What is the best time to buy life insurance for yourself and your family?

While returning back from office today, I got a call from Mithu, my 4year old daughter requesting me to get few stuff for her. While I was busy talking to her over mobile a car swept past me and missed hitting me just by an inch. I was held aback. Standing in the middle of the road my hands began to tremble and all I could think of was my family and my little daughter Mithu who was desperately waiting for me to return home. 

Various thoughts began to cross my mind. The only thing I could think of was what would have happened if I had been hit by that car or had been left physically disabled or dead post the accident. Who would have taken care of my family? Being the sole earning member of my family, I was scared about the security of my family. And this very fear got me thinking about the nine letter word ‘Insurance’ which has been by and large ignored by me till date. 

Suddenly I remembered having read recently that the frequency of traffic collisions in India is amongst highest in the world. Every year more than 135,000 traffic collision related deaths are reported in India (Source: National Crime Records Bureau, India)

 

All my life I and my friends ridiculed insurance agents. We ignored their calls stating that we were not prepared to buy an insurance plan at the moment.   But this incident made me realize my mistake and I immediately contacted my friend who works with a well-known life insurance company. He then explained to me the various types of Life Insurance plans and advised me on the one suitable for me.

Did you know that even though the Indian Life Insurance sector is biggest in the world with about 360 million policies and expected to grow at 12-15% over the next 5 years, the penetration of Life Insurance compared to our huge population is only around 3.4% only at the end of the financial year 2015-16! According to the last Swiss Re’s last sigma report the penetration was only 3.30% in 2014-15. With the expected growth rate as mentioned above, the penetration will still be at 5% level only by 2020.

Insurance aversion is a common phenomenon. While some lack the basic knowledge, others do not know how and what to buy. What about you? Do you know why and when you need insurance? 

We have heard, one must enjoy life and live it to the fullest! But what we do not hear or realize is that along with the enjoyment of life also comes are the various responsibilities and uncertainties. Responsibilities towards your loved ones come in various forms and uncertainties do not come after giving a notice. 

Let us see what our main responsibilities are -

1. Towards our Parents - When they grow old and are no more in a position to earn, it is our responsibility to look after their daily needs, health and other overall well being.
2. Towards our Spouse - Once we are married and our spouse is not working, it is our responsibility to look after his/ her financial needs.
3. Towards our children - Once they are born, right from their childhood to schooling and higher education and till they are settled in their respective lives, it is our responsibility to look after them.

Uncertainties just like responsibilities also come in various forms and without any notice. These uncertainties lead to disruption in our normal day to day life and thus leading to disablement in fulfilling our responsibilities. In such situations, how do we expect to meet the financial needs of our family? Who will take care of the lifestyle they have been used to? The education of children and financial need of our spouses and so on. 

But do not worry -There is a solution to every problem and so does this problem have a solution. The solution to this problem is what we call ‘LIFE INSURANCE’. 

Yes, life insurance can help you ensure financial security for yourself and your loved ones. But do you know when to buy a life insurance policy?

Anybody can purchase any Life insurance policy whenever he/she wishes to. But only purchasing a policy is not the right solution to this problem. Purchasing the right kind of policy at the right time depending upon your need is the ultimate solution to all problems.

For example: A Life Insurance Child Plan can be purchased once a child is born, but a term plan cannot be purchased when one is very old. Similarly, a child plan cannot be bought before the birth of the child, but an endowment plan can be purchased immediately after one begins to earn.

Let us understand that when it is the right time to buy an insurance policy by following the various life stages of Santosh Kumar, an IT professional.

1. Young and Unmarried

Santosh a young IT professional has just passed out of college and has joined a leading IT company in Bangalore. He has no responsibilities on his shoulders as his parents are still earning. He is very happy with his starting monthly salary of Rs 65,000. During one of his candid conversations with me, he told me about his dream of retiring from his job and owning a farm house at age 55. He further added that he would like to spend his retirement life farming and growing vegetables in his quiet space. 

Impressed by his thought, but with a doubt in my mind I asked him who does he plan to fulfill his dream. I asked as I knew, he spent major part of his salary towards shopping, going to the best restaurants and buying the latest gadgets. 

