Ankita Sejpal, Author at Turtlemint

How to Re-Register a Vehicle in India?

October 28, 2020March 25, 2021 Ankita Sejpal

Registration is a process of registering the vehicle in some specific person’s name. This is done at the time of purchase of the vehicle. Without a valid vehicle registration, it is illegal to ply the same in India. Once a vehicle is registered, you can officially drive the same anywhere within the geographical boundaries of India.

Registering a motor vehicle in one’s name was quite a tedious process but that seems like a distant past now. The Government of India has launched its official website named “Vahan” as a part of the ‘Digital India’ drive. Now the entire procedure has become simple. Thus, it has become quite easy for you to follow the process without any hassle.

What is Vehicle Registration?

Vehicle Registration is a process whereby you get your car number plate and it is registered under the list and records of the Government. The main motto of registration is to have a linkage between you as the owner and your vehicle through a distinct identification number and therefore shows a car registration number plate. It is of extreme importance to register your vehicle so that the Government can curb any illegal activities in India. One of the main important reasons for registration of the vehicle is to get valid insurance coverage, without which is not possible.

According to the Motor Vehicle Act, 1988, section 39A, a vehicle is permissible to be driven in public roads only after registration by the respective transport authority for registration. Hence, the registration certificate is a certified legal document which acts as a proof that your vehicle is recorded and verified in Government records. In India, registration within 7 days from the delivery date of the vehicle is compulsory.

What is Re-Registration of the Vehicle?

There are 2 situations under which a vehicle needs to be “RE”-registered, i.e. registered again. Those situations are:

Situation 1:
It is compulsory for all private vehicles to do the re-registration of the vehicle after 15 years from the date of the initial registration as per the Central Motor Vehicles Act. After this, the registration is renewable at a gap of 5 years till the RTO declares the vehicle to be safe and fit for driving on the roads in India
Situation 2:
It is necessary for you to re-register your vehicle if you move from one state to another with your vehicle.
The law says: If a motor vehicle, when registered in one particular state, is present in another state for any valid reason, for more than twelve months’ time, you would have to transfer your vehicle to the new state and RE-register the same. So, if you simply visit another state for a tenure of 12 months or less, then there is no need to re-register your vehicle.
However, if your period of stay exceeds 12 months, then you need to apply for a Transfer and Re-Registration. The process of Transfer of Vehicle is:

As the registered owner of the vehicle will have to put an application to the same RTO where the vehicle was registered
Then you need to fill in the documents and submit them to the authority of the new RTO in the respective jurisdiction for the assignment or re-registration of the vehicle
There is a timeframe of 1 year for this entire process to be completed, as mandated by the Central Government.

The procedure involved in Re-registration of vehicle

Steps for re-registering of the vehicle under certain scenarios:

Situation 1:
In order to re-register your vehicle after a tenure of 15 years of initial registration, you will have to put forward an application form. Your vehicle has to be presented before the RTO for scrutiny and the essential fee has to be paid to the RTO. After the vehicle is scrutinised and verified with all other documents, the RTO will be in a position to issue a fresh Registration Certificate or an RC. For car registration renewal, the below-mentioned documents need to be submitted to the RTO:

Properly filled Form Number 25 which is the application of renewal of registration
Registration Certificate in original
A valid Pollution Under Control Certificate or the PUC
Insurance Certificate of the Vehicle

Situation 2:
In order to transfer your registration from one state to the other, there are two vital aspects which you should be careful about which are:

Vehicle Hypothecation Position:
If the vehicle had been taken under finance and it has the hypothecation done by the financer in the Registration Certificate. In this case, you need to get the No Objection Certificate or the NOC from the respective financer beforehand, so that you can register your vehicle in the other required state without any hassles
Compulsory Road Tax:
On transferring the vehicle from one state to another,you may have to pay the road tax of the new state at a depreciated price of the vehicle. If you need to apply for a refund of the Road Tax from the state you are moving for the remaining tenure of the tax validity, you need to apply for the same at the time of obtaining the NOC.
Road Tax is levied by the State and the Central Government, and hence each state has its own specifics and basis of road tax calculation which you need to pay accordingly.

Steps for car registration renewal

Let us now see the 3 broad steps of car registration renewal in details for a better understanding:

Step 1: The first step for you is to get the No Objection Certificate or NOC.
Some important points for you to note for obtaining a NOC are:

Notary attested self-declaration affidavit has to be furnished by you on an INR 10 stamp paper stating that all relevant documents for the vehicle are original with no outstanding dues for the vehicle
A No Objection Certificate should be attained from National Crime Record Bureau or NCRB affirming that its not a stolen vehicle
A No Objection Certificate from the financer in Form Number 35 if the vehicle had been taken on loan and the same hasn’t been repaid yet
You need to provide 3 properly filled copies of:

Form No 27, i.e. the application for the assignment of new registration,
Form number 28, i.e. the application and
The grant of No Objection Certificate together with
NOCs from the Traffic Police,
NCRB as well as
The financer to obtain the NOC from the respective RTO

Other vehicle documents like the PUC Certificate, copy of Smart Card, copy of Chassis imprint, proof of identity and proof of address have to be submitted.

The RTO then will issue an interstate automobile transfer NOC within a timeline of 2-3 weeks.

