Terms plans – often termed as cheapest form of insurance are a low premium , higher cover , longer coverage insurance product with an ease of buying online. It is heartening that more and more consumers are looking to buy ‘term insurance’ and keeping their insurance and investment needs separate. Term life insurance policies provide financial security for families in the event of the insured’s death. Coverage lasts for a set period or term ; policy owners can buy term insurance for 5, 10, 20 or even 30 years. Once the term of the policy expires, the coverage will be terminated. Term policies are inexpensive compared to permanent life insurance plans. Term life policy owners may also benefit from the simplicity and flexible nature of these insurance plans.
For beginners , pure term insurance policies , pay the sum assured (or insurance cover) only on the policyholder’s death. The policies don’t have any investment component. That means that if the insurance buyer survives the term of the policy , he doesn’t get anything. However one has an option to add additional benefits such as accidental death and disability benefits and health riders with the basic term insurance policy.
For regular premium policies , the premium once fixed at the time of purchase of the policy remains the same throughout the premium paying term of the policy. If the insurance company experiences adverse morality – that is more deaths that what it has assumed at the time of product filing – the company may choose to increase the premium for the new customers. In India over a period of time , the morality experience has been improving for the life insurance companies , which is getting reflected in the low premiums for term life insurance covers.
Increased competition in Indian insurance market consisting of more than 20 private insurers have resulted in term plans being available at attractive rates to what they were couple of years ago.
What should i get at end of term-plan policy? - like questions shouldn’t crop in. while buying a term cover Here you have bought a term cover and your dependents will be compensated if something happens to you during the term of the cover. If you outlive the policy you won’t get anything at the end of the policy.
Why term plans make sense :
(a) Lower premiums : The premium is lower by up-to 40% compared to earlier rates.
(b) Higher Cover : Companies are encouraging buyers to take a higher cover. If a 25 lakhs cover is for INR 3,695 , a 1 crore cover costs INR 9706.
(c) Longer Coverage : Cover can be taken till up-to 75 years of age as compared to 60-65 earlier.
(d) Buying ease : Online term plans can be bought by individual himself.
Things to remember while buying term insurance :
(a) Adequate Cover : Make sure cover is large enough.
Expert advises a life cover of 12 times your annual income minus your investment assets plus any liabilities (includes amount of your outstanding loans). Life insurance is required in case you are earning with your effort and have dependent family members. If that’s not the case you don’t need life insurance.Young unmarried earning members with no dependents , children , homemakers , retired people don’t need life insurance. Make sure you take into account inflation , possible increase in salary and changes in life style of your family.
The loan burden (ongoing housing/ personal loan, etc.) that will fall on the family post your lifetime, the impending cash requirements for children’s education, wedding, healthcare needs of the spouse and other dependents in the family and so on are some of the things that should determine the sum assured of a term life policy.
On claim, the benefit under a term policy will be paid as a lump-sum to the insured’s nominee or the beneficiary of the policy. And the good news here is that this lump-sum amount doesn’t fall under the tax net. Insurers give term life policies for a maximum tenure of 30-35 years now.
The policy’s premium will rise as the sum assured increases and the insurer may also require a medical check-up. For a male aged 30 years and a sum assured of Rs 30 lakh, the premium of a pure term policy is around Rs 5,000-8,000 (for a term of thirty years) now. And, if you are looking to buy a rider with the policy – say a personal accident cover, then cost will add up further.
(b) Choose Maximum Term : Pick the maximum term as buying a fresh plan later in life will be costly. Ideally tenure of policy should be retirement age minus you present age. This means if you are 30 now and wish to retire at 60 , term of policy should be 30 years. Buy a cover that will offer you protection till you retire.
(c) Cover Loans Too : If you have big ticket debts , cover them also. You can choose a plan where cover progressively decreases.
(d) Review Cover : At every life stage (ideally 3-5 years) , review your existing life cover and attune it to current needs. Over the period your personal circumstances , income , assets , liabilities would have gone through certain changes. So its always good to review your requirements after 3-5 years.
(e) Mind inflation : As living costs rise , so are insurance needs.Buy more or opt for a plan where the cover keeps increasing.