He was clueless and confused and it was then that I explained him the benefits of an Endowment Insurance Plan.  An endowment plan provides life insurance benefits along with an assured amount to be returned to the investor on maturity of the plan period. Endowment plan help an individual to plan for his future expenses. Just by investing a small amount from his starting salary Santosh can be rest assured of getting a decent lump sum amount for his future needs. Endowment plans should be purchased at an early age when an individual is free of huge responsibilities and can allocate fund for future needs. The other advantage of starting early is that cost of premium will be less. 

2. Married

Now, that Santosh is well settled in his job, his parents decided to get him married. He is now happily married and his spouse stays at home and looks after the family. It is a well balanced family where one earns and the other takes care of rest of the things in day to day life. 

Since death is uncertain, what if something happens to Santosh and he dies? Who will take care of his wife for rest of her life? The answer to this question lies in a Life Insurance Term Plan. Term Insurance Plans aim at providing financial security to the individual’s family or the nominee in case of untimely or premature death of the policy holder. The policy buyer is required to pay certain premium at regular intervals. Term Insurance Plans usually do not assure any returns at the expiry of the term period. By investing a small amount in a term plan at this stage of his life, Santosh can ensure that his wife is financially secured and able to maintain the same standard of living in case of his premature death.

3. Childbirth

Santosh and his wife are expecting a baby soon. All are very happy. But raising a baby also means that the expenses start right form childbirth to vaccinations, schooling, higher education and then wedding. Fund is required at every stage of child’s life. Then how will Santosh manage to meet these expenses in his absence? How will he make sure that his child gets the best of all even if Santosh is not around? 

Well, a Life Insurance Child Plan is what he needs at this phase of his life. Child plans are insurance plans whereby, the benefits of the plan are passed to the child or the nominee in the event of untimely death of the plan buyer. A child plan secures the future of the child in case of untimely death of his parents. The plan continues even after the death of the parent and no premiums need to be paid but future benefits are paid by the Insurance Company.

4.Middle Age

Santosh has now secured the future of his family by investing in various insurance plans. Now he realizes that he has certain part of his salary which he may easily afford to invest in some other Insurance plans in order to ensure wealth creation for himself. Santosh can now choose to invest in Unit Linked Insurance Plans or ULIPs, as it is popularly known. ULIP is a unit linked insurance plan which not only ensures the life of the person but also provides market linked return by investing in various stocks, shares and other securities. As the investment of ULIPs are market linked the returns are far superior than other Insurance Plans and investment products like, Fixed deposit, postal savings etc.  

5. Retirement

Now that Santosh has ensured the security of his family members and also planned for wealth creation, it is time for him to look after his own responsibilities. You remember his dream of owning a farmhouse and living a relaxed life post retirement? However, if he spends almost all his salary in fulfilling the desire of others how would he make any substantial savings for himself? Then how can he expect to live a relaxed life post retirement without any earning or savings? 

We know he has investments in an Endowment Life Insurance Plan. But an Endowment Plan will offer him only a lump sum amount at the end of maturity period which might not be sufficient for him to meet his monthly expenses. Therefore, what he now needs is a Pension plan which will offer him regular income on a month on month basis post retirement. While he can make use of this money to take care of his monthly expenses he can use the maturity proceeds received from other plans to invest in his dream. Therefore, he should invest in a Life Insurance Pension Plan.

Remember, the life insurance policy to be purchased depends on ones need and not on the general trend. You must plan your Insurance needs based on the amount you need in future and not based on your current expenses. The average Inflation rate in India is around 8% therefore you should determine the future cost by taking into account the inflation rate. In a nutshell, before purchasing any Life insurance Plan you must properly analyze your needs like Santosh and the premium amount that you can afford till the policy tenure. You should work out your future needs carefully with an IRDA licensed Insurance Advisor or the Insurance company and make the purchase decisions accordingly. A clear understanding of the various products and the benefits provided by them will help you decide when and what policy should be you buy.

