Author: Sidharth Hampanavar

Medical Travel Insurance

Sidharth Hampanavar

Travelling overseas requires extensive planning irrespective of the travel purpose. Travel medical insurance is an essential part of travelling. Medical emergencies are unexpected and inevitable. Hence, having a financial safety net in the form of travel medical insurance is most crucial to safeguard your journey.

What is travel medical insurance?

Travel medical insurance provides coverage against healthcare expenses that may arise due to sudden illness or health issues or meeting with an accident in a foreign land during the travel. The cost of medical services is extremely expensive across the globe. Hence, it’s wise for every traveller flying abroad to have adequate insurance coverage to extend financial support during any medical emergencies.

How is travel medical insurance different from any other types of insurance?

Travel medical insurance holds a special place in every frequent traveller’s mind. There is not much difference between travel medical insurance plans and travel insurance plans. Having provisions for medical emergencies is a priority. Travel medical insurance plans are specifically crafted to address healthcare needs of travellers. Let’s learn how different it is from other travel insurance plans.

  1. The primary difference is, travel medical insurance plan focuses more on providing healthcare coverage than travel-related coverages. Travel insurance plans also cover medical expenses but mainly cover trip related issues such as loss of baggage, trip cancellation, flight delay and loss of documents etc.
  2. Travel medical insurance plans are issued for the tenure longer than that of regular travel insurance plans
  3. Travel medical insurance plans are priced based on the age, medical history and trip duration of the traveller. Regular travel insurance plans that cover many other things like flight cancellation, trip cancellation, delay etc is mainly based on the cost of the trip. Hence, travel medical insurance plans are relatively economical than regular travel insurance plans.

How to avail travel medical insurance?

As travel and health insurance industry are booming in India, there are numerous plans available for travellers. Choosing the right one may take some time. You may need to do research on benefits provides, features included in the policy and compare the cost. After analysing on cost and benefit basis, you can easily purchase travel medical insurance plans online within few clicks. Insurance technology firms provide great platform for comparison of a wide array of travel health plans from various insurance companies. Once you select the right plan to purchase online, your major work is done.

Following are the steps to follow:

  1. Enter your personal details and any other relevant information as required for filling up the insurance application.
  2. Mention the coverage requirement and medical history correctly.
  3. Submit documents, if any required.
  4. Make a payment online and proceed to complete the buying process.

Documents required for buying travel medical insurance

Travel medical insurance plans can be purchased online instantly without any paperwork involved. However, you need to keep your personal details, health history and travel details ready to make an application.

Types of travel medical insurance plans

There are various types of medical travel insurance plans are available in India. Travel medical insurance plans are categorised as follows:

  1. Individual travel medical insurance plan:
    The plan provides coverage to an insured individual for any unforeseen medical emergencies that may arise during the travel period. Travel medical insurance plan issued to an individual will also cover other travel-related risks, however, concentrates primarily on healthcare.
  2. Family travel medical insurance plan:
    In case you are travelling with the family, family travel medical insurance plan can be availed to protect the entire family within a single policy. Basically, it’s a policy that covers all the members of the family with one sum assured which can be utilised by any insured member of the family during health emergencies in the travel period. The plan also covers family against various travel risks.
  3. Annual travel medical insurance plan:
    Annual travel medical insurance plans are specifically designed and suitable for travellers who travel multiple times during the year. Hence, annual policy provides year-round protection against any health contingencies, dental problems, evacuation requirements that may arise during the travel. Other travel-related risks such as delay and cancellation will be included in the policy
  4. Senior citizen travel medical insurance plan:
    Health is a major concern for senior citizen travellers. Travel medical insurance plan exclusively designed for senior citizens provide financial security against various unforeseen health conditions during the travel. The policy will also cover other travel-related risks
  5. Student travel medical insurance plan:
    These plans are designed to address the unique needs of students travelling abroad for studies. The policy covers hospital and medical expenses during the policy period along with other non-medical expenses. When it comes to students, the coverage provided is extensive.

Medical cover provided under travel medical insurance plans

Following are the medical coverage offered under travel medical insurance plans:

  1. Medical expenses cover:
    Hospitalisation/ medical expenses incurred for an illness contracted or injuries sustained on a trip during the period of insurance. Some policies will cover pre and post hospitalisation expenses depending on the terms and conditions of the policy.
  2. Medical evacuation:
    The travel medical insurance policy will cover the cost incurred on evacuation services, transportation expenses or ambulance charges reasonably incurred to take insured to the hospital is covered.
  3. Additional benefits:
    Some of the travel medical insurance policies may include additional benefits such as daily cash allowance for hospitalisation, repatriation of remains and pre-existing illnesses extension etc. Some benefits can be added optionally at an extra cost of the premium.

However, these policies also cover other non-medical expenses such as trip interruption and cancellation, burglary, missed flight, compassionate visit, trip delay and emergency interruption etc.

Best #5 travel medical insurance plans:

There are a variety of travel medical insurance plans available with various unique features and coverage. You can compare and choose the best suitable plan based on your coverage requirement, affordability and benefits requirements. We have listed down some of the best travel medical plans available in the market

Plan NameCoverage Details
  1. Bajaj Allianz Travel Health Insurance Plan
  • Coverage is provided up to 75 years of age
  • No pre-medical check-up is needed
  • The policy covers medical expenses during the travel for injury and illness along with medical evacuation cover.
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and emergency financial assistance etc
  1. Apollo Munich Travel Health Insurance Plan
  • Coverage is provided from 6 months to 70 years
  • No pre-medical check-up is needed
  • The policy provides coverage against unforeseen medical expenses, personal accident cover during travel
  • The policy covers non-medical expenses such as loss/delay of baggage, hijack distress and passport loss etc
  1. Cholamandalam Travel Health Insurance Plan
  • Coverage is provided from 3 months to 80 years
  • Pre-medical check-ups are required for applicants above 65 years of age
  • The policy provides medical coverage for sudden illness, medical evacuation and accidental injury
  • Non-medical coverage includes loss/delay of baggage, hijack distress and passport loss etc
  1. HDFC ERGO Travel Health Insurance Plan
  • Coverage is provided from 3 months to 70 years of age
  • No pre-medical check-up is needed
  • The policy provides medical cover for medical emergencies due to illness, personal accident cover, daily hospital cash, dental treatment and emergency evacuation during the travel
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and hijack distress etc
  1. TATA AIG Travel Health Insurance Plan
  • Coverage is provided up to 70 years of age
  • No pre-medical check-up is needed
  • The policy covers medical expenses during the travel for injury and illness along with personal accident cover and emergency evacuation
  • The policy covers non-medical expenses such as loss or delay of baggage, trip delay or cancellation and personal liability, hijack distress etc

Frequently Asked Question (FAQs)

  1. Is travel medical insurance mandatory?
    No. Though travel medical insurance is an important necessity, it’s not mandatory. However, some of the countries such as Australian countries and Schengen countries have made it mandatory for visiting travellers.
  2. Can travel medical insurance plans be extended?
    Yes. Travel medical insurance plans can be extended in case your travel is extended for any reason.
  3. Does travel medical insurance plans cover dental treatment expenses?
    Yes. Dental treatments availed due to an injury or an accident are covered under travel medical insurance plans.
  4. How am I covered under the travel medical insurance plan for accidental injuries/disabilities?
    In case you meet with an accident during travel and that results in injury or disability, your travel medical insurance plan will compensate for the loss and for medical treatments needed up to the limit specified in the policy.
  5. Does travel medical insurance plan offers the cashless facility for medical cover?
    Yes. Medical expenses under the plan for sudden illnesses and injuries are covered in a cashless manner. There are also daily hospital allowances provided under some of the travel medical insurance policies.

Difference Between Sum Assured And Sum Insured

Sidharth Hampanavar

When it comes to the concept of insurance, there are some technicalities which you should understand. These technicalities dictate the terms and conditions of the policy. Until and unless you understand the terms of the policy, understanding the policy benefits might prove to be a challenge. Take for instance the concepts of sum assured and sum insured. Both these terms determine the coverage level of an insurance policy and so you might believe them to be interchangeable. But are they interchangeable?

No, they are not. Sum insured and sum assured are two different concepts which are used in different types of insurance policies. Let’s understand sum insured and sum assured meaning and differences –

What is sum assured?

Sum assured in insurance represents the coverage of a life insurance policy. This is the benefit which is paid in case of death or maturity of the plan.

What is sum insured?

