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Business Insurance

Business insurance coverage protects businesses from losses due to events that may occur during the normal course of business. There are many types of insurance for businesses including coverage for property damage, legal liability and employee-related risks.

What is Business Insurance?

Risk is a part and parcel of a business and is unavoidable. However certain risks which a business faces can be avoided by insuring your business called Business Insurance. You pay a premium and insure your business for a sum of money called Sum Assured. Business insurance covers fire and allied perils, loss of company equipment due to theft, third party liability if your business causes damage to public property and a professional indemnity cover.

Why Business Insurance?

You invest a lot of money in a business. You want to concentrate only on making a profit. You have uncertainty in the business environment which can affect your business. There is nothing you can do about these changes in the business environment. A business also faces risk to its location due to fire, flood or a natural calamity. This is true mainly for a manufacturing unit. Your business might face risk from theft of data by your employees.

Maximum sum insured depends upon the insurer. Based on your income, some insurers offer 60-100 times your monthly income. Others offer 8 to 10 times your yearly income as a sum insured.

You would have to pay a lot of money in compensation to your employees injured on duty.

The risk due to this uncertainly can be avoided by availing business insurance.

Home Insurance

The insurer bears the risk of damage and destruction to the structure of your house and compensates you for this loss. You have to pay a premium for the benefit. Based on the premium you pay the structure of your house is insured for an amount called sum assured. You can also insure the contents of your house with home content insurance under a householder’s package policy. If you stay in a rented house you can avail only home content insurance and not home insurance for the structure.

Why buy Home Insurance?

Protects your structure

Helps pay for the replacement of the structure of your home, if damaged in a natural or manmade calamity.

Protects your contents

A householder’s package policy, compensates you against damage and loss of the contents of your home.

Minimum It is very cheap

It can be very costly to repair the damage to the structure of your home. The premiums on home insurance are a pittance compared to this loss.

Special benefits

You can avail special cover for jewelry and precious items in your home. Alternate accommodation if your home is under repair.

Key factors to consider for Home Insurance

Take a basic fire and allied perils insurance policy

Lightening

Hit by an aircraft

Damaged in an explosion

Fire

Flood

Deliberately set on fire (arson and malicious intent).

Householder’s package policy

A much better home insurance policy for you is s a householder’s package policy. You have to pay a higher premium than a fire and allied perils policy. You are covered for damages suffered to the structure of your home by fire and allied perils.

You are also provided a cover for the contents for your home (Furniture, electronic items, jewelry, art) destroyed by a fire and allied perils, theft or burglary and mechanical and electrical breakdowns.

How does a home insurance policy pay you for damages?

You live in a posh area in a metro city. You have availed a comprehensive home insurance policy popularly called HPP (Householder’s Package Policy). Unfortunately due to a flood the wall of your house is severely damaged. So how the insurer does compensates you for the loss?

In a home insurance policy you are compensated only for the repair/reconstruction of the structure of your house.

Vehicle Insurance

There are thousands of reasons why you should actively protect your car and yourself in India.

Driving in India is a luxury that thousands of people partake of everyday. It is now quite simple to buy a car in the country, and with higher disposable incomes, most households are able to afford more than one car too. Having one’s car increases one’s mobility and eliminates dependence on public transport. However, driving in India also comes with its own perils. We often hear car owners rue traffic indiscipline; lack of legal enforcement by road authorities and myriad other complaints about that traffic scenario in India. Cases of road accidents and rule – breaking are reported in newspapers on a daily basis. Considering these factors, it is important to get car insurance right after one buys a car.

We present 5 reasons to get motor insurance in India

It pays for damage:

Not only are cars expensive, paying for their repairs is costly too. Sometimes, your car may be damaged due to someone else’s negligence. A car colliding with yours or you swerving to avoid a jaywalker and crashing into a wall, or even a stray cricket ball cracking your windshield can set you back by a considerable amount of money. However, if you have car insurance, you need not pay for these repairs by yourself.

It reduces your liability:

Taking third party liability (TPL) car insurance coverage is mandatory in India. The TPL policy you against the legal ramifications of an accident caused by you. For example, if you happen to cause an accident those results in damages to another person’s property or injuries to another driver/pedestrian, the insurance will pay for their treatment and save you from the legal repercussions of the case.