(f) Buy policy online : Term insurance products are also sold online and these products are much cheaper compared to ones sold by agents and brokers. Selling the products over internet does away with the agent’s commission thus bringing down the overall cost of the policy
When buying a term life policy, it is best to go online with several life insurers now offering the online option for buying term policies. When buying online, the advantage is that you save on premium. Agent commission, which is a significant proportion of the cost associated with an insurance product, is not charged while buying policies online but is passed on as a discount to the buyers.
In on-line policies however, one has to go through some minimum documentation work (and medical check-up too if required). But in simple steps, you can get a quote and apply for the policy on the insurer’s website itself. Aegon Religare, ICICI Prudential, Kotak Life are some insurers that are offering term policies online.
However, the premium on the policy should not be the only deciding factor here. The reputation of the insurer is also a key factor. For this you can check the insurer’s ‘claim settlement’ ratio – this is the percentage of claims settled by the insurer of the total he received.
The information on this is available at IRDA’s website, in its annual report for 2009-10. The insurer with the highest claim paid ratio is Life Insurance Corporation (96.5 per cent), followed by HDFC Standard (91.1 per cent) and ICICI Prudential (90.2 per cent).
(g) Don’t be distracted by riders : Additional covers of accidental death and disability arising from accidents are available on standalone as well , so don’t choose expensive term plan just because some of them have riders available.
(h) Disclose Everything : Disclose everything to the best of your knowledge while buying the policy including your existing health conditions , family history and all existing and proposed insurance including details of any insurance policy refused or provided at higher than normal premium in the past.
(i) Take medical tests : It will always be good for you to go for medical tests as this will reduce any chances of claim being rejected.
(j) Consider buying policy in blocks : For instance , if you need a cover of 1 crore – you can buy 2 policies of 50 lakhs each as it provides flexibility to discontinue one policy should your insurance needs reduce over time.Of course it will attract slight additional premium but the flexibility makes the additional cost worth it.
You should make sure at time of buying the policy :
Ensure that you read and answer all the questions correctly and accurately to the best of your knowledge.
Ensure that you have disclosed all material facts to the Company. In case of any doubt as to whether a fact is material or not, the fact should always be disclosed.
Ensure that all the documents submitted by you (E.g. Age Proof, Income Proof etc) along with the proposal form are genuine
Go through the copy of your signed proposal form enclosed along with the policy document
Review and ensure that all the questions have been answered correctly and accurately to your best of knowledge
In case you come across any discrepancy, please consult with point of contact from insurance company.
Online term plans where a customer buys the policy directly from the company are up to 35% cheaper than their offline versions. By removing the intermediary between customer and the company the world wide web has brought down the price of the cover.
Term plans are especially beneficial for young people with dependents. Low premiums set you free to invest in high-growth instruments such as equity-linked savings schemes (ELSS) initially, which also provide tax breaks.
Brokers not keen on term plans :
Agents are often not keen on selling term plans since they earn much less commission from them than, say, unit-linked plans (Ulips). Since term plans have no investment component, the lowest premium plan qualifies as the best. So be careful when you have approached a broker for insurance needs.
Make sure you don’t shun pure life cover just because you won’t get your money back. It is the best gift you can give to your dear ones. Get yourself ‘Term Plan-ed’ today and keep your investments and insurance separate.
Youngsters in their 20s or early 30s please remember – Every working professional in their 20s or early 30s must have received a call from and insurance company or an agent trying to sell its policy.Point is that insurance in the early years of professional life may sound a waste of money when other lifestyle and personal expenses takes priority. With a change in life style of young professionals which includes long working hours , high stress levels , alarming rise in lifestyle related diseases like diabetes , obesity and cholesterol – insuring oneself becomes as essential as other expenses. Investing early in insurance will also help you save tax and instill in you the habit of saving and financial discipline that ensures peace of mind in long run. So, if you are a young professional and have not insured yourself yet , the next time you come across any material related to insurance , give it a serious thought.
Monday, July 25, 2011
Wednesday, July 20, 2011
Fixed Maturity Plan and the Direct Taxes Code (DTC) Effect
Fixed maturity plans (FMPs) have been very popular with investors because they are more tax efficient than FD’s.
