Insurance

Why Multi-Year Insurance Plan is Beneficial for your Bike?

August 18, 2022 by admin Leave a Comment

Life is a series of situations that force us to make certain choices. In many cases, the choices you make will ultimately lead you to a better place in life. However, it will not always be true. A clear example is bike insurance. When it comes to two-wheeler insurance, buying a policy is the only right choice. Additionally, there may be room for error in other things in life. However, buying bike insurance is not something that allows you to make mistakes. Therefore, it is very important to have bike insurance and make the right decision when buying.

One place where these decisions can become difficult is when purchasing insurance for one year or multiple years. Usually, when you get two-wheeler insurance, you have to renew it every year. This means you have to pay an annual premium to cover your bike. Whether you can afford these payments is another matter. However, not having to pay an annual premium is a plus. A multi-year plan allows you to pay for coverage for a period of 2 or 3 years and enjoy coverage for a while without worrying about premiums. However, is this the only advantage you need to convert to multi-year bike insurance? To find out, you need to ask yourself a few questions. They are:

Do you like unnecessary risks?

One thing you can keep in mind is that you need bike insurance to ride a bike. So if you don’t have a policy, you have two options. The first is to park your bike and leave it there until you buy insurance, and it becomes active. Second, you take the unnecessary risk of riding a bike without a policy.

It’s illegal, so there’s a risk, and if you get caught, you could be booked into the authorities. Additionally, if you are in an accident, there is no coverage to repair damages and claim other benefits. Admittedly, renewing your bike insurance is a complicated process. But this fact does not help the traffic and maintenance authorities. I certainly don’t want to risk anything. Therefore, it is important to update your policy.

If you find it difficult and tiring to renew your policy every year, you can buy multi-year motorcycle insurance. Moreover, if you want to make renewal simpler, you can renew your policy through your bike insurance app. It makes the process systemically available to you at your phone screen.

Want to save money?

Money is like sand. It stays in your hand as long as you hold it tight. The moment you open your hand, it slides out. When it comes to money, holding tight means saving as much as you can. People usually save money every month and add it up at the end of the year to see how much they have saved. However, the annual renewal of insurance will wipe out your savings. In addition, IRDA increases third-party bike insurance premiums by some margin every year. This means that savings are expected to decrease with each renewal. Since updating every year has a regular policy. This means that the cost of bike insurance can add up quickly.

On the other hand, with multi-year bike insurance, you don’t need to increase your annual premium. Second, a multi-year policy does not require annual premiums. This means you can use the time between updates to save as much money as possible.

Want to be covered longer?

You may have noticed by now that after you buy two-wheeler insurance online for multiple years, you will save yourself from paying premiums for a long time. But what you may not be aware of is that it may allow you to extend your benefits to your customers for a longer period of time. If this limit is exceeded, the insured cannot renew their insurance policy. So, regardless of whether you can afford it or not, you will lose coverage after a while.

A multi-year policy will take much longer to reach this limit. This way you will keep the cover unless you change it.

Insurance for Second-hand Two-wheeler Explained

February 24, 2022 by admin Leave a Comment

Given an option to buy any bike of your choice, which one would you get? Can’t make up your mind? We understand having to pick one from several options is difficult. Making a choice becomes even more difficult when you are under budget constraints and are looking for a second-hand bike. Unlike a new bike, you must get the second-hand bike’s condition checked by a trusted mechanic and ensure all the paperwork is in order, among other things. But, amid all these to-dos, you will be surprised to learn that second-hand motorcycles offer a slight edge over new bikes. The cost of second-hand bike insurance is significantly less than that of a new bike. Read on to learn about the two-wheeler insurance for a used bike.

When it comes to bike insurance, what options do you have?

Third-party liability insurance:

This is the minimum cover that one can purchase to ride their bike on the road without attracting a penalty. According to the Motor Vehicle Act of 1988, your bike insurance must cover third party legal liabilities. This policy covers property loss and medical treatment for injuries sustained by a third party in an accident involving your bike. The premium of this policy is determined by the Insurance Regulatory and Development Authority or IRDA.

