Best Insurance Policy

Undoubtedly, the insurance industry has evolved as a process of protecting people from unforeseen instances and loss. The best insurance policy assures financial security of the insured person in case of his/her death, permanent disability, hospitalisation due to medical emergency, etc.

best insurance policy

Insurance is a legally accepted agreement between the insurance companies and the individual opting for it. With the below-cited points, you will clearly understand the best insurance policy’s working, its types, and how you can obtain its most benefits.

Need to Buy the Best Insurance Policy

The best insurance company is hired to compensate for the losses of the insured person through finances at times of uncertainty. Such contingencies are the times of any loss like death, disabilities of the insured person or loss of property. The insured person has to pay monthly premiums to enjoy the benefits of an insurance policy at times of uncertainty.

How does Insurance Works for an Individual?

A legal contract called the best insurance policy is signed between the individuals and the insurance companies. This contract document has the details of the policyholder. The circumstances, conditions, and ways in which the best insurance company will pay the policyholder/nominees are mentioned in the policy document.

Insurance policies are a way to protect the family from a sudden financial loss and instability in life due to it. Yet, the main question arises about the amount that will be provided at such times. The format is pretty simple; the higher the premium, the higher is the claim. On the other hand, there are situations and applicants where the insurance companies will take high covers with small premiums when only a few people take insurance claims.

Indeed, getting the best insurance policy is essential and easy. However, it still depends on the insurance companies when they evaluate the applicant’s claim before making any final decisions. There is usually a possibility of rejection for applicants with high risks.

Types of Best Insurance Policies

Broadly, there are two types of insurance in India

1. Life Insurance

2. General Insurance

What is Life Insurance?

Life insurance is a financial cover that comes into use if there is a loss of income to the family if the policyholder dies or is disabled permanently or temporarily. The best life insurance policy provides a financial cover for the contingencies such as death, disability, accidents, etc. You are required to make a lump-sum payment(policy premium) while purchasing the best life insurance policy. In return, your insurer pays you back an assured sum to your loved ones in the event of your death, disability, or retirement.

A comparative table highlighting the features of the best Life insurance policy plans in India

Insurance Plan

Entry age
(Minimum to Maximum)

Policy term

(Minimum to Maximum)

Sum Assured

(Minimum/Maximum)

Bajaj Alliance Insecure

18 to 70 years

10 to 30 years

20 lakh/no upper limit

LIC Jeevan Amar

18 to 65 years

10 to 40 years

25 lakh/no upper limit

Kotak Life Preferred e-term

18 to 75 years

10 to 40 years

25 lakh/no upper limit

Max life online term plan

18 to 70 years

10 to 35 years

25 lakh/100 crores

Aditya Birla Sun Life Shield Plan

18 to 65 years

10 to 20/30 years

25 lakh/no upper limit

PNB Metlife Mera Term Plan

18 to 65 years

10 to 40 years

10 lakh/no upper limit

TATA AIA Life Insurance Sampoorna Raksha

18 to 65/70 years

10 to 15/40 years

Rs 50 lakh/no upper limit

What is General Insurance?

Unlike Life Insurance, General insurance offers financial protection for any loss except death. It provides financial aid for your health treatments, loss/theft of assets such as car, bike, property, etc., and also while you travel.

Why Do You Need Life & General Insurance?

Buying the best insurance policy ensures the below-cited benefits:

● Your loved ones have a financial backup in the event of your demise/permanent disability.

● Financial aid for your child’s education

● A regular income source post-retirement

● Extra amount when you lose on your savings due to an accident or a severe illness

Similarly, a General Insurance policy ensures the following:

● Health insurance companies offer the best mediclaim policy in India that protects against the medical expenses of the policyholder. It reimburses the amount you pay towards your treatment for any illness/injury.

● As per Indian Law, driving a motor vehicle on public roads without possessing at least a third party insurance is a punishable offence. A valid Motor Insurance policy protects the vehicle owner against:

a. Damages to owner vehicle

b. Third-Party Liabilities

● Property Insurance means insurance of machinery, stocks, buildings, machinery, etc. against Burglary or Fire.

