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Frequently Asked Questions About Insurance
What Is Insurance?
Insurance is a contract which is presented as a policy to be used as a risk management tool to ensure financial protection at the time of crisis. Insurance helps an individual to ensure financial protection against losses that may arise during an unforeseen event. An insurance policy is a contract between an individual (policyholder) and an insurance company (Insurance provider), under which, the individual makes regular payments known as premiums to the insurance company which in return pays the sum assured in case an unforeseen event such as demise of the policyholder, accident, damage to the vehicles or other possessions.
Why is insurance important?
Unfortunate events like accidents, illnesses, and natural disasters come without any warning and thus it is necessary for you to keep yourself and your loved ones shielded against such unforeseen happenings. One of the best and simplest ways of keeping yourself secured against these contingent events which may cause a financial loss is buying an insurance policy.
How Does Insurance Work?
As mentioned earlier, insurance is a legal contract between the policyholder and the insurance provider. The insurance policy carries all the details about the aspects and conditions under which the insurance provider will pay out the insurance amount to the policyholder or their nominee in case an unforeseen event occurs. Insurance is a financial tool which helps in ensuring financial protection of yourself and your family. Generally the person who has purchased the policy also known as policyholder has to pay premiums for the coverage available under the insurance policy. Any person can seek insurance from an insurance company.
What are the types of insurance available?
IThere are several types of insurance available in India. The four most common types of insurance bought in India are as mentioned below:
Motor Insurance: Motor insurance policy is a type of insurance policy that provides financial assistance in the event of an accident or mishap involving your vehicle. Motor insurance can be purchased for three categories of vehicles which are personally owned four wheeler, personally owned two wheeler (bikes and scooters) and commercial vehicles. There are three types of motor insurance available in India which are Third party Liability Cover, Comprehensive Cover and Stand Alone Own-Damage cover. According to a person’s coverage requirement for their vehicle, they can choose a motor insurance that fulfills their requirements. Third party motor insurance policy is mandatory in India for all vehicles, as per the Motor Vehicles Act.
Health Insurance: Health insurance policies provide financial assistance to the policyholder in case they need to be admitted to the hospital for any kind of treatment. Additionally, some health insurance plans also cover the cost of treatment which are undertaken at home before the hospitalization or after discharge. There are several health insurance plans available in India such as Individual Health Insurance, Family Floater Plans, Critical Illness Cover, Senior Citizen Health Insurance, Group Health Insurance, Maternity Health Insurance and Personal Accident Insurance.
Life Insurance: Life insurance is an agreement between an individual and an insurance company under which the insurance company promises to provide a sum assured (death benefit) to the family of the life assured in the event of an unforeseen death of the life assured. In case of no death, a sum assured known as the maturity benefit is provided to the life assured at the time of maturity of the policy under selective life insurance plans. There are 6 types of life insurance policies available in India which are Term Life Insurance, Unit-Linked Insurance Plan (ULIPs), Child Protection Plan, Money Back Plans, Retirement Plans and Endowment Plans.
How to make a claim in insurance?
There are two ways in which you can make a claim:
- Cashless claims: Get in touch with your insurer and inform them about your claim. Depending on the type of insurance (motor/health), the insurer will guide you about the cashless claim settlement process. In case of motor insurance, the insurer shares the details of a nearby cashless workshop if available and you just have to pay your part of the liability to get your car/bike repaired. In case of health insurance, you can get in touch with your TPA (Third Party Administrator) help desk at the time of hospitalization for a cashless claim.
- Reimbursement claim:In case of unavailability of a cashless facility, you need to make a reimbursement claim. In case of motor insurance, you need to pay the entire claim amount up front (after informing the insurer of the claim) and get it reimbursed from the insurer after the repair of your car/bike. In case of health insurance, you need to pay the entire bill amount to the hospital (after informing the insurer) and get it reimbursed from the insurer post discharge from hospital.
What are the tax benefits on insurance?
Apart from providing coverage from the unforeseen financial losses, insurance policies also lets a person avail income tax benefits. Below mentioned are some tax benefits that one can avail by purchasing an insurance policy under the Income Tax Act: Section 80C: Under Section 80C of the Income Tax Act, premiums paid to purchase life insurance policy qualify for tax exemptions for upto Rs. 1.5 Lakh. Section 80D: Under Section 80D of the Income Tax Act, premiums paid towards health insurance policy qualifies for tax exemptions. Section 10(10D): Benefits under life insurance policy that shall be receivable by the life insured or the nominee also qualify for tax exemptions under Section 10(10D) of the Income Tax Act.