Step 2:
There are a specific set of documents needed for car registration renewalin other state mentioned as below which you need to submit:

Documents that need to be shown in the original include Smart Card, Insurance Document, Pollution Under Control or PUC Certificate
The Original Invoice so that the RTO can compute the road tax basis the depreciation of the vehicle

Step 3: Re-registration of vehicleand Road Tax payment
After the above step, you can apply for Re-registration of the vehicleand pay the appropriate road tax with a certain set of documents for the vehicle, your personal documents, NOCs etc. The following documents are to be submitted by you at the RTO

Re-registration of the vehiclecan be made in Form Number 20, the application for registration for your vehicle and Form number 33, the application of intimation for address change
If you have a used vehicle, you must submit the relevant documents for the transfer of title or ownership
After the vehicle is being registered, you can apply for a refund of tax as appropriate

List of documents needed for re-registration of a Vehicle

Here is the exhaustive list of documents that are needed for re-registration of a Vehicle:

Application Form in Form Number 27 as mentioned above
Registration Certificate
No Objection Certificate as mentioned above
Residence Proof
Certificate of Insurance
PUC
Form Number 28 as mentioned above
Form Number 20 as mentioned above
In the case of commercial vehicles, Challan clearance from the department of traffic police
Certificate of Fitness
PAN Card or Form 60 as applicable
Fee for parking
Certificate manufactured about emission standards
Sketch imprint of the Chassis and the Engine
Your Date of Birth proof
Proof for the address of the seller
Sign identification of the seller

Fees re-registration of a Vehicle

There is a charge for re-registration of the vehicle which must be paid before the process is completed. Here is a list of the required fees that need to be paid for re-registration of a Vehicle:

Vehicle Type	Amount (INR)
Two Wheelers	300
Light Motor Vehicle for Non-Transport	600
Light Motor Vehicle for Transport	1000
Vehicles carrying medium goods	1000
Vehicles carrying medium passengers	1000
Motor Cycle which is Imported	2500
Vehicles carrying heavy passengers	1500
Motor vehicles which are Imported	5000
Vehicles carrying heavy goods	1500
Other vehicles not included in the above list	3000

Points to keep in mind while applying for a Re-registration of the vehicle:

The Registration Certificate can be renewed easily and you need to keep in mind the following points:

Within 60 days of the Registration Certificate expiry, the fresh application for the renewal of the Registration Certificate has to be made via Form number 25 to the particular authority in registration in the same area the vehicle is registered
Payment has to be clear for all the taxes which are unpaid if there are any
Payment has to be made as per in the CMVR Act of 1989

The car registration renewalof a private vehicle is effective for a period of 5 years. You are allowed to renew them every 5 years as mentioned above.

Re-registration is a legal and easy process which can be quite hassle-free if you get the documents beforehand. All you need to do is to follow the process, get the right documents and get the vehicle re-registered.

FAQs

Is re-registration and reassignment of registration certificate same?
Yes, re-registration and reassignment of registration certificate are the same and the same applies when you are moving from one state to the other.
Is Transfer of ownership related to re-registration?
No, transfer of ownership and re-registration are different. Transfer of ownership happens under the following 3 scenarios:
- Transfer of ownership when you are selling your vehicle to another buyer
  As soon as the vehicle is sold off, the name of the buyer is recorded as the registered owner of the vehicle instead of the earlier registered owner and this process is called as the transfer of ownership.
- Transfer of ownership upon the death of the owner of the vehicle
  As soon as the registered owner of a vehicle dies, transfer of ownership is effective in the name of the legal heirs of the expired registered owner and the usage of the vehicle can be for a period of 90 days within 30 days from the date of death of the owner.
- Transfer of ownership in auction
  When a vehicle is sold in public auction, the name of the buyer is recorded as a registered owner instead of the earlier registered owner and once again this is the process called and named as the transfer of ownership.
Is No Objection Certificate mandatory in case of re-registration?
Yes, it is compulsory to get the No Objection Certificate and is a crucial step in the process of re-registration of your vehicle.
What documents are needed for address change in the registration certificate?
You can change the address in the RC book once you are shifted to a different state. As an owner of the vehicle to register a new address in case of any change in the address, you need to apply for the same with a certain document which is as follows:
- Form number 33 application form for address change in the RC book
- RC book
- Your new address proof
- Pollution Under Control Certificate
- Certificate of Insurance
- No objection certificates
- Fee for the Smart card fee or the registration certificate
- Your attested PAN card copies or form 60 as appropriate
- Sketch imprint of the Chassis and the Engine
- Your signature proof as an owner
What documents are accepted as proof of residence?
Any one of the following documents is accepted as proof of residence.
- Ration card
- Passport
- Voters’ Id
- Aadhar Card
- Life insurance policy
- Utility bills like telephone bill, electricity, gas bill
- State or Central Government issued payslip
- House Sale or Rent Agreement

IRDAI’s new rules would reduce your out-of-pocket expenses. Here’s how

October 19, 2020March 25, 2021 Ankita Sejpal

Health insurance plans prove to be a blessing in times of medical emergencies when expensive treatments and hospitalisation might blow a hole in your finances. Health plans cover your hospitalisation expenses as well as the costs of treatments sparing you the financial burden.

The Insurance Regulatory and Development Authority of India (IRDAI) constantly makes changes in the rules and regulations governing health insurance plans to make the plans more customer-friendly. Recently, IRDAI has made new guidelines for the concept of ‘proportionate deduction’ which is applicable under plans with room rent sub-limits. Before having a look into the recent changes made by the regulator, let’s understand the concept of proportionate deduction and how it works.

