In India, motor insurance is compulsory for all the vehicles except bi-cycle . Insurance premium for this vehicle would increase when the value of the vehicle increases. Most of the owners feels that buying insurance is waste of money, the important factor in the motor insurance is the third party coverage which is protecting you from damaging others property. If you effectively manage your insurance every year, there is numerous ways to reduce the significant amount of the actual premium amount. This article explores few steps you can take to reduce the insurance premium. If you have any questions, please post it in the comments section.

If you are not familiar with the motor insurance, please read our earlier articles:

• What you should know about car insurance?
• How to finance buying a car?
• Mystery of Petrol Price Hike

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1. No Claim Bonus

This discount is known by most of us. If you are not claiming for a year, insurance company would offer you a certain percentage of premium amount as the discount. Most of the time this percentage is common for all the companies. This discount will increase each year till 50% discount. Most of the insurers offer 50% discount as the maximum allowed.

For example, if you met an accident and had expenses of Rs. 1500. This is a small expenses and there is no need to apply for insurance. If you apply insurance, your no claim bonus will be cancelled and it will be a loss for you. It is always recommended to file insurance only when the amount is huge. Another factor is the processing fees for claim, this would be common amount like Rs. 700 or more than that for any claim.

No claim bonus is for customer i.e. even if customer changes his vehicle, NCB can be transferred to the new vehicle. NCB will be terminated only when if a claim is made during the policy year or if the policy is not renewed within 90 days from date of expiry on your existing policy.

• Buy: Basics of personal finance planning

2. Automobile membership

If you have the membership in the automobile association, you will get the discount. This discount will be for the own damage claim. It is allowed only for the two wheeler and car. The discount will be 5% for own damage, Rs. 200 if it is a car and Rs. 50 if it is a two wheeler.

3. Special equipments in your vehicle

Few vehicles have the special equipments which can protect the vehicle from theft and some other damages. This equipment has to be certified with the Automobile Research Association of India.  If your vehicle has that feature, you may get the additional discount of 2.5% or more from the insurer.

4. Third party coverage limit

There is a limit for the third party claim coverage. It has the two option, one is Rs. 6000 and another is Rs. 75000. The premium difference is just Rs. 100 for the two options. So, it is better you get the Rs. 75000 option to protect for more damage instead of just Rs. 6000. With this, you can protect more coverage in less premium.

5. Physically challenged

If you are physically challenged person, then you have the option of getting 50% discount on the premium. For that you have to submit the medical proof. Note that, this points you have to mention if you are buying the insurance through online. There is more chance that you will not mention these points if you buy through online, in that case get the appoint from insurer and avail the discount.

6. Compere different insurers

This is one of the great task to reduce the insurance premium. There are many website in internet offers the comparison of the insurance cost for your vehicle. You can get the quotation from different companies and choose the best price. Note that cheap price is not always the best one. It depends on your usage and how many times you claim the amount. Some companies have the poor claim payment record, you have to be careful if choose them as your insurer.

If you are not familiar with the motor insurance, please read our earlier articles:

• What you should know about car insurance?
• How to finance buying a car?
• Mystery of Petrol Price Hike

I hope the above points would be little helpful for you to save the insurance premium. Most of you may be aware of all the above points, but this will act as a remainder for your knowledge. Insurance premiums for cars are getting increased because of the high inflation in India, it had a steep increase in the last two years. So, this become important for every one to save the maximum cost in paying the premium. If you have any questions, please post it in the comments section.

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In my previous post I have written about the various popular Critical Illness (CI) plans available in the market. That helps you to get the good idea on what is best suitable for your family. But, how you can decide the most suitable policy for you. You can not take the same policy what your friend has taken for his family. Because he would have taken the policy based on his family’s medical history. The following points are you have to keep in mind while choosing the critical illness policy. If you have any questions, please post it in the comments section. If you are interested in receiving the future articles about health insurance, please subscribe here.

• Take the help from your family doctor before buying the Critical Illness policy. Lets discuss with your doctor about the illness covered in the policy and ask for the suggestions.
• Ensure that most frequently occurring illness is covered in the policy.
• When you are choosing the right policy, lets think about your past history of the blood relations and decide on the suitable policy with adequate illness coverage.
• Check the policy whether they offer the lifetime renewal .
• Know in advance about the initial waiting and survival period clause.
• Read out the complete terms and conditions of the policy document on what it promises for offering.
• Check the portability of your policy. Nowadays you can port your policy from one company to another company if you are not happy with the existing insurer.

Key Features of Critical Illness Policy

The following are some of the key features for the policy.

• The critical illness policy can be bought from life insurance company as a rider or stand alone product from the general insurance company.
• This type of policy covers various dangerous illness like heart attack, cancer, bypass surgery, etc.
• The insurer pays you lump sum upon diagnosis of any of the illness.
• Coverage of pre-existing illness different from each policy.
• There is a waiting period of 90 days after you have bought the policy. In that period you can not claim any amount.
• The lump sum benefit is provided after the survival of 30 days from the diagnosis.

If you want to read more about the critical illness cover in details, please read the following articles in our blog:

• Why critical illness policy is important?
• Why you need Critical Illness policy?
• Tax benefits under section 80D
• Which health insurance policy suite your needs?

If you have any questions about health insurance, please write it on the comments section. If you are interested in receiving the future articles about health insurance and other topics, please subscribe here.

Book Review : 51 Income Tax Tips for Investors

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A critical illness plan is a supplement to your health insurance portfolio. The main reason why one need critical illness plan is, to pay for the expensive treatments. This plan protects from the major illness which is specified in the policy document. Number of illness covered under the policy would vary for each insurer. Many would confuse with the critical illness plan with the health insurance. Normal health insurance helps you to pay the hospitalization expenses at the time of medical treatments.

This would also include the critical illness like heart attack, cancer,etc. Where as critical illness policy pays you the lump sum amount regardless of the expenses occurred. This article explores the some of the popular plans available in the market for the critical illness cover. If you have any questions, please post it in the comments section. If you are interested in receiving the future articles about health insurance and other topics, please subscribe here.

Best Critical Illness Plans (CI)

The below table illustrates the most popular Critical Illness Plans offered by the Indian market.

 The above list would provide you enough information about the various policies available in the market. If you want to read more about the critical illness cover in details, please read the following articles in our blog:

• Why critical illness policy is important?
• Why you need Critical Illness policy?
• Tax benefits under section 80D
• Which health insurance policy suite your needs?

If you have any questions about health insurance, please write it on the comments section. If you are interested in receiving the future articles about health insurance and other topics, please subscribe here.

• Book Review : 51 Income Tax Tips for Investors

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The awareness of buying travel insurance in India is very low. All the travelers purchase their suite that best needs the travel purpose. They don’t think about the protection of their travel from any of the unforeseen incidents. But, the need for travel insurance increases nowadays because of the increasing number of theft, crimes, etc. There is nothing wrong in learning about the travel insurance, if it suits your need you can purchase them. This articles explores the travel insurance and talks about what are the things covered in travel insurance.  If you have any questions, please write it on the comments section. If you want to receive the future articles, please subscribe here.

• Travel insurance in India 

Pre-existing Medical conditions

This is most common exclusion from many insurance policies. If you are suffering from any of the pre-existing illness which needs the attention and check up, those illness will not be covered in the policy. Also, if there is any complication from a surgery which happened prior to the travel, that will not be covered in the policy. before taking the policy, please read the list of illness covered under this policy.

Pregnancy

Most of the insurance policies treats pregnancy as the pre-existing illness and will not be covered in the policy. Also if it is covered, there will be number of restrictions on what condition it will be covered in the policy. So, if you are pregnancy while traveling, please make sure you are taking the right measures.

• Leave Travel Allowance (LTA)

Mental Health

Mental illness, emotional break-down that result from wounds created by self will not be covered in the policy. If you have hyper tension and due to that making damage to your body, travel insurance will not be liable to pay your damage.

Loss of belongings

If you have missed any of the items because theft or fire, in that case those losses will be covered in the policy.

Cancel of trip

For any reason, if you are cancelling the tour then the company would reimburse the expenses you have made for the travel. Note that you have to cancel the trip. The expenses include ticket, hotel bookings, etc.

The above are only the very basic details to know about the travel insurance. if you need more details, please read my earlier article Travel insurance in India  which provides lot more details about the travel insurance. If you have any questions, please write it in the comments section. If you are interested in receiving the future articles, please subscribe here.

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If you have received the original document from the insurer, it is important for policy holder to submit the original policy upon the maturity of the policy. If you loose the policy, insurance company has rights to reject the claim unless you provide the proof for your policy. It is not very easy task if you misplace your policy document (Different Types of Life Insurance).