The premium paid for health insurance plans qualify for a tax deduction of up to Rs. 25,000 under Section 80D of the Income Tax Act. These plans also qualify for an additional Rs. 25,000 tax deduction for premium paid for parents’ mediclaim policy (Rs. 50,000 if parents are senior citizens).
What Is InsuranceDekho?
InsuranceDekho is an online platform that lets you compare insurance policies from top-rated insurance companies and purchase the insurance policy that best suits your needs. Buying an insurance policy on InsuranceDekho is very simple. You just need to choose the type of policy you want, fill in the required details, compare various quotes and make payment. And you are done! Your insurance policy is issued.
What kind of insurance policies does InsurancDekho offer?
InsuranceDekho offers car insurance, bike insurance, health insurance as well as life insurance.
How long does it take to buy an Insurance Policy on InsuranceDekho?
Right from entering the details to making payment, the entire insurance issuance process takes just 5 minutes!
How do I make a payment for policy purchase on InsuranceDekho?
You can pay using a credit card, debit card, or net banking on InsuranceDekho.
How do I purchase an insurance policy?
TO buy any insurance (Car, Bike, Health, and Life), you can reach out to our dedicated support team on 7551196989 Mon to Sun 10 AM to 7 PM.
Key Components of an Insurance PolicyBelow mentioned are some components to help you understand what is insurance and how does it work: 1. Premium Amount: Premium of an insurance policy is the decided amount that you need to pay for the insurance coverage. It is typically known as regular payments which can be made monthly, quarterly, half-yearly or annually. There are various factors on which the premium of an insurance policy is calculated by the insurance provider. The idea behind that is to check whether the insured person is eligible for the type of insurance policy they want to purchase. 2. Policy Limit: Policy limit is defined as the maximum amount that an insurance provider will pay for the losses covered under the insurance policy. This is determined on the basis of policy tenure, loss and similar other factors. 3. Deductibles: Deductibles under an insurance policy refers to the amount that the policyholder has to pay before the insurance provider settles the claim. Deductibles shall be applicable as per the policy’s terms and conditions.
What is a car insurance policy?Car Insurance/Four Wheeler Insurance is an agreement between an insurance company and a car owner under which the former provides an insurance cover to the policyholder for financial damages incurred by his/her car in unforeseen events. Depending on the coverage, there are three types of car insurance plans - third party car insurance policy, standalone own-damage car insurance and comprehensive car insurance policy. Car insurance renewal online process provides instant e-Policy.
Why should I buy car insurance?
There are a number of benefits of owning four wheeler insurance. Firstly, it helps you meet the legal requirement of owning at least a third party car insurance cover. Moreover, a car insurance policy helps you meet financial liabilities that may arise towards a third party or own-damages to your car due to a road accident or any other unfortunate event.
How much fine do I have to pay for not holding car insurance while driving?
It is mandatory to own at least a third party car insurance policy while driving a car. If you get caught driving without it for the first time, you may be charged with a fine of Rs. 2,000 with or without imprisonment of a maximum of 3 months that can increase to a fine of Rs. 4,000 and/or jail of up to 3 months, when caught for the second time.
How much is car insurance premium?
The premium rates for third-party car insurance price depend on the engine capacity of the car and is fixed by the IRDAI. However, the premium for standalone own-damage and comprehensive car insurance policies varies from car to car depending on a number of factors such as car's MMV (Make, Model and Variant), RTO location, engine capacity, registration city, fuel type,
What if my car insurance policy gets expired?
Every car insurance comes with a validity period, post which you need to renew it to continue to enjoy its benefits. However, even if you miss to get your car insurance plan renewed by the expiry date, you can still get it renewed till the next 90 days from the date of expiry. After the expiry of this 90-day period, car insurance cannot be renewed. In such a case, you need to purchase a new car insurance policy.
How to find my car insurance policy number?
Car insurance policy number is a unique 8 to 10 digit number, given by your car insurance company for the identification of your insurance account. It is generally written on your insurance card or statements issued by the insurance company. The number remains the same as long as your policy is active with the respective insurance provider.