Sub-limits on room rent

Under many health insurance plans, especially when the sum insured is up to INR 5 lakhs, there are sub-limits on room rent covered under the policy. This sub-limit is expressed as a percentage of the sum insured and ranges between 1% and 2% of the sum insured. For example, if the sum insured is INR 5 lakhs and room rent sub-limit is 1% of the sum insured, the applicable limit would be INR 5000/day.

Proportionate deduction – the concept

Many hospitals have preferential pricing for treatments and doctor’s fee depending on the type of room that they are admitted. If you are admitted to a suite room and undergo an appendectomy, its cost would be higher compared to the same treatment taken in a normal room. So, since hospitals price their costs based on the room rent, health insurance companies do not want to pay higher claims for rooms with higher room rents especially when there is a specific sub-limit on the rent under the plan.

The concept of proportionate deduction, thus, becomes applicable if your actual room rent exceeds the specified limit. If your actual room rent is higher than the allowed limit, the insurance company does not pay the full cost of inpatient hospitalisation. It reduces the bill proportionately to the cost which would have incurred had you taken treatments in a room within the allowed room rent. Let’s understand with an example –

Say for a plan with a sum insured of INR 5 lakhs, the room rent limit is 1% or INR 5000. If you seek treatment in a room whose rent is INR 6000 and incur a total hospitalisation bill of INR 1.5 lakhs, the claim payable would be calculated as follows –

INR 1.5 lakhs * (5000/6000) = INR 1.25 lakhs

Thus, even if the claim is within the sum insured, the amount would be proportionately reduced to arrive at a figure proportional to the allowed room rent. Any excess costs incurred, i.e. INR 25,000 in the above example, would be borne by you and become your out-of-pocket expenses.

What has changed?

IRDAI has made two important changes in the concept of proportionate deduction in health insurance plans. These changes are as follows –

Costs included under proportionate deduction
Earlier, health insurers considered the total inpatient hospitalisation bill when calculating the proportionate claim payable. However, in the recent guidelines, IRDAI has eliminated some medical costs from the purview of proportionate deduction. The following costs would now no longer be considered in the hospitalisation bill when doing proportionate deductions –
- Pharmacy costs
- Costs of medical implants and devices
- Cost of diagnostic tests
- Consumables
Other hospitalisation costs would be considered when calculating the proportionate amount of claim thereby reducing your out-of-pocket expenses.
Non-applicability of proportionate deduction
According to the guidelines specified by the IRDAI, if hospitals do not have different room rents for different rooms, the concept of proportionate deduction would not apply. In that case, if the actual room rent is higher than the sub-limit, the total inpatient hospitalisation claim would be paid by the insurance company without any deduction.

Furthermore, if the insured is admitted to the ICU, the concept of proportionate deduction would not be applicable because ICU rent is fixed and does not change with the type of room you are admitted into.

Implementation of the change

These changes would be made effective for all new health insurance plans bought on or after 1st October 2020. For existing policies bought before 1st October 2020, the changes would be effective from 1st April 2021.

What the changes mean for you?

As specific costs are being excluded from the computation of proportionate claim, you would get full coverage for such costs irrespective of the room rent. Moreover, if you seek admission at hospitals where there are no different room rent categories or in case of ICU admissions, proportionate deduction would not apply. All these aspects would increase the claim amount payable and reduce your out-of-pocket expenses thereby making health plans more pocket-friendly.

The rules are, therefore, a welcome change for health insurance customers and might even drive the sale of new health plans. Your health plan has just become better and you should know these changes to know the expected out-of-pocket expenses when claims occur.

Complete Information on How to Transfer Two-Wheeler Ownership

October 9, 2020March 25, 2021 Ankita Sejpal

Buying a second-hand bike is quite common in today’s age. A second-hand bike is more affordable and it also fulfils your conveyance needs. That is why the used vehicle market is growing as sellers sell off their existing bikes to buy newer models or to invest in a car and buyers looking for affordable options buy them. While buying and selling used bikes has become easy in today’s times, you should know the process of transferring the ownership of the bike. As long as the used bike is not transferred from the name of the seller to the buyer, the purchase process is not complete. Thus, it becomes necessary to understand how the ownership is transferred if you sell or buy a used bike.

A transfer of ownership not only completes the process of buying a second-hand two-wheeler, but it is also essential to avoidany future problems and difficulties concerning registration of the vehicle, insurance policies for the vehicle, etc. Moreover, the Motor Vehicles Act, 1988 also mandates the transfer of ownership if the bike is bought and sold second hand. So, let’s understand the process of Bike Ownership Transfer in detail.

