Finance

From vaccination, school to higher education, my friend Satish planned everything even before the birth of his son. Also, one day he sat with his wife and decided the travel destination for the next two years. Not only this, but he also started investing to support his ‘planning’. He was confident that his investment would help him meet all the expenses.

It is good to plan in advance and then start investing for it. However, investing and investing smartly both are different things. Like most of the people, Satish also valued safety over returns and chose safe instruments, like fixed deposits, PPF, etc.; to meet all his future goals. Though considering the safety of returns while investing is not a bad idea, but what most of us forget to consider is the inflation impact. Instruments like fixed deposits, PPF, NSC can give you assured returns, but they can’t give you surety that the returns would be sufficient to beat the rising inflation rate.

As Warren Buffet, says “Do not put all eggs in one basket,” you should also diversify your investment across different options to reap the maximum benefit. So instead of putting the entire investment in fixed instruments, invest some amount in ULIPs which you can invest both in equity and debt as per your risk appetite. Killing two birds with one shot, ULIPs offer high returns along with the life cover.

Let’s have a look at some of the benefits of ULIPs:

1. High returns: ULIPs give you an opportunity to enjoy high returns by investing your money in equity. According to the Morgan Stanley report, equity has generated best returns in India over 5,10,15 and 20-year tenure as compared to gold, real estate, and fixed deposits. While equities gave 12.9% returns, gold, bank fixed deposits, and real estate generated 8.4%, 5.5%, and 6.2% respectively.

How ULIPs Have Performed

Source: Economic Times

2. Assured benefits: Along with the potential to grow your money, Unit Linked Insurance Plans ULIPs also protect your money from the market ups and downs. The insurer offers guaranteed returns on the invested amount. At the time of maturity, the insurer pays you higher of assured benefit or fund value. In some cases, the assured benefit can be 101% of all the premiums paid.

3. Switching option: Switches play a major role in rebalancing your investment portfolio as per the market condition. It is the best option to move out of loss-making funds. According to the market condition, you can adjust your fund portfolio by switching from equity to debt or vice versa. Also, you can switch as per your age and needs. During young age, the policyholder can take more risk and thus, stay invested in equities. However, as the policy moves towards the maturity date, he can switch from equity to debt to protect the investment from market volatility. Most of the insurers offer four to five free switches to policyholders.

4. Transparent structure: As it is said, “risk comes from not knowing what you are doing,” ULIP offers a transparent structure. It means all commissions and charges are clearly mentioned in the policy document. Besides, insurers send daily updates on Net Asset Value (NAV) along with quarterly and yearly reports on the performance of ULIPs. It means you can track its performance and keep a close watch on your policy.

Besides this, all ULIP fund options are clearly detailed in the policy document. Usually, insurers offer the following types of fund options.

Type of Fund Nature of Investment Risk Element
Equity Funds (also called growth fund) The investment is made in company’s stock with an aim of capital growth Medium to High Risk
Bond Funds (also called income and fixed interest) The amount is invested in government securities, corporate bonds and various other fixed income investment options Medium Risk
Secure Fund (also called cash fund, money market fund) The amount is invested in bank and money market instruments Low Risk
Balanced Fund It offers a mix of investment in equity and debt Medium Risk

5. Lesser charges: In 2010, the Insurance Regulatory and Development Authority of India (IRDAI) capped charges at 3% of gross yield for insurance policies with tenure of up to 10 years and 2.25% for those with tenure of over ten years. Also, there are no surrender charges if the policyholder surrenders the policy after five years. Depending on the tenure of the policy, the charges in ULIP are around 2.5%-4%. The most impressive thing about these charges is that they are evenly distributed throughout the policy tenure. Unlike other market-oriented products where the first premium goes towards these charges, in ULIPs only a small proportion of the premium is deducted as charges and the remaining is invested in the market.

Feature Pre-September 2010 Post-September 2010
Lock-in period 3-years 5-years
All charges Could be front loaded Evenly distributed during the lock-in period
Minimum mortality cover Not specified; five times as a practice 125% of the annual premium for single premium policies and 10 times for regular premium policies
Maximum reduction in yield* Not specified For policy tenure less or equal to 10 years, reduction not more than 3% at maturity and 2.25% for policy tenure above 10 years

* Difference between Gross and Net Yield.

Source: Business Today

6. Wealth boosters: Most of the insurers add wealth boosters to the investments and thus, help you to grow your money without making any extra investment. Usually, wealth boosters are added once in every five years starting from the end of the tenth policy year.

7. Top up investment: ULIPs allow individuals to invest the excess cash through periodic top-ups and earn returns on the total invested amount. Further, the top-up investment also enjoys tax benefits under both Section 80C and 10(10D).

8. Liquidity: Though, it is always advised to stay invested for the longest tenure, you can partially withdraw your money to meet any short-term needs like child’s college fee, family vacation or for a medical emergency. Unlike fixed deposits, where there are charges on premature withdrawal, in ULIPs, partial withdrawals are free of cost in most of the cases.

9. Tax benefits: ULIPs offer EEE tax benefit. The premium paid towards ULIPs is eligible to get a deduction for up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Like a traditional life insurance policy, death benefits paid under ULIP are also tax-free. Of course, the payouts will be higher than the sum assured, depending on the returns.

Similarly, upon maturity, the policyholder will get the assured benefit or the fund value, whichever is higher. This payout is exempted under Section 10(10D).

Tax Advantage of ULIPs

Source: The Times of India

10. Life insurance and riders: An additional benefit of life cover is available to ULIP policyholders, which is not available in any other investment options. In the case of death of the policyholder, the insurer will pay death benefits to the nominee who can use it to meet various needs. In this way, you can financially secure your family’s future, even in your absence. Moreover, there are various riders, like premium waiver, accidental death benefit, etc.; that can be added to the main policy to get more coverage. For instance, accidental death benefit rider gives double the sum assured to the nominee in case of accidental death of the policyholder.

11. Online buying: Unlike PPF, ULIPs can easily be bought online from the comfort of your home. Moreover, the online distribution has sharply cut the distribution and maintenance costs, so much so that there are various ULIPs whose cost is lower than mutual funds.

Invest wisely, live happily.

We often prefer to invest in a financial instrument that offers not only high returns but also secures our hard earned money. ULIPs serve both these purposes. So look at market fluctuations as your friend and participate in them to reap the maximum benefits. After all, “Don’t work for money, make it work for you.”

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Why Should You Buy Insurance For Your Office Online?

by Vinaya HS on November 23, 2016

in Finance

Setting up a business and gaining success must have taken a huge amount of hard work, years of perseverance and lots of timely and wise decisions. Finally, you are working in an office; built with your hard-earned money and running a business worth lakhs or crores of rupees. You have your own office equipment, machines, and other office assets. You also have a loyal workforce that needs to be regularly paid.

Looking at this whole structure, one would shudder to think about any unfortunate incident that may lead to the collapse of the whole or even a part of a precious office building or damage its machines and equipment.

