5 Tips While Buying Insurance Online

 

Purchasing insurance online has become a quick, convenient and economic way to purchase insurance products.

The trend of purchasing insurance online is gradually gaining pace in India as it is becoming popular with today’s tech-savvy generation. With the advent of online insurance, you do not need to go to an insurance company’s office or visit an insurance agent. Rather, you can purchase any type of insurance policy online through the internet – be it health, motor, travel or life covers. Besides online insurance companies, which directly sell their products through their web pages, there are websites like Insurancepandit.com, Bimadeals.com, Policy-bazaar.com, etc. which display insurance products from different insurance companies. Such sites help you to compare the features of the different insurance plans thereby enabling you to make informed decisions while you buy insurance cover.

 Here are 5 smart tips you may consider while buying insurance online:

• Amount of insurance -

  You should buy only as much insurance as you need. The general thumb-rule is that you should buy a life cover which is 10 times of your annual income to protect your family in case any untoward incident happens to you. However, there are more accurate ways of gauging how much insurance you need. One popular method is by calculating your Human Life Value (HLV). To do this, all you have to do is go online and find a couple of HLV calculators. Fill in the requested fields and submit and they will give you an idea of how much insurance you should buy.

• Selecting an insurance company -

  This is one of the most essential steps in your insurance-purchasing exercise. Your decision to purchase a policy should never be dependent on how good the website of the company is or, for that matter, how easily or how fast you can purchase a policy through its website. Also, don’t select the company simply because it is the first one that appeared during your search on the internet. Rather, you should check its claim settlement ratio, its pedigree and its history within the insurance fraternity, before zeroing in on the company.  Also make sure that you find out about the customer service policies, location of offices, etc.

• Product:

  Once you have identified the quantum of insurance you want to purchase, based on your requirements and the company from which you plan to purchase insurance, it’s time to choose the type of policy that suits you best. You should check the features of the policy such as the term of the policy, the premium-paying term, the date of maturity, the charges and benefit structure. Benefit illustrations under different return rates are available with all ULIPS. They also disclose charges and your would-be investment status on a yearly basis.

• Performance of the fund -

  While purchasing a ULIP (which is an insurance policy which doubles up as an investment vehicle), you can check the company’s past performance. Details of the performance of all funds of life insurance companies can be easily accessed online. Stability is an important factor that needs to be considered here. A company that has a good track record is more likely to have a stable fund performance over time and hence is less risky.

• Security of the insurance company’s website -

  This is the most important of all tips for purchasing insurance online. While you are ready to pay, check if the website is Verisign protected or not. Also check whether the browser of the company’s website displays the term ‘HTTPS’ or just ‘HTTP’. If it is the latter, you should refrain from using the website for payment because the ‘S’ in ‘HTTPS’ denotes secure access.

Once you follow these tips, most of your key concerns will have been met. However, if you still feel unsatisfied after buying the insurance policy online, the ‘free look’ facility, allows you to return the policy within 15 days of purchase.

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Types of Insurance & Which type of insurance should you buy?

 

With so many types of insurance products available it could become difficult to decide what type of product is best suited for you. Here’s what you need to know to help you decide what to buy, based on your financial needs or life stage…

Technically, insurance should be sold based on the needs of the person who is to be insured. But sadly, we often come across overzealous insurance agents who oversell expensive insurance products, in some cases to earn fat commissions. Now, become a proactive buyer by educating yourself about different types of insurance products designed for various life stages.

Term Insurance Plans:

The sum assured of such plans is paid to the beneficiaries (family, parents or children) only if the policyholder dies within the policy term. This type of product is designed for 100 per cent risk coverage. Hence, the premiums for this type of life insurance policies are the lowest amongst the entire insurance category.

Suitability: Single or Married with or without Kids

Whole Life Plans:

The policyholder enjoys life coverage throughout his or her entire life. On the death of the insured, the validity of this life insurance policy expires and the corpus is paid to the family.