Process of Bike Ownership Transfer

For the purpose of Bike Ownership Transfer, you should take the following steps –

If you are the buyer you are required to submit an application form for transferring the ownership of the two-wheeler. This form should be submitted to the same RTO office where the two-wheeler or bike that you are buying was previously registered
You are, then, required to submit two forms at the Directorate of Transport office. These forms are Form 29 and Form 30. Form 29 is a No Objection Certificate which should be signed by the seller stating that the seller has no objection in transferring the ownership to the buyer. Form 30 is the report or intimation of transfer of ownership. This form should be filled by you, the buyer as well as the seller and it would contain the signatures of both parties. Along with these forms, you would also have to submit certain documents like tax paid receipts, insurance, RC, proof of address of the seller, a photograph of passport size, etc. All these documents should be submitted in original
Once all the necessary verification process has been done by the RTO, the ownership documents and the insurance documents of the two-wheeler would be transferred to the buyer within 14 days
If the buyer and seller of the bike live in the same State, the buyer would have two weeks’ time to submit the forms and documents for transfer to the concerned RTO. On the other hand, if the buyer and the seller live in different States, the forms and documents for the transfer of the vehicle should be submitted within 45 days
If the seller of the two-wheeler dies, the buyer should inform the RTO about the death of the seller. The death certificate should be submitted along with the forms and documents of transfer of ownership. The buyer can, then, apply for Bike Ownership Transfer within 3 months of the death of the seller.

Documentation required for Bike Ownership Transfer

To complete the process of transfer of ownership of the bike, the following documents would have to be submitted –

Certificate of Registration:
This is a compulsory document for the transfer of ownership to be effected. The seller should give the certificate of registration to the buyer of the bike. This document confirms and endorses the fact that the bike or the two-wheeler belongs to the seller.
Pollution Certificate or PUC:
Once again, a mandatory document which states that the two-wheeler has followed all the rules relevant to pollution control and is PUC certified.
Certificate of Insurance:
An insurance cover on the bike is necessary as per the Motor Vehicles Act, 1988. Due to this rule, the bike, which is being bought, would have an insurance cover on it and the policy would be in the name of the seller. This insurance policy would also have to be transferred in the name of the buyer and for the transfer to take place the certificate of insurance would be required. At the time of buying the bike, the insurer would have to be informed of the sale of the bike so that the insurance cover can be transferred in the name of the buyer.

Two-wheeler ownership transfer fees

To get the ownership transferred in your name, you would have to pay a transfer fee to the RTO. This transfer fee is equal to INR 30.

So, if you are buying a second-hand bike, do know the process for the transfer of the bike and the documents which would be needed for such transfer. Only when the process is followed and you submit all the relevant documents would you be able to become the owner of the second-hand two-wheeler that you buy. So, remember the process, arrange for all the relevant documents and buy that second hand bike which you need.

Frequently Asked Questions

How can I get the insurance policy transferred in my name?
Only transferring the ownership of the bike is not enough, the insurance policy on the bike should also be transferred. To transfer the insurance policy, you should inform the insurance company of the purchase of the second-hand bike. You would, then, have to submit the new RC book which contains your name as the owner of the vehicle, original policy document, your address proof and passport-sized photographs. Once the documents are submitted, the insurance company would verify the documents and transfer the insurance policy in your name. You might be required to pay a fee for transferring the insurance policy in your name. This fee would depend on the insurance company and would be communicated to you when you request for transfer of the policy.
Within how much time should the insurance policy be transferred?
The insurance policy should be transferred within 14 days of buying a second-hand bike.
I am buying a second-hand bike from another State. Where should I apply for transfer of ownership?
The application for transfer of ownership of the bike would have to be made in the State where the bike is registered.
I am selling my bike second hand. Would I lose the accumulated no claim bonus on my bike insurance policy when I transfer it to the buyer?
No, the no claim bonus remains with the seller when the bike insurance policy is transferred. So, you would be able to retain the no claim bonus when you transfer your insurance policy to the buyer of your bike.
If the insurance policy has lapsed on the bike, can the transfer of ownership be done?
Usually, the bike insurance policy would have to be renewed when the bike is being sold second hand. When the policy has been renewed by the seller then the process of transfer of ownership can be done.

IRDAI makes Insurance plans more customer friendly in times of crisis

October 1, 2020March 25, 2021 Ankita Sejpal

The Coronavirus pandemic is the first of its kind to grip the whole world in its clutches. Besides causing medical complications and health issues, the pandemic has also caused financial problems for many. Loss of job, pay cuts, business interruption are some of the problems which people are facing in these trying times. At the same time, insurance policies have become the need of the hour for financial security. Thus, to make insurance plans more customer-friendly and easy to buy, the Insurance Regulatory and Development Authority of India (IRDAI) has made various changes in the insurance industry. These changes have been done to make insurance plans easily accessible and affordable for all. Let’s have a look at the top six changes brought about by IRDAI in current times –

Change #1 – Launch of COVID specific health plans

As the threat of COVID became a real concern, IRDAI proposed the launch of COVID specific health insurance policies which would cover COVID cases comprehensively. Though normal health plans covered COVID related hospitalisations, they excluded the cost of consumables which was considerable in COVID related claims. Thus, to provide individuals with an all-inclusive coverage against COVID, Corona Kavach and Corona Rakshak health insurance plans were launched. Both these plans are short term health plans covering only COVID related claims. Corona Kavach is an indemnity health plan which covers the actual costs of hospitalisation while Corona Rakshak is a fixed benefit plan which pays the sum insured in lump sum if you are hospitalised for COVID for 3 days or more. Both these plans meet the immediate coverage needs of individuals as they cover COVID after a short waiting period of 15 days. Moreover, there are no deductibles making these plans ideal tools to safeguard against the financial strain of Coronavirus infection.

