It is common to make mistakes when you are doing something for the first time. Similarly, you may make some mistakes while buying bike insurance as well.

In this article, we will discuss these mistakes and how you can avoid them.

Forgetting to analyze your needs

Before you buy two wheeler insurance policy, do not fail to analyze your requirements and then explore numerous choices. Carry out a comparative study of the advantages and premiums of various two-wheeler insurance policies that fit your budget. This could assist you to seek out similar coverages at a far cheaper premium rate. Carrying out research on the insurance company and customer reviews will help you to shop for the most beneficial policy in the market.

Opting for the cheapest option

Price is unquestionably the purpose of concern for each buyer, be it a bike insurance policy or any other product. Particularly for the policy that provides multiple advantages and coverage. The policy with cheap premium may seem to be the most effective choice for you, however, you make be left underinsured in cases of total loss or theft. Continuously hunt for a reasonable two-wheeler insurance policy that fulfills both needs – affordability as well as decent coverage.

Opting for Deductibles

Opting for deductibles may lower the price of your bike insurance policy, however, you will be financially exposed in case of major damages to your bike. This is because opting for a higher deductible will result in a lower claim amount. Paying the compulsory deductible is beyond the control of the policyholder, however paying a voluntary deductible is his/her personal decision.

Not checking the No Claim Bonus

In case you are doing not build any claims throughout the policy term, you’re eligible to receive a No-Claim Bonus at the time of shopping for a brand new policy or at the time of renewal. The No-claim bonus could be a discount offered by the insurance firm to the customer on the premium due for the consequent year. So, keep this in mind at the time of two wheeler insurance renewal your 2 wheeler contract.

Not going through the terms and conditions

This is one among the foremost common mistakes we tend to make when shopping for two-wheeler insurance policies. So, make sure that you read the policy thoroughly and don’t ignore the exclusion list of the policy. It should be that the most vital coverage you are looking for falls in the exclusion list of the policy. Before paying for the policy, do scan the underwritten terms and conditions.

Getting the insurance policy transferred in your name

If you are running tight on the budget or if you are a learner, you might decide on opting for a second-hand bike. In this case, you need to make it a point to get the insurance policy of that bike transferred in your name. If not, you will be completely exposed to financial risks that might arise from an unfortunate event.

Forgetting the expiry of your current policy

It’s quite common to see several bike riders on their bikes with no bike insurance coverage. Without an insurance policy, you may have to burn a big hole in your pocket. Some of the incidents that could financially drain you are third-party liabilities like damage repair, hospitalization costs, and compensation. Other may include damage to your bike due to accidents, theft, calamities, fire, etc. Other than that, it is against the law to ride without insurance and you will be penalized for the same.

How to buy two wheeler insurance?

You can buy two wheeler insurance either online or via offline methods. The process will be easier if you buy bike insurance online as it will save a lot of your time and efforts. To buy bike insurance online simply visit your preferred insurer’s website, navigate to bike insurance, fill your details, select a plan and make the payment.

Just as it is necessary to register your two-wheeler in a Regional Transport Office [RTO], it is also important to purchase a two-wheeler insurance policy. Both these things can be arranged for you by your bike dealer. However, unlike the RTO registration process, the bike insurance process is not one a one-time activity.

It is a recurring activity which needs to be performed periodically. And it is not necessary to purchase or renew your bike insurance policy from your bike dealer or an agent or a branch office of an insurance company for that matter. It can be easily done from your mobile phone provided you have an internet connection and know the exclusions of the policy. Read ahead to know more about bike insurance.

Basic insurance terminology

In insurance terms, the person purchasing the policy is known as the first party, the insurance company issuing the policy is known as the second party, and those affected by an accident caused by the insured vehicle are known as third party. Their property is known as third-party property.

What is third party bike insurance?

Third party bike insurance or third-party liability insurance is a compulsory policy that every rider must purchase. The Motor Vehicles Act, 1988 has made it a mandate to purchase this type of policy. The compulsion is directed towards insuring the pedestrians and others that might be affected by a vehicle accident. This policy is designed to save you from legal and financial complications arising out of an accident caused by your bike as well.

What are the exclusions of third-party two-wheeler insurance?

The Third party two wheeler insurance premium rates are specified by the Insurance Regulatory and Development Authority of India [IRDAI]. Similarly, the cover’s exclusions are also stated by the body. All insurers have to abide by the rules and regulations stated by the IRDAI.

