Ankita Sejpal, Author at Turtlemint

Thinking about cancelling car insurance? Know these things first

October 16, 2018May 11, 2021 Ankita Sejpal

Your car insurance policy is a compulsory requirement if you want to adhere to the rules set out in the Motor Vehicles Act, 1988. That is why, if you own a car, you should own a valid car insurance cover on it. However, for some reasons, you might opt for a cancellation of your car insurance policy. For instance, if you think you have bought a wrong policy and want to switch to another one, you might want to cancel your existing plan and replace it with another one. Similarly, if you are relocating to an international location and leaving your car behind, you might want to cancel your policy and claim any refunds. Do you know how such cancellations work?

Car insurance cancellations are mid-term cancellations which are done after you have bought the policy. Let’s understand how the cancellation works –

Mid-term cancellation of car insurance policy

If you cancel the policy after having bought it, it is called mid-term cancellation of the policy. In such cancellations, the premium is refunded back. However, the insurance company retains some portion of the premium for the cover provided to you till you cancel the plan. The percentage of premium retention depends on the period after which the policy is cancelled. If cancellation is done in the starting months, 75% to 80% of the premium is refunded. This percentage reduces as the policy period increases. If cancelled after 6 to 9 months of coverage, there might be no premium refund.

How to cancel a car insurance policy

If you wish to cancel your car insurance policy, here are the steps to cancel car insurance policy in India –

Buy a new policy

You should first apply for a new car insurance policy before cancelling the existing one. If a replacement policy is not availed of, cancellation might not be allowed. The insurance company might require you to provide proof of a new third party cover before cancellation is allowed. Moreover, if you do not buy a new policy, you face penalties for driving uninsured. You also bear the risk of third party financial liability and damages suffered by your car. So, buy a new policy before cancelling an existing one for continued coverage and also to provide proof of cover to the existing insurance company.

Inform your insurer

The next and the most obvious step towards cancellation is to inform the insurance company. You can write a letter to the company informing it about your desire to cancel the plan. Alternatively you can send an email. The insurance company would acknowledge your request and begin the cancellation process. The process might take 7 to 12 working days.

Take guidance from the insurer

Your insurance company helps you with your car insurance cancellation process. It would ask you to submit a declaration stating your intention to cancel the plan. You would have to sign the declaration and submit it with the company. You would also have to submit proof of another insurance policy which you have bought as a replacement to the policy being cancelled. Once these formalities are complete, the company would issue a notification cancelling your policy.

Avail the car insurance certificate

After the policy is cancelled, you should get a car insurance certificate showing the details of the cancelled policy and the no claim bonus accumulated till cancellation. This certificate is an important document. It would help you use the accumulated no claim bonus in your new car insurance policy.

Claim a premium refund

If you are cancelling the plan during mid-term, you might be eligible to receive a premium refund. The insurance company would refund the premium either in your bank account or issue a cheque in your name.

Here are the consequences of not having car insurance

Long term car insurance and cancellation

With the recent changes in motor insurance policies, cars and bikes bought on or after 1^st September, 2018 would have to opt for long term third party coverage. So, if you have bought a car on or after this date, you must have bought a long term third party cover for three continuous years. In these long term policies, cancellation of third party coverage is not allowed. Once taken, you cannot cancel the third party cover before the completion of 3 years. However, if the car is sold, not in use, lost or there is double insurance on the car, the policy can be cancelled. Similarly, if you show the insurer that you have invested in the third party policy of another insurance company, cancellation of existing third party cover is allowed. The insurance company would then refund the pro-rated third party premium when the policy is cancelled.

Things to remember

If you have disposed of your car and not buying a new one, you can still retain the insurance certificate you received upon cancellation of your car insurance policy. The accumulated no claim bonus is valid for three months after cancellation. So, you can use the bonus for future policies.

Though rare, car insurance cancellations do occur. If you are also thinking of cancelling your car insurance policy, remember the above-mentioned points.

Read more about discount on car insurance.