Sum insured, on the other hand, is the level of coverage under general insurance policies. This amount shows the maximum liability undertaken by the insurance company to compensate you in case of a covered eventuality.

Factors to consider when deciding sum assured 

After knowing the sum assured meaning, knowledge of choosing the right sum assured is also important. So, when choosing the sum assured of your life insurance policy, here are some factors which you should consider –

  • Your financial responsibilities

    If you have higher financial responsibilities, the sum assured of your life insurance policy should be high so that it can fulfil such responsibilities. So, when choosing the sum assured, understand your financial needs.

  • Number of dependents

    If your family depends on you for their financial needs, you need a high sum assured so that in your absence their needs can be easily met by the insurance policy. The more the number of dependents that you have, the higher should be the sum assured.

  • Existing assets

    If you have existing investments, the requirement of the sum assured reduces. Your investments also help in fulfilment of your financial goals and so you should consider them when picking the sum assured. 

  • Existing liabilities

    You should have a sufficient coverage in your life insurance plan if you have liabilities to pay off. The higher the liabilities, the higher should be the sum assured.

  • Age

    When you are young, your human live value is more because you are expected to work longer and earn a high amount of income during your lifetime. So, when choosing sum assured, opt for a high amount if you are young.

  • Affordability 

    A high sum assured in insurance leads to a high premium. So, you should ensure that the sum assured of the policy is optimal enough to cover your financial responsibilities and affordable enough on your pockets.

Factors to consider when deciding the sum insured

When choosing the sum insured in a general insurance policy, the following factors should be considered –

  • The value of the asset being insured

    If you are insuring an asset under the policy, the sum insured should be equal to the value of the asset so that in case of loss or damage, you get compensated for the actual loss suffered. For instance, if you are buying insurance for your car, the sum insured of the policy should be closest to the market value of your car so that you would be optimally compensated in case of claims.

  • The expected amount of loss

    In case of health insurance plans, assessing the value of the asset is not possible since your health risks are insured. In such cases, you should ascertain the expected medical expenses which you would incur in an emergency. The sum insured should be sufficient enough to cover the expensive medical treatments and costs.

  • Number of members covered under the policy

    If you are buying a family floater health plan, the sum insured should be sufficient enough to provide optimal coverage to every insured family member. So, in family floater plans, a high sum insured should be availed.

  • Inflation

    Inflation increases the cost of goods and services and when choosing the sum insured, this inflationary trend should be kept in mind. The sum insured should be sufficient enough to cover the loss which has increased due to inflation.

  • Affordability

    The sum insured directly impacts the premium of the general insurance policy. Thus, while a high sum insured is needed, you should ensure that the sum insured is also affordable on your pockets.

How sum assured affects premium amount

The sum assured has a direct impact on the amount of premium which you have to pay for your life insurance policy. If you opt for a high sum assured, the premium amount would also increase. Premium rates for life insurance plans, except unit linked plans, are expressed per INR 1000 of the sum assured. So, if the premium is INR 40 per INR 1000 sum assured, if you choose a sum assured of INR 1 lakh the premium would be INR 4,000 and if the sum assured is increased to INR 10 lakhs, the premium would become INR 40, 000. Moreover, under many plans, you can avail a premium discount if you choose a high level of sum assured. Thus, depending on the sum assured chosen, the premium discount is allowed.

In case of unit linked plans, however, the amount of premium that you pay determines the sum assured. The sum assured, in such plans, is expressed as a multiple of the premium amount. Usually, the multiple is expressed as 10 times the premium paid. So, if you pay an annual premium of INR 10, 000, the sum assured would become INR 1 lakh.

Thus, the sum assured and premium of a life insurance policy are interconnected.

How sum insured affects the premium amount?

Just like in life insurance plans, general insurance plan premiums are also directly impacted by the sum insured that you choose. The higher the sum insured, the higher is the premium charged. Moreover, there is no discount based on the level of the sum insured chosen in general insurance plans. 

Thus, when you invest in a general insurance policy, know that the amount of sum insured that you choose would directly impact your premium. Be careful when choosing the sum insured and ensure that the sum insured that you have chosen covers you completely and also proves to be light on your pockets.

Top 3 differences between sum assured and sum insured

Now that you know what is sum assured and what is sum insured you should know how they differ from one another. The difference between sum insured and sum assured meaning can be analysed in the following table –

Points of difference

Sum assured

Sum insured 

Application 

The term is used in life insurance policies 

The term is used in general insurance policies

Nature 

Sum assured in insurance represents a pre-determined benefit which is fixed. In case of death or maturity, a life insurance policy pays the promised sum assured irrespective of the loss suffered

Sum insured implies that the principle of indemnity would apply in case of a claim. The principle of indemnity pays the actual loss which the policyholder suffers. This loss might be lower than the sum insured of the plan

Relevance 

The concept of sum assured in insurance becomes relevant because the economic value of human life cannot be measured. Thus, in case of death, the cost of loss of life cannot be ascertained. The policy, therefore, pays the coverage amount which the policyholder chose when buying the policy

General insurance policies are taken on assets or to cover financial loss suffered in certain events. The value of the asset or the extent of loss suffered can be easily ascertained. That is why general insurance policies follow the principle of indemnity and use the concept of sum insured.

Illustration:

In a life insurance policy, if the cover is bought for INR 10 lakhs and the insured dies during the policy tenure, the death benefit would be INR 10 lakhs which is the sum assured of the policy.

In case of general insurance policies, say health insurance, let’s assume the coverage level to be INR 5 lakhs. When the insured is hospitalised, the medical bills amount to INR 3 lakhs. In this case, though the sum insured is INR 5 lakhs, the claim payable would only be limited to INR 3 lakhs which is the actual loss suffered. However, if the hospital bills amount to INR 6 lakhs, the claim would be INR 5 lakhs which is the maximum liability insured by the insurance company.

So, the concepts of sum insured and sum assured in insurance are different. Understand what is sum assured and what is sum insured and their relative differences so that you know what your insurance policy would pay in a claim.

Frequently Asked Questions

  1. Why sum assured is less than total premium?

    The sum assured represents the coverage amount and the premium represents the cost of insuring your mortality risk. The probability of death and/or maturity is what determines the premium and since this probability is a small number, the premium is always less than the sum assured.

  2. What is minimum sum assured in term insurance?

    The minimum amount of sum assured in term insurance plans varies across insurance companies and the term insurance plans that they offer. Some companies might offer a minimum sum assured starting from INR 25, 000 or INR 50, 000 while under some plans the minimum sum assured can start from INR 25 lakhs. So, the minimum value varies across plans and you should check your term plan to know the minimum available amount of sum assured.

  3. How is maturity sum assured calculated?

    Under most plans the maturity sum assured is the sum assured which you choose when buying the policy. Some plans offer maturity sum assured depending on the amount of premium that you have paid and the policy tenure. Under unit linked plans, however, there is no concept of maturity sum assured. You get the available fund value when the plan matures.

Life Insurance Premium Calculator

Sidharth Hampanavar

What is Life Insurance?

Life Insurance is an arrangement or rather an agreement between the insurance provider and the insured person. According to this agreement, the insurance provider will pay a specific amount to the family of the insured person on his death. This sum which is paid by the insurance provider is known as the Sum Assured. The insurance company will pay the sum assured to the insured person in exchange for the payment of a specific amount which is known as life insurance premium.

With the increase in the number of lifestyle ailments, the number of accidents, environmental pollution, etc. life has become even more unpredictable. No amount of money can ever fulfil the loss of a loved one, but it can reduce the financial hardships that your family might face in your absence. So, it is always wise to secure the financial lives of your loved ones to help them in avoiding any hardships when you are not with them anymore. Life insurance will help in providing coverage against life risks and take care of the financial needs of your family in your absence.

Life Insurance Premium

Life Insurance Premium can be defined as the payments that are made to the insurance provider for paying the sum assured to you in the future. The insurance company provides the lump sum amount to your nominee on your death only if the premium paid for your life insurance policy has been done. In other words, your life insurance policy will remain active only if your life insurance premium payments are done in time.

The life insurance premium of your life insurance policy depends on several factors such as

    • Your age

      Your age is inversely proportional to your life insurance premium. The older you are the higher your life insurance premium rate as your possibilities of being affected by diseases are more and you will make fewer payments as compared to someone younger.

    • Your medical history and health records

      If your medical history shows up cases of critical ailments like cancer, illnesses related to heart, etc. then your life insurance premium would be higher. Similarly, if your health records are normal without any hint of ailments, your life insurance premium would also be on the lower side.