It pays for your hospitalization:

Not every car owner who suffers an accident is fortunate to get away with a few cuts and bruises. Some accidents result in fractures and other serious injuries that require hospitalization. Instead of shelling out the high hospital and treatment costs from your own pocket, you can get your motor insurance to pay these expenses.

It costs less when purchases online:

Buying motor insurance online results in lower premiums and hence, a cheaper policy. This is because the insurer has lower operating costs when transacting over the internet, and is happy to pass on the component of money saved on paying commission to a broker to the customer. Buying motor insurance online has other advantages, such as renewing the policy in minutes and paying premiums without any paperwork.

It compensates your family after your demise:

Business Insurance

Business insurance coverage protects businesses from losses due to events that may occur during the normal course of business. There are many types of insurance for businesses including coverage for property damage, legal liability and employee-related risks.

What is Business Insurance?

Risk is a part and parcel of a business and is unavoidable. However certain risks which a business faces can be avoided by insuring your business called Business Insurance. You pay a premium and insure your business for a sum of money called Sum Assured. Business insurance covers fire and allied perils, loss of company equipment due to theft, third party liability if your business causes damage to public property and a professional indemnity cover.

Why Business Insurance?

You invest a lot of money in a business. You want to concentrate only on making a profit. You have uncertainty in the business environment which can affect your business. There is nothing you can do about these changes in the business environment. A business also faces risk to its location due to fire, flood or a natural calamity. This is true mainly for a manufacturing unit. Your business might face risk from theft of data by your employees.

Maximum sum insured depends upon the insurer. Based on your income, some insurers offer 60-100 times your monthly income. Others offer 8 to 10 times your yearly income as a sum insured.

You would have to pay a lot of money in compensation to your employees injured on duty.

Current Account

Businessman in India makes a large number of transactions using banks, during the course of their business. They may deposit or withdraw money a number of times a day or a month. They need to open a current account. Businessmen find current accounts very convenient to receive payments from customers. No interest is paid on the current account. However lately some banks offer interest on current accounts, to lure customers to open current accounts with them.

Why take up Current Accounts?

Benefits Businessmen

You can withdraw money, without any limit, if you are a businessman. Your business transactions are executed swiftly.

The Overdraft Benefit

If your business I facing a shortfall of money, use the overdraft facility. You can overdraw from your account, to meet this need.

Proves Credit Worthiness

lenders willingly lend your money, if you have a current account. This serves as a guarantee that you have money to run the business.

Special features

You can use a zero balance current account, when you don’t need to maintain a minimum balance. You make optimum use of your money.

Eligibility for Current Account

If you are a resident of India you can open a current account. Usually opened by businessmen who do not get interest on these accounts. You need to maintain higher balance than a savings bank account. You have to pay a penalty if you do not maintain the minimum balance.

How to apply

You require an introduction from a person already holding an account/current account at the bank.

You need to have identity and address proof as part of the KYC (Know Your Customer), procedure.

Corporate Fixed Deposit

You can make a deposit with a company in a similar way to a bank fixed deposit. The company pays a slightly higher rate of interest on deposits made with them, then a bank fixed deposit for a fixed time period.

How safe are Corporate Fixed Deposits?

Health Insurance Plan

You have to pay a sum of money (Health insurance premium), to avail a health insurance policy. Your medical bills will be paid back to the extent you have insured yourself (premium you have paid). The health insurance plan pays your hospitalization expenses/bills, if you are hospitalized for at least 24 hours. You can also take a health insurance plan for your family under the family floater plan.

What are things to know before buying a Health Insurance Plan ?

Know the waiting period of your health insurance plan

A health insurance plan has a waiting period of 1 month after you avail it. The health insurance plan will not pay your medical bills for any disease you contract, within a month of taking up the health insurance plan.

Gold Loan

You can avail a loan from a bank or an NBFC by pledging your gold. You can pledge your gold coins or gold jewelry and avail a gold loan from a bank. The gold has to be of purity 18-24 carats. You can pledge only gold jewelry to avail a gold loan from an NBFC. The amount of loan you avail In India, tradition demands that gold be collected and accumulated in the family. This means you can easily avail a gold loan with this family gold. You get an LTV (Loan to Value) ratio of 75%. You get INR 75 for every INR 100 you pledge.

