Rupanjali Mitra Basu, Author at Turtlemint

5 tips to buy life insurance

February 20, 2018May 13, 2021 Rupanjali Mitra Basu

Most of you make mistakes when buying a life insurance policy. Due to these mistakes, the plans you buy do not fulfil your financial requirements completely. What do you do in such situations? You put the blame on the agent or on the insurance company which sold you the plan. Do you ever realise your mistakes?

Many don’t. There are various types of life insurance plans and each plan has a particular use. Many of you ignore this fact and buy a policy blindly. You shouldn’t. You should understand every plan’s benefits and then choose plans based on how they fulfil your requirements. Do you know how to do that?

No? Don’t worry! Here are some tips of buying different type of life insurance plans –

Term insurance

Let’s start with term insurance. Term plans are simple insurance plans which promise to pay the sum assured in case of death during the term of the plan. Thus, these plans guarantee a financial corpus for your family if you are not around. Premiums are very low and you can buy an optimal amount of coverage under term insurance

#Buying Tip

Term insurance is a universally required plan. Everyone wants to protect their families financially in case they face premature death. A term plan fulfils this need. Since premiums are low you can also afford sufficient coverage. So, have a term plan at all stages of your life to fulfil the income replacement and financial security needs.

Endowment plans

Endowment plans also promise a maturity benefit which is absent in term plans. These plans give you a guaranteed fund either or maturity or in case of death during the term of the plan. Many endowment plans are offered as participating plans making them eligible for bonus declarations. These plans come with a term ranging from 10 years to 30 years and the returns are guaranteed.

#Buying Tip

Endowment plans give you a guaranteed corpus and helps in creating savings. So, you can buy these plans for creating a corpus for future use. The term of the plan should be kept in mind when buying the plan so that you get the corpus when you require it. Try and buy a participating plan to earn additional bonus which increases the benefits payable under the plan. The returns are guaranteed and if you don’t have any risk appetite, you can invest in endowment plans.

Child plans

Child plans, as the name suggests, are designed for securing your child’s financial future. These plans can be offered as traditional endowment plans or unit linked plans. What sets this plan apart from other plans is the plan’s design. There is an inbuilt waiver of premium rider under this plan. If the parent, who is also the life insured, dies before the completion of the term, the rider waives the future premiums. The plan continues but premiums are not payable. On maturity, the benefit promised is paid. Thus, a child plan ensures that the plan benefits would be paid as and when they are promised irrespective of whether the insured is alive or dead.

#Buying Tip

These plans are a must if you have children. You should buy a child plan securing your child’s future. Don’t forget to opt for an optimal sum assured which would provide the required corpus when your child needs it. Choose a term which coincides with your child’s needs so that the plan pays the funds when they are required, not before and not after such requirements.

ULIPs

ULIPs give you market-linked returns and, as such, are finding favour among many investors. You can invest your premium in any type of asset-class through a wide variety of funds available with ULIPs. Returns depend on the investment fund you have selected and the market performance. Since returns are linked to the market, they are inflation adjusted and yield a good corpus. There are flexible options too which let you switch between investment funds, withdraw your funds partially and also invest additional premiums through top-ups. Lastly, you get insurance coverage too where higher of the sum assured or the fund value is paid in case of death.

#Buying Tip

If you have a healthy risk appetite and want market-linked returns, ULIPs are an ideal choice. There are child ULIPs and pension ULIPs too which helps fulfil your child and retirement planning need. So, you can invest in a ULIP to get the dual benefit of insurance and investment.

Pension Plans

Pension or annuity plans help you plan for retirement. You can either buy a deferred annuity plan to create a retirement corpus or invest your retirement corpus in an immediate annuity plan to get annuity pay-outs. Pension plans also allow you to withdraw (commute) 1/3rd part of your accumulated retirement corpus tax-free. Thus, these plans create an earmarked retirement corpus for your golden years.

#Buying Tip

Buy a pension plan in your late 30s or early 40s to plan for your retirement. At that time, a deferred pension ULIP would be an ideal choice since the corpus would be inflation adjusted. Make sure to create a sufficient corpus.

The Verdict

Term plans are the most important ones and should not be ignored at any cost (Read more Term insurance are evolving here’s what’s new). After securing the need of financial security through a term plan you can choose other plans. Choose the different plans based on their requirement and their need and you would not make mistakes when buying life insurance.

Here are some reasons Why you need life insurance

Read more about Life insurance policy in India

Worried about filing your motor insurance claims? Get it expedited through video uploads

January 6, 2018May 13, 2021 Rupanjali Mitra Basu

Though a motor insurance policy is mandatory for your vehicles (as per the regulations of the Motor Vehicles Act, 1988), the claim process is often a tough nut to crack. You are required to follow some protocols to report and get your claims settled with the insurance company. Though the claim settlement process is quite simple, it takes some time. What if I told you that you can get your motor claims settled within hours?