    • The type of life insurance policy you are selecting

      Your choice of policy also determines your life insurance premium. If you are selecting a policy with longer tenure, then your premium would be lower as compared to that of a policy with shorter tenure. 

    • Your gender

       The life insurance premium for women is lower as compared to that of men as the life expectancy of women is more than men.

    • Your profession

      People working in a dangerous profession like mines, fisheries, oil and gas refineries, etc. pay a higher life insurance premium. 

    • Your lifestyle and habits

      People having habits like smoking, drinking, etc. tends to pay more premiums as these habits lead to serious health ailments reducing your life expectancy.

How to use the life insurance premium calculator? 

A life insurance premium calculator is a tool that can be helpful in giving you an estimation of your premium amount to be paid. This estimation depends on various factors such as the life insurance policy which you have chosen, your age, the tenure of your policy, your lifestyle, etc. Usually, the insurance providers have a life insurance premium calculator on their websites for the calculation of premiums.

Some of the mandatory fields which need to fill in the life insurance premium calculator are 

    1. The Policy which you have chosen
    2. The tenure of your policy chosen
    3. Sum Assured
    4. Your age
    5. The frequency of your premium payments
    6. Riders (optional) 

Let us have a look at the steps to be followed to use the life insurance premium calculator on https://turtlemint-stage.dreamhosters.com/life-insurance.

    • You need to choose from the 4 options:You need to choose from the 4 options:
      1. Term life plans
      2. Investment and tax planning
      3. Savings for child
      4. Pension/retirement
    • In the next step, you need to enter certain personal details such as
      1. Your gender
      2. Your marital status
      3. Your date of birth
      4. Your annual income
      5. Whether you smoke or not
      6. Sum assured that you wish to opt for
    • Then fill in your name and contact details then click “next” or you could “skip for now” as well
    • In the next step, some details related to the policy needs to be entered such as
      1. The sum assured the amount
      2. The coverage tenure
      3. The tenure for premium payment
      4. Payment frequency
      5. And then click on “share quotes”
    • Then you have the list of plans from which you could choose from
    • After these details are filled, you will see the estimated premium displayed in front of you along with the features and benefits of each plan.

Simple Life Insurance premium calculator

Let us study an example of a simple life insurance premium calculator.

    1. Age – 39 years
    2. Type of plan – New Endowment plan
    3. Tenure of the plan – 20 years
    4. Sum insured – Rs. 10 lakhs
    5. Additional Riders – Yes

Now, on final calculation the results obtained on the life insurance calculators are

    • Premium if paid monthly – Rs. 4, 250
    • Premium when paid on a quarterly basis- Rs. 12, 750
    • Half-yearly premium – Rs. 25, 235
    • Premium if paid yearly – Rs. 49, 940

A Sample process for calculation of life insurance

Let us illustrate an example of the calculation of life insurance premium using a life insurance calculator.

 The basic fields which need to be populated are mentioned below. 

    • Age – 31 years
    • Term of the policy – 13 years
    • The Term for premium payment- 8 years
    • Sum insured – Rs. 10,00,000
    • Riders – Rs. 50,000

 The basic fields which need to be populated are mentioned below.

    • Premium paid annually – Rs. 1,16,030
    • Premium paid half-yearly- Rs. 60,335
    • Quarterly premium payment – Rs. 30,747
    • Monthly premium payment – Rs. 10,442

 You will also have to add the premium for the rider i.e. 

    • Annual premium for riders – Rs. 50
    • Quarterly premium payment for riders –Rs. 13
    • Half-yearly premium payment for riders – Rs. 26
    • The Monthly premium for riders – Rs. 4.50

Tip #4 Benefits of Life insurance calculator

Some of the major benefits of the Life Insurance Calculator can be listed below.

    1. Error-free calculation

       The calculation of life insurance premium becomes automated in nature when you are using the life insurance calculator. This automated method will be less prone to errors in comparison to that of the manual calculations. 

    2. An Easy method of premium calculation

      Life Insurance Calculator is an easy and convenient method of life insurance premium calculation and helps in the accurate calculation without any hassles. 

    3. Determination of the exact amount

      By a life insurance calculator, you can easily determine the exact sum insured or coverage amount which will be needed for ensuring the financial security of your loved ones. 

    4. Comparison and selection of the best policy

      Life Insurance calculator will help in providing you with the scope of comparison of the premium which is being offered by various insurance providers. Then, you can select the best policy which will provide you with maximum coverage at a reasonable premium. 

FAQs

  1. I do not have any mortgages. Do I still need life insurance?You may not be having any mortgages, but if you have dependents you should have life insurance.
  2. Is life insurance policy necessary?Yes, in today’s world when the risk factors for life have increased tremendously it is a must to have a life insurance policy.
  3. How to determine what should be your coverage?To determine your coverage, you should consider the below-mentioned factors.
    • Your current income
    • Your financial goals
    • Your liabilities
    • Your dependents and expenditure related to them
    • Your age
    • What is the general tenure for life insurance policies?

    Usually, life insurance policies are sold for 5 years, 10 years, 15 years, 20 years, 25 years, 30 years, etc.

  4. Is the life insurance premium calculator helpful?Yes, life insurance premium calculator is helpful for calculating the exact premium to be paid and also helps in comparing and finding out the best life insurance policy for you.

What Is Insurance Deductible and How Does It Work?

Sidharth Hampanavar

Insurance works on different types of technical concepts. While the policy promises to pay you the compensation for a financial loss that you suffer, the claim involves some technical details which many of you might overlook. As a result, when the claim is delayed or not paid in full, you are disappointed. That is why it becomes important to understand all the technical terms and conditions with respect to your insurance claims. A deductible is one such concept which needs your attention. Do you know what insurance deductibles are?

What is an insurance deductible?

An insurance deductible represents the amount of claim which you have to pay. The deductible, therefore, is your out-of-pocket expenses in each and every instance of claim. The insurance company pays the claim which is in excess of the deductible limit. For instance, if, in an insurance policy there is a deductible of INR 3000 and you make a claim of INR 10,000, the insurance company would pay only INR 7000 while you have to foot the deductible of INR 3000.

How do insurance deductibles work?

In many types of insurance policies, there is a predefined deductible limit. This limit is communicated to you through the policy brochure and policy wordings when you buy the plan. The company states that claims exceeding the deductible would be paid. When you suffer a loss, the claim for the insurance company would be triggered only if the claim exceeds the deductible. In such cases, the insurance company would pay the excess claim and you shoulder the deductible amount yourself.

Where are insurance deductibles applicable?

The following types of insurance policies have insurance deductibles built into their terms and conditions:

  • Motor insurance policies
  • Travel insurance policies
  • Fire and property insurance policies
  • Health insurance policies, etc.

Types of insurance deductibles

Insurance deductibles can be of two types – compulsory and voluntary. Compulsory deductibles are those which are compulsorily applied by the insurance company. You have no control over them and have to bear them in case of claims. Voluntary deductibles, on the other hand, are those which you can choose yourself. If you choose a voluntary deductible limit, you choose to pay a part of the claim yourself. In such cases, the insurance company allows you a premium discount as you reduce the claim liability for the company. Voluntary deductibles are, however, treated over and above the compulsory deductible. If the plan already has a compulsory deductible and you also choose a voluntary deductible, you would have to bear both the deductibles at the time of claims. Choosing a voluntary deductible does not remove the compulsory deductible.

Why insurance deductibles are relevant?

There are two main reasons why insurance companies impose a deductible under the policy. These reasons include the following –

  • To discourage you from making smaller claims on your policy. Since you would have to bear the deductible, companies believe that smaller claims would not be made on them and they can reduce their claim liability
  • To prevent reckless claims from policyholders and to minimise losses due to moral hazard. When there is a deductible, you would be careful in raising a claim as you would also incur out-of-pocket expenses. Moreover, people intending to profit from insurance claims would be discouraged in buying the policy

Deductibles vis-à-vis co-payment – meaning and difference

In health insurance plans the concept of co-payment is applicable in many cases. Co-payment also means paying a part of your health insurance claim yourself. However, co-payment and deductibles are different. Here’s how –

Insurance deductible

Co-payment

Deductible, if applicable under the policy, would be applicable for all customers

Co-payment is applicable only in certain instances. It is not applicable to all policyholders

Deductibles are usually found in top-up or super top-up health insurance plans. Under these plans, the choice of the deductible is in your hands.

