Author: Rupanjali Mitra Basu

Home Insurance – Buy and Renew Best Home Insurance Plans

Rupanjali Mitra Basu

Buying a home is a big affair since you invest a lot of money in buying it. Moreover, additional amounts are spent on decorating, furnishing and buying appliances. As such, in case any damages occur you stand to lose huge amounts of money. If your house is damaged due to a flood or earthquake you would incur substantial financial losses which might prove unaffordable. That is why you need a home insurance policy. Do you know what the policy is all about?

What is home insurance?

A home insurance policy, also called property insurance, is a policy which covers the damages suffered by your home, its contents or both. If there is any damage which is natural or man-made in nature, the policy would pay you for the loss that you incur.

  1. Features of a home insurance policy

    A home insurance plan has the following features –

    • It comes in different variants to suit the different coverage requirements of homeowners
    • The premiums are very low and affordable
    • The policy is usually issued for one year after which you can renew the plan
    • Coverage amount depends on the asset insured and its value
  2. Types of home insurance plans

    Home insurance in India comes in the following variants –

    • Structure insurance

      This policy covers the structure of your house, i.e. the roofs, walls and floors against damages suffered due to natural or man-made calamities. The policy can also be called a Standard Fire and Special Perils policy as it covers the structure against fire and other natural or man-made calamities

    • Contents insurance

      This policy covers only the contents of the house against damages of loss. Contents of the home include home appliances, jewellery, furniture and fixtures and other contents of the house. This policy is suitable for tenants who face a threat of damage to their belongings if the house is damaged.

    • Comprehensive insurance

      This policy covers both structure and contents insurance. It covers the structure of the house as well as its contents against damages or loss due to natural or man-made conditions.

    • Public liability insurance

      This policy covers any type of injury suffered by individuals when they are on your property or if your property causes damage to another individual’s property. In such cases, the aggrieved third party might raise a financial liability on you. This liability is covered under the policy.

    • Tenant’s insurance

      This insurance policy is designed for tenants who are living in rented houses. The policy is like a contents insurance which covers the belongings of the tenants in the rented house.

  3. What is covered under home insurance?

    A home insurance policy covers the damages suffered due to the following instances –

    • Fire 
    • Riots, strikes or any other malicious acts
    • Earthquakes, lightning, floods, cyclones, storms, etc.
    • Aircraft damage
    • Missile testing operations
    • Terrorist acts
    • Burglary and theft of the contents of the home
    • Explosion or implosion
    • Landslides, road slides or subsidence
    • Bursting of water tanks or overflowing of pipes
    • Leaking from automatic sprinkler systems
    • Bush fire
  4. Additional coverage benefits under home insurance

    Besides the above-mentioned coverage benefits, add-ons are also available under property insurance plans. These add-ons increase the scope of coverage of the policy and are available at an additional premium.

    The most popular add-ons available with most home insurance plans include the following:

    • Loss of rent

      If, after damage, the house property is unoccupied, the landlord faces the loss of rent for the period the home is under repairs. This add-on covers the loss of rent.

    • Rent for an alternate accommodation

      Under this add-on the rent paid for alternate accommodation is covered when your home is damaged and you live elsewhere

    • Replacement of lock and key

      The add-on covers the cost of replacing the lock and key of your home.

    • Escalation cover

      Under this add-on, the increase in the value of the home due to inflation is covered.

    • Terrorism cover

      If the plan does not cover terrorism-related damages you can choose this add-on to include such damages.

  5. What is not covered under home insurance?

    Home insurance plans do not cover the following types of damages or losses

    • Non-disclosure of important information in the proposal form
    • Pre-existing defects or damages
    • Damages due to war, nuclear contamination, mutiny, etc.
    • Losses due to pollution and contamination
    • Loss of jewellery, cash, precious stones, etc. unless the same is specifically covered under the plan
    • Deliberate damage to the property or contents
    • Consequential losses
    • Misconduct and wilful negligence 
    • Cost of land
    • Depreciation and normal wear and tear
    • Losses suffered when the property is not occupied for more than a specified period
    • Properties under construction are not covered under home insurance plans
  6. Benefits of home insurance

    Home insurance proves very beneficial due to the following reasons –

    • The policy gives you financial security if your house and/or its contents are damaged
    • The compensation paid by the home insurance policy allows you to rebuild your damaged home or replace the lost contents without feeling a pocket pinch
    • Since the premiums are low, you can insure your house under an optimal home insurance policy without worrying about the financial outgo

How to determine the sum insured for home insurance plans

The sum insured of a home insurance policy is calculated on different bases. These bases are as follows:

  1. Agreed Value Basis

    This basis is used to calculate the sum insured of a flat or an apartment. The sum insured is calculated by multiplying the total area of the property (in square feet) with the value per square feet. The area of the property would be the area as mentioned in the Registered Sale Deed Agreement. The value per square feet would be the value which is mentioned in the Ready Reckoner for Property Tax and Stamp Duty and which is issued by the Revenue Department of the State Government. The value would be taken for the date on which the proposal for insurance is made. Moreover, if the value is mentioned in the valuation report of a Government Approved Valuer, the same could be considered in the calculation of the sum insured if the insurance company agrees.

  2. Reinstatement Value Basis

    Reinstatement Value Basis is used in the calculation of sum insured for insuring a building. The value is considered to be the cost of reconstructing the building to the original state in case of damage. The cost of land would be excluded in the calculation. The cost of reconstruction would be calculated by multiplying the area of the building in square feet with the current cost of construction in the locality where the building is situated.

  3. Indemnity Value Basis

    This basis can also be used to determine the sum insured for insuring a building. The calculation is the same as in the reinstatement value basis. However, depreciation of the building, based on its age, would be deducted from the sum insured when it is calculated.

  4. New for Old Basis

    This basis is used of insuring contents of the home and to determine their sum insured. Under this basis, the sum insured would be the cost of replacing the damaged contents of the home with new contents of the same value.

  5. Indemnity Basis for contents

    Under this basis, the replacement cost of contents is adjusted by the depreciation of the contents due to their age. So, the replacement cost of the damaged contents would be reduced to factor in depreciation.

Popular home insurance plans available in India

Here are some insurance companies in India which offer home insurance coverage –

Name of the company

Types of plans offered 

Salient features 

Bajaj Allianz Home Insurance Plan

  • My Home Insurance Policy 
  • Householders Insurance Policy 
  • Easy Householders Insurance Policy 
  • You can choose continuous coverage for up to 5 years
  • Range of add-on covers are available for making the coverage comprehensive 

ICICI Prudential Home Insurance Plan

  • Home Insurance
  • Up to 50% premium discounts for buying a comprehensive policy for 5 years
  • Water seepage related damages are covered

HDFC Ergo Home Insurance Plan

  • Home insurance for tenants
  • Home insurance for owners
  • Housing Society Insurance
  • Different types of premium discounts are available under the plan
  • The company provides 24*7 support in case of claims

Reliance General Home Insurance Plan

  • Home insurance – Structure Protection
  • Home Insurance – Contents Protection
  • Householders Package Policy 
  • Multiple types of policies are available
  • Coverage for jewellery and precious items against theft
  • Chain snatching is also covered

Oriental Insurance Home Insurance Plan

  • Householder Insurance Policy
  • You can buy different policies for the building and contents
  • The premiums are very low and affordable 

Royal Sundaram Home Insurance Plan

  • Home Building Insurance
  • Household Articles Insurance
  • Home Building and Household Articles Insurance
  • Up to 50% premium discount is allowed for a comprehensive policy
  • Mobile and jewellery can also be covered

IFFCO Tokio Home Insurance Plan

  • All in One Home Protector Policy 
  • Home Suvidha Policy
  • Home Family protector Policy 
  • A comprehensive scope of coverage is offered
  • Range of add-ons are available under the plan

Tips to choose the best home insurance policy

If you want the best home insurance policy for your home, here are some tips to follow – 

  1. Choose the type of policy that you need

    There are different types of home insurance plans and buy the best policy you should first know what type of coverage you would need. If you own your home, a comprehensive policy is the best but if you are a tenant, opt for contents insurance

  2. Compare before buying

    As you can see, a lot of general insurance companies offer home insurance plans. So, before buying, compare. Compare the available plans on their coverage features and premium rates and then choose the best policy

  3. Opt for required add-ons

    Though home insurance plans provide a comprehensive scope of coverage, the coverage can be enhanced with the help of add-ons. The add-ons have been stated earlier and you should find out the add-ons offered by different companies. Once you know the available add-ons, choose the required ones to make your plan all inclusive. For instance, you can opt for loss of rent add-on if you are a landlord and you would lose rent in case of damage to the house. Alternatively, if you are insuring your own home, you can choose the add-on which covers rent for alternate accommodation. So, assess your requirements and choose add-ons for a wider coverage.

  4. Compare the claim settlement ratio of the company

    Though there are different insurers, you should compare the companies on their claim settlement ratios too. The ratio helps you determine the probability of claim settlements. The higher the ratio the higher would be the chances that your claims would be settled. So, choose a company which has a high claim settlement ratio

  5. Look for premium discounts

    Insurers also offer premium discounts which help in bringing down your home insurance premiums. Look for the policy which offers the maximum discounts so that you can lower your premiums as much as possible.

How to make a claim under home insurance?

To make a claim under your home insurance policy, you should take the following steps –

  1. Inform the insurance company immediately after the claim occurs. You should inform the company within 7-15 days of the loss to get the claim registered
  2. A police FIR might be required in some cases. So, file an FIR and keep it handy
  3. The insurance company would arrange for a survey of the loss
  4. Once the survey is done, the claim amount would be estimated
  5. You should, then, submit your documents to the insurance company
  6. The company would verify your documents and settle your home insurance claims

Documents required for a claim

The following documents would be required to make a successful home insurance claim –

  1. Claim form which should be filled in and signed
  2. Copy of the police FIR
  3. Investigation report issued by the police after they have investigated the damage
  4. Fire brigade’s report in case of fire-related claims
  5. Original invoice of contents for replacement
  6. Court summons
  7. Estimates of repair costs
  8. Any other document as requested by the insurance company 

Whether you own a house or you live as a tenant, a home insurance policy can provide you with financial security against losses that you suffer. Having a home insurance plan ensures that you don’t suffer a financial loss if any uncertain event damages your home and/or its contents. It, therefore, saves you lakhs of rupees at very low premiums. So, having a home insurance policy is recommended for your financial protection.

Frequently Asked Questions:

  1. Do home insurance plans pay the full amount of claim?

    No, there is a deductible under most home insurance plans. The policies, therefore, pay claims which exceed the deductible limit. The amount of the deductible is to be borne by you.

  2. What is the coverage duration of home insurance plans?

    Usually, home insurance plans are offered for a period of one year. However, insurance companies now offer coverage tenures ranging from 1 day to up to 5 years.

  3. What types of premium discounts are available under the plan?

    Home insurance plans usually allow premium discounts for buying a comprehensive policy and for opting for long term coverage duration.

  4. What is underinsurance?

    If you cover your home and/or its contents for a value which is lower than their actual value, it is called underinsurance. In the case of underinsurance, claims would be settled on the average clause basis. 

  5. Can any rented property be insured?

    Yes, you can insure a residential property which you have let out for residential purposes.