Which is the best car insurance company in India 2021?
There are a number of factors which make a car insurance company better than its peers. One such important factor is Claim Settlement Ratio (CSR). It is the percentage of claims settled by a car insurance company out of the total number of claims received by it during a financial year. In the financial year 2018-19 the insurance companies which registered the highest claim settlement ratio are IFFCO Tokio General Insurance (96.44%), Royal Sundaram General Insurance (94.07%), and Oriental Insurance Company (93.16%)..
Is car insurance mandatory in India?
As per the Indian Motor Tariff, every car owner in the country is compulsorily required to own at least a third party car insurance cover. Absence of a valid third party car insurance plan is a punishable offence which attracts a fine of Rs. 2,000 and/or imprisonment of up to 3 months for the first offence.
How is car insurance premium calculated?The premium price of third-party car insurance plans is determined by the IRDAI, whereas the premium for standalone own-damage and comprehensive plans vary from insurance company to insurance company. Following are some factors which affect the premium for own-damage four wheeler insurance cover:
- Insured Declared Value – The Insured Declared Value (IDV) is the current market value of the four wheeler. It is one of the important factors which affect the calculation of the premium as IDV is the amount which insurance companies pay the policyholder in the event of total loss of car. Higher IDV attracts a higher premium.
- Engine Cubic Capacity – The premium of a car insurance plan is also a function of the car’s engine cubic capacity. Greater the car’s cubic capacity, higher is the premium.
- Age of the Car – With time the value of the four wheeler reduces due to depreciation. The normal wear and tear reduce the value of the car in the market due to which its insurance premium also reduces. Thus, greater the age, lower the premium.
- Make, Model and Variant – The make, model and variant of the car affects the IDV of the car which eventually affects the car insurance premium. For different make, model and variants of the car, the different premium is applicable.
- RTO Location – Another important factor is the RTO location of the car. It gives the insurance company an idea about the density of traffic in the area/city where the car will be driven and thus the probability of road accidents and other mishaps.
Can car insurance be transferred to the new owner at the purchase of a second hand four wheeler?
Yes, the four wheeler insurance can be transferred from the old owner to the new owner in case the sale of a second-hand car. As per the Indian Motor Tariff, the policy transfer should be completed within 14 days from the car’s purchase date.
Can one car owner buy two policies for the same car?
No, one car owner can not have two insurance policies for the same four-wheeler. However, a third-party insurance plan and own damage cover can be purchased separately for a four-wheeler, in place of a comprehensive four wheeler insurance.
How to Claim Car Insurance Online?
A car insurance claim can be made online by following the below-mentioned steps:
Step 1: Register the claim by visiting the website or mobile app
Step 2: After claim registration, the car’s owner gets a claim registration number
Step 3: After claim registration, the four wheeler insurance company sends a surveyor the place of accident/mishap to assess the extent of damage. The policyholder needs to submit the required documents at this stage to the surveyor to proceed with the claim.
Step 4: The damaged four wheeler is then sent to a garage for repairs. Depending on the type of garage, the payment for the claim will be made.
Step 5: If a network garage is chosen, the bill is directly settled by the four wheeler insurance company with the garage. In case, the garage is not a part of the insurance company’s cashless garages network, the policyholder needs to settle the bill which is later reimbursed by the insurance company.
What is depreciation in car insurance?
Depreciation in car insurance refers to the loss of the insured car’s value with time due to wear and tear. The depreciation rate plays a vital part in a car insurance policy as insurance companies consider, based on the car’s age, to determine the value they agree to provide for your car.
I have bought a used car. Can the insurance of its last owner continue while the car ownership has been transferred to my name?
The Indian Motor Tariff gives a period of 14 days from the date of the car’s sale to get the car insurance plan transferred from the previous car owner’s name to your name. If you fail to get your car insurance plan transferred within 14 days, your car will have no valid insurance protection.
What are the factors that insurance companies consider to accept car insurance applications?
While applying for a car insurance policy, the insurance company can ask you to disclose various relevant information requested on the car insurance application. Many insurers consider your credit history, age, criminal record, and other aspects for accepting or rejecting your application.
What is a two wheeler insurance policy?
A two wheeler insurance policy is an agreement between an insurance company and a bike owner wherein the insurance provider promises to cover any damage or loss sustained by the insured bike due to an accident, theft, fire, etc., based on the opted policy. Generally, the contract between insured and insurer is of a year which should be renewed every year.
