Is Flood Damage Covered Under Car Insurance?

Wondering, if flood damage covered under car insurance? Floods are one of the several natural calamities that cause huge irreparable damage in the affected areas. Nature’s wrath falls on people and property alike, vehicles including. This blog talks about the damage often caused to cars during floods and whether or not the loss is covered under insurance.

Flood damage is not something unheard of. Every year in India, heavy rainfall is noted in several parts of the country and some of them are unfortunate to witness floods as well. The worst affected areas are reported to have severe damage caused by the overflow of water everywhere, which includes loss of life and property both. A number of cars parked on the roads too get drifted away in the water or are completely damaged. Can this huge loss be covered by car insurance? Let’s find out in this post.

Does Car Insurance Cover Damage by Floods?

Yes, car insurance does cover flood damage, provided you have purchased a comprehensive insurance policy. A comprehensive plan is one that covers costs incurred on the repair or replacement of a car, especially after the damage has been done during a natural or man-made disaster.

Natural disasters include calamities caused by nature such as floods, earthquakes, droughts, hurricanes, cyclones, and the like. Man-made disasters refer to damage caused by events that are driven by man. Examples include fire, road accident, theft, and the like.

A comprehensive car insurance policy is generally costlier but can cover huge losses caused during flood damage. The car may require repairs that cost a lot or may be completely damaged due to the flood effect. In both the cases, the owner is likely to incur a huge loss, which can be covered to a large extent with a comprehensive plan.

What is Third-Party Car Insurance?

A comprehensive car insurance plan is different from a third-party car insurance policy. The latter specifically provides coverage against damage caused to a third-party person or vehicle. This is a basic insurance plan that offers financial protection to a third-party in case of any damage caused by the policyholder to the former.

Third-party car insurance is therefore different from a comprehensive insurance plan which provides complete protection to the car and the car owner, including third-party liabilities. Also, comprehensive insurance is an optional plan as against third-party car insurance which is mandatory to purchase as per the law.

Read More: 8 Tips to Drive Car Safely Through Waterlogged Roads

Type of Car Damage Caused by Floods

In case of flood, your car may suffer the following types of damages:

• Damage to electrical and electronic parts: Floods often cause short circuits, causing damage to the normal functioning of the electrical and electronic components of the car, such as the warning lights on the dashboard.
• Damage to the engine: During flood, water may enter the engine too, causing its internal components to damage either partially or completely.
• Damage to the car upholstery: The interiors of the car, such as the seats, foot mat/carpet, and other furnishings can also get damp due to the water entering the car. It may also damage the upholstery.
• Damage to the gearbox: The water can get inside the gearbox, causing it to stop functioning.

Add-on Riders for Car Insurance to Cover Flood Damage

You can buy comprehensive car insurance online to seek protection against damage to the car from floods. However, your comprehensive policy may not be able to provide complete coverage against certain losses caused to the car gearbox or engine due to flood water. Hence, to cover the repair or damage costs incurred for the internal parts of the car, you may need to buy certain riders in addition to your base plan for extra coverage.

Here are some car add-on riders that provide complete coverage against flood damage to your car:

1.  Cover for consumables: Generally, a comprehensive plan will not cover the cost of replacing consumable items in the car. These include nuts and bolts, engine oil, grease, washers, and the like. The add-on cover for consumables covers the cost involved in replacing or repairing some of these items due to damage to their functioning caused by the flood.
2. Cover for engine protection: Engine repair involves the maximum cost and in the absence of an add-on cover, you may have to shell out the entire sum from your pocket. Hence, it would be wise to purchase this rider.
3. Cover for roadside assistance: In case of waterlogging on the streets during floods, the car may break down in the middle of the road. This is where the roadside assistance rider can help. Your insurer would arrange for a mechanic nearby to reach you or get your car towed away to the closest repair shop.

How to Prevent Damage to Car During Floods?

Yes, your car insurance policy would cover the losses incurred due to damage by floods; however, it is possible to prevent such damage by following these measures:

• Choose high-ground parking for the car. In heavy rainfall areas, always take care to park your vehicle at an elevated ground surface. This majorly lowers the risk of water ingression causing damage to the internal parts and the furnishings of the car.
• Keep the battery disconnected. When there is heavy rain outside, disconnect the battery of your car for that duration. This would help avoid short circuits in case of water ingression into the engine and internal electrical parts.
• Double check the windows. Make sure they are always rolled up and that there is no gap to allow water to enter the car.

To Conclude

Flood is a natural phenomenon and hence can rarely be avoided. However, you can definitely avoid damage to your vehicle by following the above steps. In case of car damage due to floods, you can be prepared with a comprehensive car insurance policy.

