One of the simplest and the most effective insurance plan for an individual in India is term insurance. The importance of this plan can never be exaggerated enough. It is a protection plan, which has been designed to provide financial security to your family in case of an unforeseen incident were to occur.
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Many people invest in term insurance but are not aware of some common facts like the four important ones elaborated below.
The amount assured is 20 times your income
It is important to determine an appropriate amount for the security of your family in case an unfortunate event was to occur. You need to ensure that the sum assured covers the monthly expenses and it should be based on your annual income. When you decide the sum assured, you will also have to consider inflation. The amount should be anywhere between 15 to 20 times of your annual income. The maximum amount you can assure is 20 times your annual income.
The cover is available up to 85 years
This is one of the biggest benefits of term insurance. You can buy a term insurance in your 20s, 30s, and as late as your 50s, and take the benefits until you are 85 years in age. However, buying a term insurance at a later age might not be cheap but it will still cover the risk. Many people continue to work after retirement and there are plans available, which provide coverage up to the age of 85 years. Considering the life expectancy in the country, you are covered for your whole life.
A false disclosure can lead to the rejection of your claim
This is something you need to know about term insurance. If you hide important information about a pre-existing illness, you will end up with your claim being rejected. Many people avoid sharing important medical information to avoid higher premiums and at the time of settlement of the claims, the insurers will investigate your history. If they notice that the information shared by you is false, they will reject your claims.
Increase the sum assured over the course of the policy
Another benefit of term insurance is that you can change the amount of sum assured through the course of the policy. The circumstances in your life change from time to time, and when you are in different phases of life, your overall spends and the requirement of money will vary. You can adjust the sum assured of your term insurance at different stages by making extra premium payments. There are three major milestones in every individual’s life, which include marriage, childbirth, and the birth of the second child. The sum assured can be increased by 50% in the case of the first milestone, followed by 25% for the next two milestones.
Term insurance is known for the lowest premium and a comprehensive cover. It is also an ideal investment for you if you wish to save tax. There is no alternative to term insurance and you have no excuse to avoid buying one. If you want to ensure the security and protection of your family in your absence, invest in a term insurance policy at the earliest.
A Unit-Linked Insurance Plan, or ULIP, is a well-known investment tool that individuals can use to build up a corpus of funds for themselves and their loved ones. It is a unique investment avenue as it also provides life cover to the holder, which provides an additional layer of financial protection for the investor’s family members. So, exactly what is ULIP? And how do ULIPs really work? Let’s take a closer look at what investing in a ULIP means and how it can help you accomplish your financial goals.
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What Is a ULIP Plan?
A ULIP is a one-of-a-kind insurance product that also allows you to make investments in capital markets. Typically, these plans are used to save up a corpus for a very specific financial goal. ULIPs work as great financial tools while planning for your child’s education, your own retirement, or to make certain purchases, like that of a house. Additionally, they provide your family with financial cover in the form of a death benefit or sum assured. If something were to happen to you, the policyholder, during the tenure of the plan, the life cover pay-out will be handed over to your nominee.
How Do ULIPs Work?
Like with any insurance policy, you need to pay a premium to keep your ULIP policy going. This premium will then be split up and utilized to help you meet different needs. A portion of the premium will be invested in securities while the remainder will be used to provide life cover. Typically, ULIPs have a lock-in period of 5 years, following which investors can make partial withdrawals against the value of the fund.
What Investments Can Be Made?
A portion of the premiums you pay towards your ULIP will be invested in various securities. The number of units to be purchased will be decided based on the amount being invested as well as the net asset value [NAV] of the ULIP at that particular point of time.
Based on your personal risk appetite, you can choose to invest in equity funds, debt funds, or a balanced or hybrid fund. A balanced fund invests in both equity and debt instruments. This allows investors to enjoy the benefits offered by both equity and debt funds.
Types of ULIPs Available
There are two types of ULIP plans available – Type I and Type II.
Under Type I plans, the investor’s nominees will receive either the value of the fund or the sum assured, whichever is higher, if the investor were to pass away.
On the other hand, Type II plans provide the investor’s nominee with both the sum assured and the value of the fund.