Why should I purchase a bike insurance policy?
No matter which bike you own, you need to comply with some laws to ride it. To carry a bike insurance policy is the most important rule to drive a motorcycle / scooter as you need to adhere to the legal requirement of carrying at least a third party cover. Besides this, a bike insurance policy also covers your financial liabilities which you may incur towards a third party or own damages sustained by your bike due to an accident or any unfortunate incident.
What are the different types of bike insurance plan?
There are three types of bike insurance plans such as third party bike insurance plan, standalone own damage bike insurance plan, and comprehensive bike insurance plan.
What is the premium of different bike insurance plans?
The cost of the premium for different bike insurance plans are different. When it comes to the third party policy, its premium is set by the IRDAI which varies as per the bike’s engine capacity. But, the premium amount for own-damage and comprehensive plans varies from bike to bike due to various factors like bike’s make, model, and variant, engine capacity, fuel type, etc.
What if my bike insurance policy gets expired?
Every two-wheeler insurance policy has a date of expiry before which you should renew it to continue to avail it. However, if you fail to renew the policy on time, you still can renew it within the 90 days grace period from the expiry date, but it can not be renewed after that and you will have to buy a new policy in that case.
How to find my bike insurance policy number?
Bike insurance policy number is a unique number which is of 8 to 10 digits provided by the insurance company. It is generally printed on the insurance card that is issued by the insurance providers. You can also find it by entering your registered mobile number on the website of your insurer.
Which is the best bike insurance company in India?
There are numerous parameters to select an insurance company to insure your bike. The Claim Settlement Ratio (CSR) is one of the most important parameters to gauge the efficiency of an insurance provider. The CSR is a ratio of claims settled by a bike insurance company out of the total claims received by the insurer during the financial year. In the financial year 2019-20, the companies with the highest claim settlement ratio are IFFCO Tokio General Insurance (95.30%), Royal Sundaram General Insurance (92.66%), and Oriental Insurance Company (91.76%) with which the IFFCO Tokio can be considered the best company in India for the year 2021.
Is it compulsory to own a bike insurance in India?
Yes, according to the Indian Motor Tariff, every bike owner is required to carry at least a third party bike insurance plan.
Can a bike owner purchase two bike insurance for the same bike?
No, a bike owner can not buy two insurance plans for the same bike. However, you can buy a third-party policy and own-damage plan separately from different insurance companies.
Can bike insurance be transferred to a new owner of the bike?
Yes, a bike insurance policy can be transferred from the old bike owner to the new bike owner, if it is sold out. The policy transfer must be completed within 14 days from the purchase date of the bike.
What are the factors that determine the premium of a bike insurance policy?
The third party policy premium amount of your bike is fixed by the IRDAI, while the standalone own-damage and comprehensive policy premium rates varies from insurer to insurer based on several factors which are as follow:
- Type of Coverage – Different policies cost different premium amounts such as third party policy, own-damage policy, and comprehensive policy.
- Bike Make, Model and Variant – The brand, model, and variant of the bike affects the premium as per their cost. The high-end bikes have higher premiums when compared to standard bikes.
- Bike Modifications – Modifications in a bike may improve its looks and performance, but to cover those modifications and accessories your insurance premium will also increase.
- Add-on Covers – Insurers offer different add-on covers for bike insurance plan. To add them in your policy, you will have to pay an additional premium that increases the policy premium.
- Anti-Theft Devices - Anti-theft devices lessen the probability of bike theft which reduces the risk for the insurers too due to which they reward the insured with a lower premium.
How to raise a bike insurance claim online?
You can raise a bike insurance claim online with the below-given steps:
Step 1: Raise a claim at your insurer’s website or mobile app
Step 2: You will get a claim registration number from your insurer.
Step 3: Insurer will send a surveyor to examine the damage extent.
Step 4: Take your damaged bike to a garage to get repaired of your choice.
Step 5: The claim will be settled by your insurer on the basis of the chosen garage.
Can we insure bikes after 15 years?
The insurance of old bikes after 15 years of their age is possible. They can be insured with the third-party bike insurance plan as it is a compulsory cover. However, when it comes to own-damage cover, it varies from insurer to insurer.
Why Is It Important To Renew Bike Insurance Policy?