Make sure to complete your car insurance renewal online each time upon expiry to avoid financial loss in case of sudden mishap. To look for a reasonable car insurance policy online, do a thorough research on the internet for the various plans available from different insurers. This would give you a fair idea of the best car insurance in India and help you make an informed choice.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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Terminal Illness Rider in Term Insurance Plan – Detailed Guide

Term Insurance Plan with Terminal Illness Rider

Illness does come uninformed and when something as unfortunate as terminal illness is diagnosed, it does tend to add a lot of burden on the affected persons. This is where terminal illness riders in term insurance can help. Read the blog to know all about it.

Terminal illness diagnosed for an individual can indeed be heartbreaking. It essentially implies that the disease is non-curable and that the patient has a very limited life expectancy remaining. In such difficult times, the financial burden gets added on as well, when a huge expenditure needs to be incurred on the treatment and care of the patient. Thanks to the term insurance policy, a major part of these costs can be covered for the patient and their family. And to help them further, most insurers offer additional financial protection by way of a terminal illness rider.

Here we share a detailed guide covering everything you need to know about the terminal illness rider in the term insurance plan.

What is a Term Insurance Plan?

For starters, let’s begin by quickly understanding the term insurance policy meaning. Term insurance is designed to offer financial coverage to the beneficiary(s)/nominee(s) of the insured in case of the latter’s death. It is a monetary death benefit offered by the insurer to the bereaved family of the late insured with the intent to assist them financially in these difficult times.

You can easily check up online several options for term insurance offered by a number of insurance companies. After going through all of their features and benefits, you may choose the best term insurance policy in India. Of course, buying an online term insurance policy is always convenient but you can also opt for a visit to the insurer of your choice for your personal satisfaction before buying the policy.

Moreover, term insurance can be purchased both as an individual plan (for 1 person) or as a group term insurance policy for a group of people together (usually family members). You also now have the online facility to compute the exact coverage you require as per your insurance needs via a term insurance policy calculator. It is easily available online and allows you to make your own calculations at home before purchasing a term insurance plan with the insurer.

What is Terminal Illness?

As discussed earlier, your term insurance policy can provide an additional benefit in the form of a terminal illness rider on extra payment. Let us look at what is terminal illness in term insurance.

Terminal illness refers to any disease or health condition wherein the life expectancy of the patient diagnosed is merely 6-12 months. Such a serious condition can be called terminal illness meaning that it is incurable and may only result in death. Here are a few terminal illness examples for your easy understanding:

• Dementia
• Lung disorder
• Advanced stages of cancer
• Tumors
• Alzheimer’s
• Parkinson’s Disease
• Critical heart diseases, including stokes and heart attacks
• Type 2 Diabetes

If a person is diagnosed with any of the above, terminal illness insurance cover can help provide financial assistance to the patient and their family members by covering the healthcare costs involved in the treatment.

Terminal Illness vs. Critical Illness

Are terminal illness and critical illness the same or is there any difference? Let’s find out.

Both these forms of illnesses are serious; however, there is a small difference in the usage of both, meaning that they cannot and should not be used interchangeably.

When we say critical illness, it refers to a serious medical illness, disease, or injury to any body part, such as kidney failure, Bypass Surgery, organ transplant, Multiple Sclerosis, and the like.

However, reference to terminal illness is made when doctors confirm that the illness or health condition of the patient is incurable and would eventually result in their death within a year.

Terminal Illness Symptoms

Let’s also now learn about the symptoms of terminal illness that help identify whether or not the illness or health condition is terminal in nature.

• Severe and often persistent pain
• Excessive fatigue
• Nausea and vomiting
• Constipation
• Anxiety
• Depression
• Respiratory problems

What is a Terminal Illness Rider in Term Insurance?

All riders in insurance are aimed at providing additional coverage or protection to the insured over and above what is provided in the base policy. These riders can be purchased separately either at the time of buying the insurance plan or while renewing the policy.

A terminal illness rider provides considerable financial assistance to the life assured and their family in case of diagnosis of any terminal illness. In fact, a terminal illness benefit means that 100% of the sum assured promised under the rider is paid out to the insured. Note that this benefit is made available only when the insured is diagnosed with terminal illness during the coverage period of the term insurance policy.

Also note that once the insurer pays out the monetary benefit covered under the terminal illness rider to the life assured, he/she would not be entitled to receive coverage under the rider anymore. Also, your insurer would expect you to inform them about the diagnosis of terminal illness within 3 months of the diagnosis, failing which the insured would not be eligible to receive the rider benefit.

