Tag: life insurance policies

Get your life insured to be with your family

Get your life insured to be with your family

Creating provisions for your near and dear ones after your death is a very important part of financial planning. Availing a life insurance policy enables the family of the insured to receive financial assistance following the death of the insured individual. It is an agreement with an insurer wherein the insured makes premium payments on a timely basis. In the event that the insured dies, the beneficiaries will receive a lump-sum payment, which is also referred to as a death benefit. The main aim of life insurance is providing a means of financial security for your loved ones after your death. Therefore before buying a life insurance policy, it is important that you take into consideration the standard of living that you want to maintain for your dear ones.

India’s life insurance sector has been growing in leaps and bounds since 2000. The industry comprises of public sector company Life Insurance Corporation (LIC) and other private sector players. All the insurance players are expected to comply with the rules set out by the Insurance Regulatory and Development Authority of India. There are several different types of life insurance products in the market such as whole life and term life. The whole life plan covers the individual throughout his or her life. Term life insurance is designed to provide financial protection for a certain period of time – 10 or 20 years. The premium usually remains the same for the coverage period one has chosen. After the completion of the coverage period, the policies are often charged for higher premiums. It is important to note that term insurance is less expensive than permanent life cover as the risk of death is relatively low. According to experts, term life is suited for those looking to get insured against unforeseen events. But if you are looking to start a family and require insurance to protect them then a permanent life cover is your best option.

There are several benefits of getting a life insurance policy. The insurance cover serves as an income substitute following the death of the insured.  Such a policy can also be used to ensure that retirement savings last long. This can be done best when you avail the right death benefit for your loved ones at a minimal cost. Another benefit of availing a life insurance policy is that one can enjoy favourable tax treatment. Under most plans, there are tax-benefits during the time of entry and exit. It helps to understand all the aspects of tax benefits on premiums paid for a life cover so as to avoid losing it. Thus it can be concluded that a life cover serves as a means of risk protection as well as an asset in various stages of life.

Now coming to another important segment – Can a bad CIBIL score result in the payment of higher premiums for a life cover? If yes, what are the different ways to improve credit score fast?  In some countries, life insurers will look into the applicants’ credit scores to determine their insurance premiums. Other countries are expected to catch onto this trend in the near future. Hence if you are struggling with a poor or a bad credit record, now is the time that you look at the different ways to improve credit score fast. One of simplest ways to improve credit score fast is by ensuring that payments are all made on a timely basis. Additionally it helps when you use your credit wisely i.e. by not using up your entire credit limit. Maintaining the right mix of secured and unsecured debt is one of the other ways to improve credit score fast.

It is true that no amount of money can ever serve as your substitute. But having a life insurance policy can provide financial protection to your loved ones in your absence. When you compare different insurance policies, look for one that is structured to meet all of your needs. You can consider availing the services of a trained professional who will help you understand the benefits and risks involved in different policies. Lastly, take into consideration the different ways to improve credit score fast so that you will be prepared at all times if any new rules are passed.

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Know more about General Insurance

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India boasts of a deep-rooted history of insurance, finding mention in some of the ancient texts. These documents mention pooling of resources that could be re-distributed in the event of a calamity such as a flood or fire. While this may be the precursor to insurance in India, it has evolved over a period of time to come to be in the form we know today.

As per the Insurance Regulatory and Development Authority of India (IRDA), the history of general insurance in particular dates back to the Industrial Revolution in the West and the subsequent growth of trade and commerce in the 17th century. A legacy of the British Raj, insurance came to Indian shores back in 1850 in (then) Calcutta. Subsequently, the insurance sector in India has opened up tremendously and there are now 28 general insurance companies operating in the country, including the General Insurance Corporation of India (GIC), Export Credit Guarantee Corporation (ECGC) and Agriculture Insurance Corporation of India.

What is general insurance?

General insurance, also known as non-life insurance covers a range of eventualities including illness, damage to property or assets (house, car etc.) motor accidents etc. With adequate general insurance, it is possible to minimise the loss or damage owing to an unforeseen circumstance, be it an Act of God or an accident.

With so much being said about general insurance today, let us look at the various types of general insurance available to consumers today, along with the cover they provide:

Home Insurance – It is not only an individual, but also the assets they own that require adequate coverage in case any unforeseen event occurs. This comprehensive coverage normally includes not just the house or apartment itself, but also the contents therein, from electronic appliances to jewellery to furniture. Of course, do compare home insurance policies prior to purchase.

Health Insurance – This type of insurance tides you over financially in the case of hospitalisation owing to illness or an accident or mishap that occurs. The escalating costs of healthcare mean that without insurance, an individual would need to pay large sums out of pocket in the case of any eventuality. This facility includes cashless mediclaim coverage, pre- and post-hospitalisation expenses and ambulance charges.

Within the gamut of health insurance, you can opt for coverage for the entire family under a Family Floater Scheme, or for an individual.

Typically, health insurance includes:

  • Personal accident cover
  • Daily cash allowance in the case of hospitalisation
  • Critical illness coverage

Travel Insurance – Going on the vacation of your dreams? Well, don’t let any unfortunate occurrence spoil your holiday. Travel insurance is a good idea to avail of when travelling, especially overseas. This coverage is especially useful as not only does it provide for financial assistance in case the policyholder is taken ill with travel health insurance, but also protects against lost or damaged baggage, delays in flight travel, theft or loss (of foreign exchange, in the case of trips abroad) and other incidental expenses.

Travel insurance covers various options, such as:

  • Individual policies
  • Family travel coverage
  • Insurance for students travelling overseas for further education

Motor Insurance – This is critical coverage for owners of both four- and two-wheelers, and covers all damages and liability to your vehicle. Further, as per the Motor Vehicles Act, 1988, driving a vehicle without insurance in public is a punishable offense. Most policies are comprehensive and include coverage against physical damage to the vehicle, and also third party liability.

Common types of motor insurance include:

  • Car insurance
  • Two-wheeler insurance
  • Commercial vehicle insurance

Commercial Insurance – This type of general insurance covers various sectors across industries ranging from manufacturing, automobile, chemical, transport and logistics etc. With this insurance coverage, not only property can be insured, but also employees (and benefits for them).

In conclusion

Having non-life insurance in place can protect not just you and your loved ones, but also your assets from loss and damage. As with any financial product, do make sure that you read the fine print before purchasing an insurance policy. With some careful research and planning, you can provide for the security of your family.