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Term

Here is why term policy comparison is necessary to get the best coverage.

Term insurance provides your loved ones with the required financial security for the uncertainties of life. To choose the most suitable term insurance for yourself, you should do a term insurance comparison as it is crucial to invest in the right insurance policy to avoid any future financial troubles for your family. 

When you compare term insurance plans, you will find that options are abundant, which may confuse you. Therefore, a careful term plan comparison is a must to choose the most suitable plan for you and your family.

What is Term Insurance Plan?

A term insurance policy is the simplest life insurance product that offers financial protection for a specific period. In case of your untimely demise during the policy term, your loved ones will get the insurance benefit to maintain their lifestyle and secure their goals.

Why Do You Need Term Insurance? 

Term insurance is perhaps the most affordable variant of life insurance that you can take to ensure your family’s protection. In case of an unfortunate event, term insurance provides financial security for you and your family. It is advisable to buy life insurance as soon as you start earning after careful term insurance comparison to cover your liabilities and have a financial backup at the time of a health crisis.

When you compare term life insurance, you can create a comprehensive financial support system for your loved ones. If you have dependents in your family, it becomes even more crucial for you to compare term insurance plans mindfully before purchasing one. 

Life

Difference Between Life Insurance and General Insurance?

Insurance is a contract that is designed to protect the interest of policyholders or beneficiaries in the face of the various uncertainties of life. There are two broad categories of insurance contracts in India– life insurance and general insurance. Unfortunately, there is some confusion regarding the differences between life insurance vs. general insurance in India.

In the following sections we will discuss the key differences between life insurance and general insurance along with the key features of these common types of insurance in India.

What is Life Insurance?

A life insurance policy is a life cover to put it simply. It is a contract that bounds the insurance provider to offer financial compensation to the beneficiary in case of the unfortunate events covered under the policy, like the insured’s untimely demise. In exchange, the policyholder pays a predetermined amount as regular premiums or single premium.

The life insurance policy covers a certain period, and if the policyholder survives it, they are eligible for a maturity benefit, as per the terms of the contract. People opt for life insurance policies to provide financial protection in case of unprecedented circumstances.

Health Insurance

What are the Various Types of Health Insurance in India

Health insurance plans are a type of insurance policy that can cover medical expenses incurred for treatment of a range of illnesses. These expenses can include medication, surgeries, hospitalization due to an illness, emergencies of injuries due to unfortunate accidents, etc. However, the types of expenses that are covered by a health insurance plan can vary for different types of health insurance policies.

Read on to know more about the different types of health insurance policies available in India.

The truth is – there is a difference between mediclaim and health insurance. Each of these plans has its distinct definition though they seem to serve the same purpose. It is high time to address this misconception by digging deeper into mediclaim and health insurance differences.

Common Types of Health Insurance Plans in India

Currently, there are 5 types of health insurance plans that you can choose from. Below is the list of different types of health insurance policies and some of their key features:

In the individual type of health insurance plans, the person buying the insurance is the sole beneficiary of the health insurance. It ensures that the policyholder is covered in the event of a medical emergency. This type of health plan can cover a variety of medical expenses while the policy is still in effect. However, the sum insured and the health insurance premium payable may be influenced by variables such as the individual purchasing the health insurance's age, gender, smoking habits, and so on.

Individual Health Insurance 

In the individual type of health insurance plans, the person buying the insurance is the sole beneficiary of the health insurance. It ensures that the policyholder is covered in the event of a medical emergency. This type of health plan can cover a variety of medical expenses while the policy is still in effect. However, the sum insured and the health insurance premium payable may be influenced by variables such as the individual purchasing the health insurance's age, gender, smoking habits, and so on.

Family Floater Health Insurance 

Family floater plan is a type of health insurance than can be used to cover medical costs for family members like your spouse, parents/in-laws and dependant children/siblings in addition to yourself. Family floater health insurance is the way to go if you want to buy health insurance for you and your family without having to pay premiums for multiple policies. Additionally, these medical insurance policies have a collective sum insured that keeps premium prices reasonable while providing adequate health cover for multiple family members.

Group Health Insurance

Among the different types of health insurance policies, group health insurance is often provided by companies to their employees. The low cost of premiums on group health insurance is the reason for purchasing it as an incentive for employees. It is not only convenient for the employer but also for the employees because insurance companies frequently offer refills on the assured sum. However, the low premiums required for such group insurance policies do have a drawback – the sum insured for these health insurance policies is quite low.