But do not worry! This is where an insurance for your office comes into the picture. The best way to obtain insurance for the same is to opt for office insurance online. There are multiple insurers that provide this facility that is economical and comes without any glitches of middlemen, etc. The office insurance covers you and your business from threats like fire, burglary, riot, earthquake, etc.

Moreover, the advent of the internet has made it easy to buy office insurance. If you are still not convinced that an office insurance is a must, following are some of the reasons that you would like to consider to avail office insurance online:

1. Time saver technique: By availing office insurance online, you can protect your office premises without hassles. You don’t need to take a day off from everyday business to visit the insurer as everything is now just a click away with several options of comparing different policies offered by different insurance companies. You can choose whatever suits you the best weighing the premium costs that require being paid and the benefits that different policies offer.

2. Relatively lower premium rates: The online approach will enable you to get the best facilities at lower premium rates. This is because by selling policy online, the insurer saves administration charges and agent’s commission and this saving is passed on to customers in the form of low premium rates.

3. Covering a wide range of damages: The best part of availing an office insurance policy online is that with just some digital work on your part, you can protect your office premises from multiple unwelcome destructive incidents. If you think that your office has been constructed flawlessly and there no damage is likely to occur, think again! There are many dangers that are uncalled for, and they may occur either by mismanagement or due to the use of low-quality material in some areas. These incidents include fire, bursting of pipelines and some unfortunate event in the adjacent building that may also affect your office premises.

4. Protection from natural disasters: A natural disaster is common in coastal areas that have dangers from cyclone or floods. If your office is situated in a mountainous region, there is a risk of landslide. The problem is that such disasters are not in human control and often destroy everything in the region. Imagine the amount of loss in case of such an unfortunate incident takes place. It is thus better to insure your office to protect it from widespread damage and destruction.

5. Protection from criminal activities: Do you think that your office is safe from any illegal activities? With rising criminal activities, you can never be sure enough.

You need to ensure the safety of your office from theft and burglary. A good way is to have a suitable cover in case such incidents might take place. The office insurance policy also covers damage due to riots and strikes. So, if your office is situated in a riot-prone area, secure it through the office insurance policy instead of suffering a huge loss later.

6. Secure office equipment: Most insurance policies also offer a cover for your office equipment and machines. After all, these are the main things through which your business runs.

It is thus better to secure the machines from any damage or destruction due to fire, burglary or forceful entry into the office premises with the aim to destroy office equipment. If you lose your essential equipment, the production and your business are likely to be halted in an untimely manner. It will also decrease your employee satisfaction and reduce their efficiency at work. Extended benefits include compensation for any loss of money in a safe or in transit.

So, no second thought needs to be spared now when you know the easy way to obtain the office insurance is online.

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A PPF Calculator

by Vinaya HS on October 30, 2016

in Finance

The following post is a sponsored post.

PPF calculator refers to the simple calculator that determines interest earned on your investment in PPF account. The basic idea behind PFF calculator is compounding the interest on your investment. Although, you can exercise this method manually when you have to calculate interest for one year. But when it comes down to fifteen or ten years, the calculations can be messier but no need to worry simple PPF calculators can help you do all the calculations. Before we go to details of PPF calculator, Let’s understand more about PPF account, its features and benefits

What Is Public Provident Fund Account?

In simple words, Public Provident Fund is the saving scheme that helps individuals to build the retirement corpus and also save taxes. With this scheme, you can invest your savings for fixed period and will earn the periodic interest (compounded annually). Currently, the PPF interest rate is 8.1%! That is reasonable!

PPF account can be opened with a low and affordable amount of deposit. The second attraction to this scheme is the tax benefits. The interest earned is completely tax-free. And, this scheme is backed by the government, so comes with security. No doubt, why PPF is so popular in India!

PPF is easily accessible. You will face no problem while registering for the account. To open a new account, you have to visit the authorized bank or post office. Simply, get the form, fill it and submit with required documents. PPF accounts can be opened in all PSU banks and some select private banks.

Why Should You Choose PPF Scheme?

Some people don’t opt for PPF scheme because they don’t know its awesome features and benefits. For your convenience, I have outlined some of them as follows:

Interest Rate: The Indian Government set the interest rate for PPF periodically Currently the review period is quarter. You earn interest on investment which is compounded annually. Current interest rate is 8.1%, which is pretty good.

Tenure: To avail the benefits of PPF, you need to keep the account active for fifteen years. It means you need to invest in this account per year for fifteen years. After maturity, you can invest for further five years.

Initial Deposit: You can open the account with Rs. 100.

Minimum/Maximum Annual Deposit: To keep the account active, you have to make a deposit every year. The minimum amount is Rs. 500 and the maximum are Rs. 1.5 lacs per years. You can make deposits with a cheque, cash, PO, online funds transfer and DD, etc.

Withdrawals: Withdrawal is allowed after maturity. Well, premature withdrawal can be made, but on certain conditions and after seven years from opening date. Otherwise, premature withdrawal is not possible!

Tax Advantages: The tax rebate is the main attraction of PPF. The interest earned is completely tax-free

How To Calculate The Interest Using PPF Calculator?

Calculation of PPF interest is not difficult. So what is the exact algorithm of PPF calculator? As mentioned in the start, the interest will be compounded annually. For instance, you have made the initial investment of Rs. 1.5 lac. So, you will calculate the interest on Rs. 1.5 lacs at the rate of 8.1%. Pretty easy right! Now, we have to compound it. Next year, you will make an investment of Rs. 1.5 lacs again. Now, the rate will be applied to the sum of previous year’s balance including interest earned and current year’s balance. And this process will be continued for fifteen years. You can use a simple calculator below to calculate interest and yearly balance for PPF calculator.

Author: Sarabdeep Singh; Co-founder bodhik.com, an online financial advisor.

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What is Property Insurance and How to Buy It?

by Vinaya HS on October 30, 2016

in Finance

Opting for an appropriate property insurance is as important as buying a property. Make sure that you go for an insurance that offers 360-degree coverage. As per your property choose the type of insurance you need and go for the one that offers comprehensive coverage. To help you in deciding the best, we have compiled an infographic.

Property Insurance Infographic

Image source: Securenow.in

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When you are looking to take a personal loan, two of the key factors that play an important role in lender’s decision to lend to you are:

  1. Your Credit History
  2. Your Income Stability

Personal loans are unsecured loans. This means that lender is giving the borrower money without taking any collateral. So in case of a default by the borrower, lender will have no security that can be sold off to recover outstanding loan amount. And this is the reason why interest rates on personal loans are typically higher than rates on secured loans like home or auto loans.

In unsecured loans, the only thing that the borrower can depend on is your past credit history and your future income potential.

If you have been regular with your EMI payments in past, it will reflect positively in your credit report. A good credit score tells the lenders that the applicant has been regular in clearing his past dues and this can be expected in future too. So the perceived risk of a borrower with good credit score is lower.

So having a good credit score is very important for getting a personal loan at competitive rates. If lenders perceive that you are a high-risk borrower with lower-than-average credit score, they might deny you a loan or offer you a personal loan at very higher interest rates.

Now coming to future income potential. You can only pay off your new loans with future income and not by past credit record. Isn’t it?