Benefits of a Terminal Illness Rider

Here are some advantages of buying the terminal illness benefit rider in addition to your base term insurance policy:

1. Lump Sum Payout: This is the most important benefit to the life assured in case he/she gets diagnosed with a terminal illness. The insurer would immediately pay out the sum assured amount to the person in lump sum for covering the cost of the treatment.
2. Financial support: The sum assured provided by the insurer provides enough financial assistance to the insured as well as their family members during those difficult times.
3. Extension of Coverage: The base term insurance policy does not cover treatment cost for terminal illnesses. However, with the addition of the terminal illness rider to the plan, the insured stands to receive extended coverage which includes cost of treatment for the condition, which is generally very high in India.
4. Tax Exemption: The rider benefit is also exempted from tax payment under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Know More: Is Critical Illness Cover Included in Term Insurance Plans?

To Conclude

A terminal illness can cause great difficulty, both physically and financially, to the person diagnosed and their loved ones. Buying a terminal illness rider in term insurance can help ease out that difficulty to a great extent.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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First Salary Gift for Yourself – Health Insurance

The first salary is no less than a milestone in one’s life. The excitement and joy of earning money with our hard work for the first time is unmatched. With our newfound freedom of having our own money, it is usually used to spend it on our loved ones and buy things that we wanted for a long time. While we do so, we seldom think about the things that should actually matter to us. One of the most important things in our life is our health, and to achieve that eating a balanced diet, a minimum of 30-minutes of workout, and an active lifestyle may still fall short. You must also start investing in a health insurance policy as well. In case you need to be admitted to the hospital, you will not have to worry about our finances depleting. Your health insurance policy will settle the bills. So, let us talk about the reasons that justify gifting ourselves a health insurance policy, especially with the first salary.

• You can pay a lesser premium: The premiums of a health insurance policy depend much on the age of the insurance buyer. The lesser the age is, the lower the premiums are. Therefore, when you are drawing your first salary, you are most likely to be in your early 20s, and buying a health insurance policy at that age will help you to pay low premiums. Also, you may even just pay yearly premiums and not monthly.
• The waiting period in the health plan: All health insurance plans come with a waiting period. During the waiting period, you cannot make any claims. When you are young, you are likely to have lesser illnesses; therefore, the need of claiming the sum insured right away is also lesser. On the other hand, if you buy health insurance at an age when you are already diagnosed with some illness and need regular health checkups, you will not be able to use the health plan during the initial months or years, even when you are paying premiums for it.
• Types of diseases are increasing: With people getting more and more into sedentary lifestyles and new viruses coming up, many new diseases have shown up recently. These days, people in their 20s are diagnosed with diabetes and hypertension. In fact, cardiac arrest has also become very common. Therefore, buying a health insurance policy even for people who have just started their careers certainly makes sense.
• Medical expenses are high: One of the main reasons for buying a health insurance policy is to save some money during your medical treatment. We all know how costly medical treatments have become. And if one is diagnosed with a critical illness, the treatment will certainly burn a hole in the pocket. In one such situation, a health insurance policy can come as a great help.
• Tax benefits: When you pay the premiums of your health insurance policy from your salary, it helps in saving taxes. You can get tax benefits for dependents or yourself under Section 80D of the Income Tax Act, 1961.

Factors to consider while buying a health insurance policy for yourself

As you are buying a health insurance policy with your first salary, you need to be mindful of certain factors. Some of them are mentioned herein below:

1. Type of policy: There are basically two types of policies, individual and family floater. You need to choose the one that is suitable for you.
2. Claim Settlement Ratio: The Claim Settlement Ratio of an insurance company matters a lot. It is an indicator of the number of claims that have been settled by the insurance company.
3. Network hospitals: Checking the network hospitals is a must, and also finding if the network hospitals are near your home.
4. Claim Settlement process: You must check the claim settlement process such as reimbursement or cashless. Having clarity about this will help you to choose any one of these two.
5. Free-look period: Each health insurance policy comes with a free-look period within which you can cancel the policy. You must know the free-look period of the health insurance plan that you are planning to buy.
6. Waiting period: You must try to find out the waiting period of the health plan you are going to buy. In the waiting period, you will not be able to avail yourself of the benefits of the policy.

What else can you do with your first salary?

Apart from buying yourself a health insurance policy, you can purchase a health plan for your parents as well. After all, the kind of things they do and the sacrifices they make for us cannot be compared with anything else in this world. And as they grow old, the only thing that we can do is to support them in every possible way.