4 Things That You are Doing to Yourself That is Affecting Your Health Without Knowing

Several ailments are caused by an unhealthy lifestyle. Did you know that as much as 40% of India’s adult population and 20% of children are affected by obesity? These figures released by the World Health Organization (WHO) highlight the severity of the problem. In fact, there has been a startling increase in the incidences of diabetes and cardiovascular ailments in India, both of which are lifestyle diseases. It not enough to have a health insurance policy. One needs to consciously work towards preventing these ailments. Due to our busy schedules, we often forget to take care of our health and indulge in certain activities on a routine basis that can cause serious health issues in the future. Here are a few common things that we do which can have serious consequences on our health.

4 Things That Affects Our Health

1.      Sitting for long hours: Most of us lead a sedentary lifestyle. We work for long hours at a computer, travel home in a vehicle and relax at home by watching television. None of these activities result in any physical exercise. This can increase the loss of lean muscle tissue, make us more vulnerable to diabetes and heart disease and cause greater anxiety and stress. So, it’s essential to make some changes. Go for a short walk after lunch. Stand up at regular intervals and stretch your arms and back. Make it a habit to exercise every morning, even if it is for 5 or 10 minutes. You could even try going for a walk after dinner.

2.      Overuse of the phone: We depend heavily on our smartphone. Apart from attending calls, we check work-related documents, communicate with friends and family via WhatsApp, play a game and update our social status every now and then. According to studies, overuse of smartphones causes chronic back pain by putting the spinal disks under pressure. Light exposure can cause sleep disruption and also strain the eyes. Using the phone too much also results in weight issues as well as high stress levels. So, instead of watching YouTube on your phone before going to bed, it’s much better to read a book.

3.      Snoring: People generally ignore snoring as just an annoyance, but it can be an indication of a severe health issues. It can be an interruption in breathing during sleep because of a disorder known as obstructive sleep apnea. So, it’s important to not ignore snoring and consult a doctor if you snore and face tiredness during the day.

4.      Drinking tea/coffee on an empty stomach: This is the most common bad habit. It can increase acidity, which in turn can cause heart burn and a decrease in appetite, followed by chronic indigestion.

A little precaution and prevention can go a long way in ensuring better health. Of course, do consider getting a good health insurance plan in India to ensure you can afford better healthcare in case you do fall ill.

5 Things to do to Safeguard the Future of Your Child

Every parent wishes to ensure the very best for their children. If you too wish to ensure a good better standard of living for your child, you will need a little financial planning. Investments, such as child insurance plans, could be a good idea. Here are some basic things you should do to secure your child’s future.

1.      Ensure the Best Education

The first step is to decide the school in which you want to enroll your child. Their schooling can open up a plethora of opportunities for them. Unlike the West, in India, it is the private schools, rather than those run by the government, that offer higher standards of education, with a focus on the child’s higher education needs. In this cutthroat world of competition, it is one’s qualifications that can ensure a lucrative and fulfilling career.

2.      Open a Savings Account

Many parents are put aside a specific portion from their monthly income towards their child's future financial needs. While it is a good idea to open a savings account for your little one and put in small amounts at regular intervals, also consider investing in long term fixed deposits, where you can earn higher interest.

3.      Invest in Gold

In India, gold holds a special emotional value and investing in gold jewellery for one’s child’s wedding is what every parent looks forward to. However, given that gold investments can bear good fruit, also consider investing in gold ETFs, which can give you returns without you having to risk owning tand storing physical gold. But make sure that your investment doesn't exceed 10%-15% of your overall investments.

4.      Buy Them an Insurance Policy

Do a little research online about child insurance plans or make a direct inquiry from a reputed company. Choose the right insurance policy, taking into account inflation and your child’s specific needs, while also keeping in mind the premium you can afford. Make sure the child plan offers you waiver of premium, in case you're unable to pay premium because of a disability due to an unfortunate event like an accident or the early demise of the parent. The policy should continue and the child should receive a fixed sum of money after a certain age.

5.      Insure Yourself for a Large Sum

The aim is to fulfill the everyday needs as well as cover your child's future expenses like education and marriage. Certain insurance policies provide money to you or your child when they are in the age group of 18-26 years, in your presence or absence. Life insurance can provide financial support in case of any unforeseen events and keep your family financially secure.