But, you can get the duplicate policy document if you have lost the original document. This needs few steps for process to get the document from the company. This process vary across the different insurance companies. Here I highlight some of the common process enforced by most of the companies in India. Knowing this fact would be good for you to keep your original document in safer place. Following are the steps to get the duplicate policy document:

• What is Term Insurance Plans?

• Application: A written application must be submitted to the insurer with the following details:
  • The reason for loss
  • Likely date of loss
  • Policy details such as policy number and  cover
  • Date of issuance
  • Whether or not the policy was assigned
• Publishing Ad: Few insurance companies may ask the policy holder to publish an ad in the English newspaper about the lose of your policy. Month after the publication, you have to intimate the insurance company with the newspaper ad details.
• Indemnity Bond: Also some companies ask the policy holder to submit the indemnity bong in the stamp paper. If the original policy document is found in the later date, there should not be any loss to the company and they are liable for the damage. And the document should be submitted to the company.

• Difference between insurance and investment

Some of the common points are:

1. At the time of submitting the application, pay the nominal fee for issuing the duplicate document which is requested by the insurance company.
2. If the policy is held jointly, all the applicants has to be signed on the application.
3. If company requested, a surely also may have to be submitted with good financial status. This may be required if the sum assured is very high.

I hope this post would have provided some some basic insights on the difficulties of missing the insurance document. Please keep your policy documents in the safer place.  If you have any questions on the gift taxes, please post it in the comments section. If you want to receive future articles from me, please subscribe here.

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Bharti AXA Life has recently updated its online term insurance product with many features. Bharti AXA is one of the first insurance company has taken steps on selling the term insurance products. eProtect is launched by them 6 months back and they have recently changed some of the features in the policy and the premium. Within 6 months of launch, we are currently amongst the top five players in the online term market.

If you are looking for the pure term insurance policy, Bharti AXA Life eProtect should be in your consideration list. This review focuses on the product’s premium, term and basic idea on the term insurance. If you have any thoughts on buying the term insurance, please write it in the comments section. If you want to receive more reviews, please subscribe to our future newsletters here.

Importance of term insurance

In India, awareness towards term insurance is very low compared to other countries. The reason is, most of the companies selling the insurance as the investment products to the customers. Most of the customers confused whether insurance is for protection or an investment. If you are more concerned about your family, then you must first think about buying a term insurance plan with at least Rs. 1 crore sum assured (it varies based on your yearly income).  Also the principle rule is that the term insurance has to be bought for the only working member in the family.

• Why the insurance claims are rejected?

If you pay any premium for term insurance, you will not receive any money back to your hands. It makes customer feel like its not useful for them. We cannot predict what would happen to our future, it is premium for protecting our loved ones from the uncertain things which we never like or expected in our life. But, if you really love your family and you are only earning member, please protect your family with a adequate term insurance cover.

• What is Term Insurance?
• Different Types of Life Insurance

Online term insurance plans and advantages

In the recent development, most of the insurance companies come up with the online version of term insurance products. It eliminates the intermediate brokers to buy an insurance policy. In India, insurance products are sold only through the agents. Insurance companies has to spend lot of money for marketing the product and pay the commission to the agents. All these expenses will be added to premium of your policy.

When they sell policies online, the expenses would be very less and the premium cost would be very low compared to buying through agents. Also it is more convenient for the customers to process the payment and get the policy from the company. Only few companies offering the online term insurance policies.

• Aegon Religare Term Life Insurance Plans – Review

Bharti AXA Life eProtect

What makes Bharti AXA Life eProtect is standing out from the other policies. The following are some of the notable advantages of this product:

• You can buy a lump sum cover (Rs. 1 crore) for very low premium Rs. 6100.
• It is sold online.
• There is no maximum cover specified. You can buy maximum amount you want to protect your family.
• Minimum sum assured is Rs. 25 lakhs
• Claim settlement ratio for Bharati-AXA for the year 2010-11 is 87.17%.

The above points are sufficient to choose this policy. The below table is taken from their website which explains the premium about for a Rs. 1 crore policy.

If you are 25 years of age and want to buy a 10 years policy, the premium is only Rs. 6100. It is very low compared to any other companies. Another good factor is the claim settlement ratio for Bharti AXA. This is encouraging factor for you.

Conclusion

If you are looking for high coverage of amount more than Rs. 1 crore or lower amount with the low premium cost, I would strongly recommend to buy this product. Also compare this product with my another review Aegon Religare term life insurance plans. If you have not purchased any of the term insurance plans, please consider buying a new policy. If you have questions on choosing a good policy, please post it in the comments section.

It is for protecting your family!. It must be in your first action item for the new year. Please share your views on buying this policy and write it in the comments section. If you are interested in receiving the future emails, please subscribe here.

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If you have a health insurance policy or your company is covering you and your family with group health insurance policy, the limitations on those policies are high. Normal health insurance policies and group covers are sufficient for covering the basic expenses incurred on your family like small surgeries, medical check up, etc. But, if you or one of your family member has the serious illness which requires major surgeries which may cost more expensive, then the normal health policy’s covers will no be adequate to pay your medical bills.

What are you going to do? Are you going to buy another policy with more sum assured? That is not the good solution. This article talks about the critical illness which is protecting you from the specific illness. I have earlier written about these topics, however this post will be a remainder for the new reader to aware the subject. If you are interested in receiving future articles on investments, please subscribe here.

What is Critical Illness Plan?

A critical illness plan is a supplement to your health insurance portfolio. The main reason why one need critical illness plan is, to pay for the expensive treatments. This plan protects from the major illness which is specified in the policy document. Number of illness covered under the policy would vary for each insurer. Many would confuse with the critical illness plan with the health insurance. Normal health insurance helps you to pay the hospitalization expenses at the time of medical treatments. This would also include the critical illness like heart attack, cancer,etc. Where as critical illness policy pays you the lump sum amount regardless of the expenses occurred.

• Why you need Critical Illness policy?
• Tax benefits under section 80D

What to check?

When you buy the policy, you have to check the following things to get the maximum benefits.

• Illness Covered: Check the list of illness covered under the policy. Also check with your family health if the covered illnesses are making sense to invest on that policy. Otherwise skip that plan and search for the suitable policy with another company.

• Sum insured: Understand the cost involved on the treatment and inflation of medical expenses. Based on the above criteria, decide the sum insured for the policy. The premium would have change based on the sun insured. Compare with multiple companies to get the cheap product with maximum sum insured.

What is the cost?

The below list is the sample premium charged from few insurers. The premium amount is for yearly premium for a cover of Rs. 5 lacs for a 30 year old non-smoker.

• HDFC Ergo:Critical Illness (Rs. 1405)
• ICICI Lombard: Critical Care (Rs. 2017)
• Tata AIG: Criticare (Rs. 3237)
• Bajaj Allianz General: Critical Illness (Rs. 1500)
• Reliance General: Critical Illness (Rs. 1538)

The above section has detailed out on the critical illness policy. If you are salaried and your family is dependent on your income, you must spend time on reviewing your protection plans and give the importance for critical illness policy. If you have not already taken one, please don’t delay and take the corrective action. It is for your family’s happiness!! If you have any doubts, please post it in the comments section.

• Which health insurance policy suite your needs?
• Book Review : 51 Income Tax Tips for Investors

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Santosh, 24, was checking his old documents while re-arranging his documents. He found an old insurance policy document which is has totally forgotten to pay the premium every year. The last unpaid premium was four years back. He felt the money went into drain and throw away the old documents. That is not correct, still he can revive the policy and get the benefits from the revived insurance policies.

• Buy: Plan your insurance : Life and Health

He is not the only one who does this mistake, many in our country mistakenly forget the insurance policies and leave the money invested to go in drain. The reason why it happens is that they buy insurance policies while filing the income tax returns and forget that after investing in that. When they realize the mistake, it would have been late. But, it is not always late, you can still revive the policy.

also read:

• How to revive lapsed LIC policy?
• Aegon Religare Term Life Insurance Plans – Review
• What is Term Insurance Plans?

Grace Period for premium payment and Revival

Insurance policies has the grace period of one month for the premium payment. That means you can pay the insurance premium after one month from the due date. If you are not paying in the grace period, then the policy will lapses and they will not be any claim for your policy if any eventuality happens in your life. In this case, the policy is inforce for three years.

Yet, he can revive his policy within five years from the unpaid premium amount. What he needs to do is contact the insurance company and submit a declaration of health from a doctor recognized by the insurance company, then pay the unpaid premium amount with the late payment penalty.