Yes, you heard me correctly. With the recent amendments effected by the Insurance Regulatory and Development Authority of India(IRDAI), you can now get your motor claims settled through video uploads. Intrigued? Let’s find out more –

What is the new change made by IRDA?

IRDA has allowed claims up to Rs.50, 000 to be raised and settled using video proofs and images. All you need is a Smartphone and an internet connection. In case of an accident where your vehicle suffers damages you can make a video of the damage suffered and send it to the insurance company. The company would analyse the video, estimate the extent of damages you have suffered and would approve the claim. You can, then, get your vehicle repaired and the company would settle the claim directly with the workshop.

How it works?

Leading insurance companies are now accepting video documentation of your vehicle’s damages. They have introduced automation facilities wherein you can shoot pictures and videos of the damages suffered and share it with them. If your insurance company has launched its app, you can upload the video and images on the app and the company can access them. Data analytics are used to assess and analyse the video uploaded or sent by you.

Important points to be remembered

Though the motor insurance claim process has been simplified with this change, there are certain things which you should know. These include the following –

A Smartphone is necessary with which you should record the video. Your Smartphone should have a camera resolution of at least 4 Megapixels.
You should record the video in complete daylight. Moreover, the video should capture a 360-degree view of your vehicle and the damages suffered in one single clip.
Your video should also contain the images of your RC book, policy document and driving license.
Though IRDA has allowed claims of up to Rs.50, 000 through video upload, different insurers have set their own limits. For instance, ICICI Lombard entertains claims of up to Rs.20, 000 only while Bajaj Allianz allows claims of up to Rs.50, 000 through its ‘Motor on the Spot’ facility.

The final word

Technology has indeed made a lot of difference in today’s world. The insurance segment is also adapting to the changing technology and is simplifying the purchase and claim settlement processes. You too can benefit from the technological advancement of the insurance industry. Since Smartphones and an internet connection have become very common, get your claims settled through your phone itself. It is simple, easy and also saves a lot of time and effort. If you have queries you can take the assistance of Turtlemint. Turtlemint not only lets you buy a motor insurance plan after comparison, it also helps you at the time of claims. So, you can contact Turtlemint for your claim related queries and you would get personalised services. Making a claim cannot be any easier!

Know more on how to claim for a theft of your car

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Are you out-of-pocket healthcare expenses high/

December 14, 2017May 13, 2021 Rupanjali Mitra Basu

‘Health is wealth’ and so we are told but when it comes to maintaining it, we are none the wiser. Given the modern lifestyle and pollution, our health suffers the most. According to the Global Burden of Disease Study conducted by The Lancet, India ranks 154^th amidst a list of 195 countries in healthcare index (Source: https://www.business-standard.com/article/current-affairs/global-burden-of-disease-study-india-at-154-lags-behind-bangladesh-117052000010_1.html ). This index depicts the capability of a country to face diseases and prevent death. Such a low position shows that Indians succumb to various diseases and ailments because of lack of awareness. It shows that India is not completely prepared to tackle diseases and so has a high death rate. Coupled with the high incidence of ailments, India’s out-of-pocket expenses on healthcare is very high. Indians spend a major proportion of their healthcare costs from their own pockets. As per WHO’s report for the year 2014, the out-of-pocket expenditure as a percentage of private expenditure on health in India is a whopping 89.2% Surprising, isn’t it?

(Source: https://www.who.int/gho/health_financing/out_pocket_expenditure/en/ )

There are about two dozen insurance companies in India offering more than 50 health insurance products. These health plans help individuals deal with the financial implications of an ailment. Yet, the out-of-pocket expenses on healthcare are high. Have you ever wondered why?

The reason is because the penetration of health insurance is low. Though illnesses have become frequent, very few people invest in a health insurance plan. Here are the reasons why –

Lack of awareness

The primary reason for not investing in a health insurance plan is a lack of awareness. Many individuals don’t understand the need and benefit of a health insurance policy. Their savings are directed to more lucrative investment avenues which bring in returns. As a result, health insurance is always given a miss. But, the rising cost of treatments and high incidence of ailments together take a toll on your savings. You either don’t have enough money to pay for your healthcare costs or you deplete your available savings and face a financial crisis.

Burden of premium payments

Another major reason, beside lack of awareness, is the premium payable. Health insurance plans require policyholders to pay premiums to avail coverage benefits. Since these premiums do not earn returns, they are considered to be a burden by many. People do not like paying health insurance premiums and abstain from a health insurance plan.