The Benefits
There are a number of benefits that investors can enjoy when they opt to purchase a ULIP plan. Let’s take a look at what these benefits are:
Choice of Investments
ULIP provides investors with flexibility and allow individuals to choose their investments based on their personal risk appetite. Right at the onset, investors can opt between a good mix of equity and debt instruments. Based on market forces and how they expect the market to grow, investors can choose to switch their funds to reap better investments. Typically, up to 12 switches per year are allowed.
Provides Liquidity
For the first 5 years, the money that is invested in your ULIP plan cannot be touched. However, after this initial lock-in period is over, investors can choose to make partial withdrawals from the fund to help them deal with financial emergencies as required.
Promotes Regular Savings
Since a regular premium has to be paid for the upkeep of your ULIP policy, it promotes the habit of saving every month. While this may seem insignificant, this habit goes a long way in building up a corpus over a period of time.
Allows for Tax Benefits
As with most insurance policies, premiums that are paid towards the upkeep of a ULIP are exempt from tax under Section 80C of the Income Tax Act, 1961.
Diversification of Risk
Since ULIPs offer market-linked returns, there is some amount of risk. However, since the fund is looked after by a fund manager and you have the opportunity of reassessing your investments based on your personal risk appetite, these investment options are quite safe.
Flexible Life Cover
Possibly the most amazing benefit of a ULIP plan is that it allows you to pay a top-up amount on your premium to avail extra life cover. You can also opt for a number of add-ons or riders that will provide better cover in a number of situations.
Transparent
When you opt to invest in ULIPs, you won’t have to worry about fund managers trying to hide information from you. The sales brochure you receive should have a clear break up of how much your ULIP premium will be along with a breakdown of all the costs. This will give you an understanding of how much money is being invested and how much is being used to provide you with cover. There’s also a free-look period during which you can look over the literature and see if this plan is truly what you’re looking for.
Is It Worth It?
As compared to other term insurance plans, ULIPs can appear to be quite costly, but it’s important to remember that the premium you pay also includes your investment amount. While there are some risks that come with investing in the market, it’s important to discuss your options with your fund manager and find a mix of funds that work for you and your financial goals. In the long run, ULIPs are a great way to build funds to achieve a long-term financial goal, and should only be purchased for very specific reasons.
Retirement planning is essential if you wish to have a fulfilling life after your work life ends. With a holistic approach to retirement planning, therefore, you would be able to create a vision of your life in your 50s and onwards, and make choices such as where to live, how to spend time in retirement and when to completely quit working.
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That said, the emphasis you put on retirement planning is likely to vary throughout different stages of your life. Early in your professional career, you may set aside some money here and there for your retirement. During the middle stages of your career, however, you may want to include employing specific asset or income targets and work towards achieving them.
You may also look for retirement plans offered by reputable insurers. Today insurers like Max Life Insurance offer many benefits with such plans to help streamline your savings and maximize them in due time. Finally, once you reach the retirement age, you may move on from accumulating assets to the distribution phase, wherein you are no longer paying in, but only availing the benefits of your decades of saving.
Here’s how you can build a retirement corpus that is free from all liabilities, including taxation:
Monthly Income Plan
What is It?
There are two types of Monthly Income Plans or MIPs, offered separately by mutual fund houses and life insurers. While MIPs in the form of mutual funds are a unique class of hybrid funds that invest your money primarily in equities [in varying proportions], those offered by life insurers are savings plan that provides life coverage up to 25 years and pay guaranteed monthly income after the premium payment term completes.
Monthly Income Plans from life insurers are essentially annuities that allow you to select a one-time lump sum amount [also known as purchase price], choose an appropriate annuity option and payout mode [usually monthly, but you can also go for a quarterly, half-yearly or annual payout from the plan].
With time, these annuity payouts will start accordingly, while their amount would be based on the applicable Annuity Rate. Further, monthly income plans also provide you with life cover, offering financial security to your dear ones even in your absence.
Type of Investment
When we talk about mutual fund MIPs that invest in debt investments, these hybrid funds create income from the interest accrual route, which is then reinvested to make the fund’s Assets Under Management [AUM] grow or distributed as a dividend.
In the case of equity investments; however, mutual fund MIPs mainly generate returns through capital appreciation via trading shares on the stock market. Also, a secondary source of gains is accrued through periodic dividends or bonuses received against the shares held by the mutual fund.
