You may think twice about spending money on anything in the world, except for health insurance.

In today’s times, nothing is more important than safeguarding one’s health. Rising stress, lifestyle diseases and extremely fast-paced lives are making more and more people ill. Also, the incidence of cancer and heart ailments has increased

On the other hand, medical treatment costs are prohibitive, prompting many people to seek a doctor’s opinion only when it is absolutely necessary. People who need expensive surgeries are forced to either forego the operation or borrow money before getting admitted.

Take the responsible route out of this situation – invest in family health insurance. This is why you should consider taking health insurance:

1. It pays for hospitalisation and medical care

In the absence of family health insurance, you or a family member will have to pay for hospitalisation, medicine and doctor’s visits. These costs can be extremely high, and a single round of hospitalisation will wipe out your savings. Instead, a family health insurance plan will help you tide over the crisis easily.

2. It provides coverage for dependents

In the event of your unfortunate demise, a family health insurance plan will ensure that your family does not suffer from a sudden loss of income. Whether you are present or not, the presence of a family health insurance policy is a backup option to provide expenses for children’s education, wedding, household running costs, even senior dependents’ health care.

3. It keeps your savings intact

In the absence of family health insurance, you will have no option but to dip into your savings to finance sudden emergencies. It takes years to build a savings corpus, and just one tragedy to completely deplete it. But if you have sufficient health coverage, your savings can be untouched while you treat yourself or a family member.

4. You can depend on yourself in your old age

Senior citizens are hampered by a lack of finance when they need expensive hip replacement surgeries or regular therapy for arthritis. A lack of income, coupled with daily expenses, can result in many seniors not being able to fund their own medical care. If there is family health insurance, the seniors can easily get quality healthcare without having to request money from their children.

5. Taking it young ensures a higher pay-out

Taking family health insurance when you are young and earning good income will make it easier for you to pay high premiums. The capability to pay a high premium will help you choose more add-on benefits in the policy. It is difficult to take health insurance when you get older. Instead, you will get sufficient health coverage when you are young, with no diseases and a stable income.

So why wait? Buy a great family health insurance plan and secure your collective future.

 

My Child Dreams of becoming a Doctor

Your daughter is ten years old, and all she talks about is being a lawyer. Imagine this – your child is in the first year of college, all set to pursue her dreams of becoming a lawyer. She has taken all sorts of tough classes, and is securing great marks. Suddenly, one night, she says, “I don’t want to be a lawyer anymore; I want to be a doctor!” What would you do? Other students with the same dream have already started their MBBS preparations. So, now you daughter has to run the rat race all over again. Will she make the cut? How will you pay for such an expensive degree without planning? Where should you start?

This is why your aim is not only to prepare your child for a steady career, but to help them choose the right path. Rarely do you know what your five-year-old will become. However, finances are essential, regardless of the end choice. So, start early and make investments. A life insurance policy and child plans are a great way to start. And today, it has become easier, since you can buy life insurance online as well.

Supporting your Child’s Dreams

As parents, you should always believe in your children’s dreams. Why? Well, because they believe in themselves, and you as a parent are the only support system they have. And, this holds good financially as well. In the unfortunate event that you are not around, would their dreams come to an end? So, it would be a great idea to first buy life insurance online.

What You Can Do

Research shows that several students enter college with a vague notion. They are clueless about their aspirations and the type of career that will suit them best. Here is what you can do as a parent:

1. Encourage Internships: Encourage getting exposure during high-school. Many might judge you, saying that you are being demanding. However, this will help your child narrow down their interests.

2.Help Making Choices: Never do you want your child to lose out on proper education. In fact, the best decisions are made before college. Hasty career decisions can lead to unpleasant experiences. So, use your experiences and help them make the right choice well in advance.

3. Start Early and Stay Prepared: Today children want to travel abroad and pursue courses that could cost lakhs. Who will support this? You! So, plan your finances when they are toddlers. Make investments and consider buying life insurance. You never know when you might need it.

Term Insurance Myths Busted

Insurance is one of the lesser understood sectors, where personal finance is concerned. Since insurance coverage in India remains quite low, there are some misconceptions among consumers regarding term insurance. First, what is a term insurance policy?

Term insurance in India provides a sum assured on the death of the insured; although there is no payout at the maturity of the product, since these are pure insurance products. There is no upper limit on the sum assured; the premium you pay is calculated based on the sum assured you opt for.

Term Insurance Demystified

Myth: Term insurance is a waste of money.

