Gullak Archives -

How Married Couples Should Buy a Health Insurance?

Tue, 20 Jun 2023 16:11:14 +0000

The Buy Desk

If you are getting married soon or have married just recently, you must consider investing in a health insurance policy that provides maternity benefits. Although you are not legally bound to port your health insurance post-marriage, it will assist you in getting coverage for your and your growing family’s future requirements.

Why Married Couples Should Have Health Insurance?

No one knows when they have to deal with unexpected medical emergencies. To successfully meet those emergencies without breaking the bank, health insurance comes to the rescue. The main reason couples need to have a health insurance plan after marriage is to effortlessly cover the cost of medical expenses. It will help you prevent catastrophic financial costs.

Which Health Insurance Policy Should Married Couple Buy?

Nowadays, multiple health insurance plans are available in the market with excellent maternity coverage. If you are already covered under any corporate health insurance policy, you can consider buying a personal health insurance cover of at least 10 lakh sum insured. Let’s discuss some of the best ways to buy a health insurance plan after marriage–

Family floater scheme

You may go for a family floater plan that consists of a simple documentation process. Buy a family floater plan or include your wife if you have already purchased it. As per this scheme, your wife will be included under the coverage of your family-floater insurance plan. The inclusion can be done immediately after marriage or upon your policy renewal.

Based on your health insurance providing company, this may overrule the previous coverage under pre-determined T&Cs (terms and conditions). If you have an individual plan and your wife financially relies on you then you must include her in your plan. You will get tax deductions on your paid premiums.

Continue or port the plan

If your wife is financially independent and has her own health insurance policy, she can either port the plan to another individual policy with her new married name or continue with the existing plan by changing the maiden name via endorsement.

Options for wives for their husbands

If you have been covered under a health insurance policy before marriage, change that plan to a family floater plan with your spouse included in the policy coverage. However, if your partner already has a separate individual plan, continue with your existing plan with a changed name.

If you have purchased a family floater plan for your parents before marriage, add your husband in the plan after marriage excluding your parents. Another option is to purchase another family floater plan with you and your husband in the coverage while continuing the existing one. Just be sure that you inform both insurance providers so that a proportionate claim would be paid by both providers during a claim.

Options for a married couple

If any of the partners was not covered under any insurance cover, buy a new individual health insurance cover irrespective of if there is an already family-floater scheme post marriage. You may get two separate individual insurance plans for both of you.

If the wife is financially dependent on her husband, the husband can be the proposer in both individual plans, and vice-versa. Other than this, the wife can be a proposer in her policy and the husband in his policy in case they both are financially reliant. Note that this may increase the payable premium and the amount to be invested in the plan. Alongside two separate individual plans, married couples can consider buying a family floater plan with coverage of both of them in a single plan. The husband or a wife could be the proposer given that the proposer is financially independent.

Whether or not you and your partner need health insurance is completely your personal decision. Make this decision based on your financial condition and other essential parameters. However, it is recommended to compare multiple policies before buying a specific one. Go through the inclusions and exclusions and associated terms and conditions before purchasing a policy.

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What is a Restoration Benefit in Health Insurance?

Mon, 19 Jun 2023 16:24:04 +0000

The Buyt Desk

After the COVID-19 pandemic, almost every person has understood the significance of buying a health insurance policy. Having adequate health coverage is equally important. Given the increasing medical inflation, an insufficient sum insured could land you in a financial mess. To stay safe from this situation, restoration benefit assists a lot. It provides additional protection against unforeseen medical crises.

What is Restoration Benefit in Health Insurance?

Generally known as the refill benefit, the restoration benefit refers to the benefit wherein the insurance company restores the sum insured by a policyholder up to the maximum limit after it gets completely exhausted after a claim for any treatment.

This benefit is provided for individuals and their families under health insurance plans. You can use this benefit as your backup plan or an add-on cover to your current insurance plan. You’ll have to pay a higher premium for restoration benefits with your health insurance.

For example, an individual has purchased a health insurance plan of INR 5 lakhs with restoration benefits. The whole sum insured gets exhausted from his heart surgery. Now, after some months, he had to undergo cancer surgery costing about INR 4 lakhs. He doesn’t need to arrange funds from other sources as the entire expenses get covered in his health policy by restoring the original sum insured of INR 5 lakhs.