When our parents are old, they often visit the doctors to get medical treatment for the illnesses they have. And while doing so, they end up paying huge amounts of bills. You can help reduce the medical bills by gifting them a health insurance policy.

Whether you want to buy a health insurance plan for yourself or you want to give one to your parents, keeping the above-mentioned points in mind will help you to find the best health insurance policy. To make things easier for you, PayBima has come up with the Khushiyon ka Tohfa plan. The plan will help you choose between health insurance plans from the best health insurance companies in India for yourself or your family.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

 

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How is Child Insurance Different from Term Insurance?

Difference Between a Child Insurance Policy and Term Insurance Plan

When we become parents for the first time, along with a heap of joy, also comes the responsibility to take care of our child. From choosing the best available diapers for them to doing our research on the kind of homemade food that we can feed our child, we leave no stones unturned. As the child grows up, we make sure that their future is safe, even if anything unfortunate happens to us. While securing the future, we mostly go for two options, either a term insurance plan or a child insurance plan. And even after buying any one of these, we are not sure if we have done enough for our little ones. To understand things better and clear all our doubts, what can be better than discussing both of these options? Here we have outlined the differences between a term insurance plan and a child insurance plan.

What is Term Life Insurance Plan?

Term insurance is one of the life insurance products which you can buy for the financial security of your family in your absence. And since it secures the financial future of your family, your child is included too. In an event where the policyholder dies within the term insurance policy tenure, a lump sum amount is offered to the nominee of the plan. The premiums payable under a term insurance plan are much more affordable as compared to the other types of life insurance products. This kind of plan can be bought at any stage of life and a policyholder can even customize the plan, as and when required. To get even more benefits, policyholders can even buy riders by paying an additional premium.

Read More: Best Term Insurance Plans in India 2022

What is Child Insurance Plan?

A child insurance plan is an investment as well as a life insurance cover. This is one of the most sought-after plans that is opted by parents for the security of their children’s future. Child insurance contains two components such as investment and life insurance. Therefore, the life insurance component helps in securing the financial future of the child in case of the death of the parent; and the investment component helps in covering the education cost or marriage expenses of the child, depending on the returns earned.

Read More: Best Child Insurance Plans in India 2022

Term insurance vs Child insurance – Major Differences

For more clarity, let us discuss some of the key differentiators between both of these insurances.

1. Premiums

The premiums that have to be paid under a child plan totally depend on the chosen coverage and the benefits. The insurance provider continues investing in the child insurance plan even after your demise. On the other hand, term insurance plans are known for their affordability. To get an estimate of the premiums, you can even use a term insurance calculator, which is easily available online. After the sudden death of the policyholder, the nominee is offered a lump sum amount by the insurer.

2. Sum assured

Upon the death of the parent, their children get a lump sum benefit under a child policy. Likewise, even in a term insurance policy, a lump sum benefit is paid to the nominees of the policy.

3. Partial withdrawals

Under your child insurance plan, you will be able to make partial withdrawals. However, under a term insurance policy, you will not be allowed to make a partial withdrawal. Only if you have a critical illness cover and you are diagnosed with one such illness, you will get a lump sum amount from the insurance provider. The money you get from there can be used for your treatment and hospital bill payments.

4. Payouts

As the payouts are concerned, under a child plan, the children receive money at specific intervals. Under a term insurance plan, the only payout is the death benefit received by the nominees.

5. Tax benefits

You can claim a tax deduction of the premiums that you pay for child insurance under Section 80C of the Income Tax Act. And the benefit received from the policy under Section 10(10D) of the Income Tax Act, 1961 is tax-free. The term insurance tax benefit is exactly the same as the child plan; the only difference is in the critical illness cover. You can get a tax deduction under Section 80D of the Income Tax Act, 1961 when you have a critical illness cover.

List of Top Child Insurance and Term Insurance Plans 2022 in India

Here we mention some of the best and most sought-after child insurance plans as well as term insurance plans that you can find in India.