This is the reason why importance is given to borrower’s ability to meet future EMI obligations. This is judged basis stability of income and its adequateness given other expenses of the borrower. If lenders feel that borrower will be unable to meet his EMI obligations due to lack of sufficient regular income, they can chose to reject the loan application.

So when you are applying for a personal loan, make sure you have paid heed to these two factors. This will save you from any negative surprises that might spring up in loan processing phase.

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There is not much difference between a festival loan and a personal loan as far as loan structure is concerned. Infact, both are unsecured loans – i.e. do not need any collateral to be provided by the borrowers. But there are some differences that are there. Festival loans can be availed for smaller amounts of upto Rs 1 lac. Personal loans on other hand can be taken for larger requirements like Rs 25 lac.

This is one of the reason why festival loans come at lower rate of interest. Generally these loans are 2-3% cheaper than regular personal loans. Since the amount involved is small, the risk involved (of default) is lower. Hence the lenders are willing to take lower compensation (lower interest rate) for the lower risk they are taking.

So coming back to your requirement, if you need just a small amount of money for some months then you would obviously benefit more from lower rate of interest. Isn’t it?

This is the reason that you can consider taking a festival loan in this time of the year. Festival loans are specifically offered to help borrowers during this festive season when their expenses start getting out of hand. Though employers to pitch in with annual bonuses, fact is that bonuses tend to be less than what is needed by most employees. So lenders have come up with this special seasonal loan product that is designed specifically to help borrowers this festive season.

It is also possible that you might be considering using credit cards to part-fund your expenses. But remember that in spite of being quite convenient, credit cards are extremely costly. At times these can cost about 40-50% on an annual basis. So it doesn’t make financial sense to take a high-cost loan when a cheaper loan (in form of festival loans) is easily available.

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Critical illness policies pay the entire benefits as a lump sum amount when the insured is diagnosed with such conditions. The sum assured is paid in total irrespective of the treatment cost.

Generally, a person diagnosed with a critical illness may be unable to fulfill his duties as an employee for an extended period of time. Although the treatment costs may be covered under the health plan, the individual may face severe financial difficulties due to loss of regular income.

The critical illness benefit amount is useful to avoid a liquidity crisis. The critical illness insurance amount has no limitation on its use and the policyholder may use it to meet his financial liabilities, such as loan installment, children education fees, or regular home expenses.

Critical illness coverage is available as:

  • A rider along with a life insurance policy from a life insurer
  • A standalone policy from a general insurer

Here are four salient features of a critical illness policy.

1. Policy Term

Generally, a life insurance policy term is between 10 and 30 years. A critical illness rider included within the life plan will have the same term as that of the original policy. The critical illness benefit ends when this term is over. Therefore, individuals lose such coverage on the maturity of their life insurance policies, which is often at an older age when most people would require these benefits. In comparison, standalone critical illness policies are available for a tenure of one to three years. Moreover, most general insurers offer standalone policies with a lifetime renewal option for the convenience of policyholders.

2. Premium Amount

Both standalone critical illness policies, as well as coverage taken as a rider, provide the option of increasing premium amounts over the years. A common misconception among people is that since the life insurance premium does not change during the policy term, the premium on the rider also remains constant. However, the fact is that policyholders have the flexibility of increasing the rider premium every 3 to 5 years.

3. Sum Assured

When an individual acquires critical illness cover as a rider along with a life insurance plan, the sum assured on the rider is restricted to the amount of the original policy. On the other hand, there is no restriction on the sum assured when a person opts for a standalone critical illness policy. However, he must check for any restrictions that may be imposed by the insurer for the specific products.

4. Illnesses Covered

Most riders purchased with an existing life insurance plan limit the number of illnesses that can be covered. In comparison, standalone policies provide wider coverage by including a higher number of critical ailments. Furthermore, an individual must check how pre-existing conditions are treated while researching on critical illness policies. This will allow a person with an existing condition to make an informed decision. Most indemnity-based life insurance policies do not cover existing ailments even at the end of the waiting period. A majority of insurers do not provide benefits under the insurance policy for pre-existing conditions for a period of 2 to 4 years.

5. Claim Process

Policyholders must carefully review the survival and waiting periods before making any decision. Both these periods affect the claim procedure if such a need arises in the future. Survival period is the minimum number of days (often 30 days) a person must survive after being diagnosed with an illness to be eligible for a claim. Waiting period (90 days or more) is the number of days for which no benefits are paid if a person is diagnosed with any medical condition included in the policy. This limitation is applied to prevent fraudulent claims by policyholders. Furthermore, policyholders must remember that the critical illness benefits are not automatically paid if they are diagnosed with a severe medical condition. Most insurers have severity criteria for various conditions that are covered under these policies. Only if the diagnosis meets these severity conditions, the insurers will pay the benefits to the policyholders. In case these criteria are not met, the companies may reject the claims.

Critical illnesses are on the rise because of the unhealthy and stressful lifestyle led by most people. To ensure no financial difficulties arise in the case of being diagnosed with such a condition, acquiring critical illness insurance is important. However, understanding all the terms and conditions before availing of the policy will prevent inconvenience in the future.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises of solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, Health and Online Term Insurance.

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Pros and Cons of a Car Loan

by Vinaya HS on September 6, 2016

in Finance

The following post is a sponsored post.

A new purchase is always exciting, be it a home or a car. However, ensuring you have a seamless experience while making your purchase is equally important. Selecting a good car is only the first step, but completing all financial tasks related to the same will ensure you drive off in your new car without any trouble.

If you have been contemplating on buying a brand new car but are discouraged by the burden of making a large payment, considering your current financial status may help choose between paying in cash and opting for a loan. Often, arranging for a large amount of cash may not be within your means, and in such a case, opting for car finance may be the best thing to do.

When you purchase a car from a dealer, the dealer may also provide the option of financing. Although, opting to finance your car from such dealers may not guarantee you security. Therefore, choosing private financing could be more beneficial. You are more likely to have a hassle-free experience if you choose to finance your car through a credit union or a bank.

Here are the pros of financing a car that will help you decide whether it is the right choice for you:

  • Helps manage the budget: The first and foremost advantage of a loan is that it lets you purchase a car without having to burn a hole in your pocket.
  • Fast loan approval: Getting a loan sanctioned is not a tedious process anymore. After all the necessary documents have been furnished, you can expect the loan disbursal in three to six days.
  • Option of EMI: Choosing a loan lets you repay the amount in Equated Monthly Installments (EMIS), thereby reducing the pressure of having to pay a huge amount in one go. The financer sanctioning the loan strategically spaces out the EMI and, the duration is increased depending on your ability to pay off the loan.
  • Choice of variable and fixed interest rates: Furthermore, you may conveniently decide between variable and fixed interest rates. In the case of a variable interest rate, the interest rate varies according to the changes in the market. However, a fixed interest rate remains the same for the entire tenure of the loan.
  • Tax deduction: If your new car will be used for business purpose, then you may qualify for tax deduction under the Income Tax Act.
  • Advantage of employing the residual value: The residual value may also be attached which could contribute towards decreasing the number of installments per month.