Change #2 – Inclusion of telemedicine

As COVID required individuals to practice social distancing and to stay at home, doctor’s consultations went online. Telemedicine became popular which involved medical consultations on a virtual basis without the doctor and patient meeting physically. To make health insurance plans more comprehensive, IRDAI asked insurance companies to include coverage for Telemedicine if their plans allowed coverage for doctor’s consultations. Thus, health insurance plans have become more inclusive and have started covering the costs of Telemedicine.

For a detailed understanding please check out our youtube video below:

Change #3 – Online sales and KYC verification

To allow individuals to buy insurance in a safe manner even when the country was under lockdown, IRDAI promoted online sale of insurance plans. It has allowed insurance companies to sell their policies online so that policyholders can easily make purchases from their own homes. Moreover, the KYC verification process has also been made virtual wherein the KYC details are verified online either through a video call with the policyholder or by asking the policyholder to upload the KYC documents online. So, you can, now, buy insurance policies with a minimal fuss and also while practicing social distancing norms.

Also check out how digitization is making your life easy while buying insurance

Change #4 – Payment of health insurance premiums in instalments

To make health insurance plans affordable for policyholders, IRDAI has allowed the instalment payment mode. Now, you can pay health insurance premiums in instalments through the monthly, quarterly, half-yearly or annual mode rather than paying it in lump sum. This change is expected to make health plans affordable and popular among individuals.

IRDAI has also announced changes in the life & motor insurance category to make the buying process convenient and faster, these changes are listed below.

Change #5 – No need for physical signatures for life insurance plans

To ease the buying process of life insurance plans, IRDAI has done away with the need of physical signatures on the proposal forms. Now, you can fill up the proposal form and submit it online to buy a life insurance policy. The company would send the completed proposal form to your email wherein you can verify and declare the details of the form either by clicking on the confirmation link or by sharing the OTP sent by the company. Life insurance companies can then send you electronic policy document thereby overcoming the problem faced in printing and sending the policy bond during these times.

Change #6 – Withdrawal of long term motor insurance plans

To make motor insurance plans more affordable, IRDAI has withdrawn long term comprehensive motor insurance plans which had high premiums. Now, new cars and two-wheelers would have to buy a long term third party coverage while the own damage coverage would be on an annual basis. This would make motor insurance plans affordable and also prevent miss-selling in the insurance market.

For more details please check out the our youtube video below:

The IRDAI continuously makes changes in insurance plans so that they fulfil the changing need of policyholders. In these trying times when individuals are facing financial difficulties as well as restrictions on free movement, IRDAI has introduced the above-mentioned changes so that insurance plans can provide the solution to these challenges. With these changes effected by the IRDAI, insurance plans have become inclusive, more customer-friendly and even affordable. So, what are you waiting for? Invest in a suitable insurance plan and secure yourself financially in this crisis.

IRDAI’s efforts towards a healthier India through wellness benefits in Health Insurance plans

September 22, 2020March 25, 2021 Ankita Sejpal

The Insurance Regulatory and Development Authority of India (IRDAI) has always ensured that health insurance plans adapt to the changing trends of the modern society. Gone are the days when health insurance plans offered vanilla coverage benefits against medical costs. Today’s health plans have become multi-dimensional in their scope. They offer new-age coverage benefits as well as value-added services so that policyholders can get something extra from their health insurance plans. IRDAI has also promoted the evolving changes in health insurance plans and one such change, in recent times, is the inclusion of wellness benefits in health plans.

Wellness and preventive healthcare can go a long way in taking care of your health and reducing the probability of health insurance claims for insurers. As such, some insurers offered incentives to policyholders for adopting a healthy lifestyle. Wellness benefits, which were previously offered by few health insurers, have been made universal by the recent IRDAI guidelines. These guidelines are asking insurance companies to include wellness related benefits in their health plans so that India can practice healthy living.

IRDAI guidelines – the talking points

IRDAI issued a set of guidelines for inclusion of wellness benefits in health insurance plans. These guidelines asked insurers to include the following benefits in their health insurance costs –

Coverage for preventive healthcare
To motivate policyholders to track their health on a regular basis, IRDAI asked insurance companies to allow policyholders coverage for preventive healthcare costs. Under preventive healthcare, insurers have been asked to provide coverage for the costs incurred in the following –
- Health check-ups
- Pharmaceuticals
- Outpatient treatments
- Diagnostic tests
The coverage can be offered as a part of the policy benefits or insurance companies can offer discounts to policyholders on these costs. The coverage would, however, be provided if such costs are incurred at networked hospitals or empanelled hospitals of the insurance company.
Benefits for wellness and healthy living
Many individuals practice a healthy lifestyle and maintain their health. Insurance companies have been asked to reward such policyholders through wellness benefits in health insurance plans. This reward can be in the form of gift vouchers which policyholders can redeem on –
- Health supplements
- Sports club membership
- Fitness centre membership
- Gym membership
- Yoga membership, etc.
Furthermore, if policyholders practice healthy living during the policy tenure and fulfil the conditions of a wellness regime stipulated by the insurance company, they can be rewarded at the time of policy renewals. Insurers can offer such policyholders a discount in renewal premium or a free increase in the sum insured.
A very common example of this benefit is the ‘Stay Active’ benefit in HDFC Ergo Health plans. Under many of the company’s plans, if the insured takes a specified number of steps during the policy tenure, a premium discount is offered on renewal.
Coverage for excluded hospitalisation costs
When you are hospitalized, your health insurance policy does not cover all the costs of such hospitalisation. However, IRDAI, in these guidelines, asked insurers to provide coverage against such excluded costs as a part of wellness related benefits.

