The idea of owning a car evokes emotions like no other. It gives us a sense of freedom and endless possibilities that lay open—something that has often been romanticized in movies and novels. You too would have imagined yourself going on those picturesque drives, turning up the music, and driving off into the sunset. But while you plan to embark on great adventures, car ownership comes with great financial responsibility, making car insurance a crucial component.

As a responsible car owner, buying appropriate car insurance is not only a legal obligation but also a critical step in safeguarding your valuable assets and protecting your financial future by ensuring against financial security. And yet, car insurance is often perceived as a mere formality, with many car owners buying it without much thought. That’s largely due to the vast array of insurance providers and policy options that make selecting the right car insurance an uphill battle. To simplify this arduous task and assist you in making an informed decision, here’s a look at five key factors one must consider when purchasing car insurance for the first time:

Coverage That Suits Your Needs

One of the most vital considerations when buying car and motor insurance is the kind of coverage it offers. Most of the policies available on the market generally include two primary types of coverage: third-party liability and comprehensive coverage. Third-party liability insurance provides coverage for damages one might cause to someone else’s property or injuries to others in the event of an accident. When it comes to comprehensive coverage, it safeguards the insured by covering third-party liability and also covering damages to their vehicle due to accidents, theft, vandalism, and natural disasters (as per the policy). Thus, by factoring in your requirements, driving habits, and the value of your car, you can narrow down the best-suited coverage option.

Understanding Deductibles and Premiums

Having decided on the coverage option, the next crucial aspect of buying car insurance involves contemplating the deductible and premium structure. Since the deductible denotes the amount that one is subjected to paying out of their own pocket before their insurance coverage comes into effect, it can have a significant impact on the premium amount. For instance, opting for a higher deductible can lower your premium, but it will increase your immediate expenses in the event of a claim. On the other hand, a lower deductible will lead to a higher premium, but it can relatively reduce the financial burden at the time of a claim. Hence, you must analyze your financial capabilities to pay the deductible and choose a balance that is in sync with your budget and risk tolerance.

Extend the Scope of Your Policy with Add-On Covers

Regardless of the insurance provider one opts for, understanding the add-on coverage offered by them can serve as a platform for extending the scope of your policy. Today, modern-day insurers offer various add-on covers that could include zero depreciation covers, engine protection, and roadside assistance, among others. Though these add-ons do increase your premium, they adequately make up for it by providing extra protection that can prove valuable in dire situations. Given your driving pattern and the condition of the vehicle, you can specifically opt for the add-ons that would be beneficial for you. When purchasing car insurance for the first time, tailoring your policy with relevant add-ons can help enhance the coverage that suits your specific needs.

Evaluate the Insured Declared Value (IDV)

Determined by the current market value of your car, the Insured Declared Value refers to the maximum amount the insured can claim in case of a total loss or theft of your vehicle. Since a higher IDV leads to a higher premium and vice versa, it is essential to choose an appropriate IDV that accurately reflects your car’s true value to avoid underinsurance or overinsurance scenarios that can have serious consequences during the claims process. That’s why you must consult with the insurance provider or use online tools to determine the appropriate IDV for your vehicle. This key consideration will enable you to receive fair compensation in the event of a significant loss and help you avoid financial setbacks.

Compare Quotes and Read the Fine Print

After you’ve spent countless hours contemplating the aforementioned points, the last and definitely not the least consideration should be given to comparing multiple quotes from insurance providers and reading their fine print. Just like other things, you must not settle for the first insurance policy that comes your way. Making use of credible online tools, one must take the time to compare the quotes from different insurance firms and look beyond just the price, considering the coverage, deductibles, and additional benefits offered in each policy. Once you’ve chosen the policy, factoring in all key elements, don’t forget to read the policy documents before making the purchase. After going through all the terms, conditions, and clauses mentioned in the policy, you should not hesitate to seek clarification from the insurer in case of any doubts.

Afterword

Arguably one of the most underrated components of car ownership, purchasing car insurance demands thoughtful consideration and a thorough understanding of an individual’s requirements. The right policy should not only comply with legal obligations but also provide adequate coverage for your specific needs. By taking into consideration key factors such as coverage options, deductibles, premiums, add-on covers, and the Insured Declared value, one can make an informed decision that helps in attaining both peace of mind and financial security. When buying car insurance for the first time, remember to compare policy quotes from multiple insurers and read the fine print diligently before making the payment. Bolstered by this knowledge, you can efficiently navigate the confusing technicalities of car insurance to procure a policy that safeguards you against unforeseen risks while driving on the road.