The benefits of reviving the policy would be, the same premium amount when he bought the policy. If he buys the new policy, the premium amount would have been higher. Also all other benefits like bonus, guaranteed returns will be same as when the policy is purchased. Also, he can avail the tax exemption under the section 80c.If he he is not reviving the policy, he will loose the premium paid if the policy is less than 3 years, otherwise he will get the accrued bonus at the time of policy maturity.

How to avoid this situation?

In many instances, this happens because of the travel to other countries and job pressure to forget the events.  To avoid that, you could follow these instructions:

•  Setup ECS facility to pay the insurance premium. In this way you need not remember the date for the insurance renewal.
• Set the remainder notifications in your calendar to remain you before one month of the renewal.
• Update the correspondence address in the policy to get the postal communication from the insurance company.
• Update the mobile number to receive the SMS alert on the policy renewal.

If you are already having any policy without the premium payment, please check whether it can be revived. Also set the reminders for the policy renewals. If you have any experience with any of the insurance companies, please post it in the comments section.

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Aegon Religare has launched its online health insurance plan for its customers. Offering online health insurance policies has become good option for the companies. Already few of the companies offering the online health insurance policies, now Aegon Religare has joined the elite group. One advantage of buying insurance through online is that the premium would be very cheap compared to buying through an agent. The reason is the expenses incurred for marketing the  policy is reduced because of the online medium. In this post I will review the Aegon Religare iHealth product with its features and cost of the policy. If you have any thoughts, please post it in the comments section.

Who can be covered in the policy?

This policy has few advantages over other policies like covering your in-laws. The below image represents clearly who can be covered under one policy.

Benefits in this policy

AEGON Religare iHealth Insurance Plan is available in 2 variants viz. Gold & Platinum. The benefit amounts under both these plans are
as under:

Daily Hospitalisation Cash Benefit (DHCB)

This option is provided by all the policies. The amount offered under this category would be different of each policy depends on the premium amount. Under this category, a fixed amount is paid to the policy holder for each day admitted in the hospital. The basic requirement is that policy holder must have stayed in the hospital for atleast 24 hours. This payment is additional to the other cach benefits like surgical cash benefit.

Surgical Cash Benefit (SCB)

If you undergo any major surgeries, you are eligible for the lump sum amount as the surgical expenses which will be paid for the listed surgeries in the policy document. In most of the cases, all important diseases would be covered under this category. In the Aegon Religare iHealth Insurance plan, surgeries are classified under the 6 categories depending upon the type and severity of each surgery as follows:

1. Heart bypass; Knee joint replacement
2. Heart angioplasty; Open heart; Liver tumour
3. Brain & Spine operation; Bone tumour
4. Ankle fracture; Bone grafting; Cataract
5. Bone open fracture (screw & plates);Gastrointestinal; Glaucoma
6. All surgeries not covered under grade 1 to 5 and carried out along with 24 hours hospitalisation.

 Eligibility for Aegon Religare iHealth Insurance

Premium Amount

With the quote provided in their website, premium amount calculated is 4600 for the policy owner with the age 32 who opted the Gold plan. The Daily Cash Benefit under gold plan is Rs. 180000 for one year. Total surgical benefit is Rs. 300000 for one year. If he also wants to buy rider for the Critical Illness (CI), he has to pay the extra Rs. 347 for one year.

Other Points to Consider

• Free Look Option – If you are not satisfied with the terms and conditions of the policy, you have an option to cancel the policy stating the reason within 15 days from the date of receipt of the policy bond/document. Upon such cancellation, you will be paid back the premiums after deducting stamp duty and medical examination charges, if any.
• A waiting period of 90 days from the date of commencement of the policy is applicable for all benefits payable under this cover.
• You are allowed a grace period of 30 days for payment of your renewal premium from the last premium due date. The insurance
• coverage continues during the grace period. In case of a claim during the grace period, premium due will be debited from the benefits payable. No new Waiting Periods or Fresh Underwriting will apply if premium is received during the Grace Period.
• In case you are up to age 45 and in good health, your cover begins immediately. If your age is more than 45, you would under go a health check up.
• You can avail of the Cashless facility (no need to pay any money for the treatment) in more than 3,000 key hospitals across the country. Please refer to the “Easy Claim Process” explained below.
• You are guaranteed a lifelong renewal of your health cover. The premium applicable on renewal will depend upon the attained age.
• You benefit from a fixed premium rate for 3 years. This means even if you have a claim in year 1 or 2, the premium will not increase.
• Your benefit amount increases by 10% for every no claim year (the maximum increase will be capped at 50%).

Our Rating

Premium amount for individual is little higher in this policy. But, it is not big difference compare to other insurance policies. The advantage of this policy is that policy holder can add their in-laws into the coverage with additional premium. By looking into the benefits and coverage, it covers most of the illness and offers the daily cash benefits in the good range. Since the cost of medical is growing every day, this policy would protect you from the major health expenses. I would recommend Aegon Religare iHealth Insurance policy for your family.

Buy Aegon Religare iHealth

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LIC Jeevan Ankur (Plan 807) is introduced by the LIC on January 2012. The timing of the new policy is to attract the investments from the tax payers. Who are looking for the tax savings investments that too in middle class always prefer to think of buying an insurance policy is the good source for investments. Unfortunately, every companies including LIC would sell the policies by marketing gimmicks. By looking into the details of the Jeevan Ankur, it of one of the low returns policy offered by LIC and there is not clear objective why one should invest in the Jeevan Ankur.

In LIC’s words “Jeevan Ankur is a conventional with profit plan, specially designed to meet the educational and other needs of your child”. Some of the key points about the Jeevan Ankur:

1. It is an endowment plan
2. There is option of regular premium payment and Single Premium (one time)
3. The life assured is the parent and not the child.
4. There are riders ( Accidental and Critical Illness) associated with the basic policy.
5. The maximum age of policy holder at maturity has to be 75 yrs.
6. The maximum policy term is 25 minus age of the child.
7. No loan facility will be available under this plan.
8. Minimum and Maximum age of the policy holder at the time of taking the policy has to be between 18-50 yrs and minimum and maximum age of child has to be 0-17 yrs.

Death of the Policy Holder or Child

• Buy: Plan your insurance : Life and Health

As mentioned in the above points, the life assured is the parents who are the policy holders. If there is unexpected death of the policy holder, sum assured will be payable immediately and 10% of the sum assured on each year till the policy maturity period.  The premiums of the policy will be waived off by the company in case death of the policy holder happens before the maturity.

In case, the nominee of the policy (child) is died before the maturity, policy holder has the option to nominate another child and continue the policy. If there is no other child then, the benefits will continue and the maturity proceeds will go to legal heirs.

Illustration of LIC Ankur Jeevan

• Age at entry: 35 years
• Policy term: 25 years
• Mode of premium payment: Yearly
• Amount of annual premium: Rs.3587/-
• Sum Assured : Rs. 100,000 /-

Returns on Ankur Jeevan

The problem with most of the endowment plan is that it provides very less return compare to many other investment categories. Also insurance can never fight with the high inflation what we are seeing in our country. If you consider the inflation, the inflation in education sector is around 12-15%. Needless to say, how much we are spending for our kids in these days to get admission in the colleges. These huge expenses can not be matched with the returns offered by policies like Jeevan Ankur.

If you look into the above example, the final returns offered by the policy is less than the 5%. When comparing to the inflation, your investment would carry the negative value.

Our Rating

Don’t ever plan to buy Jeevan Ankur and it would surely will not satisfy your needs. If you are willing to invest for the tax savings, there are many other good policies and investment options available in the market. Fixed Deposit would give you more returns than this policy. Please share this with your friends if anyone planning to buy this policy.

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We are more familiar with Life Insurance, Medical Insurance, Auto Insurance. The realty is that, there are many other insurance policies available in the market to protect every valuable assets of the citizen. If you take an example, you are buying a house or constructing your own house by spending about 60 lacs with the dream of staying in that house for rest of the life.

The probability of damage on the house structure or building is very less, but if it happens because of riots, terrorist, or take earthquake which destroys the complete building. Are you prepare to handle the situation?. It is an unexpected event and would ruin your entire life. If you are not aware of this policy, House Holder Policy which is taken for protecting your house from the unexpected events and it also provides the rider to insure goods inside the house. This policy is not popular among the people one reason it is new and less marketing taken by the banks.This article explores the details about the house holder policy and how it can be purchased.

also read:

• Home Loans and Tax Benefits
• Apartments in Bangalore

What is House Holder Policy?