Consider the following cons, so that you are well informed prior to your car purchase:

  • High interest rates: High car loan interest rates in a loan could come in the way of gaining ownership of your dream car. However, financers now offer them at competitive prices and you could compare rates before your purchase.
  • Risk of financer repossessing car: Inability to pay at regular intervals puts you at the risk of losing ownership of your new car. So, ensure you keep a track of your repayment tenure and avoid a bad credit history.

Considering the flexibility and convenience of car loans, it is wise to choose this option when buying a new car. So, now you won’t have to delay the process of bringing home your new car. Being aware of the loan tenure and inspecting interest rates will help you avoid the risks, thereby facilitating a smooth buying experience.

Disclaimer: The blogger is solely responsible for all the posts, comments and mentions posted within this website. Mahindra Finance does not endorse the accuracy or reliability of any information’s, content or advertisements contained on, distributed through, or linked, downloaded or accessed from any of the services contained on this website, nor the quality of any products, information’s or any other material displayed, purchased, or obtained by you as a result of an advertisement or any other information’s or offer in or in connection with the services herein.

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Many people take personal loans when they are unable to arrange funds in the short term. But the same people are capable of getting the required amount after some time. So personal loans do help these people bridge the time gap.

So when these people actually have enough money to clear off the loans, does it make sense to go and do just that?

The answer depends on 2 important factors:

1. When you want to pre-close a personal loan, lenders might charge a prepayment penalty. So how much is the prepayment charge (generally a percentage of outstanding amount) will help you decide whether to pre-close or not.

2. Now most loans are structured in a way that they start charging interest first and principal later. So if you have taken a personal loan of tenure 2 years and you can pay the entire sum back after just 4 months, then you can save a lot in terms of the interest. However, if you are nearing the end of the loan tenure, pre-closing the loan might not make much financial sense. It is because you would have already paid most of the interest. The remainder principal would be in any case have to be repaid with time.

Now these are mathematical factors. But having a clear zero-loan life gives you peace of mind that cannot be calculated by financial mathematics.

So if you have surplus money available with you and which can be used to prepay a part or full personal loan, think of it in two stages. First do the math as explained in above two factors. Once it’s clear that prepaying makes sense mathematically, just go and do it. But if mathematics says that there is no great benefit of prepayment, then ask yourself as to what holds higher priority for you – saving money or peach of mind. Your answer will help you take the decision.

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Unlike home or car loans, the personal loans are unsecured form of loans. So there is no collateral for lenders. So with no recourse to any security in case the failure to repay the loan, the lenders give compensate themselves for higher default risk that they are taking by charging higher interest rate.

So how do lenders decide what rate to charge from different personal loan customers? There are several factors that are used to assess the risk – current income, income stability, profession, age, existing loan EMIs, credit history, etc.

A good credit history means that you do not have too many loans. Also, you have regularly paid your loan EMIs in past. The idea of credit score is to help lenders gauge your riskiness. It is an indicator of your credit-worthiness and is calculated based on your financial history. So higher the risk assessed (lower credit score), higher will be your loan interest rate.

To see how higher interest rates effect your loan EMIs, try using the personal loan EMI calculators online. You will get a good idea of the actual link between your risk (which results in change in interest rates) and your EMIs.

But it is not that only your credit score can affect your personal loan rates. How you handle you personal loan will also affect your credit score. If you are irregular with your new loan EMIs and fail to pay them on time, it will reflect in your credit score. Slowly your credit score will start deteriorating. Remember that even a single missed payment can negatively affect your credit score. So, if you have taken a personal loan recently, ensure that monthly payments are done on time.

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What is Health Insurance Portability?

by Vinaya HS on September 6, 2016

in Finance

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In October 2011, health insurance companies provided a new feature to their customers. Users were allowed to port their health covers in case they were unsatisfied with the current service providers. Although the portability was considered to be simple, a policyholder cannot port as per his wish.

The Insurance Regulatory and Development Authority (IRDA) provide the right of accepting the portability to the service providers. This means that if the insurance company providing critical illness plan and mediclaim plans finds an application for portability unacceptable, it reserves the right to decline the request.

To avoid rejection, here are five important things an individual must know before making a portability request

1. What is health insurance portability?

Health insurance portability allows policyholders to switch from their current insurer to another service provider. During the portability, the policyholders do not lose the continuity benefits related to pre-existing conditions. The terms related to waiting period and other time-bound exclusions remain the same after porting the health plan. The portability is subject to the policyholders receiving the same coverage as offered by the previous insurer.

2. Who can apply for portability?

Holders of indemnity health policies issued by registered general or non-life insurers are allowed to port their plans. Furthermore, only similar policies (basic to basic reimbursement or top-up to top-up) are portable. If a person is covered under a group insurance plan, he first needs to migrate to an individual policy from the same insurance provider. After a period of one year from the date of such migration, he may port the individual health insurance plan to another service provider.

3. Is it recommended to port current health insurance?

The main reason for policyholders to port their insurance is the poor quality of services. Several users are dissatisfied with varying reimbursement limits, age limitations at the time of renewal, cumbersome claim settlement procedure, co-payment terms, room rent limits, and other conditions. Increasing awareness among the users has enabled them to gain an improved understanding of health insurance.

Policyholders have to undergo medical tests while applying for portability. The new insurer may reject the portability request if the underwriting norms are not met. Furthermore, individuals may lose their no-claim bonus resulting in higher sum insured when the policy is ported. This is because the new insurer considers the cumulative amount as the basic sum insured, which may entail a higher premium. Major variations between inclusions and exclusions among the two service providers may also result in rejection.

4. When should one consider porting health policies?

Most experts advise porting the health insurance policies at the time of renewal. A majority of the insurance service providers recommend applying for portability 45 days before the date of renewing the policy. This is because existing insurer is required to provide certain details within a specific period of time. Moreover, the new service provider must communicate the decision on the portability request within 15 days of receiving the application.

5. Does age and health history matter when it comes to health insurance portability?

Purchasing a health policy when a person is young and healthy is easy because of the low-risk profile. The insurers are hesitant to offer health cover to elders because the possibility of them falling sick is much higher. Applicants over a certain age need to undergo medical tests. If a person has contracted some medical conditions after acquiring the original policy, the new insurer may reject the application for portability due to the higher risk. Any adverse medical history reduces the possibility of being covered under new plans.

If a person is considering porting the health plan, it is important to initiate the process early. Being honest careful while filling the application form is advisable to avoid rejection. Moreover, portability is not guaranteed; therefore, users are advised to fully comprehend the implications.

About HDFC Health

HDFC Health is an initiative by HDFC Life, a life insurance company in India to help increase awareness, spread knowledge and enshroud myths surrounding the health insurance sector in India. As a wholly owned subsidiary of HDFC Life, HDFC Health Insurance and other mediclaim plans in India cover individual, family floater, critical illness and cancer care insurance plans.

