Three Reason why you should buy Life Insurance Before the Age of 30.

If you are below 30 years of age, you probably feel you are invincible. You have a good job, in a happy relationship and nothing can go wrong. Unless you are God or some invincible vampire, unforeseen events can change all that in a jiffy. While people may call it luck or fate, your loved ones and people who are dependent on you are often left to pick up the pieces.  You need to ensure that your loved ones are taken care of.

1.   Earlier you buy cheaper the premium

Most of us know that it is always better to start saving early. Effect of compounding means that small savings done early and regularly will results in large savings in your older years. Same is true about life insurance. If you buy life insurance at an early age, you will pay lot less for same amount of cover. The following graphs shows you what you will pay for a cover of 1 Crore up to 65 years of age for a non-smoking male.

As you pass the age of 30, premiums tend to shot up dramatically.

2.   Avoid age and lifestyle related issues

Not only does premiums shoot up after the age of 30, but you may also find it difficult to get cover. Let me explain why. Current day sedentary life style means that one is more likely to suffer from age and lifestyle related diseases early and often in the thirties. Insurers see these diseases are major risks and tend to be very careful in providing cover to people with diseases like Diabetes, hypertension etc. You may be altogether refused cover or may have to pay a premium as much as 3 times what the cost of a standard cover.

3.   Financial Planning must include Life Insurance

Insurance is an integral part of a financial planning. There are a number of instruments to enhance your wealth but only one to protect it. You wouldn't think twice before buying a lock for your house or valuables, but we often don’t think about protecting our wealth and sources of our wealth. There is no greater sources of wealth than one’s life. It is imperative that you protect your wealth thru a life insurance early. Life insurance should be an integral part of your financial planning.

Also look at 5 questions to ask before buying life Insurance. 

Reviewing your Car Insurance - 3 simple steps

You probably spend a lot of time picking out your new car, visited a number of Car dealer, asked your friends and experts about their opinion and finally settled on your dream car. When you were just about to get the Car keys your dealer reminded you that you need insurance to drive the car out of the gate. But worry not, the dealer can arrange car insurance for you, complete all the paper work and have you covered in no time. Insurance is last thing on your mind and you go with dealer. What you probably don’t know is that the dealer made a hefty sum on your premium and you ended up with a bad deal on the Insurance. What you negotiated on the car value you lost in insurance.

Past is past, when the time comes to renew your car insurance give the dealer a miss. Here are 3 simple steps that you should follow to get the best insurance deal.

1.   Compare rates and shop around

Car insurance rates vary widely from insurer to insurer. Insurers frequently change their rates. The plan that was cost effective last month may not be same today. Comparing insurance and then choosing the right one can save you up to 50% on your car insurance. Compare car insurance rates to bring out the coverages offered by various plans, the cost effectiveness of each plan and the help you arrive at a right decision.

2.   Evaluate your coverage needs

Every car insurance plan has a number of options. You need to figure out the options that are relevant to you. If you have a car costing over 10 lakhs, you may want to go in for zero depreciation cover. Don’t forget to get personal accident protection for your passengers. Accidents can happen because of no fault of yours. Irrespective of your fault your NCB may go away. You have want a coverage to protect your NCB. Here is a list of coverage that you may want to consider:

a.      Personal accident for passengers

b.      Cover for accessories: Things like A/C and music system are not covered in the normal course. You may need this cover if you want to insure them.

c.       Zero Depreciation: Get your insurer to pay the entire claims with no deduction for depreciation.

3.   Investigate the Insurers

Not all insurers are same when it comes to claims and service. First and foremost check out the cashless garage list of the insurer in your city. Pay special attention to the garages for the manufacturer of your car. Car these garages manufacturer authorized? It is also important that you find out what the claims and service performance of insurers are. How quickly do does the insurer settle the claims. How many complaints does the insurer has? Visit the insurer’s home page to find out or check out the insurer’s performance of policylitmus.com

One last thing. Before renewing the insurance, check out what you must pay from your own pocket in case of claims and if there are ways to minimize the same.

So when it is time to renew your car insurance, don’t just send out the premium check to your existing insurer, compare and evaluate to get the best deal. 

This New Year buy your Parents a Health Insurance Policy

The cost of health care is rising a healthy rate and it show no sign of coming down. The oil prices may have tanked, the inflation may be near zero but as far a medical expenses are concerned they seem to live in a completely different planet. Dependence on private hospitals is near total and even a basic hospitalization would cost you about one lakh in this day and age.

However the taxman provides you some help if you buy your parents health insurance.  This year you can claim a tax deduction of up to Rs. 20000 for health premium paid for your parents above the age of 65 under section 80D. In case your parents are below the age of 65, the deduction applicable is Rs. 15000.

Now that you have decided to buy your parents health insurance, the question in your mind is what to buy? When it comes to health insurance for seniors keep the following few things in mind.

1. Go for policies with lifelong renewability: Check how long the policy can be renewed. In the senior years changing life insurance is not easy. Today there are polices that have lifelong renewability, go for policies that have lifelong renewability.

2. Check the Co-Pay: Lots of health insurance plans require senior citizens to share the cost of treatment with the insurer. Your parents may be required to pay as much as 20-30% of the treatment cost themselves. In insurance parlance this is called Co-Pay. Ideally go for policies that have no Co-Pay. These policies may be bit costly but they are worth it.

3. Check Cashless Hospital Coverage: When your parents fall ill, the focus should be on the best treatment and not on arranging cash for the treatment. Make sure you study the cashless network coverage of the policy in the city where your parents reside. Ensure that the plan you take has in its network, the hospital that your parents prefer.

If your parents already have a health policy, you can enhance their cover thru a Top-UP plan.

So in this New Year take away any worries that your parents may have on their Medical cost and get the taxman to share part of your cost.