● Lastly, Travel Insurance protects you and your loved ones against travel-related accidents, unforeseen medical expenses during travel, baggage & passport loss, and delays in flights or baggage.

How many types of General Insurance Policies are there in India?

There are four types of General Insurance available in India:

1. Health Insurance

2. Motor Insurance

3. Travel Insurance

4. Home Insurance

Health Insurance

Health Insurance companies usually provide cover for:

● Hospitalization expenses

● Treatment of critical illnesses

● Pre/post-hospitalization bills

● Daycare expenses

You can also opt for add-ons like:

● Maternity: Health insurance companies offer health policies that also cover childbirth-related costs such as pre-delivery check-ups, hospitalization during delivery, and post-natal care.

● Pre-existing diseases: It also takes care of the treatment of health conditions you may have before purchasing the best mediclaim policy in India.

● Accident: Additionally, it pays for the medical treatment of injuries caused due to mishaps/accidents.

Inclusions

● Room rent of the hospital

● ICU room rent

● OT charges

● Nurse’s fee

● Doctor’s fee

● Surgeon’s & Anaesthetist’s fee

● Cost of medicine, blood, oxygen

● Pre and post hospitalisation

● Ambulance costs, Day-care treatments

● Organ donor expenses

● AYUSH treatment

● Domiciliary treatments

● Free health check-ups

● Restore benefit

Exclusions

● Pre-existing illnesses

● Illnesses within 30- 90 days of the policy purchase

● Hernia, joint replacement, piles, etc. are not covered in the first 2-4 years of the policy

● Injuries due to self-harm, drug abuse, alcohol

● Maternity related expenses unless there is a maternity cover

● Cosmetic & Dental treatments

● Unproven and experimental treatments

● OPD expenses unless there is OPD cover

● HIV/AIDS

● Riots or nuclear warfare

Motor Insurance

A motor insurance policy offers financial protection to your vehicles against damages/loss due to theft, fire, accidents, human-made/natural disasters. Generally, the two types of motor insurance policies are:

1. Two-wheeler Insurance: A comprehensive or third party insurance for two-wheelers provides cover for individually owned bikes/scooters against damages due to accidents and thefts.

2. Car Insurance: A comprehensive or third party car insurance online covers cars against damages due to accidents or loss due to theft or human-made/natural calamities.

Types of Car or Two-Wheeler Insurance

1. Third party Insurance: It only covers for the damages caused to another individual, their vehicle or property.

2. Comprehensive Insurance: It covers all kinds of damages/liabilities caused to you or a third party due to natural/human-made calamities, fire, theft, accidents, etc.

What Motor Insurance covers?

Below-mentioned is the inclusions of Motor Insurance:

1. Fire, Explosion, Self- Ignition, Lightning

2. Burglary/Housebreaking / Theft

3. Riot & Strike

4. Earthquake

5. Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost

6. Accidental external means

7. Malicious Activities

8. Terrorism activities

9. In transit damages by sea, road, rail, air, elevators, etc.

10. Landsliding

What Motor Insurance excludes?

Usually, the below-mentioned contingencies are excluded from Motor Insurance:

● Driving without a Driving License.

● Under the influence of liquor/drugs

● Accident occurring beyond geographical boundaries

● Unlawful usage

● Mechanical/Electrical Wear & Tear

Travel Insurance

A travel insurance policy pays for any financial liabilities occurring due to any medical or non-medical emergencies while you are travelling within the country or abroad.

Inclusions

● Loss of baggage

● Emergency medical expenses

● Loss of passport

● Hijacking

● Delayed flights

● Accidental death

Exclusions

● Pre-existing diseases

● Accident due to sports

● Self Harm Accidents

● Natural calamities

Home Insurance

A home insurance policy is a cover that pays you for damage to your home due to human-made or natural disasters such as theft, earthquakes, floods, burglary, etc. It not just provides financial security to your home but also protects the valuables inside your home.