On the other hand, insurance MIPs are essentially savings schemes that guarantee a monthly income for up to 10 years after the premium payment terms complete. Also, these plans also offer accrued bonuses and terminal bonuses [upon maturity] along with comprehensive life cover benefit throughout the policy period.
Taxation
Mutual fund MIPs are taxable as a debt-oriented fund. Therefore, tax regulations related to Long-Term Capital Gains [LTCG] and Short-Term Capital Gains [STCG] taxation are applicable, based on the type of plan.
However, you are entitled to receive indexation benefit, while the dividends are also tax-exempt [under specific conditions].
Life Insurance MIPs, on the contrary, offer tax deductions on both premiums paid and death/maturity proceeds [as per applicable laws].
Target Investor Segment
Overall, a monthly income plan helps create multiple sources of income, which feature a relatively lower level of risk than pure equity investments. Hence, mutual fund MIPs are usually preferred by conservative investors, who are seeking more significant returns than fixed deposits but with a minimum additional level of risk.
That said, individuals who want to secure their retirement with an additional income source that offers life cover too can go for Life Insurance MIPs.
Money Back Plans
What is It?
When you invest in a money back plan, you are eligible to receive a percentage of Sum Assured at periodic intervals, rather than getting the lump sum amount paid at the end of the policy term. In other words, money back plans are endowment plans that come with the benefit of liquidity.
Taxation
That said, given the fact that the returns on your Money Back Plans have a life insurance component [same as the Monthly Income Plans] the survival benefits of these plans are entirely tax-deductible.
Target Investor Segment
Therefore, these plans are suitable for risk-averse investors, who prefer saving through an insurance plan and also maintaining liquidity throughout. Further, in case of an eventuality, your nominee receives the entire sum assured.
Public Provident Fund [PPF]
What is It?
Public Provident Fund or PPF was introduced in India, with the primary objective to encourage small savings in the form of investments. Thus, PPF is also known as savings-cum-tax savings investment instruments that help you create a retirement corpus while availing tax savings annually.
Taxation
The principal amount that you invest under PPF is eligible for deduction under Section 80C. Further, the interest accrued is tax exempt under Section 10 [10D]. When we talk about the investment aspect of PPF, this scheme offers a suitable alternative for allocating the debt share of your investment portfolio.
Target Investor Segment
Essentially, PPF is a 15-year scheme that can be extended indefinitely in periods of 5 years. Therefore, if you are a risk-averse investor, looking for long term capital appreciation, you can open a PPF savings account in a designated bank branch or a post office. Further, investing into a PPF account also has provisions to apply for loans and make partial withdrawals against the scheme.
Mutual Funds
What is It?
In the simplest terms, mutual funds offer access to professionally managed portfolios comprising bonds, equities, and other securities to small or individual investors. Each shareholder, therefore, can participate proportionally in the profits or losses of the fund. Mutual funds are managed by the Securities and Exchange Board of India and are categorized under four broad categories:
Equity Mutual Funds
Debt Mutual Funds
Hybrid Mutual Funds
Solution-oriented Mutual Funds
Types of Investments
Overall, mutual funds invest in an array of securities, and their performance is tracked as the change in the fund’s total market cap, which in turn, is derived by combining the performance of the underlying investments.
Taxation
In the 2018 budget, however, the government has re-introduced tax on long term capital gains or LTCG tax on equity returns. Therefore, all accrued income over Rs 1 Lakh in a given financial year would be taxed under LTCG at a flat rate of 10 per cent. Further, there wouldn’t be any indexation benefit.
Target Investor Segment
Overall, mutual funds are suitable for regular investors who are new into the market-based investments. Investors can select a mutual fund scheme, as per their financial goal and set aside a portion of their savings to achieve the goal. The amount invested into a mutual fund would help add sizeable returns over a long-term investment tenure.
Make Your Retirement Tax-free and Tension-free
Each one of us has a unique view of how we wish to spend our retirement years. While some of us may want to purchase a retirement house in a far-away countryside, others might want to fulfill their dream of travelling the world. Therefore, the cost associated with the retirement will automatically be different for every individual.