National Pension Scheme Calculator, Tax Benefits, How to Invest & More

Rupanjali Mitra Basu

Retirement is called the golden phase of your life as you are free from financial responsibilities and you can live out your life doing whatever you want. However, to make your retirement a golden phase you need to prepare for it in advance. When you retire, your income flow stops. However, the expenses continue and so it is essential that you have a retirement corpus at your disposal to meet such expenses. That is why many of you invest in retirement oriented avenues with a view to creating a substantial retirement corpus for your older ages. One such avenue is the National Pension Scheme (NPS) which was launched by the Government to offer investors a tax saving investment avenue. Ever since its launch, NPS has become quite popular. If you too are thinking of putting your money in NPS investment scheme, here’s a complete guide to the scheme and the best way to invest in it.

What is the National Pension Scheme?

National Pension Scheme is a retirement oriented investment scheme launched by the Indian Government. You can invest in the scheme when you are working and have a regular source of investment. Then, when you retire, the scheme would offer you a corpus to meet your retirement-related expenses. The corpus can be availed partly in a lump sum and partly in annuity pay-outs which give you a regular source of income even after retirement.

Types of NPS investments

When you choose to do NPS investment, there would be two accounts to choose from. One is a mandatory account which you have to choose and the other one is optional. You can invest only in the mandatory account or in both. The accounts are as follows –

  1. Tier I Account
    Tier I Account is the compulsory account into which you would have to invest. When you register for NPS investment, the minimum investment into Tier I Account is INR 500. Moreover, in a financial year, you would have to contribute at least INR 1000 in the account. Investments are done in Tier I account are not permitted for partial withdrawals till you reach 60 years of age. However, to allow liquidity in times of need, there are instances in which withdrawals are allowed. Such instances are as follows:

    1. If you remain continuously unemployed for 60 days or above
    2. If you have to bear marriage related expenses
    3. In case of medical emergencies
    4. If you want to buy a house, etc.
  2. Tier II Account
    As mentioned earlier, the Tier II account is a voluntary account which you might or might not choose for NPS investment. This account gives you the flexibility of easy withdrawals any time that you want. However, you can open this account only when you already have a Tier I account in your name. The minimum investment for Tier II Account is INR 250. You can open these investment accounts only once. Multiple accounts are not allowed. Moreover, if the specified minimum investment is not done in any account, the account is frozen. To unfreeze the account you would have to visit a POP and make a contribution towards the scheme along with a penalty of INR 100.

How do NPS investments work?

NPS allows you to earn market-linked returns since the accounts invest your money in securities of the capital market. When you invest, you would be given a choice of two investment options. Each option has a particular investment strategy and you can choose to invest as per either of the available options. The options are as follows –

  1. Active choice
    As the name suggests, Active choice is when you want to manage your investments yourself. There are four types of investment funds to choose from. Each fund has different types of portfolio and risk profile. You can choose to invest in one fund or multiple funds. The available funds include the following –

    1. Asset Class E where 50% of the portfolio consists of stocks
    2. Asset class C where the portfolio has fixed interest instruments. However, these instruments do not include Government securities
    3. Asset class G where the portfolio only contains Government securities
    4. Asset Class A – where the portfolio contains alternate investment funds like REITS, MBS, AIFs, etc.

    You cannot invest 100% of your investment in Asset Class E. The maximum NPS investment into Asset Class E is restricted to 75% while the remaining can be invested in Asset Classes C and G. Asset Class A is optional and if you choose it the investment is limited to 5%. The investment also depends on your age. After reaching 50 years of age the equity exposure reduces by 2.5% every year till it reaches 50% after 10 years. Thereafter, equity exposure in Asset Class E is restricted to 50%. Investments in Asset Class C or Asset Class G, on the other hand, can be done without any limitations.

  2. Auto choice
    If you don’t know how to handle your investments yourself for maximum returns and minimum risk, you can choose Auto Choice. Under this choice, the investments are managed pre-defined manner which has been specified by the PFRDA. Your investment is split into three different asset classes depending on your age and the risk profile that you select. There are three risk profiles which are Aggressive, Moderate and Conservative. Based on the profile that you choose and your age, here’s how your NPS investment is split –

    1. LC75 – Aggressive Life Cycle Fund
      AgeAsset Class EAsset Class CAsset Class G
      Up to 35 years75%10%15%
    2. LC50 – Moderate Life Cycle Fund
      Age Asset Class EAsset Class CAsset Class G
      Up to 35 years50%30%20%
    3. LC25 – Conservative Life Cycle Fund
      Age Asset Class EAsset Class CAsset Class G
      Up to 35 years25%45%30%

    Thereafter, with increasing age, investment in Asset Class E is reduced and investments in the other two classes are increased every year. You can also change your investment strategy from Active Choice to Auto Choice and vice-versa. Changes in Asset Class are also allowed. However, any change that you do is allowed only once a year.

How to invest in NPS?

NPS investment can be done online as well as offline. Let’s understand both the processes in details –

  1. Investing offline
    To invest offline, you would have to locate a Point of Presence (POP). A POP is a financial institution which is registered to open an NPS scheme. Most banks and other non-banking financial institutions have registered themselves as POPs for NPS investments and you can choose to invest through them. Each POP has an authorized branch from where you can invest in the scheme. These branches are called Point of Presence Service Providers or POP-SPs. You can approach any POP-SP, deposit your investment and your NPS investment account would be opened. To find the list of POP-SP you can check the website of the Pension Fund Regulatory and Development Authority (PFRDA) https://www.npscra.nsdl.co.in/pop-sp.php. PFRDA is the body which regulates and governs the NPS scheme
  2. Investing online
    Locating a POP-SP can prove to be time-consuming and so the online mode of NPS investment is also available. To invest online, you can follow the below-mentioned steps –

    1. Log onto the website of the scheme which is: https://enps.nsdl.com/eNPS/NationalPensionSystem.html
    2. On the home page, choose the ‘National Pension Scheme’
    3. You would then be asked to register yourself before you can contribute towards the scheme
    4. To register, provide the details asked in the online registration form. These details include the type of investor, citizenship, bank account through which you want to contribute and your PAN card number
    5. Then you would have to provide your personal and family details like name, age, address, etc.
    6. An acknowledgement number would be generated
    7. You would be able to register yourself and generate your Permanent Retirement Account Number (PRAN) which would be the number of your NPS account
    8. You would have to e-sign the registration form to complete registration
    9. Once you are registered, you can contribute towards the NPS scheme by providing the PRAN number, the account to which the contribution is to be made and the amount that you would like to contribute

Once these steps are taken, you would be able to do NPS investments online.

Documents required to apply for NPS investment

Whether you apply online or offline, the following documents would be required to be submitted to open your NPS account –

  1. The filled Registration Form
  2. Proof of identity
  3. Proof of age
  4. Proof of address
  5. PAN Card
  6. Aadhar Card
  7. Passport-size photographs

Eligibility parameters for NPS investment

To be able to invest in the National Pension Scheme, you should fulfil the following eligibility parameters:

  1. You should be an Indian citizen
  2. If you are an NRI you can also invest in the scheme. However, if your citizenship status changes after you have invested, the scheme would be closed for you
  3. You should be aged between 18 years and 60 years

Benefits of NPS investments

NPS investments are favoured by many because of the benefits that these investments provide. Let’s assess what these benefits are –

  1. NPS investments give you additional tax-saving benefits. 10% of your salary or annual income can be contributed towards the NPS scheme to claim a tax deduction under Section 80CCD (1). You can claim a maximum deduction of up to INR 1.5 lakhs under this Section. Moreover, you can invest an additional amount of up to INR 50,000 to claim an additional deduction under Section 80 CCD (1B). This deduction is available over and above Section 80C and Section 80 CCD (1) limit of INR 1.5 lakhs. If you are a salaried employee and your employer also contributes towards NPS investments, the employer’s contributions would also be allowed as an additional deduction under Section 80 CCD (2) up to 10% of your salary. This tax advantage of NPS investments makes them popular among individuals looking to lower their tax liability.
  2. You can withdraw 60% of your corpus in a lump sum when the scheme matures. This lump sum withdrawal is also tax-free
  3. NPS investment promises you annuity payments which create a series of regular income after you retire
  4. The scheme’s minimum contribution requirement is low and affordable making it suitable for all types of investors
  5. The scheme invests in the market which gives you inflation-adjusted returns to fulfil your financial goals

NPS investments vis-à-vis other investment avenues

NPS is often compared with other popular investment avenues which are available for retirement planning. So, here’s a comparative analysis between NPS investments and other popular avenues –

Points of analysisNational Pension SchemeEquity Linked Saving SchemePublic Provident FundFixed DepositsPension Unit Linked Insurance Plans
Type of investmentMarket linkedMarket linkedNon-market linkedNon-market linkedMarket linked
Risk Low to high depending on the fund selectedHighVery lowVery lowLow to high depending on the fund selected
Returns Moderate to highHighLowLowModerate to high
Tax on investmentsTax-free up to INR 2 lakhs under Sections 80C, 80CCD (1), 80CCD (2) and 80 CCD (1B)Tax-free up to INR 1.5 lakhs under Section 80CTax-free up to INR 1.5 lakhs under Section 80CTax-free up to INR 1.5 lakhs under Section 80C if five years FDs are selectedTax-free up to INR 1.5 lakhs under Section 80C
Tax on returnsThe lump-sum amount is tax-free. Annuities are taxableReturns are taxed at 10% if they exceed INR 1 lakhReturns are tax-freeReturns are taxable. However, for senior citizens, returns up to INR 50,000 are tax-free under Section 80 TTB1/3rd of the fund can be commuted and withdrawn in cash. This is tax-free. Annuities are taxable
Payment of returnsPartly in a lump sum and partly in annuitiesCan be withdrawn in a lump sum or in instalmentsPaid in a lump sumPaid in a lump sum2/3rd of the corpus is payable in annuities
Deposit tenureTill maturity, i.e. up to 60 yearsMinimum of 3 years15 yearsCan range from 7 days to up to 10 years. Tax-free deposits are, however, for 5 yearsCan range from 10 years to up to 30 years or above

So, understand how to invest in NPS and the way the investment works before you invest so that you know exactly what to expect from the scheme.

Claim Settlement Ratios for Top Term Insurance in India

Rupanjali Mitra Basu

A term insurance plan is the simplest form of life insurance. It gives you the promise of payment of a fixed benefit in case of death during the term of the plan. Term insurance provides coverage for premature death of the breadwinner of the family.

When you invest in a term insurance plan, you are secured that if anything happens to you, your family will not suffer financially as the plan would give them a financial corpus to tide over the difficulties. Given the security that term plans give, they are considered to be the most important investment which you can do for your family’s security.

Features of term insurance plans:

Term insurance plans are quite different from other types of life insurance plans. They have some unique features which include the following –

  1. Since term plans are the cheapest, you can choose high levels of coverage without worrying about the premium
  2. There is no limit on the sum assured amount that you can choose.
  3. Term plans offer long coverage durations
  4. There is usually no maturity benefit under term plans
  5. You can opt for different types of term insurance plans as the plans are available in the following variants-
    1. Increasing term insurance – under this variant the sum assured increases every year
    2. Decreasing term insurance – under this variant the sum assured decreases every year
    3. Return of premium plans – under this variant the premiums paid are returned back if the plan matures
    4. Level term insurance – under this variant the sum assured remains the same throughout the policy period
  6. Term insurance plans do not earn a bonus. You get the sum assured only as a death benefit.

Term insurance claim settlement ratio

Before buying a plan you should always check the term insurance claim settlement ratio. The ratio shows the percentage of claims that the insurance company has paid vis-à-vis the total claims which were made upon it. It is calculated as follows –

Claim settlement ratio = Number of claims settled / total number of claims made * 100

The ratio is represented as a percentage and the higher the term insurance claim settlement ratio is, the better would be the plan. This is because a high ratio improves the chances of your term insurance claims being settled. Different insurance companies have different term insurance claim settlement ratios. You should, therefore, compare the ratios when comparing term insurance plans so that you can increase the chances of your claim settlements.