Co-payment is found in almost all health insurance plans. This is usually applicable if the insured member is aged 60 years and above

Under normal health insurance plans, deductibles might be offered as an option and if you choose the deductible you can avail premium discounts

There are no premium discounts for co-payment and co-payment is not optional. It is compulsory for the cases where co-payment is applicable. For instance, if the insured is aged 60 years and above or if the policy is bought in a non-metro city and the claim is made in a metro city the co-payment would be compulsory.

So, though both concepts infer your out-of-pocket expenses, they are quite different from one another in terms of their relevance and meaning.

Amount of insurance deductible

The amount of deductible applicable to insurance plans depends on the type of plan that you buy and the insurance company’s discretion. Only in case of motor insurance plans, the deductible limits are fixed. For two-wheeler insurance plans the deductible is INR 50 and for four-wheelers, the limit is INR 500 for cars with engine capacities up to 1500 cc and INR 1000 for cars having a higher capacity. In other types of insurance plans, the deductible limits vary across plans and companies.

What you should do?

When you are buying an insurance policy, check for insurance deductibles. If the policy has deductibles, compare and choose a plan which has the lowest deductibles. A lower insurance deductible means a lower out-of-pocket expense for you and so you should try and choose plans which have limited or low deductibles to reduce your claim burden.

Frequently Asked Questions

  1. Can I avoid insurance deductibles?

    No, you cannot. If the insurance policy has deductibles those deductibles would be compulsory and you would have to bear them. You can only avoid voluntary deductibles, not compulsory ones.

  2. Are deductibles expressed only in amount?

    No, deductibles can be expressed as a percentage of the total claim or in hours also. For instance, in travel insurance policies, a deductible of 6 to 12 hours is applicable in case of delay of checked-in baggage or missed flight connection. In such cases, the delay should be more than the specified deductible period for your claim to be valid. Similarly, in fire insurance policies, architect, surveyor’s or engineer’s fee can be covered as an optional cover if it is in excess of 3% of the claim amount. In these cases, the deductible is expressed in a percentage of the claim amount.

  3. Do life insurance plans have deductibles?

    No, deductibles are not applicable for life insurance plans.

  4. How do deductibles work under top-up health plans?

    Under top-up health plans, you choose a sum insured and a deductible limit. If any claim exceeds the chosen deductible limit, the policy pays the excess claim. For instance, if you choose a deductible of INR 1 lakh and you face a claim of INR 1.5 lakhs, the top-up plan would pay INR 50,000 as a claim. 

Premium calculation of Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) plans

Sidharth Hampanavar

Postal Life Insurance policies have been in effect from the year 1884 when they were launched with the approval of the Secretary of State under the British Empire. Postal Life Insurance (PLI) policies were intended to provide affordable insurance coverage to the population of India. Rural Postal Life Insurance (RPLI), on the other hand, was launched in the year 1995 as per the recommendations of the Malhotra Committee. These policies were designed to offer low-cost insurance to the rural population. Both PLI and RPLI offer a range of life insurance plans which have low premiums and offer good coverage.

Before understanding how the premiums for PLI and RPLI policies are calculated, let’s have a look at the different types of life insurance plans offered under both these categories –

Life insurance plans under Postal Life Insurance:

Name of the planType of planSalient features 
SurakshaWhole life plan
  • Coverage up to 80 years
  • The plan earns bonus
  • Sum assured and bonus are paid either on maturity after attaining 80 years of age or on earlier death
SantoshEndowment plan
  • The loan can be availed after 3 years
  • The plan earns bonus
SuvidhaConvertible whole life plan
  • The plan is a whole life plan which can be converted to endowment after five policy years
  • Bonus is added to the plan
SumangalMoney-back plan
  • Policy term can be 15 or 20 years
  • 20% of the sum assured is paid as money back benefit periodically
Yigal SurakshaJoint life endowment plan
  • Both husband and wife can be covered under a single plan
  • The death benefit is paid if either of the spouses dies
Bal Jeevan BimaChild plan
  • The policy covers minor children
  • Premiums are waived if the parent dies
  • The plan continues until maturity even after the parent’s death and pays the maturity benefit
  • The policyholder’s two children are eligible for coverage

Life Insurance plans under Rural Postal Life Insurance

Name of the planType of planSalient features 
Gram SurakshaWhole life plan
  • Whole life insurance plan that can be coverted to an endowment plan after 5 years
  • Coverage up to 80 years of age
  • On maturity the sum assured and bonus is paid
  • On death before 80 years, the sum assured and accrued bonus are paid
  • A loan facility is available after 4 years of the policy term
Gram SantoshEndowment plan
  • Sum assured of up to INR 10 lakhs can be availed
  • Bonus is added under the plan
  • Loan facility after 3 years
Gram SuvidhaConvertible whole life plan
  • The plan can be converted to endowment after five years of buying the policy
  • Bonus is added to the plan’s benefits
  • A nominee will receive the assured sum in case of death
Gram SumangalMoney-back plan
  • Money-back benefits pay a part of the sum assured at periodic intervals
  • In case of death, the full sum assured with bonus is paid irrespective of money back benefits already paid
Gram PriyaMoney-back plan
  • The policy has a fixed tenure of 10 years
  • 20% of the sum assured is paid at the end of the 4th and 7th policy years
  • Bonus is also added to the plan
  • There will be no interest on premiums during year of flood, drought, or earthquake
Bal Jeevan BimaChild plan
  • Up to two children can be covered under the plan
  • If the parent dies the premiums are waived off but the coverage continues

Who can buy Rural Postal Life Insurance and Postal Life Insurance plans?

Indian citizens who are employed with any of the following organisations can buy PLI insurance plans –

  • Central or State Government
  • Defence services or para military forces
  • RBI
  • Local bodies
  • Education institutions which are aided by the Government
  • Public sector companies
  • Financial institutions
  • Autonomous bodies
  • Banks which have been nationalised
  • Scheduled commercial bank employees
  • Co-operative society employees
  • Employees working in deemed universities
  • Professionals
  • Employees who work in companies listed in the NSE or BSE in specified sectors

For RPLI insurance plans, the individual should live permanently in a rural area and should be an Indian citizen.

Rural Postal Life Insurance and Postal Life Insurance calculators

RPLI and PLI calculators can be of two types – RPLI and PLI maturity calculator and RPLI and PLI premium calculator. Let’s understand these two calculators in details –

RPLI and PLI maturity calculator

On maturity of both RPLI and PLI insurance plans, the sum assured chosen and the accrued bonuses are paid. Since bonus is not guaranteed or fixed, the exact maturity amount cannot be calculated in advance.

RPLI premium calculator

There is no specific RPLI calculator to calculate the premiums of RPLI insurance plans. There are, however, premium tables which give the monthly premiums payable for RPLI plans. The premium tables for different plans are different. For instance, the premium tables of Gram Suvidha and Gram Sumangal are as follows –

How to use PLI & RPLI calculators?

In order to use the PLI insurance calculator, follow the below-given steps-

  • Visit the official website of Postal Life Insurance
  • Next, click on the ‘Buy Policy’ button which is placed in the right-hand corner of the page
  • You will be redirected to a new page where you will need to fill in your details correctly
  • Once the form is filled up, enter the captcha image and click on the ‘Get Quote’ button
  • The postal life insurance website will now display the monthly premium on the policy

For accessing the RPLI calculator, the following steps are needed to be followed:-

  • Visit the official website of India Post
  • Scroll down to Postal Life Insurance and click on it
  • Once you click on ‘Ok’, you will be redirected to an external website
  • Click on ‘Quote’ under the Purchase a Policy tab
  • Next, fill up all the required details like Name, Occupation, Age, product type (RPLI in this case), etc along with the name of the policy
  • Then fill up the image captcha and click on ‘Get Quote’
  • The page with monthly, quarterly, half-yearly, and yearly premium details opens up

Premium table for Gram Suvidha for sum assured of INR 1 lakh

Entry ageMonthly premium per INR 1000 sum assured if the plan is converted to endowmentMonthly premium per INR 1000 sum assured if the plan is not converted and matures at 60 years of age
30 yearsINR 205INR 305
35 yearsINR 250INR 395
40 yearsINR 325INR 535
45 yearsINR 440INR 80

Premium table for Gram Sumangal for sum assured of INR 1 lakh

Entry ageMonthly premium per INR 1000 sum assured for a term of 15 yearsMonthly premium per INR 1000 sum assured for a term of 20 years
30 yearsINR 660INR 500
35 yearsINR 665INR 510
40 yearsINR 675INR 530