Lack of trust at the time of claim

Health insurance claims specify a certain set of rules. You have to follow these rules to get your claim settled quickly and easily. These rules are considered technical by many. Policyholders do not read the fine print of their policies. They don’t find out the claim settlement process and make mistakes when raising a claim. As a result their claim settlement process is jeopardized. They blame the company for any hassle and lose trust on health insurance as a product.

Affordability

People have the notion that health insurance premiums are high and they cannot afford them. They do not like parting with a few thousand rupees to get health insurance coverage. Even when they do buy a health plan the sum insured chosen is very low in fear of the high incidence of premium and non-affordability.

What can be done?

While it is true that health insurance penetration is low, all in not lost. Through some efforts, the penetration can be increased. Insurance companies and even the regulator are devising ways to increase such penetration. Some of the ways include –

Increasing awareness

The barrier of lack of knowledge can be overcome through proper education programs. Individuals should be made aware of the various benefits a health insurance policy provides so that they can be motivated to buy a plan. The claim process should be communicated in clear language for people to understand so that making a claim becomes easy. They should be enlightened about how health insurance is a boon for their finances in medical emergencies.

Propagating the benefit structure of health insurance plans

The coverage features of a health insurance policy are quite technical in nature. Individuals do not have the required technical knowledge due to which they do not understand the importance of a health insurance plan. The plan benefits should, thus, be adequately propagated. Potential customers should be told how the various coverage features provide an all-round financial coverage against possible medical costs. They should be made aware of high inflation prevalent in medical costs. This inflation is a serious risk to their savings which can be safeguarded only through a health insurance plan. Not only would a health plan pay for the medical expenses, it would also protect your savings to be drained out.

Comparing premium payments vis-à-vis the benefit

For individuals who consider health insurance premiums to be a burden, the benefit payable should be highlighted. They should be shown how the quantum of coverage available under the plan outweighs the minimal premium which is payable against it. Everyone has miscellaneous expenses amounting to thousands. Can’t this money be invested for their health? For instance, Apollo Munich’s critical illness policy for Rs.5 lakhs sum insured covers 37 primary illnesses like heart attack, cancer, open heart bypass, stroke, etc. It pays Rs.5 lakhs immediately on diagnosis of any ailment. Against such lump sum benefit, the premium is only Rs.2213 for a 35-year old male. Is it expensive?

(Source: https://www.apollomunichinsurance.com/individual-optima-vital-premium-calculator.aspx )

Increasing the penetration of health insurance in India is a daunting task, a task which should be undertaken. However, as a consumer you should also be self-aware and invest in a good health insurance plan. The premiums would be affordable compared to the out-of-pocket expenses on health. Turtlemint believes in the importance of a health insurance plan and provides you a platform to compare and buy a plan easily. You can find the plans of all leading insurers on Turtlemint. Besides helping you with the buying process, Turtlemint also helps you at the time of claim with its dedicated claim handling department. So, understand the importance of a health insurance plan and invest in one today!

Read more about Dejargonizing health insurance terms

Read more about How to choose health insurance plans

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How to claim for car theft and the total admissible amount for the same?

December 11, 2017May 13, 2021 Rupanjali Mitra Basu

Car insurance – something which is mandatory when you buy a car. A comprehensive car insurance policy covers you for the damages sustained by your car and even for any third party liability. It, thus, comes in handy when your car is damaged or stolen.

Car theft has become very common nowadays. In fact, according to police reports, in the first three months of 2016 in Delhi, 9741 vehicle were reported lost against the last year’s figure of 6724 during the same period. (Source: https://timesofindia.indiatimes.com/city/delhi/A-vehicle-is-stolen-every-13-mins-in-Delhi-rate-up-44-since-last-yr/articleshow/51836205.cms ). Thankfully, if you have a comprehensive car insurance policy, you can get a claim if your car is stolen. Do you know the claim process?

The claim process of a stolen car is simple and, if, done properly, you can get your claim settled easily and quickly. Let’s find out how to claim for the theft of your car and the claim amount.

Step 1 – inform the insurance company immediately

This is the basic thumb rule when raising a car insurance claim. Your insurance company should be informed immediately of any damages or theft. When you discover that your car has been stolen, call up the insurance company’s claim assistance helpline and inform them. The company would tell you about the next steps which you should take to make a valid claim. You would also be given a claim reference number which you should note down for future references.

Step 2 – Obtain a FIR

This is the most logical and important step which is required after the insurance company is informed. You should visit your local police station and file a First Information Report (FIR) of the car theft. This report contains the details of the car and the theft which has taken place. The FIR serves as the proof of theft and is required by the insurance company to process your claim.