4 Simple Ways to Achieve Inner Peace

The Associated Chambers of Commerce & Industry of India (ASSOCHAM) suggests that out of 100 working class professionals, more than 40 are victims of depression and anxiety disorders. And the root cause for depression is nothing but mental stress, which in turn restrains you from attaining peace.

Peace is a term that is often misunderstood by people. Most people think that peace is an endpoint, or a destination, whereas peace is a constant journey of positivity and inspiration.

Stress is the only barrier that stands between you and that journey. It’s a silent killer that gradually erodes us mentally, physically, emotionally, and spiritually. But most people are not aware that eliminating stress doesn’t require too much effort. For instance, did you know that by using a simple thing such as an insurance premium calculator, you can ensure adequate financial backup for your loved ones after you depart this world?

So, we present you 4 simple ways in which you can get rid of the excess baggage you’ve been carrying all this while.

4 Tips to Start Your Journey of Peace

1. Accept the Things You Cannot Change

The past is history, the future is a mystery, and therefore try living in the present as because getting stuck in the past or future could damage your inner self and cause extreme levels of despondency and despair.

2. Don’t Let Others Control Your Mind

Be in charge of your own happiness. If you let other people’s comments affect you, you’re not doing justice to yourself. It’s like that quote from renowned spiritual author, Pema Chödrön, “Inner Peace begins the moment you choose not to allow another person or event to control your emotions.”

3. Peace, Even after You’re Gone

We all dream of leaving this world without the burden of guilt for not having made clever and responsible investments for our loved ones that would sustain them and give them a life of dignity even long after we are gone. So, right now is the best time to use an insurance premium calculator to choose a plan that fits your requirements aptly. Opting for the appropriate life insurance ensures reasonable financial coverage for your family, in case any unforeseen circumstances occur.

4. Be in the Driver’s Seat of Your Success Vehicle

Don’t let others determine the future course of your success. Realize your true potential, spend time cultivating it, and simply put it into action.

Do keep these tips in mind if you want to live a peaceful life. And don’t forget that your loved ones will always be protected with the simple use of a life insurance premium calculator. Protect you family, and free yourself from stress and anxiety.

Understanding cashless hospitalization

The most useful insurance plans in health care are cashless hospitalization plans. We decode their meaning and significance.

With living expenses going through the roof every single month, it is important for every family in India to budget for the future. It is not enough to rely merely on your income to see you through a rainy day. You must actively invest in such instruments that help pay all your expenses during times of financial uncertainty.

The single most important factor that drains your precious savings is the area of healthcare. Medical treatment, diagnosis and medicine costs are quite high in India. The costs are exponentially higher for prolonged treatment of critical illnesses. Even just one visit to the hospital can empty your savings created over months. Hence, many people resort to buying health insurance plans that protect them and their loved ones from the high costs of healthcare in the future.

What is a cashless hospitalization plan?

A growing area of interest in health care insurance is the cashless hospitalization insurance plan. The advantage of investing in it is that it helps you start treatment on yourself or a loved one without having to pay admittance or treatment costs.

This is how it works: If you have a cashless hospitalization plan and you need to get admitted to hospital, you can simply show your policy credentials to the hospital and get admitted at once. The hospital also starts treatment immediately. This saves precious time during critical health issues; there is no need to scramble to collect money for admittance. Meanwhile, you do not need to pay treatment costs or the room/bed charges. The hospital settles the bills with your insurance provider.

What you must know about cashless health plans

• They are applicable to both emergent and non-emergent cases. Some policy holders actually plan their surgeries well in advance for a convenient time, if they have cashless hospitalization to back them.
• They cannot be used in every hospital or treatment centre. The cashless plan can be used in network hospitals only (also known as ‘participating hospitals’). Your insurance provider will give you a list of network hospitals in your city or town, so you can avail of cashless hospitalisation only at any of the listed facilities.
• The policy holder(s) must only hire an ambulance and reach the closest network hospital in an emergency. This is beneficial for people who are new to a city and do not know any people who can help transport them or their loved ones in case of a medical emergency.
• Cashless hospitalization plans are available for individuals, families and even senior citizens. 