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How to Choose the Right Used Car Loan Lender?

by Vinaya HS on August 29, 2016

in Finance

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Most people turn to a finance option if they do not have outright cash required to purchase a pre-owned car. There are numerous factors that have to be considered while availing of vehicle loans. The most important step in the loan application process is choosing a lender. While selecting a lender, you must consider the following six factors:

1. Reputation of the lender

Always opt for a reputable and well-established lending institution. Such institutions are well-versed with the latest trends and schemes. They understand their customers’ needs and provide services to suit those needs. You should therefore check on a lending institution’s reputation and its professional lending experience.

2. Amount of loan offered

Not all lending institutions provide the entire sum that borrowers apply for. In case of used car loans, the borrower has to provide a certain percentage as down payment. This amount varies from lender to lender. Hence, it is important to select those lenders who approve a higher loan amount so that your down payment may be lower.

3. Interest rates

Usually, the interest rates for second-hand auto loans are slightly higher than that of new car finance. However, there are many banks and lending institutions that offer loans at attractive rates in order to draw more customers and increase their customer base. Take advantage of this benefit, and choose a lender who offers lower rates of interest. Low interest rates mean that you have to pay less for your car loan.

4. Borrowing costs

It is imperative to read the Terms and Conditions of repayment before signing on dotted line. Check for pre-payment charges, part-payment fee, processing fee, late payment charges, and loan cancellation charges, besides others. You need to have thorough knowledge about such fees and charges.

5. Repayment options

Used car loan seekers now have the option of customizing their EMIs based on their financial capabilities. Hence, choose lenders who offer such kind of flexible repayment options as it helps you adjust your repayment amount in case you have a surge in income or are cash-strapped.

6. Loan processing time

Some banks and financial institutions take a few days to approve used vehicle loans, while some take a couple of weeks. Based on your requirement of the loan, you may choose the right lender. If you wish to obtain a loan on an urgent basis, opt for a lender who offers faster processing time. Some lending institutions may also provide customers with the option of checking their approval status online thereby providing convenience to customers.

Finalizing on a particular lender may be a confusing task due to the array of options available in the market. Consider all the above-mentioned factors before you select your used car loan lender as it will help you avail of a pre-owned car loan conveniently.

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The following post is a sponsored post.

Filing income tax is a procedure which requires individuals to be aware of latest income tax slab and various tax saving investment options as well. Filing ITR without paper is possible only for individuals with digital signatures. Taxpayers without a digital signature need to post a physical copy of the returns to the Central Processing Center (CPC) in Bengaluru within 120 days of completing filing their returns online.

The Central Board of Direct Taxes (CBDT) issued a notification on 13th July 2015 in relation to the use of Electronic Verification Code to verify the electronically filed ITR. Taxpayers who verify their ITR through this EVC are not required to send physical copies through the post.

Understanding EVC

The EVC helps in the verification of the person’s identity known as the verifier and can be generated on the e-filing site of the IT department. This code can be used for verifying ITR 1, 2, 2A, 3, 4, 4S, and Karta of an HUF. Every assessee will need to generate a unique EVC related to his or her Permanent Account Number (PAN) and can be used to verify only one ITR irrespective of the Assessment Year (AY) or type of return (revised or original). This code is valid for 72 hours and stored against the assessee PAN. Verifiers can generate multiple EVC and use more than one mode for its generation.

EVC generation modes

The CBDT, to simplify the process of filing income tax returns online provides 4 methods to verifiers to generate the EVC. Assesses are advised to ensure their e-mail address and mobile number is registered with the CBDT to enable the generation of the code.

E-filing website: This is the simplest and fastest way to generate the electronic verification code. You will simply need to follow the steps on the e-filing website and the EVC is sent to your registered mobile number and e-mail address. You will need to login using your PAN, click the e filing returns online tab and select Generate to receive the EVC.

Linking AADHAR card to your PAN: After logging in, click on the “Profile Settings” tab. A drop-down menu providing an option of Linking AADHAR to PAN will open. After filling the necessary details, you can click to complete the process and generate the EVC.

Through Bank ATM: You will have to use the ATM card of the registered bank with the income tax department. To generate the EVC, you will have to select “generate EVC for ITR filing” tab that appears on the ATM screen. The code will be sent to your registered mobile number

Net Banking: For using this method you will need to route the income tax returns online filing process through the registered bank. Assesses must login to their net banking account to be redirected to the e-filing website to generate the EVC, which will be received on the registered mobile number.

Using EVC to verify the ITR
The EVC is usable while uploading the returns through net banking, returns that are already uploaded, or uploading the ITR without net banking facility. The entire procedure is simple and well-outlined on the e-filing website and can be easily used by most users to make filing online returns easy and convenient.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises of solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, Health and Online Term Plan.

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The following post is a sponsored post.

One of the biggest perks of working at a multi-national company is that your health is secured by your company’s group medical coverage. In fact, not only is your health secured, many companies offer health insurance plans that cover your dependents as well. The benefits offered by your health insurance policy tend to vary from company to company and it is also a function of your tenure at the company. For group medical coverage, the cumulative risk of all the members is considered while deciding upon the premium amount. In any group, some members are less likely to make a claim than the others. As a result of this, the risk factor is balanced to a great extent.

However, not everyone works at an MNC & not all companies provide health insurance plans to their employees. In this case, there are individual health insurance plans available that only cover one person’s medical expenses. An individual health insurance policy is only valid for the time decided by the policyholder and is not dependent on any other factors like employment. The premium rate is fixed at the time of buying the policy.

What happens when you quit your job to start your own business or join another company? Your group medical coverage is not in force anymore and before you seek employment elsewhere, your health is not covered. In this case it is advisable to shift from your group medical plan to an individual plan. Since a group medical policy underwrites a group, the norms are more relaxed. Hence, the waiting period that you have accumulated for pre-existing conditions can be carried forward the when you switch your insurance plans. This is only possible if you opt to stay with the same insurer. You can only switch insurers when you have completed at least one year with your individual policy with the present insurer.

Usually, there are no waiting periods in a group health insurance and pre-existing conditions are covered from the very first day. However, as per the IRDA the credit gained for pre-existing conditions in the form of a waiting period is eligible to be carried forward. When shifting your policy from group to individual, you can also shift policies if your entire family is covered by it. You can choose individual policies for each family member or opt for a family floater cover.

The transition can be carried out by filling a form to port from one policy to another. You will need to furnish the details of your policy, your medical history and declarations alongside. Certain insurance providers might also ask you to take a few medical tests. The benefits of portability can only be availed if your previous policy has been carried forward without interruptions. It is important that you submit your form for porting at least 45 days prior to your renewal date.

Once the application for porting is processed, the insurance provider underwrites the new policy and the terms and conditions associated with it along with the new premium. This typically takes around 15 days. Once the premium is paid by the insurance holder, the new policy begins.

There are several benefits of shifting from a group medical plan to an individual health plan. An individual insurance policy gives you more exhaustive coverage than a group coverage would. You can choose a customized policy to suit your specific medical needs. In addition to this, you can enhance the cover when you shift from one health insurance plan to another. However, the benefits of the waiting period will only apply to the existing sum assured and not the new sum assured.