Postal Life Insurance Premium Calculator

Just like RPLI has no specific premium calculator, there is no postal life insurance calculator too. However, like RPLI, there is also a PLI premium table for different types of insurance plans. As per the available PLI premium table, here are the sample premium rates for Santosh and Sumangal –

PLI Premium table for Santosh for sum assured of INR 1 lakh

Entry ageMonthly premium per INR 5000 sum assured if maturity age is 50 yearsMonthly premium per INR 5000 sum assured if maturity age is 60 years
30 yearsINR 400INR 260
35 yearsINR 560INR 320
40 yearsINR 860INR 420
45 yearsINR 1740INR 580

PLI Premium table for Sumangal for sum assured of INR 1 lakh

Entry ageMonthly premium per INR 5000 sum assured if term is 15 yearsMonthly premium per INR 5000 sum assured if term is 20 years
19 to 36 yearsINR 660INR 500
37 to 42 yearsINR 680INR 520
43 to 45 yearsINR 700INR 540

Factors affecting PLI and RPLI premiums

The premium rate of PLI and RPLI insurance plans depend on the following factors –

  • Age of the insured – higher the age higher would be the premium and vice-versa
  • Term selected – higher the term lower would be the premium payable and vice-versa
  • Sum assured – higher the sum assured higher would the premium payable and vice-versa
  • Type of policy – the type of policy selected determines the premium rate
  • Mode of premium payment – RPLI and PLI premiums can be paid monthly, quarterly, half-yearly or annually. Monthly premiums are higher than annual premiums because they involve additional administrative costs

Details required for premium calculation

Now you know the factors on which the premium of RPLI and PLI insurance plans depend. So, for calculating the premium of these plans, the following details would be required –

  • Age of the insured
  • Term of the plan
  • Sum assured that you want
  • Premium payment mode
  • Type of plan

Once you have all these relevant details, you can use RPLI and PLI premium tables and calculate the premiums payable for the policy yourself.

Benefits of PLI calculator

Calculating the premiums for RPLI and PLI insurance plans is beneficial because of the following reasons:

  • You can ascertain the premium payable for the policy before you actually buy the policy. This way you can know exactly how much the policy would cost you
  • You can provision in your financial budget regarding the premiums payable so that the policy does not lapse
  • You can select the coverage level at which the premium would be the most affordable for you
  • By knowing the premium rates you can also compare PLI and RPLI insurance plans with other insurance plans offered by life insurance companies and find out which plan offers the lowest premium rate

Both Postal Life Insurance and Rural Postal Life Insurance plans offer good coverage at lower premiums. The bonus that these plans give is also attractive which helps in creating a substantial corpus over the policy tenure. You can, therefore, choose plan offered by PLI and RPLI (if you live in a rural area) to avail life insurance coverage as well as to create a good corpus on the maturity of the plan. The tables are readily available on the official website of PLI and the premiums can be calculated easily. So, calculate the premiums and invest in an RPLI or a PLI insurance plan at the earliest.

FAQs

  1. What is the difference between PLI and RPLI plans?

    In PLI plans, the sum assured or aggregate sum assured limit is more than INR 1 lacs while in RPLI plans, the sum assured or aggregate sum assured limit is more than INR 25,000.

  2. What is the minimum and maximum sum assured with postal life insurance plans?

    The PLI plans provide a minimum of INR 20,000 and a maximum of INR 50 lakhs. However, the Bal Jeewan Beema is an exception. It provides a maximum of INR 3 lakhs.

  3. Can a person living in an urban area avail of the RPLI schemes?

    N, individuals who reside in rural areas are only eligible to avail themselves of the RPLI schemes.

  4. What is the maximum amount that can be availed under the RPLI insurance schemes?

    You can obtain a maximum of INR 5.5 lakhs under the RPLI insurance schemes.

  5. What is the interest rate against the loans taken under PLI schemes?

    A 10% interest is charged against the loans taken under PLI schemes, which is charged at an interval of every 6 months.

Third Party Car Insurance

Sidharth Hampanavar

Traffic rules and guidelines are determined by the Motor Vehicles Act, 1988. The Act states the rules for all types of vehicles which run in India. One such rule of the Act is that every vehicle should have a third party insurance cover on it. Only if the vehicle has a valid insurance cover can it run on Indian roads? If you have a car you would also need a valid third party insurance cover on it. While many of you understand that the cover is necessary, do you understand the coverage benefits of third party insurance?

If you don’t, here’s a detailed analysis of third party car insurance plans –

What is a third party insurance policy?

A third party insurance policy is a mandatory motor insurance policy which covers any type of third party losses which are caused by the car. The policy covers the losses and pays the financial liability which is suffered by the car’s owner.

How does third party insurance work?

Under a third party insurance policy, three parties are involved which are as follows –

  1. The first party which is the car’s owner who buys the plan
  2. Second-party is the insurance company which covers the risk
  3. Third-party is any other individual other than the first and second parties

The owner buys a third party liability cover from the insurance company. The company promises coverage against third party liabilities. When the owner suffers a third party liability, the insurance company is intimated of the claim. The insurance company then pays the aggrieved third party the loss that he/she suffers.

Types of third party insurance plans

Third-party insurance plans can be of the following types depending on the vehicle that they cover –

  • Third-party car insurance plans cover private cars
  • Third-party two-wheeler insurance plans cover privately-owned two-wheelers
  • Third-party commercial vehicle plans cover vehicles which are used for commercial nature including, but not limited to, taxis, commercial two-wheelers, tempos, trucks, lorries, etc.

Features of third party car insurance plans

Third-party car insurance policies have the following salient features –

  • The policy covers only the damages suffered by third parties. If the car itself suffers any type of damage, the same would not be covered under the plan
  • The premiums for third party plans are determined and fixed by the Insurance Regulatory and Development Authority of India (IRDAI). The premiums are, therefore, fixed across all insurance companies
  • The premiums for third party car insurance plans depend on the engine capacity of the car
  • The premiums are not fixed. They might change any time as per the IRDA’s discretion
  • Third-party plans are the cheapest car insurance plan available in the market
  • Physical injury and death are covered for an unlimited amount. The insurance company would pay the claim as directed by the claims tribunal
  • In case of property damage claims, the liability of the insurance company is limited to INR 7.5 lakhs

What does third party insurance cover?

Coverage under a 3rd party insurance policy includes the following –

  • If the car kills an individual, the vehicle owner faces a financial liability for the loss of life caused due to his car. The third-party insurance policy covers this loss
  • If the car physically injures or hurts any individual, the car’s owner faces a financial liability for the physical injury caused. This liability is covered under 3rd party insurance plans
  • If the car damages any property which belongs to any other individual, the vehicle owner is financially liable to compensate the individual for the loss of property. This financial liability is covered under third party plans

Besides these third party liabilities, the plan also covers the owner/driver of the car against accidental contingencies. There is a mandatory personal accident cover under third party car insurance plans. Under this personal accident cover, accidental death or permanent disablement is covered.

What is not covered under third party insurance?

Third-party car insurance plans do not cover the following –

  • Damages suffered by the car itself
  • Damages caused by the influence of drugs and/or alcohol
  • Deliberate losses caused to third parties
  • Liability suffered when the car is being driven outside India or without a valid driving license
  • Any type of contractual liabilities
  • Damages suffered due to war and nuclear perils
  • Liability suffered when the car’s usage limitations were violated

Premiums of third party car insurance plans

As stated earlier, premiums of third party liability plans are fixed by the IRDAI and reviewed every financial year. The premiums which are applicable currently for the financial year 2019-20 are as follows:

Cubic capacity (cc) of the carPremium rate
Up to 1000 ccINR 1850
More than 1000 cc but below 1500 ccINR 2863
More than 1500 ccINR 7890

Benefits of third party car insurance plans

Though third party car insurance plans are mandatory by law, they have various benefits too. These benefits include the following:

  • The plan helps you avoid legal hassles and penalties which occur when you are caught driving without a valid cover
  • The financial liability which you would face in an unfortunate death of another individual could go up in lakhs. Since the policy covers such liabilities, it gives you financial security
  • The plan has very low premium rates and is, therefore, easily affordable

Difference between private and commercial third party insurance plans

As mentioned earlier, third party insurance plans are available for both private as well as commercial vehicles. However, the plans are different in various respects. The differences are as follows –

Points of differenceThird-party coverage on private vehiclesThird-party coverage on commercial vehicles
Types of vehicles coveredCars and two-wheelers are covered under these plansTrucks, lorries, taxis and other passenger and goods carrying vehicles are covered
Premium amountThe premium amount is lowerPremium rates are higher

How to buy 3rd party car insurance plans

Buying third party insurance plans for a car can be done online through Turtlemint. Turtlemint gives you the facility of comparing different third party plans and then choose the best plan. You can also get guidance on buying the best policy as well as assistance at the time of claims. Turtlemint, therefore, helps you choose the best third party cover for your car. The process is simple and is as follows –

    • Visit Turtlemint’s car insurance page at https://turtlemint-stage.dreamhosters.com/car-insurance
    • Enter in your car’s registration number and click ‘Find Plans’
    • You would also have to enter the details of your car like the make and model, manufacturing year, fuel type, variant, type of policy that you previously owned and your contact details
    • Once all the details are entered you can click ‘Submit’ and the next page shows you the list of available plans
    • Choose ‘TP liability’ to view some of the best third party plans for your car
    • Compare the coverage benefits of the plans and choose the plan which offers the best coverage features
    • Pay the premiums online and your car insurance policy would be issued

Simple, isn’t it?

