What is the difference between an insurance broker and an insurance agent?

Car Insurance Send feedback »

Kalyani Narayanan,CEO and Principal Officer says,

In a recent survey conducted, we came to know that about 50% of our registered users do not know the difference between an insurance broker and an agent. As a broker, I feel I need to create awareness about the difference. So, here it is

Insurance Broker, that is, 
www.easyinsuranceindia.com

Insurance Agent

Customer Benefit seeking broker to identify suitable insurance

Represents the customers and DOES NOT represent any particular insurance company

Represents only one company (one for life and one for non life)

Brokers are better equipped to meet customers' requirements

Can sell any product from any company

Can sell only the products of the company he/she represents

Brokers are able to offer wide variety of choices because they can identify policies from any company based on customer requirement

Insurance companies give us best policy benefits and premium rates for our customers since we have choice on the companies we can go to

Less influential since they represent only one company

Negotiate better benefits on policies and best premium rates (this applies largely to commercial insurance)

Insurance companies respond better to us when it comes to settling disputed claims because we represent the customers

Less influential since they represent only that company

We can represent the customer more effectively during the time of claim especially if there is a dispute

Brokers have a much more stringent norms and come under scrutiny by IRDA before getting/renewing broker license

Less stringent norms to obtain agency license

Brokers have a fully functional company to provide continuous customer service

In addition to the above, we add more value as broker to you compared to other brokers.

www.easyinsuranceindia.com is owned and operated by us - a licensed broker

Other web sites may or may not be owned by a licensed broker

Retail business is a separate focus area for us (SBU)

Most brokers focus only on corporate businesses

Full-fledged customer care, and back office to help you and answer all your questions.

No such customer care / back office exists for retail customers

We sell even non-money making policies such as third party only policy, Rural insurance, Insurance for poor, etc.

Not offered by any other brokers online because these products don't result in any earnings for brokers or event agents

Your personal/contact information is NOT SOLD or GIVEN to anyone. It is given only to the insurance company whose policy you purchase

Your personal / contact information may be sold to various insurance companies

We offer comprehensive list of all policies that a customer would ever want such as Health, life (both traditional as well as ULIP), motor including third party, personal accident, travel, home, etc.

Other sites are not as comprehensive as ours

 

Difference between Health Insurance sold by Life Insurance companies and the same sold by General Insurance Companies

Health Insurance Send feedback »

Kalyani Narayanan,CEO and Principal Officer says

Greetings !

 

You may notice that just about every insurance company today sells some policy or another that focuses on health related risks.

You should know the difference between the two basic categories of health insurance and which one is appropriate for you. Here are some basic differences:

Health policies Sold by GENERAL Insurance Companies
Health policies Sold by LIFE Insurance Companies
The expenses incurred due to hospitalization like room charges, surgery, medicines, etc. are reimbursed (or) paid directly by the insurance company (in case of cashless benefit) Fixed amount is paid as per policy, regardless of the expenses incurred. The actual expenses may be more or less.
If you have more than one health insurance, then the claim, if any, is paid by sharing between such insurances You can claim even if you have already claimed from health insurance with a general insurance company
The premium has to be paid first in one payment to get cover for the year The premium can be paid as monthly, quarterly, or annual basis
Need to wait 30 days before any claim can be made Need to wait 90 days before any claim can be made
Premium differs from one year to the next depending on claim during current year Premium is generally fixed for three years – after that, it may change
The policy term is mostly for one year The policy term is generally for longer duration, 10 years or even 15 years
Cannot return the policy after purchasing it You can return the policy within 15 days if you decide that you do not want the policy
There is no life insurance benefit or maturity benefit There may be life insurance component and may or may not have maturity benefit

Both kinds of health policies have:
  • Medical check requirement
  • Waiting period for various diseases
  • Exclusions
  • Maximum payable amount applicable

So, how do you know which policy you should purchase?

Here is what I recommend:

If your company already provides health insurance cover, then you can purchase health policies sold by Life insurance companies. If you are hospitalized, your company's medical policy will cover the expenses. Over and above that, you can still legally file a claim under the health policy that you have from life insurance companies.

Many times, when we are hospitalized, there are many expenses like caretaker's food, transportation, hospital administrative costs, etc. that the health insurance under General Insurance would not cover. If you have a health policy from Life insurance, you can make claim against this so that you can get fixed amount of cash which would help you to meet those additional expenses.

www.easyinsuranceindia.com

Sources of Income checklist

Insurance Send feedback »

Kalyani Narayanan,CEO and Principal Officer says

Don’t forget to include the income from the various sources – Here is a check list to help you remember

Typically, as a salaried tax payer you'll need to have the following items at hand for filing your Income Tax Return. This might vary on a case by case basis.