Senior Citizen Health Insurance 

Among other types of health insurance policies in India, Senior Citizen Health Insurance is more expensive. It is because people in their late adulthood, which begins at the age of 60, are more vulnerable to critical illnesses and diseases. As a result, this type of health insurance covers medical expenses such as medication, pre and post-treatment care costs, and critical and terminal illnesses.

In some cases, senior citizens are required to undergo a full body examination. This aids in determining the health insurance premium rate and maturity value.

Maternity health insurance is one of the types of health insurance that is appropriate for couples or families who are planning to have a baby. If you are looking for family planning insurance options, this is a viable investment. It will assist in covering both pre and post-delivery costs, as well as the infant's expenses for a period of 90 days, including all pregnancy-related expenses. However, the waiting period for this type health insurance variant can be up to two years or longer.

Critical Illness Insurance

Critical illnesses like heart disease, stroke, lower respiratory infections, Alzheimer's disease, and other conditions are on the rise. Such diseases impose a significant financial burden on individuals. A critical illness insurance policy, which is usually provided as an add to term insurance plans provides a lump sum payout in the event the insured person is diagnosed with a critical illness as per the list provided by the insurer. However, the cover is terminated after the diagnosis and the lump sum assured amount is paid out by the insurer.

There is an additional option known super top-up health insurance, however, that is not a unique health insurance variant or type. It is a feature that may be available with any of the health insurance types mentioned above. 

Investments

Long-Term Investment Plans in 2022: Definition, Benefits & Options

The proverb ‘Patience is a Virtue’ holds special meaning for those making long-term investments. Long-term investments plans are made for investment tenures of 5 years or longer and are designed to help investors beat inflation and achieve various long-term goals. This is quite different from making short-term investments where in the focus is primarily on preserving capital by choosing low-volatility investments.   

So, if you are an aspiring investor, you must know about the workings, types, and strategies for making appropriate long-term investments that are in line with your goals.  Let’s begin by learning about what long-term investments are and their key benefits.

What is a Long-Term Investment?

Long term investments mean holding an asset for a longer period, mostly five years or more, to enjoy bigger capital gains in the future. Some of the best investment options for the long-term include direct equity, real estate, saving schemes like Public Provident Fund (PPF), gold, equity mutual funds, and others.

Benefits of Investing in Long-Term Investment Plans

Compounding Helps Grow Wealth Exponentially 

When you hold an investment for a longer time, you have the power of compounding working in your favour. This means that the profit or interest you earn annually is added to the principal amount to give you bigger gains the following year.

Let’s understand this with an example.

Suppose you invest Rs. 1,000 in an asset and get 5% p.a. interest compounded annually. So, for the 1st year, your interest earning will be Rs. 50. But due to compounding the next year’s principal amount will be Rs. 1050, and the interest earned will increase to Rs. 52.5. This increase in returns will continue as long as you stay invested and let compounding of your investment continue. You can easily use a compound interest calculator to estimate the growth of your investment over time. 

Minimizes Short Term Volatility Risk 

Making long-term investments would help protect your capital against short-term market volatility. So, by staying invested for a longer tenure, the investment risks involved with short-term ups and downs in the market will be minimized.

This is primarily because, you get more time to choose long-term investment options that can help you diversify your investments and get an appropriate balance between returns and potential risks from these investments.

Potential for Tax Benefits 

Many long-term investment plans can give you the benefit of tax deductions under various sections of the Income Tax Act like Section 80C. Such long-term tax-saving investment options like PPF, ULIPs, tax saver FD, ELSS mutual funds provide a dual benefit. You end up paying less tax by making the investments and also get the opportunity to grow your wealth through the benefit of compounding by staying invested for the long-term.   

Helps Achieve Long-term Goals

One of the key reasons why people invest for the long term is to try and achieve long-term financial goals. Such goals can be as widely varied as buying a house, saving for children’s higher education, ensuring adequate retirement planning, etc. Achieving these goals typically requires a large corpus and can be made possible only by making long-term investments that provide compounding benefits.

Knowing these multiple benefits must have certainly tempted you to go ahead with the best long-term investment plan. But how to pick a long-term investment plan that is suited for your needs? Read on to find out. 

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