We deals in LIC of India all Insurance Plans, Life Insurance, Cashless Mediclaim, Income Tax Return, Health Insurance, Medicare, GST, Return

Showing posts with label Term Insurance. Show all posts
Showing posts with label Term Insurance. Show all posts

Term Insurance Plan - Pure Life Insurance

What is Pure Life Insurance Plan? Best answer is Term Insurance Plan. What is the right time to get Term Insurance Plan? The short answer would be, “as early as possible.” But that doesn’t mean a child should also buy a term plan. There are various term & conditions that define the right time for anyone to buy a term insurance life cover. First of all, it is important that you understand ‘what is term plan after all? And what makes it important enough for such consideration?’
What is Term Plan?
Term plan or term insurance plan is a pure life insurance cover. The name term insurance (or term plan) refers to an insurance contract where an insurer agrees to compensate your nominee(s) for a specific premium cost.
Why Term Plan?
The purpose of insurance is to minimize the financial stress on the family or insured in case a specific loss occurs. For example, in case of life insurance, the insurer pays the sum assured to the family of the insured, in the event of the untimely demise of the insured. Thus, the family is saved from the financial problem after the death of that insured person.
The term insurance cover sustains the family’s financial stability in the worst circumstances.

Also Read : Term Insurance Plan Good or Bad Decision

How Will Term Cover Work?
Nowadays, insurers offer multiple pay-out options to make dependents life easier after the claim. Following are the most prominently offered pay-out options:
·         Lump-sum
·         Regular Income
·         Growing Regular Income
·         Lump-sum with regular income (fixed or growing)
The fourth option is quite useful if you think from your dependents’ perspective who may not want to manage a large investment. The lump-sum amount is useful in meeting the immediate financial needs, liabilities, etc. and regular income for future.
What is the Ideal Age to Buy Term Plan?
Most term plans consider 18 years of age as the minimum eligible age for availing a term cover. However, the ideal age for a term cover is defined by the income earning potential of the individual. For example, a 40 years old person who is not employed and financially dependent on another may not be eligible for a term cover, though at 20-year-old person earning Rs. 300,000 p.a. would be eligible.
Thus, whether your age is ideal for a term cover or not will depend on:
·         If you are above 18 years of age
·         Your annual income
Benefits of Buying Term Cover Early
The premium on term insurance cover is quite affordable, especially for younger buyers, since age is one of the major factors in premium estimates. Also, since the premiums will remain the same, early buyers may enjoy a very low term premium later in life.
How Much Life Cover You Need?
Since the purpose of term insurance is to meet your dependents financial needs, it is better that you choose a sum assured that is large enough for that. Usually, you can avail approximately 20 to 25 times of your annual income as maximum sum assured.
Example: Suppose Pradip had the annual income of Rs. 500,000 p.a. at the age of 30, thus maximum sum assured he could choose was about Rs. 25 to 30 Lakh. He can, however, increase the sum assured as his income increases or based on certain life events.
Term Insurance and Life Events
The life insurance need is not static throughout your life. It changes with your income, lifestyle, the number of dependents and other factors. After retirement, when you start earning out of your own savings from your working years, and your liabilities are over, your life insurance need could be zero.
Following life stages should make you revisit your term life cover:
·         Marriage
·         Addition of a life (Child birth)
·         Lifestyle changes/upgrades
·         Income increase/Job changes
Whatever your age at this moment, if you have not considered a term insurance so far, perhaps it is the right time to start.
Call me at 9958781151 or whatsapp to know more or book a term plan.
Share:

Term Insurance Plan - Good or Bad Decision

Term Insurance is a contract between Insurance Company and insured person that primary provides guaranty to pay insurance amount only in case of demise of secondary to their Nominee, If all term & condition full-filed. If demise incident does not happen then company are not liable to pay. So, before taking Term Insurance Plan, person should think and analyze the utility of it. 
Term Insurance takes your risk at very low premium with certain term & condition. Like other insurance and investment alternatives it is also simple and easy. You know the premium amount you have to pay till the policy term and insurance amount your nominee will get if unfortunate demise will happen. 
For taking term insurance to ensure your family's financial future in your absence there are certain things to know before.
First understand the Term Insurance, it is designed for providing a pay-out only in case of demise. It is not an investment option because it would not give you any return. It is not for you, it is for your family member. Only good things about it that it cover high risk amount with very low premium cost
Analyze your requirement, in case you have any loan outstanding (like home loan) and don't want to forward this burden on your family member's in your absence then it is the only best option for you. Certainly you do not want your family to compromise on their lifestyle or find difficulty in sustaining a good life in your absence. It will be big favour by getting yourself a Term Insurance Cover.