This policy used for protecting your house from the natural calamities like earthquake, flood and unexpected events like riots, terrorist attack or burglary. In the above list, most of the options would be given as the customer’s choice to select and protect from the specific cause. If you think that in your place there is very less chance of terrorist attack, you may not select that option on the policy. Depends on the number of riders or options selected on the policy, the premium would vary.  There is previous article about the same topic. Pleas read that

What is Householder Package Policy (HPP)?

The above link provides more details about the policy and what can be covered under the policy. In this article we will take an example of a bank and see how they are charging the premium for this policy.

Where to by House Holder Policy?

It is offered by most of the private banks in the country offers this policy. Interestingly, HDFC Ergo offers this policy and it can be purchased through online. If you want, they would send the representative to your home.  Lets look into the policy details offered in their website and premium amount. HDFC Ergo offers this policy in the name of Home Insurance. The have listed the following notable features in the policy.

Fire and Special Perils:-Building(Section I) and Contents(Section IA)
Covers the structure of your home and contents against

• Fire, Lightning, Explosion/Implosion, Aircraft Damage
• Riot Strike, Malicious and Terrorist Damages
• Bursting and overflowing of water tanks, apparatus, pipes
• Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
• Earthquake, Volcanic Eruption & other Convulsions of Nature
• Impact damage by rail/road vehicle and animal
• Subsidence and Landslide including Rockslide
• Missile testing operations
• Leakage from automatic sprinklers installations
• Bush fire The sum insured for the structure of the house is based on the Reinstatement Value. Quite simply, it would be the reconstruction cost of the house in the event of any loss/damage due to any of the insured events like Fire, Riots, Storm, Flood and so on.
•  The reconstruction value for the structure is determined by the construction cost. This, however, would not include the cost of Land. The home insurance policy will calculate reconstruction cost based on two parameters which are mentioned below:-
• Built Up Area of the House (Square Feet)
• Cost of Construction in your area / locality

Burglary and Housebreaking including Larceny and Theft (Section II) – Contents (as defined by Indian Penal Code)

• You can also insure the contents of your home against loss due to burglary and /or housebreaking or any attempted burglary. Jewellery kept in Locked Safe within the Home premises can also be covered.
• Sum Insured for Contents under Section I A Fire & Special Perils and Section II Burglary & Theft should be the same.
• The Sum Insured for Contents / Valuables is based on the market value.
• HDFC ERGO Home Insurance enables you to cover a host of household items like Electronic Equipments, Furniture & Furnishings, Jewellery, Clothes and so on.

Premium for House Holder Policy

The cost of the premium would be different from the each company. But, the difference would be not much and it depends on the features in the policy. We would analyze the HDFC Ergo premium table as per the above list of features in the policy. If you look into the above list, they have divided into the sections and based on that premium is calculated. Look into the below table for the premium details.

If you are analyzing the above table for the price of premium, it is less compared to the other insurances. The reason is that the occurrence of the event is very less so the premium amount would be less. But, it is wise idea to protect your house with this policy. I would recommend everyone who are the owners of the house think about this policy and protect your house.

This policy can be purchased through online from the HDFC Ergo website by clicking the “Buy Online” link here.

Who are offering House Holder Policy?

This policy is offered by most of the private players in the market. The above example is for purchasing the policy from the HDFC Ergo which is one of the leading private player. Apart from that, below list is leading players in the market offering the house holder policy.

• ICICI Lombard
• Bajaj Allianz
• Axis Bank
• SBI Home Insurance

Update:If you are traveling abroad for more than one month period of time, then you have to inform your insurer about your travel. This is not aware of many of the advisers. It is better to have this in the writing, just send them mail about your travel and the duration. There is no need to hear them back. It is important and one of the rules in the house holder policy.

Summary

It would be very useful write up for many of our readers. If you are aware of the house holder policy, please start understanding it and buy one for you. It would protect your dream home and your family. If you have already taken this policy, please share your experience with the readers and help them to chose the best one.

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If your family depends on your income, you have to seriously consider buying a suitable term insurance plans. In the past decade, we are more familiar with only one life insurance company that is Life Insurance Corporation of India (LIC). Even today most people trust LIC compare to taking the policy with the private companies. But, the trend is changing and there are some good private players in the market with good claim settlement ratio.

In this article I will explain about the Aegon Religare Life Insurance plans. Aegon Religare provides the various flavor of the life insurance plans, here we would review only the most suitable for the individual and compare them with each other. If you have any thoughts, please post it in the comments section.

 Aegon Religare Term Life Insurance Plan

What is Term Insurance plans?

The following are the list of term life insurance plans offer by Aegon Religare. They name this plans under the category “Protection Plans“.

1. Aegon Religare Level Term Plan
2. Aegon Religare Increasing Term Plan
3. Aegon Religare Decreasing Term Plan
4. Aegon Religare Group Term Plan
5. Aegon Religare Rural Term Plan
6. Aegon Religare Group Credit Life Plan
7. Aegon Religare iTerm Plan

In the above list, we would see more details for the first two plans which is the common for an individual. Last one in the list is about the online purchase of the life insurance which I would write it in the another article. Remaining plans are related to the group schemes which is more useful for the companies or joint family.

Aegon Religare Level Term Plan

It is the most common term plan from the Aegon Religare. The following are the key points about this plan.

• Enhanced Sum Assured
• This plan provides you the option of increasing the sum assured on two occasions of your life, your marriage and the birth of your child. You can increase the sum assured by maximum of 50% of existing sum assured or Rs.1000000 which ever is the lower. This gives you the more sum assured for the same premium amount.
• Riders
• With this plan, you have the option to riders for any specific events. The allowed riders are ADDD rider or Critical Illness (CI) rider. If you have chosen the ADDD rider, the amount would be paid on the event of your death, permanent disability, etc. If you have chosen the CI rider, if you are suffering from the disease listed as the CI, then you will get the assured amount for the rider.

What you need to know about Critical Illness Policy?

Aegon Religare Increasing Term Plan

• Increased Sum Assured
• This policy has the model of increasing the sum assured value for each year by 5% of the sum assured value of the policy. For example, if the policy holder dies on the first year of the policy, his family gets 100% of the sum assured and it gets increased every year 5% till it is the double the amount. Then it is remain as the double the value of actual sum assured.
• Riders
• This policy covers the same two riders in the Aegon Religare Level Term Plan (ADDD and CI). The following diseases are covered under the critical illness rider:
• Cancer (malignant) including Leukemia
• Coronary Artery Bypass Surgery
• Heart Attack
• Kidney Failure
• Stroke
• Major Organ Transplantation
• Paralysis
• Heart Valve Surgery
• Surgery for disease of the Aorta

General Information

Other information related to the policy is similar for both the schemes because they are issued by the same company. The following are the key facts about the policy.

1. Minimum Sum Assured – Rs.500000
2. Entry Age (Minimum 18 years – Maximum 55 years)
3. Maturity Age – Maximum 75 years
4. Policy Term (Minimum 10 years – Maximum 30 years)
5. Premium payment frequency (Single, Yearly, Half- yearly, Quarterly, Monthly (via ECS only))

Premium Calculation

There is variance of premium amount for the each policies. Aegon Religare Increasing Term Plan is little expensive than the level plan because of its high sum assured value. The following are the details of the possible premium amount for each policies.

• Sum Assured – Rs. 50 lacs
• Premium Frequency – Yearly
• Policy Term – 25 Years
• Age of the applicant – 32 Years
• Premium for Increasing Term Plan – Rs. 18450
• Premium for Level Term Plan – Rs. 11900

The total premium in the above table is excluding the tax and other extra expenses.

Final Verdict

These two term policies from Aegon Religare has some promising value for the individuals who are looking to cover their life with low cost premium.  It is you take on deciding the which one of this will suit your needs. But, the premium  amount is less compare to other products in the market for sum assured Rs. 50 lacs. This can be a good buy if you are looking for purely term insurance. Please post your thoughts in the comments section. You will find more details on their site here.

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In my earlier articles, I have written lot of information on the health insurance policies. I would like to write this article to consolidate those information and present it in the single post. In the current inflation rate, medical expenses are shooting up to the high levels which will make a big hole on your budget. This would make the health insurance polices are very important for you and your family.