The importance of being earnest…about your future

What would you rather choose – an uncertain future or financial security for your family? The choice is obvious, and the answer lies in term insurance.

Of all the things in the world, what is most important to you?

• Financial security
• The health of my family
• Freedom from financial worry for my parents
• All of the above

If you choose Option #4, it means that you are sufficiently invested in your loved ones’ security to provide them with whatever they need to stay happy and healthy always. This includes investing in your children’s education, maintaining your parents’ home, setting up a savings account for your spouse, investing in property for your family…the list of things to do for your loved ones’ happiness is endless.

And yet, you may have missed out on the most important investment of all – taking a term insurance plan to look after your family in your absence.

Why taking term insurance helps

You can guarantee that all of your loved ones – parents, spouse, children, siblings – will realise their dreams while you are present with them, but what happens when you are not? Do you have a lot of money stashed away in savings that will pay all your loved ones’ expenses for years to come? Will your investments be enough to fund their every need? If not, it is time to take a term insurance plan.

A term insurance policy is one of the simplest life insurance products in India today. It has an affordable premium amount, a high sum assured and a term (tenure) of 10, 15, 20 or 30 years. Generally, term plans are beneficial for those who do not wish to spend a large amount of money on expensive policies, while also receiving sufficient life coverage. Also, you can easily buy a term policy online. Many premier insurance providers in India allow customers the chance to purchase a term plan online without a medical examination first.

Thus, though the term insurance plan does not have maturity benefits, its high sum assured is more than sufficiently prepared to deal with your loved ones’ many requirements in your absence. From paying for children’s education to their weddings, from financing parents’ or spouse’s medical emergencies to repaying unpaid debts, term insurance plans have a lot of important uses for your loved ones. Their primary function is to keep your family safely protected from any financial uncertainty in your absence.

What could be a better plan than that?

Did you just buy a car? Here’s what you do next

Your duty as a car owner is complete when you get your car documentation right and take motor insurance.

Most people who do not own cars can scarcely comprehend the psyche of those who do. The average car owner might seem obsessed or even borderline fanatical about his car, and with good reason, too! For a car owner, his car is not just his private vehicle that transports him around the city. It is also his sanctuary, companion and guide every time he takes the wheel. Naturally, he is a little protective about his dream machine!

But for most car owners, the idea of ‘car maintenance’ starts and ends with servicing the car regularly and driving safely. Other tasks like getting the PUC done and insurance premium payment flit in and out of their horizon occasionally. If you are a car owner who thinks like this, here’s what you need to do:

Take insurance first, do other things later

After you purchase your car and get the necessary documentation ratified, it’s time to move to the next step – taking car insurance. But many people try to skip this step, deeming insurance an unnecessary expense. However, taking car insurance is mandatory in India, so every car owner must have a motor insurance plan. Take an insurance plan before you throw a celebratory party for friends and family.

How to take insurance

You can easily take online insurance for your car. All major insurance companies in India offer car owners the option of purchasing and renewing car insurance online. It is fairly simple to take online insurance for your car. Just log on to the insurer’s website, fill in the car details and the plan you want in the application form provided, calculate your premium payable, make your final selection and pay for the plan online.

But why take insurance at all?

…Because you need to be protected from accidental injuries and potentially fatal wounds every time you take the wheel. Your car insurance pays the costs of treatment and hospitalisation in case of an accident.

…Because other drivers and pedestrians must also be protected, in case of an inadvertent accident caused by you. A comprehensive car insurance plan includes a Third Party Liability (TPL) component that helps take care of legal costs and liabilities in such a case.

…Because it gets your car serviced for free. Insurance providers have a network of service centres where you are liable to get a free annual service and any repair work done by lieu of being a policy holder. Without an insurance policy, you would have to shell out these costs from your own pocket.

Besides, taking car insurance gives you and your loved ones peace of mind every time you take the wheel. This is an important benefit that far outweighs the cost of insurance.