Best term insurance plans in India

There are a number of Term Insurance Plans available in the market and choosing the best plan whose term insurance claim settlement ratio is also high might prove difficult. So, to make your work easier, here is a list of some of the best term insurance plans available in the market which also boast of having a high claim settlement ratio –

  1. LIC’s Jeevan Amar Plan:

    LIC boasts of having the highest claim settlement ratio in the industry and its term insurance plans are among the best. Here are the salient features of Jeevan Amar plan –

    • You can choose either level sum assured or increasing sum assured option under the plan
    • Premiums can be paid at once, for a limited time or regularly
    • You get premium discounts for choosing the high sum assured levels

      Important parameters of LIC’s Jeevan Amar Plan

      Entry age18 to 65 years
      Plan term10 to 40 years
      Sum assuredINR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-1898.04%
  2. Aegon Life iTerm Insurance Plan

    This is an online term plan which is offered by Aegon. The plan has the following salient features –

    • There are three different options for coverage. You can even choose the plan to cover you till 100 years of age
    • Terminal illness benefit is inbuilt in all coverage options
    • There is also an optional rider for better protection

      Important parameters of Aegon Life iTerm Insurance Plan

      Entry age18 to 65 years
      Plan term5 to 82 years
      Sum assuredINR 25 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-1895.67%
  3. HDFC Life Click 2 Protect 3D Plus Plan

    This is quite a comprehensive term insurance plan which has the following salient features –

    • This plan offers you a choice of nine coverage options to choose from
    • Inbuilt riders are available under many coverage options
    • You can choose the premium payment term as per your suitability

      Important parameters of HDFC Life Click 2 Protect 3D Plus Plan

      Entry age18 to 65 years
      Plan term5 years to whole life
      Sum assuredINR 10,000 onwards
      Term insurance claim settlement ratio for Financial Year 2017-1897.80%
  4. TATA AIA Life Sampoorna Raksha Plan

    This plan also offers you flexibility in choosing your coverage. It has the following features –

    • There are four death benefit options from which you can choose
    • You can extend the coverage up to 100 years
    • You get attractive premium discounts which make the premiums more affordable

      Important parameters of TATA AIA Life Sampoorna Raksha Plan

      Entry age18 to 70 years
      Plan term10 years to whole life
      Sum assuredINR 50 lakhs onwards
      Term insurance claim settlement ratio for Financial Year 2017-1898%
  5. ICICI Pru iProtect Smart Plan

    You can buy this plan online and the plan has the below-mentioned features–

    • The premiums are extremely affordable
    • You can enjoy coverage till 99 years of age
    • Optional critical illness rider is available which covers you against 34 major illnesses

      Important parameters of ICICI Pru iProtect Smart Plan

      Entry age18 to 65 years
      Plan term5 years to whole life
      Sum assuredDepends on the minimum premium which is INR 2400
      Term insurance claim settlement ratio for Financial Year 2017-1897.88%

      Here is a complete list of life insurance companies currently operating in India along with their published Claim Settlement Ratios for the financial year 2017-18 –

      Name of the life insurerClaim Settlement Ratio
      Life Insurance Corporation of India98.04%
      HDFC Life Insurance Company Limited97.80%
      Max Life Insurance Company Limited98.26%
      ICICI Prudential Life Insurance Company Limited97.88%
      Kotak Mahindra Life Insurance Company Limited93.72%
      Aditya Birla SunLife Insurance Company Limited96.38%
      TATA AIA Life Insurance Company Limited98%
      SBI Life Insurance Company Limited96.76%
      Exide Life Insurance Company Limited96.81%
      Bajaj Allianz Life Insurance Company Limited92.04%
      PNB MetLife India Insurance Company Limited91.12%
      Reliance Nippon Life Insurance Company Limited95.17%
      Aviva Life Insurance Company Limited94.45%
      Sahara India Life Insurance Company Limited82.74%
      Shriram Life Insurance Company Limited80.23%
      Bharti AXA Life Insurance Company Limited96.85%
      Future Generali India Life Insurance Company Limited93.11%
      IDBI Federal Life Insurance Company Limited91.99%
      Canara HSBC OBC Life Insurance Company Limited95.22%
      Aegon Life Insurance Company Limited95.67%
      DHFL Pramerica Life Insurance Company Limited96.62%
      Star Union Dai-ichi Life Insurance Company Limited92.26%
      IndiaFirst Life Insurance Company Limited89.83%
      Edelweiss Tokio Life Insurance Company Limited95.25%

    (Source: https://www.basunivesh.com/2019/01/18/latest-irda-claim-settlement-ratio-2017-18/)

    You can choose any of the above-mentioned term insurance plans and you would be assured of high claim settlement ratios. While the plan would give you a comprehensive scope of coverage, the high term plan claim settlement ratio would ensure that the claims are settled easily. So, invest in the best term insurance plan and gift financial security to your family.

Frequently Asked Questions:

  1. Is there any benefit that I can get if I surrender my policy?

    No, there is no surrender benefit under term insurance plans.

  1. How can I buy the best term insurance plan?

    To buy the best term insurance plan, you can visit www.turtlemint.com. Turtlemint is an online platform which is tied up with all the leading life insurance companies. You can visit Turtlemint to compare and find the best term insurance plan for your coverage needs which also has a high claim settlement ratio. To buy a term plan through Turtlemint, follow these steps –

    • Visit the website and choose ‘Life’
    • Then choose ‘Term Life Plans’
    • You would then have to provide your details like your gender, marital status, birth date, annual income, smoking preference, the sum assured that you want and your contact details
    • You would then be shown a list of the best term plans
    • You can compare the plans and buy the best one.
  1. What type of premium discounts are allowed under term insurance plans?

    Term plans offer premium discounts if you don’t smoke and if you choose a high sum assured level. Some plans also allow a discount for paying the premiums annually.

Best Immediate Annuity Plans – Everything You Need To Know

Rupanjali Mitra Basu

Retirement is that period of your life when your regular income stops. However, your lifestyle and medical expenses continue irrespective of your income. In this situation you need to arrange for a source of income to fund your lifestyle expenses. This is where retirement oriented life insurance plans come into the picture. These plans are called pension or annuity plans and an immediate annuity plan helps you substitute your income even in your retired years. Do you know who? Let’s explore –

What is an immediate annuity policy?

Immediate annuity is a type of life insurance pension plan. Under this plan, you are promised a series of annuity payments for as long as you live. Moreover, there are joint life immediate annuity plans as well which promise annuity payments for the lifetime of your spouse as well.

Features of immediate annuity plans

Immediate annuity plans have the following salient features –

  1. Single premium is payable under the policy which is called the purchase price
  2. You can choose the annuity payment frequency which can be monthly, half-yearly, quarterly or annually
  3. The person on whose life the annuity is paid is called the annuitant
  4. There are different annuity payment options and you can choose any option
  5. Annuity can be chosen to be received on a single life or joint life. In case of joint life annuities, the spouse can be covered. The policyholder would be called the primary annuitant and the spouse would be the secondary annuitant
  6. The annuity stops on death of the annuitant

Annuity payment options

As stated earlier, there are a lot of annuity payment options under an immediate annuity plan. These options include the following –

Annuity optionMeaning
Annuity for lifeAnnuity is paid till the lifetime of the annuitant
Annuity certainAnnuity is paid for a certain guaranteed period which can be 5, 10, 15 or 20 years whether the annuitant survives this period or not. If, however, the annuitant survives the guaranteed period, annuity is then paid for his/her lifetime
Annuity for life and return of purchase priceAnnuity is paid till the lifetime of the annuitant. When the annuitant dies, the purchase price is refunded back to the nominee
Joint life annuityAnnuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant
Joint life annuity with return of purchase priceAnnuity is paid till the lifetime of the primary annuitant. On death of the primary annuitant, if the secondary annuitant is alive, the annuity is paid till the lifetime of the secondary annuitant. The rate of annuity payable to the secondary annuitant can be 50% or 100% of the annuity paid to the primary annuitant. When the secondary annuitant also dies, the purchase price is refunded back to the nominee
Increasing annuityAnnuity is paid till the lifetime of the annuitant. This annuity increases every year at simple or compound rate of interest. The rate of interest depends on the plan and ranges between 3% to 10%

How does immediate annuity plan work?

When you buy an immediate annuity policy, here’s how the plan would work –

  1. You buy the policy by paying a lump sum amount premium at once.
  2. You have to choose the annuity payment option that you like. There are different annuity payment options and you can choose any one as per your requirement
  3. You also have to choose the annuity payment frequency.
  4. Once you have bought the policy and chosen the annuity payment option and frequency, you would start receiving annuity pay-outs immediately from the next frequency. For instance, if you buy the policy on 1st January and choose monthly payment frequency, annuity payments would commence from 1st February
  5. The amount of the annuity is fixed and is specified beforehand
  6. The annuity payment would continue for as long as you are alive. In case of joint life annuities, annuity payments continue till the lifetime of the last survivor
  7. On death, the payments would stop and the policy would be terminated. The availability of death benefit would depend on the annuity payment option that you have selected

Benefits of immediate annuity policies

By buying immediate annuity plans, you get the following benefits –

  • You get a regular stream of income which are guaranteed throughout your lifetime
  • You can ensure financial security for your spouse by choosing joint life annuity wherein your spouse would get annuity if you predeceased him/her
  • If you choose the annuity option which returns the purchase price, you can leave behind a legacy for your family after your demise
  • Immediate annuity plan ensures that you remain financially independent even after you retire

Drawbacks of immediate annuity policies

Though immediate annuity insurance promises the above-mentioned benefits, there are one or two drawbacks which you cannot overlook. These include the following –

  1. If you choose an annuity for life and then you die after a few years, the insurance company would be left with a large part of your retirement corpus which would be retained by them
  2. Once started, you cannot cancel the annuity payments. This might prove to be a problem if you invest all your retirement funds in an immediate annuity plan and then face a financial contingency which requires funds

Barring these drawbacks, immediate annuity plans provide a lot of benefits and should be chosen if you need regular income after you retire.

Tax implication of immediate annuity plans

Annuity plans have different tax implications compared to other life insurance plans. These implications are as follows –

  • Tax implication of the premium paidThe premium paid for the plan is allowed as a deduction under Section 80CCC. The maximum limit of deduction is INR 1.5 lakhs which also includes deductions under Section 80C.
  • Tax implication on annuity receivedAnnuity payments qualify as income in your hands. They are added to your total income and are taxed at your relevant tax slab rates.