Know about the changes in third party motor insurance premiums

October 1, 2018May 11, 2021 Ankita Sejpal

A motor insurance policy is legally mandatory if you want to drive on Indian roads and not face penalties. The Motor Vehicles Act, 1988 mandates every vehicle plying on Indian roads to have a valid third party liability policy. The policy covers your financial liability if you are involved in a vehicular accident and harm any third party or property. Here’s a brief look at what the third party policy covers –

Bodily injury or death of the third party arising out of an accident involving your vehicle
Damage caused to any third party property because of your vehicle

In both these instances, you might be financially held liable for compensating the aggrieved third party for the damages caused. A third party liability policy covers this financial obligation and settles the compensation payable to third parties in case of any accidental injury or damage.

Given the nature of the third party policy, the policy was made mandatory. Since the policy is mandatory in nature, the premium is fixed by the Insurance Regulatory and Development Authority of India (IRDAI). IRDA is the apex governing body of the insurance sector and is entrusted with the task of fixing third party policy premiums. Third party premium rates depend on the cubic capacity of the motor vehicle. Ever since 2011, IRDA has been formulating and notifying the third party premium rates to general insurers offering motor insurance policies. These premium rates are, usually, modified every year and the changed rates are communicated to the concerned insurance companies. This year too, IRDA has made some changes in the third party premium rate and has issued new rates which are applicable from 1^st April, 2018. Here are the new rates –

For private cars

For privately owned two-wheelers

If you compare the older rates which were applicable in the year 2017-18, you would find that there have been some reductions in the new premium. For private cars and two-wheelers with a small engine capacity, the new premium is lower. However, for higher engine capacities in two-wheelers, the new premium has increased. Here’s a comparative analysis of the old v/s the new –

Small cars up to 1000 cc have seen a premium decrease of about 11%. Other than that, there has been no change in third party premiums for higher engine capacities.

For two-wheelers, there has been an only decrease in two-wheelers with limited engine capacities. No changes have been made to two-wheelers with engine capacity of 151 cc to 350 cc. Premium and luxury two-wheelers have seen an increase in premium. While vehicles with engine capacities of 151 cc to 350 cc have seen an increase of 11%, premium for luxury two-wheelers have been increased by more than 127%.

In case of commercial vehicles, taxi owners have a reason to rejoice. Third party premiums for taxis have come down by 15%. In case of three-wheeled autos the premiums have increased. Goods carrying vehicles like trucks and dumpsters have seen a premium increase of 10% to 25% while for smaller vehicles the premium rates have been kept same.

Though the premium for third party policy has changed, the change would be applicable from the coming financial year. Policies bought or renewed on or after 1^st April, 2018 would reflect the changed premium rates. Existing policies would not be cancelled and reissued for affecting the change in premium.

The third party premium rates are changed every year. You should know about these changes whether you are buying a third party policy or a comprehensive one. After all, you should know how much premium are you paying for your motor insurance policy, should you not?

Visit our site Turtlemint.com to compare and buy your car or bike insurance.

Read more about Everything you should know about two wheeler insurance policies in India

Check out our video below to understand why the premium of motor insurance has shot so high

How will modification affect your car insurance

September 28, 2018May 11, 2021 Ankita Sejpal

Modification and your car insurance policy
‘The only thing that is constant is change’, wrote Heraclitus, a Greek philosopher. He was right. That is why many of you make changes to your home, your wardrobe, your lifestyle, etc. In fact, many car owners also make changes in their cars. They fit various accessories or modify their cars as per their requirements. Major modifications to the car are done for the following reasons –
1. To change the look of the car – This is done more with a view to make the car look more trendy and stylish thereby reflecting the fashion sense of the owner
2. To make the car suitable for a disabled user – If the intended passenger of the car is disabled, modifications might be made to enable easy mobility of the disabled individual
3. For suiting the driving terrain – if the car is primarily driven off-roads, changes can be made to the car’s tyres for suiting the driving terrain
4. For improving the performance of the car – this is relevant when speed boosters or other performance oriented modifications are done to the car
5. For changing the fuel type – in many cars, CNG kit or bi-fuel tanks are installed for fuel efficiency. This is also a type of modification
Modification and insurance
If the car is modified, it might change the value of the car. If the value of the car changes the premium would be affected. Therefore, in many cases of modification, the car insurance policy should also be modified. The policy should include details of the modification done, the increased value of the car and the subsequent increase in premium. So, if you are modifying your car in any way, you should consider modifying your car insurance policy as well. The following things should, therefore, be done in such cases –
• Inform your insurance company about the modification being done or already done on the car
• Submit all the relevant bills, documents and other paperwork which show the details of the modification and its cost
• The insurance company would, then, analyse whether the said modification has increased the Insured Declared Value (IDV) of the car or not.
• If the IDV is supposed to be increased, the company would increase the IDV and fix the new increased premium.
• You would, then, have to pay the additional auto insurance premium based on the increased IDV.
If you do not inform the insurance company of the modification, your car insurance policy does not reflect the said modification of your car. In case of any claim when the car is damaged and is sent for repairs, any damages sustained by the modified parts of the car would not be covered. The insurance company would, therefore, not pay for any damages incurred on any modifications. Moreover, if the insurance company does not record the said modification, you might land up in legal trouble in case you face any legal liability.
Now you know how modifications in car can affect insurance policy. So, do whatever modifications you want on your car but remember to get the same updated in your car insurance policy. You might be required to pay an additional premium but your modified car would be completely covered against any unforeseen contingencies.