Based on your retirement plans and life expectancy, hence, you must start investing in an appropriate investment avenue from an early age. To make sure that you have the best mutual fund for monthly income in your retirement portfolio, you need to devote much time in comparing different plans on their merits and shortcomings before investing in one.
Remember, planning for your retirement is an ongoing, lifelong process that would eventually take years of commitment before you can receive the final pay-off. However, once achieved, your commitment to investments will help ensure that you have an adequate amount of income every month to take care of your lifestyle expenses.
Off late, the Indian car market has taken a decisive turn where the used car market is growing faster than its new car counterpart. The reasons are plenty and include the fabulous variety of cars on the market, the swift depreciation of new car immediately after purchase, some strong marketing strategies by car makers to protect their turf, the absolute ease of purchasing a used car and the most important facility of availing used car loan by progressive lenders including banks and NBFCs such as Tata Capital.
The size of the used car market and the availability of numerous models and variants from reputed car makers are so large and varied, it makes sense to segment the used car market into price groups and within this price group to further segment is based on the brands available in a particular segment. Actually, the used car market follows closely the new car market, and the popular new cars also end up being the popular used cars as well.
If you are looking for a used car and don’t know where to start your search, here are the top segments in the used car industry:
Small Hatchback Segment – Less the Rs 3 Lakh
The most popular segment is the small hatchback segment because of the price point. These cars are available in most of the top brands. This segment caters to the Rs 3 lakh and below price point in which buyers graduating from 2-wheeler to a car are looking for their first car purchase. The brand wise cars available in this segment are
Maruti Suzuki Alto – available between 1-1.5 lakh. Good value for money
Maruti Suzuki Wagon – available between Rs 2-3 lakh. Popular because of good features
Hyundai Santro – the war horse from the Hyundai stable available for less than Rs 2 lakh
Hyundai Eon – price less than Rs 3 lakh
Datsun Go – price less than Rs 3 lakh
Renault Kwid – price less than Rs 3 lakh
You can approach any of the constituents of the used car industry like Tata Capital and avail a secondhand car loan for the used car of your choice.
Mid-size Hatchback Segment
The next most popular segment is the mid-size hatchback segment, again dominated by Maruti and Hyundai cars. This segment caters to the Rs 3-7 lakh price point in which buyers graduate from small hatchback to mid-size hatchback or buying their first car and need a mid-size to meet family needs. The choice here too is fairly wide and includes
Maruti Suzuki Swift – one of the most popular used cars in the segment. The model is a runaway success both in the new and used car segments. A wide choice is available from Rs 3-7 lakh price range
Hyundai Grand i10 and the lower end of Hyundai i20 – another popular segment
Ford Figo and Ford Figo Aspire –these are good cars though not very popular a new cars
Renault Pulse – some good cars are available in this brand model
The NBFC lenders such as Tata Capital extend used car loans for these models and the customer is spoilt for choice both in terms of models and availability of secondhand car loans.
Mid-size Sedans
There are lots of customers who want to own a sedan either for self-driving or for being chauffeur driven. There is a good range of cars available in this segment and they include
Maruti Suzuki Swift Dzire – this is also a very popular model both in the new and used car segments. You can get these cars in the price range of 4-7 lakh
Maruti Suzuki SX4 and Ciaz – these cars are more powerful than the Swift and are a very popular choice of used cars in the price range of Rs 5-8 lakh
Hyundai Verna and Xcent – these are two good models from the Hyundai stable. Both are very popular and good used cars are available in the price range of Rs 5-8 lakh
Ford Fiesta – this is a popular model from the Ford Motor Company. It is available in the price range Rs 4~8 lakh
More affluent people who are able to afford these cars can go in for the used car loans from any of the lenders. In fact, these lenders offer attractive terms for the second-hand car loans that are effortless to avail.
These are just a few of the popular used car models available in different segments. These used cars are available from a variety of sources. You can get the car directly from an owner through classified ads. You could visit a used car dealer in your city and check out the cars. You can also visit the pre-owned car outlets promoted by various car makers – Maruti True Value, Hyundai H Promise. Mahindra First Choice, Toyota U Trust. You can also visit any of the numerous stand-alone used car dealers online or those promoted by car makers and lenders such as banks and NBFCs such as Tata Capital. In fact, most of them offer single window purchase process – second-hand car loan, choice of used cars, transfer process.