As per the Indian Motor Tariff Act, a bike insurance plan is necessary for every bike owner in order to legally ride their vehicle on the Indian roads to avoid paying any penalty. Therefore, it is advised to buy and renew your two-wheeler insurance on time.
What is the right time To Renew Bike Insurance?
Keeping your best interest in mind, it is usually recommended to renew your bike insurance plan at least 45 days prior to the expiry of your two-wheeler insurance policy. You should not wait for your insurance plan to lapse. This is because in case your insurance plan lapses, then you might stand to lose all the accumulated insurance plan benefits so far.
What is a health insurance plan?
Health insurance policy is an agreement whereby an insurance company agrees to undertake a guarantee to compensate the insured for medical expenses in case of a medical emergency. A health insurance policy protects the insured for several surgical expenses, critical illnesses, and daycare expenses, for a policy term, for up to the sum insured limit.
Can I purchase more than 1 health insurance plan? How are the claims settled in this case?
Yes. You can be covered under more than one health insurance plan. In this case, the claims are settled as per the contribution clause, when the claim is higher than the sum insured for one health insurance policy.
Why should I buy a health insurance plan?
A health insurance policy not only protects the insured financially for future, but also offers relief in the present. Lifestyle habits such as drinking, smoking, or sedentary lifestyle invite health issues, which can be minor or serious, may be expensive to treat. To stay financially protected in such times, you need a reliable health insurance plan that covers you at all times. Apart from this, buying a health insurance policy also reduces your overall tax liability by allowing you tax deductions on the premium paid, under Section 80D of the Income Tax Act, 1961.
How is health insurance premium determined?
Different health insurance plans have different premiums. The insurance companies determine premiums after considering various factors that are explained below:
1. Type of Insurance Plan: Your health insurance premium is based on the type of plan you choose. If you choose a critical illness insurance plan, then the premium will be high. If you choose an individual health insurance policy, then the premium will be different from that of a family floater plan. To know the difference in health insurance premiums, you can use InsuranceDekho’s health insurance premium calculator.
2. Age of the Insured: With age, you become more prone to health issues and are more likely to make health insurance claims. Therefore, you are required to pay higher premiums if you buy health insurance plans in later stages of life. This is why it is recommended to buy health insurance policy when young.
3. Policy Term: Most health insurance plans come for a period of 1 year, 2 years, or 3 years. Greater the policy term you choose, the greater will be your coverage, and hence higher will be your health insurance premium, and vice versa.
4. Lifestyle Habits: If you drink alcohol or smoke regularly, then you may be denied health insurance completely. However, there are some insurance companies that cover you for the same, for which they charge high premiums. This is because, with these lifestyle habits, you are more prone to health issues.
5. Family Medical History: Before deciding your health insurance premium, the insurance company will ask about your family medical history. This is because if someone in your family has a certain disease that you are also vulnerable to, then the insurance company will charge you a higher premium due to increased risk.
6. Sum Insured: Health insurance plans come with different sum insured options that you can choose from as per your budget and requirement. The higher the sum insured, the higher the medical coverage and hence higher the health insurance premium. But it is not recommended to compromise on the sum insured to save on premiums. This is because it will not cover you adequately in the time of need.
Can I cancel my health insurance policy? If yes, will I get a refund for the same?
Yes. You can cancel your health insurance policy. Every health insurance company provides you a free look period to understand the policy terms and conditions. During this period, if you find any objectionable clause in your health insurance policy, then you can cancel the policy and ask for a refund. Note that you will receive the refund only if no claim has been made during the policy term. The amount of refund will be calculated after taking into consideration the expenses incurred on medical check-ups, stamp duty, and proportionate risk premium, i.e. the number of days you have been covered for risks under the policy. To know more about a premium refunds, it is recommended to go through the policy document.
How can I renew my health insurance policy?
It is imperative to renew your health insurance policy to avail continued coverage, and save on accumulated benefits such as waiting period benefits and No Claim Bonus (NCB). You can easily renew your health insurance policy by following the simple steps given below:
Step 1: Visit the website of the insurance company and navigate to the ‘Health Insurance Renewal’ page.
Step 2: Enter the required details such as health insurance policy number and the registered mobile number.
Step 3: Check the policy details displayed and renewal premium.
Step 4: Pay the required health insurance premium via Credit card/Debit card or Net Banking.