IRDAI guidelines – the objective

The primary objective of issuing these guidelines for inclusion of wellness benefits was to promote healthy living. Today, individuals are becoming increasingly conscious of their health and try and maintain a healthy life to keep illnesses away. With the introduction of wellness benefits in all health plans, IRDAI aims to –

Increase the collective consciousness about healthy living among policyholders
Motivate policyholders to look after their health to gain additional benefits from their health plans
Reward those who practice healthy living
Make health plans wellness-centric

IRDAI guidelines –the terms and conditions

While the afore-mentioned inclusions would considerably improve the scope of health plans and make wellness important, IRDAI also stated some terms and conditions associated with the coverage. These include the following –

The main objective of the afore-mentioned benefits should be to promote healthy living
Insurance companies can set eligibility parameters for providing such wellness benefits. Policyholders would fulfil the parameters would be eligible to avail the wellness coverage benefits offered by the company
Providing the wellness benefits would be the choice of the insurance company. The benefits can be inbuilt in the health plan or offered as an add-on
Insurers can offer a range of wellness benefits and ask consumers to choose the benefits that they want
The details of service providers tied-up with insurance companies to offer wellness benefits should be disclosed by the company on its website
In case of family floater health plans, the plan should clearly state the members who can avail wellness benefits
Many plans also offer the benefit of carrying forward the unused wellness coverage to the next year. If such a benefit is offered by a health plans, its terms and conditions should be clearly stated

The modern-day mantra is healthy living and IRDAI intends to make this mantra more popular by introducing wellness rewards in health insurance plans. This move would not only enhance the scope of health plans, it would also make them relevant in today’s times when health has become a priority. So, the next time you are on the lookout for a health insurance policy, find out the wellness benefits which different plans have to offer. Change your lifestyle to practice healthy living and get dual benefits – a fitter you and a rewarding health insurance policy.

List of necessary documents for buying Insurance Policies in India as well as claim processing

September 16, 2020March 25, 2021 Ankita Sejpal

Buying insurance plans has become quite simple due to the availability of the online platform which allows you to buy a policy from your home or office. Whenever you buy insurance whether online or through insurance agents, you are required to submit a set of documents to the insurance company. An insurance policy is a legal contract and thus, to establish the legality of the contract, insurance documents are needed. After the insurance company verifies the submitted documents, the insurance policy is issued. Moreover, at the time of an insurance claim, a specific set of documents would have to be submitted for claim settlement.

Since documents are important for buying insurance and also for making a claim, let’s have a look at the types of documents needed for insurance.

What are the documents required for buying insurance plans in India?
Different documents are required to buy different types of insurance plans. So, let’s analyse the documents required to buy different types of insurance plans separately-
- Life insurance
  To buy a life insurance policy, the following documents would be required-
- Health insurance
  For a health insurance plan, the following set of documents would be needed to be submitted –
- Motor insurance
  To buy a car or a bike insurance plan, the following insurance documents would be required –
What are the documents required for insurance claim?
In case of a claim in your insurance policy, the requirement of insurance documents would depend on the type of insurance policy that you have bought and the type of claim suffered. So, here is a look into the claim-related documents which would be needed in different types of insurance claims:
- Life insurance claims
  Life insurance claims can be maturity claims, money back claims or death claims. The documents needed for maturity and money-back claims are the same while for death claims, the documents are different. Let’s understand how –
- Health insurance claims
  In the case of health insurance claims, the documents required for insurance claim are as follows –
- Motor insurance claims
  In case of a car or bike insurance claim, the documents required for insurance claim are as follows –

These documents are necessary to buy an insurance policy or make a claim in it. You should, therefore, keep the documents handy in both these instances so that you can buy an insurance policy easily and also get the settlement of your insurance claims without any hassles.

A guide to LIC Pradhan Mantri Vaya Vandana Yojana

August 28, 2020March 26, 2021 Ankita Sejpal

Having pension payments creates a source of income for senior citizens and gives them financial independence. Thus, the Government launched the Pradhan Mantri Vaya Vandana Yojana (PMVVY) which is a short term pension scheme for senior citizens. After launch, LIC was given the authority of selling these plans exclusively. Let’s have a look at what this scheme is all about –

What is Pradhan Mantri Vaya Vandana Yojana?

PMVVY is a pension scheme with a duration of 10 years. Pensions are payable during the scheme tenure which gives you regular incomes.

Salient features of the scheme

Here are the salient features of the PMVVY scheme –

The scheme is available till 31st March 2023
The pension rates would be guaranteed
You can buy the scheme online or offline through LIC
Pensions can be availed monthly, quarterly, half-yearly or annually
The policy offers a free-look period of 15 days for offline purchases and 30 days for online ones

Why is the scheme beneficial?

Besides paying pensions, the Pradhan Mantri Vaya Vandana Yojana scheme also has a guaranteed death and maturity benefit. In case of death during the scheme tenure, the purchase price is refunded. Moreover, the purchase price is refunded even on maturity along with the last instalment of the pension. Thus, the PMVVY scheme not only creates incomes from your corpus, it also gives you your corpus back on death or maturity. Additionally, if you exit from the scheme before the completion of the duration of 10 years, you can avail a refund of 98% of the purchase price. Such exit should, however, be because you need funds for treatment of any critical or terminal illness suffered by yourself or your spouse.