Whether you have a group plan or an individual plan, it is essential to have medical insurance in this day and age. There are several insurance service providers that offer various health insurance plans and critical illness insurance as well that cover a variety of medical conditions. These days cashless health insurance is also a popular option that is available so if you do not have a health insurance policy, get one today & safeguard your health today!

About HDFC Health

HDFC Health is an initiative by HDFC Life, a life insurance company in India to help increase awareness, spread knowledge and enshroud myths surrounding the health insurance sector in India. As a wholly owned subsidiary of HDFC Life, mediclaim and other health insurance plans in India cover individual, family floater, critical illness and cancer care insurance plans.

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Most Indians have a life insurance policy today but why is it that very few have a term life insurance policy? While traditional/endowment life insurance policy provides returns on maturity, a term life insurance policy is different from a life insurance policy and getting a term cover may be important to have to get that ultimate protection.



Image credit: economictimes.com


Here are few reasons why getting a term plan may be necessary to get sufficient life cover.

1. Flexibility helps fill in the life protection gaps as per your needs

Pure term plans while not an investment options help financially secure you’re loved ones in time of need. With every passing year due to changing needs and inflation rates the insurance cover needs to be revised from time to time. For instance, you may have taken a cover when you were 30 years of age but after that if you started a family this would mean that you would need to consider revising and increasing the insurance cover. While we don’t know at any given point exactly how much insurance is completely apt for us, however, it is essential not to have inadequate cover. Your current life insurance plan may provide returns when you are 60 years but considering the high rate of inflation and different needs at different stages of life the cover may not be adequate.

A term plan offers options where you can opt for a policy where payout increases every year. Also they offer great flexibility where you can also opt for online plans where companies usually do not insist on health check-ups if the cover is less than or equal to Rs 50 lakh. In such a case while you won’t be able to increase the sum assured during the renewal process, you can always opt for a new plan online as and when the need arises or even customize the plan with optional riders.

2. Lower premiums & higher cover

As there is no investment element included in the amount insured the best part about getting a term plan is that the premium amount is much lower than all the other insurance plans available out there. For instance: If you buy a term plan like the ICICI Pru iProtect Smart which offers a Rs 1 crore cover for 30 years then if you are currently 30 years of age the average premium will be only Rs 8000/- per year but a life insurance policy for a 30-year-old which provides returns on maturity can have a premium as high as Rs. 16,000/- per year or more with much lesser cover. In this case if your salary is 8 lakhs per year then Rs. 8000 is just 1% of your annual income for a cover as high as Rs. 1 crore. While you have the benefit of getting returns with a life insurance plan the whole objective of a life cover gets defeated.

3. Extra funds left over = added financial security from other investments

Due to the affordability of the term plans you can benefit by earning interest on investing the premium difference in other instruments with fairly good to high returns such as a PPF, FD’s, mutual fund or unit-linked plan which will give compounded returns. For example, if you had decided to put aside Rs. 36,000/- per year for the sake of insurance and the term plan costs only Rs.7940/- then you can invest the remaining Rs 28,060/- elsewhere. So if the difference Rs 28,060, is invested for only 15 years (half the time of the policy) at an interest rate of 10% a year, it will result in return of Rs 9,80,689/- and investing it for 30 years will mean higher returns. This way your family and you will have double benefits of returns which can be en-cashed earlier as well as an adequate life protection cover.

To illustrate this further in another example for a 30-year-old male, we take a life cover of Rs 10 lacs for a policy term of 15 years, the annual premium is Rs 67,070 (exclusive of service tax) and a term insurance of Rs 50 lacs with a term of 15 years, the annual premium is Rs 5,985 (inclusive of service tax). We invest the remaining amount in PPF (Rs 63,432) every year. Let’s compare the returns.



The PPF and term plan combination outperforms the endowment plan in terms of returns and most importantly in terms of providing adequate life cover.

4. Provides additional riders missing in traditional life insurance policies

Your life insurance policy which you have provides returns at the end of the policy. But what if there is a mishap like a critical illness, partial or permanent disability and so on before the term ends? In these cases it would become essential to a cover that caters to your financial needs at that time. Term plans come with a host of riders which provide extra benefits at a nominal cost; including critical illness cover, partial or permanent disability cover, waiver of premium and income benefits. The advantage of a term plan is that it is pure protection which is what insurance is supposed to be so like in the case a person who works in the heavy industries a waiver of premium or a permanent and partial disability cover can be explored. Since riders come with additional costs it is better to buy a rider only depending on your needs and not just for the sake of it.

Comparison of two financial portfolios:

X Y
Makes an investment in a FD, PPF & Traditional life insurance Makes an investment in a MF, FD, PPF & Term insurance
Portfolio Value – 10 lakhs Portfolio Value – 10 lakhs
In case of untimely death with traditional life insurance policy the family of X will get Rs.10 lakhs. In case of untimely death with term insurance policy the family of Y will get Rs. 1 Crore & 10 lakhs.

So while the portfolio values of X & Y are the same (Rs. 10 lakhs), Y’s family who has invested in the term plan has much greater protection and also has money invested in an additional mutual fund as not present in the case of X. Hence Y’s family can expect good return with the additional mutual fund.

The bottom-line is that while it is good to invest and expect returns but we should not lose sight of the fact that the main reason we take insurance is to protect our family in case of an unfortunate event. As seen above a term cover is a pure insurance product which can be bought online at a very low cost and can provide a cover of as high as Rs 1 Crore 10 lakhs.

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The dream of an average lower or middle-class family in India is to own a house even if it means 1-BHK. Moreover, the easy availability of financing options has turned dreams of thousands of home buyers into reality. But what if a natural calamity destroys this dream? Or what if your house is burgled and you lose possessions worth Rs 10 lakhs or more? Whom will you blame?

Rise in natural disasters in India

The basic elements of Nature — Fire, flood, air, water and space along with other nature’s forces can create disturbances in the Universe, which are unexpected. No one is prepared to face these unforeseen circumstances. Though the government may support you with relief fund in case of natural calamity, will this fund be sufficient to rebuild the same house which you had earlier? Or can you spend Rs 15-20 lakhs out of your savings to rebuild your house?

Natural Disasters in India

Source: www.slideshare.net

Man-made risks are on the rise

In 2014, house theft cases increased by over 300% with 12,276 cases reported in the year. The cases of burglary get increased especially during vacations when scores of the family go for holidays.

