen to the Podcast conversation between Dhirendra Mahyavanshi & Michael Waitze from Asia Insuretech podcast about about the ever-evolving dynamic Insurtech landscape in India.

Dhirendra speaks about his 19 years journey from his early days in the insurance industry to creating the largest Insurtech startup in India with a PoSP network of more than 1,20,000 insurance advisors in India. 


Some Important Excerpts of the conversation:

  • A large part of the population has been introduced to insurance very, very recently, because maybe COVID has accelerated that a little.
  • We are solving for increasing penetration, getting new customers, who were probably in the rural markets, with less access to insurance kind of products, they become part of the insurance world and they get insured.
  • One big change that I see is that this industry is able to attract talent now. Earlier, it would be very hard to get top notch students from the best colleges to come and join the insurance industry. Now we’ve got the best engineering talent that wants to work in the insuretech space.
  • We firmly believe that insurance is a business of relationship, it’s a business of trust. The product is complex. Consumers may understand parts of it, but can’t make a decision for themselves without expert advice. And, and that’s why also the need for buying insurance is not something that is inherent in a person, it has to be told to him and then he makes a then he comes to know that he needs to be insured, especially in markets like India. 
  • We have a content strategy that is focused on creating awareness around insurance. And we disseminate this content, which is what we call micro bite sized content, which is both video and sort of text and material based. We disseminate through our network of advisers.
  • So we have about 500,000 financial advisors, who use our platform. More than a million downloads, but 500,000 actively distributing content within their community and getting customers to know about insurance.
  • We have about 80% of our business that happens in cities beyond the top 10 and 65% of our business comes from cities beyond top 30.
  • What we also did was we created technology that could also be consumed by large companies or small companies alike, who probably did not have access to this kind of a platform. So we’ve created API’s that banks, fintechs, or any other startup with a captive consumer base can use.

You can also share the interesting conversation from your social media handles in your network.