Fact: Term insurance is meant to provide protection against death only. For a very nominal sum, you can purchase a large insurance cover. In fact, the cost in terms of premium per rupee of protection is the lowest for term insurance.

Let us look at it from another angle. The cost of term insurance is very low. If you were to take the amount of premium you pay for this type of policy, and invest it in savings, the return you get would cover just a few months of expenses on retirement. In comparison, the cost of leaving your family unprotected in the event of your untimely demise would be incalculable. It is, therefore, far better to pay the premium for the best term insurance plan available rather than consider it as money wasted.

Myth: I am too young to worry about insurance.

Fact: Actually, the younger you are, the lower the premium you have to pay for a given sum assured. It makes good financial sense to purchase the best term insurance you can find when you are young; you may not have any dependents now, but you can always change the nomination details once you get married and have a spouse and children. Your family (and that of your spouse) will thank you for being so thoughtful at such an early age!

Myth: Life insurance is for saving taxes.

Fact: Since there are tax-saving life insurance plans available, you may think that it makes sense to buy such a plan; you save taxes, get protection, and also get some return. But at what cost? The management charges of life insurance products are much higher than those for mutual funds. Also, other equity mutual funds or the PPF may provide better tax and investment benefits. Term plans are a better bet for insurance protection.

Tips for Choosing the Best Term Insurance Policy

A term insurance policy is the least expensive way of purchasing protection against the risk of death and the consequent financial loss for the policyholder’s family. Term insurance is a policy with a fixed term, annual or monthly premiums, and a sum assured as chosen by the insured. There is no limit on how high the death benefit can be; the insured also chooses the term of the policy. Term plans usually require the policy holder to be medically checked, and premiums differ depending on the age of entry into the policy, whether the insured is a smoker or non-smoker, and the overall health of the insured.

Criteria for Choosing a Term Policy

There are a variety of term plans on offer. So, how do you choose the best term insurance? Here are some criteria you should apply when making your choice.

1. Check the claim settlement ratio. This is the ratio of total claims settled to total claims received by the company. The claim settlement ratio should not be lower than 80%. The Insurance Regulatory and Development Authority of India (IRDA) publishes these numbers in its annual report.

2. Look into the financial background of the insurance company. One key parameter is the solvency ratio, which denotes the ability of the company to meet its financial obligations and debts. It is the size of its capital relative to the risks it has taken, and is calculated as the ratio of net assets to net premiums written. The IRDA recommends a minimum ratio of 1.5. A good solvency ratio means that the insurer will be able to settle any large claims in the event of a catastrophe. Cash in hand, annual profits, the leverage ratio, etc, are also important. In addition, look at the reputation and longevity of the company. These indicate its standing in the industry and its experience.

3. Premium rates are another criterion for selecting a term insurance policy. However, cheapest is not always best, nor is the most expensive. Look at this criterion along with all the others.

4. Average claim settlement time is a key input in your decision. Taking a policy with a company known to delay claims may cause trouble for the beneficiaries, so look at the IRDA report for these numbers.

5. Compare the policy statements and riders, and choose the one with the clearest statements and conditions. Choose additional policy benefits carefully. A pure term insurance policy is generally your best bet.

Things you Need to Look into while Reviewing Insurance Documents

Term Insurance (jagoinvestor)

Most of us study an insurance policy beforehand, so that we buy the best term insurance plan or any other type of cover. The first thing we look into is the type of policy. Is it a whole-life cover or a term plan? This is important because each comes with its own unique benefits. Sometimes, you will have options like annuity plans and wealth creation plans as well. So, looking at the type will allow you to decipher its scope and find one that suits you the best.

Reviewing the Document

Once you take into account all the factors and buy the policy you deem is the best term insurance plan, the review does not stop there. You also need to carefully look into the policy document that you get. Study it to ensure that it is exactly what you signed up for. This is because discrepancies might affect your claim amount.

1. Start with the Policy Number: Validate your policy number with the insurance company. This is the reference number that will be linked to your plan in the company’s database. It is using this number that you would need to make referral calls or claims. Make sure to store the policy number via email or on a cloud-based storage option. This will ensure that your plan is easily traceable even if you lose the physical document.

2. Look at the Dates: This is important for a life term insurance policy, especially since such the policy has an expiration date. See if this is the period that you agreed to. If you have taken a whole-life policy, you will have to pay a surrender charge in case you cancel it before a specific period.