You can also avail a loan under the scheme after the completion of three years. Loan of up to 75% of the purchase price is available at an affordable interest rate of 9.5%. This loan would help you meet any financial need that you have without having to use your pensions.

The eligibility parameters to opt for the PMVVY scheme

The PMVVY scheme is available only for senior citizens, i.e. for those who are aged 60 years and above. There is no limit on the maximum entry age. Moreover, there are limits on the minimum and maximum purchase price too depending on the pension payment frequency that you have selected. These limits are as follows –

Pension payment frequency	Minimum purchase price	Maximum purchase price
Monthly	INR 1,62,162	INR 15,00,000
Quarterly	INR 1,61,074	INR 14,89,933
Half-yearly	INR 1,59,574	INR 14,76,064
Annually	INR 1,56,658	INR 14,49,086

Corresponding to the above-mentioned purchase price limits, the minimum and maximum pension amounts can also be checked below –

Pension payment frequency	Minimum pension	Maximum pension
Monthly	INR 1000	INR 9250
Quarterly	INR 3000	INR 27,750
Half-yearly	INR 6000	INR 55,500
Annually	INR 12,000	INR 1,11,000

The Pradhan Mantri Vaya Vandana Yojana is a beneficial retirement planning tool which you can use for receiving regular incomes from the retirement corpus that you have built. What’s attractive about the scheme is that it refunds the invested corpus on death or maturity thereby allowing you to enjoy incomes without utilizing your accumulated corpus. Since pension rates are guaranteed, you don’t have to worry about market volatility affecting your incomes. The benefits of surrender value and loan also make the scheme flexible and suitable for meeting emergency financial requirements.

So, if you have accumulated a retirement corpus, invest the corpus in the PMVVY scheme to get guaranteed periodic returns for ten years as well as the refund of the corpus once the scheme duration expires.

IRDAI Allows Paying Health Insurance Premium in instalments. Here’s how..

August 4, 2020March 26, 2021 Ankita Sejpal

In the current Coronavirus pandemic, having a health insurance policy has become a must. As the number of positive cases is increasing every passing day, more and more individuals are prone to contracting the virus. Hospitalisation due to Coronavirus can incur considerable medical costs and so a health insurance policy has become the need of the hour.

Though the importance of health insurance is being felt among many, paying the premium for the policy is challenging for many when COVID has had such a negative economic impact. Job cuts, pay cuts and uncertainty in business are some of the major economic impacts of the pandemic. In these situations, affording health insurance premiums can be a challenge. Keeping this in mind, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced the concept of instalment premiums in health insurance. Do you know what the concept means?

Paying health insurance premiums in instalments

The insurance regulator, IRDAI, has allowed health insurance premium payments in instalments. While life insurance premium payments are allowed to be paid monthly, quarterly, half-yearly or annually, the same facility is now being offered under health insurance plans. Thus, you can pay your health insurance premiums monthly, quarterly or half-yearly rather than in lump sum.

What it means for you?

Here are some of the benefits which you can avail from this facility of instalment premiums in your health insurance plan –

Affordable premium
The main idea behind the introduction of instalment premiums was to make health insurance affordable for you. Thus, in current times when health insurance is a must, you can easily buy the policy and afford the coverage by paying premiums in instalments.
Possibility to avail higher coverage
An optimal sum insured is a must to meet the expensive medical costs which incur in a medical emergency. Now, with the benefit of instalment premiums, you can easily afford a high coverage level in your health insurance policy. A high coverage level would cover your medical expenses sufficiently and protect your savings thereby giving you financial relief.

What is means for insurance companies?

As health insurance policies become affordable for many, health insurers can expect an increase in the demand of their products. This would increase their premium collection and boost their revenues. Moreover, the facility of instalment premium would boost the popularity of health plans making it profitable for health insurance companies.

What it means for the insurance sector?

The introduction of instalment premiums is a major boost for the insurance segment as a whole. As health insurance plans become popular, insurance penetration is expected to increase. Moreover, as high coverage levels become affordable, the insurance industry would grow on the increased premium that they can earn.

A few things to check!

Though paying premiums in instalments is good news for you, here are some aspects of such facility which you should know –

Some companies might put loading on monthly or quarterly premiums and offer discounts in annual premiums. For instance, if the annual premium for a policy is INR 10,000, you might have to pay INR 900 every month if you choose the monthly mode of premium. Alternatively, if the annual premium is INR 12,000 and the monthly premium is INR 1000, you might enjoy a discount if you choose to pay the premium annually.
If you are paying premiums in instalments and there is a claim before the full premium payment has been done, there would be two choices. One, you would have to clear the outstanding premium before the insurance company settles the claim. Two, you do not pay the outstanding premium and the insurance company deducts the premium from the claim amount. For instance, if you are paying a monthly premium of INR 900 and there is a claim in the 6th month, you can either pay INR 5400 and receive the full claim amount, or the insurance company would deduct INR 5400 from the claim amount payable.
The facility of instalment premium is being offered in the current situation when the pandemic has caused economic disturbances. The facility might be continued in future or it might even stop depending on the insurance company’s practices.

EMI payments have always found favour with customers who can make big purchases and then pay for them in small and affordable investments. The facility of instalment premiums is, therefore, beneficial for you as you can afford a higher coverage and invest in a comprehensive health insurance plan. So, choose this facility and opt for an optimal sum insured. If, however, you can pay the premium in one lump sum, you can also opt for annual premium. So, assess the suitability and make a choice but do invest in health insurance for financial security in these times of crisis.