Here’s a quick guide to the documents you will need for the Assessment Year 2012-13 that will help you prepare and file your Income Tax Return.

PAN number

Verify your PAN number online with the Income Tax Department before filing your Income Tax Return by going to this link: https://incometaxindiaefiling.gov.in/portal/knowpan.do

Form-16 issued by your employer

A Form-16 is a statement issued by your employer which has details of your Salary, the taxable salary amount after various perks and allowances, the TDS deducted by your employer, the deductions you have claimed and the overall tax due. TDS is Tax Deducted at Source. Your employer will have already deducted some portion of your salary and deposited it with the Income Tax Department. This is a good starting point to start preparing your tax return.

Bank statements / passbook for Interest Income on bank deposits

Note that you have to declare all Interest Income earned in the Financial Year 2011-12 in your Income Tax Return. A lot of people forget to do this, so please go through your bank statements and find out the Interest received.

Other Statements of Interest Income besides Bank deposits

Sometimes you may have fixed deposits which may have matured, debentures which yield interest. Take a look and make sure to declare this income on your Tax Return.

TDS certificates issued to you by your bank and others TDS may have been deducted on your Interest Income by your bank. Check whether any TDS was deducted. You can ask the Bank to issue you a TDS statement. Declare these TDS entries in your Tax Return to reduce your tax liability.

Form 26AS

This is one of the most important documents that you should look at while preparing and filing your Income Tax Return.

Form 26AS reflects all the Income Tax received by the Income Tax Department with respect to you. This is a tax credit statement which shows TDS payments, voluntary tax payments made by you.  Link to Indian Government site to view Form 26AS

This Form-26AS should match all your TDS certificates issued to you by your employer, your bank etc. If there is a mismatch you may have a tough time getting your tax refund. In case there is a mismatch between your TDS certificates and Form-26AS, you should contact your employer or your bank. They might have to inform the Income Tax Department of the TDS they have deducted.

Proof of investment under Section 80C

Investments done under LIC, NSC, PPF, school fees of your children qualify for Section 80C deductions. Payment towards the principal of your Housing Loan also qualifies for deductions under Section 80C. The maximum limit for claim under section 80C is Rs. 1 Lakh.

Charitable donation statements

Donations that can be claimed for tax deductions under Section 80G. Typically the receipt issued by the charitable organization you donate to mentions the eligibility under Section 80G.

For making sure you can avail of your tax deduction, make sure you quote the PAN number of the charitable organization.

Interest paid on housing loan.

If you pay EMI towards housing loan for a house that you live in: The Interest paid on housing loan is eligible for tax saving. The upper limit for tax saving is Rs 1,50,000. If you pay EMI towards housing loan for a property that you rent out to others: The Interest paid on housing loan is eligible for tax saving. There is no upper limit for Interest paid exemption on rental property.

Other (less common) documents: Proof of investment under Section80CCF:

Investments in Infrastructure bonds upto Rs. 20,000 can be claimed as tax deduction under section 80CCF.

Proof of investment under Section 80E:

Interest Paid on Education loan is tax deductible and can be claimed under Section 80E.

Proof of investment under Section 80D:

Medical Insurance payments for your family and your parents can be claimed here.

Proof of Disabilities

If you have disabilities, you might want to check up on Section 80U. If you have dependents with disabilities then check on Section 80DD.

Stock trading statement:

If you have sold any stock in the Financial year 2011-12, then you might have had Capital Gain or Capital Loss. This has to be declared in your Income Tax Return. Take a look at your brokerage account and then declare your Capital Gain.

Capital gain on sale of property

In case you sold any property or house or land or anything of value, you may have had a Capital Gain or Capital Loss. You have to declare this in your Income Tax Return. Overall the key take away is - Look at your Form-26AS to ensure that your records match those of the Income Tax Department.

Courtesy : Taken from Yahoo

www.easyinsuranceindia.com

Explanation for common life insurance terms

Life Insurance Send feedback »

 

Kalyani Narayanan, CEO and Principal Officer says

Just thought I would explain some life insurance buzz words to you!  These are terms that are common terms related to all life insurance (traditional) policies. I have NOT covered the terms specific to ULIP based plans.

Policy holder

Policy Holder is the person who is responsible for making the premium payment for the policy

Life Insured

This is the person whose life is insured in this policy.  Most of the times, the policy holder and the life insured are the same person, but this is not always the case.  For example, father can take life insurance on his son.  In such case, father is the policy holder, and the son is the person whose life is insured.

Beneficiary/ Nominee

This is the person who would receive the insurance money if the life insured dies.

Insurer

This is the insurance company that has issued the policy.

Premium

Premium is the amount you pay to the insurer for them to provide you insurance cover.  This premium is paid in different ways.