Suitability: Single or Married with or without Kids.

Endowment Plan:

In this type of plan, if the insured dies during the term of the plan, the beneficiaries receive the sum assured. If, however, the insured survives the term of the plan, he or she receives a lump sum of money. Such plans help you to accumulate funds over a longer period of time enabling you to meet future obligations such as buying a flat or an annuity policy.

Suitability: Ideal for individuals who wish to save for the future and at the same time purchase insurance cover.

Money-Back Plans:

With such plans, the insured regularly receives a percentage of the sum assured at regular intervals throughout the policy term. The periodic payouts of Money Back Plans are useful for meeting financial obligations from time to time such as children’s higher education or marriage, foreign tours, etc.

Suitability: Ideal for those looking for a 2-in-1 product – insurance cover plus savings.

ULIP:

This category of insurance combines the advantages of risk coverage with the benefits of mutual funds. A certain percentage of the premium is invested in listed equities, debt funds and/or bonds, depending on what options you choose, and the balance meets insurance and fund management expenses.

Suitability: ULIPs are a good option for investors who would like to get involved in managing their investment cum insurance funds.

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Importance Of Life Insurance & Its Advantages

A life insurance policy is a contract between an insurance company and you as a policy holder. By paying a pre-decided premium amount every year to the company for a fixed term, your family members get a protection cover in events of critical illness or death.

Through Life Insurance, you ensure that your family stays financially independent in case of an unexpected eventuality. That objective itself makes it an integral component of life planning.

An insurance policy covers you as the insured and ensures sustenance of your beneficiaries- the individuals you have enlisted under the policy to be looked after in case of any unforeseen circumstances.

It provides financial support and assistance to your dear ones including spouse, children, aging parents or even your business partners and employees.

How Much Life Insurance Cover Do You Need?

How much coverage you should have on your insurance policy is a difficult figure to determine because you would want to make sure that your coverage is adequate. That is because excess coverage can affect your finances due to higher premium payments and being underinsured is never ideal. To make matters easier, a very elementary thumb rule is that your life cover should be 10-12 times your annual income.

The best way to figure out the perfect policy coverage option is to let an insurance consultant conduct a Financial Needs Analysis for you. This gives you the estimated coverage you’ll need to ensure a secure future for your loved ones. Insurance is a ‘prevention is better than cure’ adage applied to real life.

Features of Life Insurance Policy

Life insurance policies have a number of features that make them a much needed life-planning tool.

• You get to choose the best coverage option, payable in affordable premiums.
• Based on your lifestyle, needs and preference, you can select from a variety of life insurance options ranging from pure insurance to hybrid insurance products like ULIPs and endowment plans where you get maturity benefits.
• Life insurance provides financial security of your dependents in case of any eventuality.
• Additionally, you also enjoy tax benefits on different types of policies under different sections of the Income Tax Act, 1961.

Asserting the point

By now, it must be evident how important a life insurance is for you to ensure your family’s financial independence. Depending on the type of insurance you choose, you are either building a corpus that you will get on maturity or you are simply insuring yourself and your loved ones to sustain their financial

independence in case of an emergency or an eventuality. In either case, having life insurance allows you to live a life free from financial worries as far as your future is concerned.

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What Is A Health Insurance & Its Advantages

 

A health insurance policy is a type of insurance which covers for the medical expenses incurred by the insured. It insures you against medical expenses incurred during the treatment of illnesses and guarantees a financial stability in case you fall sick and require medical attention. Without a proper health insurance, an unexpected medical condition can leave you and your family financially weakened.

The advancement in medical treatments and technology has increased the average life expectancy. However, this improvement in technology comes at a higher cost in terms for treatment expenses. Add to that the new illnesses coming into picture, health insurance is now an integral part of how you plan your finances.

Health insurance is your safeguard against unforeseen illnesses or accidents where high expenses like hospitalization, tests and operations are required.   A health insurance helps you out by providing cover for medical care or may compensate you for the amount spent as medical expenses.