Types of Restoration Benefit

There are two major types of restoration benefits based on the level of exhaustion of the sum insured –

Partial exhaustion

This restoration benefit comes into force when the partial sum insured is exhausted. Go with this benefit only when it is proven highly beneficial.

Complete exhaustion

This restoration benefit comes into play when the whole sum insured is exhausted. This benefit comes with most health insurance policies.

Benefits of Restoration Benefits in Health Insurance

Purchasing a health insurance plan with a restoration benefit provides numerous advantages –

Get the complete amount of your sum insured reinstated as soon as the original sum insured expires.
It provides more financial efficiency than purchasing a health plan with twice the sum insured.
This benefit will cover you against several medical costs for different illnesses within the same year.
You would not need to worry about future medical expenses even when your original sum insured has already been exhausted. The required amount can be restored for any unexpected medical emergencies or needs in the future.

Who can Buy Health Insurance Policy with Restoration Benefits?

Older individuals who have more possibility to develop health conditions should opt for restoration benefits. People who are susceptible to some illnesses should also consider this benefit to get the treatment done without worrying about medical cover getting exhausted. Alongside them, people living in metropolitan cities or high-cost-of-living regions should opt for health insurance plans with restoration benefits.

Things to Consider When Buying a Health Insurance Plan with Restoration Benefit

You can buy the health insurance with restoration benefit as an add-on to your policy or health insurance premium while buying a new policy or renewing the pre-existing one. It will be available as a valuable add-on for individual and family floater plans. It means when any family member exhausts the base cover, other members can also take advantage of the cover.

Before opting for restoration benefits, consider the following points –

If you don’t use the restored sum insured in the year it was restored, it can’t be carried forward.
This benefit will be activated for unrelated medical issues.
You can opt for restoration benefits while purchasing an insurance policy with a nominal additional cost.
This benefit will not be applicable in your first insurance claim in a policy year. It will be available once the partial or complete sum insured is exhausted.
This benefit is meant just for future claims.
Only one family member can get the restoration benefit at a time.
Some policies might include the same health condition during a policy year while other policies allow the use of a restored sum insured by other family members for the same illness.

To enjoy all the advantages, thoroughly read the fine print of your policy with restoration benefits.

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How to Plan an Inflation-Resistant Retirement Corpus?

Wed, 31 May 2023 17:31:59 +0000

The Buyt Desk

As you closely observe the retirees in your surroundings, you will notice two distinct groups. One group retired from a government job enjoying a comfortable retirement supported by a decent pension. Another group of retirees struggle to make ends meet and find it difficult to cope with the rising cost of living. They are private job retirees having no pension or second income source.

But, shortly, the disparity between these two groups will no longer exist as the government has ended the pension scheme in most jobs. As a result, those who are proactive and plan retirement corpus smartly will likely to have a more comfortable and fulfilling post-retirement life.

Thus, one must plan for retirement at an early age. And while planning the retirement corpus, keep the inflation in the centre. It is because inflation will increase the price of everything around. Today, things that cost Rs 100 would cost Rs 200 or even more after ten or twenty years.

If you don’t believe this, remember that cup of tea you would enjoy with your friends in the canteen during college. At that time, the cost of that cup was Rs 2, and now, the same cup might cost you Rs 10 or even more. The price rise is the result of inflation.

After ten more years, the price of the same cup of tea will be even higher because of inflation.

So, you must understand that inflation has a compounding effect on prices. It means the prices of things will continue to rise year after year, and if you plan your retirement corpus according to the current inflation rate, you may fall short of the funds required to sustain you during the post-retirement period.

E.g., Suppose today you need Rs 1 cr for retirement. After 20 years, with 6 % inflation, your requirements will be Rs 3.20 cr to meet the same requisites.

What is the Best Method to Grow Your Retirement Corpus in Pace with Inflation?

Building a corpus for retirement in pace with inflation doesn’t mean you should work harder and save more. Instead, let your investment do this job for you. It is the easiest and smartest way.

