Category: Life Insurance

How to Buy the Right Term Insurance plans in India?

When we are speaking of buying the right insurance term insurance is something that always comes in anybody’s mind. You should always keep in mind that Insurance is actually financial protection against emergency and what you should look at the paying the insurance company is a price for it. The insurance company takes the risk on you behalf and refunds you with a claim amount depending on the sum assured. A regular term policy for continuation of the benefits needs to be renewed every year. You can also opt payment of premium on quarterly or half yearly basis but then the cost of protection will always be high.

HOW TO BUY THE RIGHT TERM INSURANCE- My insurance bazaar

Buying a term insurance is always very helpful which you are doing the same at an early age. People at early age are believed to be a low risk for the price charged as premium for any amount of sum assured is always very less compared to what you pay at an older age. But this doesn’t say that you can’t have a term insurance at an old age. The insurance requirement generally increases as you grow old and your financial situation improves. While taking the policy at an early age people generally not able calculate the exact amount of sum assured so it is always advised that you start the policy and early age and increase the cover as your financial requirements increase. Starting early will always have its own benefits and the insurance company will continue the benefits even if you increase the cover at a later age.

 

The challenge here is now to Buy Best Life Insurance Policy India. There are close fifteen plus insurance companies in India offering term insurance plans. Every plan has some specific feature customized to suit specific needs. Plus there are certain complex calculations which need to keep in mind to buy the right policy. In fact it is always believe that people buying term plans online are more knowledge and they have already taken steps to protect him / herself for future risks so insurance companies have started offering online term plans which are bit different from the regular term plans which is available through offline agents. Online term plans are generally cheaper than their offline variants since the insurer views the risk associated with online policyholder is less. The smartest way to buy a term policy is to buy it online, online websites acts as facilitators for this particular job. You can easily Compare term insurance plans online, know the underlying nuances and identify the best features available that suits your needs. This is actually a herculean task if you try to do it offline. Online comparison of term plans help you to take the right decisions keeping you future needs in mind and help you understand the right price that one should pay for safeguarding a particular amount of risk.

We should remember that emergencies can occur any time. if you are the sole bread earner in the family any mishap happening to you can have disastrous consequences when their financial well being too. Their life is aligned to your well being so get insured with the right term insurance cover as early as possible.

How to claim tax benefit on term insurance plans?

Technically speaking when somebody is looking for financial security of their dependent , life insurance plans are the most effective solution for it.But there are different alternatives which are available today in the life insurance space out of which term insurance plans are most effective, efficient and the cheapest way to handle the issues relating to financial security.

How to claim tax benefit on term insurance plans-My Insurance Bazaar.jpg

Every people who is looking at financial well being for himself and his/her family the first step towards it is to planning for investments in a disciplined manner which means you need to follow a definite pattern of segregating your regular income into savings and spending but the challenge is what happens when the regular flow of income would stop. May due to death and disability of the bread earner and this is where a term insurance plays a vital role. Buying right term plan refers to buying a policy which offers the right amount of insurance cover at an optimum price. In fact there are many smart ways by which you can optimize the cost of term insurance plans. One of the common method is to Buy Best Life Insurance Policy India. In fact insurers offer two different plans two different types of policyholders -offline and online. Online policyholders are always deemed to have better access to knowledge and have better access to health care so the insurer always charges a low cost of premium to them.

 

But other than the benefits mentioned above people generally don’t talk a lot of the tax benefits that one can get by investing into term insurance plan.Though the benefits quite similar what other forms of life insurance plans offer but the benefits are bit different in case of term insurance plan.Like any other life insurance plan one can also claim for tax benefits on term insurance plans on the total premium that you pay towards buying a new policy or renewing an old one.The premium deposited towards an term policy can be claimed as tax benefits under Section 80C of the income tax act.Potentially the maximum amount of benefits that one can claim under this particular Section is Rs.1.5 lacs.For somebody to claim for tax benefit in the current fiscal year the premium should be paid in that particular year only. Compare term insurance plans online and You need to keep your policy premium pay receipt ready to claim this tax benefit.One should remember for claim tax benefits the term policy has to be necessarily taken in the tax payer’s name. You can’t pay premium for your friend’s policy and take a tax benefit.

So potentially clubbed with tax benefits and features associated with a term plan makes it a worthwhile investment to make.

HOW TO AVOID TERM INSURANCE POLICY LAPSES?