You can also buy third party car insurance online through the website of the insurance company but then you lose the benefit of comparing. Comparing lets you choose a plan which has the most inclusive coverage features and the insurance company which has the best garage network for cashless claims. So, buying through Turtlemint is a wiser alternative.

Making a claim under third party insurance

Claims under third party insurance plans are handled by the Motor Accidents Claims Tribunal (MACT). The process is as follows –

    • You have to file a police FIR after the claim occurs
    • Also, inform the insurance company immediately of your claim
    • The claim would be taken to MACT where the ruling for the claim amount would be given
    • As per the ruling of MACT, the insurance company would pay the claim directly to the third party. You wouldn’t have to shoulder the financial burden yourself

Various documents are also required for making a third-party claim. These documents include the following –

  • Police FIR
  • RC book of the car
  • Your driver’s license
  • Coroner’s report, post mortem report and punchnama in case of death of a third party
  • Police report in case of accidental injuries or property damage
  • Hospital reports, bills and invoices in case of physical injury suffered by third parties

You can also get a settlement of your third party insurance claims through Turtlemint by calling the company’s helpline number 1800 266 0101 or by sending an email at claims@turtlemint.com . The company’s claim department would then handle your claims and get it settled from the insurance company.

Third-party insurance policy on your car is a must if you want to abide by the traffic rules prevalent in India. The policy also has affordable premiums making it pocket-friendly. So, if you own a car make sure to have third party coverage on it.

Frequently Asked Questions

  1. Do third party premiums remain constant?
    No, third-party premiums are dynamic and reviewed by the IRDAI every year. The IRDAI may increase or decrease the premium as per its discretion.
  1. Can I earn any tax benefits on third party insurance premiums?
    No, you cannot earn any type of tax benefit on third party premiums.
  1. In an accident, I hurt an individual and my car also got damaged. Would I get coverage for both under third party plans?
    No, under third party plans you would get coverage only for the physical injury that your car caused to another individual. The damages suffered by your car would not be covered.
  1. What is the coverage amount for personal accident cover?
    The coverage amount for personal accident cover is INR 15 lakhs and the premiums that you need to pay for the same is INR 750.

 

Endowment Policy – Saving Plans, Features & Benefits (Complete Guide)

Sidharth Hampanavar

Life insurance plans come in many different variants. Broadly, life insurance plans are classified under two heads –

Life insurance plans

Traditional plans are those which promise guaranteed returns whereas under unit linked plans the returns depend on the performance of the market.

Traditional plans can be of different types and one such type is an endowment policy. Do you know endowment policy meaning? If you don’t here’s a complete lowdown on endowment insurance plans.

What is an endowment plan?

An endowment policy is a life insurance policy which helps you in creating guaranteed savings for your financial goals. The plan has a death benefit and also a maturity benefit. In case of death of the insured during the term of the policy, a promised death benefit is paid. Moreover, if the insured survives till the end of the policy tenure, a promised maturity benefit would be paid. Thus, endowment insurance plans cover both death and maturity and help in creating savings.

Types of endowment policy

Now that you know what is an endowment plan let’s find out the different types of endowment plans available. Endowment plans can be offered in two variants which are as follows –

  • With profits or participating plans

Or

  • Without profits or non-participating plans

With profits plans are those which earn bonus. If the insurance company earns a profit in a financial year, the profit is distributed among the policyholders in the form of bonus. Participating policies are eligible to earn a bonus and if an endowment policy is offered as a participating or with profits policy, it would accrue bonus.

Without profits policy, on the other hand, do not earn bonus. Even though the insurance company declares a bonus, the bonus is not added to non-participating endowment plans.

How does endowment policy work?

Here is a graphical representation of how endowment plans work for a better understanding –

endowment policy

Salient features of endowment policy

Here are some of the salient features which you can find in endowment policy –

  • An endowment plan is offered for longer tenures which can go up to 30 years
  • There are whole life endowment plans too which allow coverage till 99 or 100 years of age
  • An endowment policy does not invest in capital markets. As such, the policy promises guaranteed benefits. Only the bonus, if allowed, is non-guaranteed since it depends on the performance of the company.
  • Bonus is added under participating plans only if you pay the premiums as and when they are due
  • There are optional riders under endowment insurance plans which help in enhancing the coverage
  • Guaranteed additions or loyalty additions are added under many endowment plans
  • There are regular premium, limited premium as well as single premium endowment plans. You can choose any plan as per your premium paying capacity
  • You can avail policy loans under endowment plans. The loan is allowed against the surrender value of the plan

Benefits of endowment policy

Now that you have understood endowment plan meaning, its types and features, let’s see what makes these plans beneficial –

  • The plan benefits are guaranteed protecting your savings from market volatility. An endowment policy is, therefore, suitable for risk-averse individuals who are looking at secured returns
  • You can choose any policy tenure ranging from 10 to 30 years or even lifelong
  • Endowment plans help you to create a guaranteed corpus for your financial goals
  • If you buy participating plans, you can get an increased corpus through bonus additions
  • The premiums that you pay for the endowment policy are allowed as a deduction from your taxable income. You can claim a deduction of up to INR 1.5 lakhs on the premiums that you pay
  • Policy loans available under the plan helps you meet emergency financial needs at lower interest rates
  • Even the plan benefits, maturity or death benefit, are completely tax-free in your hands under Section 10 (10D). Thus, endowment plans helps you to create tax-free savings for future needs

Best endowment plans of 2020

Here are the best endowment plans of 2020 which you can choose from –

HDFC Life Jeevan Sanchay Plus

This is a non-participating endowment plan which promises the following features –

  • There are four benefit payment options under the plan. You can choose to receive the maturity benefit either in lump sum or in instalments under these options
  • Maturity benefit can be chosen to be received as lifelong incomes till you reach 99 years of age
  • Guaranteed additions are added under the policy
  • There are two optional riders which you can choose for a wider scope of coverage

The parameters of the plan are as follows –

Entry age5 to 60 years
Policy term6 to 20 years
Premium payment term5 to 12 years
PremiumMinimum – INR 30,000/annum

Maximum – no limit

Sum assuredDepends on the premium paid, age and the plan option selected

ICICI Pru Cash Advantage

Cash Advantage is a money-back endowment plan wherein the sum assured is paid in instalments over the policy period. Let’s understand the salient features which make it the best endowment plan –

  • Premiums are payable for a limited tenure only
  • 1% of the Guaranteed Maturity Benefit is promised as Guaranteed Cash Benefit throughout the policy term
  • Regular incomes are paid for 10 years after the completion of the premium payment term

The plan parameters are as follows –

Entry age0 to 60 years
Policy term15, 17 or 20 years
Premium payment term5,7 or 10 years
PremiumMinimum – INR 30,000/annum

Maximum – no limit

Sum assured7 or 10 times the annual premium paid depending on age

ICICI Pru Savings Suraksha

This is another endowment plan offered by ICICI Prudential which comes with both regular premium and limited premium payment options. The features of the plan which make it the best endowment plan are as follows –

  • The plan is a participating endowment plan which helps you grow your corpus through reversionary bonuses
  • Guaranteed additions are also added to the plan corpus in the first five years of the policy

Parameters of the plan are as follows –

Entry age0 to 60 years
Policy term10 to 30 years
Premium payment term5 to 30 years
PremiumMinimum – INR 12,000/annum

Maximum – no limit

Sum assured7 or 10 times the annual premium paid depending on age

LIC’s Jeevan Labh

LIC offers some of the best endowment plans and Jeevan Labh is one such plan which allows limited premium payments only. The features of the plan are as follows –