To ensure your investment grows in pace with inflation, it must earn at least 1% or 2% interest above the projected inflation.

The average inflation in India is 6%. Hence, your target should be to earn a minimum of 7% to 8% return on investment post-tax deduction.

You can target 1-2 % above the inflation, but try to attain a 7-8 % average. If you fail to do so, inflation will harm your retirement corpus.

Which Investment Products Give Higher Returns?

Traditional investment products such as FD, PPF, and NPS generally yield a return that ranges between 5-6 per cent. On the other hand, investment products like mutual funds, equity, and real estate deliver more return, up to 11-12% in the long run.

Although, the investment is subject to individual risk-taking ability. The investment that gives higher returns comes with high risk too.

Conclusion: Planning for retirement corpus is the need of time today. To ensure your retirement corpus outpaces inflation, include traditional and non-traditional both investment products in your portfolio. Traditional Investment products like FD, Bonds, and PPF offer relatively stable returns but may not keep up with inflation. On the other hand, non-traditional investment products such as the stock market and mutual funds have given higher returns and outpaced inflation.

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5 Reasons That Can Lead to Term Insurance Claim Rejection

Fri, 26 May 2023 17:17:53 +0000

The Buyt Desk

How to ensure that the life insurance which you are buying for your family does not get rejected. It is disheartening to see families struggling after losing the breadwinner of the family. The term insurance that they had been counting on for years to address emergencies gets turned down by the company in the eleventh hour. The insurer rejected the claim, giving reasons hard to swallow.When this happens, we start blaming the insurance company and the entire service, but is the insurer always at fault, or are you accountable for it?

Many times insurance claim rejection happens because of the policyholder.People make mistakes while buying term insurance that lands them in such a situation. The 5 mistakes that can lead to claim rejection are as follows-

Concealment of Information – The most common mistake people make while buying a policy is that they get casual in providing relevant information to the insurer. Never do this!

Always be proactive in asking questions and providing information about your lifestyle, habits, health, etc. If you provide wrong information or if the provided information happens to be false, the insurance company has the right to reject your claim.

Non-payment of Premium – Paying the premium on time should always be on your priority list. Never postpone premium payment to the next date or month; otherwise, your policy will lapse, and a lapsed policy is unclaimable.

Insurance companies give some grace period to pay the premium, which varies from insurer to insurer, but on average, it remains between ten to fifteen days. Do not cross your premium due date.

Death Due to Excluded Clause – Excluded clauses are conditions which insurers do not entertain. If the policyholder happens to die because of any excluded clause, the insurer will not accept the claim. The best thing to do in this case is to carefully read the terms and conditions of insurance before taking it.

Non-Disclosure of Hazardous Activities – If you enjoy adventure and engage in hazardous activities, you should pick the insurance policy accordingly. However, if you have chosen the wrong insurance and happen to meet with an accident, the insurer might reject your claim.

Providing Wrong Information – If you provide false or misleading information about your health while applying for a policy, your claim might get rejected. For instance, if you have mentioned in detail that you don’t smoke, but later on, if the insurance company finds out you are a smoker, they may reject your claim.

Conclusion: Term insurance protects families in times of emergency.It is bought with the purpose to help the family as a means of income replacement. However, to avail of all its benefits, one must comply with the policy terms and conditions and provide accurate and relevant information while buying the policy.

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Is Mutual Fund a New Investment Destination for Indian Women?

Thu, 25 May 2023 17:33:57 +0000

The Buyt Desk

Things are changing for women in India in every sector. They are doing all types of jobs, even the traditional male-dominant bastions. So, when it comes to finance management, they are not behind. Women are doing excellent work in personal finance management.

The latest study by the Association of Mutual Funds in India (AMFI) states that women’s participation in the Mutual Fund industry has witnessed a significant increase in the last few years. It has risen to 14% year-on-year. The number of women investing in mutual funds has increased to 74.5 lakhs in December 2022 compared to 63.8 lakhs in the same month last year. The more interesting fact is that the increased number of women investors in mutual funds is not limited to big cities. Instead, there is participation across the country.