If you are part of the group mediclaim taken by your company, then review their coverage and check if that is covering all your members in the family. Most of of the companies will not cover the dependents like parents in their policy. This article explores the various points to be considered while planning for health insurance policies. If you have any comments, please post it in the comments section. Subscribe to our future articles here.

also read:

• Importance of Health Insurance

Individual or Floater Policy

Health insurance policies can be taken as the individual or family floater policies. If you are taking the individual policies, the premium would be high compare to taking the family floater policy for all your family members. Also, you have do the through analysis on which health insurance would best suits your needs. Every individual and their family has the different needs based on the health condition and age of their family members. You can read the following articles to plan better:

• Individual or Family Floater health insurance is best?
• Which health insurance policy suite your needs?

Health Insurance for Senior Citizen

If you want to add any of the senior citizen in your family to health insurance, then it is important to plan it wisely. Normally the medical expenses are higher for the aged people. So, the premium cost would be higher compare to the other people. If you add them in the family floater policy, then the cost of the premium would be high. So, it is good idea to take the individual policy for the senior citizen members. Also the coverage for the senior citizen policies would less.

Eligibility for Claim

You can not claim for all the expenses in the health insurance policies. The following are few of them which is eligible to be considered for the claim.

• Room rent in the hospital
• Doctor Fees

• Medicine for the treatment

• Operation doctor fees
• Consulting fees for a doctor
• If you have bought blood and Oxygen while treatment
• Operation theater’s fees

Critical Illness Plan

In the normal health insurance policies, the coverage for all the diseases won’t be available. If you want to cover all the diseases, then you have to buy the critical illness rider on top of the main health insurance policy. This is available as the rider or the separate insurance policy. You can read the following article to know more about the critical illness policy:

• Why you need Critical Illness policy?

Know more about Health Insurance Policy

Apart from the above sections, there are lot of changes coming in the health insurance section. The following are the list and you can read that in the specific article mentioned.

• Health Insurance portability
• The new announcement says beginning July 1st, customers can carry benefits to the new insurer which is not existing till date. It will create healthy competition between the insurers and increase the customer satisfaction. read more.

Summary

The above information would be more useful to understand the importance of the health insurance policies and plan it better. If you are delaying the plan for medical insurance, the premium would be higher. It is thump rule that you have to buy a new health insurance policy before the age of 35 to get without any medical checkup and less premium. Otherwise the premium would be higher. If you have any doubts please post it in the comments section.

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The insurance policy you have can bring you money for less interest rates. Yes, you can pledge the insurance policy to get the loan with low interest rates and can repay with the flexible duration. When Bangalore based engineer Murthy  is have no clue when his application for the personal loan is rejected. His insurance policy brings relief to him to get the loan. It may not bring the huge amount, but it is worth instead of taking the personal loans for high interest rates. There are various factors which would decide the loan amount against the policy, we would look into those details in this post. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

Eligibility to Apply for loan

It is not possible for every policy holder or every policy can apply for the loans. The following are the few points to remember while applying for the loans:

• You can not apply for loans against the Money Back policies. All other policies are eligible. Moreover it is depend on the company.
• You should have paid the minimum of three premiums to the policy, otherwise you can not apply for the loan.
• Some banks not interested in paying loans for the Unit Linked Insurance Plans(ULIP) policies.
• You can not take the loans against your term insurance and health insurance policies.

Loan Limit

The loan limit is calculated for the traditional policies and ulips are different.

• Traditional Policies:
• You can get the guaranteed amount of 80-90% of the surrender value (How to find surrender value of policy?). Please note that, policy gets surrender value only after paying the three years premiums. Basically the minimum surrender value is 30% of the total premiums paid minus first years premium. If you have paid Rs.25000 as the yearly premium for four years, then its surrender value would be Rs.22500 (25000×4 = 100000 minus – 25000). It is the minimum amount you can get, but the maximum amount is depends on the company and other factors.
• Unit-linked plans (ULIPs):
• Many companies not interested in giving the loans against the ulips. The loan amount would be based on the current market value of the policy. If your ulips invested 60% amount in the equity, you could get up to 40% as the loan amount. If your ulip has invested 60% in the debt funds, then maximum eligibility to get the loan is 50%.

Repayment of Loans

The repayment schedule would vary from the each insurance companies. It is more flexible compare to the normal loans. But, minimum of six months are required for repaying the loans. The following general points to consider:

• If you repay the loans before six months, you have to pay the interest for full six months.
• In some companies, if you have paid the loan on time, the policy will lapse.
• In the same way, if a person taken a loan and not paying the premium for the policy, then policy will lapse.
• Incase the policy holder is died or policy is matured, the interest will be charged only up to the date of death or maturity.

Negative impact on taking loans

If you have taken a loan against the insurance policy and paying on time, then it won’t be any problem for the policy. But, if you are not able to pay the installments, then policy would loose the benefits. In that case, if the insured dies, beneficiaries would get the sum assured after deducting the pending amount as well as the interest due.

Summary

I hope this article would be very useful for who are looking for the alternative loans. Earlier I have written about the same topic. This would be the refreshing post in the same topic. If you have any doubts, please post it in the comments section.

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Are you looking to apply for studying in abroad or one of your relatives would like to continue their education in abroad?. If that is the case, you must read this article to know about the students insurance policy and why it is very important for the foreign education. Those who are applying for the education in abroad would go through the painful process to prepare the various documents and approval including the students visa. But, only very few would consider the importance of taking the students insurance policy to protect them from the unexpected expenses and the bad health condition while studying in abroad.

This article explores the importance of students insurance policy and why it needed for the students and the process to apply for it. If you are a parent of a student who want to apply for foreign education, please spend you time to learn the students insurance policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• Interest Free Education loans
• Health Insurance Policy
• Critical Illness Policy

What is students insurance policy?

This policy combines the medical insurance and the travel insurance for the students traveling abroad for their higher education. This is a compulsory policy for the students to avoid any unexpected expenses while studying in the abroad.  For example, if you are taking the medical help outside India, the cost would be very high compare to India. Not only that, if a student meet any accident or become disabled this insurance would help to recover from the losses. Apart from this, if you lose the passport or package while traveling, this policy would help him.

Another important note is that, medical insurance is must for many universities abroad. Most of the students who travel to abroad would know this fact only  at the time of joining, this forces them to take policy in foreign soil which is very expensive. It would be good idea to search on the college’s website to find out whether the medical insurance is compulsory and what is the minimum coverage required for the eligibility. Otherwise they would reject the policy and forces you to take the another policy.

What is covered?

The following items are covered from the students insurance policy:

• Medical expenses
• Treatment of mental and nervous disorders
• Bail bond
• If you are done a crime which is bailable nature, this policy would help you to pay the bail amount.
• Return journey
• Loss of checked-in baggage

What is not covered?

The following expenses are not covered under this policy:

• Attempted suicide
• Injuries due to dangerous sports
• Expenses arising due to loss of valuables, money or securities.
• Traveling against the advice of the physician.
• If your health is not good for the travel and your doctor has advised not travel, then this policy would not incur any expenses arising out of your travel.

Cost of the students insurance policy

The cost of this policy would vary depend on the region. Normally the premium is expensive for the education in USA and Canada because their expensive health care products. The following are the premium collected by few leading insurance companies:

 Summary

It is important for the students to know this policy and apply for it. When you are studying in abroad, the expenses would be very high and it is difficult for you to manage if your family is not wealthy. This policy doesn’t require any medical test, but few companies don’t accept for the pre-existing disease. Please ask insurer more details about the policy and buy if it suits your requirement. If you have any doubts, please post it in the comments section.

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Have you ever heard about the wedding insurance?. The basic principles on insurance is to protect you from any unforeseen events like death, loss or damage of property or vehicles. Anything if it would damage individual mentally or physically would need to be  protected. It is insurers interest to offer the various insurance types, if they feel they can capture a market on such an type, they would come up with new kind of insurance type. In the changing world, it is necessary to adopt the latest hazardous for the human life and protect him.

One of the latest insurance category they are offering is the wedding insurance. One has to prepare and arrange marriage event by spending the lakhs of money, it would have been their life long savings. If there is any unexpected thing stopped the marriage, will they have money to arrange the event again?. The wedding insurance to cover the expenses for a wedding. If you have any doubts, please post it in the comments section. Subscribe to future articles here.

also read:

• Health Insurance Portability from October 1, 2011
• Individual or Family Floater health insurance is best?
• Why you need Critical Illness policy?

What is Wedding Insurance?

It is new type of insurance offered by selected insurers to protect the wedding event for the policy holder. Basically, the intention of the insurance is to protect the money spend on the event if there is unforeseen incident stopped the wedding event. This type of insurance would pay the policy holder the amount spend for arranging the wedding event. It is related to the amount policy holder has taken to insure the marriage.