Step 3 – Submit the RC book, FIR and both your car keys to the insurance company

The insurance company requires some important documents to authenticate your claim and process it. You would have to submit the RC book of the car, the FIR you have filed and the keys of your car. If your RC book was in the car, a photo copy of the same might be sufficient if insurer accepts it. You are provided two sets of keys and both sets are to be submitted to the insurance company. This is required to rule out possible gross negligence on your part. If you have both the keys on you it proves that you didn’t leave the keys inside the car which might have resulted in theft. If you did and the theft occurred due to the key in the car’s ignition, it is ruled to be an act of gross negligence on your part. In this case the insurance company has the authority to reject your claim. That is why both keys are insisted upon when you make a claim for car theft.

Step 4 – Get your claim settled

If your car is not recovered by the police, the insurance company settles the claim for theft. The settlement usually gets completed within 2 months of making a claim. The claim amount would be the Insured Declared Value (IDV) of the car in the year when the theft took place. For instance, if your car insurance policy for the current year shows an IDV of Rs.4.8 lakhs, in case of theft, Rs.4.8 lakhs would be the admissible claim amount.

Wasn’t the process simple and easy? Just informing the insurance company, filing a FIR, submitting the FIR along with RC book and both sets of car keys and you can get the claim settled. There are a few pointers to keep in mind though. These include the following –

Make sure that your car insurance policy has not expired. No claim is paid on a lapsed policy.
Don’t carry the original insurance documents in your car. In case of theft you would lose the policy documents and might face difficulty in making a claim. Carry the copy of your Insurance Certificate in your car.
Never leave your car unattended with the keys still in the ignition. It increases the chances of theft and your claim might also get rejected.

Though losing a car to theft is a big deal, you might find yourself in this situation. If you do, utilize the benefits of your comprehensive car insurance policy. Know the steps of raising a claim and get your claim settled. Don’t expect the insurance company to reimburse you for the car’s cost though. You would get the IDV which is the fair market value of your car less applicable depreciation. So, be wise, be careful.

Read more about Anatomy of car insurance plan

Buying car insurance? Make sure to do this 5-point check

November 24, 2017May 13, 2021 Rupanjali Mitra Basu

A car purchase is a well-researched process. You do thorough studies. You compare the various models of a car, look at the features, understand the mileage and engine capacity and finally see if it fits into your budget. After all you are parting with a huge amount of savings to invest in a car! When it comes to car insurance too, a research is necessary. A car insurance policy should be studied carefully before it is bought. If you don’t know what to look for here are 5 of the most important points to get you started –

#1 The Insured Declared Value

The IDV of your car insurance policy is equivalent to its sum insured. This is the maximum amount of claim which you get when your car is either stolen or is damaged beyond repairs. The IDV actually represents the market value of your car after deducting the relevant depreciation. Every insurance company follows a different approach in fixing the IDV. That is why, the IDV of different policies differ. When you are buying a plan you should check its IDV. It is advised to compare between the different plans and choose one which has a high IDV. A high IDV boosts the claim value and so should be considered at the time of purchase.

#2 The premium rate

Just because a car insurance policy is mandatory it doesn’t mean that you should not check the premium rate. You are paying the premium from your hard-earned money and so it should be considered at the time of buying the policy. You should understand how the premium is being charged. In a comprehensive plan there is a premium break-up for the different covers opted. You should understand the break-up. Moreover, just as in case of the IDV, you should compare the premium rates of different plans before buying.

#3 The coverage features

A comprehensive car insurance policy provides three basic coverage features. One is the mandatory third party liability cover which takes care of your financial liability towards third parties. Two is the coverage for damages suffered by your car. Three is a personal accident cover for the owner/driver of the car. These three areas are covered by all policies. However, there are some features which are added to make the policy one of a kind. For instance, many car insurance plans have an inbuilt roadside assistance cover for breakdowns. Some give you coverage for towing your car in case of a major damage, etc. When buying a policy you should check for the coverage features. Find out exactly what is being covered by the policy and what is not.

#4 The add-on covers

Add-on covers are optional coverage features which are available at an additional premium. These features enhance the scope of coverage of a policy. For instance, a roadside assistance cover is helpful in case your car breaks down in the middle of the road. Similarly, a zero depreciation add-on increases your claim amount by nullifying the effect of depreciation. An engine protect add-on covers the damage sustained by your engine due to water-logging. These add-ons are beneficial and you should choose one or two based on your requirements. While buying a policy find out if any add-ons are added to it. If they are, analyze whether the add-ons are suitable to your requirements or not. If there are no add-ons choose some yourself.