Lapsing of a term insurance policy can have serious aftermaths on your total insurance portfolio. This can also create a financial imbalance in your financial plan leading to heavy cost being paid for financial security. We all know that a term insurance plan bought at an early age can be quite beneficial and cheaper but if at an older age the policy lapses you always need to pay an extra cost for the same amount of cover and might not even get all the benefits of the cover as you have a grown older.

HOW TO AVOID TERM INSURANCE POLICY LAPSES - My Insurance Bazaar

When we say your term insurance policy has lapsed, we should first understand what it means. When you enter into insurance agreement with an insurer, the promise that you make while buying a policy is that you would pay all the premiums on time. Paying all the premiums on time depends on the mode of premium payment one has shown. It can yearly, quarterly and even monthly. In either of the modes of payment it is always a fixed date on which the premium need to be paid. Other than the specific date your insurer always gives you a grace period generally for a period of one month post the premium paying date. If the policyholder fails to pay the premium of the term policy within this restricted time horizon, the policy is deemed to be inactive or lapsed. Buy Best Life Insurance Policy India  With the policy being in the lapsed state all your benefits stands on hold. You can’t make a claim on the policy.

So from the above description you can easily understand how a lapsed policy can effect. Previously since the term insurance was not online you where suppose to deposit the money through a cheque and plus if the premium payment mode is yearly there are always chances that you forget the date. But with the advent of technology the process has become bit easier. Now your insurer is always proactive in sending you sms notification a month before your policy is due and now you also have online payment options to pay premium. So the offline hassle has gone away but still remembering renewal date is always a problem. To get away with this problem you can possibly set auto debit mandate with your bank account or credit card so that even if you forget to remember the renewal date, the money can be automatically debited from your debit or credit card and the premium get paid.

But still if situation of term insurance policy lapse occurs, Compare term insurance plans online insurers have now started offering reinstatement options. You can opt for the reinstatement option generally within one to two months posts the policy inactivation date. The insurer in this case would charge you the premium with interest on the lapsed period and most of the times a processing fee is also charge.

So it is always advised that don’t miss your renewal and try following smarter ways to avoid the same.

My Insurance Bazaar- Adequate Insurance Cover For The Women Is Important.

A country with 994 women for every 1000 men is grossly uneducated about having an adequate amount of insurance for the women of the house. In most of the cases are supposed to the primary bread earner for a family so they are generally insured with the highest sum assured amount but when it comes to women it is grossly understated. Even in families where the women are also a part of the earning fraternity of house still most of them remain either underinsured or uninsured.

http://www.myinsurancebazaar.com/life-insurance/article/Why-adequate-insurance-cover-is-important-for-the-women-of-the-house?-

Take the case of family where the female member is sharing the home loan liability with her husband but when it comes to insurance you will generally find that the sum assured for the male member is always very high and compared to the female member. This is technically a paradox situation which people generally ignore. In today modern households where both the members are working and are equally responsible for the long goals and liabilities of the family having less insurance cover for the female member can considerable repercussions on the financial health of the family if she dies an unforeseen death. So it is always advised to have a term insurance cover for the women in the house to the extent of the financial responsibility she shares with her husband.
Adequate insurance for the women in the family becomes more important if her parents are dependent on her or if she is a single parent. In both the case the overall financial liability of the family lies with the women of the family. Right amount of term insurance cover is very much needed for her to handle unforeseen situation which her dependent parents or children may fall into in case of her death.
Another important scenario to look into where women of the family are mostly uninsured is the case when they are just homemakers. People generally ignore them because they don’t form the part of financial backbone of the family. They don’t earn anything for their family. Few years back even insurance companies ignored things but now things are considered in a much different way. A woman who is the homemakers if dies early the loss is not just the moral hazard but there are other things that need to be considered. We generally ignore the invisible labour which the homemakers puts in terms of taking care of the elderly and children of the family and how she contributes to financial planning of the family.A sudden death of the homemaker can lead to unwanted financial cost which one need to bear, the things that she was taking care of now need to be handled by somebody for which you might have to pay an extra sum of money. In fact most of the insurance experts advise to have at least a term insurance for the homemakers in which the sum assured should be not less that 50% of the cover of the husband.
A well planned approach is always important whether it is the men or the women of the family. You can always look for online term insurance for the women of the family. Online versions are always cheaper and help you to plan things in the smartest way.