Own damage bike insurance:

The own damage bike insurance was introduced in 2019 by the IRDA. The policy covers the damage caused to your own bike by incidents such as fire, natural disasters, man-made disasters, etc. However, to buy this bike insurance in Delhi or any other state, you must hold an active third party policy.

Comprehensive two-wheeler insurance for a second-hand bike: Comprehensive bike insurance for second-hand bikes has the feature of both own damage and third-party liability cover. It compensates you for the loss arising from an accident, theft, man-made disaster, fire, etc. If you have a comprehensive or an own damage policy, you can also purchase add-ons to enhance your policy cover.

Why do you need to secure your second-hand bike with two-wheeler insurance?

Whether you are riding a new bike or a second-hand bike, there is always a certain amount of risk that can severely impact your hard-earned savings. Here we have compiled a list of reasons why having bike insurance in Delhi, or any other state, is critical.

Covers third-party risks: When you ride your bike, there is a possibility that you cause injury or property damage to a third party in an accident. Bike insurance safeguards your finances by covering third-party legal liability.

Theft cover: A two-wheeler insurance safeguards you financially if your bike is stolen. The insurance will compensate you with the bike’s current market value, or the Insured Declared Value, in the event of theft.

Covers natural calamities: You may be in control of your riding style, but what will you do if a natural disaster strikes and damages your bike? You can’t do much but will only have to spend a hefty amount on repairs. Bike insurance secures you financially by covering cyclones, earthquakes, landslides, and other similar natural calamities.

Covers man-made disasters: Your bike can be damaged not only when a natural calamity strikes but also when a man-made disaster takes place. Two-wheeler insurance minimises your financial loss by covering terrorism, vandalism, riots and more.

Traffic fine: Two-wheeler insurance not only secures you financially but also protects you from a traffic penalty for driving without third-party bike insurance as per the Motor Vehicles Act 2019.

To conclude

Whether new or used, buying a two-wheeler is a significant financial commitment, and you should not put your bike at financial risk. Bike insurance is a saviour when any accidental damages happen to your bike. Second-hand bike insurance offers all the coverage and features similar to new bike insurance, with the only difference being lesser premium. Second-hand two-wheeler insurance is significantly less expensive because of factors such as the age of the bike, depreciation, and so on.

Whole life insurance – what is it, and how does it work?

December 17, 2021 by admin Leave a Comment

Whole life insurance is defined in Investopedia as providing “permanent death benefit coverage for the life of the insured.” Importantly, it also “contains a savings component in which cash value may accumulate on a tax-advantaged basis.”

Where term life insurance policies only provide insurance for a certain number of years, whole life insurance policies provide insurance for the insured’s entire life. Term life does not have a cash savings component and only pays out a death benefit.

The difference between whole life insurance and term life insurance

Although different insurance products can seem pretty complicated to the layperson, the products are easy to understand once the concepts are broken down.

Let’s start by highlighting the differences between whole life and term life insurance and then take a quick look at the practical differences between them.

Term Life Insurance Policies

A term life insurance product provides insurance for a limited period (term). Typically the period runs between 10 and 30 years. The main idea behind the term life insurance policy is to pay out a fixed death benefit to the beneficiaries of the policy upon the death of the insured person, provided the death takes place within the term, and all premiums have been paid during the preceding period.

When you take out a term life insurance policy, you need to consider the period carefully. Try to predict the period during which such a payout would be required most by the family members who would receive the money. For instance, once the kids are grown up, have studied, and left home, your house is bond-free, and there are savings that the surviving partner can use to live off; such a policy will no longer be required. However, before these eventualities, your death may have severe consequences for those left behind due to significant expenses, in which case the term life payout would be critical to ensure that their lives are not too severely disrupted, at least from a financial perspective.

Term life insurance policy premiums do not generally remain the same over the period but are increased periodically.