Why avail Gold Loan?

Low Interest

you can preserve your savings and still provide for the costly education of your children. You don’t have to break your fixed deposits.

No credit History

Banks offer education loans at lucrative interest rates. No collateral for education loans up to Rs. 7.5 lakh.

High Margin

you don’t have to repay the loan until you finish your studies. Repayment is after completion of the course, or getting a job.

Easy Repayment

you can claim a tax deduction on the interest portion of your educational loan. Tax deduction for a period of 8 years, after you start paying back the educational loan.

Key factors to consider for Gold Loan

Rural areas

If you reside in a rural area, you can easily avail a gold loan from an NBFC (Non Banking Financial Company).

The documentation is much faster if you avail a gold loan from a NBFC rather than a gold loan from a bank.

Remember: The NBFC charges you a higher rate of interest on the gold loan than a bank. The interest charged by the NBFC could be around 22-24%.

Another benefit you get from availing a gold loan from a NBFC is you have to only pay the interest amounts regularly on the gold loan.

You pay the Principal (Borrowed amount) back, at the end of the term (tenure of the gold loan) and reclaim your pledged gold jewelry.

There are no processing charges and pre payment penalty, if you avail a gold loan from an NBFC.

Gold Loan

Banks and NBFCs give you loans against loan. Borrowers can pledge gold coins or gold jewelry and avail a gold loan. The purity of gold has to be between 18-24 carats.

Gold loan is a product designed to provide liquidity against gold ornaments without having to sell them. Gold ornaments lying idle can be put to better use by availing loan against gold ornaments.

Gold loan will be sanctioned on submission of all the required documents and satisfactory assessment of gold ornaments. Typically, gold loans have tenure of one year. This can be further extended.

Eligibility for Gold Loan

The borrower should be in the age group of 18-65 years.

Maximum age of applicant at loan application should not be more than 65 years.

The purity of gold ornaments should be 18 carats and above.

The gold jewelry should be owned by the borrower or any of the family members.

Advantages of Gold Loan

No income proof is required to apply for a Gold Loan.

Banks don’t check credit history to grant Gold Loan.

Gold Loan has less documentation.

Gold Loan interest rates are low as compared to personal loans.

Agricultural loan against gold is available for an agriculturist at a nominal rate of interest of 7-8% per year.

In case of NBFC, borrower will have an option to pay only interest during the tenor of the loan. At the end of the tenure, the borrowed amount is to be repaid in a single shot.

Gold loan takes less processing time.

Life Insurance

Life Insurance is an agreement or a long-term contract between the life insurer and the policyholder. It guarantees compensation on loss of life within the term of the plan, in return for a specified premium. The beneficiary/nominee whose name has been mentioned in the contract gets a specific sum called sum assured from the insurer, on death of the policyholder, within the term of the plan. A Life Insurance Plan gives adequate security to your family on an unexpected demise. Money can never compensate the loss of a loved one. But, there’s no need for your family to suffer financially. You enjoy peace of mind knowing your family is secure.

Why Life Insurance?

Your family enjoys financial security in your absence. Your wife gets the money to meet daily expenses and pay back loans like home loan, car loan and any other liability. Your children enjoy a quality education and there’s money for their marriage.

Life Insurance is a contingency plan for death and family’s financial security.

Life Insurance must be availed for risk protection. Your family gets the money on an unexpected demise.

Life Insurance also has savings and investments plans. They invest your money in equity or fixed income.

The loan facility is available against Life Insurance Plans. You can assign the Life Insurance Plan and take a loan against it.

Life Insurance enjoys tax benefits. You get tax deductions under Section 80C of the Income Tax act up to Rs. 1.5 lakhs a year.

Life insurers offer annuity plans for retirement. Annuity plans give you regular income after retirement.

Terms of Life Insurance

Insured: This is the person whose life in being insured under the Life Insurance Plan. If the person availing the plan is different from the person being insured, the buyer is the proposer of the plan. The proposer must have an insurable interest in the person being insured under the plan.

