The best thing about new private sector players enteringthe market is not just the variety of products they offer but also theinformation they are willing to share. The first thing you should remember whenopting for a policy is that it's not only for your benefit but also for thebenefit of those who depend on you -- your wife, your parents, or your children.In case something unfortunate happens to you, it's your family that will have toface the financial crisis. Who will take care of your parents in their old age,who will take care of your children's education, marriage etc? We're not tryingto scare you into taking insurance, but just trying to remind you that insurance is a wise option every family person should choose. Your insurance amountdepends on your present and future earnings and the size of your family.According to experts, roughly 15 times your annual income should be devoted toinsurance policies.
Most people complain about the cost of their auto insurance, hardly surprising when you consider how steep the cost of a typical policy is. Depending on your age, driving record, and other factors, your annual premium can vary dramatically. So how can you lower your premium and save yourself money?
Here are 11 useful tips on lowering your premiums -
1. Shop around. One of your first steps should be to shop around. A particularly good time to investigate your alternatives is when your current policy is about to be up for renewal, especially if you find that your premium has gone up. You may be surprised to learn that auto insurance premiums for the exact same coverage on the same car can vary widely between different insurers.
2. Increase your deductible. For many people, raising the deductible on their auto insurance is a good way to cut the cost of the policy. If you do this, however, make sure you have the financial resources to handle the larger deductible when the time comes.
3. Keep an eye on your credit report. Your credit history is an important factor for most auto insurance companies. Many studies have shown a correlation between your credit history and the risk to an insurance company. Paying your bills on time and maintaining a good credit history will allow you to enjoy lower auto insurance rates.
4. Drive less. If you drive for less, you may qualify for a low-mileage discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, use public transportation instead of driving. When you go away on vacation, fly or take the train.
5. Don't use your car for business purposes. Since work-related driving generally subjects you to higher premiums than pleasure driving, it may be in your best interest to stop using your car for business purposes.
6. Drive more safely. You may be eligible for a price break on your policy if you maintain a clean driving record for a specified period (usually three years). A clean driving record generally means no accidents, moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.
7. Buy a low-profile car. Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals, and because statistically, the people who own them tend to drive more recklessly. If you own such a vehicle, you will likely pay a higher premium than if you owned a more practical, low-risk vehicle.
9. Keep your car in a garage. Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction.
10. Have safety/anti-theft devices installed. You may receive discounts on your insurance if your car is equipped with one or more of the following options: anti-lock brakes, automatic seat belts, and airbags. Similarly, anti-theft devices such as car alarms and tracking systems may also get you a discount because they reduce the chances of your car being stolen or vandalized.
11. Inquire about multifamily/multi-policy discounts. You may receive a discount from your insurance company if you buy more than one type of insurance through that same company (e.g., auto and homeowner's). A discount may also apply to your auto insurance if you insure multiple cars under the same policy or with the same company.
Insurance is one of the least understood modes of investment. Most people scoff at the idea because they think that they will only get access to the benefits while taking their last rites! Nothing can be further from the truth.
So what is the concept of insurance all about?
Insurance protects you, your car, your business i.e. whatever you wish to protect against potential losses or damage. For instance if you insure your car or your house, in the event of an accident or a fire, you can stake a claim to a certain amount of money, which will bail you out of financial worry.
As the consumer, youpay a premium (a certain amount of money) to the insurer to transfer the risk.The insurer pools all its premiums into a collective fund. When any policyholderhas a loss, the insurer draws out from the fund pool to accommodate the loss.
While insurance coverage is essential, how much and what type of insurance you need depends on your circumstance. For instance the amount and type would depend on whether you are single or married, have a huge family to support (especially if you are the only earning member) etc.
Nowadays, insurance isvery affordable because you pay the premium in installments, and accessible,because there are so many players in the market. The earlier you get aninsurance policy, the better.
An insurance product is much morethan an instrument of financial security. It can even prove more effective thanmany other savings plans. Remember that a bank fixed deposit, PPF, Units etc payonly the actual amount invested even if you happen to die prematurely. A lifeinsurance policy on the other hand pays the assured sum along with a bonus (viabonus policies) even if you expire before the end of the payment term. Now,isn't that greater security for you and your family?