Top tips for cheap bike insurance

September 20, 2018May 11, 2021 Ankita Sejpal

Who doesn’t like saving money? Whenever you set out to buy something you always look for offers and deals which would reduce your expenditure. This is one of the reasons why the online medium of shopping has gained such popularity. It offers cheaper rates and helps you in saving your hard-earned money. What if I tell you that you can also reduce the premiums of your bike insurance policy?

Yes, you heard me right. There are tips and tricks which, if followed, reduce your premium outgo and make bike insurance cheap. Are you aware of these tips? Let’s discover them, shall we?

Top tips for cheap bike insurance

Compare

The first tip when buying bike insurance is – ‘Compare’. There are numerous bike insurance plans in the market today. Each plan has its own set of coverage benefits and charges a different premium rate. If you are to buy a cheap bike insurance policy, you should compare before buying. Comparing would allow you to know the available premium rates of different policies along with the corresponding coverage benefits. You can, then, choose a policy which offers the best coverage at the lowest premium rate and save on premium costs. You can compare and buy bike insurance on https://turtlemint-stage.dreamhosters.com/two-wheeler-insurance

Look for the available discounts

Did you know your bike insurance policies offered premium discounts?

Yes, to sweeten your bike insurance purchase you can avail discounts in your policy. There are various types of discounts which are available. You can get a discount if you buy a long-term policy and pay premiums at once. If you are a member of a reputed automobile association, you can avail a premium discount. There is another discount for buying the policy online. Lastly, if you install safety devices in your two-wheeler, your premium gets discounted. You can avail any one or all of these discounts in your bike insurance plan. Wouldn’t the plan become cheap then?

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Utilise the No Claim Bonus discount

If you don’t make a claim in your two-wheeler insurance policy, you get a No Claim Bonus (NCB). This bonus awards you a discount in the renewal premium. The rate of discount starts at 20% and increases every subsequent year if you maintain a claim-free record. In fact, if you have not made a claim for five successive years, you can avail a discount of up to 50%. Amazing, isn’t it? So, when renewing your bike insurance policy, look out for the accumulated NCB discount and utilise it.

Renew on time

Wise men say that delay costs more. They are right. If you delay the renewal of your bike insurance plan and the policy lapses, you would have to part with a higher premium on subsequent renewals. Moreover, if the renewal is not done within 90 days of lapse, you also lose out the accumulated NCB. So, heed the advice of wise men. Renew your bike insurance plan on time and ensure lower premiums.

Buy long term two-wheeler policies

Thanks to amendments made by the Insurance Regulatory and Development Authority (IRDA), two-wheeler insurance policies are, nowadays, being offered for longer tenures. You would find plans with a continuous coverage period of 2 or 3 years. These long-term plans are relatively cheaper on your pockets. Firstly, the third party premium remains constant during the continuous coverage tenure. Secondly, you don’t lose the No Claim Bonus completely even in case of a claim. This helps you in earning renewal premium discounts. Lastly, long-term plans allow you premium discounts (as stated earlier). So, given these three cost-saving benefits, buying a long-term policy is a better choice.

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Choose voluntary excess

Every bike insurance policy has a component of compulsory excess. Compulsory excess represents the amount of claim which is borne by you whenever a claim is made. Along with this compulsory excess there is also an option of choosing a voluntary excess. Voluntary excess, also called voluntary deductible, is the part of claim which you voluntarily undertake to pay from your pockets. Since choosing a voluntary excess reduces the insurance company’s claim burden, you are rewarded with a premium discount. So, for a cheaper bike insurance policy you can also choose a voluntary excess.