Term of the contract: This is the time period of the Life Insurance plan or the period when Life Insurance is available. The life insurer specifies an upper age limit (maximum age), when the term of the policy ends.

Terms of Life Insurance

The payment of sum assured takes place on death of the policyholder or expiry of the policy term. The mode of payment of the sum assured is either through a lump sum or in periodic installments. This is specified under the contract. Premium paid:The premium paid depends on sum assured. Premiums could be monthly, quarterly half-yearly or annually and is clearly mentioned in the contract. Some Life Insurance Plans have a single premium paid at the start of the plan. A grace period is provided for delayed premium payments. You can revive the Life Insurance policy within the time frame specified by the Life Insurer, on payment of pending premiums + penalties.

Bonus in Life Insurance

Life insurers periodically announce a bonus, as a percentage of the sum assured. This amount is added to the sum assured and paid to the policyholder on maturity of the plan. This amount is paid on maturity or in case of death within the term of the plan, the sum assured + accrued bonus is paid by the insurer.

Types of bonuses under Life Insurance

Guaranteed Bonus:

Guaranteed bonus is paid as a percentage of the sum assured. It’s paid for the first few years of the Life Insurance Plan, say 5 years. The guaranteed bonus is received at the end of the term of the plan. Reversionary Bonus:

An insurer declares a reversionary bonus, if it performs well. This bonus is completely at the discretion of the insurer. The bonus is declared after the completion of the guaranteed bonus period and is applicable only on participating policies.

What is surrender of a Life Insurance Plan?

If you surrender the Life Insurance Plan before the full term of the plan is completed, you get a portion of the money paid in premiums, after certain charges are deducted. If you decide to terminate the Life Insurance Plan before maturity, the insurer pays you (policyholder), what is known as the surrender value.

A surrender charge is deducted which varies across Life Insurance Plans. You can surrender traditional Life Insurance Plans. These are whole Life Insurance Plans, money back plans or endowment plans. Life insurers cannot levy surrender charges if you terminate the plan after 5 years as per IRDA rules and guidelines.

Types of Surrender Value

Guaranteed Surrender ValueYou get guaranteed surrender value only after paying at least 2-3 annual premiums. If the premium paying term is less than 10 years, your Life Insurance Plan acquires a surrender value after paying two annual premiums. If the premium paying term is more than 10 years, your Life Insurance Plan acquires a surrender value after paying three annual premiums.

If you surrender the Life Insurance Plan after 3 years, the life insurer has to pay at least 30% of the total premiums, excluding the premiums paid for the first year. Any additional premium paid for riders and bonus that you have received from the insurer, is excluded.

If you terminate the Life Insurance Plan after 4-7 years, you get 50% of premiums paid.

If you surrender the Life Insurance Plan in the last two policy years, you get up to 90% of the premiums paid.

Special Surrender ValueThis surrender value depends on sum assured, term of the plan, premiums paid on the plan and bonuses. You can calculate special surrender value by

Special surrender value = Surrender value of the Life Insurance Plan = [{(Number of premiums paid on the plan / Number of premiums payable on the plan) * Sum Assured of the plan} + Accumulated Bonus on the plan] * Surrender Value factor.

Business Insurance

Business insurance coverage protects businesses from losses due to events that may occur during the normal course of business. There are many types of insurance for businesses including coverage for property damage, legal liability and employee-related risks.

What is Business Insurance?

Risk is a part and parcel of a business and is unavoidable. However certain risks which a business faces can be avoided by insuring your business called Business Insurance. You pay a premium and insure your business for a sum of money called Sum Assured. Business insurance covers fire and allied perils, loss of company equipment due to theft, third party liability if your business causes damage to public property and a professional indemnity cover.

Why Business Insurance?

You invest a lot of money in a business. You want to concentrate only on making a profit. You have uncertainty in the business environment which can affect your business. There is nothing you can do about these changes in the business environment. A business also faces risk to its location due to fire, flood or a natural calamity. This is true mainly for a manufacturing unit. Your business might face risk from theft of data by your employees.

Maximum sum insured depends upon the insurer. Based on your income, some insurers offer 60-100 times your monthly income. Others offer 8 to 10 times your yearly income as a sum insured.

