Tag Archive | "General Insurance"

Insurance Before GST: Should You Buy Before 1st July or Not?

  • Easypolicy
  • 09 Jun 2017

Hence, any changes in taxation are definitely going to leave an impact on insurance markets. That is the reason, introduction of GST (Goods and Services Tax) will affect the insurer's business largely and the prices of insurances thereof. Lok Sabha passed the long pending GST Bill on 8th August, 2016, wherein the indirect tax system (multiple/various taxes) which has a cascading effect due to double taxation on goods and services, will be replaced by uniform GST. This shall come in effect from 1st July, 2017.

Is it going to affect the insurance industry positively or negatively?

Is it advisable to buy insurance before 1st of July, 2017?

Let's find out!

It has been established that GST is a value added tax, which is being brought in implementation to eliminate adverse effects of current multiple  taxes on costs of goods and services, down the value chain. Therefore, this new tax reform, with the new service tax rate anticipated to be fixed at 18%, will leave a not-so-favorable effect on insurance industry and cost of insurance products.

·     The reason is that with GST in picture, service tax will be increased from 15% to 18%, hence the cost of buying and maintaining insurance is going to go high.

·         This is because, when you buy an insurance policy, you pay the service tax on the Risk element of premium. The risk being, the payment (term policy) made by the Insurer to you, if something happens to you. You are not paying any service tax on investment that you are making in buying insurance. After GST implementation, all insurance policies including term, health, and car will become expensive as the service taxes rate will go high from 15% to 18%. Which is by minimum 300 basis points, where one basis point stands equal to 1/100 of percentage point. This stands true for Policy renewal too.

·         The traditional insurance savings plans, better known as endowment plans currently attract a service tax of 3.75% on premium, in first year. This will see an hike up to 4.5%, which will prevail for the first year of GST. In second year the current tax slab on endowment plans is 1.88%, which will be 2.25% after the implementation of GST, second year onwards. Hence, the maintenance of endowment plans will also become expensive.

·         Talking of Health Insurance, the present rate of tax is 15% on premium, which is again rise up to 18% after GST. Same is the case with Car Insurance. GST of 18% will be levied upon every motor insurance policy you buy.

All in all, the overall cost of insuring life and assets, and making investments in insurance based products, is definitely going to rise as GST comes in force. This indicates, that buying a long Term effective plan or term insurance before GST, to secure your life, is going to be a smart move.

Moreover, as the cost of insurance is likely to go high, the insurance market is going to become even more competitive, before the implementation of GST. The insurance provider companies are going to offer the best possible insurance products with maximum benefits to consumers. There are other intermediary costs associated with insurance premiums, such as issuance cost, agents' commissions etc. The companies are going to lower these costs to make as much sales as possible, to compensate the effect of enhanced service tax, pro GST.

If you plan to buy insurance before 1st July, 2017, which is actually a sensible move, you must go for term plans. Life insurance or term plans are the most suitable plans one can invest in, because they provide comprehensive Coverage to the Insured individual and provide for the family in the absence of the policyholder.

Other investment plans are also going to make a suitable choice only if you compare smartly.

Before you buy, you must compare the insurance products to match with your financial requirement, investment needs, tax structure, your liabilities, future objectives, cost and your insurance budget.

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Aegon iTerm Plan – Investing Small to Protect Big

  • Easypolicy
  • 14 Dec 2016

In today’s day and age, a number of horrific incidents happen daily and also more and more threatening diseases are discovered all the time. To get worried about your family thinking about their security in times when you won’t be there for them is very normal.

The key determinants of any good insurance Policy are Income benefit, rider benefit, life stage benefit etc. In terms of development, many private insurance companies have entered the market. One of the most successful and cost-effective plans are provided by AEGON Life Insurance.

AEGON Life Insurance

AEGON Life Insurance Company is a joint undertaking between Bennett, Coleman, and company and one among the leading financial organization. For the year 2015-2016, the insurance Claim settlement ratio of AEGON Life Insurance is 95%.