The ideal way to go about buying would be to first decide on your budget and find out which one of the segments you would best fit in. Once you get an idea about that, you can start your used car loan process accordingly.
You should remember that since you are availing a second-hand car loan, you will have to repay the same. So just because a car has caught your attention, does not mean you should just apply for the loan and buy the car. Understanding your repayment budget is as important as your buying budget.
For the times when you wish to stay secure ULIP plans are the ones that offer you the same. However, while getting a ULIP plan, a thing of crucial importance involves the knowledge of the policy premiums and the returns.
ULIP calculator is the tool that gives you the information about your policy premiums and the returns that they are going to give you in the future. An ample number of websites provide their customers with the facility of ULIP calculators that gives an estimate of the ULIP returns depending on the plan of the policy and tenure involved. There are some of the ULIP tools that not only serve their customers by giving them the return estimate but also allow them to compare the different policies and help them choose the best ULIP plan.
Why to use a ULIP calculator?
ULIPs are one of the best ways for the investors who look forward to achieve future returns in addition to the life cover and tax benefits. Investing in a ULIP plan is one of the safest ways to invest for forthcoming time. With enormous amount of insurance companies with number of different plans and policies, it has become difficult for the investors to find the best deal. That is exactly when the ULIPreturn calculator comes to your rescue helping you to the most beneficial deal for you with maximum future returns.
How to use the ULIP calculators effectively and efficiently
While now that you know how efficient these online ULIP calculators are to make the right purchase of a ULIP plan, you must surely be wondering how to use them? Huge mathematical figures might surely be revolving around in your head. If yes, it is time to stop thinking about the same because using these ULIP calculators is even easier than you could ever imagine. You simply need to put in your personal details like your name and birth date.
Once you are done with it, the next step involves, filling in the premium amount that you can pay. Later, select the frequency of these premiums and for how long you want your policy to last that is the tenure of the policy. Lastly, you will be required to enter the percentage of the total fund. Once you are done with entering the above listed details you can easily find the exact rate of return that you will be achieving in future through the ULIP plan.
Here is a step by step guide to how to use the ULIP calculators
The first and the foremost step involves the investor to find a trustworthy source that offers the facility to use the ULIP calculators for free. Once you succeed in that, start filling up your personal details including your name, birthday and smoking habits.
For the next step, you need to fill in the amount of money that you wish to invest into the ULIP plan. This amount can also be termed as the premium amount of the ULIP plan. Make sure to keep in mind the expenses and liabilities before you fill in this amount. Filling a realistic amount that is easier to pay throughout the tenure of the policy is considered the right choice.
For the third step, as an investor, you need to select the frequency of the payment of the premium amount intended against your ULIP plan. You can choose this as per you comfort and the amount of the plan. You can go for onetime payment, annual payments, quarterly payments or monthly payments. Keep in time the tenure of the plan to select the frequency of the premium payments.
Followed by step 3, the next step involves the selection of the time period of the ULIP plan. This step should be filled in with care after analyzing your interest and capability to stay in the investment. Once you are done with the same, you can choose the time period for the plan.
For this step you will need to perform a little bit of Mathematics. Subtract all the applicable charges from the premium payment as chargeable by your ULIP plan. Now, you will have to select the percentage of premium that you want to invest in the life insurance coverage and the fraction that you want to keep as the investment funds.
Pick a choice as to where you would like to invest. Most of the ULIP plans allow the investors to invest in equity or debt instruments or sometimes maybe a combination of both of them. Do not make a decision in a hurry, analyze the past performances and then make a decision for the same.
The last step of the procedure involves the investor to select the lock-in period of the investment. The minimum lock-in period that a ULIP plan offers is 5 years so you have to select at least 5 years of the time period. However, on a relatable note, the experts suggest the investors to select a longer lock-in period. The reason for the same is that the longer the lock-in period, the better are the result. Hence, in order to get the best ULIP benefits, it is recommended to opt for a higher lock-in period.
With this step-by-step guide now you know how to grab the maximum returns from a ULIP plan by using the free ULIP return calculator.