If the FMP term exceeds one year , the income is treated as long term capital gains and taxed at flat 10% or 20% after indexation. In case of fixed deposits , the interest earned is clubbed with the income of investor and taxed at the normal rate. That is why a 370 day FMP is the most common maturity in this category.
But this is set to change if Direct Taxes Code (DTC) replaces the Income Tax Act from April 1 , 2012. FMPs will lose some of the tax advantage they enjoy under the current tax regime.The DTC will not make a distinction between long-term and short term capital gains form debt mutual funds. All gains will be added to income of investor and taxed at normal rate applicable to him.This means if you buy a 370 day FMP today , the gains will be taxed at same rate as the interest earned on Fixed deposit. So if you want to invest for a period of one year right now , a fixed deposit might be a better bet , given the post tax returns will more or less the same.
There’s another way in which the DTC queers the pitch for FMPs. As mentioned earlier , long term capital gains from debt funds are taxed at flat 10% or 20% with indexation. Indexation takes into account the inflation during the holding period while calculating the cost of acquisition of an asset. For instance , if an asset was bought in March 2010 (financial year 2009-10) and sold in April 2011 (financial year 2011-12) , it would be eligible for inflation adjustment for two years. This will change under DTC. For an investment to quality for long-term capital gains, the asset has to be held for at least one year from the end of financial year in which it was bought. So in you invest in FMP right now , one year period will start from April 1 , 2012 and term should extend till March 31 , 2013 for the income to be treated as long term capital gains.
Indexation benefits will be available only if gains are long term.Obviously a 370 day FMP won’t make the cut if you buy right now.But it will do so if it is bought in the last week of financial year.If you buy in March 2012 , the FMP matures in April 2013 , the gains will be long term capital gains. Given this new rule for calculating the holding period , an investment will have to be held for terms varying from between a little over a year to up to two years to quality fo long term capital gains treatment.If you want to invest now and are looking for indexation benefits , going for a 735 day plan can be an option. A 1,100 day plan will fetch you double indexation.Though such long maturities are rare right now , mutual funds are likely to launch more such plans once the DTC proposals become a law.There’s another change in indexation rules.Under DTC , long term capital gains after indexation will be taxed at the marginal rate of tax.So if you fall in 30% tax bracket , the long term capital gains after indexation will be taxed at peak rate.
So in brief things to keep in mind:
- Under DTC , there will be no difference on long term and short term capital gains from debt funds.Gains will be added to income and taxed at normal rate.
- To qualify for long term capital gains , the asset will have to be held for at least one year from the end of financial year in which it was bought.
-If you invest in a 370 day FMP right now , it won’t get benefit of indexation.But it will do so if it is bought in the last week of the financial year.
-Long term capital gains after indexation will be taxed at the marginal rate.The tax will be 30% in the highest tax bracket.
If the FMP term exceeds one year , the income is treated as long term capital gains and taxed at flat 10% or 20% after indexation. In case of fixed deposits , the interest earned is clubbed with the income of investor and taxed at the normal rate. That is why a 370 day FMP is the most common maturity in this category.
But this is set to change if Direct Taxes Code (DTC) replaces the Income Tax Act from April 1 , 2012. FMPs will lose some of the tax advantage they enjoy under the current tax regime.The DTC will not make a distinction between long-term and short term capital gains form debt mutual funds. All gains will be added to income of investor and taxed at normal rate applicable to him.This means if you buy a 370 day FMP today , the gains will be taxed at same rate as the interest earned on Fixed deposit. So if you want to invest for a period of one year right now , a fixed deposit might be a better bet , given the post tax returns will more or less the same.
There’s another way in which the DTC queers the pitch for FMPs. As mentioned earlier , long term capital gains from debt funds are taxed at flat 10% or 20% with indexation. Indexation takes into account the inflation during the holding period while calculating the cost of acquisition of an asset. For instance , if an asset was bought in March 2010 (financial year 2009-10) and sold in April 2011 (financial year 2011-12) , it would be eligible for inflation adjustment for two years. This will change under DTC. For an investment to quality for long-term capital gains, the asset has to be held for at least one year from the end of financial year in which it was bought. So in you invest in FMP right now , one year period will start from April 1 , 2012 and term should extend till March 31 , 2013 for the income to be treated as long term capital gains.
