What is Life Insurance?
Life Insurance is insurance for you and your family's peace of mind. It safeguards your money and ensures its growth, thus providing you with complete financial well-being. Life insurance is a product which provides twin benefits of: protection, and long-term wealth creation.
Life Insurance is an agreement between the policy owner and the insurer, where the insurer for a consideration agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness, critical illness or maturity of the policy. Investment in Life Insurance plans is primary need of every individual for his/her protection through life cover.
At Mahajani Consultants we understand the customer’s needs and advice them the most suited and competitive insurance from well-established insurance companies. We take pride in servicing our customer’s needs and providing services during claims and settlements.
Which Life Insurance to choose?
Life Insurance is an agreement between the policy owner and the insurer, where the insurer for a consideration agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness, critical illness or maturity of the policy. Investment in Life Insurance plans is primary need of every individual for his/her protection through life cover.
At Mahajani Consultants we understand the customer’s needs and advice them the most suited and competitive insurance from well-established insurance companies. We take pride in servicing our customer’s needs and providing services during claims and settlements.
Life insurance policies are broadly categorized into 2 types:
What is General Insurance?
- Conventional (Traditional) Plans
Conventional plans offer some form of guaranteed returns and definitive maturity benefits. Investment income is also distributed amongst the policyholders through annual bonus depending on the term.
These policies are ideal for policyholders who are not market savvy and do not wish to take equity risks and want guaranteed returns.
In Conventional plans, the insurance company invests money in a way as prescribed by the IRDA. Typically, the money is invested in government and public sector undertakings. The policyholder normally gets 6-7% p.a. returns approximately.
Consider for example, Sachin has a 2 year old child and wants to invest for his child’s education. He wants Rs. 10,00,000 for his child’s higher education when his child turns 18. In such a case, an ideal investment for him would be in a Children’s Plan. Parents who want to invest for their child’s future education needs should opt for guaranteed returns in each important stage of the child’s education.
So, Sachin (the proposer), at the age of 31, opts for a Children’s Plan for his child (the nominee), with a premium paying term of 20 years. In a typical Children’s Plan he will get 25% of the assured sum at each of child’s ages of 15, 17, and 20 years respectively. Also, at the time of the maturity of the Children’s Plan, he gets 25% of the assured sum plus the accumulated bonus. If, in unfortunate circumstances, the proposer dies after 2 years of the Plan’s issuance, a waiver of premium is given for the rest of the Plan’s term and the nominee gets the returns as mentioned above. - Unit Linked Insurance Plans (ULIPs)
ULIPs provide a combination of risk cover and investment. More importantly they offer a flexibility to decide your risk taking profile. Insurance companies invest the investment amount in equity-related stocks or government security bonds.
A ULIP is made up of units and these are allocated depending on the Net Asset Value (NAV) of the investment fund. The following simple formula shows how the units are allocated:
Number of units = Investment amount / NAV of the ULIP fund
The returns in such plans depend upon the performance of the fund. Selection of the fund is at the discretion of the customer. Following are the choices of funds from which a customer selects:
Equity fund: Greater proportion of the allocation (~80%) is done in equity markets and related securities and lesser proportion (~20%) done in debt bonds or government securities or cash.
Debt fund: Greater proportion of the allocation (~80%) is done in debt bonds or government securities or cash whereas lesser proportion (~20%) done in equity markets and related securities.
Balancer fund: Usually the allocation in a balancer fund is (50%-50%) in equity markets and related securities and in debt bonds or government securities or cash.
ULIPs are suitable for people who want to invest in a long term investment return-yielding investment option that offers a life cover for the policy holder and ~5-8% p.a. returns.
General Insurance is insurance against unforeseen events such as accidents, illness, fire, burglary etc. This type of insurance does not provide any returns, but is a protection against eventualities to life, property or assets.
All General Insurance companies have products that – a) Cover property against fire, floods, storm, inundation, earthquake, burglary, theft etc; b) Cover machinery against breakdown; c) Cover motor vehicles against damages and theft; d) Cover personal hospitalization costs either on reimbursement or cashless basis for accident or health cases.
When opting for a General Insurance plan for a property, one must make sure that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim.
General Insurance can be opted for:
Illness- As is the case now-a-days; hospitalization and treatment expenses are not cheap. In cases of critical illness to oneself or one’s family members, it is sometimes difficult to arrange for immediate finances. Therefore, accidental cover (Mediclaim) is required so that such expenses are covered either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators (TPAs) who have arrangements with various service providers, i.e., hospitals.
Property- It is a wish for most of us to get a house of our dreams. We spend our life working hard to earn more to realize that dream. It is important that we insure our house against damages caused by natural calamities such as floods, earthquakes, etc. and unfortunate cases of burglary, robbery or acts of terrorism. Therefore, house insurance is necessary to avoid expenses incurred under such unforeseen events.
Vehicle- Sometimes the callousness of a few or unavoidable circumstances cause accidents and damages to vehicles and incur expenses for repairs. Vehicle insurance is therefore important to assure the owner that these expenses are taken care of. Legally, this insurance is restricted to insuring owner’ vehicle. In case of accidents involving one or more vehicles, Motor Third Party Insurance covers loss or damage to other’s vehicle and bodily injury or damage people or property.
Travel- Travel is a common part of routine for most of us. We travel - a) because our work/business requires us to travel; b) to meet family & friends; c) on vacations. Travel insurance is important to cover our medical expenses, financial and other losses coming while traveling. Travel insurance can be for travel in India or overseas for the duration of the stay.
All General Insurance companies have products that – a) Cover property against fire, floods, storm, inundation, earthquake, burglary, theft etc; b) Cover machinery against breakdown; c) Cover motor vehicles against damages and theft; d) Cover personal hospitalization costs either on reimbursement or cashless basis for accident or health cases.
When opting for a General Insurance plan for a property, one must make sure that the cover is taken for the actual value of the property to avoid being imposed a penalty should there be a claim.
General Insurance can be opted for:
Illness- As is the case now-a-days; hospitalization and treatment expenses are not cheap. In cases of critical illness to oneself or one’s family members, it is sometimes difficult to arrange for immediate finances. Therefore, accidental cover (Mediclaim) is required so that such expenses are covered either on reimbursement or cashless basis. The cashless service is offered through Third Party Administrators (TPAs) who have arrangements with various service providers, i.e., hospitals.
Property- It is a wish for most of us to get a house of our dreams. We spend our life working hard to earn more to realize that dream. It is important that we insure our house against damages caused by natural calamities such as floods, earthquakes, etc. and unfortunate cases of burglary, robbery or acts of terrorism. Therefore, house insurance is necessary to avoid expenses incurred under such unforeseen events.
Vehicle- Sometimes the callousness of a few or unavoidable circumstances cause accidents and damages to vehicles and incur expenses for repairs. Vehicle insurance is therefore important to assure the owner that these expenses are taken care of. Legally, this insurance is restricted to insuring owner’ vehicle. In case of accidents involving one or more vehicles, Motor Third Party Insurance covers loss or damage to other’s vehicle and bodily injury or damage people or property.
Travel- Travel is a common part of routine for most of us. We travel - a) because our work/business requires us to travel; b) to meet family & friends; c) on vacations. Travel insurance is important to cover our medical expenses, financial and other losses coming while traveling. Travel insurance can be for travel in India or overseas for the duration of the stay.