Statistics

Source: Livemint

Benefits of home insurance

Though some events are uncontrollable, you can alleviate the risk by buying home insurance:

  1. Natural calamities can strike anytime and anywhere: It becomes important to fix the perception that misfortune happens only with other people. It takes years and sometimes decades to save the hard earned money to build a dream home where you can create beautiful memories with your family. With a home insurance policy, you can protect your house against all types of “Acts of God” or natural calamities like cyclone, flood, landslides, etc.
  2. Man-made risks are the reality: Like every TV crime show proves, despite the trendiest and fanciest of safety equipments, human-engineered disasters like burglary, theft, etc. are prone to happen. Further, acts of terrorism, riots, and strikes pose new threats to your home. While not every home insurance policy offers coverage against these risks, you can get the coverage in the form of a rider.
  3. Cover is required irrespective of where you live: Even if you are living in a rented apartment or a housing society, you need home insurance to protect your place. In case you are a tenant, you should go for the policy that covers the content of the house.
  4. Your house might have precious items: You might have spent thousands or lakhs in furnishing the interiors of your house and beautifying it with domestic appliances, light fixtures, furniture and more. Many of us also have some items that hold sentimental value like artwork, jewellery, etc. But what if someone steals them? Apart from the emotional loss, there will be a financial loss also. A home insurance ensures that precious items which have sentimental value are protected from all hazards.
  5. You might need to relocate to a new place: In case your house is being reconstructed, you may need to find an alternate place to live, which means spending extra money as rent. Some insurers bear additional expenses of rent for alternative accommodation, which ensure that you have a comfortable way to live while your house is being reconstructed.

Chosen with care, a home insurance policy can give comprehensive cover against all types of perils. Typically, it has the following parts. As a homeowner, you can either opt for both the covers or for one. There are various other riders also which can be added to the insurance policy.

  1. Cover for structure: It is calculated in three different ways:
    • Reinstatement value: It is calculated on the basis of the built-up area and the total construction cost of the property.
    • Agreed value: It comprises the total area of the land and the cost of the house.
    • Indemnity value: It includes the total property cost and depreciated value of the property.
  2. Cover for content: While it is expensive to rebuild the structure of the house, contents of the house also involve a large amount. Therefore, while protecting the structure, it makes sense to insure content of the house also. While buying the policy, make sure to give the correct valuation of all the insured items to the insurer through bills and invoice.
  3. Riders: You can expand your coverage by adding riders to your main home insurance policy. For instance, rent cover helps you if you need to stay at a temporary location while your house is being rebuilt. Some insurers also offer riders like public liability, cost of removing debris, architect’s fee, personal accidents, etc.

It is imperative to take the optimum coverage under home insurance— neither too high nor too little. You can go for the long term home insurance policies, in which the coverage is offered for five or ten years in one go. The longer you take the cover, the cheaper the premium will be.

As said by Jane Sherwood Ace, home wasn’t built in a day, so why not go the extra mile and safeguard the abode by insuring it with a comprehensive home insurance policy?

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How to Avail a Car Loan with Bad Credit Score?

by Vinaya HS on July 29, 2016

in Finance

Who wouldn’t want to drive around in a big fancy car of their dreams? But not everyone can afford it. Some of us may be trapped in a financial crisis which affect loan repayment schedules. This may in turn result in defaults, thus creating a bad credit history.

The Credit Information Bureau (India) Limited (CIBIL) assigns a credit score, based on an individual’s borrowing and payments towards loans and credit cards. Most Indian banks accept 750 as the minimum CIBIL score for individuals seeking a car loan. If you have a bad credit score, fret not. It doesn’t mean you can’t purchase your dream car. Though you may not have it easy like other car loan seekers, you can still get a loan.

The following tips will help you get an auto loan when the bank is frowning at your CIBIL score.

Buy a new vehicle instead of a used one

Usually, loans for used cars are more expensive than that of a new one. Hence, it is advisable to buy a new car if you do not wish to shell out extra money on loan interests. However, if you find a good deal on a used car, go ahead.

Know what’s on your report

Checking your credit report is critical as many auto loan seekers assume that their credit score is low and thus end up paying more. If you find any errors on your report like charge-offs or late payment charges, fix it immediately.

Research well

The next logical step is research. Conduct your research about loan lenders, car loan interest rates, etc. Approach selected lenders which have a greater chance of lending the loan. Each time an auto loan lender pulls out a CIBIL report, it creates a tag. Too many inquiries on the report may adversely affect the lenders decision.

Don’t go above your price limit

Setting a budget should be at the forefront while planning to purchase a car. The price you end up paying may increase due to interest payments, mainly due to higher rates of a bad credit loan. Hence, prepare a budget and stick to it. Auto magazines, car loan calculator, dealer’s websites and other resources could provide a true cost of the desired vehicle.

Negotiate

Though you may not be in a position to negotiate the terms of the loan, you can try to settle for the best possible price. Don’t pay more than your budget. Instead, try to lower the price if possible.

Look out for add-ons

Car buyers end up signing contracts which have many unessential add-ons like extended warranty, after-sales service, insurance, etc. These add-ons add up to the cost, thus raising the amount of the loan required.

Make regular payments

Once the loan is approved and you’ve purchased the car, make regular payments. Set up automatic payment options to help you pay the loan on time. Chances are the lender may repossess your vehicle should you miss a single payment.

Don’t let bad credit come in the way of buying your dream car. Plan well and research well before approaching lenders. Once you have shopped within your price range and made regular payments, you know you’ve made financially right decisions.

Know more about car loans and their interest rates at Mahindra Finance.

Disclaimer: The blogger is solely responsible for all the posts, comments and mentions posted within this website. Mahindra Finance does not endorse the accuracy or reliability of any information’s, content or advertisements contained on, distributed through, or linked, downloaded or accessed from any of the services contained on this website, nor the quality of any products, information’s or any other material displayed, purchased, or obtained by you as a result of an advertisement or any other information’s or offer in or in connection with the services herein.

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Term insurance plans are the best way to provide financial security for loved ones of the insured in case any unfortunate incident. Compared to traditional plans, online term plan is available at a lower premium, which makes it easier for a larger number of people to procure insurance.

Term plans do not provide survival or maturity benefits, which is why people try to opt for the cheapest policy. Although saving money on the insurance premium is beneficial, it must not be the only deciding factor. Cheap is not always the best and considering some of the below-mentioned factors while making the decision is very important.

Higher Policy Tenure

Several insurance companies now offer term plans with longer tenure, which ranges between 35 and 50 years. With improved medical facilities and technical development in the healthcare sector, life expectancy has significantly increased. Checking the tenure being offered by the insurance provider before availing the policy is advisable. The best life insurance plans offer longer tenure, eliminates the need to purchase another policy in case the first one expires.

Maturity Age

The majority of the term insurance plans have a maturity age between 65 and 80 years. As a person grows older, the possibility of suffering from various sicknesses and critical illnesses also increases. Individuals are advised to choose a plan with a higher maturity age to ensure coverage is available at an older age when the possibility of ailments is higher. The best term plan will be one that has a maturity age of over 75 years for the policy holder to enjoy coverage during the senior years.

Claim Rejection

The claim rejection ratio is one of the most important factors that must be considered while choosing term insurance plans. Claim rejection ratio is the number of claims that are not paid as a percentage of total claims made during a year. Benefits of these life policies are given to the beneficiaries only on the death of the insured. Opting for an insurance provider that has lower claim rejection ratios will be advantageous to the family members. The procedure and time taken for claims to be cleared must also be considered to ensure the beneficiaries do not undergo too much stress while already dealing with the sorrow of losing their loved one. Selecting a reputed and reliable insurer is an important factor that must be considered while availing term plans.