The insurance policy is effective from 7 days before the marriage event till the completion of the event. In this period, if there is any incident which stopped the marriage (as per the policy words there is certain incidents would be included or excluded for accepting the claim process. for details read the following section).

List of events can be approved

To get the claim approved by the insurer, there is list of events or conditions to be satisfied. Not all the events can be a reason to stopping the marriage, in that case insurer would reject the claim. The following are the some of the events to be approved for the claim process:

• Unexpected death of family member listed in the policy. While buying the policy, policy holder has to mention the family members name in the policy details.
• Fire in the marriage hall that stopped the marriage event.
• If there is any burglary of jewels or valuable things that would result in cancelling of the marriage.
• Earthquake that makes damage in the property and canceled the wedding.

Claim process for Wedding Insurance

This type of insurance works for giving the protection to policy holders from the losses. The policy holder would get the actual loss incurred by him subject to the maximum of policy coverage (sum insured) amount. If he wants to claim the losses, he has to submit all the bills with the FIR copy of the complaint he registered in the police station in case of the burglary. The following is the steps to claim the losses:

• Policy holder would intimate the insurance company about the loss.
• They would send the surveyor to the site to verify and investigate about the event.
• Policy holder has to submit the required bills and other documents to claim the money to the surveyor which he lost on the event.
• Then surveyor would send the survey report to the insurance company.
• If there is no issues on documents and survey report, the claim will be sent to the applicant.

The difficult thing is that keeping the bills and even getting the bills would be not easy in our country. Most of the expenses they spend for the marriage they would not give a bill. Practically, if they buy groceries from a super market run by individual, they would not get a bill. This would not come under the account. The insurance company would thing these and make amendments in the policy wordings to help the policy holders.

Who are offering Wedding Insurance?

Bajaj Allianz General Insurance, the leading private general insurance company is the first company to launch an insurance coverage for weddings cancellation or postponement. The insurance policy covers wedding cancellation /postponement due to fire or any natural disaster, accident of bride/groom, accident of blood relations resulting within 7 days of the wedding date, damage to property including the venue, burglary and even cases of food poisoning at the function. This scheme has four insurance options -Rs.2 lakhs,Rs.4 lakhs,Rs.6 lakhs and Rs.8 lakhs. Within each of these options, one can get from six different types of covers. The indicative premiums for the four options range from Rs.3770 to Rs.14276.

ICICI Lombard, is another insurance company offering the wedding insurance. This policy covers the Wedding Cancellation, Material Damage to the Property, Personal Accident cover for Insured Person and Public Liability. The above link on their website would provide more details on the insurance policy.

Summary

In India, the basic insurance awareness itself very poor. These kind of insurance types would take long time to catch their eyes. IRDA has to come up aggressively to promote and encourage the insurance companies to sell more policies. It is important type of insurance for the parents who are spending the life savings into son/daughters marriage. If you thing its worth knowing, spread this article to your friends. Thank you for the reading!!. If you have any doubts, please post it in the comments section.

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It would be embarrassing moment for the family if the insurance claim got rejected after the death of earning member in the family. Sakthy, a factory worker in Bangalore did not know that his family would suffer because of his mistake in taking the insurance policy by hiding few important details about his health and nature of work to the insurance company. This is the case for many rejected claims in the recent days. If you are taking the insurance to cover your family, make sure that family would get the money after your dismal.

Nowadays growing number of rejected claims reported by the IRDA. According to the data, of the 7.62 lakh life insurance claims filed in 2009-10, nearly 15000 were rejected by insurers. The percentage of rejecting is very high with private companies. LIC has the very less percentage of the claims rejections in the report. But, if you look into the reason for the major number of rejected claims are because of the wrong information given to insurers. This article explores the reasons to reject the claims and what are the things to keep in mind while taking the insurance policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• What is term insurance?
• Different Types of Life Insurance
• Difference between insurance and investment

Why the insurance claims are rejected?

The following are the main reasons for the claims to be rejected from the insurers side :

Early Death

If the policy holder dies within two years of taking the policy. Insurance company will probe the case closely. It would take six months.

Non-disclosure of health conditions

If the insurer thinks that policy holder deliberately hide his health problem, then the claim can be rejected.

Non-divulgence of family medical history

If the relatives suffer from a hereditary disease and it is not mentioned in the application form at the time of buying the insurance, the claim can be rejected.

Details of work nature

There are specific jobs which carry high risk for the life like working in mine, etc. The nature of job must be revealed to the insurer before buying the insurance policy. If the insurer thinks it is hidden from them, the claim can be rejected.

Over insurance

When you are buying a new insurance policy, you must reveal your total income and other insurance policies in your name. If you are not revealing the facts and taking the over insurance on your name, it would create problem at the time of claim settlement.

What you have to do?

In the general, agents are misleading the policy holders to buy the policy without mentioning the complete details about the. The intention of most of the agents are to sell the products and not to think about your families future when they are in need of claim. At the end your family will be in trouble if you fully depend on the agents. Do the following things to avoid any problem in the claims settlement:

• Don’t rely on the agents. Fill the application yourself and provide all the details for the insurance company. If you have any doubts, directly go to the insurer and clarify your doubts.
• Don’t ever hide your health condition to your insurance company. If there is any need of medical test, please go through it and it would be more helpful at the time of applying the claim.
• Provide all the correct details about your age, occupation and nature of job. Be honest to the insurer.
• After you purchased the policy, cross check once and notify the insurer if there is any problem in the document.

Summary

Don’t take this as slightly when you are buying the insurance policy. There is no use if your policy is not helping the family at the time of claim settlement. All your work would go vain if the policy has the wrong details about you. Please make sure that you are applying the above points while buying an insurance policy. I you have any doubts, please post it in the comments section.

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Have you every think about the insurance policy which you have purchased from your insurance agent is whether suits your needs?. In India, most of the households has at least one insurance which is not meeting their needs. They have purchased only because of tax planning or agent’s misselling the policy. It is not worth for paying the premium which doesn’t suit your needs. But, unfortunately you have to loose money if you are surrendering the policy before its maturity period. This article explores some of the way to escape from the bad insurance policy.

If you are buying the new insurance policy, please understand the purpose of the insurance policy and the clear difference between investments and insurance. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• What are the different types of riders in Life Insurance Policy?
• 3 Tips for Saving Insurance Premium
• What is Free Look Period in Insurance?

1. Let policy lapses

It is the costliest option because you are not going to get anything if the policy has not completed the three years. Also, you would loose the tax benefits for the premium paid. The only advantage is you are free from this policy. As I have already told, if the policy not suits your needs, get rid of that spending.

2. Surrender the policy

If you have paid the premium for first three years, surrender the policy. You will get some money back. But, the amount will be less compared to the what premium you have paid for the policy. The amount will be reduced because of the surrender charges. Last year IRDA has put the cap on these charges, which is Rs. 3000 or 20% of the annual premium in the first year if the premium is less than Rs.25000 or it will be Rs.6000 or 6% of the premium.

How to find surrender value of insurance policy?

3. Convert it into a paid-up plan

It would be one good option, in this case insurance company instead of returning to the investor the policy will be converted to the life cover. It will be good option to exit the policy. It is possible only if you have paid the three years of premium payment.

4. Continue if the maturity is near

If you have almost paid the most installments of the policy and only few years remaining. Then it is wise to continue and complete the policy term instead of the exiting the policy. It would be a loss for you if you have surrendered the policy.

Summary

Do you have life insurance policy?. Don’t let agent’s decide suitable policy for you, you must understand your family needs and choose the best policy for you. If it is not worth paying, first step is to exit the policy and find the best term insurance plans. If you have any doubts, please post it in the comments section.

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Most of us are aware that insurance is a very effective tool to take care of our loved ones, should something happen to you. But what baffles most people is how much insurance do they really need. Most people end up having multiple insurance schemes, because they are gullible and get taken in by the charms of sales executives.

It is obvious that not everyone has the same need for the insurance cover. For example, if one has the good wealth for his family, probably he don’t need any insurance because he already saved more wealth for his family. The insurance would be more important for those who don’t have the enough corpus for their family in case of their demise.  This article explores the need of an insurance with an example. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

also read:

• Difference between Investment and Insurance
• 3 Tips for Saving Insurance Premium
• Life Insurance Premium u/s 80C
• What is Term Insurance Plans?

Insurance Needs on Different Stages of Life

So just to illustrate what is the right amount of insurance for an individual let us take the case Ravi Mathur. Ravi is a an engineer with an annual income of Rs 20,000,00. He is married with two school going children. Ravi’s biggest worry is who will take care of his family, should something happen to him. At present Ravi’s wife stays at home looking after the house and their children. In such a scenario, there are various parameters one needs to consider before deciding how much insurance Ravi should get. Also another thing to keep in mind is that these parameters are variable and subject to change.