Whole Life Insurance Policies

Whole life insurance, in comparison, is more expensive than term life insurance. This is because premiums are payable until death, at which time a death benefit is paid out. Importantly though, a whole life insurance policy also has a cash savings component. Part of the monthly premium is invested by the insurance company and has a cash value. You can see it as a kind of parallel savings account balance which increases every month. Initially, the amount is small, but the balance can be substantial over time. Why is this important, you might ask? It acts as a forced savings account that accrues every time you pay your premium. Once the amount has compounded into something significant, you have the benefit that you can borrow money against the cash surrender value, or you can withdraw cash from the balance as the need arises.

Some whole life insurance policies even pay out regular dividends. Still, you should note that this is not an automatic benefit and depends on the insurance company and the product offered.

Whole life insurance premiums remain the same and are not increased when the policy is in place.

So which is better, term life or whole life?

It depends.

Before deciding which policy is better for you, there are many aspects to consider. This depends on your personal circumstances and is different for everybody. An experienced professional insurance brokerage company can assist you in making your choice and will ensure that all the important aspects are covered before you make this decision.

Petrol vs. Diesel: How it Impacts Your Car Insurance and Other Crucial Factors

December 16, 2021 by admin Leave a Comment

Today, a car buyer is spoilt for choices. Not only do you have so many car brands to choose from, but you also can opt for a fuel version—petrol, diesel, CNG, electric, or hybrid—that suits your need. With buyers looking beyond petrol-only car models, manufacturers are flooding the market with several varieties of cars. However, irrespective of the car type, it is mandatory to have insurance to drive the car on Indian roads. Does the make of a car have any effect on the car insurance, and if so, then to what extent? Here’s the answer.

Car engine

A basic third-party liability car policy is a must-have for all types of four-wheelers. However, it does not cover any damage to your car. You have to buy an additional own-damage policy or upgrade your plan to a comprehensive policy to cover any damages to your car. The third-party policy premium is pretty straightforward as it depends only on the engine capacity of your car. Also, it is standardized by IRDAI, the insurance regulatory body, across insurers.

IDV (Insured Declared Value) of the car

The premium component for own damage (OD) cover takes into account the IDV of the car after deducting depreciation. The IDV determines the sum insured of the motor policy. A diesel car’s engine is more expensive than a petrol car. This leads to a higher price for diesel cars and pushes up the IDV.S o, you will have to pay a higher premium for the OD and comprehensive policy of a diesel car compared to that of a petrol car. The OD and comprehensive policies are not compulsory by law. The insurance companies can fix the premiums independently, taking into account the IDV and depreciation cost. However, you can negotiate with the insurer to keep the IDV close to the car’s current market value.

Certain other factors that affect the car insurance premium are:

Type of plan

A comprehensive policy would be higher than a liability policy due to greater coverage. Besides third party liabilities, it covers damages to your car. You may get additional discounts if you buy online 4 wheeler insurance.

Add-on covers

You may buy add-on covers for additional coverage. This would increase the total premium but is beneficial in the long run for covering damages to the car.

Policyholder’s location

Insurers consider metro cities as more accident-prone due to the huge volume of traffic and rash driving. So, compared to a policyholder in a small town, you have to pay a higher premium if you stay in a metro city.

Anti-theft protection

If you install anti-theft devices certified by the ARAI (Automotive Research Association of India)in your car, it will serve as added protection. You should mention this during policy purchase to get additional discounts from the insurer.

So, factors such as fuel type and engine capacity of a car affect the total insurance premium. Therefore, the premium of a diesel car would be higher than a petrol car. Apart from these, your location and optional covers will also affect the policy premium to some extent.

Which is better and why: term or whole life insurance?

November 22, 2021 by admin Leave a Comment

Introduction:

Securities in life come with planning and saving money in the right volume and time.

“Save your money. You are going to need twice as much money in your old age as you think.”-Michael Caine.

Saving a portion of the money you earn every month can appear a handy and manageable task. But practically, that is not possible for families who still live together with one earning member in the family. Finances remain a constraint, which is why a large part of the population in India prefer to make investments through instruments. Out of approximately 136 crore people in India, only 4.3% make financial investments. Nevertheless, active investor accounts rose by a record 10.4 million in 2020. The type of product chosen varies from the perspective of investment. Two standard financial products sold in India include Term Life Insurance and Whole Life Insurance Cover.