#5 The discounts available

Did you know that there are different types of discounts in a car insurance policy? Exciting, isn’t it? Insurers allow various forms of discounts on the car insurance premium. While buying the policy you should check out these discounts so that you can save on the premium cost. There are discounts for buying the policy online, for accumulated No Claim Bonus in an existing policy, for installing safety devices in your car, for being a member of Automobiles Association of India or any other recognized group and for choosing a voluntary deductible among others. You can find the available discounts only when you are careful when buying a policy. Wouldn’t you like saving money?

So, don’t make the mistake of buying a policy without proper consideration. Look for the above-mentioned points and then invest in a car insurance plan. You would not only get the best coverage, there would be savings on the premiums too.

Also, check the below video before buying car insurance

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Term plans are evolving. Here’s what’s new – The new age term plans

November 15, 2017May 13, 2021 Rupanjali Mitra Basu

Term plans have become popular amongst individuals nowadays. The unparalleled benefits endowed by the plans are the driving USP behind its popularity. People are increasingly becoming aware that they need to ensure the replacement of their income for their family in case of their premature demise. This replacement is provided by term plans at very marginal costs making them popular. Even insurance companies have acknowledged this popularity and have made revolutionary changes in their term products. As such, today, you can find a newer and improved version of your beloved term plans which promise much more. Do you know what is new?

You might not and so here is a list of new evolved features which come inbuilt in current term insurance plans:

Different types of payout options

Gone are the days when term plans promised only lump sum payouts. Today, you can find plans where the payouts are of different types. Some common payout options include the following:

Lump sum payout – this is the traditional payout option which has been present ever since term plans were introduced. This option pays the Sum Assured in lump sum. If you know that your nominee is investment savvy and would be able to invest the lump sum benefit in good investment avenues after your demise, you can choose this payout option. If you buy Aegon’s iTerm Plan for a Sum Assured of Rs.50 lakhs, a lump sum benefit of Rs.50 lakhs is paid on death.
Monthly payouts – this new addition to a term plan is where the death benefit is paid in monthly instalments for a specified period of time. The duration for which monthly payouts would continue is mentioned beforehand. Moreover, in many term plans, the monthly payouts also increase on an annual or monthly basis. You can choose this payout benefit if you want your family to receive regular incomes in your absence. For instance, ICICI Prudential’s iProtect Smart Life Plan with Sum Assured Rs.50 lakhs pays Rs.41, 700 every month for 120 months.
Combination of lump sum and monthly instalments – as the name suggests, under this payout option, the death benefit is paid partly in lump sum and partly in instalments. For instance, Aegon’s iTerm Plan also has the option of taking the benefit partly in lump sum and partly in instalments.

You have the freedom to choose a term plan depending on its payout option and your suitability.

Inbuilt riders

Riders are additional coverage options which can be selected for an enhanced coverage experience. Earlier, term plans gave you a list of riders to choose from. However, today, you can also find inbuilt riders in the plan benefits. These inbuilt riders pay an additional benefit in case you face the contingency covered by the rider. Some common inbuilt rider benefits which you can find in term plans include the following:

Accidental Death and Disability Benefit – in this benefit you get an additional Sum Assured in case you suffer an accidental death during the plan tenure. Even in case of accidental disability you get an additional Sum Assured which is usually paid in instalments.
Terminal illness or Critical Illness Benefit – this benefit covers a list of terminal or critical illnesses. If you are diagnosed with any covered illness during the term of the plan the benefit pays the Sum Assured.
Premium Waiver Benefit – under this benefit, the future premiums get waived off in case of an accidental disability. The plan continues as the company pays your premium on your behalf.
Waiver of premium on critical illness – if you get disabled in case of any critical illness your premium is also waived.

Terminal Illness benefit is inbuilt in AEGON’s iTerm Plan. ICICI Prudential iProtect Smart Life Plan has inbuilt riders of Waiver of Premium in case of Accidental Disability and Terminal Illness. If you opt for Smart Life Plus plan, you get an additional inbuilt rider of Accidental Death Benefit. Aegon’s iTerm Plus plan waives the premium in case you are diagnosed with a critical illness.

Understand the basics of term insurance plans by watching the below video

Online term plans

The online medium has redefined the way we transact. You can compare and buy a term insurance plan online. These plans have lower premiums since they are sold directly by the insurance company. Moreover, the underwriting rules are less stringent. You are simply required to fill an online application form, pay the premium and the policy is, usually, issued in an instant. No more elaborate paperwork and unending wait for the commencement of insurance cover.

Higher coverage tenures

Even the coverage tenures have been increased in new term plans. You can easily get coverage till 85 years of age under many plans. Moreover, some plans also allow you to convert your term plan into a whole life pan which runs till you reach 99 or 100 years or age.

Lower premiums

Finally, here’s the sweetest deal for the last point. Term insurance premiums have become cheaper than they were before. Increased competition in the insurance market and improvement in the mortality rates have lowered the premiums considerably. Sweet, isn’t it?