Inclusions

● Aircraft damage.

● Riots, strikes

● Missile testing operations.

● Storm, flood, cyclone, lightning, etc.

● Wear & tear or loss because of depreciation.

● Cash loss.

● Act of any foreign country or war.

● Nuclear war.

Exclusions

● Cases of damage by erosion or volcanic action

● Not maintaining your property

● Any intentional loss

● Any wear and tear or any defects

● War and nuclear accidents

● Running a small business at your home.

Tax Benefits on Best Insurance Policy

Having the best insurance policy in today’s time is a necessity. To enhance its awareness, the Indian government has allowed individuals to claim tax deductions on the policy premiums.

Section 80C: Premiums paid towards the best life insurance policy such as endowment/money-back, whole life, term insurance, and ULIPs– qualify for a tax deduction (INR 1.5 lakhs- maximum claim amount) as per ITA’s Section 80C, 1961.

Section 80D: Premiums paid to health insurance companies for your health policy qualify for a tax deduction as per ITA’s Section 80D, 1961.

i. Self & family: INR 25,000

ii. Self & family + Parents: INR 50,000 (INR 25,000 + INR 25,000)

iii. Self & family + Parents(S. Citizens): INR 75,000 (INR 25,000 + INR 50,000)

iv. Self (S. Citizen) & family + Parents (S. Citizens): INR 1 lakh (INR 50,000 + INR 50,000)

Factors That Costs Your Best Insurance Policy

Each person has different needs and requirements. Several factors are there that help you find the ideal insurance and determine its cost. Although there are online calculators available to help you check and get an idea of the premium amount, the following factors are essential.

Life Insurance

● Age of the insured person

● Past and present health conditions

● Occupation

● Type of plan or coverage required.

● Smoking or drinking habits

● Sum assured

Motor Insurance

● Model of the vehicle

● Type of coverage or plan

● Age and value of the vehicle

● History of claims

Travel Insurance

● Total sum assured

● Age of the insured person

● History and current status of health

● Type of plan or coverage

● Travel location

Health Insurance

● Health history and current status of the family

● Sum assured

● Type of plan or coverage

● Age and gender of the insured person

● Health status of the insured person

Home Insurance

● Size of the house

● Type of plan or coverage

● Age and value of the house

● Systems installed in the home.

● Location of the house

● Total sum assured

How To Buy Best Insurance Policy?

In this rapidly growing market, finding the right platform to buy the best insurance policy is not difficult. Follow the below-cited steps, and get your insurance policy now.

Know What You Need

● Since each policy differs from the other, it is essential to find the one that best suits your requirements. Therefore, carefully examine each policy for its inclusions & exclusions before finalizing it.

● It is vital to go through the details to avoid any fuss at times of claiming the benefits. For life insurance, determine if you need a policy just for you or for the entire family. Similarly, in the case of motor insurance, carefully check the engine manufacturing date and other specifications.

● Doing this will help give you a brief about your insurance policy and help you avoid falling into any hidden traps.

Check All the Options Available In the Market

● Since there are a plethora of options available to choose from, it is always smart to compare the benefits offered by the various insurance policy providers.

● Why leave a policy with some extra benefits? Thus, look for the add ons available in the best insurance policy as well.

● To avoid falling into some hidden pitfalls, it is necessary to read the exclusions too. Usually, the best insurance companies look for the things that are included in the policy, but on the other front, it is crucial to look for the aspects that are not included in the policy as well. It will avoid confusion in the future or at times of claim.

● Do not forget to go through the sum assured in the best insurance policy. It can help you enjoy the benefits as well.

● Ask the insurance companies if they provide you with any extra services. It might help you get a better option and some extra privileges in the same policy or get a better one.

Pick the Right Plans

● If you have confusion with the type of policy you need, it’s best to reach out to someone with expertise in the sector. Some insurance companies might be rushing to sell the maximum premiums, but be clear with your requirements and go with it.