Companies offering immediate annuity plans

Though immediate annuity policies are offered by almost all life insurance companies, here are the best plans for you to buy –

  1. LIC’s Jeevan Shanti PlanThis plan combines immediate and deferred annuity benefits and has the following features:
    1. You can choose to receive annuities immediately or after a specified period
    2. There are nine annuity options offered by the plan
    3. If you choose the deferred annuity option, you get guaranteed additions added to your corpus during the deferment period
    4. You can take a joint life annuity with spouse, siblings, grandparents, grandchildren, parents or children

    Plan parameters

    Entry age30-85 years
    Purchase priceMinimum – INR 1.5 lakhs
    Maximum – No limit
    Annual annuity rateMinimum – INR 12,000
    Maximum – no limit. Depends on the purchase price paid
  1. ICICI Pru Immediate Annuity PlanThis plan is also quite popular which has the following salient features:
    1. There are 12 annuity options offered by the plan
    2. You can choose to get a refund of the purchase price on death, critical illness or accidental permanent disability
    3. You can choose deferred annuity payments and receive annuities from a later date
    4. National Pension Scheme subscribers can claim a discount of 0.5% on the purchase price
    5. You are promised higher annuity rates if you choose to defer your annuity incomes or if you pay higher levels of purchase price
    6. You can top-up your annuity amount by paying an additional purchase price

    Plan parameters

    Entry age30 years onwards
    Purchase priceDepends on the annuity income that you want to receive and the entry age
    Annual annuity rateMinimum – INR 12,000
    Maximum – no limit. Depends on the purchase price paid
  1. HDFC Life New Immediate Annuity PlanHDFC is a leading name in the life insurance industry and its immediate annuity plan also comes with all the benefits. The features of the plan are as follows:
    1. 11 annuity pay-out options are available under the plan
    2. The annuity rates are higher if you pay a higher purchase price

    Plan parameters

    Entry age20-80 years
    Purchase priceDepends on the annuity income that you want to receive and the entry age
    Annual annuity rateMinimum – INR 10,000
    Maximum – no limit. Depends on the purchase price paid

Buying immediate annuity policies:

You can buy immediate annuity plans online through Turtlemint. Turtlemint gives you the following advantages of buying an immediate annuity plan from its platform –

  • A choice of the best immediate annuity plans available in the market
  • The facility to compare and buy the best plan which offers the highest rate of annuity
  • Complete guidance in buying the policy by solving all your product related queries
  • Dedicated claim assistance department which helps you in getting your claims settled easily and conveniently

To enjoy these benefits and to buy immediate annuity coverage from Turtlemint, here are the steps which you should take –

  • Visit Turtlemint’s life insurance page at https://turtlemint-stage.dreamhosters.com/life-insurance
  • Choose the coverage need ‘Pension/Retirement’
  • Fill in your personal profile wherein the following details would be required –
    • Your gender
    • Date of birth
    • Annual income level
    • Smoking preference
    • Retirement age
    • Preferred investment tenure
    • Mode of investment and amount of investment
    • Your name, phone number and email ID
  • In the next page you would be able to see handpicked plans as per your coverage requirements
  • You can select the most suitable policy and buy it by paying the premiums online

When you buy an immediate annuity plan, you would have to submit the following documents –

  • Your photographs
  • Age proof
  • Identity proof
  • Address proof
  • Any other documents as required by the insurance company

Once the required documents are submitted, the insurance company verifies your proposal and issues you the policy.

Immediate annuity plans are the best way to substitute your income after you retire. These incomes would continue till you live. You can also ensure annuity incomes for your spouse in your absence creating financial security for your family. So, if you are nearing retirement and you have a retirement corpus in your hands, invest in an immediate annuity plan and get assured income even without having to work.

Frequently Asked Questions

  1. What is the meaning of vesting age?Vesting age is the age from which you start receiving annuity payments.
  1. Do immediate annuity plans offer any discounts?No, there are no discounts under immediate annuity plans. However, many immediate annuity plans offer higher annuity rates if the purchase price is high.
  1. What would happen if the secondary annuitant dies before the primary annuitant?If the secondary annuitant dies before the primary annuitant, the annuity payments would stop after the death of the primary annuitant.
  1. On what factors do annuity rates depend?Annuity rates depend on the following factors –
    • Vesting age of the annuitant – annuity rates are higher at higher ages
    • Type of annuity payment option selected – rates are lower under joint life annuities than under single life annuities
    • Amount of purchase price – higher the purchase price higher would be the annuity rate
    • Annuity payment frequency – the lower the payment frequency the higher would be the annuity rate
  1. Can I change the annuity payment frequency after buying the immediate annuity policy?No, once the policy is bought, the annuity payment frequency cannot be changed.

How to Transfer Ownership and Bike Insurance

Rupanjali Mitra Basu

My friend Raj wanted to sell off his existing bike to buy the new trendy model which everyone was talking about. He was a bike enthusiast and his promotion gave him the excuse to splurge on a new bike. Thanks to the online platform, he also found many interested buyers for his bike but what he was clueless about was how to transfer his bike’s ownership and what to do with the existing insurance policy.

Raj’s problem is not uncommon. Most of you who are looking to sell your bike second-hand don’t know how to transfer the ownership of the vehicle. Moreover, when it comes to the attached insurance policy, the confusion increases further. After all, transferring ownership and insurance are both legal steps which require you to follow specified procedures. Considering the procedures to be difficult most of you are ignorant about the process of transfer of ownership and bike insurance policy. So, let’s un complicate things for you –

Selling your bike second hand requires you to deal with two main aspects –

  1. Transferring ownership
  2. Transferring insurance

Both these aspects have a well-defined procedure. Let’s understand what the procedures state –

Process of transferring ownership of the bike

  • You should first approach the RTO of the state in which your bike is registered. You are required to inform the RTO regarding the sale of your bike and the transfer of ownership. If you do not know your nearest RTO office, you may find the same by clicking on this link.
  • To inform the RTO, you are required to submit some forms and documents. These include the following –
    • Completed Form 28 which is for transfer of ownership
    • Completed Form 29 which is a No Objection Certificate. The form should be filled and it should contain your (the seller’s) signature
    • Completed Form 30 which is an application for intimation of transfer or report of transfer. This form should be filled and signed by both you (the seller) and the buyer of the bike. Moreover, you also have to attach a print of the chassis of your bike
    • Registration Certificate
    • Tax certificate
    • PUC Certificate
    • Copy of the bike’s insurance policy
    • Your address proof
    • Passport sized photographs
    • If the bike is registered at another state’s RTO and the sale is happening in another state, a NOC from the registered RTO would also be required
    • If the bike is on loan, NOC from the lender would also be required
  • If the actual owner of the bike dies and then the bike is being sold or acquired by anyone else, additional documents would be required. They would include the death certificate of the owner, Form 31, succession certificate and an affidavit from the successor.
  • A registration fee would also have to be paid when transferring ownership. The fee should be paid along with the submission of all relevant documents.

Once you follow these steps, the process of transfer of ownership would start and your bike would be legally transferred in the buyer’s name. The transfer process should start within 14 days from the date of sale of the bike. However, if the buyer resides in another state, the transfer should commence within 45 days of the sale of the bike.

Process of transfer of bike insurance policy

Once you are done with the transfer of ownership, you are required to transfer the insurance policy. In fact, it is the duty of the buyer of the bike to get the insurance policy transferred in his name within 14 days of buying the bike. If not, any claim made would not be paid. You should also help the buyer with the transfer process as you would be legally held liable for any claim faced by the buyer till the policy is transferred.

Bike insurance in India can be either third-party insurance or comprehensive insurance policy. These help you stay protected against any damages in case of an accident.

Browse comprehensive bike insurance plans in detail by clicking the following button.

Transferring insurance is quite a simple process actually. To do so all you have to do is follow the below-mentioned steps –

  • Inform the insurance company about the sale of your bike
  • Some documents need to be submitted to the insurer to transfer the insurance cover in the name of the buyer. These documents would be the following –
    • The new RC book of the bike containing the name of the buyer. If the new RC book is not yet available, the proof of transfer of ownership can be submitted for the time being. Later, when the RC book is available, it should be submitted to the company
    • Original policy bond
    • Address proof of the buyer
    • Passport sized photographs of the buyer
  • Once the documents and request for transfer is submitted, the insurance company would begin the transfer process
  • The bike might be inspected in some cases
  • A fee would also be required to be paid for transferring the policy
  • You should avail the no claim bonus certificate from the insurance company so that the accumulated bonus of the policy can be retained in your name
  • If the documents are in order and the transfer fee is paid, the insurance policy would be transferred in the name of the buyer

The whole process of insurance transfer should also be done within 14 days of selling the bike. The third-party cover would automatically operate in the name of the buyer from the date of sale for up to 14 days. It is assumed that during this process the transfer process would be completed. However, once 14 days are over and the policy has not been transferred, the third-party cover would also cease.

As stated earlier, though transferring the policy is the burden of the buyer, you, as a seller should be involved in the process. Here are the reasons why –

  • Retention of No Claim Bonus – any bonus you earn because of not making any claim in the previous policy years entitles you to a discount. It was your safe driving which caused no accidents and, thus, incurred no claims. Therefore, you are entitled to enjoy the benefits of the No Claim Bonus earned on your policy, especially when it allows premium discounts. If you do not transfer the policy, you cannot avail the No Claim Bonus Certificate and you lose the discounts earned by you. Would you want that?
  • Freedom from future liabilities – suppose the new buyer of your bike causes damage to any person or property while driving the bike. If a third party claim is raised on your policy and you are named as the policyholder, you would be legally liable. Though your insurance policy would pay off the financial claims, you would have to ensure such claim settlement. Transferring the policy, therefore, frees you from future liabilities.

Transferring the ownership and insurance policy of your bike is essential when you are selling it off to another person. It is legally required and is also beneficial. My friend Raj didn’t know about it and so he was given the complete lowdown on the transfer process. You have been informed too. So, the next time you sell your bike, remember what you have to do.

If you’re transferring your bike insurance in order to buy a new bike, we suggest you click on the button below to browse through the variety of attractive insurance plans for new bikes available at our portal.

Simply enter a few details and compare the most relevant plans as per your needs at the most competitive premiums and attractive insurance declared values!

Read more RTO forms for availing a driving license

Read more Everything you need to know about two wheeler policy in India

Read more Top 5 ways to get discount on two-wheeler insurance

National Pension Scheme (NPS): Benefits, Types, Premium & More!

Rupanjali Mitra Basu

The Government of India introduced the National Pension Scheme (NPS) in the year 2004 solely for Central Government employees so that they can contribute towards a retirement corpus. However, in the year 2009, the scheme was made public for all individuals. Moreover, the Government also introduced an additional tax deduction of up to INR 50,000 if you invest in the National Pension Scheme. This further popularized the concept of NPS and made investors invest in the scheme.

What is NPS?

NPS is a retirement oriented investment scheme which promises you pensions and lump sum benefits on maturity. The scheme is a market-linked scheme where your investments grow as per the market performance so that you get inflation-adjusted returns when you retire.

Who can invest in NPS?

Both Indian residents and NRIs can invest in the National Pension Scheme if they are aged between 18 and 60 years. In case of NRIs, though, the investment would be terminated if the citizenship changes after opening the NPS account.

Investment into the National Pension Scheme

When you choose to invest in the National Pension Scheme, there are two investment accounts which are available. These are as follows –

  1. Tier I Account
    Tier I Account is the mandatory account into which you have to invest if you want to invest in NPS. The minimum investment required for Tier I Account is INR 500. This means that you can invest in the NPS scheme with as little as INR 500. Moreover, over a financial year, you have to invest a minimum of INR 1000 into Tier I account to keep it active. If the minimum investment is not done, the account would freeze and you would face a penalty to unfreeze it.Tier I Account does not allow withdrawals till the scheme matures. It, therefore, helps your investments to grow. However, in certain situations which are mentioned below, withdrawals are allowed. The situations include the following –
    a. Unemployment for 60 or more continuous days
    b. Paying the expenses of a wedding
    c. Paying for medical emergencies
    d. To buy a home, etc.
  2. Tier II Account
    Tier II Account is not mandatory. You can make investments in this account or only if the Tier I Account investment has been done. The minimum investment for Tier II Account is INR 250. Tier II Account is quite flexible. You can make investments anytime and even withdraw anytime. Withdrawals are permitted from Tier II Account freely.