3. Premium Terms: The terms of the premium will be mentioned in the policy document. Look at how much you need to pay and how frequently you need to pay. If you used a premium calculator at the time of policy purchase, check if your policy mirrors the figure the calculator quoted. In case you have not understood the terms of premium payment, you can clarify all this with a customer care representative. For instance, you might have opted for a rider. Your policy document must also reflect this. If it doesn’t, you should have it clarified.

4. Insured: You also need to look if the name in the policy is spelled correctly right, else it might be invalid. Also, look at the beneficiaries mentioned. Does it include the dependents you mentioned?

5. Detailed Benefits: Read through the section called Summery of Benefits in your term insurance policy. Look at things like death benefit, additional riders, waiver of premium and other such unique features. Does the policy deed reflect the promised terms?

How Insurance Needs Change for Every Life Stage

Term Plans (advisorkhoj)

I am 30 years old and just married, so do I need a term insurance plan? You are faced with different priorities at every stage in your life. You need to change with it, in all aspects, whether it is career goals or finances, especially insurance. For instance, a cover that is sufficient when you are 25 will never hold good when you are 60. So, it is important to consider what insurance needs you would have as your life progresses.

What Do I Need?

When you begin your career and acquire financial assets, you need to build a strong foundation. In an event of injury, death or disability, your family needs financial security as well. So, it is imperative to always protect your most valuable assets – Income and Life.

1. Would Income Disability Insurance be Sufficient?

When your employer provides disability insurance, you must ensure that you are adequately covered. In most cases, the cover is insufficient and might also end if you happen to leave your job. With the volatile job market, you need something more permanent. An alternative would be to go in for an individual plan, apart from what the employer provides.

2. What could Short-Term Insurance do for me?

Short-term insurance is the best policy you could start with when you are young. It protects the financial foundation you lay. Later, it can be converted to permanent insurance. Term insurance plans offer you the option of inexpensive coverage when you have major financial commitments, such as home loans.

3. Growing Assets and Middle Age

Once you are financially stable, you can go in for whole life covers and also include add-ons to your term insurance policy. Financial growth of assets requires constant attention.  Insurance can be a valuable investment to ensure that your financial goals are met. Your family might depend on the salaries of both you and your spouse to build your child’s college funds, buy a house, or even setup a retirement fund. At this stage life, you might want to consider converting your term insurance plan to a permanent one.

This will help accumulate savings and also provide tax free benefits for your family in case of your unforeseen demise or disability.

If you and your spouse survive your policy’s tenure, your maturity benefit will also give you a major source of income. This will take care for your medical needs, retirement plans and goals, lifestyle maintenance and much more.

Life insurance basics

Literally, life insurance is nothing but a type of contract between the insured and the insurance company. The insured picks up a suitable plan, and pays the premiums in regular installments. For the premiums paid, the insurance company would give a lump sum amount of money, known as the benefit, to the insured’s dependents on the occasion of unforeseen death of the policy holder. Before choosing the type of life insurance, the owner needs to set their goals and needs. Term life insurance would provide protection only for a set time period, whereas other life insurances would provide lifetime coverage. All the benefits from the life insurance are tax free.

Types of life insurance:

There are a lot of life insurance policy types that an individual can choose before investing on one. First and foremost is the term life insurance. This type of insurance is designed in such a way to provide financial protection for a specified period of time, like around 10 or 30 years. After that period of time, some policies might offer coverage for an extended period of time for a higher premium rate. It is a less costly as compared to other life insurance policies. The next type of insurance is universal life insurance that is designed to provide lifetime coverage. Universal life insurance policies are flexible and allow one to raise or lower their premium as and when it is needed. This type of insurance usually has higher premiums than the term. The last type is the whole life insurance which is a type of permanent life insurance that is designed to provide lifetime coverage. When one decides to buy life insurance, helps to save a good amount of tax accruing benefits.

Buy life insurance online:

Rather than going for the traditional methods of buying, purchasing insurance online has a lot of benefits. There are no intermediates involved in the online insurance purchase, and the customers can buy insurance directly from the companies. Since there is a lack of brokers in between the purchase, the customers can buy life insurance online without additional commission charges and reduction of operational costs etc. This results in reduced costs to the company, who pass on the benefits to their customers. When one buys life insurance online, there are a lower add-on costs that are added on to the purchase.

The buyer is the king when it comes to purchasing life insurance online. The buyers can access all the information of the plan, its features, terms, rules and regulations, and the like on the website of the insurance company. Buyers can review and compare the options that are available online which will help them to choose a best policy. It is all about making a future secure, so one needs to make sure that they would make the best decision while choosing insurance.