Also, check out our video below which simplifies the terms like compulsory & voluntary excess

These tips help you to save on your two-wheeler insurance premium. You can pick one or more of these tips for a cheaper bike insurance policy on your two-wheeler. Happy saving!

Different types of ULIPs

July 25, 2018May 12, 2021 Ankita Sejpal

Unit Linked Insurance Plans (ULIPs) became a rage in the insurance market when they were launched some 15 or more years ago. Even today, ULIPs find favour among many individuals because of the inherent benefits they provide. You can enjoy insurance coverage as well as market-linked returns from a unit linked plan. Moreover, there are flexible benefits like partial withdrawals, switching, top-ups, etc. which make the plan customisable. The best part about ULIPs is their tax-saving nature. The investments made and benefits received are both tax-free. In fact, even partial withdrawals and fund switching do not attract tax. Do you need any more reason for buying a ULIP?

Just like they are beneficial, ULIPs are also varied in nature. You can find different types of unit linked plans. Each plan fulfils a different need. Let’s see what these different variants of a ULIP are –

- ULIPs for child planning
  Child ULIPs are child-oriented saving plans. They have an inbuilt premium waiver rider. The parent is covered under the plan. In case of death of the parent during the policy tenure, the sum assured is paid. The plan, however, doesn’t stop. It continues and future premiums are paid by the insurance company. When the plan matures, the fund value is paid. Child ULIPs, therefore, create assured funds for your child’s future even in your absence.

- Pension ULIPs
  Just like child ULIPs fulfil child planning need, unit linked pension plans help you build a retirement corpus. These ULIPs, therefore, help in retirement planning. You choose the plan tenure and pay premiums during the tenure. In case of death, higher of the sum assured or the fund value is paid. When the policy matures, you get different options of availing the fund value.
  - You can buy an immediate annuity plan with the maturity value and start receiving annuity pay-outs.
  - You can withdraw (commute) 1/3rd of the fund value in cash and receive annuity from the remaining 2/3rd of the maturity value.
  - You can buy a single premium deferred annuity plan using the fund value
  - You can postpone the vesting age and receive the maturity proceeds after some years
  Thus, under pension ULIPs, maturity benefit ensures that you receive annuity pay-outs to fund your retirement.

- Tailor-made ULIPs
  Under tailor-made ULIPs, there are automatic investment strategies. You can choose any strategy and your premium gets invested by the company as per the strategy chosen. Some common investment strategies which you can find include the following –
  - Age-based strategy – under this strategy, your fund’s equity exposure is reduced as your age progresses. Thus, as your plan approaches maturity, your fund value is invested majorly in debt oriented funds to protect your returns
  - Trigger based strategy – under this strategy, your fund is invested in equity. There is a trigger level which you can choose. Once the fund increases or falls by the trigger level, the excess fund is invested in debt. This maintains your returns
  - Risk profile based strategy – under this strategy, you choose your risk appetite and the company then chooses the funds based on your risk profile
  Tailor-made ULIPs are beneficial for amateur investors who feel confused when choosing the investment fund and cannot monitor their investments regularly.

- ULIPs with enhanced death benefit
  These are unit linked plans with an option of enhancing the death benefit. Rather than paying higher of the sum assured or fund value on death, these ULIPs pay both the sum assured and the fund value in case of death during the plan tenure. Thus, these ULIPs are suitable for those who are looking for a higher insurance cover.

Limited or single pay ULIPs
This category of ULIPs is based on the frequency of premium payment. If the plan requires only limited premium payments, the plan is a limited premium ULIP. Similarly, if the plan requires only one-time investment, it is called a single premium ULIP. These ULIPs are suitable for investors who want to pay premiums either for a limited period or in one lump sum.

ULIPs come in the above-mentioned variants. Which variant is suitable for you?

Choose your ULIP from Turtlemint based on your requirements and enjoy the benefits which the plan provides.

Read more about Types of life insurance plans

Can you afford not to have term insurance plan?

July 17, 2018May 12, 2021 Ankita Sejpal

‘Term insurance plans are not very beneficial because they don’t have a maturity benefit’. ‘I don’t need a term insurance plan because I already have planned for my family’s finances in my absence’. ‘Term plans are a waste of money because they don’t yield any returns’. These are some common sentiments which most of you have for term insurance plans. These beliefs make you abstain from buying a term plan. Are these beliefs correct?