National Pension Scheme Investment Funds

Now that you know the accounts under NPS, let’s understand the returns that the scheme promises. As stated earlier, the National Pension Scheme invests in market-linked funds. There are four investment funds to choose from. They are as follows –

  1. Asset Class A – This fund invests its portfolio in alternate investment funds which include REITS, MBS and AIFs among others. This is an optional investment fund. If you choose to invest in this fund, the maximum investment would be limited to 5% of your total investment.
  2. Asset Class C – This fund invests its portfolio in securities which promise a fixed rate of interest. However, the securities do not include Government securities. Since the underlying assets of the portfolio have guaranteed returns, the risk in Asset Class C is very low and the returns are stable. You can invest 100% of your investments in this fund without any restrictions.
  3. Asset Class E – Under Asset Class E, at least 50% of the portfolio is invested in equity-oriented stocks. The portfolio, therefore, depends on the performance of the stock market. Since the market is volatile in nature, the risk is high. The returns, on the other hand, are attractive since equity promises good returns. When investing in the National Pension Scheme, however, you cannot invest 100% of your money in this volatile fund. The investment would be restricted to 75% and the remainder should be invested in either Asset Class C or G or in a combination of both. Moreover, as you age, your equity investment would reduce to reduce the volatility that your investments would be exposed to.
  4. Asset Class G – Under this fund, the portfolio consists of only Government securities. These securities are highly secured and offer a fixed rate of return. The fund, therefore, has negligible risks and the returns are moderate and stable. 100% of your investment can be invested in this fund without restrictions.To invest, you can choose either one of Asset Class C or G or a combination of multiple funds. You can also switch between the funds when you want to change your investment preference. There are two investment strategies too to invest your money. These strategies are as follows –

NPS investment strategies:

  1. Active Choice

    If you choose Active Choice, you can invest in the above-mentioned funds as per your discretion. However, the minimum and maximum investment limit would have to be followed.

  2. Auto Choice

    Under this strategy, your investments are managed automatically depending on your risk profile. There are three risk profiles to choose from and the profile you choose would determine your asset allocation. The profiles and their asset allocations are as follows –

    3. Risk profilesAllocation in Asset Class EAllocation in Asset Class CAllocation in Asset Class G
    Aggressive75%10%15%
    Moderate50%30%20%
    Conservative25%35%40%

Thereafter, as you age, the equity exposure from Asset Class E is reduced and redistributed towards the other two Asset Classes.

Switching is also allowed between these two strategies. You can choose the Auto Choice strategy and then switch to Active Choice or vice-versa.

Historic National Pension Scheme Returns

National Pension Scheme returns are not promised as they depend on the performance of the securities into which the scheme has invested in. However, the historic National Pension Scheme returns can be assessed to check how the scheme has performed ever since its inception. So, let’s have a look into the National Pension Scheme return for different types of Asset Classes available under the scheme –

National Pension Scheme returns under Tier I Account as on 31st September 2019

  1. Asset Class A:
    Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return2.31%1.66%1.53%2.53%3.11%1.70%1.59%
    6-month return3.96%2.99%3.33%4.63%8.06%4.07%3.34%
    1-year return11.48%10.41%7.26%13.32%16.19%12.74%7.32%
    Return since inception8.15%7.78%6.98%7.99%7.69%8.40%7.09%
  1. Asset Class E:
    Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return-2.70%-3.30%-1.68%-2.53%-0.93%-1.12%-0.36%
    1-year return3.94%2.26%4.44%4.21%7.19%6.67%4.80%
    3 years return9.16%7.73%9.44%9.26%9.79%10.97%NA
    5 years return8.18%6.83%8.51%8%8.50%9.11%NA
    Return since inception9.31%10.79%10.98%10.98%10.27%13.89%8.73%
  1. Asset Class C:
    2. Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return3.29%2.90%1.79%3.02%1.77%3.25%3.34%
    1-year return14.39%14.51%12.63%14.43%12.95%14.92%15%
    3 years return8.01%7.56%7.18%8.19%7.29%8.10%NA
    5 years return9.99%9.84%9.39%10.38%9.69%10.13%NA
    Return since inception10.57%10.21%9.29%10.58%10.29%10.42%9.88%
  1. Asset Class G:
    2. Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return2.01%1.68%2.33%1.69%1.98%1.78%1.90%
    1-year return18.42%21.02%18.21%18.08%18.97%18.48%18.26%
    3 years return7.87%9.46%7.39%7.63%7.69%7.67%NA
    5 years return10.90%11.69%10.38%10.71%10.78%10.65%NA
    Return since inception9.93%11.69%8.83%9.13%9.08%10.34%9.07%

National Pension Scheme returns under Tier II Account as on 31st September 2019:

  1. Asset Class E
    2. Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return-2.62%-2.90%-1.75%-2.49%-1.04%-1.13%-0.16%
    1-year return3.93%2.81%4.37%4.33%7.15%6.81%4.51%
    3 years return7.46%5.39%7.98%7.78%7.20%8.36%NA
    5 years return8.19%6.64%8.63%8.04%8.52%9.28%NA
    Return since inception8.99%7.74%9.32%9.02%9.55%11.24%8.47%
  1. Asset Class C
    2. Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return2.59%2.54%2.10%2.96%2.78%3.32%3.13%
    1-year return13.39%14.11%12.80%14.08%13.77%14.61%13.78%
    3 years return7.68%7.17%7.34%8.04%7.61%8.13%NA
    5 years return9.77%9.22%9.44%10.22%9.68%9.39%NA
    Return since inception10.13%9.02%9.40%10.41%9.34%9.37%8.35%
  1. Asset Class G
    Returns Name of the Pension Fund Manager
    SBIPF*LICPF**UTIRSL**ICICI PF***KOTAK PF ^HDFC PF ^^BIRLA PF^^^
    3-month return2.30%2.38%2.05%1.68%2.02%2.06%2%
    1-year return18.12%22.75%18.37%17.76%17.67%18.70%18.46%
    3 years return7.78%10.07%7.52%7.54%7.49%7.70%NA
    5 years return10.82%11.89%10.51%10.66%10.56%10.59%NA
    Return since inception10.02%12.15%9.65%9.23%8.84%10.75%7.52%

SBIPF* is SBI Pension Fund Private Limited

LICPF** is LIC Pension Fund Limited

UTIRSL** is UTI Retirement Solutions Limited

ICICIPF*** is ICICI Pension Fund Management Company

KOTAK PF ^ is Kotak Pension Fund Limited

HDFC PF ^^ is HDFC Pension Fund

BIRLA PF^^^ is Birla Sun Life Pension Fund

The National Pension Scheme returns are quite good and attractive even for low-risk asset classes like C and G. You can, therefore, invest in the National Pension Scheme to earn good returns on your investments and create a substantial retirement corpus for your golden years. Remember, the earlier you start investing the more the returns that you can get. So, start investing today and secure your retired life financially.

Frequently Asked Questions:

  1. Who manages the portfolio of NPS?

    NPS investments are managed by authorized pension fund managers. Currently, there are seven pension fund managers which are as follows –

    • Birla Pension Fund
    • LIC Pension Fund
    • SBI Pension Fund
    • ICICI Prudential Pension Fund
    • Kotak Mahindra Pension Fund
    • UTI Retirement Solutions Pension Fund
    • HDFC Pension Management Company
  1. When does the National Pension Scheme mature?

    The National Pension Scheme matures when you reach 60 years of age. You also have the option to defer the maturity age by another 10 years and collect the maturity proceeds when you attain 70 years of age.

  1. What happens on the maturity of the scheme?

    When the National Pension Scheme matures, you have the option of withdrawing 60% of the accumulated corpus in a lump sum. This withdrawn amount would also be tax-free in your hands and can be used for any type of financial requirement that you have. The remaining 40% of the corpus would then be utilised to pay you annuities. There are nine annuity payment options under the National Pension Scheme and you can choose to receive annuities under any option that you like.

  1. Can National Pension Scheme returns be negative?

    Yes, if you invest in Asset Class E which invests in equity-oriented stocks and if the market is falling, the returns can be negative. Positive returns are only promised by Asset Class C and G which invest in fixed income securities which do not depend on the volatility of the capital market.

All You Need to Know About Travel Insurance

Rupanjali Mitra Basu

Going on a trip is a joyous experience for all. You get to take a break from your routine life and relax. You also get to bond with your loved ones as you spend some quality time with them. Moreover, the thrill of exploring new places is also exhilarating. That is why everyone loves to travel and a vacation is planned with great excitement and enthusiasm. But what if your perfectly planned trip goes awry.

Uncertainties cannot be predicted. What you believe to be a relaxing holiday can become stressed when any unforeseen emergency strikes you. When that happens, you not only get mental stress but financial stress too. When you are travelling to an unknown place and if you face unexpected contingencies, finding help in an unknown land might prove difficult. Moreover, it would also incur additional financial expenses which might overshoot your travel budget and cause a financial strain. Would you be able to handle the strain yourself? What about emergency medical hospitalisation abroad? Would you be able to meet the expensive costs from your own pockets?

Travelling is fraught with risks and that is why a travel insurance plan is recommended to cover your trips. Though the plan is essential to cover your trips, many of you don’t understand the concept of travel insurance and that is why you don’t invest in the plan. So, let’s understand what travel insurance is all about and why it is essential.

History of PLI India Post

The concept of Postal Life Insurance was first floated in the year 1884 when the Secretary of State to Her Majesty approved life insurance schemes for the employees of the post office. In the year 1888, the scheme expanded its scope and covered the employees of the Telegraph department as well. Later on, in the year 1894, female employees in the Postal and Telegraph departments were also covered under PLI which was a first in the history of insurance.

PLI India Post is the oldest life insurance company in India. Initially, the plans offered under Postal Life Insurance provided coverage of up to INR 4000 only. However, in recent times, the limit has increased. Nowadays, you can enjoy coverage of up to INR 50 lakhs in aggregate under different types of post insurance schemes.

What is travel insurance?

A travel insurance policy is one which covers the financial losses that you might suffer when you are travelling. Travel insurance plans cover you for the duration of your trip and help you meet with financial emergencies that you might face on such a trip.

Features of travel insurance

Here are some notable features which you can find in travel insurance policies –

  1. There are different types of travel insurance plans available in the market. Each type of plan caters to a particular type of trip that you are undertaking
  2. The sum insured is expressed in US Dollars and ranges from $25,000 to $500,000
  3. The coverage duration is the duration of your trip
  4. If you are travelling to Schengen countries, buying travel insurance would be a must
  5. The premiums for travel insurance policies are very low

Types of travel insurance plans in India

In India, you can find the following types of travel insurance policies for your travels –

  1. International travel insurance plans

    These plans cover trips taken abroad. International travel insurance plans can also be further sub-divided into countries that they cover. There are plans which cover all countries except the USA and Canada and then there are those which cover all countries including USA and Canada. You can also find a specific plan for Asia, Japan and Schengen countries.

  1. Domestic travel insurance plans

    Contrary to international travel insurance plans, domestic travel insurance plans cover trips taken within India itself. You can travel anywhere in India and buy a domestic travel insurance plan for covering your travel risks.

  1. Student travel insurance plans

    Student travel insurance plans are those which cover students who are travelling abroad for higher education. These plans have some specific coverage benefits for such travelling students.

  1. Senior citizen travel insurance plans

    As the name suggests, senior citizen travel insurance plans are meant to cover senior citizens (individuals aged 60 years and above) when they are going on a trip.

  1. Single trip travel insurance plans

    Single trip travel insurance plans cover one trip for a specified number of days.