● Once you have found the best insurance policy for you, do not hesitate to reach out to the best insurance company for the plan’s details.

Pay Premium

● All things set? Fill in the application and start by paying the premiums of the insurance policy.

● There are various platforms for you through which you can pay your premiums. Be it the offline mode or online mode by reaching the website.

● One can also buy the best insurance policy from a broker or a dealership. Only look for authentic sources to avoid any fraudulent.

Top 5 Best Insurance Companies for General Insurance:

New India Assurance Company Limited

● Entirely owned by the government

● Most significant in the public sector market

● Headquartered in Mumbai, operations in 22 different countries

● Numerous insurance products

● Up to 85.66% incurred Claim Ratio and 99.94% grievances solved ratio in 2017-18

● Easy access with 1600+ offices across India

National Insurance Company Limited

● Set up in Kolkata, 1906

● One of the oldest General Insurers in India

● Ranked as one of the top premium brands in India by Economic Times

● Best Insurance Company(Public sector) & entirely under the government

● 6000+ network hospitals

● 114.24% incurred claims ratio and 97.07% grievances solved ratio in 2017-18

Oriental Insurance Company Limited

● One of the most customer-friendly insurance companies

● Headquartered in New Delhi

● 1800+ branches across India with 31 regional offices

● Offer different policies for the urban & rural communities

● Substantial customer loyalty value, as there is a low ratio of claim rejection.

Bajaj Allianz General Insurance Company

● One of the most financially strong General Insurers

● Growth margin of 17% since the last financial year

● iAAA rating for 13 consecutive years

● High claim paid ratio.

● Offer incredible customer-oriented services.

● Convenient AI portals to include the rising automation and digitization better

● Took industry-first initiatives like in-house health management, cashless claim settlement

Reliance General Insurance Company Limited

● Formed in 2000

● Intermediary offices are over 12000, 139 head offices, and online facilities

● 106.54% claim ratio for health insurance and 81.47% for motor insurance for the previous year

● Numerous personalized policies

● India’s first to provide over-the-counter health and home insurance policies

FAQs

What is the best life insurance policy?

Life insurance is an agreement between the insurance companies & the policyholders, wherein the insurer pays a pre-decided sum assured to the policyholder’s loved ones in the event of the policyholder’s death. To avail of this benefit, the policyholder pays a policy premium either annually or monthly.

What is the significance of life insurance?

The best life insurance company in India financially protects the policyholder’s loved ones in the event of the insured person’s death. If it is just you who earns in your family, it would be great if you buy the best life insurance policy to guarantee that your loved ones do not suffer financially, when you are not around. The sum assured can help them continue the same lifestyle as they live in your presence.

How many types of Life Insurance are available in India?

The best life insurance policy is of the following two types:
● Term Insurance: It is a complete protection life insurance policy during which if the policyholder passes away, a pre-decided sum assured is paid to his/her family.
● Endowment plan: It is a plan that combines the benefits of life insurance and savings. In this, the sum assured is paid to the policyholder’s family in the event of his/her demise. Otherwise, at the end of the policy’s term, the policyholder gets a maturity amount.
● ULIP: It is a life insurance policy that offers both risk and investment cover. One part of the policy premium offers life insurance coverage, and the remaining is invested in the market.

What benefits does the best life Insurance policy offer?

Below-mentioned is the benefits of life insurance:
● Financial support for your loved ones when you are not around them
● Money-back payouts if you have opted for a money-back/endowment plan
● Up to INR 1.5 lakhs of tax savings as per section 80C, India
● You can avail  loan against your life insurance policy

Why should I buy the best life Insurance policy?

A life insurance policy guarantees that your loved ones continue to get income even when you are not around. It acts like a financial safety net that secures your loved ones financially by providing them with a sum assured in the event of your demise. Your family can use the sum assured to tackle everyday expenses.

What documents do the car insurance companies require for the claim process?