The number of unique investors has tripled from 2017 to 2023. In 2017, the number of women investors in the mutual fund was 1.20 Crore, which has risen to 3.77 Crores in 2023. The leap has come after the Covid-19 breakout.

According to the AMFI, women investors in the 25-35 age group have shown higher participation. It means young professional women have become cautious about their finances and doing financial planning proactively.

In terms of Age

If we break the data age-wise, 35 percent of investors are in the age bracket of 45 years and above. The major contributors are women between the 18 to 24 year age category. Their percentage share has increased in the last ten years.

In terms of Asset

In terms of asset break-up, women investors have invested approximately Rs. 6.13 trillion in regular Mutual Funds and about Rs 1.42 trillion in direct plans.

Women have come a long way in the last few decades and have changed their stereotypical image. It is visible in the field of financial planning as well. They know how to handle their finances to secure their future. The rise in women investors in the Mutual Funds market reflects the same.

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5 Investments That Will Support Your Child’s Education

Wed, 24 May 2023 18:17:03 +0000

The Buyt Desk

As your child starts schooling you start planning for her/his higher education too. You realize how the cost of education has increased over the years and you don’t want to leave any stone unturned when it comes to her/his higher education. So, what is the foolproof plan to ensure you and your child get what you both aspired for when she/he is ready?

The cost of higher education has increased tremendously in the last few decades. It has risen more than food, fuel and medicine. Its average inflation rate is 10%-12% per year. Therefore, it becomes prudent for you to get worried about your child’s higher education before it’s too late. If you start investing at the right time, in the right plan with the appropriate amount, you can secure your child’s higher education fund before they are ready to fly.

Best Investment Avenues to Support the Education of a Child

Children-Focused Insurance Policy – Children-focused insurance policies are one of the preferred ways to secure funds for higher education as well as protect the child incase of any eventuality. If the parent meets with an untimely demise this plan can help in covering the expense of the education. They give bonuses and sometimes even a return on the investments too.

Additionally, unlike the usual investment plan, the children-focused policy becomes a hedge for children in difficulty. Waiving off premium if something happens to the premium depositor and paying the sum accumulated are a few of them.

Equity Mutual Fund – If you have an appetite to take risks, an equity mutual fund could be an option you can rely on. It gives a better return than children-focused policies and thus has the potential to beat inflation in the education sector. The average annual return mutual fund has offered till 2022 in several broad categories is 11.54%. However, before investing in a mutual fund, do check its nitty-gritty. It is crucial.

Public Provident Fund – PPF is a traditional but the most effective way to accumulate funds to support child education. It is one of the most favoured options among investors.It has government backing, offers steady, decent returns and is tax efficient. PPF accounts are easy to open at the post office and banks. But do remember that it has a long lock-in period of 15 years.

Invest in Sovereign Gold Bond (SGB) – Gold has been a consistent performer in offering returns. Because buying and keeping solid gold is risky these days, SGB is a safer way to invest in gold. It offers an interest of 2.5% pa on face value with capital appreciation. With SGB you lock your money for a long term i.e. 7 years though you could sell it in the secondary market after the fifth year. SGBs come with the benefit of capital gains exemption if held till maturity.

Recurring Deposit – If you do not have a lump sum amount, you cannot invest in a policy or FD. In this situation, RD is a solution. A regular deposit of a small amount will help you build a corpus. It is also a way to get a contingency fund. An RD of Rs 2,000/month for five years at an average interest rate of 6% can help you accumulate Rs. 1,40,128. Or you can open a recurring deposit for one year to build a corpus for FD or another investment that offers a higher return.

Things to Remember

Be critical while selecting an option to build a corpus for your child’s higher education. Invest in plans that can beat inflation in the sector yet offer security. For that, it is better not to rely on one investment avenue. You can choose two or more plans to get a better return and avoid financial stress.

Make small goals and try to achieve them step by step. Most importantly, start as early as possible. If you start early, you will get better results.

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5 Investment That Can Give You Regular Income

Sat, 13 May 2023 15:17:49 +0000

The Buyt Desk

We invest to make return. This is a way in which we grow our money for us. Here are 5 ways to invest your money that will give you assured monthly return.