In order to shield their finances from potential losses and damage to their properties, it is imperative for homeowners to be protected with home insurance. The subject of whether home insurance costs are deductible from taxes does come up frequently among Indian homeowners, however, the Income Tax Act of 1961 currently prohibits the direct deductibility of home insurance premiums. Indian tax regulations do not make any provisions for specifically deducting the premiums paid for house insurance when determining taxable income, unlike other insurance services like life insurance or health insurance.

Although home insurance might not offer tax benefits directly, it’s crucial to take into account the overall financial protection it offers. Homeowners must balance the possible tax benefits with the peace of mind that comes from knowing that their most valuable possession is sufficiently safeguarded in case of unanticipated circumstances like fire, theft, or natural catastrophes. It is important to remember that India’s tax laws and regulations are dynamic and might change over time. For the most up-to-date and accurate information on the tax deductibility of home insurance premiums, it is wise to keep up with the latest tax laws and consult highly trained PoSPs like the ones associated with insurance brokerage services such as Policy Ensure.

Other tax benefits for homeowners

Despite home insurance not being tax deductible in and of itself, homeowners can look into alternative options to obtain tax benefits associated with their properties. For instance, under Section 24(b) of the Income Tax Act, those who have taken out home loans may be eligible for deductions on the interest paid. In addition, homeowners may deduct, up to a certain amount, the principle of their mortgage payments under Section 80C. Through riders or add-on covers that are included with some home insurance policy cost, one can also potentially obtain tax savings. These add-ons may provide coverage for certain hazards or objects, such as jewelry, electronic equipment, or the cost of external accommodation in the event of property damage. These add-ons can also qualify for tax deductions depending on the specifics of the policy. To ensure compliance with tax rules, it is crucial to carefully analyze the policy documents and speak with tax professionals or insurance broker PoSPs.

At a glance: Home insurance and tax benefits

While the cost of house insurance itself is not tax deductible in India, property owners should not undervalue the importance of protecting their houses with sufficient insurance policy coverage. Home insurance offers security and peace of mind against unforeseen hazards that far outweigh any potential tax advantages. It’s important to keep in mind that tax regulations often change, therefore, for smart financial planning and maximizing attainable tax benefits, staying informed on the most recent developments and seeking competent guidance are crucial. To conclude, purchasing home insurance remains a wise move to safeguard one’s most valuable asset and provide long-term financial security. 

When it comes to insuring your vehicle, it’s essential to choose the right type of motor insurance that suits your needs and offers adequate protection. In most countries, there are two primary options: comprehensive motor insurance and third-party motor insurance. Each type has its advantages and drawbacks, and understanding the differences between them is crucial for making an informed decision. This article aims to compare comprehensive and third-party motor insurance in terms of coverage, cost, and important considerations to help you choose the most suitable policy for your vehicle.

Coverage

Comprehensive Motor Insurance:

Comprehensive motor insurance, as the name suggests, offers extensive coverage for various scenarios. It not only includes third-party liability coverage but also covers damages to your own vehicle. In the event of an accident, theft, fire, or natural disasters like floods or storms, this type of insurance will reimburse you for repairs or replacement of your vehicle. Moreover, comprehensive insurance usually covers personal accident benefits for the driver and passengers, medical expenses, and legal liabilities arising from accidents.

Third-Party Motor Insurance:

Third-party motor insurance, on the other hand, provides coverage only for liabilities towards third parties involved in an accident caused by the insured driver. This includes compensation for injury or death of third parties and damage to their property. However, third-party insurance does not cover any damages to your own vehicle. It is the most basic form of auto insurance mandated by law in many countries.

Cost

Comprehensive Motor Insurance:

Comprehensive motor insurance typically comes with a higher premium compared to third-party insurance due to its wider coverage. The premium amount depends on various factors such as the vehicle’s make and model, the driver’s age and experience, previous claim history, and the location where the vehicle is primarily used or parked. While the upfront cost may be higher, the additional protection and peace of mind make it a preferred choice for many vehicle owners.

Third-Party Motor Insurance:

Third-party motor insurance is generally more affordable as it covers a limited scope of risks. While it provides the necessary legal coverage, it might not be sufficient for those seeking greater protection for their own vehicle.