Indexation benefits will be available only if gains are long term.Obviously a 370 day FMP won’t make the cut if you buy right now.But it will do so if it is bought in the last week of financial year.If you buy in March 2012 , the FMP matures in April 2013 , the gains will be long term capital gains. Given this new rule for calculating the holding period , an investment will have to be held for terms varying from between a little over a year to up to two years to quality fo long term capital gains treatment.If you want to invest now and are looking for indexation benefits , going for a 735 day plan can be an option. A 1,100 day plan will fetch you double indexation.Though such long maturities are rare right now , mutual funds are likely to launch more such plans once the DTC proposals become a law.There’s another change in indexation rules.Under DTC , long term capital gains after indexation will be taxed at the marginal rate of tax.So if you fall in 30% tax bracket , the long term capital gains after indexation will be taxed at peak rate.
So in brief things to keep in mind:
- Under DTC , there will be no difference on long term and short term capital gains from debt funds.Gains will be added to income and taxed at normal rate.
- To qualify for long term capital gains , the asset will have to be held for at least one year from the end of financial year in which it was bought.
-If you invest in a 370 day FMP right now , it won’t get benefit of indexation.But it will do so if it is bought in the last week of the financial year.
-Long term capital gains after indexation will be taxed at the marginal rate.The tax will be 30% in the highest tax bracket.
Tuesday, July 19, 2011
Free Financial Planning application for iPad /iPhone
Few Financial Planning application for iPad/iPhone
Best Free Financial Planning apps for iPad that let you do all financial planning on iPad. These Top free financial planning iPad apps that will keep you on top of your finances.They are highly effective and above all, totally free. All these financial planning apps work on iPhone as well.
CashFlow
CashFlow is Free app for iPad that lets you manage all your expenses. Proper tracking and management of your income and expenses forms the basis of proper financial planning.
With CashFlow app for iPad, you can promptly record your daily cash receipts, expenses and even your ATM balances, thus making it possible to track historical cash flow information.
CashFlow for iPad also gives you the opportunity to adequately describe the nature of these transactions and export them in CSV and OFX format over a course of 30, 60 or 90 days as desired.
This app has an in-built calculator to help you track these cash flows and determine balances in a simple manner. For multi-national usage, CashFlow free for Ipad is available in several languages including English, Japanese, Korean, Spanish and Russian among others.
Suffice it to say that with CashFlow free for iPad, you will not need to see your bank statement before being able to make reconciliations on a monthly basis. Also you will be able to
effectively manage your finances and track how much you have spent in real time terms.
Bloomberg app for iPad
To aid cash management and what exactly you spend your money on, you need to have the best and reliable financial information at your finger tips. Bloomberg for iPad is one great free financial app that opens you to real time financial information globally.
According to some analysts, Bloomberg for iPad is the “most trusted source for financial information on the iPad and it is loaded with tools to help you analyze the world’s markets in real time”. With Bloomberg for iPad you get stock information across several markets, breaking financial news, industry information and trends etc.
Also, you can create a specific list of stocks and market you wish to follow on Bloomberg for iPad, including RSS feeds for specific financial news across the world. This app can be freely downloaded from the Apple iPad App store anytime.
Jumsoft Money for iPad
Jumsoft Money for iPad is another free financial management app for iPad. It meets accounting needs of home businesses, small businesses, individuals, associations, clubs, and more. This iPad app also lets you set and manage budget, manage multiple accounts, and see all types of reports about your money.
Easy Books for iPad
Easy Books for iPad is about the best, and also free iPad app that serves as a fully fledged financial accounting module. It is ideal for small businesses and independent consultants/service providers who need to generate financial reports in real time.
Easy Books for iPad is also a fully integrated double entry accounting package that lets you input an unlimited number of transactions, including adding several features from compatible apps as you need them. In a way, Easy Books for iPad can be described as a financial Enterprise Resource Planning application, meaning you have access to all financial reports regardless of location and time.
Easy Books for iPad makes it possible to keep track of all your accounts including receivables, purchases, sales, assets, depreciation etc. Major financial reports that can be spooled from this app include you profit and loss statement, trial balance, aged debt analysis, and cash flow statement among others.