One needs a different kind of insurance depending on what stage of life he is at. Below I briefly summarise the various types of policies available:

Ravi is in the third stage as outlined above, so he not only needs insurance cover for creating wealth but also to take care of his children’s education. So to determine how much insurance he needs, he should look at the following:

1. Current annual income
2. Personal assets
3. Non-financial assets
4. Insurance cover
5. Loans
6. Education funds
7. Emergency needs
8. Other cash needs

From the above variables it is easy to get his REPLACEMENT INCOME. This number represents how much money you and your family would need if something happens to you.  There are a number of calculators available online to calculate how much insurance one needs.  But replacement income may increase or decrease depending on several factors. If there is an increase in their family’s income, like if Mrs Mathur takes a job or he has some pre-existing savings, then the amount of insurance needed will decrease.

Similarly due to some changes the insurance needed may increase like pre-existing debt, sudden onset of a medical condition, unforeseen expenditures etc. To cover all these, insurance needed will increase. But if the Mathur family’s present monthly expenditure is Rs 50,000 then the insurance should be such that the interest income from the sum assured should be able to meet the family’s expenses. Secondly if he wants to cater for inflation, then Ravi can opt for higher insurance.

Ravi should also consider the tax benefits he can get under section 80c when he gets the insurance policy. As a general rule of thumb, the following sums up how much insurance an individual really needs:

From the above Ravi can get a rough estimate of how much insurance he needs. If he needs Rs 1 lakh p.a. for his family’s needs, and assuming he does not have any other income-generating assets, he may like to create a capital fund of Rs 12.5 lakh (Rs 1.25 million) which can yield Rs 1 lakh (Rs 100,000) annual income @ 8% p.a. He may therefore buy a life insurance policy of Rs 12.5 lakh.

Summary

There is a broad relationship between needs and assets over a period of time. But LifeInsurance is not an investment. Therfore a careful analysis is required before one buys insurance.

This article is written by Founder at www.ninemilliondollars.com , a personal finance blog where your mutual fund and insurance queries are handled

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The insurance agent mis-communicated to me the product features and is now not responding to my calls.”

• “The insurance company is not addressing my complaints.”

• “The insurance company is not refunding back my premium.”

Aren’t these the common set of woes we hear from the insurance policyholders who say they have been cheated by the insurance companies? For most of us it is a tendency to blame the seller in case any product or service we bought didn’t turn out as it was expected to. The reason why there are a high number of insurance policyholders who’re not happy with their insurance products is because unlike buying other products and services, they do not understand the insurance product before buying it.

Quite often it has been noticed that customers do not care to thoroughly go through the insurance plan’s brochure/leaflet before deciding to buy. They blindly believe the insurance agent and in some cases then skim through the brochure/leaflet to portray that they have gone through the product and understood it very well.

To add to this, there have been innumerable cases where the customer simply fills in the personal details, signs the insurance application form and asks the insurance agent to fill in the rest of the details. And in certain cases, customers do not even care to fill in the personal details such as name, DOB (Date of Birth), communication address, etc. They simply sign on the application form and ask the insurance agent to fill in all the required details including personal details based on the documents of proof provided by him/her. Keep reading if this sounds anything familiar.

• Difference between Investment and Insurance
• What is Term Insurance?

So, Where exactly the problem lies?

How many insurance policyholders even care to read their policy documents once they buy the insurance cover? Is it justified? And then amidst all this, we blame the insurance company for cheating us. This is not to justify mis-selling but as buyers, isn’t it our duty to ensure that we try and understand all the required details of the insurance product(s) we buy.

It’s a familiar sentiment that the terms and conditions in the insurance policy documents are difficult to understand for someone who has no insurance background or any financial services background. But here’s the fact – it does not require any thorough knowledge of insurance domain or financial services to understand insurance products. There have been umpteen number of cases where the grievances are not on account of the typical insurance related terms and conditions mentioned in fine print, but on account of basic insurance cover features including payout of benefits, premium payment frequency, premium amount, type of product, etc.

A quick question – Do we require an in-depth knowledge of insurance domain in order to know and understand the above mentioned basic details of an insurance plan? Spending just 15 minutes on our insurance policy document shall help us address any grievances if we think that the product cover we bought is not what we actually intended to buy. And remember, we always have the 15 days free-look option from the date of receipt of policy document to ask for a refund of premium.

Did you ignore these while buying insurance?

Quite often, buyers ignore or don’t care much about the below mentioned three basic stages of buying an insurance cover:

• Understanding features of the insurance product including the benefits, term of the policy, premium amount, etc.

• Duly filling the insurance application form.

• Reading the policy document once an insurance cover is bought.

Now, is it fair to blame the insurance company alone when we ourselves didn’t put in considerable efforts to ensure that we buy the right insurance product that suits our needs? For an easy reference, below given is a checklist that includes a minimum set of things a buyer should verify while buying an insurance product:

During Stage 3, if you find a discrepancy between what you opted for in the insurance application form (a copy of which is also attached in the policy document) and what has been actually mentioned in the policy document, quickly get in touch with the insurance company and exercise the free-look refund option. You only have 15 days from the date of receipt of policy document to request for a free-look refund. Also ensure to write the correct address of communication in the insurance application form so that the policy document reaches you on time and you can verify it and act accordingly.

The author, Shalin Tejpal Jain is an insurance professional and a blogger. He runs India’s first stand-alone insurance complaints forum, http://policycomplaints.com. On the forum, insurance complaints are addressed by an Insurance Experts Team, representatives of Insurance companies and other members. This article was originally published at pankajbatra.com and has been re-published with due permission from the author

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One of the worrying factor in the Indian insurance industry is the rate of claims rejection. If a person claims for his father’s death and the claim is rejected, he will loose his confidence on the insurance industry. There should be a rational to reject a claim. As of now one of the reason for rejecting the claim is policy holder applying for the claim after the maximum period allowed by the insurer to request the claim. This restrictions has been changed by the IRDA recently to help the policy holders. This article explores that in detail. If you have any thoughts, please post in the comments section. Subscribe to our future articles here.

The Current Norm

Currently there isn’t any strict norm of time frame for the requesting a claim. For example, a life insurance is claimed after 6 months can be approved by the insurance industry if the applicant if honest and submitting all the relevant supporting documents . The time frame given by the insurance companies are only because to ease their administrative burden. If a policy holder requesting for the claim after the stipulated time, that doesn’t  mean he is not eligible to get the claim.

IRDA’s Guidelines

Some of the insurers framing the time for requesting a claim keeping in mind that rejecting the maximum claims. This is not rational and will result in people lose confidence on the insurance industry. In the recent guidelines, IRDA has clearly mentioned that any insurance company can not reject a claim only for the reason of late application. This made it clear that, now onwards policy holders need worry about the time frame to apply for the claim. IRDA requested insurers to add a clause in the policy document, they will honor the late claim if the reason for the late is genuine and valid.

Summary

If the insurance companies has to honor the late claims doesn’t mean that you have to apply very late. If you have any genuine reason only it is acceptable, you must be proactive to claim it faster. It is one of the move to gain the confidence of the policy holders. In case, the insurer doesn’t honor your claim, you can approach the regulator through toll free number 155255 or through its website igms.irda.gov.in. If you have any thoughts, please post it in the comments section.

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Earlier I have written about the health insurance portability and it will be available from July 1,2011. But, IRDA has clarified saying that there is system required to monitor the porting of policy holders from one company to another company, so it updated as the portability should start not later than October 1, 2011.  It is only few days away for the new guidelines to be effective and policy holders can enjoy the good service from the health insurance companies. This article explores some facts on the health insurance portability and what are the restrictions on it. If you have any thoughts, please post it in the comments section. Please subscribe to our future articles here.

• Importance of Health Insurance
• Which health insurance policy suite your needs?
• 15 Days Lock-In period for Health Insurance Policies
• Tax Savings on Health Insurance

Apply before 45 days of premium renewal date

• The portability process should be initiated at least 45 days before the premium renewal due date of the health insurance policy.
• If you are a policy holder wants to port your policy to another company, you must approach the new company at least 45 days before the next premium renewal date.
• If you are failing to do, new insurance company can reject your proposal for the portability. But, it is up to the insurer to accept your application if you are failing to approach before 45 days.