Contrary to your pre-conceived notions, a term insurance plan is an absolute requirement. The financial security which the plan can provide cannot be found elsewhere. If you believe that the plan is not very important ask yourself the following questions. Find out if you can afford not to have a term plan –

- Would my spouse be able to meet the financial loss associated with my death?
  Couples create financial goals for their family and save towards achievement of those goals. If you are a single income family your spouse depends on your income for meeting the everyday expenses and planning for the future goals. In case of your premature death, the financial loss suffered is tremendous. Even if you are in a double income family, your spouse might not be able to supplement the loss of income caused by your death. You should, therefore, understand whether your spouse has sufficient financial resources to substitute your lost income if you die early.

- Are my existing investments enough to meet my family’s lifestyle expenses?
  Many of you who feel that you have invested enough for your family’s financial requirements should assess your investments once again. As inflation is rising at a steady pace, would your investments be sufficient to meet your family’s expenses for years to come?

- In my absence, how will my family manage its lifestyle expenses?
  Many of you have invested your savings and created emergency funds to take care of your family’s future financial needs. However, in case of your sudden death will these investments and emergency funds be enough to cover for your family’s expenses given that inflation is rising at a steady pace? would your investments be sufficient to meet your family’s expenses for years to come?

- Would my loans be taken care of if I am not around?
  Most of you must have loans to your credit. Have you wondered who would pay off your loans in your absence? Wouldn’t the burden of loan fall on your family? If it does, your investments would be utilised for paying off your liabilities. How would your family meet its lifestyle needs in that case?

Will my child’s future be secured in case of my sudden death?
Everyone wants a secured future for their children complete with a good education and a stable career. Ensuring a secured future requires funds. That is why most of you invest towards building a sufficient corpus for your child’s future education. What if your investments are cut short due to sudden death? Would the invested funds be sufficient in paying for your child’s higher education?

A term insurance plan provides you a common solution to all the afore-mentioned questions. By having low premium rates the plan allows you to buy a considerable sum assured. You, therefore, insure your life for a sufficient amount. In case of your premature death the sum assured is paid which, being of a considerable size, solves your family’s financial dilemma. Your family can use the plan’s benefits to pay for your child’s higher education, for meeting their lifestyle expenses, for giving your spouse the necessary financial support and also for paying off your liabilities. The plan, therefore, presents an all-in-one solution for all your financial needs. Doesn’t it, therefore, become important?

A term plan is important and should form a part of your financial portfolio. If you are thinking of skipping out on the plan, revisit the above questions once again. I am sure you would be forced to accept the importance of the plan.

Here are some more questions which would force you to think twice if you want to avoid term plans

Read more about Common terms in life insurance policy

Also, check out our video to understand Why you should buy term insurance plans

Know about single premium term insurance plan

June 19, 2018May 12, 2021 Ankita Sejpal

Securing one’s family in one’s absence is one of the most important needs of every individual. That is why you work hard to provide financial security to your family. But what if, suddenly, your financial plan goes haywire because of your untimely death. Would your family be financially secured?

They might not be. After all, your financial planning would be cut short in your absence, wouldn’t it? What would you do to ensure that it is not?

The answer is simple – buy a term insurance plan.

A term insurance plan is a life insurance plan which pays a lump sum benefit in case the insured dies prematurely. The plan has very low premium rates which allow you to buy a high sum assured level. Thus, the plan ensures that you can afford a substantial coverage which would provide your family the much-needed financial security in your absence.

Why is a term insurance plan important?

The importance of a term insurance plan lies in its design. The plan, usually, pays only the death benefit. As such, the premium is charged for the risk cover only. Since the mortality cost is low, the resultant premiums are also low. Therefore, as stated earlier, you get to buy an optimal sum assured level which provides the required financial security to your family. In your absence your family gets a lump sum amount which, being optimal, secures them financially.

Single premium term insurance plan

A single premium term insurance plan is a term insurance plan which requires only one premium payment. You pay a lump sum premium when buying the policy while the plan continues for the chosen tenure.