We are all concerned for our forthcoming lives – probably, to an extent that we start to ruin the present one. We all have different goals and aims that we wish to achieve in future but the lack of money just forces us to question the same. Life insurance investments like ULIP help in inculcating a saving habit in you. This saving is used to pay the premium amounts and thus getting a policy return at the end of the tenure of the policy. Being long term investments, these ULIP plans help in assuring a monetary return that helps in achieving the future life goals that you have ever been dreaming of.
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Through these investments, the premium amount that the investor pays are divided into two different parts. One of these goes for the life cover insurance while the other one goes for the investment purpose. The investor can choose his/her mode of investment. Through ULIP plans one can make an investment into different investment products like equity funds, debt funds or hybrid funds.
If you are yet confused about the ways how these investment plans help in creating wealth for your forthcoming and uncertain future, here are some of the ways that can help you guide through your first ULIP investment –
Make use of the investment switching option that these plans offer – With ULIP investments, you have the opportunity to switch your investments whenever you wish to. For example, if you have already made an investment into equity funds but now you are finding the investment difficult to cope with due to the high risk involved. You can easily switch your investment to debt funds as they involve a lesser amount of risk. Not just for the risk factor, you can switch your investment for any of the occurring reasons.
Enjoy the benefit of power of compounding through long term investments – While investing in ULIP, one has to select a lock in period for the same. Usually, the minimum lock in period of the investment is for 5 years. However, when you apply for the investment, you can choose your lock in period which has to be either 5 years or above it. Making long term investments, with lock in periods of 10 – 15 years are considered more beneficial for the investor. The reason for the same is that, your money will grow by getting reinvested in the principal with each passing year.
Increase your returns through equity funds and enjoy tax benefits – We all know that investing in equity funds can be risky but certainly more profitable than the debt funds. If you have the money and audacity to take the risk, investing your money in the equity funds can be a wiser choice for ensuring better returns from these plans. Moreover, to the benefits, these investments also give you a chance to get tax benefits. Through these tax benefits, your money will not get taxed for the investment that you have made.
These above listed tips can help you get a better amount of monetary return at the end of your policy. When you put your hard earned money into an investment, you surely want assured and expected returns from the plans you are investing in. for the same, there are many ULIP websites that provide you the chance to get an estimate for the amount of return that you will earn at the end of your policy by providing free ULIP calculators. These calculators help you find the returns for your investment. The process further helps you in making the required changes to the investments to ensure better future returns.
How ULIP plans help?
We all save for a better future. However, when these savings give us better returns, they are surely of huge importance. ULIP plans are one such procedure of investment that does not only help you secure your life through the insurance but also helps in getting you positive returns for the investment against your savings.
Here are some of the ways saving your money and investing it in ULIP can be beneficial for an upcoming future,
Helps in saving money and gathering returns for the future that can further be a source of help for an uncertain future.
With better returns after the completion of the tenure of the policy, one can think of a better future for his/her children through the adequate amount of money.
Getting the dream house can be an expensive choice. But, when you have already invested into the ULIP plans, it might not be. You can buy your dream house with the investment returns with no hurdles and burdens.
Additional to the investment returns, one also gets life cover through the ULIP plans. For the unfortunate times, at the death of the policy holder, one can get different life cover opportunities through the return money.
Investing in these ULIP plans, in addition to the life cover and investment returns also help in giving you the tax benefits. The investor can save the tax amount through these investments up to 1.5 Lakhs.
Even when your future cannot be certain, it is safe to say that you can make it secure with these ULIP plans.
Car insurance is mandatory in India. And yet, there are still many cars that carry fake insurance papers just for the sake of having them. Hence, when it comes to claiming compensation in case of an eventuality, these car users fail to get the adequate compensation amount. Even the car users who purchase motor insurance generally are not in complete control of their policy. The first policy is generally bought from the car dealers and the buyers hardly go through the same. The tougher part is when they initiate the car insurance plan renewal process.
Let’s look at a few important factors every car owner must keep in mind while renewing their car insurance policy.
Which Car Insurance Plan is needed?