Do you know about the extended date for life insurance premium payment?

July 2, 2020March 26, 2021 Ankita Sejpal

The recent Coronavirus pandemic has brought about unprecedented changes in the economy. With the lockdown extending to prevent the spread of the virus and the emphasis on social distancing, businesses are finding out new ways of operating. Even the Insurance Regulatory and Development Authority of India (IRDAI) has been issuing new guidelines for the insurance segment in the interests of the policyholders. All the guidelines are aimed to provide reliefs to the policyholders in their insurance policies. One such guideline issued by the IRDAI was the extension of grace period allowed in paying life insurance premiums.

A relief, isn’t it? But do you know how long the extension is allowed for or what grace period is exactly?

Grace period is a technical term used in the context of insurance policies but it is actually quite simple to understand. So, given below is the meaning of grace period and the changes which IRDAI has proposed –

What is a grace period?

Grace period is an extension allowed under a life insurance policy to pay the premium beyond the premium payment date. During the grace period the coverage does not stop. If the policyholder pays the premium within the grace period, the policy continues without any lapse. If the premium is not paid even within the grace period the policy would lapse.

Duration of grace period

In case of policies where premiums are paid annually, quarterly or half-yearly, the insurance company allows a period of 30 or 31 days (one month) as a grace period. For instance, suppose the premium payment date in a life insurance policy is 30th June. If premiums are paid annually, the policyholder would have until 30th July to pay the due premium. The period between 30th June and 30th July would be called a grace period wherein the coverage would continue. However, if premiums are not paid within 30th July, the policy would lapse on 31st July.

However, in policies where premiums are paid monthly, the grace period allowed is 15 days. So, if in the above example, the premiums were paid monthly, the grace period would be allowed till 15th July. From 16th July, the policy would lapse.

IRDAI’s guideline on extension of grace period

The Coronavirus pandemic resulted in a lockdown imposed by the Government since 25th March 2020. This lockdown restricted free movement and closure of businesses. Thus, policyholders whose life insurance policies were up for renewal in March found it difficult to pay the premiums due to the lockdown. Thus, keeping in mind the interest of the policyholders, IRDAI allowed an extension of the grace period allowed for premium payments. As per IRDAI’s new guideline, policyholders whose premiums were due in March 2020 can pay their life insurance premiums by 31st May 2020 and the policy would not lapse. Thus, the grace period allowed to policyholders has been extended till 31st May 2020.

Reason for extending the grace period

The sole reason behind IRDAI’s guideline to increase the grace period is to allow policyholders to renew their policies with ease. This is aimed to reduce lapsation allowing policyholders to enjoy uninterrupted coverage in their life insurance policies. If the lockdown has caused a financial crunch for individuals, they can plan their finances during the extended grace period and then pay the premium to keep their life insurance policies in force. Moreover, the extension of grace period is also aimed to avoid policyholders visiting the insurance company’s offices to renew their policies during the lockdown. IRDAI has asked insurance companies to offer online modes of premium payments to allow their customers to renew their policies online from the comfort of their own homes.

How does the guideline impact policyholders?

The IRDAI’s guideline is a welcome relief for policyholders who were worried about paying their life insurance premiums during the lockdown. For those of you who forgot the premium payment during April 2020, you can pay the premiums within the extended grace period and continue enjoying the full benefit of your policy. For those of you who had a financial crunch due to the lockdown, you can arrange for sufficient funds during the extended tenure to pay the premium and continue your policy without lapse. Thus, from the policyholders’ point of view, this extension is beneficial as it allows them to avoid lapsations.

How does the guideline impact insurance companies?

Even the insurance companies have welcomed this extension of grace period as it means better persistence for them. Persistency is measured in terms of the policies which are in force at the end of the financial year compared to the total number of policies issued by the company. A higher persistency is favourable as it provides insurance companies with revenues in the form of premiums to meet their expenses and generate a profit. Since customers are allowed a longer grace period, the policies are less likely to lapse ensuring better premium collections for insurance companies.

Here’s a quick look as to how the new guideline is beneficial for both policyholders and insurance companies –

The IRDAI’s new guideline on extension of the grace period, therefore, is beneficial for both policyholders and insurance companies. The measure was needed during this uncertain time of nationwide lockdown and it is expected that it would benefit the insurance segment.

Frequently Asked Questions

Does the extension of grace period apply for health insurance policies as well?
No, this particular guideline is applicable only for life insurance policies. For health insurance policies, if the premium payment date fell between 25th March 2020 and 3rd May 2020, the grace period allowed is up to 15th May 2020. (Source: Economic times)
What would happen if the insured dies during this extended grace period without paying the due premium?
During the grace period, the coverage remains intact in a life insurance plan. Thus, if the insured dies during the extended grace period, the insurance company would pay the death benefit after deducting the premium amount which is due.
If I pay the premium within the extended grace period, would I be charged an additional interest?
No, payment of premium within the extended due date would not incur any additional interest payment. You would just have to pay the premium amount.
What would happen if the policy matures during the extended grace period and the premium is unpaid?
In case of maturity of the policy, the maturity benefit would be paid by the insurance company after deducting the premium which is due.

Author: Ankita Sejpal