Benefits of single premium term plan

A single premium term insurance plan is beneficial in the sense that it frees you from regular premium payments. So, if paying annual premiums seems like a hassle or if you have a short-term source of income, buying a single premium term plan is a better alternative. You can pay premiums once and enjoy coverage for the chosen tenure. It is, therefore, a convenient plan which gives you all the benefits of a term insurance plan and yet requires only one premium.

Things to look out for when buying such a plan

Before you buy a single premium term insurance plan you should look out for the following factors –

The sum assured

Term plans allow you a high coverage at affordable premiums. So, you should ensure that the sum assured you choose is sufficient for your family’s financial goals. Don’t underinsure yourself. Choose an ideal level of coverage depending on your income and expenses, your financial goals and your family’s lifestyle requirements.

Premium

Since the plan requires a single premium the amount of premium would be substantial. The insurance company would charge the premium in one lump sum for the tenure you have chosen. Thus, you should be careful about the affordability of the premium amount. Make sure that the single premium is affordable and doesn’t blow a hole in your pockets.

Tenure

A term plan pays the death benefit only if death occurs during the chosen term of the plan. So, you should, ideally, choose the maximum possible tenure. This would allow you to avail coverage for the longest possible time and increase the probability of claim.

Rider

Term plans provide additional riders which help in increasing the scope of cover. You can choose an accidental death benefit rider which pays an additional sum assured in case of accidental death. You can also choose a critical illness rider which covers major illnesses. There are other riders too which give you additional coverage benefits. So, choose from the available riders and enjoy a wide scope of coverage under your term plan.

Read more about Should you buy Term Insurance riders?

Single premium term plans are an ideal solution if you are looking for financial security with a one-time payment. Now you also know how the plan works and its benefits. So, invest in a single premium term plan if you want you ensure your family’s financial security without having to burden yourself with regular premium payments.

Know more about Difference between Life Insurance and Term Insurance

TDS on life insurance policies

June 5, 2018May 12, 2021 Ankita Sejpal

Tax saving is a primary motive in every investor’s mind. That is why people try and invest in tax saving avenues which help in lowering their tax liability. When it comes to life insurance policies, one of their USP is tax-saving. Life insurance policies allow tax relief on both the premiums paid and the benefits received. That is why many of you prefer buying a Life Insurance policy along with from the fact that it ensures financial security. However, there is confusion among many individuals regarding TDS (Tax Deducted at Source) on life insurance policies. Many of you don’t understand whether there is a TDS element in the premium paid and the benefit received. Is there? Let’s find out –

What is TDS?

Before we move onto the TDS implication on life insurance policies, let us understand what TDS is. TDS is a tax which is deducted from the earnings before they are paid to you. This tax is then deposited with the Income Tax department in advance on your behalf. If your tax liability is lower than the TDS deposited you can claim a tax refund on the TDS deposited.

TDS on insurance policies

In case of insurance policies, TDS might factor in on the benefits received. Let’s understand how TDS applies in life insurance –

On the maturity or death benefit – the benefit received from a life insurance policy is exempted from tax under Section 10 (10D) of the Income Tax Act. There are certain qualifying conditions under this section. If the insurance policy qualifies on the prescribed conditions, TDS is not deducted. If, however, the policy does not qualify under such conditions, TDS would be deducted on the benefits.

Now you must be wondering what the qualifying conditions are? These conditions include the following:

The sum assured should be at least 5 times the annual premium amount for policies which have been issued before 31^st March, 2012
For policies which have been issued on or after 1^st April, 2012, the sum assured should be at least 10 times the annual premium amount

If these conditions are fulfilled, no TDS is deducted on the maturity or death claim. If, however, the conditions are not fulfilled, TDS is deducted on the maturity amount.

Deduction of TDS

According to Section 194DA, if your PAN details are available, TDS is deducted at the rate of 1%. If, however, PAN details are not available TDS is deducted at the rate of 20%. TDS is deducted if the maturity amount is Rs.1 lakh and above.

For NRIs, TDS is deducted under Section 195 if the qualifying conditions of Section 10 (10D) are not fulfilled. TDS would, however, not be deducted for NRIs residing in countries which have the benefit of Double Tax Avoidance Agreement (DTAA).

Life insurance policies are, usually, free from the implication of TDS. However, if the prescribed rules are not fulfilled, the maturity benefit is taxable. So, understand the implication of TDS on your life insurance policy to understand the taxation on your policy benefits.