  • Bonuses are declared under the plan which enhance the death or maturity benefit
  • There are two optional rider coverage benefits which can be selected
  • Premium discounts are allowed for choosing sum assured levels of INR 5 lakhs and above

Plan parameters include the following –

Entry age8 to 59 years
Policy term16,21 or 25 years
Premium payment term10,15 or 16 years
PremiumDepends on age, sum assured and policy tenure
Sum assuredMinimum – INR 2 lakhs

Maximum – no limit

LIC’s Jeevan Tarun Plan

LIC’s Jeevan Tarun plan doubles up as a child insurance plan for safeguarding your child’s financial future. The plan, therefore, acts as the best endowment policy for your child. The benefits of the plan are as follows –

  • The child is covered under the plan while the parent is the policyholder
  • There are four coverage options under the plan. Under these options, you can choose to receive the sum assured in money back benefits too
  • If the money back benefit is chosen, a part of the sum assured is paid in the last four policy years
  • Bonuses are added under the plan
  • Premium waiver rider can be selected by paying an additional premium
  • Premium discounts are available if the premiums are paid yearly or half-yearly

Parameters of LIC’s Jeevan Tarun are as follows –

Entry age90 days to 12 years
Policy term25 years – entry age
Premium payment term20 years – entry age
PremiumDepends on age, sum assured and policy tenure
Sum assuredMinimum – INR 75,000

Maximum – no limit

How to buy endowment policy?

To buy an endowment policy of your choice the online medium is the best option. Though you can buy a policy from a life insurance agent or from the insurance company itself, you don’t get a choice. There are various endowment insurance plans available in the market and when you compare you can buy the best endowment policy. Comparing can be done when you buy endowment policy online. The process is easy and quick. Turtlemint is an online platform which allows you to buy the best endowment policy for your needs. Turtlemint is tied-up with the leading names in the life insurance industry and offers you the choice of the best endowment plans. You can compare and buy the most suitable coverage for your needs. Besides offering you the choice of the best endowment plans, Turtlemint also offers personalised assistance for your queries and claim assistance. This makes your buying and claim process easy as a breeze.

To buy an endowment policy through Turtlemint, here are the steps that you should follow –

  • Visit https://turtlemint-stage.dreamhosters.com/life-insurance
  • Choose your financial need for which you are buying endowment plan. There are two needs which you can choose from – ‘Investment and tax planning’ and ‘Savings for Child’
  • Then you would be required to enter your personal details which include the following –
  • Gender
  • Date of birth
  • Annual income (so that the ideal sum assured level can be recommended)
  • Smoking preference
  • Investment horizon (for choosing the right coverage tenure)
  • Investment amount and also the frequency (yearly, half-yearly, quarterly, monthly or one-time)
  • Your contact details – name, mobile number and email ID. This is optional and is required so that Turtlemint’s team can contact you and help you buy the policy
  • In the next page you get a choice between ULIPs and traditional plans
  • Choose traditional plans to see the best endowment plans. You can also check the plan’s benefits and the premiums charged
  • Compare the premiums vis-à-vis the benefit and choose the best endowment policy as per your coverage needs

Thus, when you buy through Turtlemint you can easily compare and buy the best endowment policy.

Documents required for buying endowment policy

You would have to submit some documents to complete the buying process for your endowment policy. These documents include the following –

  • Your photographs
  • Photographs of the life insured if you are buying the policy for someone else
  • Identity proof of the insured
  • Address proof of the insured
  • Age proof of the insured
  • Income related documents if you are opting for a high sum assured level and paying higher premiums
  • Aadhar card and PAN card

Things to remember when buying endowment policy

When you buy an endowment plan, here are some things which you should keep in mind –

  • Ensure that the premium is affordable so that you can pay it over the term of the plan
  • Endowment plans allow single premiums, limited premiums as well as regular premiums. Choose a premium paying term as per your affordability
  • The term of the plan should match your investment horizon. Buy a plan keeping a financial goal in mind. These choose the term so that you get the funds when you need to fulfil the specific goal
  • If you choose a participating plan, remember that bonus would only be paid if you continue paying the premiums. So, don’t let the policy lapse
  • A lapsed policy can be revived within two years. Try and revive the policy for a wider scope of coverage
  • Choose policy riders to increase the coverage of the endowment insurance plan

Endowment plans are low risk savings oriented life insurance plans which let you create a secured corpus over the term of the policy. So, if you want guaranteed returns, buy an endowment policy and create funds for your financial goals.

Frequently Asked Questions

  • What would happen if I stop paying premiums under an endowment plan?

If you stop paying premiums, the policy would lapse. If you have paid the specified minimum number of premiums, the coverage under the policy would continue on a reduced sum assured. This reduced sum assured is called paid-up value and the policy is called a paid-up policy. No future bonuses would be added to participating plans which are in a paid-up state. However, the accrued bonuses would be added to the paid-up value. In case of death or maturity, the paid-up value would be paid.

  1. Can I surrender an endowment policy?Yes, you can surrender an endowment policy if the policy has acquired a paid-up value. On surrender, you receive a surrender value which is calculated as the paid-up value multiplied by a surrender value factor. The factor is determined by the insurance company.
  2. How much loan is available under an endowment insurance plan?You can avail up to 90% of the surrender value as loan under endowment plans. However, the exact limit of loan varies across plans.
  3. Are bonuses taxable?No, the bonus that you earn from participating endowment policies is not taxable.

Term insurance plans India guide

Sidharth Hampanavar

What is Term Insurance?

Term insurance is an insurance contract for a specific term in which an insurance company promises to pay a certain pre-decided sum of money to the designated beneficiary in the event of the death of the policyholder during the term. The coverage is provided in return of premiums paid the policyholder. Basically, the term insurance plan is the pure protection plans that only cover the risk of death without any savings benefit attached to the plan. However, there are plans that have been introduced to pay back the premium at the end of the policy tenure if the policyholder survives. It’s imperative for every bread earner of the family to have adequate protection in order to secure their loved ones from financial trauma that may result from an unforeseen event like death.

Why Term Insurance? Term insurance benefits

Term insurance policies come with various benefits which makes it the must-have before planning one’s personal financial portfolio. Following are the major benefits offered by term insurance:

  1. Simple structure/Easy to understand:Term insurance is simple and easy to understand. It is a policy that provides only life cover. The policyholder needs to pay a fixed premium periodically to avail a certain pre-determined amount of coverage (sum assured). If the policyholder dies during the policy tenure, the beneficiary will be compensated with sum assured as a death benefit. In case the policyholder survives the policy term, no benefits are paid.

    Let’s understand this with an example. Let’s say, Mr. Rahul, 30-year salaried man has purchased INR 50, 00,000 coverage for 25 years term. Let’s say he is paying INR. 12,000 for this coverage yearly which he needs to pay for 25 years. Suppose, Rahul dies at the age of 40 years, his beneficiary (spouse as mentioned in the policy) would be paid INR 50, 00,000 as a death benefit. Once the death benefit is paid, the policy gets terminated. In case, Rahul survives 25 years policy term, he will not be receiving anything in return at the end of the term.

  2. Protection/death benefit:The unfortunate demise of the bread earner of the family can have the worst financial repercussions in many ways. Dependants may have to suffer the loss of regular income/income stream, the burden of unpaid debts and corpus to meet various long-term goals such as children’s education, marriage etc. These things can make the family’s financial position unstable. Term insurance benefits you by paying the sum assured as a death benefit to the family (designated beneficiary) on the unfortunate demise of the policyholder during the policy term. The lump sum paid as death benefit helps to maintain the financial stability of the family.
  3. Higher coverage option:Compared to other investment cum insurance products, term life insurance being the pure protection plan offers a higher range of coverage at a relatively lower cost.
  4. Low cost:Term insurance premiums are lower in comparison to other life insurance products. As the term insurance plan only provides protection and no savings component involves, premium payable is also lower. Specifically, when you purchase term insurance online, premium will be even lower as online policies will not involve intermediary cost.
  5. Tax benefits:Though term insurance plans should be purchased on the basis of just the tax benefits provided by the plan, it’s important to know the tax implications of the plan. Premium paid towards term insurance plan in a year maximum of up to INR 1.5 lakhs qualifies for tax deduction under Section 80C of the Income Tax Act, 1961. Death benefits paid in a lump sum by the policy is completely tax-free under the provisions of Section 10(10D) of the Income Tax Act, 1961
  6. Additional benefits:Term insurance benefits are not just limited to death benefits. The plans available today are customisable as many of the plans offer additional optional benefits. There are many riders offered by various term plans which can be availed by paying an additional nominal premium in order to enhance the coverage. Riders available are critical illness rider and accidental death and disability rider etc

Top 5 term insurance plans in India

Now that we know term insurance benefits, the following are some of the best term insurance plans offered by various insurance companies.