Bank Fixed Deposit

Fixed deposits (FDs) with monthly payout are the most popular investment option to get regular income. By investing in this scheme, your investment amount gets locked for a fixed tenure and you’ll earn interest on your investment. You can consider a regular payout on a monthly, yearly, quarterly, or half-yearly basis. Fixed deposit with monthly payout is also called non-cumulative fixed deposits.

Bank FDs have a insurance protection for the deposit up to Rs 5 lakh. This investment option provides mid-high single digital interest rates, allowing investors to invest their money into an extremely secure scheme and get a guaranteed payout each month. You can earn money without the risk of losing your valuable amount due to market fluctuations.

Post Office Monthly Income Scheme or POMIS

This is a low-risk investment option offered by the Department of Post (DoP), Indian Post. The DOP reviews the interest rate quarterly. The POMIS is perfect for risk-averse investors who need regular income. The interest rates for this scheme are based on the returns provided by the Government Bonds of the same tenure. The Post Office Monthly Income Scheme presently offers a 7.40% interest rate per annum, payable monthly.

Since this scheme is regulated by the Government of India, you’ll receive an interest rate with a negligible scope of credit risk. An individual will get a deposit tenure of 5 years and can start investing with a minimum investment amount of INR 1500. The maximum investment amount is INR 4,50,000 which gets doubled i.e. INR 9,00,000 for joint accounts. You can reinvest the same POMIS investment for another five years once it matures.

Senior Citizen Saving Scheme or SCSS

This investment option is best for senior citizens. This scheme enjoys sovereign backing thus loaded with complete security assurance. It provides an interest rate of 8.2% per annum from 1st April 2023. You can open an account for this scheme as an individual or as a joint account with your spouse. It comes with five years of tenure and can be obtained at notified post offices and bank branches. If you want, you can extend the period for up to 3 more years.

You can invest INR 15 lakh and enjoy good returns. However, make sure that you subscribe to this scheme within one month after retirement. The interest you will receive from this investment is added to the taxable income and taxed according to your income tax bracket. You can save tax on this scheme as per Section 80C of the Income Tax Act, 1961.

This scheme is available easily. All you need is just fill out an application form at the nearest post office or bank. The application process needs minimum paperwork. KYC generally includes a DOB certificate, PAN card, passport, senior citizen card, etc.

Annuity Plan

This is another fund investment option for a regular income at a lower risk. Annuity plans are provided by Indian insurance companies for people who need a steady income to enjoy their life without any financial burden. You can use this investment option as a retirement plan by investing in a lump sum to get payments at regular intervals.

The investment made is further invested by the Indian insurance companies and the investor is paid with the produced returns. Investing in annuity plans requires several fees like surrender charges and commissions. Also, it doesn’t offer any tax benefits and is taxable.

Government Long-Term Bonds or Govt Securities

Government bonds or securities also called G-Secs are great low-risk investment plans for risk-averse investors. The main purpose of the government behind this bond is to increase the capital for government expenditure and the country’s economic needs. Long-term government bonds are basically the debt instrument issued by the State or Central Government. These are issued under the RBI (Reserve Bank of India) supervision.

These types of bonds generally range from 5-40 years and come with a predefined maturity date. By investing in these bonds, you will get regular interest rates or coupon payments as agreed by the Indian government. The interest rate on G-Secs bonds is known as the coupon rate or yield. According to RBI, the interest added must be paid to the investors every six months.

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How Multi Year Health Policy Works?

Sat, 13 May 2023 14:45:43 +0000

The Buyt Desk

To meet health emergencies in India, the insurance market has noticed significant growth over the past years. In one of the latest reports, India is considered to be the 6th largest insurance market in the coming years. Health insurance is greatly supporting this rapid growth. The increase in the Indian health insurance market is making people realize its importance during medical emergencies. Before you buy any health insurance policy, you must know its inclusions and exclusions. If remembering the renewal date of your health insurance policy is a task then opt for a multi-year health insurance policy.

What is a multi-year health policy and how it works?

As the name indicates, this is a health insurance policy that will keep you covered for over one year (mainly a two or three-year policy term). These long-term policies provide coverage for an increased duration. Insurance companies provide this insurance policy to allow policyholders to pay the premium in one go while purchasing the policy. This helps them in enjoying the plan advantages for an extended period without worrying about renewing it every year as with a typical annual plan.