Low Claim Pending Ratio

While ensuring the claim rejection ratio is lower, the claim pending ratio must also be considered. If an insurance company has a high pending ratio it may be reflective of inefficiencies of the service provider while settling the claims. According to the regulatory guidelines, claim settlements must be completed within six months and if an insurance company has a higher pending ratio, it is recommended to choose another service provider to buy the best term insurance.

Actual Premium

An increasing number of users are going for online insurance. This is because they are able to acquire higher coverage at lower costs. Insurance companies are willing to offer the cost savings by eliminating the intermediaries through the online channel, which reduces the premium on term plans. However, potential buyers need to understand that the online quotes are indicative and the actual premium amount may differ. Certain factors, such as medical history, current health conditions, and lifestyle play an important role in determining the actual premium and checking the exact amount before making the decision is very important.

Complexity

Individuals must ensure the procedure to acquire the insurance coverage is not complex. Moreover, the claim filing process should also be easy and quick to prevent the beneficiaries from having to run from one department to another to receive the policy benefits. Investors are advised to check the past history and track records of the various insurance providers before making their final decision.

While availing term insurance provides peace of mind to the investors, doing some research before opting for one is crucial. It is very important to provide accurate and truthful information to avoid rejection. Considering the above-mentioned factors before buying term plans will go a long way in ensuring financial security to your loved ones.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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The following post is a sponsored post.

Technology has developed and the Internet is used by millions of people for various reasons. This has even affected the insurance industry and a greater number of individuals are now opting to purchase insurance using this advanced technology.

When investors opt for purchasing life insurance policies, investment plans or retirement plans online, they eliminate the agents and brokers. This makes the entire procedure faster and less cumbersome. Moreover, most insurance providers offer excellent in-house support to assist clients in case of any difficulties.

Here are seven reasons to buy insurance online

1. Cost

The cost of availing insurance online is at least 50% to 70% cheaper than the expense of acquiring coverage using the traditional method. This is because intermediaries are eliminated and clients directly deal with the insurance companies, thereby reducing the expenses. In addition, insurers consider people opting to buy insurance online as having less mortality risk, which means the premiums for such buyers is lower.

2. Sum assured

Investors tend to choose higher coverage sum assured because online term insurance plans are cheaper. A reason for availing higher coverage through online is the marketing strategies adopted by the insurance companies providing low per day costs for these policies. Moreover, most online insurance policies do not have mandatory medical tests, which make it more convenient for people to avail higher coverage.

3. Premiums

Compared to insurance coverage acquired offline, the premium on online plans is significantly lower. This lower premium is available only for investors who choose to acquire the insurance coverage online. Insurance companies are willing to pass on the benefits of reducing their overheads and intermediaries’ expenses to online policy buyers.

4. Comparisons

Several websites are available, which make it easier for potential buyers to make intelligent comparisons. Using a single resource, individuals are able to compare the terms and conditions, coverage, premiums, and other factors of policies offered by different insurance companies. Such comparison makes it easier for users to make the right choice as per their personal requirements ensuring maximum benefits.

5. Transparency

Availing insurance includes several factors and each policy comes with a long list of terms and conditions. Understanding these before signing the dotted line is crucial to avoid any problems in the future. The online term plan is completely transparent and provides all details related to riders, features, and tenure. Riders are additional covers that may be chosen by paying extra premium. Moreover, potential buyers have access to customer testimonials and comments, which makes it simpler to understand the overall experience while dealing with a particular insurance company. Another transparency feature is that every policy buyer receives text and e-mail confirmations on their transactions that allow them to track their application status and rectify any errors that may have occurred at the time of submission.

6. Easy access

If the policy has been purchased in the traditional manner, the possibility of being able to access related information at all times is often difficult. This difficulty is easily overcome when individuals choose to buy term insurance online. Investors can log in to the insurance company portal from any place at their convenient time to access the required information.

7. Flexibility

Online policy purchase allows users to make modifications as and when required before submitting the form. Therefore, if the buyers make any mistake in entering the information, they can edit or delete it before making their application. This prevents the insurance company from rejecting their applications because of providing inaccurate information ensuring insurance coverage is easily available to the investors.

It is easily seen that buying insurance online has several benefits. However, individuals must research about the different options because they do not have the option to rely on an insurance agent or broker. Investors must know the coverage, terms and conditions, and all the inclusions and exclusions before buying the policy to prevent any nasty surprises in the future. Several online resources are available, which provide beneficial information and taking guidance from these will ensure investors are able to acquire the right policy that maximizes their benefits at the lowest possible costs.

About HDFC Life

HDFC Life, one of India’s leading private life insurance companies promoted by HDFC Ltd. & Standard Life Ltd., offers a range of individual and group insurance solutions. HDFC Life’s product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health.

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The following post is a sponsored post.

Buying a car is an event that brings in an enormous amount of joy and apprehension at the same time. This is because unfortunately, any vehicle plying on the roads is susceptible to numerous risks of accidents or damage; often involving the third party. Cars are expensive, and any such untoward incident might rob you of your hard earned money.

It is thus necessary to buy a good car insurance policy to safeguard your vehicle against any such occurrence. This article will provide you the essential details regarding Third-Party coverage with Cholamandalam car insurance.

Third-party coverage

When you are driving on the roads, you become intertwined with the lives of numerous people around you. Regardless of how good a driver you are, there is always a risk of some unfortunate accident which might include a third party. And then a blame game might ensue, enhancing your troubles. In such cases, third party policies might turn to your advantage.

The policy shall cover all the compensation costs, including property damage and bodily injury liability involved in the accident. This is purchased by the insured from the insurer which is the second party as a safeguard against any claims made by a third party in case of any accident. The beneficiary of this policy is thus the third party which is not directly involved in buying it but, has become the legal liability of the first party.

Driving is a risky business. It is thus necessary to buy this third party motor insurance so as to avoid burdening your pocket if an accident causes damage that involves a third party. Hence, your third party coverage might turn out to be a lifesaver by cutting down your expenditure.

Benefits of the policy

Cholamandalam car insurance provides you with a broad range of benefits as mentioned below:

  • It provides a complete comprehensive cover that offers both Third Party Cover and Own Damage Cover.
  • The Third Party Liability Cover includes TP Personal Liability & Property Liability.
  • Third Party Property Damage includes a maximum cover of Rs.7, 50,000, in the case of private cars.
  • It provides Personal Accident Cover for the owner, driver, and passengers.
  • It provides protection for your vehicle against damage or loss due to accidental external means, theft, burglary and various other perils.
  • Discount on Own Damage (OD) premium for claim free policy years – No Claim Bonus can also be availed.
  • The Own Damage Cover protects against loss due to fire, burglary, earthquakes, floods, terrorist activity, landslide, etc.
  • It provides optional cover for a personal accident of up to Rs. 2 lakhs for passengers in your car.
  • Cashless claims facility available at more than 600 Chola MS preferred garages
  • Seamless and hassle-free claims process
  • Facility to buy online car insurance through simple and hassle-free procedures
  • Quick and easy online insurance renewal process

Third Party coverage with Cholamandalam car insurance thus provides you with a wholesome package that can help you get rid of all your worries in case of an untoward accident.

Happy driving!

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