Best term insurance plans in India

Some of the top term insurance plans that you can go for in the country are:

• Max Life Smart Secure Plus Plan
• Bharti AXA Life Flexi Term Plan
• Pramerica Life Tru-Shield Plan
• LIC Tech Term Plan
• Exide Life Smart Term Edge
• ICICI Pru iProtect Smart Term Plan
• Kotak Term Plan
• Bajaj Allianz Life Smart Protect Goal Term Plan
• HDFC Life Click 2 Protect Life
• SBI Life Smart Shield

Best child insurance plans in India

A few of the child plans in India that you can totally trust are:

• Bharti AXA Life Child Advantage Plan
• HDFC Life Youngstar Super Premium Plan
• ICICI Pru Smart Kid Solutions
• Kotak Head Start Child Assure Plan
• Bajaj Allianz Young Assure Plan
• Max Life Shiksha Plus Super Plan
• Birla Sun Life Vision Star Plan
• LIC New Children Money Back Plan
• Aegon Life Rising Star Insurance Plan
• Future Generali Assured Child Education Plan

You can compare these plans and then make an informed decision that best suits your family’s needs. No matter which plans you choose, it is going to provide benefit to your family when you are not around anymore.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

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What is a Systematic Withdrawal Plan?

Systematic Withdrawal Plan – Get Detailed Information Here

A Systematic Withdrawal Plan, also called SWP, is a facility or one of the investment features that enable investors to withdraw funds from their mutual fund in a phase-wise manner. The withdrawal can be made at regular intervals such as monthly, quarterly, half-yearly, or annually.  The dates can be chosen by the investors themselves. This facility is apt for investors who need regular cash flow to meet their periodic expenses.

In stark contrast to lump sum withdrawals from a mutual fund, an SWP can create a stream of income that the investor can direct to their savings bank account. Using the SWP, the investors can create a cash flow that can supplement their monthly income and continue receiving the steady cash flow well into their retirement.

The investor can choose to reinvest the fund into another instrument or gain benefits in form of cash. The two options available to the investor are either to withdraw a fixed amount at certain intervals or withdraw the capital gains earned on the mutual fund investment.

The importance of a Systematic Withdrawal Plan

As the mutual fund investments are subjected to market fluctuations and risks, the capital gains from the mutual fund may vary according to the market conditions. Market fluctuations may cause the fund NAV to be adversely affected and a timely withdrawal can prevent the erosion of fund returns. That is where an SWP can be a great tool for investors to withdraw their earnings from the fund in a phased manner. It is also helpful to the investors who are investing with a goal in mind. It protects the fund earnings from adverse market conditions. It can be also planned in a way to ensure that your capital remains invested while the gains are siphoned to the savings account of the investor.

Is it a good investment option?

The Systematic Withdrawal Plan has proven to be a beneficial investment option due to the following reasons.

• Regular cash flow: One of the primary needs that most investors have is to periodically gain returns over the investments that they have made. The SWP allows the investor to customize their cash flow according to the financial needs that they may have. This includes having desired cash flow at certain life events such as higher education for children or adequate disposable income in the form of a pension upon one’s retirement.
• Protection from market fluctuations: While investing in mutual funds is generally considered safe, the fluctuations in the market can still hamper the growth of the mutual fund. Through the SWP, the investor can withdraw the capital gains while ensuring their capital stays invested in the mutual fund.

Factors to decide if SWP is right for you

Before you make up your mind regarding the SWP and the important role it can play in your financial portfolio, you must consider certain factors.

• Regular income: As opposed to the lump sum withdrawal from the mutual funds, the SWP instead focuses on a periodic withdrawal at regular intervals. You can decide how much monthly income are you looking for from the mutual fund in form of SWP and then decide on the frequency and amount.
• Tax implication: The Systematic Withdrawal Plan taxation on the capital gains varies depending on your withdrawal frequency. For example, the capital gains tax on the short-term capital gains of less than 12 months are taxed at 15%, while the long-term capital gains of more than 12 months duration are taxed at 10%, provided the gains are higher than 10%. This is true for equity-based mutual funds while for the debt-based mutual funds withholding period of less than 36 months the capital gains would be included in your overall income and the tax will be according to the income tax slab rate that you fall under. If you have managed to hold a mutual fund for 36 months or more then the flat 20% taxation after indexation is applied.
• Pension: One of the useful ways of using SWP mutual funds is drawing a pension for yourself after your retirement. The SWP capital gains can be periodically collected and deposited in your savings bank account that you can use as a pension for yourself and your dependents. If the investor does not wish to withdraw the amount on a monthly basis then investing in multiple SWPs can also be an option.

A Systematic Withdrawal Plan can easily fortify the cash flow of the investor or provide a secondary stream of income. This makes them a lucrative investment plan. You can use the Systematic Withdrawal Plan calculator to estimate the amount that you can hope to gain from your mutual fund investments. Once you have decided on the desired amount, you can browse through and compare the best Systematic Withdrawal Plan in India and choose the one that fits your needs.

Checkout Other Popular Investment Options in India: ULIP Insurance | Guaranteed Return Plans | Child Plans | Pension Plans | Money Back Policy | Endowment Policy

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