Regular payment

This means you make a payment periodically (either monthly, quarterly, semi-annually or annually) for the duration of the policy payment term.

Single Premium

There are policies where the premium can be made just once instead of every year.

Policy Term

Policy Term is the number of years for which the policy is bought for. For example, if the policy is purchased for 10 years, that means, the policy term is called 10 years.  This is, the insurance company agrees to pay the sum assured to the beneficiary if the policy holder dies any time in the 10 years.  Most of the times, the first 2 years death would be seriously investigated before money is paid.

Premium Payment Term

Many times the premium payment term (PPT) may be different from the Policy Term.  For example, you may pay premium for 10 years, but the policy period may be 15 years.  What this means is that you stop paying the premium at the end of 10th year but the policy continues to be valid for another 5 years.

Bonuses

Guaranteed bonuses

Insurance companies guarantee a return. Generally, it is not given for more than five years of the policy period.  By and large, it is a percentage of the sum assured. This amount is paid to you, the policy holder, at the end of the term.  If a policy comes with a guaranteed bonus, this would be mentioned in the brochure.

Reversionary bonuses

Based on the performance of the company, the insurance company declares a bonus for its policy holders every year. You can get this amount only at the end of the term. Reversionary bonuses are declared only after guaranteed bonus period is over.

This is offered purely at the discretion of the insurance company and depends on the profits made that year.

 

Sum assured

This is also known as the cover or coverage and is the total amount that you are insured for.  This is the amount the life is insured for.

Rider

It is an optional feature that can be added on to a policy.  You could compare it to additional toppings on a pizza.  When you add additional toppings you have to pay extra for them.  Similarly, you have to pay an additional premium to avail these benefits.  For instance, you may take a life insurance policy and add on accident insurance as a rider.  What this means is when you take accident insurance rider, if the death is due to an accident, you would get twice or thrice the amount of sum insured as mentioned in the insurer’s write up.    Some of the common riders that are available are to receive twice the amount of sum insured if the death is due to accident (this is called Double Accident Cover), or get the sum assured if the insured gets one of the dreaded diseases like cancer or stroke, etc. or if the insured losses a vital part of his body like limbs, eyes, etc. (called Partial dismemberment).

Surrender value

Halfway through the policy, you might want to discontinue the policy and take whatever money is due to you. The amount the insurance company then pays is known as surrender value. The policy ceases to exist after this payment has been made.  Not all policies have surrender value.

Paid up value

If you discontinue paying the premiums, but do not withdraw the money or surrender the policy, the policy is referred to as paid up. The sum assured is reduced proportionately, depending on when you exit from the policy. You then get the amount at the end of the term.

Maturity benefit

The amount that the insurance company has to pay you when the policy term comes to an end is known as the maturity benefit. It generally comprises the sum assured + bonuses (guaranteed + non guaranteed).

Here is an example:

Age of policy holder, John 30 years

Beneficiary Spouse

Cover Rs 2 lakh

Term 20 years

Premium (per annum) Rs 9,000

Type of policy Endowment

If John passes away

He is insured for 20 years (between the age of 30 and 50). If he passes away during this time, his spouse gets the death benefit. This will be Rs 2 lakh (Rs 200,000) along with the bonus (if any) until the death occurred.

If John lives till his 51st birthday

He is entitled to the maturity benefit. This will be:

i. Sum assured: Rs 2 lakh (Rs 200,000). This amount is guaranteed.

ii. Guaranteed bonus: Please check with your insurance policy document for the actual amount. This amount is guaranteed.

iii. Reversionary bonuses: This is the amount which will be declared by the company every year based on its performance. It is considered only after the guaranteed bonus period, if any, is over. This amount is not guaranteed.  Once declared however, it becomes a guaranteed amount.  The payment would be given only during maturity or death.

A tentative break-up

Sum assured: Rs 200,000 + Guaranteed bonus: Rs 30,000 + Reversionary bonus: Rs 200,000

So at the end of 20 years, John gets back Rs 430,000.

Survival benefit

Some insurance policies make payments at specified intervals (before the policy term is over) to the customer. Typically, they are called money back policies.

The amounts paid are generally fixed and predetermined. They are called survival benefits.

Here is an example:

Age of David 30 years

Beneficiary Spouse

Cover Rs 2 lakh

Term 15 years

Premium (per annum) Rs 18,000

Type of policy Moneyback

The policy promises to give back a portion of the sum assured (10%, 15%, 20%, 25%) every three years.  This means David would receive

After three years: Rs 20,000

After six years: Rs 30,000

After nine years: Rs 40,000

After twelve years: Rs 50,000

If David passes away anytime in the 15 years, Rs 2 lakh (Rs 200,000) and bonuses (if any till then) will be paid to the spouse as the death benefit regardless of if the company has already paid him some of the money as promised above. For example, if David dies at the end of 10th year, he would have already received Rs 90,000 by that time.  But, this amount would NOT be deducted from the Sum Insured.