ADVANTAGES OF HEALTH INSURANCE

There are a number of reasons that make it important for an individual to have health insurance.

1. You get healthcare facilities at an affordable rate.
2. You do not need to delay any immediate medical expenses.
3. You have access to an extensive network of hospitals and treatment centers provided by the insurance company where cashless facility is available.
4. Any medical conditions that you have at present also get included within the policy.
5. Peace of mind if any unforeseen illness or accident occurs.

Considering the rising cost of medical equipment and treatments, not having health insurance cover can result in you spending a high amount of medical expenses which can disrupt your finances.

WORKING OF HEALTH INSURANCE

Just like any other insurance type, a health insurance works on a pooling mechanism. When you buy a health coverage policy, you actually join a group of individuals who sign up for health insurance coverage. Health insurance coverage is based on the pooling manner so as to combine a group’s premium resources to cover for the whole group. Thus the premiums you pay help in covering the whole group rather than just an individual.

The insurance company analyses overall risks involved with healthcare along with your likeliness to be affected by a risk and the cost of coverage you might require to develop a finance structure and determine your premium costs.

The premiums collected from every individual of the group is pooled and used to pay for health coverage claims made by others. Thus your healthcare expenses are spread out and coverage assured by the insurer. The healthy customers help pay for the medical care required by the ill individuals, knowing that the same will be provided in case they need help.

COMPONENTS INVOLVED IN A HEALTH INSURANCE

There are a number of components involved with your health insurance coverage policy which needs to be understood and read before obtaining one.

1. Premiums:  The periodic payments you make to keep your health insurance policy active is defined as premium. The premium payments you make towards your health insurance policy pays for the coverage. These premiums collectively are used by the insurer to provide cover to the claimant.
2. Deductible: A certain amount that you have to pay out of your pockets is referred to as deductible. An insured is supposed to pay deductibles in the different types of insurances. The range of deductible depends upon how much you would like to pay out. The higher the deductible the lower your premium cost would be.
3. Co-insurance: A percentage of the expense incurred on medical care is to be paid by you and the rest is guaranteed by the insurer. Generally in a co-insurance arrangement, an 80/20 split is made between the insurer and the insured to pay for the expenses.
4. Co-payment: Also referred to as co-pay is the amount you must pay out of your pocket before the health insurer pays for the coverage.

HEALTH INSURANCE COVERAGE: WHAT’S COVERED & WHAT’S NOT

A number of health insurance policies are available which covers loss or expenses incurred due to medical care. The insurance plans cover your expenses in case you need to be hospitalized. Your insurance cover pays for the hospital rooms, ICU charges and other treatment charges.

Health insurance also covers medical expenses, which may not require 24 hours hospitalization but a simple visit to a medical center.

Your insurance policy provides coverage against critical illness such as heart attack, organ transplants, stroke, kidney failure etc.

However there are certain exclusions which might not be covered within your health insurance policy.  Medical condition or expenses incurred by indulgence in any act of war, terror, criminal activity, attempted suicide, participation in defense activities, mental disorders, abuse of drugs and alcohol, expenses arising from HIV or AIDs related diseases, infertility treatment, laser treatment etc are amongst some of the various exclusions which are not covered under health insurance policy.

While having a health insurance policy is important, it is equally important that you extensively analyze the available health insurance products before buying. The analysis and comparison should be based on:

• The amount of medical facilities and illnesses that a policy covers.
• Its hospital network where cashless facilities are available.
• Quality and swiftness of claims resolution. This is one of the most important factors one should consider.
• The amount of premium you pay towards a policy should be value for money in regard to keeping you properly insured without putting a strain on your finances.

Buying your health insurance after proper research ensures that the health expenses are covered as per your own requirement and allows you to have peace of mind if any unforeseen illness occurs.
Now that we have understood the importance of health insurance, let’s read more on why everyone one should have a life insurance.

You may also like to read which type of insurance you should buy while financial planning.

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