Also Read : Term Insurance Plan Pure Life Insurance

First choose the Insurance Amount you think should be enough for your family to get normal life in your absence. Now second option comes that what will be premium/installment amount. There are lot online site who will help you to compare the premium instantly. It can be vary from company to company. The best thing about term insurance  plans is that these plans  are designed to charge the same premium throughout the policy term, even though the risks increases when you grow old. So, it is better to have it in early age and reassess it in every 5 years and if fills & can able to pay premium, you can increase the cover amount you require.
Secondly before selecting any insurance company check their Claim Settlement Ratio at IRDA website. The insurance company could have rejected few claims but you should check the causes behind such decisions. Insurance company will not process a claim which is fraudulent. Choose the best one. Read Term and Conditions & understand the Exclusions carefully. It is important to know before purchase it so that you don't leave your dependents with various issues relating to your term plan in your absence.
Selecting Nominee is very important & crucial job while purchasing insurance plans. It should be a person who shall need your money the most after your passing. It can be your spouse, your parents or your child. It is advisable to keep your beneficiary informed about the key features of the policy and any changes that you decide to make about.
If you consider the above mentioned things when you are getting term insurance plan, you certainly will find the right plan for yourself.

Share:

Effect of GST on Insurance Premium

With  a hike in GST rates to 18% from the current 15%, the insurance sector are poised to get more expensive after July 1, 2017. The immediate effect will be the increase in premiums especially for families that own Life Insurance, Health Insurance and Car Insurance.

The existing and new insurance buyers would have to bear the updated prices. The Policy holders stand a chance to be benefited if the insurance providers get a green signal on the input tax credit benefit. Unfortunately, as of yet, it is still unclear since he Center/State GST  structure is very complex. It might create confusions and conformity for the insurance buyers and increase the administrative expenses for the insurance providers. If the insurance buyers remain confused about the GST updates, then irrespective of the increase or decrease in the prices the financial strength will adversely affected. The general insurance sector will be equally impacted. The overall outgo for health, car, and various non-life plans would be increased by 3 percent.

The Insurance policies premium represents two components - Savings and Risk Coverage. The service tax is levied specified only on the premium component. 

What GST (Goods And Service Tax) Rules says, the value of service on which the GST is levied regarding the life insurance sector shall be accordingly;
(i) The gross premium would be reduced by the amount allocated for or savings or investment on policyholders behalf.
(ii) When it comes to the single premium annual policies, ten percent of the single premium would be charged from the policy holder.
(iii) In other cases, 25 percent of the premium for the first year and 12.5% of the premium in the upcoming years will be charged.
(iv) In case the total premium paid by the policy holder is towards the life insurance's risk cover, oly the 18% GST would be levied on the total premium.

There are three types of life insurance;
* Term Insurance Plans - Basic life insurance policy
** ULIP Plans - Insurance and investment under a single integrated plan
*** Endowments Plans (including money back plan) - Life insurance policies that pay a lump sum on maturity/death or a fixed sum every month (like pension)

List of new revised rates on all insurance plans are as follows :
GST RATES : NEW RATES UNDER GST FOR
INSURANCE POLICIES
INSURANCE PRODUCTS
BEFORE GST
AFTER GST
APPLICABILITY
Endowment Plans – 1st Year
3.75%
4.50%
On 25% of Premium
Endowment Plans – Renewal Premium
1.88%
2.25%
On 12.5% of Premium
Health Insurance Premium
15%
18%
On Entire Premium
Rider Premium
15%
18%
On Entire Premium
Annuity: Single Premium
1.50%
1.80%
On 10% of Premium
Term Insurance Premium
15%
18%
On Entire Premium
ULIP (On Charges)
15%
18%
On Premium minus
Investment Amount
Vehicle Insurance
15%
18%
On Entire Premium
Travel Insurance
15%
18%
On Entire Premium

Life and health insurers will not have input tax credit as it is not available for life and health insurances ( as they are for personal purposes). Even corporate policyholders with group life and health insurance for their employees will not enjoy any input tax credit.

Life insurance provided under Government Schemes are exempted from GST;
1) Janashree Bima Yojna (JBY)
2) Aam Aadmi Bima Yojna (AABY)
3) Life Micro-Insurance product (as approved by the IRDA having maximum amount of cover of fifty thousand rupees)
4) Varishtha Pension Bima Yojna (VPBY)
5) Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY)
6) Pradhan Mantri Jan Dhan Yojna
7) Pradhan Mantri Vaya Vandan Yojna 
8) Any other insurance schemes of the State Government as may be notified by Government of India on the the recommendation of GST Centre.

Share:
Copyright © SAVE TAX SAVE MONEY | Insurance | Accounting | Taxation