My Insurance Bazaar- Term Insurance Plans Common Myths

If you call yourself as financially planned then you should be quite aware of the importance of a  term insurance policy in your financial plan.
Technically insurance is layman terms can be defined as a service where you pay a cost to a person, the so called insurer to take care of your life’s financial risk . In any case the emergency arises the insurer would take the loss on them so that the same doesn’t affect your wallet.Going by this principle a term insurance plan is the most effective and cheapest way to secure yourself from any type of  financial risk. Say in a family when you are the only bread earner and the rest of the family dependent on you for regular upbringing and reaching their own life goals .Then your death in a scenario like this can be very disturbing for the rest of family.This is the biggest risk that anyway need to take care of and this is where you term insurance plan can act as the real weapon.

http://www.myinsurancebazaar.com/life-insurance/article/breaking-the-common-myths-about-term-insurance-plans

Though the benefits are endless but still people want to give a second thought before buying one and that is only because of myths that surrounds term insurance. Some of the common myths that need to broken are broken below

a) One of the common myths is a financial instrument which doesn’t return is not worth of investing. People might end up buying other forms of life insurance plans because they give return on maturity but avoid term insurance. This mind sound quite hilarious if you do the real calculation.A regular life insurance which gives money in return generally charges you a much higher cost for the same amount of insurance when compared with a term plan and the return on investment they offer is very less but still get carried away by the fact that the money is returning back. Actually they give you a low return because a part of the money is actually not invested and the insurer cuts the same as cost for the insurer cover it offers to the policyholder. So if the objective is just protection then it is worth buying a term plan.
b) This is a common myth that all insurers are same and they don’t give claim.This is actually a matter of trust, you should know that insurer is actually in the business of settling claim and not take away your money.Cases that you hear about claims being rejected are generally either because the claims raised don’t fall under the rules binding the policyholder and the insurer or something not being disclosed at the time of taking the policy. Hiding of information is a common phenomenon and people do it because they be might be saving some money on their premium  initially .
c) Buying term insurance too early or too late is not beneficial.This is actually a technical problem is most of the people who avoid buying term insurance . It is never too late or too early.Definitely buying it at a much younger age can give you benefits of getting highest cover and lowest premium but still if you are looking at insuring your financial risk at any age term insurance is always the best and the cheapest option.
d) I already have group term policy from my employer so i don’t a individual term plan.One should keep in mind the amount of coverage should be calculated keeping perspective of the overall requirement of your family and existing financial liability. You should always look at the amount of cover the group policy has to offer and in most of the cases you will find the amount is not enough considering your family requirement so the rest of the requirement can be taken care by individual term plan. On the other hand you should always keep in mind that once you leave a particular job you group cover cease to exist so you should always have your own backup plan in place.
e) Term insurance cover can’t be increased, this is again a very common myths.Though in the old days of term insurance this used to be a phenomenon but in recent times there are many options in which when at a later age where you need a larger amount of covered because of increased income you can anyways increase the cover of the existing plan rather than buying a new plan.
f) Last but the most common of the myths is related hassles of buying term insurance plan online. People feel the process is very tiring but on the other hand the process is actually very easy. What you get as a benefit is that you are able compare a lot of other term insurance option just by a click of a button. In fact buying online give you a benefit of discount for being an online policyholder. Insurer perceive online customers as less risky because of the amount of information one has and so incentivizes the policyholder for it and the premium is quite low compared to if you bought the same policy offline,

My Insurance bazaar-Which One To Look For Individual Or Joint Term Insurance

Invariably term insurance is the most effective form of life insurance which anybody should look for their personal finance portfolio. Plus the affordability and coverage offered by a term plans makes it the most favored financial instrument for anybody to secure future of their loved ones. The plan is simple and straight, in case of demise of the insured person before the completion of tenure of the policy, the nominee get all the benefits at one go. The benefits that the nominee gets are completely tax free in the hands of the receiver under Income tax Section 10(10D).
http://www.myinsurancebazaar.com/life-insurance/article/Individual-or-joint-term-insurance:-which-one-to-look-for-
A term insurance can be quite effective for you as person also. Lets understand by a scenario where you are only bread earner in the family and your monthly salary is something on which rest of the members of family are dependent on for daily needs and long term financial goals.In a scenario like this your death can lead to a financial turmoil in their lives and this is where the term plan that you have brought come as a great help. Other than this the affordability would always an important factor that lets you consider term plan as the right option to get insured.