Change is the only constant and term plans have embraced this motto. They have evolved and become more customer-friendly. So, if you have not bought a term plan till now, don’t wait. Buy a term plan at the earliest and enjoy the new benefits.

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Common mistakes to avoid when buying a term plan

November 7, 2017May 13, 2021 Rupanjali Mitra Basu

A term insurance plan is a popular life insurance product because of the unmatched benefits it endows. It promises your family a lump sum benefit in the event of your untimely demise and that too at very marginal premiums. Which other investment instrument promises you this?

Don’t scratch your heads. No other investment does. That is why term plans have become popular. The benefits promised the low premiums and also the payouts structure have made term plans the part and parcel of everyone’s financial portfolio. However, when buying a term plan, individuals are not careful. They commit some very common mistakes because of lack of knowledge or because of their ignorance. Some common mistakes made include the following:

Find out why term insurance is a must buy

Choosing a low Sum Assured level to save on premiums

The USP of term plans is that they promise a high coverage at very low premiums. Thus, these plans are the only life insurance plans which let you afford a very high coverage level. However, when you buy a term plan you often skimp on the amount of the Sum Assured for saving few hundreds on the premium outgo. This is a mistake. The Sum Assured should be selected based on your lifestyle requirement. It should be sufficient enough to provide for all your financial obligations in case you are not around. If you are not sure about selecting the correct coverage amount there are online term insurance calculators which help. They let you calculate your ideal Sum Assured level based on your financial profile. So, when buying a term plan, choose the optimal level of coverage to ensure financial freedom.

Choosing a lower term

Term plans promise to pay the benefit only if death occurs during the selected term of the plan. If you survive the chosen plan tenure there is, usually, no maturity payout. People usually tend to choose a lower tenure which gives them coverage for a lower period. If you are to enjoy maximum coverage under your term plan go for the highest possible tenure. A higher tenure would cover you till a longer age which increases the probability of the plan benefits being paid.

Not filling or verifying the proposal form

Very often, when you buy a term plan from an agent or broker, all you do is sign the form without bothering with the details mentioned therein. Even if you do fill your proposal form, you lie about certain details asked in the form. This is a mistake. The proposal form forms the basis of insurance contract based on which your policy is issued. If you do not verify the details or misrepresent any important fact your claim might get jeopardized. Your policy might become null and void if any important fact is not informed to the insurance company. So, whenever buying a term plan, make sure to fill in the proposal form yourself and verify that all the information mentioned therein is true and correct.

Buying without comparing

Do you know how many term insurance plans are there in the market? Too many to even count! Every plan, though similar in nature, has different features and benefit structure. Even the premium rates differ across different plans. So, if you buy a term insurance plan without comparing the different plans you are bound to make mistakes. Either you would buy a plan with lesser features or end up paying a higher premium. So, always compare the different term insurance plans before you buy one. If you need help you can find assistance at Turtlemint.com. You can enter your details and find out not only the ideal Sum Assured but also the different premium quotes. You can compare the different premium quotes against the plan’s features and buy the best plan for your needs.

Buying a term plan, though commendable on your part, should be done only after careful consideration. You should avoid making these mistakes if you want the best term insurance experience. Just a little knowledge, some extra effort towards plan comparisons and you can buy the best term insurance plan. The plan would not only give you adequate coverage for an adequate tenure, it would be reasonable on your pockets too.

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What is insurance and how does it work?

October 31, 2017May 13, 2021 Rupanjali Mitra Basu

Rahul is super confused about all the jargons that are thrown on him whenever he reads insurance; Rahul avoided insurance, but then with his first job came his first car and then the company offered him Health insurance as a part of his package and Rahul had a Motor insurance and also a Health Insurance but didn’t know the importance of them. Unfortunately, he met with an accident and his car was damaged and Rahul had a minor injury. At this point of time, the 2 sheets of paper took care of his expenses!! This experience was an eye-opener and he decided to meet his college buddy Rohan who had got a job in one of the Top Financial company as a wealth manager. Below is the conversation they had.

Rahul:- Hey Buddy please simplify and tell me “What is insurance and how does it work?”

Rohan:

It’s very simple Rohan – You just get overwhelmed with the terms – let me explain you.

Insurance is a policy taken to cover the risk of financial loss, i.e. it provides protection against financial loss that may occur. In your case, it was financial loss due to damage of your car which was covered because you had an insurance policy.

However such loss may be due to death of the insured, damage to a property, liabilities or expenses incurred in car accident, etc. The entity from which insurance is taken is known as the insurance company or an insurance company.