Considerations

Vehicle Value and Age:

The value and age of your vehicle play a significant role in deciding the type of insurance you should opt for. If you own a brand-new, expensive car, comprehensive motor insurance would be a wise investment to safeguard your substantial financial outlay. On the other hand, if you own an older vehicle with a lower market value, third-party insurance might suffice.

Personal Financial Situation:

Your personal financial situation should also be considered when choosing insurance. If you can afford a higher premium and want comprehensive coverage, it could save you from significant financial burdens in case of accidents or damages. However, if you have budget constraints, third-party insurance might be the more viable option.

Driving Habits and Location:

Assess your driving habits and the environment in which you drive regularly. If you frequently commute in heavy traffic or live in an area with a high incidence of accidents or thefts, comprehensive insurance could be beneficial. Conversely, if you rarely use your vehicle or drive in low-risk areas, third-party coverage might be sufficient.

Additional Riders and Deductibles:

When choosing comprehensive insurance, consider the additional riders available, such as roadside assistance, zero depreciation, or engine protection. Additionally, check the deductible amount, which is the portion of the claim you’ll have to bear in case of an incident. A higher deductible can lower your premium but might increase your out-of-pocket expenses during a claim.

In conclusion, the choice between comprehensive and third-party motor insurance depends on your individual needs, budget, and risk appetite. Comprehensive vehicle insurance offers broader coverage, including damages to your own vehicle, while third-party insurance provides essential legal coverage for third-party liabilities. Carefully evaluate your vehicle, financial situation, driving habits, and location before making a decision. Ultimately, having any form of auto insurance is essential to protect yourself and others on the road, providing you with the peace of mind that comes with knowing you are financially secure in the event of an unforeseen accident.

Owing to rising pollution levels, sedentary lifestyles, and changing food habits, the incidence of critical illnesses has skyrocketed. Yet, very few people buy a critical illness cover that can offer them protection against these financially ruinous ailments. A study by PolicyX.com found that of every 100 policies purchased on their platform over the past year, only two were critical illness covers (89 were hospitalisation plans, seven were senior citizen plans, and one was an accidental cover).

How do they work?

Critical illness policies cover diseases like cancer, kidney failure, heart attack, coma, stroke, organ transplant, bone marrow transplant, paralysis, major burns, and others listed in the policy.

Says Naval Goel, founder and chief executive officer (CEO), PolicyX, “These policies cover a broad spectrum of life-threatening diseases and pay a lump sum amount if one is detected after the policy has commenced.”

Reasonable premiums

Critical illness policies usually come with a high sum insured, as the cost of treating these illnesses is very high. A Rs 10 lakh cover costs approximately Rs 3,500-5,000, depending on the number of ailments covered.

Two variants of these policies are available. Says Roopam Asthana, CEO and whole-time director, Liberty General Insurance, “First is the bundled plan which covers a range of critical illnesses. Typically, the bundles cover nine, 25, or 43 conditions. Second are the disease-specific policies, which cover one particular condition such as cancer, kidney failure, etc.” Both offer similar benefits.

Compensate for loss of income

The lump-sum payout acts as a replacement for loss of income and can also be utilised for costs that are not covered by a normal health insurance (hospitalisation) cover. Says Rahul M Mishra, co-founder and director of PolicyEnsure. “The receipt of a lump sum allows the policyholder to focus on recovery without worrying about medical expenses.”

Parthanil Ghosh, president, retail business, HDFC ERGO General Insurance Company, points out that that a critical insurance policy offers coverage even if the policyholder avails treatment abroad.

They also offer tax deduction on the premium paid.

Only listed ailments covered

One drawback of these policies is that they only cover the illnesses specified in the policy. Says Mishra, “Many policies have waiting periods before certain illnesses are covered.”

Be aware of exclusions

The exclusions vary from one insurer to another. Says Goel, “Critical illness policies do not cover dental care, cosmetic surgeries, illnesses not listed in the policies, maternity and infertility treatments, critical illness arising due to a congenital disorder, etc.”

A claim under this policy cannot be sought during situations of war or natural calamities like earthquake, tsunami, etc. Says Ghosh, “Claims will be rejected if the insured participates in or is involved in naval, military, or air force operations, racing, diving, aviation, scuba diving, parachuting, hang-gliding, rock climbing, or mountain climbing.”