Top myths about buying Life Insurance online

May 22, 2018May 12, 2021 Ankita Sejpal

The world is progressing and the digital movement has seen a tremendous growth in the past decade. With the progress of internet the online platform has boomed. The online marketplace has completely transformed the way you shop. It allows you the facility of comparison, ease of transaction and the promise of lowest rates. Even life insurance policies are being sold online as more and more insurers are developing Over the Counter (OTC) insurance products which can be bought with a few clicks. Despite the popularity of online insurance plans, many still abstain from buying online. They believe in common myths about online life insurance which makes them hesitant to try out the online marketplace. Do you know the top myths about buying insurance online?

Here are some of them. Find out how many of these do you believe to be true –

Online medium doesn’t sell genuine plans

A most common myth which most of you have is that online insurance plans are not genuine. This is wrong. Insurance companies sell their life insurance plans directly and also through authorised brokers and aggregators. As such, when you choose to buy a plan through a reputed online platform, you get a genuine plan.

I would be cheated into buying a plan

Buying a life insurance plan is your decision. Nobody forces you to buy a policy which you don’t want. You can compare different plans, find the one which you want, seek assistance and then buy the plan. The process is completely transparent and there is no scope of cheating.

Online mode is not secured

Another notion which people have is that the online medium is not secure. It possess a risk of cyber fraud. While the risk of cyber fraud and online theft is present in online transactions, if you choose reputed websites, security is ensured. Reputed online brokers and aggregators have encrypted payment gateways which provide a secured platform for online transactions. Thus, you don’t need to fear about online security when you transact online through these authorised websites.

I might end up with a wrong plan

Many of you might fear the purchase of a wrong plan due to a lack of knowledge about life insurance. This fear is also a myth. Online platforms have customer service representatives who are available to answer all your queries. When you are buying a plan you can find out your requirements through online calculators and assess the suitability of the plan. For any queries you can engage the service of customer representatives who help you buying the right plan. Even after all this facility if you feel that you have bought a wrong plan, there is a free-look cancellation feature in all policies. You can cancel the plan within 15 days and avail a premium refund. Simple, isn’t it?

Online purchases are difficult

Online transactions involve some simple steps and authentications for a safe and secured transaction. This leads people to believe that online purchases are difficult. Online plans have simple application process. You just have to fill an online proposal form, provide the necessary information and make online payments and the plan is bought. Was it difficult?

My claim might be rejected if I buy online

Insurance companies reject claims only if you make a claim for an uncovered event or if the claim is found to be false. Buying online doesn’t result in rejection of claims. If you have provided the required details correctly and truthfully and if the claim is genuine, your claim would be honoured whether it is bought online or not.

Sharing personal information is unsafe

With all the fear of leaking of personal information online, many believe that the online medium is unsafe in protecting your personal information. This is, again, a myth. Reputed and authorised websites protect your personal information when you buy an insurance plan from them. Whenever you buy insurance online, check whether the website is authorised by the Insurance Regulatory and Development Authority (IRDA). If it is, there is no danger of leakage of your personal information as the website would be secured.

Online is suitable only for the acknowledged few

Being unaware of the online mode of buying an insurance plan, many of you believe that online purchases are suitable for the acknowledged few. It is not so. You don’t need too much knowledge to buy an insurance plan online. The online platform informs you about the different plans, their suitability, benefit structure and associated cost. You can get the required information online before buying the plan. Thus, everyone, and not few, can buy online.

How many myths did you believe in?

The internet revolution is here to stay and if you want to adapt to the changing world, its time you become online savvy. Online insurance plans are simple, easy and also allow comparison before you buy. So, shop online and get the best life insurance plan for your needs.

Read more to find out the mistakes to avoid when buying life insurance

Read more about types of life insurance plans

Read more about 5 tips to buy life insurance

For private cars

For privately owned two-wheelers

Top tips for cheap bike insurance

Utilise the No Claim Bonus discount

ULIPs for child planning

Pension ULIPs

Tailor-made ULIPs

ULIPs with enhanced death benefit

Limited or single pay ULIPs

Would my spouse be able to meet the financial loss associated with my death?

Are my existing investments enough to meet my family’s lifestyle expenses?

In my absence, how will my family manage its lifestyle expenses?

Would my loans be taken care of if I am not around?

Will my child’s future be secured in case of my sudden death?