Important points to consider

• 7 working days is the maximum time within which the new insurer seeks details from the existing insurer.
• 7 working days is the maximum time within which the existing insurer provides information to the new insurer.
• The new insurer must respond within 15 days of receiving the application from insured, otherwise he will loose the right to reject the application.
• The portability is available for the all types of non-life insurance policies either it is individual or family floater.
• On receipt of an application for porting, the insurance company shall furnish the applicant, the Portability Form as set out in  the guidelines together with a proposal form and relevant product literature on the various health insurance products which could be offered.
• The policyholder shall fill in the portability form along with proposal form and submit the same to the insurance company.

Summary

It is one of the good move from IRDA to help the consumers to get valuable service from the health insurance companies. If you have health insurance policy and not satisfied, it is your time to check for the suitable policy and switch to the new company. Keep the above points while switching to the new insurer. If you don’t have health insurance, read why you need health insurance?. If you have any thoughts, please post it in the comments section.

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If you are healthy today, there is no guarantee that you can sustain your healthiness for life long. When your family is depend on your income, your healthiness and job is more important for the family’s happiness and you must be prepared for the nightmare that would cause or affect your family’s happiness.

In India, the survey shows that the rapid growth in the major diseases like heart attack, diabetics, blood pressure, etc. due to the work culture. This also forces us to think about the protection for our income when there is serious health problem for you that affects the day job. This article explains about the critical illness policy and what is the benefit of taking the policy. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

What is Term Insurance plans?

What is Critical Illness policy?

You can not envisage your future and it is always good idea to prepared for the any misfortune happen to you. The one of the prominent factor that affects your income is suffering from the critical illness, permanent disability or the unexpected demise of you. This all will put your family on cross roads and nobody to take care of their expenses (please note that if your family is very rich and have more savings then this would not be suitable for you).

In the above cases, one has to take the protection measures for his family if he can not get any future income or losses his job. It would happen only when you are suffering from the deadly diseases. It is your responsibility to insure you from the unexpected illness or death. You need a Critical Illness policy to protect you from any of the mentioned deadly diseases. If you are suffering from illness and quit the job due to that, insurance company would pay you the compensation.

Difference between Critical Illness policy and Rider

The Critical Illness policy will come under the health insurance policies. It is a standalone policy and will not be added to any other existing policy. This policy premium will be paid specific to this policy.

Where as critical illness rider will come with the term insurance policy. If you know about the term insurance, it is the pure insurance for protecting for your life. While you survive, there may be misfortune like disability or critical illness. It overcome those unexpected situations, you must take the critical illness rider on top of the term insurance policy. There will be some extra premium associated with the rider which will be paid along with term insurance premium.

Critical Illness policy is taken for one year and it needs to be renewed every year. You can come out of the policy at any time. But, rider can be taken at the time of starting the term insurance. Once you come out of the rider, there is no option to add the rider to the policy.

Different type of riders in Life Insurance

How it is different from health insurance?

It is the common doubt for everyone to confuse with the critical illness policy and the health insurance. The intention of health insurance is to provide hospitalization expenses at the time of medical treatments. This would also include the critical illness like heart attack, cancer,etc. Where as critical illness policy pays you the lump sum amount regardless of the expenses occurred.

Where to take the Critical Illness policy?

• This policy can be taken from the general insurers or life insurance company.
• Life insurance companies provide this with the two options: Adding rider to the life insurance or the stand alone policy.
• Normally taking from the general insurance company would have short term, we have to renew every year.
• Prefer taking the stand alone policy from the general insurance company, it will have the wide coverage.

What is not included?

• It doesn’t cover the pre-existing diseases and no claim can be made during the first 60-90 days of the policy.
• The insured has to survive 30 days after the treatment.
• Hospitalization expenses may not be claimed.

Tax Benefits

• You can show the premium paid for this policy under the Section 80D of the income tax act.
• The maximum limit is Rs.15000 (Rs.20000 for the senior citizens)

Tax benefits under section 80D

Summary

The above section has detailed out on the critical illness policy. If you are salaried and your family is dependent on your income, you must spend time on reviewing your protection plans and give the importance for critical illness policy. If you have not already taken one, please don’t delay and take the corrective action. It is for your family’s happiness!! If you have any doubts, please post it in the comments section.

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Health Insurance policies can be taken as the individual or family floater policies.  The problem is, many of us confused which one to choose?. This article explains in details about the advantage and disadvantage of each category. It all depends on the person’s capacity to pay the premium and his dependents. If you are not having enough idea on the health insurance, please read our previous articles on Which health insurance policy suite your needs? , Importance of Health Insurance , Tax Exemption for Medical Insurance u/s 80D. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

Advantages on Family Floater Policy

• Compare to the individual policies, floater policy’s premium amount will be 20-40% less.
• In individual policy, if one has utilized the whole amount for treatment, the policy will be deactivated for that year. In the floater policy, remaining members in the family can utilize the remaining amount.
• For maintaining the documents, floater policy is each because only one policy is taken from the entire family members. For individual policy, each one has the separate policy.
• In the floater policy, it is easy to add the new member. But, individual policy you have to buy a new policy. The premium will be higher than the adding new member in the floater policy.
• In the floater policy, if one of the senior person died, the policy will not be stopped. The remaining family members can use the policy.

Dis-Advantages on Family Floater Policy

• If the whole family is met an accident, the total amount spent will be more than the policy amount. In those cases individual policies will be better than floater policies.
• If you are adding the senior members in the floater policy, the premium amount will be higher. So, the floater policy will be more suitable for the young persons in the family.

Summary

Looking into the above points, it is good for you to take the floater policy if you are married person with children. The total premium amount will be reduced. But, if you are not married then it is good idea to take the individual policy. Most important point is that you read the instructions in policy documents before buying one.  It must be suitable for your family. I hope this article is useful for the readers.  If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

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As we know that term insurance (What is term insurance?) is pure form of insurance and it comes with the maximum cover for your life. But, it doesn’t offer any attached riders while taking the policy. In our previous article we have understood what is life insurance riders?. The riders provide the additional benefits to the policy holder in case of unexpected things happened in his life. In this article I will explain the different types of riders in the life insurance. These riders are not only for term insurance, any product which offers the life insurance. Subscribe to our future articles here.

Types of Life Insurance Riders

Accidental Death

This rider is taken to get the additional benefits for the family if the policy holder is died in the accident. Normally the amount the family will get is double the amount of  full coverage. For example, if the policy holder insured for Rs.500000, in normal cases his family will get only Rs.500000 after his death. But, if death is due to an accident, they will get Rs.1000000.

This rider is very useful and it gives the more protection to the family for the unexpected loss of family member. If you are a person who has dependents and travel more for your business, this rider is must for your life insurance.

Read: Difference between Investment and Insurance

Permanent Disability

In case if policy holder become permanently disabled, then this rider would give him the benefits. This rider is mainly for who survived in the accident and become permanently disabled. Thus, depending on the disability of the body or the part which has been severed, a part or whole rider sum assured is paid to the customer as a survival benefit, subject to terms and conditions.

For example, Mr. X has taken the life insurance for Rs.1000000 with accidental death benefit of Rs.500000. If he met an accident and survived with permanent disability, then he would not get any benefits if he has not applied for this rider. Policy holder can apply both, accidental death and permanent disability in a single rider. It is available with most of the insurers.

Critical Illness

It is another survival benefit to the policy holder. The definition for critical Illness would vary for each insurer. If the policy holder affected with serious disease and which is under the category of critical illness, then he would get the benefit if he is taken this rider with the life insurance policy. Since it is survival benefit, this would help the policy holder to meet the medical expenses.

The difference between medical insurance and the critical illness rider is that, in this rider, the policy holder would get the sum assured without considering the medical expenses.

For example, Birla SunLife Insurance covers the following diseases under this rider:

1. Heart Attack
2. Cancer
3. Stroke
4. Major Organ Transplant

The rider benefit will also cease when a claim is paid.

Waiver-off Premium

In cases where the insurer not able to pay the premium due to his Illness, permanent disability or any other injury which result in loss of income to pay the premium. In this cases, he/she need not pay the premium and the policy will not be lapsed. This rider is very useful when the premium amount is very high.

Under Section 80C, premiums up to Rs. 100,000 are allowed as a deduction from your taxable income each year.

Under Section 10(10D), the benefits you receive from this plan are exempt from tax.

Summary

The above are the four important riders coming with the life insurance products. It is very important that taking these riders with little extra amount would make big difference for you or your family when there is something unwanted disaster happened in your life. When you are taking the riders, please read it carefully to understand whether the rider would meet your needs. Because, if there is small mismatch then insurance company will reject the claim. If you have any doubts, please post it in the comments section.

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