What if my health insurance policy lapses when I am hospitalised?
There can be two situations. First, where you get hospitalised before the policy expiry date and notify the insurance company before the policy lapses, and the policy lapses when you are still in the hospital. In the second situation, you may be hospitalised during the grace period, the policy lapses then, and you inform the insurance company about the same during the grace period. In both cases, the insurance company will compensate for the coverage availed, as per the terms and conditions stated in the policy document.
Can I avail coverage benefits if I get hospitalised for less than 24 hours?
Yes. Most health insurance plans cover you for medical treatments that do not require hospitalisation of at least 24 hours. These are known as daycare procedures. Daycare treatments are performed under local or general anaesthesia in a clinic, hospital, or daycare center. Some daycare treatments that health insurance plans cover you for are chemotherapy, eye surgery, sinusitis, dialysis, angiography, etc.
Do health insurance plans cover diagnostic charges like X-rays, Ultrasound or MRI?
Yes, most health insurance plans give compensation for various types of diagnostic tests comprise X-rays, MRIs, blood tests, etc., if the policyholder stays in the hospital for at least 24 hours.
Do health insurance covers robotic surgery and modern treatments?
According to the health regulations issued by the Insurance Regulatory and Development Authority of India (IRDAI) in 2019, all insurance companies are required to insure robotic treatments. Therefore, all insurance companies provide it with some sub-limits and policy conditions.
What Is a cumulative bonus in a health insurance plan?
A cumulative bonus in health insurance refers to the financial benefit which you receive as a reward for not making any health insurance claims in a policy year.
How does smoking affect health insurance premium?
Smokers have to be prepared to make the payment for higher premium cost for their medical insurance policy as health risks increases for smokers and insurance companies charge a higher amount to combat the medical crisis.
Under what conditions are my policy premium likely to increase at renewal?
Here are different situations that increase the premium during the renewal:
- Healthcare Inflation – Inflation in healthcare is soaring at a rate of 12% to 18% which comprise the costs of medicines, hospital admission costs, medical advancements, etc. It leads your insurance companies to increase your sum insured every year which increase your premium too during policy renewal.
- Age of Policyholder – Increase in age can also impact your health insurance premium while renewing the health insurance policy, especially for those touching 60 just before renewal.
- Change in Coverage – If you change your health insurance policy coverage during the renewal process either by adding some add-on covers to your plan or by changing your insurer altogether, it may increase your premium.
What if I forgot to pay my health insurance premium?
If you could not make the payment for the health insurance premium on time, then your policy can be cancelled. After paying the first premium, you will be given a grace period if you do not make the payment for the premium on time. You can renew your health insurance plan by paying the premium within 15 to 30 days of the grace period, which can vary from insurer to insurer, but, if you miss this opportunity too, then it could risk you losing your coverage.
What happens to my health insurance plan after a health claim is filed?
After a health insurance claim is filed and settled by the insurance company, then the policy coverage tends to be reduced by an amount that has already been released during the settlement. For Instance, if your buy a plan with Rs. 5 lakh policy coverage and make a claim of Rs. 2 lakh, then you can avail of the health insurance of Rs. 3 lakh in the remaining policy year.
What is Life Insurance ?
Life insurance is an insurance cover which provides a sum assured to the family of the assured in the event of sudden death. The plan also offers a survival benefit to the assured if he/she survives the policy term.
What are the factors that affect the calculation of a life insurance plan premium?
Factors that determine the premium of Life Insurance Plans include the policyholder’s age, sum assured, gender, lifestyle, job, medical history, type of policy, tenure of the policy and riders (if any).
Why should I purchase life insurance?
Life insurance helps you attain financial security that ensures your family’s life goals are not affected. Life insurance also offers tax benefits on the premiums that a policyholder pays for their life insurance. Moreover, life insurance plans are affordable and the policyholder can purchase additional benefits by purchasing a rider to enhance their life cover.
Which is the best life insurance plan?
Different life insurance plans have different features and advantages. Thus, the definition of the best plan varies from individual to individual. The best life insurance plan is the one which best meets your requirements and budget. However, among all the different types of life insurance plans, the most preferred type of life insurance plan is Term Insurance Plan because it provides high coverage at nominal premium.
What are the factors which I should consider before buying a life insurance policy?