Aegon iTerm Plan: Aegon iTerm insurance plan is an online Term plan which helps you to build a secure future at minimal cost.

Why chose Aegon iTerm Insurance?

The policy definitely has some key benefits for the policy holder:

Key Features:

• Maximum Coverage Upto 80 Years
• Longest Policy Term ; 5-62 years provided
• Complete Pack of Riders -Accidental Death, Critical Illness, Disability, Waiver of Premium, Women Critical Illness & Terminal Illness
• Enjoy the Inbuilt Terminal Illness Rider & Life stage option
• Enjoy the income option with 1.2% of SA till 100 months.

Death benefits:  On the death of policy holder, the nominee will receive:

•    As a lump-sum payment, or
•    As fixed monthly income for 100 months, or
•    As a combination of the above

At the time of claim, the nominee will be able to choose the option of being paid the Total Sum Assured in one single lump-sum immediately. The Policy will terminate on payment of the above benefits.

Inbuilt Terminal illness benefits: On diagnosis of any terminal illness an amount equal to 25% of the Total Sum Assured will be paid immediately as a lump-sum. Subsequently the total Death Benefit will be reduced by the amount equal to the benefit paid under this clause.

Flexi Life Stage:  The Sum assured amount can be increased. The option is available for the following events:

•    On Marriage – 50% of Original Sum Assured 
•    Birth/Adoption of 1st child – 25% of Original Sum Assured 
•    Birth/Adoption of 2nd child –25% of Original Sum Assured

Riders Benefit: The plan has several riders also such as Waiver of premium, Women Critical Illness, Accidental death, Critical illness & Disability Rider.

Market Comparison

In case you are still confused, here is a thorough analysis of Aegon Life- iTerm plan along with other online term plans in the market.

Note: All the above Premium amounts are for the 30-year-old male, non-smoker, for Rs 1 Crore Sum Assured with 30 years Policy Term. Premium Amount is for the yearly mode.

How to buy term insurance plans smoothly and safely!!

  • Easypolicy
  • 06 Nov 2014

Term plan is an insurance Policy with limited Coverage period in contrast to a life insurance plan that provides insurance cover till death. The premiums for these plans tend to be lower and hence more attractive to the buyer. With the advent and proliferation of the internet, the Term plan options are available online for purchase, so one does not have to go through an Insurance Agent or broker to choose a plan suited to them. One could also save money buying an online insurance as it is cheaper than buying from an insurance agent.

However, ease of purchase does not substitute the need for knowledge. One who wants to choose a term plan should know how to decide on term insurance, since there is not going to be any advisor around to explain the pros and cons of an insurance plan.

1. It is important to know accurately all health related details before filling in an online form, since many companies offer an insurance cover assuming that the applicant is healthy. So, it is necessary to provide accurate health information so that your insurance cover application does not get rejected.

2. It is wise to buy a higher insurance cover for a lower price than to buy a lower insurance cover based on the assumption that Premium will be low. The very purpose of bypassing an agent and purchasing an online policy gets defeated.

3. Checking the availability of the plan in the place where you reside is important as some plans are available only for selected cities. There is no use of buying an insurance that does not cover your geographical location.

4. When buying Term Insurance online, the payment is usually done with a debit or credit card, or through internet banking. Hence it is necessary to have these toosls ready before opting to buy an insurance policy online.

5. A good research involving various companies, the insurance policy benefits that they offer, the cost and its suitability to the purchaser’s needs is essential. There are many online portals which help the person to compare different insurance policies offered by different companies before purchasing it. The insurance companies also have their own websites from where online purchase can be done.

6. Reviewing the policy by reading the user comments online, scrutinizing the details of the policy before choosing one and working out an economical solution based on financial requirements, age of insurance applicant and Inflation rate are also some factors that help in smooth and safe policy purchase decisions.

Purchasing a plan can be easy if we know how to get the right information about the policy and the company before purchasing according to our needs.