Though they are already mentioned in the policy, here is a handy list for your convenience:
● A copy of the best insurance policy
● Driving license
● Claim form appropriately filled
● Vehicle’s original RC
● Copy of Pollution Certificate
● Incident photos & police intimation if there are multiple impacts or injuries

How can I make an insurance claim from car insurance companies?

 Intimate about the car damages to the insurance company immediately
● Lodge an FIR at any nearby Police Station
● Capture the photographs covering the car damages, injuries(if any), make a note of the name and number of any witnesses, or a third-party(if involved)
● Present the following documents to your insurer:
a. Policy document’s copy
b. Duly filled & signed the claim form.
c.  Vehicle’s RC
● The best Insurance Company appoints an inspection officer to examine the vehicle damages.
● Now, once your insurer approves your claim request, you can either take your car to any network garage for the cashless repair benefits. In this, you do not pay from your pocket as the best insurance companies settle the bills with the garage directly.
● Else, you can take your car to any nearby garage, and get it repaired by paying from your pocket, and later make a reimbursement claim request in which your insurer will reimburse you the repair expenses after verifying all the documents(original invoices, claim forms, bills, etc.)

How can I claim two-wheeler insurance if my bike is stolen?

Firstly, you need to file an FIR at any nearby police station. Submit the FIR’s copy, documents (claim form, vehicle’s RC, payment receipts, original invoices), bike keys, and a non-traceable certificate to your insurer.
● The entire IDV can be claimed in case of bike theft.
● Natural calamities and human-made disasters are covered too.

What documents do I require for purchasing a new 3rd party car insurance?

● Copy of Previous Insurance
● Vehicle’s RC

Is third party insurance mandatory?

Indeed. You are both financially & legally liable to the third-party in the event of an accident. Kindly note that the third party insurance does not cover any injuries/damages to you or your vehicle.

What is the main difference between health insurance and mediclaim?

Health insurance companies cover the medical expenses of the insured persons such as cost of surgery, hospitality, medical bills, etc. or in the case when the insured person is sick or injured due to an accident. On the other front, a mediclaim in a similar manner is like health insurance, yet does not offer wide coverage. It is less comprehensive and pays out a specific sum to the policyholder.

Is it necessary to have a health insurance policy even when a person is fit and healthy?

It is always smart advice to select the best health insurance companies for their health coverage even when an individual is fit and healthy. One can get an adequate sum assured when the insured person is young and healthy. On the other front, the possibility of uncertainty is always there, and hence, having the best mediclaim policy in India from health insurance companies can be your saviour.

Are best insurance policy premiums exempted from tax?

Yes, under section 80D of the Income Tax Act, the premiums paid under any policies are exempted as they are entitled as income tax.

What is the waiting period to get the claim from health insurance companies?

Usually, it is expected to wait for 30 days from the date of issue of the best insurance policy. During this time, the insured person will have the facility not to be bound to pay any hospitalization bills. In case of emergencies, there are no such restrictions as the insurance company will be paying the medical expenses of the insured person.

Is there a difference between the price of the best insurance policy bought online and offline?

Yes, insurance policies that are bought online are usually cheaper than those online purchases; there are no brokers or agents hired by the insurance companies to get maximum purchases. Yet, in offline mode, the situation is the opposite.

What is the No Claim Bonus?

The renewal offered to the policyholder to stay healthy and fit without claiming the best insurance policy is the No Claim Bonus. As per the contract, when there is no claim of the policy in the preceding year, the insured person is eligible for No Claim Bonus.

Can the best insurance policy be transferred from one person to another?

Yes, the policyholders can transfer their policy to another person as per the rules and guidelines of IRDA. Such transfer of policies is common in the two-wheeler or car insurance companies. Yet, the plans and benefits may differ in some cases.

How many claims in total can be raised in a year?

There is no fixed number of claim requests in the best insurance policy. However, the amount can not exceed the sum assured amount. On the other hand, these policies may differ from company to company as some insurance companies offer the benefit No Claim Bonus as well.