  1. Annual multi trip travel insurance plans

    Annual multi-trip plans are those travel insurance plans which cover multiple trips taken within a year. If you are a frequent traveller, buying single trip travel insurance plans might prove expensive and inconvenient. In such cases you can invest in an annual multi trip travel insurance plan which would cover all the trips that you take within a year.

  1. Individual travel insurance plans

    Individual travel plans cover a single individual and/or his family members travelling with him/her on a trip.

  1. Group travel insurance plans

    Group travel insurance plans are those which cover a group of individuals under a single plan. A group travel insurance plan can be taken by companies whose employees frequently travel for business. Similarly, a tour operator can also buy a group travel insurance plan for a group of people travelling on a package trip.

What is covered under travel insurance?

There are different travel insurance plans available in the market and each plan has a different set of coverage benefits. However, all travel insurance plans have some common coverage benefits which are also called standard coverage benefits. These benefits include the following –

Coverage benefitMeaning
Emergency medical expensesIf you are injured or if you fall sick when you are travelling and you are hospitalised, the travel insurance plan would cover the costs of such hospitalisation and pay your medical bills
Repatriation of mortal remainsThis covers the cost of sending the remains of a dead body if the insured dies while on the trip
Loss of baggageIf your checked in baggage is misplaced by the airline and it is lost, the policy would cover the financial loss that you would suffer
Delay of checked-in baggageIf there is a delay in receiving your checked-in baggage, the travel insurance policy would pay you a claim so that you can buy items of personal use which your bag contained
Third party legal liabilityIf, while on the trip, you damage someone’s property or hurt an individual physically, you might have to pay a financial compensation for the damages that you have caused. This compensation is also paid by the travel insurance policy
Loss of passportIf you lose your passport on the trip, the policy pays you the cost of arranging a duplicate one
Hijack distress allowanceIn case of a hijack, the policy pays a benefit for the distress that you suffer
Trip cancellationIf your trip is cancelled due to unavoidable reasons, the costs incurred in pre booking hotels and travel tickets are reimbursed
Accidental death or disabilityIf you suffer accidental death or disability when travelling by air or when you are on the trip, the policy pays a lump sum benefit

Other coverage benefits

Travel insurance plans provide a comprehensive scope of cover which ensures that most of your financial losses are covered. That is why, besides the above-mentioned standard coverage benefits, you would find some of the below-mentioned benefits too under many travel insurance plans –

  1. Trip curtailment

    While trip cancellation covers the cancellation of your trip before it begins, trip curtailment covers cutting short an ongoing trip due to unavoidable emergencies.

  1. Hospital cash allowance

    Under this cover a daily allowance is paid if you are hospitalised during your trip. This benefit is paid along with the medical insurance coverage that you get for your hospital bills.

  1. Missed flight connection

    If you are taking connecting flights and if you miss such flights due to unavoidable reasons, coverage is allowed for the loss that you incur.

  1. Compassionate visit

    Under this benefit, the return ticket for a family member is arranged if you are hospitalised on your trip and your family member wants to visit and check on you.

  1. Emergency cash advance

    If you lose your wallet and or money while travelling due to theft or robbery, this cover provides cash advance to you so that you can meet your travel related expenses.

Unique coverage benefits under student travel insurance plans

Student travel insurance plans allow all the standard coverage benefits along with some of the above-mentioned coverage benefits to students travelling abroad. Moreover, these plans have some unique coverage features which are especially designed for students. These coverage benefits include the following.

  1. Bail bond

    If the student gets arrested in an international country, the travel insurance policy would cover the cost of posting a bail.

  1. Study interruption

    If the student’s study is interrupted due to illness or injury which takes time to recover, the travel insurance plan would cover the tuition fee incurred during the interrupted period.

  1. Sponsor protection

    If the sponsor of the student, who finances the student’s international education, dies or becomes disabled, this benefit covers the student’s cost of tuition and pays the tuition fee In place of the sponsor.

Exclusions under travel insurance plans

While the above-mentioned coverage benefits make travel insurance plans quite comprehensive in their scope of coverage, the plans also have a set of exclusions which are not covered. If you make a claim which is because of the exclusion, the claim would be rejected. Commonly found exclusions in travel insurance plans are as follows –

  1. Pre-existing conditions and medical complications faced due to them
  2. When you travel against the advice of a medical practitioner
  3. If you are travelling solely for the purpose of receiving medical treatments abroad
  4. If you suffer any accident, injury or illness due to the use of alcohol and/or narcotics
  5. If you suffer any accident or injury when participating in adventure sports and other hazardous activities
  6. Claims due to war, nuclear contamination, radiation, mutiny, etc.
  7. Medical expenses incurred on pregnancy and childbirth
  8. Medical expenses incurred due to HIV/AIDS or any other sexual diseases
  9. Attempted suicide, self-inflicted injuries or deliberate accidents
  10. Any type of cosmetic treatments would not be covered
  11. Non-allopathic alternative forms of treatment are not covered under travel insurance plans
  12. Consequential losses are not covered
  13. If you lose your passport because you left it unattended, such a loss would not be covered under travel insurance plans

Optional coverage benefits under travel insurance

Optional coverage benefits are those which are not inbuilt in the coverage of the plan but can be taken by paying additional premiums. Travel insurance plans also offer different types of optional covers some of which are as follows –

  1. Home burglary insurance

    If your home is burgled while you are away on a trip, the benefit covers the loss that you suffer.

  1. Coverage for pre-existing conditions

    While pre-existing conditions are excluded from coverage, many travel insurance plans allow coverage for such conditions on the payment of additional premiums.

  1. Coverage for adventure sports

    If you are taking a vacation and plan to engage in adventure sports, you can inform the insurance company of your intentions. Many companies, then, allow coverage for injuries suffered when engaging in adventure sports if you pay additional premiums.

  1. Trip extension

    If you have to extend your trip due to unavoidable reasons, this benefit would cover the costs incurred on such extensions.

  1. Enhanced cover for accidental death and disablement

    If you choose this optional cover, the coverage benefit payable under accidental death and/or disablement would be enhanced.

Why travel insurance is a must?

It is always recommended that you insure your trips under a travel insurance plan. The reason is the assistance which travel insurance plans provide. Here are some benefits which you can get from travel insurance plans which make the plans a must buy –

  1. Coverage for medical costs

    Medical costs are pretty expensive and when you are travelling to an international country, the costs multiply manifold. A travel insurance plan covers these costs and ensures that you don’t suffer any financial contingency due to illnesses and injuries suffered when travelling.

  1. Help in an unknown land

    When you are travelling to an unknown country and you face contingencies you can be assured that your travel insurance plan would come to your assistance. This makes travel insurance a friend in foreign lands and ensures a smooth trip.

  1. Trip cancellations are covered

    Though you might be excited to go on a vacation but a sudden illness or death in the family might put a dent in your plans. In such cases you incur huge losses on pre-booked flights and hotels. Travel insurance plans cover these costs and help you financially in such dilemmas.

  1. It might be mandatory

    Schengen countries have mandated a valid overseas medical insurance plan when you are travelling there. So, if you are travelling to any Schengen country, buying a travel insurance plan becomes mandatory.

  1. The plan protects your whole family

    The best thing about a travel insurance plan is that you can insure all your family members under the same plan if they are travelling with you. Thus, a single plan allows coverage for your whole family and allows risk-free travelling.

  1. Financial help in case of thefts

    Losing your wallet and cash is quite common and this loss proves quite expensive. By advancing emergency cash, a travel insurance policy helps you out financially when you have no one to turn to.

    Given these benefits, you should insure your trip under a suitable travel insurance plan and safeguard your travels.

How to buy travel insurance plans?

You can buy travel insurance online or offline. Offline policies are bought through travel insurance agents or through the branches of insurers. On the other hand, you can buy travel insurance online directly from your home or office by visiting the website of the insurance company or an insurance aggregator. The process to buy travel insurance online or offline is as follows –

  1. Choose the most suitable travel insurance plan for your needs
  2. Ensure that the plan has all the required coverage benefits
  3. The sum assured should also be sufficient enough to cover expected contingencies
  4. Once the plan has been shortlisted, you can apply for it
  5. Fill up an application form stating all the relevant details. These details include the following
    1. The trip destination
    2. The duration of the trip
    3. Number of members travelling
    4. Trip start and end date
    5. Age of the travelling members
    6. Their relation with you
    7. Sum insured that you need
    8. Any other optional coverage benefits that you need
    9. Any pre-existing illnesses that you or any travelling members have, etc.
  6. Once all the details are filled, the form should be submitted to the insurance company
  7. A set of documents might also be required to apply for insurance. These documents include the following –
    1. Identity proof of the travelling members
    2. Age proof of the members to be insured
    3. Copy of your passport in case of international travel
    4. Visa documents
    5. Copy of the travel tickets
    6. Photographs of the members who are to be insured

      The insurance company would then assess the application form, verify the documents submitted and issue the policy once the premium is paid.

Best travel insurance companies in India

To buy the best travel insurance plan for your trip, here are some of the best companies which you can consider –

Name of the companyTypes of travel insurance plansSalient features
HDFC Ergo
  • Individual Travel Insurance
  • Family Travel Insurance
  • Student Travel Insurance
  • Frequent Flyers Insurance
  • Emergency dental expenses are covered
  • Hospital daily cash allowance
  • Loss of personal belongings is covered under international travel insurance policy
Apollo Munich
  • Family travel insurance
  • Individual travel insurance
  • Senior citizen travel insurance
  • Annual multi trip travel insurance
  • Student travel insurance
  • A range of travel insurance plans are available
  • The coverage is comprehensive in nature
  • Premiums are affordable
  • Plans can be bought online
Future Generali
  • Schengen and Worldwide travel insurance
  • Overseas Travel Insurance
  • Student travel insurance
  • No documents are required to buy the company’s travel insurance plans
  • Cashless claims are settled hassle-free
  • The plans provide worldwide emergency services 
Bajaj Allianz
  • Individual travel insurance
  • Family travel insurance
  • Senior citizen travel insurance
  • Student travel insurance
  • Corporate Travel Insurance
  • Travel Asia policy
  • Bharat Bhraman Policy 
  • The company settles its claims quickly
  • A range of travel insurance plans to suit different travel destinations
  • Home burglary insurance is also available under the coverage benefits
  • You get covered against trip cancellation or curtailment
Religare
  • Explore
  • Student Explore
  • Group Explore
  • No pre-entrance health check-ups are required to buy Religare’s travel insurance plans
  • Coverage for pre-existing illnesses is allowed
  • Outpatient expenses are also covered under international travel insurance plans

Top #10 Things to remember before buying travel insurance

Though buying a travel insurance plan is quite simple, thanks to the online mode, and you also have the list of best companies to buy the plan from, you should do your research before buying a travel insurance policy. There are certain things which you should keep in mind before buying the policy to ensure that you invest in the best and the most suitable travel insurance plan. These aspects which you should remember are as follows –

  1. Make sure to cover all your family members travelling with you. Emergencies can befall anyone and you don’t want to bear the expenses yourself if any member is left uncovered, do you?
  2. The sum insured should be sufficient depending on the destination, the number of members travelling with you and your trip duration. If you are travelling to developing countries which are expensive, choose a high sum insured. Similarly, if many members are travelling with you, the sum insured should be sufficient to cover all of them.
  3. Always choose the right trip of plan depending on your trip. For instance, if you are travelling to the USA, choose travel insurance USA plans which cover the USA and Canada. Similarly, if you are travelling for higher education, a student travel insurance plan is required. So, choose the plan depending on the nature of your trip
  4. Look for the coverage features offered by the plan and make sure that your plan has all the necessary coverage benefits that you need
  5. Check the claim settlement ratio of the insurance company. A high ratio indicates that the company settles most of its claims. You should choose an insurer having a high claim settlement ratio
  6. Ensure that the premiums are affordable
  7. Check the details of your policy to make sure that there are no errors
  8. Check the claim process of the insurance company. It should be simple and convenient so that you don’t face any problems in making a claim and getting it settled
  9. The insurance companies are tied up with international service providers to provide claim assistance in foreign lands. Before you embark on your trip, note down the contact details of the service provider located in the city or country that you are travelling to. This would help you at the time of claims when you can directly contact the service provider and get your claims settled quickly
  10. Always compare and buy the best travel insurance plan. Comparing would let you find a plan which has the most inclusive coverage features at the lowest rates of premiums. So, compare and then buy travel insurance

How to make a claim under travel insurance plans?