Joint or individual term insurance:

Though the concept of joint term insurance is very new to India and you will very insurance companies are offering products under this category but still at times the option can be looked as a smart opportunity of getting insured when compared with individual plans. You will also have an option to buy two separate term insurance plans for people who are more important for the rest of the family. Joint Term Insurance Plans a Better Option For Working Couples and the financial plan for the rest of the family is considered on a joint basis.
The key feature of a joint plan and which is mostly common is the expiry of the policy happens on the first claim basis.if both the husband and wife is insured under a joint plan,if any of the member dies first before the completion of the policy tenure  the total sum assured is paid to the other partner and policy ends there. But when compared to buying separate individual plans even if one dies still the other policy continues. Some joint plans come with a rider where the other member is paid monthly income till the completion of the plan tenure and on a later stage sum assured is paid. One of the key demerit of joint plan is that even if both the members die due an accidental scenario only one claim is paid. In case of divorce the policy would always cease to exist subject to condition the other member stay prepared to take the burden on him or herself.
Though with all the merits and demerits joint plans are there and generally cheaper compared to buying separate individual plans.It all depend on the scenario and how you are managing your personal finance balance sheet which would define which type of term insurance plan is suitable for your needs.

IS TERM INSURANCE IS THE BEST LIFE COVER OPTION?

So let’s try to make the process more simple. Let’s first understand what life cover is and what purpose the same serves for you. From the perspective of having a better financial life people generally make investments and which in future aggregates to give you lump sum money and the same can be used for purpose of fulfilling financial goals. But for that you need to have regular flow of money in the initial year, what if the family’s main bread earner dies and the flow of money stop. In a case like this the investment fully not serves the purpose. This is where the live cover option comes at a great help to the person. In case the person is the sole bread earner for the family and if he or she dies, then the regular income flow stop but the goals and liabilities still stays. A life cover provided under a life insurance policy or aptly saying under a term insurance plan enables the family members with the right amount of financial support to fulfill the liabilities and goals. Thus the life cover is an apt financial instrument for having a better financial life and health.

IS TERM INSURANCE IS THE BEST LIFE COVER OPTION

Now coming to the point which is the best option to get a life cover. From the above the description it is quite clear that the money that is paid towards life cover is actually a cost.So lower the cost the most effective it is. There are lot of life insurance policy options that available today to give a better life cover. Some plans come with return option similar to an investment product and some do not. Life Insurance plans which only offers life cover and don’t return any money at the end of the term of the policy period are technically called term policy. Since the term insurance only insures financially security for the nominees of the policy proposer so all these plans come with a very cheap premium pricing. The insurer generally charges a premium depending on the risk profile of the person. Premium pricing largely depend on the age of the policyholder. People people Buy Best Life Insurance Policy India at a very early age always enjoy the benefits of getting a higher cover at the lower price with more additional benefits attached to it. But this is not the case of people buying term plans at a much older age. The main reason behind it is that as the person grows older he/she becomes more susceptible to diseases and health problems so the insurer also evaluates the person to highly risky and charges a higher fee for the same amount of life cover.

Other than this online term plans are always considered cheaper. People opting for online term plans are believed by insurers more access to information and health care facilities and this become an additional factor which leads to online term plans becoming cheaper compared with other life cover option. So when the objective is clear and straight forward there is no point of wasting money in other options.  The life cover plans which even come with extra return option generally invest you money with assets like debt market and equity market but there operating cost is always higher. So from the perspective of life cover term insurance becomes the most effective option for people choose upon. if you are smart person to make a better decision you can also further save more by doing online compare term insurance plans online of various term plans available from various insurers.

Save Tax For FY 2016-17 Though life insurance Insurance

Already with rise in the cost of living has caused lot tremors in the life of middle class today .The worries have further aggravated because of current rate of health care inflation which it at its zenith compared to past years. So everybody is looking at smart ways to save a lot of tax to build a good balance between good health and well managed wealth.

http://www.myinsurancebazaar.com/life-insurance/article/3-Smart-ways-for-individuals-to-save-tax-for-FY-2016-17-though-insurance

There are whole array of financial instruments which are available today which can come with triple advantage to an individual

  1. Help him or her save a lot of tax
  2. Build a wealth for long term future
  3. Create a financial safety net for future emergencies.