Here are the exclusions of a third-party liability policy

• This policy does not cover damages to your bike due to fire
• This policy does not cover damages to your bike due to accidents
• This policy does not cover damages to your bike due to man-made calamities such as riots
• This policy does not cover damages to your bike due to natural calamities such as flooding
• Bike theft is not covered
• Damages shall not be covered if it is found that the bike rider was under the influence of alcohol at the time of accident
• Damages won’t be covered if the rider does not have a valid driving license
• Damages shall not be covered in case of a lapsed policy
• You cannot buy Add-on covers such as Roadside Assistance, Zero Depreciation, etc. with only a Third-party Liability policy
• Pillion rider is not covered

Upgrading your third-party two-wheeler insurance policy

As it is evident from the above exclusions that a Third-party two-wheeler insurance policy is not at all extensive. It is a minimalistic cover. If you wish to go for an extensive cover, you can opt for a Comprehensive plan. It includes the mandatory third-party cover and insures your bike from accidents, calamities, and theft. It also includes a Personal Accident cover that comes along with the Third-party policy. You can choose to strengthen your Comprehensive bike insurance plan with suitable Add-on covers as well.

Online Two-wheeler Insurance

Whether you choose to purchase the basic third-party cover or go for a Comprehensive plan, you can insure your bike within minutes. Online two wheeler insurance is easy, quick, and hassle-free. With online two-wheeler insurance, you do not have to visit the insurance company’s branch or chase an agent, you can simply insure your bike from your mobile phone within minutes.

Unit-Linked Insurance Plans [ULIPs] are attractive investment products for those who want to grow their wealth along with availing of a life insurance cover. ULIPs serve two purposes- investment and insurance. They invest a portion of the funds into investment products and the remaining into covering for your life. ULIPs have a dual advantage and offer various benefits.

If you are a goal-oriented investor, ULIPs are an ideal investment option for you. Bajaj Allianz Life, a leading insurance provider has tied up with India Post Payments Bank for its life insurance service. It offers a goal-based plan, which has numerous benefits for you. The unique features of the plan are the benefits through the ‘Return Enhancer’ and the ‘Return of Mortality Charges’. The ‘Return Enhancer’ benefit allows you the option of an additional 0.5% of each installment due in cases when the benefit is given in the form of installments over a tenure of five years. The ‘Return of Mortality Charges’ is a facility where the company guarantees the cost of life cover on the maturity of the policy, which enhances the value of the maturity amount.

Consumers have always preferred investing in ULIPs and the returns have been consistently increasing. The charges on ULIPs have come down over the years. Today ULIPs are quite different as compared ten years back when it comes to investment. ULIPs are a dependable investment option as they help you in diversifying your investment portfolio. Moreover, they are a viable investment product if you are looking to invest for a long period.

Why ULIPs are an ideal product for you

Higher returns

ULIPs have shown better returns than any other investment or insurance product and this is because of the equity advantage. The premium paid by you will be invested into different asset classes, which will help you gain maximum returns from the investment. The amount of maturity will depend on the performance of the equity market and the tenure of your investment.

Flexibility

With ULIPs, there is an option of switching the funds during the tenure. This allows you to choose from equity, balanced, growth, and income funds as per your risk appetite and your investment goals. You can make four switches in one year without incurring any charges in your ULIP investment and you need to keep a track of the companies in which the fund invests. You need to choose the policy and change the allocation of the funds anytime in the term.

Dual advantage

Term insurance offers life cover and helps save tax. However, it offers no returns. With ULIPs, the tax advantage is up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. They will help you achieve your long-term financial goals and provide life insurance coverage simultaneously.

Lock-in period

There is a lock-in period of five years in ULIPs, which will help build financial discipline in your life. It is a long-term contract; hence, you can choose to invest in a single ULIP. You do not need to invest in multiple products for insurance and investment purposes, as this one investment product will meet all your financial needs.

Comparison of ULIPs and mutual funds

Many investors who were once inclined towards fixed deposits are shifting to mutual funds and ULIPs. It is important to understand the difference between ULIP and mutual fund. They both are different types of investment products that serve different purposes. Firstly, ULIP is an insurance cum investment product and serves the dual needs of the investors whereas mutual fund is solely an investment product. There is limited liquidity in ULIPs because of the five-year lock-in period and in case of mutual funds, the liquidity is very high because you can withdraw the funds as per your needs and requirements.

ULIPs offer a tax deduction under Section 80C of the Income Tax Act, 1961 for an amount of INR 1.5 lakh. In addition, the maturity benefit is also eligible for tax benefits under Section 10 (10D) of the Income Tax Act. In the case of mutual funds, only the profits from Equity-Linked Savings Scheme (ELSS) are tax-free below the amount of INR 1 lakh as per Section 80C.

Before you make an investment decision, it is important to understand and compare the products. You can compare ULIPs online and choose the one that fits your financial goals. If you are a new investor and aim to make the most of the stock market, you can choose from a range of investment products based on your goal and investment horizon.

ULIPs are much more investor-friendly as compared to when they were first introduced in the market. Today, they are showing steady returns and the cost associated with them has declined. However, it helps to remain invested ULIPs for a long tenure. ULIPs are a great wealth-creating investment option combined with the benefit of life insurance coverage. You can choose the best ULIP plan based on your risk-taking ability and then determine the tenure. You will have to remain invested until the end of the lock-in period to gain maximum benefit from the investment product.