You would have to pay a lot of money in compensation to your employees injured on duty.

The risk due to this uncertainly can be avoided by availing business insurance.

Why buy Business Insurance?

Protection from fire

Compensation available to the location of the business, furniture and also costly office equipment if destroyed in a fire.

Lifelong Compensation to workers

Your workers is compensated, if they suffer on the job injuries. Workers compensation is compulsory in India.

Protection from theft

Your business is compensated from any theft, burglary or robbery on the business premises.

Professional Indemnity

Compensation to clients and legal fees taken care of, if errors, omissions or negligence by the business, results in a loss to the client.

Types of Business Insurance

Property Insurance

Protects against damage to business location. It can also insure the property of others in your control when the loss occurs. Property insurance can be for a specific risk. For example, a fire insurance policy insures only against a fire loss to the location. A cyclone is not a fire and therefore, that loss would not be covered. The insured location may be owned, leased or rented.

Causality Insurance

Protects against damage to business location. It can also insure the property of others in your control when the loss occurs. Property insurance can be for a specific risk. For example, a fire insurance policy insures only against a fire loss to the location. A cyclone is not a fire and therefore, that loss would not be covered. The insured location may be owned, leased or rented.

Liability insurance

Liability insurance insures against liability legally imposed upon your business because of the negligence of the business or its employees. Put in another way, it protects your business when the business is sued for negligence.

Worker compensation

You will need to insure your employees against on-the-job injuries. Most states in India have put into place some form of worker’s compensation system. Worker’s compensation is a system where the employee is not allowed, by statue, to sue their employer for on-the-job injuries; but, in return, the employer must participate in a system that provides nearly automatic payment to the employee in case of injury for medical bills and damages. There are many options for worker’s compensation coverage. Some states allow an employer to opt-out of the system if the employer is self insured, some run the system through private insurers while others use state agencies.

Business interruption insurance

Protect against loss or damage to cash flow or profit caused by business being unable to operate because of interruption. The easiest example is to think about a critical piece of machinery being struck by lightning. The repairs to the machine may be covered by other coverage such as property or casualty insurance.

Commercial Vehicle Insurance

Travel Insurance

You book yourself a holiday abroad, or want to travel within the country. You need to insure yourself against a medical emergency while travelling or in the country you are holidaying, loss of baggage, passport and so on. The travel insurance plan compensates you for this loss.

Why Travel Insurance?

Medical ailments may force you to cancel your trip, which will result in heavy cancellation penalties. Such scenarios are covered to a certain degree by Travel Insurance. Losses incurred due to missing flights, delays and missed connections. Loss of Baggage could create serious issues. Travel Insurance helps in covering the cost of baggage and transport to the intended port. In case baggage is permanently lost, travel insurance will help you cover the necessary costs. Ailments suffered during the trip can result in heavy medical bills. Travel Insurance helps tide over such costs. Some Travel Insurance policies help cover the losses incurred if an airline, cruiser or hotel defaults on their commitments. Acts of Terrorism or war are also covered by Travel Insurance.

Why buy Travel Insurance?

Medical Costs

Travel Insurance pays your costly medical bills and hospitalization expenses, even in a foreign country.

Missed Connections

Travel insurance pays you, if you miss your connecting flight in a foreign country or for bail if you get arrested in a foreign country.

Baggage Loss

You are compensated for the loss of baggage or your passport in a foreign country.

Emergency Evacuation

You are compensated for any emergency evacuation, especially storms and hurricanes in a foreign country.

Eligibility for Travel Insurance

Domestic travel insurance can be purchased by any Indian national travelling within India. If any foreigner passenger is travelling in India and has received work permit in India, he can also purchase domestic travel insurance. The eligibility age can be anywhere between 6 months and 65 years and varies from plan to plan. The coverage provided depends on various factors, such as your medical condition, the place you are travelling to and the length of your trip.

Key factors to consider for Travel Insurance

Factors to consider while buying Travel Insurance

The destination is the first major factor you must consider while buying travel insurance. Medical expenses in countries like USA, Canada and Greece are expensive. The sum assured must be high if you are travelling to these countries.

The duration of the trip is another important factor you must consider. The longer the trip, the higher the sum assured.