When we compare all the options that are available in the market today insurance is something that aptly fits into the whole scheme of things.  Truly speaking there are three options which are available to any individual which if used correctly used can help him or her save a lot of tax.
Option 1: One of the common income tax section which is available to most individuals is Section 80C. Any premium paid towards a life insurance policy to a maximum of Rs.1.5 Lakh can be claimed for tax exemption under this section. This is available for both individuals and HUF assesses. This benefit can be accessed for any type of life insurance plan but the preferred one keeping financial well being in mind is a term policy. Try looking for online term plans because they are quite cheaper than their offline counterparts. An Important factor which one needs to keep in mind while claiming exemption under Section 80C is, for a policy to qualify for exemption the sum assured should be at least 5 times of the premium that you are paying. So if you are paying a premium is Rs.10000 then the minimum sum assured should be Rs.50000 for the policy to qualify for tax benefits.
Another important thing which one should keep in mind while opting for this particular option is that one should not be over skewed with the objective of tax saving. The person claiming tax exemption should first understand how much cover one should look into. It should always be based upon your goals and future liabilities. Going by the rule of financial planning one should always apply for a sum assured value which should be at least ten times of one’s monthly income.
Option 2: The second option which is available is individuals are benefits under Section 80D. Exemption under this section can accessed on the premium that you pay towards health insurance plans. Keeping in view rising cost of healthcare health insurance is now become a mandatory thing but you can avail tax also enjoy tax benefits on the premium that is paid towards these plans to a maximum Rs.25000. Other than this Rs.25000 an individual can also claim for extra exemption of to a maximum of Rs.30000 if one is also paying for health plan of his/her dependent parent. So you can actually a benefit of Rs.55000 to a maximum under this option.
Read Also : How Can One Maximise Tax Benefits On Health Insurance In Fy-2016-17?
Option 3: Last and the most unknown option not very known to most individuals is Section 80CCC.if you paying premium towards an Annuity plan where the objective of the investment is draw the money invested into in the form of pension in later years. In a case like this an individual can claim tax exemption without any limits on the money invested under this plan.
Though the options mentioned above can make a lot of difference towards saving a lot of tax but the challenge still lies in how one should make a balance between their twin objectives of savings tax and managing wealth in a proper way. People generally get over skewed towards either of the objective and end up missing the broader objective of having a safer financial future.

Why online term plan is always a cheaper option

Going by the basics we all know that online term plan is always a cheaper option compared to its offline counterpart because of very many reasons, one being that the insurer considers more risk averse so they charge them a low price for the same amount of cover. Other than the low price a online term plan also qualifies for the same type of tax benefit which any offline plan or any form  of life insurance plan qualify. You can always get tax exemption under section 80C to a maximum of Rs.1.5 lacs on the premium that you pay towards buying or renewing a term plan and can also get an additional benefits under section 80D to a maximum of Rs.25000 if your term plan has a critical illness add-on against which you have paid an extra premium over and above the premium of your term plan.

http://www.myinsurancebazaar.com/life-insurance/article/Critical-points-to-be-considered-while-buying-an-online-term-insurance-plan

The above mention benefits are quite common for any type of online term insurance plan but to buy the best plan that not only fits in your budget but also has the requisite cover that you require you need to consider few critical points which are listed below
A)Insurer’s reputation is very important:  This is always an important factor to consider. Insurer’s reputation defines the stability and trust the insurer has. Since the relationship between the insurer and insured is very long term so reputation becomes an important factor to consider.
B)Expenses and cost factors: We should understand the expense structures under a term plan are a critical component under an online term plan. You should know that in a regular term plan if claim doesn’t arise the premium that you have paid over the years goes to waste. The expenses and the cost structures are very important which makes the premium of the cover low. To reduce the cost further you should look for insurers who offer discount premium rates for non smokers.
C)Convenience: Over all sets of protection plans that offered today by insurers term plans have shown the highest level of advancement. You should be able to judge well what you pay against what you are getting. The plan should have a flexibility in terms of pricing which means if you opt for additional cover you pay extra and if your reduce the cover the premium cost should go down accordingly.
D)Claim settlement ratio: This is a critical component while selection online term plan. A claim settlement ratio can be defined as the claim which is settled by the insurer considering 100 claims being made. The real test of insurer insured relationship comes when a claim is raised Higher claim settlement ratio of the insurer is also a measure of the rating of a particular term plan.
E)Riders : Riders are something that can make a plan more robust. Though the policyholder end up paying an extra cost for it but it can help a person to customize the term plan. A plan that offers multiple riders to suit your needs makes it more flexible and effective for a person to look into while buying a policy.

Looking at the long term relationship between you and your insurer under a term insurance policy one should give effective impetus to the above critical factors and should consider them a benchmark to choose or reject a plan of an insurer and not just consider the cost of the premium.