Plan nameEntry ageAge at maturitySum assuredPolicy termClaim settlement ratio
TATA AIA Life Insurance Sampoorna Raksha Plan18 years to 70 years28 years to 80 yearsINR 50 lakhs to no limit10 years to 40 years98.00%
ICICI Pru iProtect Smart Plan18 years to 60 years23 years to 75 yearsSubjected to the premium amount5 years to whole life97.88%
HDFC Click2protect 3D Plus Plan18 years to 65 years23 years to 75 yearsINR 10 lakhs to no limit5 years to whole life (depending on the plan chosen)97.80%
Max Life Online Term Plan Plus18 years to 60 yearsUp to 85 yearsINR 25 lakhs to INR 100 crores10 years to 50 years98.26%
AEGON Life’s iTerm Insurance Plan18 years to 65 yearsUp to 75 yearsSubjected to the premium amountTill 100 years95.67%
    1. TATA AIA Life Insurance Sampoorna Raksha PlanTATA AIA Life Insurance Company is a joint venture between two leading business groups – TATA sons and AIA group. Being one of the leading insurance companies, it offers a variety of life insurance products. Sampoorna Raksha is one of the popular term insurance products offered by the company which can be purchased online. Following are the features of the plan:
      • The pure protection plan that comes with the flexibility to choose the various death benefit options:
        • ‘’Sum assured on death’’ that pays out a lump sum benefit
        • ‘’Sum assured on death’’ to avail lump sum benefit and monthly income for the next 10 years
        • ‘’Enhanced sum assured on death’’
        • ‘’Enhanced sum assured on death’’ plus monthly income for the next 10 years
      • Premium payment type can be regular or limited pay (5 or 10 years)
      • Flexible premium payment mode – Yearly/half-yearly/quarterly/monthly
      • Enhance the coverage with accidental death and dismemberment rider
      • Offers discounted rates for non-smokers and female lives
      • Large sum assured rebates are offered
    2. ICICI Pru iProtect Smart PlanICICI Prudential Life Insurance Company is one of the leading private insurers that has a countrywide presence. The company offers a wide range of life insurance plans to cater to various protection and investment needs of people. ICICI Pru iProtect Smart is a popular product on the digital platform. Following are the salient features of the plan:
      • Flexibility to choose the protection cover in four options – life, life plus, life and health, all in one
      • The policy provides comprehensive coverage against death, disability and critical illness (depending on the option chosen)
      • Special discounts for female lives along with extensive coverage by covering breast cancer and cervical cancer
      • Sum assured can be increased while achieving major milestones in life
      • Flexible payout options to choose from – Lump sum, monthly income and increasing income
      • Provide an overview of Term insurance
      • Add what are the benefits of term insurance (high life covers at lower premiums, tax benefits, death benefits option, etc.)
      • Flexible premium payment mode – Yearly/half-yearly/monthly
    3. HDFC Click2protect 3D Plus PlanHDFC Life Insurance Company is a well-established private insurance player in India that offers various individual and group insurance policies. HDFC Click2Protect 3D Plus Plan is a term plan that provides comprehensive protection. Following are the features of the plan:
      • The plan offers flexible protection options to choose from 9 different plans:
        • Life option
        • 3D life option
        • Extra life option
        • Income option
        • Extra life income option
        • Income replacement option
        • Return of premium option
        • Lifelong protection option
        • 3D Lifelong protection option
      • All the plans come with three in-built features – Death benefit, accidental total permanent total disability and terminal illness
      • Increase in sum assured during major life stage events
      • Premium payment methods – single, limited pay and regular pay
      • Maturity benefit is offered under the return of premium variant
      • The policy offers top-up option to enhance the cover
      • Flexible premium payment mode – Single/yearly/half-yearly/quarterly/monthly
    4. Max Life Online Term Plan PlusMax Life Insurance Company is one of the most popular insurance companies in India that offers a wide array of life insurance products with innovative features. Max Life’s online offering, Max life online term plan plus also has various new-age features. Following are the features offered by the plan:
      • Comprehensive term insurance plan that gives protection against death, disability and critical illnesses. There are three variants to choose from – life cover, life cover + monthly income, life cover + increasing monthly income
      • Flexibility to increase the sum assured based on the life stage requirement
      • Plan can be opted with the return of premium to receive the maturity benefits
      • Flexible premium payment mode –yearly/half-yearly/quarterly/monthly
    5. AEGON Life’s iTerm Insurance PlanAEGON Life Insurance Company that came into operation in India in the year 2008 offers various individual and group insurance plans. iTerm insurance plans are one of its popular offerings on the online platform. Following are the features of the plan:
      • The policy provides comprehensive protection with in-built terminal illness cover
      • Coverage can be enhanced with various optional riders
        • Aegon Life accidental death rider
        • Aegon Life waiver of premium rider on critical illness
        • Aegon Life critical illness rider
        • Aegon Life women critical illness rider
        • Aegon Life disability rider
      • Premium payment methods – single and regular pay
      • Flexible premium payment mode – Single/yearly/half-yearly/quarterly/monthly

How to buy Term Insurance? The process to apply for term insurance

Term Insurance can be bought online without any hassles. It is quite easy and simple to buy term insurance through Turtlemint. Following are the simple steps to follow for purchase online:

      1. Log on to Turtlemint home page
      2. Choose the category as ‘life insurance’
      3. Once you click on the category, various types of insurance available under that category will be displayed.
      4. Click on ‘term life plans’
      5. Provide your profile details such as gender, marital status, date of birth, income details and contact details and more depending on the plan type you have chosen
      6. Once you submit the profile details, a wide range of plans available under term insurance will be displayed
      7. You can compare term insurance plans offered by various life insurance companies on the side by side basis and select the right one as per your needs
      8. After choosing the plan, provide relevant details and continue to make payment

Documents required for buying term insurance plans

Following are the documents required for buying term insurance plans:

      • Identity proof – PAN Card/Passport/Voter’s ID card/Aadhaar card
      • Address proof – Bank statement/Driving license/ Passport/Aadhaar card/Voter’s ID/Ration card/electricity or telephone bill
      • Income proof – Income tax return for last 3 years/salary slips/latest form 16/Bank statement
      • Passport size photographs
      • Medical check-up reports (if required)

Frequently Asked Questions (FAQs)

    1. How much term insurance coverage do I need?Deciding the coverage depends on various factors. Keep your liabilities, investments, number of dependents, your income and lifestyle in mind while choosing the cover. Coverage requirement may vary from individual to individual.
    2. What is Return of premium term insurance plan?Return of premium term insurance plans is designed to provide maturity benefit. In case the policyholder survives the policy term, return of premium policies pays back the premiums paid by the policyholder on maturity. The premium for such plans is relatively higher in comparison to a regular term plan.
    3. What should be the ‘ideal term’ for term insurance plans?The policy tenure needs to be chosen depends on each individual’s requirement. It’s important to be covered until your retirement age that is usually 60 years. As, after that, you may not have financial dependants and unpaid debts. Calculate the term of the policy that you need to take based on these factors.
    4. What happens to the policy if I surrender or terminate the policy during the policy term?In term insurance plans, the major benefit provided is the life cover. If you surrender in between you would not only lose out on premium but also be deprived of risk cover for the rest of the tenure. There is no surrender value paid in term insurance policies.
    5. What is the claim settlement ratio?Claim settlement ratio indicates the company’s claim payment ability. Claim settlement ratio is a ratio of a number of claims settled against the number of claims filed with the company.
Get Insured
Quick Links
Contact
  • Turtlemint Insurance Broking Services Pvt Ltd (f/k Invictus Insurance Broking Services Pvt Ltd)
  • IRDAI License No. 487,
    Composite Broker,
    Valid upto : 02/04/2026 (Renewable)
  • Principal Officer: Vilas Gandre,
    1800-266-0101
    +91-9833248023
Secured by:
SSL
  • Insurance is the subject matter of the solicitation. For more details on policy terms, conditions, exclusions, limitations, please refer/read policy brochure carefully before concluding sale.
  • © 2020 Turtlemint. All Rights Reserved. Privacy Policy  and Terms