This is the first step of any car insurance policy renewal. The car owner needs to understand whether he/she needs a
Standalone 3rd Party Liability Insurance – Covers damages caused to another vehicle by the insured vehicle. It also covers damages or loss caused to a third party individual or property due to the insured vehicle or,
Comprehensive Car Insurance Policy – Covers both self as well as the 3rd party against damage. This policy is costlier than a third party liability insurance as it provides protection against a wider range of unforeseen events.
Are there any add-ons?
This is what every policy holder should keep in mind right after choosing the car insurance policy that best suits his / her needs. Some car insurance renewal plans offer additional benefits along with the core offers. A few of the additional benefits generally offered by premium policy holders are
Nil depreciation cover – This plan has complete coverage for car insurance in case of accidents. It leaves out the depreciation factor and offers 100% coverage to fiber, rubber and metal parts. This is generally beneficial to people who own luxury cars, are inexperienced drivers or live in an accident-prone area. It generally costs 15-20% of the standard premium. Car owners who have a relatively new car [under 5 years old] must choose this coverage.
Hydrostatic cover – This coverage is important considering Indian roads, especially during monsoons. This additional benefit covers issues like damage of cylinder walls, piston and engine caused due to hydrostatic lock. This kind of issue generally occurs when the roads are flooded with water.
Roadside Assistance Cover – This cover helps you in case you are stranded in a remote location due to a flat tyre, battery issues or an empty fuel tank. The insurance company will also provide accommodation assistance [if applicable and required]
NCB Protection Cover – This cover, as the name suggests, reduces the slab for NCB discount on premium. In simpler terms, a NCB protection will not let your NCB discount go to zero in the event of a claim
Is there Cashless damage repair?
A car owner should choose a car insurance policy which offers cashless car repairing services. Insurance companies generally have tie-ups with garages and if the car is repaired at one of the affiliated garages, cashless repairing services are provided.
So, a car owner should go through the complete list of garages with whom the insurance company has tie-ups with and then choose the one which offers services at the locations they visit the most. This is an important point people should check when they renew car insurance plans because it is easy to settle cashless claims than reimbursements.
What is the Insured Declared Value [IDV]?
This is the basic amount which the car insurance company pays in a particular year if the car gets stolen / damaged. This amount is fixed on the current year’s market value of the car.
These tips might help car owners make the right choice. It is advisable that car insurance plan renewals be done only after comparing quotes from several companies. You should be smart about this process in order to stay fully covered and protected!
Owning a vehicle is a dream come-true for many of us. Notwithstanding the price of fuel, the maintenance cost and the overall wear and tear of the vehicle, what we enjoy is the power and joy of owning. Yet, there are things that we have to consider before we push the auto pilot button in our minds with regard to enjoying the dream. Of course, once we take care of the car loan, we can then look forward to many more journeys to come.
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There are many situations where we have to think of refinancing this dream possession of ours. Some of the often seen situations where people think of refinancing are as below.
You see interest rates falling
In the present times, there is nothing that is static. The rates of interest that we pay for owning almost anything is also substantively low. Of course, we do not have to bother with these figures if we have bought the car in an all cash deal. However, that doesn’t seem to be the case these days with many banks jumping in the fray along with many other institutions offering goodies of all kinds. Hence, when shopping for a car, you have to also be on the lookout for a better car loan interest rate.
Your credit score improves
This is one of the best things that can happen to an individual across the spectrum in these testing times. Any person, who has kept his head cool and not given in to temptation or procrastination while clearing credit card dues, will vouch for this fact that there is no greater joy than to see an improved credit score in the long run. This can also be one important time when you can think of refinancing the car loan, since there could be a possibility of getting a better deal with refinancing.
Improving on a dealer sourced loan
There is something known as a single window clearance or solution to all your problems. This can be called as a very well placed low hanging fruit that not many customers resist, especially when they are looking to avail a car loan and not paying the whole cost upfront.
However, the single window approach is not a win-win but a win-lose favoring the dealer. The simple reason is that the bank or institution that has a strategic alliance with the dealer strategically increases the cost of the car, albeit in a way that is not too obvious. Hence, it is always advisable to shop around for a car dealer and a car loan provider that does not operate from the same space.
The above-mentioned points should be your key takeaway if you are planning to buy a car that is being serviced with a car loan. It will help you in reducing not just the costs of your car but also quite an amount of hassles related to refinancing your car can be easily taken care of.