The person who buys the insurance is known as the insured or policyholder. You have to pay a fee to the insurance company to subscribe for the insurance; such fee is known as an insurance premium. Insurance premium is the financial cost payable in instalments or in lump sum for obtaining an insurance cover. You must pay the premium at pre-defined intervals. Non- payment of premium results in cancellation of insurance policy.

To purchase an insurance policy, you have to subscribe for insurance by paying premium at the prescribed intervals. On subscription, you receive a contract or an insurance policy document that you get from the insurance company which contains the terms and conditions subject to which financial loss you suffer will be compensated. In case any loss is suffered by you, you need to claim along with the required documents to the insurance company. The insurance company after conducting an investigation and on being satisfied with the loss approves the claim. Once the claim is approved, you receive the compensation & you are paid for the damage you have claimed.

Insurance can be broadly classified into two categories, Life insurance and general insurance. As per IRDA(Insurance Regulatory Development Authority of India), as on March 31, 2016 the share of life insurance business in India is 79% and that of general or non-life insurance is 21%. There are 54 insurance companies operating in India of which 24 are life insurance companies, 24 are general insurance companies and 5 are health insurance companies exclusively doing health insurance business. The insurance company, in order to reduce the risk undertaken can also sell the insurance further to other insurance companies, this is known as reinsurance. As of now GIC(General Insurance Corperation of India) is the only reinsurance company in India.

Also check out our video to understand insurance in a simple way

Life Insurance: Life insurance is a policy taken on the life of the insured. In this case, the insurance company agrees to pay a guaranteed sum of money to the beneficiary in case of death of policy holder in return for the premiums paid by the policy holder. The premium may be paid in lump sum or installments.

General Insurance: All insurances other than life insurance are known as general insurance including property insurance, motor insurance, etc. Following are the various types of general insurance:

Motor Insurance: Motor insurance is the policy taken by the car owner to mitigate the financial risk involved while operating the car. In case the car meets with an accident, damaged or is stolen, the loss borne by the owner is compensated by the insurance company depending upon the coverage of insurance policy. Car insurance in India is mandatory for all the vehicles whether they are for personal or commercial use. As per the provisions of The Motor Vehicles Act, 1988 all the vehicles, which are operating in public places should have a car insurance policy at least to cover third party liability as specified under the Act.

For example, in case of car insurance, if the car meets with an accident the losses suffered and the cost of repairs will be borne by the insurance company. The amount and extent of compensation depends on the features of the policy opted. In some car insurance cases only third party liability is covered whereas in other cost of repair of car is also covered.

Read more about Anatomy of a car insurance plan

Health Insurance: Health insurance is a policy that provides coverage of the medical and surgical cost of the individual. The insured pays premium towards the policy and in return the cost of medical expenses is born by the insurance company. The payment by insurance company is either paid directly to the hospital/service provider or the insured has to pay the expenses out of pocket and then it is reimbursed by the insurance company. Payment type, i.e. cashless or reimbursement depends on the type of policy chosen.

For example, if an insured falls ill and is hospitalized, then the expenses incurred on hospitalization and treatment is borne by the insurance company.

Also check out our video to understand health insurance in details

Travel Insurance: Travel insurance is a policy that provides coverage for the losses incurred while travelling, within the country or internationally. It covers losses incurred due to loss or theft of baggage, loss of important documents, cost incurred due to trip cancellations, medical expenses, etc. Travel insurance policy can be of 2 types, single trip and multi – trip. As the name suggests, a single trip policy is meant for a single trip, it can be taken at the time of booking the trip and it provides the coverage only for the exact duration of the trip. A multi-trip policy is designed for frequent flyers; it covers multiple trips during the coverage period usually a year.

For example, if on a trekking trip the insured suffers from a serious injury in such case the travel insurance company ensures medical treatment. Travel insurance in such case becomes more relevant as some of medical insurance policies are not applicable outside the coverage area.

Home Insurance: Home insurance, also known as homeowner’s insurance is a policy that provides coverage for the individual’s home against damage. It covers the loss incurred due to damage of the house due to natural or man-made disasters such as earthquake, fire, lightening, riots, etc. The damage may be to the structure or the contents of the house.

For example, in case the ceiling or flooring of the house is damaged due to leakage in pipeline the cost of such loss is borne by the insurance company.

Marine Insurance: Marine insurance is a policy that provides coverage for the damage of cargo, ships, or any other transport through which cargo is transferred. It is of two types, cargo insurance and hull insurance. Cargo insurance provides coverage against the losses that may incur during the transit of goods while they are being transported from one place to another. Such transportation may be via road, rail, sea or air. Hull insurance provides coverage for the damage of vessel or aircraft.

For example in case if the goods (value being INR 10 lakhs) being transported is damaged during transit. However, the extent of damage is INR 7 lakhs then such loss of 7 lakhs shall be borne by the insurance company.