If he survives the 15 years, then What would David get on maturity, that is, at the end of 15 years?

He already received Rs 140,000 as can be seen above.  On maturity, he would get the remaining balance on sum assured (Rs 2 lacs – Rs 1.4 lacs = Rs 60,000) + Guaranteed bonus + Reversionary bonus.

A tentative break-up

Maturity Amount: Rs 60,000 (since balance has been paid over the years)

Guaranteed bonus: Rs 30,000

Reversionary bonus: Rs 125,000

So at the end of 20 years, he could get Rs 215,000 back

In sum, you get back Rs 355,000 (Rs 140,000 as survival benefits + Rs 215,000 as maturity benefits).

 

Hope you have already done your TAX planning for 2012 – 13.  If you need help,write us at kalyani@easyinsuranceindia.com

 

www.easyinsuranceindia.com

 

Time to Analyse

General Insurance, Insurance Send feedback »

Kalyani Narayanan, CEO and Principal Officer says

Most families do not have the discipline of analyzing their financial portfolio and discussing where they are, what they need to do, how to go about, etc. If you are one of those, I am sure you are not alone.

I urge you to please set aside some time, at least once a year, where you and your spouse need to do some serious portfolio analysis. To help you get started, here is a check list of what you should be discussing.

What are the assets you own under various categories – Total it up – this is Total Assets

  • First Home, Second house, third house, etc - take current market value

  • Any vacant lands – take current market value

  • Shares – take current market value

  • What is money left in PF

  • What is the money invested through Mutual Funds

  • What is the money invested in Insurance (this is NOT policy value – this is money if you have saved up over and above your premium for life cover)

  • Any Fixed Deposits you have

  • Value of gold/silver you may have (usually diamonds and other precious stones are not taken into consideration)

  • Any long term bonds, etc.

  • Other minor assets like furniture and fixture, car, etc. – put depreciated value

What are the liabilities you have – Total it up – this is Total Liabilities

  • Money you owe to pay for the loan towards purchase of apartment, home

  • Money you owe towards purchase of car, furniture, or other

  • Money you owe to credit card company

  • Money you owe to other people (may be borrowed from friends and family)

Total Assets minus Total liabilities = Net Worth.

You need to know if this ‘Net Worth’ is enough. You need to answer the following questions.

  • Are you saving enough money for your children’s ‘big expenses’ like college education, and marriage expenses? How much time you have till you hit ‘big expense’?

  • Are you saving enough for life after retirement? Plan for at least till you and your spouse are 85 years old

  • Can one of you afford to take early retirement and still enjoy the same lifestyle?

  • Is there any other ‘Big ticket’ expense that you foresee?

  • The most difficult question to ask - What if something happens to you (or your spouse)? Either death or permanently disabled? In such a case,

    • Do you have enough ‘net worth’ to run the family without borrowing?

    • Do you have enough life insurance cover which would give you the money required to run the family?

    • Will you be able to pay for ‘big expenses’ like children’s education and marriage?

You and your spouse need to do this exercise together so that responsibilities can be jointly taken

Good Signals - The following are considered good signals indicating sound financial position

  • You have life insurance cover that is at least 10 times the annual gross earning with disability rider

  • You are saving at least 30% of your post tax money

  • Your investments are diversified into stocks, bonds, gold, insurance, real estate, etc.

  • You have health insurance along with critical illness cover for you and your family

Bad Signals – If you have any of the following, you need to do serious financial planning

  • You owe money to the credit card company

  • You owe money to your friends and family

  • Your overall money owed is more than 30% of your post tax earning

  • You DO NOT have life insurance cover that is at least 7 times your annual gross earning

  • You DO NOT have money saved up for ‘big ticket’ expenses like children education or marriage

Our site www.easyinsuranceindia.com has the following calculators to help you plan your finance better.

Retirement Calculator – Helps you to calculate how much money you should be saving to have a comfortable retired life

Human value Calculator – Helps you calculate how much life insurance cover you should have at any time

Inflation Calculator – Lets you calculate how much money you would need in future given the amount in today’s value.

Compounded Fund Calculator – Lets you calculate how much your investment today would grow in future at a certain interest rate

EMI Calculator – Lets you calculate the equal monthly installment on borrowings

May your portfolio be filled with good signals.

If you have any questions, write me back.

www.easyinsuranceindia.com

 

Contact. ©2016 by admin. free blog / green hosting / FP.
Design & icons by N.Design Studio. Skin by Tender Feelings / Evo Factory.