Benefits of buying a multi-year health insurance policy

Compared to traditional annual health insurance, multi-year health insurance provides a long-term alternative that is more economical and convenient. A multi-year insurance policy comes with several perks including the following –

Locking Premium

With multi-year health insurance, you’ll get a fixed premium for longer tenure.You pay the premium for all the years at one go. Hence,any kind of premium revision will not have an impact on your pocket.

Long-term policy discounts

Most insurance companies provide up to 10% discount on a multi-year health policy tenure of 2 years and up to 15% for a 3-year tenure. Since this policy comes with a lifelong renewal option, you’ll enjoy substantial amount savings in the long run.

No stress of annual policy renewal

Renewing a policy is no longer a challenging task today as there are so many digital policies and applications that ease this process. But, so many people are not able to renew their health insurance policies each year. Thanks to the multi-year policy that provides a one-time durable solution with no need for periodical renewal for the policy duration.

Annual tax benefits

According to Section 80D of the Income Tax Act, a policyholder gets a tax deduction of up to Rs 25,000 on the annual health policy premiums paid for themself, their spouse, and their kids. In a multi-year health policy, you can’t get the whole premium at once. You can get the tax benefits because a one-time paid premium will get proportionately divided.

Less maintenance

An annual health policy needs to renew annually. So, a policyholder has to renew it every year to keep the plan active. Ignoring this need will result in policy lapse and losing several benefits. A multi-year health insurance plan, on the other hand, provides constant coverage without any hassle and stress of maintenance.

Easier EMI

Just like an annual health insurance plan, policyholders of a multi-year health insurance policy can pay the premium in easier installments at their convenience. This helps in avoiding the need to arrange the premium amount for a specified duration in one go. You can decide to pay the premium amount in quarterly, annual, monthly, and semi-annual installments.

Who can get the multi year health policy?

The coverage nature remains the same for annual health and multi-year health insurance plans. However, you can consider purchasing a multi-year health policy if you wish to prevent the need for annual renewals of policies while saving on your premiums. A multi-year policy is the right choice if you don’t want your plan to lapse or result in heavy penalties.

You can purchase a multi-year health insurance policy after choosing the best plan according to your requirements. Compare multiple similar plans to choose the right one. Select a comprehensive plan having a high sum insured to enjoy better protection.

Although this policy has numerous benefits, experts recommend carefully going through all the essential documents and terms and conditions (T&Cs) to get aware of all inclusions and exclusions. This will help you in preventing last-minute surprises while claiming settlement during any medical emergency.

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How To Review Your Insurance Requirement?

Tue, 09 May 2023 17:04:33 +0000

The Buyt Desk

We live in an unpredictable enviornment and thus a life insurance becomes a must have investment. But merely buying insurance is not enough. Since nothing remains same in the life, it is essential to review your insurance policy regularly. Big events like purchasing a home, a child’s education, marriage, and others can impact your finances. Reviewing your insurance policy will help you in ensuring that your beneficiaries will get enough coverage for their future financial responsibility.

The best way to review insurance policies is to create a one-page summary separately for all policies you have. In most plans, you’ll find a page in front of the contract – a declaration page or policy summary. You’ll get most of the required details here to review your insurance.

Basic things to include in your insurance review

Let’s jump ahead over some important things you must include in your summary page for an insurance review.

Type of insurance plan

Figures out exactly what type of insurance policy you want. For example, auto insurance, health insurance, long-term care insurance, etc. Before you review or summarize an insurance policy, figure out the type of plan you require i.e. universal life, term life, variable life, or whole life.

Policy number

When you call and ask some crucial questions regarding your insurance policy, you will require to remember your correct policy number.

Insurance carrier

To know everything about the company that gives the insurance, it is good to track customer service numbers on which you can call or other vital contact details for an insurance agent.

Date issued

Note down the date on which your insurance policy was issued. Most policies just cover a specific duration. After that, your insurance coverage may lapse or you might have to renew the particular plan. The renewal process might take place automatically if you’ve a bank account linked to your payment. If that would be the case, you must be aware of when you can expect that change.