Commercial Insurance: Commercial insurance is a policy that provides for any unforeseen event that may hamper the normal working of business. It may be due to property damage, theft, injured employees, etc.

For example, certain commercial insurance policies provide coverage on the liability arising out of lawsuits, judgments or settlements.

Though insurance comes with a cost in the form of insurance premium and as optimistic individuals we all believe that nothing can go wrong with us. However, there is always a risk that can never be avoided. Also, it provides a peace of mind to the insured. For example in case of life insurance, though the loss to the family of insured can never be compensated but an insurance policy ensures some financial support in the absence of an earning member. Thus, insurance aims at safeguarding the interest of people from uncertainty by providing the certainty of financial support.

Know about other general insurance in our video below

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Buying a two-wheeler for the first time? Know about two-wheeler insurance policy

October 24, 2017May 13, 2021 Rupanjali Mitra Basu

A teenager stepping into adulthood covets the trendy two-wheeler for its speed and style statement. On the other hand, an office-going middle-aged man buys a two-wheeler for ease of conveyance. A housewife on the contrary considers buying a scooty for the daily household chores of buying groceries or picking and dropping her children to school. Whatever be the reason, a two-wheeler is a favored mode of transport for young and old and males and females alike.

When you buy a new two-wheeler, you look deeply into the MMV (Make, Model, Variant) of the vehicle, its cost, mileage and also the reviews. But, do you pay any attention to the insurance policy associated with it? The Motor Vehicles Act, 1988, has mandated every vehicle on Indian roads to have a valid insurance cover. Therefore, like it or not, if you are buying a two-wheeler you would also have to buy a two-wheeler insurance cover.

Do you know the important aspects of such an insurance cover? If not you should. So, here are some important and rudimentary features of your two-wheeler insurance policy that you should know:

The type of plan

There are two types of two-wheeler insurance plans available in the market – third party liability only plans and comprehensive plans. Third party plans are mandated by the Motor Vehicles Act. These plans cover financial liabilities against third parties for any damage or bodily injury caused by your two-wheeler. Comprehensive plans, on the other hand, cover third-party liability as well as damages faced by you and your bike. So, in case of an accident, any cost of repairing your bike is also paid by comprehensive plans. As such, comprehensive insurance plans score over liability only policies which have a limited coverage.

Tenure

Thanks to the new IRDAI regulations, two-wheeler insurance policies are now being offered for a longer tenure. While earlier the policies had a one-year coverage period, with the change in regulations you can avail coverage for 2 or 3 years at a stretch. Long-term two-wheeler plans are better as they eliminate the hassle of annual renewals and save on the premium costs too.

Add-ons

Add-ons are additional coverage features which are available with comprehensive two-wheeler insurance policies. You have to pay an additional premium for availing any add-on cover you want. The additional premium is very low while the coverage is very helpful. Some important add-ons which you can consider include roadside assistance cover, zero depreciation cover, passenger cover, etc.

NCB Discounts

Every year when you don’t make a claim in your two-wheeler insurance policy you get a reward in the form of No Claim Bonus (NCB). This NCB discounts the premium which you are required to pay when you renew your policy. Moreover, the NCB discount is cumulative in nature. The rate of discount increases every successive year in which no claim is raised. In fact, you can claim a maximum discount of 50% on your renewal premium by accumulating your NCB discount for 5 or more consecutive claim-free years. Know your NCB discounts and save money.

Making a claim

What use is your two-wheeler insurance policy when it doesn’t come to your rescue in the time of claim? Making a claim in your two-wheeler insurance policy is a simple process. However, there are some steps which you are required to follow correctly to get your claim settled. For instance, the very first step in making a claim is informing the insurer. After that, a survey is done of the damages before repair works start. Only if the steps are followed correctly would you be able to get your claim settled easily. So, know the claim settlement process of your insurance policy beforehand so that when crisis strikes you would know exactly how to handle it.

Renewals

Whether you buy a one-year insurance cover or a multi-year cover, renewals are essential as long as you own your bike. When it comes to renewals many of you either ignore it or forget about it and the policy lapses. A lapse in your bike insurance has serious consequences. Firstly you violate the law of having your vehicle insured. If caught without insurance you would face heavy penalties. Secondly, you take the financial risk of any damages on your head. Thirdly, renewing a lapsed policy requires inspection done by the insurance company. This inspection takes time and might increase your premium outgo. Lastly, if not renewed within 90 days of lapse, you lose your entire accumulated NCB discount. So, timely renewals are important.

Know how to renew your lapsed policy

Be conversant with these important factors of your bike insurance policy and enjoy a smooth ride on your new two-wheeler. Your insurance policy would take care of any contingencies if they arise.

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