Points to keep in mind

Review the list of critical ailments covered by the policy and see whether those relevant to your family’s medical history are included. Says Ghosh, “Before deciding the sum insured, assess your current health status and lifestyle habits and then determine an appropriate coverage amount that will be adequate to handle medical expenses, loss of income, and financial obligations during a critical illness.”

Check the total tenure. Says Asthana, “Some insurers put a cap on the maximum age of renewal. Check this particular ceiling before buying a plan.” It is advisable to go with a plan that offers lifelong renewal.

Ghosh suggests checking the claim settlement ratio of the insurer.

These policies come with a survival period condition. Says Bhaskar Nerurkar, head of the health administration team, Bajaj Allianz General Insurance, “The insured needs to survive for a specific number of days after being diagnosed with a listed ailment to make a claim.” The lower this period, the better.

Making a claim under this policy is simple. All a policyholder needs to do is submit the diagnostic reports for the listed ailment.

Finally, Goel suggests that if you have a family history of a critical illness or work in a risky and polluted environment, then you must purchase this plan.

Key features to look for

 Go for a policy with minimum waiting period

 Also select one with the minimal condition regarding survival after diagnosis

 Select a policy that offers lifetime renewal

 Some policies allow you to pay the premium for up to three years; some discount is available if you pay for a longer tenure in   one go  

 Many policies offer additional benefits, such as cancer reconstructive surgery, cardiac nursing, dialysis care, physiotherapy,   etc. (there may be caps on these benefits)

Inflation is an inevitable economic reality that erodes the purchasing power of money over time. As prices rise, the value of the currency diminishes, impacting your ability to afford the same goods and services. While inflation is a concern for everyone, it can be particularly worrisome for those planning their financial future, especially when it comes to retirement and providing for loved ones after they’re gone. This is where life and health insurance plays a crucial role in safeguarding your financial well-being against the effects of inflation.

The purchase value of money gradually decreases over time as a result of inflation, an unavoidable aspect of the economy. You may find it harder to afford the same goods and services if prices rise due to the declining worth of currency. While inflation is a concern for everyone, it can be particularly worrisome for those planning their financial future, especially when it comes to retirement and providing for loved ones after they’re gone. Hence, to protect your financial security from the consequences of inflation in this situation, life insurance is essential.

Preserving the Value of the Payout:

One of the primary methods by which life insurance policy shields your future finances from inflation is by offering a death benefit that keeps its true worth constant. Regardless of how the economy is affected by inflationary forces, the sum assured, or death benefit amount, for a life insurance policy stays the same. Consequently, in the event of your passing, your beneficiaries receive a payout that still holds significant value, even if it was purchased years or decades ago.

Long-Term Financial Security:

Life insurance provides your loved ones long-term financial security, ensuring that they possess the resources to cope with the effects of inflation on their standard of living. Mortgage payments, cost of education, unpaid debts, and ongoing living expenditures that can rise due to inflation can all be covered with this death benefit, ensuring a financially protected life for the policyholder’s family.

Supplementing Retirement Income:

Whole life and universal life permanent life insurance policies include a cash value component that increases over time. As an added benefit, these policies create a cash reserve that policyholders can access at any moment during their lifetime. This cash value builds up on a tax-deferred basis, which allows it to expand more quickly than taxable savings accounts. Policyholders can also augment their retirement income by accessing the accrued cash value, which lessens their reliance on other assets that might be impacted by inflation.

Inflation-Indexed Policies:

Some insurers offer inflation-indexed life insurance policies to more effectively keep up with inflation. Inflation rates or a particular consumer price index are taken into account when adjusting the death benefit and cash value under these policies. This allows the policy’s coverage to grow in step with the cost of living, guaranteeing that beneficiaries will have enough money to cover rising costs.

Avoiding Financial Strain for Loved Ones:

 In addition to safeguarding your financial future, life and accidental insurance policy offers the peace of knowing that your loved ones won’t suffer financially in your absence. Living expenses can rise significantly as a result of inflation, and without careful financial preparation, your family’s finances may be put under financial stress. By securing life insurance coverage, you create a safety net that shields them from the potentially devastating effects of inflation.

At a glance: Life insurance and protection against inflation

Life insurance is an effective instrument to protect your financial future and combat the damaging impacts of inflation. Life insurance makes sure that your family receives the support they require, even in the face of escalating costs, by supplying inflation-indexed policies, a consistent death benefit, or generating cash value. You may safeguard your family’s financial stability, take care of their needs, and leave a long-lasting legacy of security and stability by investing in life insurance.