Knowing the claim process of a travel insurance policy is necessary so that you know how to make a claim when you suffer a contingency. So, here’s the process in brief –

  1. Inform the insurance company immediately as soon as you face a claim. Insurance companies have to claim helpline numbers for different countries. Keep the numbers handy or call the central claim helpline number of the insurance company in India to register your claim
  2. Once you inform the insurance company, the company would give you the details of the tied-up service provider in your destination country that would help you with your claims
  3. Inform the insurer’s service provider of the claim
  4. The claim related documents would have to be submitted to the insurance company or the service provider. Submit the documents so that the claim can be processed
  5. Once the documents are verified and if the claim is valid, the insurance company would settle your travel insurance claim

Documents required for making a claim?

Documentation plays an important role in getting the settlement of your insurance claims and travel insurance is no different. You would have to submit the following documents for your travel insurance claims –

  1. The claim form completely filled in and signed
  2. Policy bond in original
  3. All the relevant bills which you incurred and for which you are making a claim
  4. Medical reports, bills and hospital records for medical claims
  5. Details of the claim like the time, place, manner in which it happened, etc.
  6. Your identity proof
  7. Your passport copy
  8. Copy of your travel tickets
  9. Police FIR, wherever necessary
  10. Any other document as required by the insurance company

A travel insurance plan provides a good scope of coverage at very low premiums and should not be given a miss. It is always better to insure your trips so that those unforeseen contingencies do not cripple you financially. By parting with a small amount of money in premiums you can buy peace of mind knowing that if any misfortune befalls you while you are on a trip, the travel insurance policy would come to your rescue.

Frequently Asked Questions:

  1. What are Schengen countries?

    Schengen countries are a group of European countries which do not require multiple visas to visit. In these countries, there is a single jurisdiction for international travel. There are 26 countries which are Schengen countries which are Belgium, Denmark, Austria, Czech Republic, Finland, Estonia, France, Germany, Iceland, Hungary, Greece, Lithuania, Malta, Italy, Liechtenstein, Sweden, Luxembourg, Spain, Netherlands, Slovakia, Portugal, Slovenia, Switzerland, Poland, Norway and Latvia.

  1. What is a deductible?

    Under many coverage benefits under travel insurance plans, there is a deductible limit. This limit is the limit up to which the policy would not pay any claims. If the loss is more than the deductible, the claim would be payable. For instance, in case of delay of baggage, there might be a deductible of 12 hours. This means that if the baggage is delayed for more than 12 hours you can make a claim under your policy.

  1. Do coverage benefits have limits under travel insurance plans?

    Yes, except medical insurance benefit, all coverage benefits are covered up to specified limits.

  1. If I am travelling with my senior citizen parents do I need to buy a separate policy for them?

    Most travel insurance plans have a maximum entry age. If your parents are within the entry age limits of your travel insurance plan, you can get them covered. If not, you would have to buy a separate travel insurance policy for them.

Best Cheap Car Insurance Plans in India : Compare & Buy/Renew Plans

Rupanjali Mitra Basu

Car insurance policies are a must if you own a car. The Motor Vehicles Act, 1988 lays down the traffic rules which are to be followed by vehicles that run on Indian roads. One such rule imposed by the Act is the requirement of a valid car insurance policy. So, besides needing a driving license to drive, you also need a valid car insurance plan.

 Car insurance types

There are two types of car insurance policies which are available in the market. These are as follows –

  • Third party policies which cover only the third party liabilities which you face if your car causes any third party damage. This damage includes physical and bodily injury to third parties as well as property damage. Third party coverage is the mandatory coverage for cars as specified under the Motor Vehicles Act, 1988.
  • Comprehensive policies which have two coverage benefits. They cover the mandatory third party liability as well the damages suffered by the car itself.

Click on the button to read more about detailed comparison between a third party and comprehensive car insurance plan.

List of the 10 best and cheapest car insurance plans

Here is a list showing the best and the cheapest car insurance policies available in the market –

  • HDFC Ergo Car Insurance Plans HDFC Ergo offers a range of car insurance policies for different coverage needs. There are long term plans as well as annual and bundled car insurance plans. The features which make HDFC’s car insurance plans one of the best include the following –
    • There is a network of more than 6800 cashless garages all over India
    • You get a range of add-ons to enhance your coverage
    • The company promises overnight car repair services in 13 main cities of India
  • TATA AIG Private Car Package Policy TATA AIG is also a leading name in the insurance industry which offers cheap car insurance plans. The features of TATA AIG’s car insurance plans are as follows –
    • There are 13 car insurance add-ons which promise to provide an exhaustive coverage
    • The premium rates are low and affordable
    • The company promises 24*7 assistance in case of claims
  • ICICI Lombard Car Insurance Plan ICICI Lombard’s car insurance plans have the following features which make them popular –
    • There are more than 3900 cashless garages tied-up with the company
    • Even lapsed car insurance plans can be renewed instantly
    • The company offers a comprehensive roadside assistance coverage in its car insurance plans
  • Royal Sundaram Car Shield Plan Royal Sundaram also offers cheap car insurance policies which have the following benefits –
    • Free roadside assistance cover is allowed under the policy.
    • There is an add-on cover which offers 100% purchase price to be paid in case of theft of the car or total loss.
    • The company is tied up with 4600+ garages across India for easy cashless claim settlements.
  • New India Private Car Policy New India is a public sector general insurance company which has a large customer base. This allows the company to offer cheap car insurance plans which have the following benefits –
    • Long term, annual and bundled car insurance plans are sold by the company
    • There are different add-ons to make the coverage comprehensive
  • Reliance Car Insurance Policy Another leading name in the general insurance industry, Reliance offers a multitude of car insurance policies for its customers. The features of Reliance’s car insurance plans include the following –
    • The policy is issued and delivered within 10 seconds
    • There is a free roadside assistance cover under the plan worth INR 500
    • The company has a tie-up with more than 4450 garages all over India. This makes claim settlements easier.
  • Bajaj Allianz Car Insurance Bajaj Allianz offers cutting edge yet cheap car insurance plans. The features of the company’s car insurance plans include the following –
    • The company offers 24*7 spot assistance in case of claims
    • The Motor-on-the-spot feature allows you to make a claim through videos and images right from the spot of the accident
    • There are more than 4000 cashless garages which are tied-up with the company
  • IFFCO Tokio Car Insurance Policy IFFCO Tokio offers some of the best benefits in its car insurance plans which include the following –
    • There is unlimited zero depreciation cover which allows you to make multiple zero depreciation claims under the plan.
    • 24*7 roadside assistance is provided by the company
    • There is a network of more than 4300 garage in India for cashless claims
  • United India Motor Insurance Policies United India is another public sector general insurance company which offers both comprehensive and third party plans. The company offers cheap car insurance plans which have the following features –
    • Premiums are low and affordable
    • There are a range of premium discounts which further lower the premium
    • Inbuilt as well as optional coverage benefits are available under the plan.

These are some of the best plans which are also cheap.

Most important 5 benefits of car insurance policies

Besides being a mandatory legal requirement, car insurance policies also give you the following benefits –

  • If any individual dies in an accident involving your car, you face an unlimited financial liability. You might have to pay a huge amount of compensation to the bereaved family which would create a financial crisis for you. Car insurance policies cover this liability and pay the compensation on your behalf freeing you from the financial crisis which you might face otherwise.
  • Even in case of injuries suffered by individuals or any property being damaged, you are required to compensate for the financial loss caused. The car insurance policy covers this compensation as well giving you financial relief.
  • If you buy a comprehensive car insurance policy, you also get coverage for the damages suffered by your car. So, the repair costs are paid by the policy and you don’t have to shoulder the burden yourself.
  • If your car is stolen, a comprehensive car insurance plan pays you a lump sum benefit which allows you to bear the financial loss that you suffer.
  • There are useful add-ons under comprehensive car insurance plans which, when opted, promise assistance in case of car related contingencies. You are, therefore, assured of help in case of car related contingencies which makes it easier for you to face emergencies.

Car insurance plans are, therefore, beneficial. If you have a policy on your car, you would also be saved from high legal fines and/or imprisonment if you are found to drive your car without a valid cover. So, you should invest in a car insurance policy for your car.

Car insurance premiums depend on these 7 factors

When you buy a car insurance policy, you have to pay premiums on the same. The premium of your car insurance policy depends on the following factors –

  • Make, model and variant of the car which determines its value. The more expensive the car is the higher would be the premium.
  • Age of the car which reduces the value of the car due to depreciation. The older the car the lower would be its value and also the premium of the car insurance policy.
  • The type of policy you buy – third party plans have cheap car insurance premiums while comprehensive policies are expensive.
  • Fuel type of the car as the fuel variant determines the car’s value. Higher the value, higher would be the premium.
  • City of registration – cars in metropolitan cities have higher premium rates compared to non-metro cities
  • Add-ons selected – each add-on has an additional premium. If you select one or more add-ons, the premium would increase.
  • Policy discounts – there are different types of policy discounts available in car insurance plans. The higher the discounts that you can claim the lower would be the premium of the car insurance policy.

It is a smart option to calculate your car insurance premium online using a car insurance premium calculator before buying a car insurance online.

Top 7 tips for cheap car insurance policies

Now you know how the premiums of car insurance policies are calculated but do you know you can reduce them?

Yes, there are ways in which you can reduce the premiums of your car insurance policy to avail a cheap car insurance plan. These ways are as follows –

  • Avoid making small claims in your policy. When you don’t make claims you earn a no claim bonus. This bonus starts at 20% and keeps increasing after every successive claim-free year. You can get a maximum no claim bonus of 50% which allows you a premium discount. However, when you make a claim, the bonus reduces to zero and you don’t get the discount. So, if you have small claims, pay them yourself rather than losing your accumulated no claim bonus.
  • If you are a member of an approved automobile association, you can get a premium discount.
  • If you install safety gadgets in your car, you can get a premium discount and enjoy cheap car insurance coverage.
  • If you use your car sparingly or if the car is very old, you can opt for only third party liability cover. Since third party allows cheap car insurance cover, your premiums would be very low.
  • Choose only those add-ons that you require. For instance, if you don’t take your car on road trips, roadside assistance cover would not be required. Similarly, if you live in an area which has no water-logging problem in monsoons, avoid engine protect add-on. When you choose only the necessary add-ons, you can cut down on unnecessary additional premium payments and enjoy cheap car insurance cover.
  • Choose a voluntary deductible if you are a safe driver. Voluntary deductible represents the part of claim which you are willing to cover yourself. When you choose voluntary deductible, you lower the claim burden of the insurance company. Due to the reduced burden, the company offers you a premium discount.
  • Always compare and buy car insurance policies. Comparing lets you check the coverage details vis-à-vis premium rates of different car insurance plans. Through comparing you can get the cheapest car insurance policy for your car without compromising on the coverage.