If you’re involved in adventurous activities like trekking, skiing and water sports, a higher sum assured must be availed.

Home Loan

A home loan is an amount of money that an individual borrows from a bank or money lending company at a certain rate of interest to be paid with the EMI every month. The property is taken as a security by the money lending company from the home loan. The property can either be commercial or personal in nature. When the borrower cannot pay the dues, the lender will possess all the legal rights to recover the outstanding loan amount by sale of the property in question.

Types of home loans

Home purchase loan

This is the loan that one takes for purchasing a home.

Home improvement loan

This loan covers expenditure related to repairs of your home or even renovation.

Home construction loan

This loan comes in handy when you are building a new house.

Land purchase loan

Someone wishing to buy a plot for construction his/her own house can avail this loan.

Home extension loan

Suppose you plan to add another room, garage, bathroom or kitchen to your home. This is the loan that you should apply for and this also comes in handy if you are planning to have another floor.

Joint home loan

These are loans taken by two people or even more. For instance, spouses can apply for joint home loans.

Home loan balance transfer

you can use this mechanism to switch your outstanding loan amount to a difference lender with better terms and conditions and lower interest.

Top up home loan

Public Provident Fund

You invest your money in a PPF. You get interest on the money; you invest in the Public Provident Fund. On maturity of the PPF, you get your principal (money you have invested), back along with interest. You can make up to 12 transactions a year. Minimum amount: You can invest a minimum amount of INR 500 in a year in a PPF. Maximum amount:You can invest a maximum amount of INR 1.5 lakhs in a year in a PPF. Lock in: The PPF has a lock in period of 15 years. You can extend your PPF in blocks of 5 years, with or without making a further contribution. If you continue your PPF after 15 years without making any contributions, you can withdraw any amount from this account, subject to a single withdrawal a year. If you continue your PPF after 15 years and you make contributions (invest money into the PPF), then you can withdraw up to 60% of the amount in the PPF account, at the beginning of the 5 year block.

Why invest in Public Provident Fund?

Safety with returns

The investment you make in a PPF is not only safe, but also gives high interest. The interest you get is unmatched among fixed income securities.

Pledge as Collateral

You can pledge the amount in your PPF up to a certain limit and avail a loan. This loan being secured, you pay a lower rate of interest.

Tax Benefits

You get a tax deduction on the amount you invest in a PPF. You also get an EEE benefit, which signifies a complete tax exemption.

In Minor’s name

You can open a PPF in the name of your minor child. Helps you save for your child’s education and marriage.

Eligibility for Public Provident Fund

You need to be an Indian citizen to invest in the PPF. This account can be opened only in the name of a single holder and no joint account is permitted. The account can be opened in the name of a minor, by parents or legal guardian. An NRI and a HUF is not allowed to open a PPF account. A resident turned NRI is able to invest in the PPF account, through NRE/NRO bank accounts till maturity. After the completion of 15 years the amounts can be remitted to the host country. No extension is permissible for the NRI beyond the 15 year term. The amount is not taxable in India but might be taxed in the country of residence.

How much interest can you get from the PPF?

The interest on the PPF is calculated on the lowest balance between the 5th and the last day of the month. The interest rate payable by the PPF is linked to the Government securities rate.

PPF enjoys EEE exemptions

“EEE” means exempt exempt exempt. The PPF enjoys a deduction under Section 80 C of the Income tax act up to INR 1.5 lakhs a year. You can invest a maximum amount of INR 1.5 lakhs a year in a PPF and avail a deduction under Section 80 C of the income tax act on the full amount invested.

The money accumulates with time (increase as you get interest on this amount over 15 years) and no tax is charged on this amount. The money you withdraw on maturity is tax free.

PPF has a new name. Riskless and tax less.

How to apply?

A Public Provident Fund can be opened at any branch of the State Bank of India or its subsidiaries. It can also be opened at any post office and some nationalized banks, which even allow you to open an account outline.

The Public Provident Fund form can be downloaded from the SBI website. A photograph and a PAN card are necessary. An identity and residence proof is must. A passbook is given to you, which has all subscriptions, withdrawals, interest accrued and loans which are recorded.