Before purchasing a life insurance plan you must check your insurance objectives, your income, your life insurance existing policies (if any), your assets, liabilities, and your expenses.
Is it safe to buy life insurance policy online?
Purchasing life insurance policy is easy, quick and hassle-free and the payment is made through a safe gateway. Buying policies online is less time consuming as well.
What are the tax benefits on insurance premiums?
Under Section 80C of the Income Tax Act, premiums paid towards a life insurance policy qualify for a deduction up to Rs. 1.5 Lakh. Also under Section 10(10D), income received from a life insurance plan on maturity is tax-free if the premium is not more than 10% of the sum assured or the sum assured is at least 10 times the premium.
Does tobacco and alcohol consumption affect life insurance premiums?
Yes, if an individual declares that he/she consumes tobacco/alcohol then the premium for a life insurance plan increases because of high-risk involved.
Can I return my policy immediately after I purchase it?
You can return the policy stating the reasons why you disagree with terms and conditions of the policy within the free-look period as per regulations of IRDAI. For Life Insurance policies, the free-look period is of generally 15 days (30 days for online policies) from the date of receiving policy documents.
Can I purchase a new life insurance policy even when I already have one?
Yes, you can purchase a new life insurance policy despite already having one. It helps a policyholder get an increased life coverage along with all other benefits of a life insurance plan.
What is the difference between term insurance and life insurance?
Major difference between life insurance and term insurance is that term insurance is a type of life insurance policy. Term insurance policies are quite affordable as compared to life insurance policies, but life insurance policies provide extensive coverage. Life insurance policies provide coverage for whole life and term insurance policies provide coverage for a fixed period of time.
Why is buying life insurance important?
Life insurance policy can help an individual to ensure financial security of their family. In case of your unforeseen demise during the policy tenure, the financial burden of fulfilling financial requirements will on to to your family members who were fully dependent on your income, under such circumstances a life insurance policy will provide a death benefit to your family members which will allow them to fulfil their financial requirements in your absence.
How to choose the right sum assured under life insurance?
Before you choose a sum assured for your life insurance policy, it is important that you consider a sum assured which is 10 - 15 times your annual income and enough to help your family to maintain a decent lifestyle in your absence. Consider a few factors such as age, current expenses, liabilities, future expenses and number of financial dependents before choosing a sum assured.
What is a life insurance premium?
Life insurance premiums are the periodical amount that you pay for the life cover provided under the life insurance policy. Life insurance premium is provided to the insurance provider. Premiums are the amount of payments made for the life cover provided by the insurance provider.
Who decides the life insurance premium?
Underwriters are people who play an important role while determining the premium for your life insurance policy, the underwriters assess your application and decide the premium for your life insurance policy.
Why should I choose a term insurance plan?
Term insurance plans are the most affordable type of life insurance plans. These plans provide high insurance cover at a nominal premium amount. Some term insurance plans also offer whole life cover benefits with which you get a life cover till 99 years of age. A term insurance plan helps you enjoy peace of mind and leave a financially stable future for your family in your absence.
What are the key features of a term insurance plan?
Following are the key features of a term insurance plan -
- Budget Friendliness
- Long-term life protection
- Availability of riders
- Easy to Purchase
- Availability of whole life protection
What are the different types of term insurance plans?
Term insurance plans come in 5 different types namely Level Term Plans, Term Insurance With Return on Premiums (TROP), Increasing Term Plans, Decreasing Term Plans, and Convertible Plans.
What are different types of payout available under term insurance plans?
Different term insurance payouts are Lump Sum, Lump Sum plus Monthly Income and Monthly Income by way of monthly, quarterly, semi-yearly, and yearly instalments.
Is suicide covered under term insurance ?
Generally suicide is not covered under term insurance plans. In case the life assured commits a suicide within 12 months of issuance of the policy, the nominee receives a minimum of 80% of the total premiums paid till the date of death after deduction of applicable taxes and charges.
What is the minimum and maximum entry age to purchase a term insurance plan?
Anyone who is between 18-65 years of age is generally qualified to purchase a term insurance plan.
If the policyholder passes away in a foreign country, will his term insurance be effective?
As soon as one purchases a term insurance plan, the policy will be effective disregarding the geographical whereabouts.
Is loan against policy available under term insurance plans?
No, facility of loan against the insurance policy is generally not available under term insurance plans.
Can I purchase term insurance even if I consume tobacco/alcohol ?