Let us look at each one by one and see which one is better.

What is a Term Plan?

The insurance policy applicable for a specified period is defined as a term plan. The cover under the plan begins only after realising the premium paid. It is a long term savings plan that helps a family achieve their financial goals when the policyholder passes away during the term plan.

Term Plan is the most accessible life insurance without many complexities. You buy a cover and live to pay a premium to benefit your family. If the policyholder dies during the policy term, the sum assured is paid to the nominee. These plans are also the most affordable, which can be continued for a more extended period.

Positive Note:

The Term Plan is affordable.
It is best when you buy it at an early age.
The insurance can be taken for a more extended period.

Drawback:

The Term Plan gives you a feeling of all money spent, and in the end, you get nothing.
Protection is provided only during the policy.

Next, let us see what whole life insurance is?

What Is Whole Life Insurance?

A Whole Life Insurance, on the other hand, is different from Term Insurance. The cover continues till the time you pay a premium for it. After that, whole Life Insurance pays the policyholder some “cash value” along with the death benefit. If the policyholder survives upto the age of 100 years, then the matured endowment coverage is provided as a maturity benefit.

The premium under the whole life insurance is paid for the first 10 and 15 years, but the insurance cover is extended till the entire life of the policyholder. Under this type of life insurance cover, the premium component is split into two; one goes to the insurance component while the other helps create a fund for future financial requirements.

Positive Notes:

The premium for the whole life insurance policy is fixed, and it does not fluctuate irrespective of the market conditions. It keeps you free from worries of an increase in premium with age.
The policyholder’s death benefit is guaranteed until the time premium is paid.
The money collected in funds under the whole life cover can be used for emergency funds. You can take a loan against the funds collected.

The cash value of the funds may increase over time when you continue to contribute money to the funds.

Drawbacks:

The value of the death benefit goes down if you take out a loan against the money collected.
You cannot stop making premium payments under the policy as it affects the cover.

After understanding the type of cover, it is best to evaluate which one is a better insurance policy.

Which is Better: Term Insurance or Whole Life Insurance?

Here is the difference between Term Life Insurance and Whole Life Insurance:

Particulars	Term Insurance	Whole Life Insurance
Cost	Term Insurance is cheaper than the whole life insurance.	Whole Life Insurance is costlier than the term cover. It costs 5 to 15 times more than the term policies. The premium is paid for a limited time of 10-15 years and hence it is higher.
Continuation	If you are not able to afford the premium, you can quickly stop making the payments.	On the other hand, if you stop making the payments under Whole Life Insurance, the death benefit will cease.
Surrender Charges	No surrender charges if you stop making the premium payment for a term plan.	You will have to face the surrender charges if you choose to stop the policy payment.
Loans	You cannot take loans against the premium paid under the term plan.	You can take the loan for the amount contributed to the funds. These loans are tax-free. The outstanding loan amount reduces the death benefit.

Looking at the table, the favourable policy is the one that appears to match your requirements. Term plan is affordable, whereas Whole Life Insurance cover allows you to collect funds for varying financial needs. However, in recent times, the Return of Premium option feature does pay you all the premiums back if you survive the policy term. But the premium for this additional feature is comparatively higher.

Term life insurance is pure life insurance, whereas Whole Life Insurance is a dual benefit policy. The premium you pay under the Term Plan changes dynamically, especially at the time of renewal of the policy, which on the contrary, is fixed under the Whole Life Cover.

Conclusion

Whether Term Life Insurance or Whole Life Insurance, the policy you purchase must also meet your financial goals after keeping in mind the affordability. If the idea of buying an insurance policy is an accumulation of wealth, then whole life insurance is a better idea. Still unsure of which insurance product you should choose, check both Term Plan and Whole Life Insurance online. You must also ask an expert before taking the final call of buying the policy.