Understanding the issued date is important as permanent insurance will have a particular surrender charge that would apply once you cancel the plan in starting 5-20 years.

Insured

Determine who the insurance benefits apply to like you, your dependent kids, or your life partner based on the insurance type.

Premium required

Keep a complete record of the premium you pay and how frequently it is paid.

Beneficiary

A person you designate to get the benefits of your policy when you are not there is known as a beneficiary. Many insurance policies like life insurance policies are designed mainly for beneficiaries not highly for the policyholder. If you want, you can change the beneficiary by reaching your insurance company.

How to review life insurance requirements?

Review your life insurance plan at least once a year. Your present policy will possibly remain the same if there have been no big life-changing events over the last 1 year. A yearly review helps in making current coverage changes and analyzing them in the context of your future plans.

Evaluate coverage requirements after big life-changing events

A child’s admission to a college, the birth of a grandchild, and taking care of an ill parent are some life-changing events that could disturb your savings. Your life coverage requires some modifications no matter whether the events in your life produce less or more income.

Keep into account whether to get higher coverage or direct your amount to profitable investments. Immediately inform your financial advisor or an insurance agent about the possible major life change events and determine the effective ways for current life insurance plan modifications to meet your changed financial requirements.

Consider these factors while reviewing your insurance plan

Financial responsibilities

The financial responsibilities increase with the passage of time. You may have to pay the bills for the healthcare cost of the family, schooling, and education for children, and more expenses. Thus, it is significantly important to extend your life insurance coverage to cover the financial burden.

Debts

A single and young individual has some big investments. With the flow of time, you might have to take on a mortgage to purchase a house and borrow capital for a business startup. So, it is highly recommended to timely upgrade your insurance policy and add debt cover when borrowings increase.

Add-ons

Some urgent illness cover and waiver of premium are some add-ons you could keep in your account. If you get a critical ailment, it could be financially damaging.

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5 Reasons That Can Lead to Term Insurance Claim Rejection

Mon, 01 May 2023 18:07:31 +0000

The Buyt Desk

It can be very tough for families to learn that the term insurance that they have been counting on for years to address emergencies has turned out futile. The insurer rejected the claim, giving reasons hard to swallow. When this happens, we start blaming the insurer and the entire service, but is the insurer at fault, or are you accountable for it?

It has come to notice that most of the time, insurance claim rejection happens because of the policyholder’s fault. Policyholders make many mistakes while buying term insurance that lands them in such a situation. Learn from the 5 mistakes that can lead to insurance rejection.

1. Concealment of Information

Despite having numerous terms and conditions, term insurance plans are an integral part of your financial planning. It can come to your rescue when financial assistance is needed the most. But your carelessness can put you in trouble. The most common mistake people make while buying a policy is that they get casual in providing relevant information to the insurer. Never do this!

2. Non-payment of Premium

Timely payment of premiums is very important. Never postpone premium payment to the next date or month; otherwise, your policy will lapse, and a lapsed policy is unclaimable. Insurance companies give some grace period to pay the premium, which varies from insurer to insurer, but on average, it remains between ten to fifteen days. Do not cross your premium due date.

3. Death Due to Excluded Clause

Excluded clauses are conditions that insurers do not entertain. If the policyholder happens to die because of any excluded clause, the insurer will not accept the claim. The best thing to do in this case is to carefully read the terms and conditions of insurance before taking it.

4. Non-Disclosure of Hazardous Activities

If you enjoy adventure and engage in hazardous activities, you should pick the insurance policy accordingly. However, if you have chosen the wrong insurance and happen to meet with an accident, the insurer might reject your claim.

5. Providing Wrong Information

If you provide false or misleading information about your health while applying for a policy, your claim might get rejected. For instance, if you have mentioned in detail that you don’t smoke, but later on, if the insurance company finds out you are a smoker, they may reject your claim.

Conclusion: Term insurance protects families in times of emergency, and nothing is better than it. However, to avail of all its benefits, one must comply with the policy terms and conditions and provide accurate and relevant information while buying the policy.

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