How General Insurance Helps You Save Money And Taxes?

  • 2 years   ago

Everybody wants to minimize the risk factors associated with their and their loved ones’ lives, and this is why the insurance policies are so at demand. Insurance policies go hand in hand with our planning of life as well as finance, and we indulge in having the policy to safeguard ourselves and our family members to keep them safe from any kind of harm. There are different kinds of insurance policies available; such as Life Insurance, Medical Insurance, General Insurance, and so on. A General Insurance is basically defined as a non-life insurance policy which covers for the losses of a particular financial event.

General Insurance: A Brief Overview

General Insurance, as it has been already mentioned above is an insurance policy which provides or covers for the payments which appear during the losses of a financial event. General Insurance also includes policies regarding automobile, as well as homeownership. It is known by different names in different continental regions. In America and Canada, General Insurance is known by the name of Property or Casualty Insurance, and in continental Europe, it is known as non-life insurance.

How General Insurance helps you save money & taxes?

General Insurances is not only helpful in ensuring oneself and family from the potential risks but is also quite useful in saving money and deduction of taxes. Among the categories of General Insurance, it is the Health Insurance which can provide with tax benefits for the insurer. On the basis of Section 80D of Income Tax Act, 1961, the amount spent on the health insurance plan can qualify as a deduction and can be taken against the taxable income of an individual. However, it must be noted that the premium is needed to be paid during that particular financial year.

The amount which is allowed to be deducted under this section 80D is Rs, 25,000 (maximum) and this amount can be extended up to Rs, 30,000 in case of a senior citizen. Moreover, it has been decided and is quite good news that the amount of Rs, 30,000 are now allowed to be extended up to Rs 50,000 in case of the Senior Citizens as per the announcement in the Budget 2018, and it will be in effect from the financial year of 2018-2019.

Thus, this allowance means that if a person is paying for himself and his senior citizen parents’ Health Insurance Policies, he will be allowed to have a deduction of Rs, 75,000 in his tax, in that particular financial year.

Things to Keep in Mind while claiming Tax Benefits

There are a few things which are needed to be kept in mind in order to avail the tax benefits through the General Insurance Policies. These are given as follows:

  • Remember that the amount of the premium should not be paid in cash. If done so, you would not be able to claim the deductions in the tax.
  • Do note that a person can only claim the benefits on the premiums paid for himself, or his spouse and children, and his parents.
  • The deduction of the taxes has been made available for preventive health checkups which are subjected to a maximum amount of Rs, 5,000.

The Health Insurance Policies for the Disabled Persons

The Section 80D of the Income Tax Act, 1961, has allowed a deduction on the tax based on the premium paid for a disabled person. It is limited to Rs, 50,000 per financial year. This deduction is extended up to Rs, 70,000 if the person is suffering from a severe form of disability.

Other Insurance Policies that can be useful in saving Taxes

Apart from General Insurance, your policy of Life Insurance can also save money and induce deductions on your taxes. The method is quite simple to follow through. All you are needed to do is buy a policy of Life Insurance by the payment of a premium and this amount of the premium will be cut off from your income when the tax will be calculated. The maximum amount to which you can deduct the tax by buying this Life Insurance Policies is Rs, 1.5 Lakh. By lowering the figures for your income, your tax will deduct too. So, if you buy a policy worth Rs, 1.5 Lakh, then you will be able to deduce the tax up to 30% of that amount which means you will be able to save up to Rs, 45,000.

Categories of General Insurance

General Insurance can be categorized in the following manner:

  1. Motor Insurance: Motor Insurance is a policy which compensates for the damage or loss of the insured automobiles. This insurance can be further divided into two groups: two-wheeled vehicle insurance, and four-wheeled vehicle insurance.
  2. Travel Insurance: This insurance policy can be further divided into four types; namely, individual travel policy, family travel policy. Senior citizen travel policy, corporate travel policy, and student travel policy.
  3. Rural Insurance: This policy covers for the rural people and their business of cattle, farming, poultries, and so on.
  4. Home Insurance: This policy covers for the home and its assets.
  5. Health Insurance: There are various kinds of health insurance policies available such as individual health insurance policy, surgery cover, comprehensive health insurance, senior citizen health insurance, hospital daily cash allowance, critical illness, personal accident, and family floater health insurance.
  6. Commercial Insurance: This insurance policy covers for all the business sectors and protects them from losses. The insurance provides with the solution for automotive, aviation. Textile, telecom, transport, logistics, enterprises of small and large sectors, and so on.

The following types are comprised of Commercial Insurance:

  1. Property Insurance: This Insurance covers for the property and its contents.
  2. Marine Insurance: The insurance which covers and compensates for the goods in transit by rail or road or sea or air, such as freights, cargoes, and other articles.
  3. Liability Insurance: It covers for the damage or loss of someone else’s property or injuring someone out of negligence.
  4. Engineering Insurance: This policy covers for the engineering instruments and sites such as the construction project, installation project, and the equipment used in the project.
  5. Energy Insurance: This policy covers the risks faced by the energy-providing industries.
  6. International Insurance Solutions: This policy is a cross-border regional insurance intermediary which minimizes the risks face by the international companies.

How to purchase the Best Insurance Policies?

The façade of being the best is inherent in every insurance company, but in order to purchase the best and the authentic policy to cover for the risk factors which we might face in the future, we need to take a look into the claim settlement of that company. You should always keep in mind the particulars of the claim settlement ratio which refers to the number of claims which has been settled by the company successfully to the total number of claims documented in a particular financial year. Plus, you are also needed to take note of the incurred claim ratio. Incurred claim ratio can be defined as the total number of the amount spent on claims to the total amount earned in the form of premium by the insurance company in a financial year. And last but not least, do mind the particulars of the claim settlement turnaround time, which refers to the span of time between the filing of a claim and its settlement taken by the company.

The New India Assurance Co. Limited

New India Assurance is a company which provides with General Insurance. You can, here, convert your approved quote into an active policy instantly by paying online through the debit/credit cards, whichever you find convenient. The company offers both quick payments as well as New India Assurance Renewal through the online mode of payments.

If you already have a premium policy which is needed to be renewed, you can access the procedure of renewal on the website of New India Assurance which is very quick and the guidelines are much easier to follow.

Given below are the steps to New India Assurance Online Renewal:

  1. Enter the Customer ID and the Renewed Quote Number which you will receive through an SMS or your old policy number.
  2. Check your details and Save that quote.
  3. Click Proceed.
  4. Pay your premium by using any of the online modes of payment such as Debit Card/ Credit Card/ Net Banking.
  5. With the success of the payment, your renewal of the policy will be completed.

Note: Remember that the Customer ID is not your Login ID. It is the ID which is mentioned in the document of your policy.

So, hopefully, now you have understood that the insurance policies can do more than it is generally known about them. File and get your insurance policies now to secure the future of yourself and also that of your loved ones to keep them far, far away from any kinds of risk or danger; and in this way, also save some money by availing the tax benefits.

Source: General Insurance