Top 4 points to consider before investing in cheap car insurance policies

Before investing in cheap car insurance online, the following points should be remembered –

  • Skimping on the coverage If the premiums are very low, the coverage benefits would be limited. You would get what you pay for. The policy might not offer value-added benefits which provide better coverage. So, dot skimp on the coverage and buy cheap car insurance online just to lower the premium rates otherwise you would suffer huge claims which would prove financially disastrous.
  • Ignoring add-onsYou might choose to ignore the add-ons to save on the premium cost. Add-ons, however, are quite beneficial as they provide unmatched coverage and increase the amount of claim payable. So, don’t avoid add-ons which are necessary.
  • The flip side of deductibles If you are availing a premium discount by choosing a voluntary deductible, remember that you would have to foot the amount of deductible that you have chosen. There is already a component of compulsory deductible under car insurance plans which you have to pay in a claim. Choosing voluntary deductible would increase your claim burden. So, always weight the savings in premiums to the cost that you would be bearing. Choose voluntary deductibles only when it proves economical.
  • Claim processAlways check the claim process of the insurance company before buying the plan. If the company is offering cheap car insurance online but has a complicated claim settlement process, you would eventually suffer. So, pay heed to the claim process and choose an insurer which has a simplified process.Car insurance plans are mandatory but they don’t need to be expensive. Know how car insurance premiums are calculated and use the afore-mentioned tips to lower the premiums. Buy cheap car insurance policies from the best companies and enjoy plans with the best coverage benefits. Turtlemint is an online platform which lets you compare car insurance plans. Through Turtlemint you can compare the best policies and choose cheap car insurance online as per your coverage needs.

Read more related articles:
Best Car Insurance Companies in India
5 consequences of driving without Car Insurance

Retirement Plan Calculator – Calculate & Plan Your Pension Returns Now

Rupanjali Mitra Basu

Pension planning is a crucial part of your financial planning as it ensures you comfortable retirement life. Pension is essential for you to maintain the standard of living, income support for unforeseen expenses once you stop working. Hence, during your work-life stage, it’s important to plan your future financial goals prudently so that your retired life is financially secured. After retirement, even if you stop working, your responsibilities continue to exist. You would probably meet major goals of your life such as children’s education, marriage and paying off home loan dues before retirement. But, you still need regular income to match up your standard of living, for health and some for your hobbies and vacations. Pension planning helps you know how much money you would need to have a prosperous and comfortable retirement life. Pension calculator helps you through the process of planning. In this article, let’s learn more about pension calculator.

Pension plan calculator

Pension plan calculator is an effective online tool that helps you figure out how much amount you need to save for your retirement life. You can know a tentative pension by using pension plan calculator. In India, a basic retirement calculator would require following details to calculate your tentative pension.

  • Personal details:

    Details include your name, date of birth, expected retirement age, risk appetite and preferred lifestyle after retirement

  • Finance details:

    Details include your current income and expenses, money saved for retirement till date and how much can you save each month.

  • Savings details:

    Details include money already saved for investment, various types of financial instruments you are invested in and your preferred investment tools for long-term.

    Once you input your details into the online retirement planning calculator, the calculator will assess your retirement needs and provide you with the result that illustrates the amount that you need to save monthly for reaching your retirement goals.

    You can also edit the details that have been entered if there are any changes and the result will be given based on your risk profile and pension requirements.

Benefits of pension plan calculator

Pension plan calculator or retirement planning calculator available online is an efficient and effective tool that helps you draw a roadmap for your financial security in the golden years of your life. Following are the main advantages of using pension plan calculator while you are planning for your retirement:

  1. Provides your financial guidance:

    Every bread earner of the family wants to secure his and family’s life post his working years of life. To get a clear idea of how much one needs to save for availing adequate security post-retirement, a tentative calculation and guidance are needed. As the pension plan calculator helps you understand the amount that you need to save, you get a clear picture of what needs to be done

  1. Pension plan calculators do the amazing job without any cost:

    You can plan your retirement without any cost of the assessment.

  1. Retirement calculator helps you in long-term planning:

    Retirement calculators assess your long-term financial requirement based on your needs, lifestyle and current financial status.

How to use pension plan calculator?

When you access an online retirement planning calculator, you need to insert below details

  1. Your date of birth to find figure out your current age
  2. Fill in the expected retirement age in years. This will be the tentative age at which you would want to retire.
  3. Choose your risk appetite. This will help to know your risk profile – conservative, moderate or aggressive
  4. Choose your post-retirement lifestyle – luxurious, comfortable or basic
  5. Mention details of current income that salaries income, current expenses
  6. Mention details of investments that you have already made for the purpose of retirement
  7. Input the amount of savings that you can make every month

Once you provide all the details, the online pension plan calculator will take your age, savings details, years left for retirement into consideration and then factor in inflation to calculate the corpus required for your retirement life. This will also show how much money you need to invest monthly to achieve this corpus target. Based on the information given by you, the retirement calculator makes an estimated projection and calculates your future cost of living after considering inflation at an assumed rate.

Let’s take an example to understand this.

Let’s say you are born on 1st October 1989 and you are planning to retire at the age of 60 years. Your current annual salary is INR. 10, 00,000 and your yearly savings are INR. 1, 00,000. You would prefer to make investments in moderate risky financial products. Post-retirement, you would want to live in your own house comfortably.

That means you would be retiring in 2049! You have 30 more years to save for your retirement life. If you assume inflation at the rate of 6%, you would need INR. 2 Cr corpus to be saved for your comfortable retirement life. The corpus can yield you adequate pension post-retirement. To achieve this, you would need to save approximately INR. 16,000 per month.

Pension plan calculator makes it easy for you to plan your retirement life. If you have a clear roadmap, it becomes easy to reach the desired goal. Planning retirement well in advance is imperative to lead life peacefully post-retirement.

Why is pension required post-retirement?

Pension is required after retirement to create a source of income. Retirement is that time when you don’t have a regular source of income but the expenses do not stop. To meet these expenses and to be financially independent you need a source of income. Pension receipts are the source of this income and play an important role after you retire.

Types of pension instruments available in the market

Since pension plays an important role after retirement, there are different types of pension instruments which you can choose to create a retirement corpus. Some of the most popular types of instruments are as follows –

  1. Mutual funds

    Mutual funds are market-linked investment avenues wherein the investment risk is diversified. You can invest in small affordable amounts regularly through Systematic Investment Plans or you can invest in lump sum into mutual fund schemes. There are different types of schemes with different risk profiles and you can choose any scheme to create a retirement corpus.

  1. EPF

    Employees’ Provident Fund or EPF are retirement related investment schemes for those of you who are employed. 12% of your salary is invested every month by you and your employer towards the EPF account. The money accumulates till you are employed and then it pays you pensions after retirement. EPF is a good way of creating a retirement corpus and a guaranteed pension post-retirement for salaried individuals.

  1. PPF

    Public Provident Fund or PPF is a voluntary investment scheme wherein you can invest to create a retirement corpus. PPF investments can be done by both employed and non-employed individuals. The investments done, interest earned and the corpus created are all tax-free in your hands. Moreover, PPF investments have a long-term horizon allowing you to build up a substantial retirement corpus.

  1. NPS

    National Pension Scheme (NPS) is a newly introduced retirement oriented investment scheme. You can invest in the NPS scheme and build up a corpus for your life post retirement. The investments in NPS are directed towards the capital market which allows you attractive returns. Moreover, you can claim an additional tax deduction of up to INR 50, 000 on your NPS investments under Section 80 CCD which also helps you in saving tax.

  1. Life insurance pension plans

    Life insurance pension plans are retirement plans meant to create a regular source of income after you retire. You can invest in these plans to create a retirement corpus and receive guaranteed income post retirement. There are two types of pension plans which are as follows –

    1. Deferred pension plans which allow you to build up a retirement corpus by gradually investing over your active working life. You can buy a deferred annuity plan and choose a policy term over which you can pay the premium and build up your retirement corpus. You can then pay premiums to build up the corpus. In case of death during the policy tenure the plan would promise a death benefit to your nominee. On the other hand, when the plan matures, you would have created a corpus for your retirement. You can, then use the corpus to receive lifelong annuities
    2. Immediate annuity plans which give you regular income immediately after you buy the plan. These plans are for those who have built up a retirement corpus and are looking to invest the corpus for earning regular incomes. Immediate annuity plans promise lifelong incomes from the corpus that you invest. They also allow you to choose from a variety of different annuity options to receive the income. You can either receive the income only for yourself or you can add your spouse and ensure that your spouse also receives a regular income if you die early.

      Life insurance pension plans, therefore, are a source of guaranteed income for you after you retire.

Why retirement planning is required?

Following are the reasons why you need to plan your retirement well in advance, in fact as soon as you start earning.

Need for retirement planning

  1. Peace of mind:

    One of the crucial reasons to plan retirement in advance is for peace of mind in the golden years of your life. Planning several decades in advance gives you and your family a sense of security. Specifically, after retirement when you are free of all the major responsibilities of your life you would want to pursue a hobby or go on vacation and spend quality time with your life partner. You may also need fund to meet your healthcare requirement at that age. Considering all of this, financial worry is the last thing that one would imagine at the retirement age. If you would want to lead a peaceful and comfortable post-retirement life.

  2. Compounding effect:

    When you start investing for retirement at an early age, you get the benefit of compounding. Specifically, for long-term goals like retirement, planning is very much essential to reap the benefits of compounding.

  3. Insufficient employer-funded pension:

    An employer funded or government-funded pension schemes are not completely sufficient to meet your post-retirement needs. Hence, it’s important to plan retirement and fill the gap in investment. You can make use of pension plan calculator to know the tentative pensions and how much you need to invest to get to the target point.

  4. Support system:

    You never retire from your responsibilities. Also, desires never end. Even after you retire, you would still want to fulfil your family’s dream and stay as a support system for them always. Planning retirement life well in advance helps you to stay as a support system to family even after you retire from work.

  5. Social security:

    In a country like India, focusing on the social security system is imperative. It’s wise to plan in advance for your retirement life and start building a corpus for a happy and comfortable life later. You should be self-sufficient to face the unforeseen events along with meeting regular expenses.

    With the help of a retirement planning calculator, you can effectively and efficiently plan for your prosperous post-retirement life.

Frequently Asked Questions:

  1. What is the pension plan?

    A pension plan is a financial product offered by insurance companies. Pension plans help you build sizable retirement corpus through regular investments that you make over the years. On maturity or at the time of the vesting of the policy, you can take part of the corpus in a lump sum and the remaining will be used to buy annuities which will continue to pay you regular monthly income. You can also choose to buy annuities with the entire corpus without withdrawing the lump sum.

  2. When is the ideal time of your career to plan for retirement?

    There is nothing called an ideal time for retirement planning. It’s always sooner the later. It’s wise to start contributing to your retirement corpus as soon as you start earning. With age and time, you can keep increasing your investments.

  3. What are the factors I should consider while planning for my retirement?

    You need to keep certain key points in mind while planning for your retirement. Following are the key factors to consider while you plan for retirement:

    • Current financial conditions which include your current income, expenses and existing savings
    • Your debt obligations
    • Long-term living arrangements
    • Financial planning for other long-term goals

    While planning, to get clear guidance on the amount that you need to invest you can take the help of pension plan calculator.

  4. What are the tax benefits offered by pension plans?

    Annual contributions made to pension plans qualify for tax deduction under Section 80C of the Income Tax Act, 1961. Tax implications of pension plans also depending on the type of plan you are availing.

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