Yes, you can purchase a term insurance even if you consume tobacco/alcohol on a regular basis. However, the premiums for people who consume tobacco/alcohol are usually higher than the ones who maintain a healthy lifestyle.
What are the different premium payment options available for term insurance plans?
The policyholder can choose to pay the term insurance premiums through Net Banking, Debit/Credit cards, NEFT (National Electronic Fund Transfer) or through any e-Wallets.
What Is a Term Life Insurance Plan?
Term life insurance plan or term insurance plan is a type of life insurance policy. Term insurance provides a guaranteed death benefit in the event of the death of the policyholder within the policy term. The policyholder can avail the benefits of term insurance in exchange of the policy premium.
What Are The Benefits Of A Term Plan?
The key benefits of a term plan include high sum assured at a reasonable premium, multiple death benefit payout options, freedom to add riders, income tax benefits, easy to understand, return of premium option, and more.
Why Is Term Insurance Important?
Term insurance is important to ensure financial stability of the surviving family members of the life assured in the event of the unfortunate death of the latter. Term insurance also plays a significant role by providing optional coverage for critical illness, accidental death and other unfortunate incidents.
Is It Good To Buy a Term Insurance Plan?
Yes, it is good to buy a term insurance plan! Term insurance plans help in not only strengthening the financial condition of a family in case of unexpected death of the earning member of the family, but also in ensuring peace of mind even during critical times.
What is the minimum and maximum entry age to purchase a term insurance plan? -
While the minimum entry age to buy a term insurance plan is 18 years, the maximum entry age is 65 years.
What is investment planning?
Investment planning refers to the process of fulfilling your financial obligations/goals with your financial resources. Investment planning is the core financial planning that helps an individual to establish investment goals, determine their risk appetite and choose an investment option, which helps an individual to grow their wealth and fulfil their financial goals. Essentially this plan helps manage your investments and help you manage your money to achieve your goals.
When should I start investing?
There is no specific age at which one should start investing their earnings to grow a corpus. It is advised to start investing your money in different investment options at a young age or as soon as you start earning. This will provide you more time to build a bigger corpus. This way you will be able to overcome market risks and gain high returns in the long-term.
Are investment plans risk-free?
Market linked investment options always involve some kind of risk because return on investments totally depends on the performance of the investment option in the market. There are few risk free investment options available in India that provide guaranteed return on investment such as Savings account, Post Office Schemes, Fixed Deposits, Recurring Deposits etc.
Which is the best investment plan option in India?
There are plenty of investment plans available in India, you can choose an investment plan that suits your requirements. You should always choose an investment plan based on your risk tolerance. Check the rate of returns and select a plan that suits your needs.
Which investment plan gives the highest return?
Top investment option that can help you achieve high returns on investment are Direct Equity, Equity Mutual Funds, Debt Mutual Funds, National Pension System, Public Provident Fund, Bank Fixed Deposits, Senior Citizen’s Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, Real Estate and Gold. You can choose to invest in the mentioned investment plan according to your risk appetite.
What are the 4 types of investments?
There are 4 main types of investments available in India classified on the basis of characteristics, risks and benefits. The 4 types of investment are Stocks, Bonds, Mutual Funds and Cash Equivalents.
What are 3 good investments?
As a beginner you can consider some investment options which will help you avail high return on investment. 3 good investment options for beginners are Unit Linked Insurance Plans, Bank Fixed Deposits and Mutual Funds.
How can investment plans help in retirement planning?
Investment plans can help an individual create a corpus for retirement, helping them to ensure a financially independent life as they retire. An individual can choose to invest in retirement savings plans that provide a lump sum as retirement fund or maturity benefit which can help an individual to ensure income after retirement.
What is the difference between saving and investing?
People almost use savings and investment conversely not knowing that both of them are different from each other. Savings accounts are low risk accounts under which rate of interest is earned on the money one saves. Savings account lets an individual save money for a short period. On the other hand investments involve high risk and the return on investment are high as compared to savings. Investments let an individual create wealth over a long period of time.
How can I save tax on my investments?
While choosing an investment option look for one which provides tax benefits under Section 80C of the Income Tax India, 1961. Some investment options that provide tax exemptions are Equity Linked Savings Scheme, Public Provident Fund, Employee Provident Fund, Unit Linked Insurance Plans etc.