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POINTS TO KEEP IN MIND BEFORE TAKING A LOAN AGAINST LIFE INSURANCE POLICY

Posted on Friday May 29th, 2020

Whenever in your life, you find yourself in a financial crunch where your savings are not enough to cover up the expenses then having an insurance policy can help you to take loan against it. Life insurance policies are known to have lots of benefits over credit cards or traditional loans. Therefore, you can apply for loan against life insurance policy. Your policy will be pledged as security and desired loan quantum will be disbursed to you. However, before taking this loan, you must weigh your options if you are unable to pay the interest on it as these loans will come with certain liabilities if they are unpaid. We have listed some points to keep in mind before taking a loan against Life Insurance Policy to secure you in financial emergency.

1. No credit history needed: Life against insurance policy is very easy to get as there is no credit history needed for it. If you have a good cash value in your policy, you can take a loan with bad credit also but it should be noted that death benefits on your policy may reduce if your repayments are pending at the time of policy claim.

2. Low interest rates: These loans come with possibly low interest rates. You can borrow required funds under the total amount of cash value of your policy. You must remember that the interest rate on loan is generally taken from your permanent policy’s cash value.

3. Slow cash value: Your policy must build in value before you take loan against it. You cannot borrow during the early years as there may be little value of it. You must remember if you default then your policy gets lapsed and you may have to pay some tax over the unpaid portion of loan. Therefore, set a repayment timetable according to your convenience.

4. Unpaid interest can cause trouble: If you are paying the interest out of your budget, you have little to fear but if your insurer is paying with dividends, you may be headed towards some serious problem because unpaid interest can be accrued as income and get added to loan balance. Once the amount gets bigger than the money you borrowed, you will have to pay back the entire amount.

5. Decreased assets: You need to be pretty sure when you take a loan against Life Insurance Policy as lenders will give you many options to choose from. Your policy’s cash value will be pledged as collateral for your loan. The important thing to keep in mind is that once you take this loan, there will be fewer assets to borrow against them in the future. This loan is suitable for the individuals who are facing the unexpected debts and do not afford the costly personal loan.

At the end, availing a loan against insurance policy can be a best choice than availing a personal loan as the interest rates are lower in the former case. Moreover, taking such a loan, you may approach your insurer to secure it rather than trying it from other lending institutions as opting with insurer will get you some flexibility on repayment period and rate of interest will also be low.


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WHY HEALTH INSURANCE PLAN FROM SHUBHBANK IS A GREAT DEAL

Posted on Thursday April 16th, 2020

Nowadays, with an outbreak of COVID-19 all over the world, every individual have realized the importance of health insurance in their life. A Health Insurance Policy is a necessity of modern times as it provides you the financial protection in big medical emergencies or routine ailments. It has become priority that we simply can’t live without blaming it on high rising healthcare facilities. A health insurance plan covers cost of an insured person’s medical expenses in the hospital. As we know, health complications grows more as we grow older so it is better to start it at early age because most of the insurance companies charge lower premiums from the young. So choosing a right med claim policy can be a tough and mind boggling. Here are some essential factors to inform you why health insurance plan from ShubhBank is a great deal to reap the good benefits.

1) Co-Pay term: It is the fixed percentage of hospital bill you have to pay out from your own pocket. For instance, if your plan has a 20% co-pay clause, you have to pay Rs. 200 on a bill of Rs. 1000 and rest will be paid by insurer to the hospital. If you choose a no co-pay policy then you don’t have to burn a hole in your pocket.

2) Coverage Duration: Most of the individuals do not require any medical assistance till the age of 40, so always choose a plan that provides you lifelong coverage. This way you can keep the financial worries far away when your health begins to deteriorate as your hairs grow grey.

3) Waiting Period: Be aware, the expenses related to your pre- existing disease will not be covered in policy from the day you buy the policy. In such cases, you have to wait for a specific period. Before you apply for Health Insurance Plan at ShubhBank, make sure to check the duration of waiting period to get covered for the ailment you are suffering from.

4) Rent of Room: The kind of room you get admitted in hospital matters incredible as your health insurance is concerned. Always check the sub limit on room rent because if you exceeded it, the insurer will end up reducing the sub limits for other medical expenses.

5) Pre and Post Medical Expenses: Pre medical expenses will cover all the series of medical tests of insured person before getting admitted to a hospital while Post medical expenses cover all the charges incurred by a person after getting hospitalized.

At the end, we can say that if you know your policy better, then there are greater chances of claiming benefits from your insurance company. Before you sign up for health insurance from ShubhBank, we advise you to read the terms and conditions carefully, check the list of inclusions and exclusions, compare the different policies offering different benefits and choose the right one that suits best to your requirements and make a wise move.


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WHAT IS THE NEED OF TERM INSURANCE PLANS IN LIFE?

Posted on Monday February 10th, 2020

It is an insurance policy that provides the fixed coverage to the insured for a fixed period of time at fixed rate of payments. In any causality or demise of the person during the policy term, the insurer pays a pre-decided amount of money to the nominee. Some insurance companies in the market also provide coverage in case of full or partial disability. Don’t take it as a financial instrument to generate wealth during the lifetime. The policy holder pays a certain amount of money annually as premium since the start to end of the policy, and in case of death or disability resulting in loss of regular income; the insurer pays coverage to the nominee either as one-time payment or in lump sums. Let us understand the better way that what is the need of term insurance in life?

Availing this insurance will benefits the family dependents of insured person even after they are gone. Every person who has dependents in their family such as parents, spouse, and children should definitely by a Term Insurance Plans. It is catered especially for those who are only one to earn bread and butter for their families and have dependents that will face the money crisis after your job loss or demise. The coverage amount received from policy in that case can be used for daily expenditures, higher studies or wedding expenses of their children.

Features of a Term Insurance Policy
The key features of this insurance plan which one should look for before buying it are:

Assured Sum
Assured sum in the plan is the amount of money that is payable to your nominees/dependents after the insured person’s demise.

Age
Every person in the age bracket of 18 to 65 is eligible to Buy a Term Insurance Plan.

Maturity age of Insurance
The age at which an insurance policy expires is known as maturity age of the policy. Generally, most of the policies have a maturity age of 75 years but a few may even go up to the age of 85 years.

Policy Tenure
The duration for which an insured has coverage is known as the tenure of the policy. For instance, if a person having age 40 years want to opt for a term plan with a maturity age of 75 years, then, in this case, he will have tenure of 35 years. The tenure period of a term plan may range from 10 years to 40 years depending upon particular insurance company.

Claim Settlement Ratio
Before choosing a term insurance plan, you must ensure that you are buying it from an insurer who is offering a higher claim settlement ratio. This ratio implies the percentage of claims that the insurer offers to policy holder, so one must choose an insurance company on the basis of its claim settlement ratio.

Health Check-ups
The insurer may ask you to undergo some health tests while applying at a certain age or in need of high insurance cover.