The capabilities of Easy Books for iPad are almost limitless as you can add accounts and report heading, including transaction lines without effort. Before you purchase that new accounting software for your business, visit the Apple iPad app store and check out a free downloadable version of Easy Books for iPad.
MoneyDance for iPad
MoneyDance is another free money management app for iPad. It lets you quickly enter your expenses while you are on the move. It easily syncs with desktop version of MoneyDance, so you can easily manage you finances on both ipad, as well as your PC.
MoneyDance uses strong encryption to ensure that your data is secure when you try to sync your transactions on your local wifi.
Best Free Financial Planning apps for iPad that let you do all financial planning on iPad. These Top free financial planning iPad apps that will keep you on top of your finances.They are highly effective and above all, totally free. All these financial planning apps work on iPhone as well.
CashFlow
CashFlow is Free app for iPad that lets you manage all your expenses. Proper tracking and management of your income and expenses forms the basis of proper financial planning.
With CashFlow app for iPad, you can promptly record your daily cash receipts, expenses and even your ATM balances, thus making it possible to track historical cash flow information.
CashFlow for iPad also gives you the opportunity to adequately describe the nature of these transactions and export them in CSV and OFX format over a course of 30, 60 or 90 days as desired.
This app has an in-built calculator to help you track these cash flows and determine balances in a simple manner. For multi-national usage, CashFlow free for Ipad is available in several languages including English, Japanese, Korean, Spanish and Russian among others.
Suffice it to say that with CashFlow free for iPad, you will not need to see your bank statement before being able to make reconciliations on a monthly basis. Also you will be able to
effectively manage your finances and track how much you have spent in real time terms.
Bloomberg app for iPad
To aid cash management and what exactly you spend your money on, you need to have the best and reliable financial information at your finger tips. Bloomberg for iPad is one great free financial app that opens you to real time financial information globally.
According to some analysts, Bloomberg for iPad is the “most trusted source for financial information on the iPad and it is loaded with tools to help you analyze the world’s markets in real time”. With Bloomberg for iPad you get stock information across several markets, breaking financial news, industry information and trends etc.
Also, you can create a specific list of stocks and market you wish to follow on Bloomberg for iPad, including RSS feeds for specific financial news across the world. This app can be freely downloaded from the Apple iPad App store anytime.
Jumsoft Money for iPad
Jumsoft Money for iPad is another free financial management app for iPad. It meets accounting needs of home businesses, small businesses, individuals, associations, clubs, and more. This iPad app also lets you set and manage budget, manage multiple accounts, and see all types of reports about your money.
Easy Books for iPad
Easy Books for iPad is about the best, and also free iPad app that serves as a fully fledged financial accounting module. It is ideal for small businesses and independent consultants/service providers who need to generate financial reports in real time.
Easy Books for iPad is also a fully integrated double entry accounting package that lets you input an unlimited number of transactions, including adding several features from compatible apps as you need them. In a way, Easy Books for iPad can be described as a financial Enterprise Resource Planning application, meaning you have access to all financial reports regardless of location and time.
Easy Books for iPad makes it possible to keep track of all your accounts including receivables, purchases, sales, assets, depreciation etc. Major financial reports that can be spooled from this app include you profit and loss statement, trial balance, aged debt analysis, and cash flow statement among others.
The capabilities of Easy Books for iPad are almost limitless as you can add accounts and report heading, including transaction lines without effort. Before you purchase that new accounting software for your business, visit the Apple iPad app store and check out a free downloadable version of Easy Books for iPad.
MoneyDance for iPad
MoneyDance is another free money management app for iPad. It lets you quickly enter your expenses while you are on the move. It easily syncs with desktop version of MoneyDance, so you can easily manage you finances on both ipad, as well as your PC.
MoneyDance uses strong encryption to ensure that your data is secure when you try to sync your transactions on your local wifi.
Note: Hope Lady Gaga,Justin Bieber,Shakira,Eminem,Kesha Rose Sebert,Rihana and all use this apps and make this popular.
Term Insurance and its importance
What is Term Insurance?
Term Insurance is a form of Life Insurance which provides a stipulated cover for a certain period under contractual agreement. Simply put, Term Plan is financial cover in case if the insured dies; death claim is given to the beneficiary.
Why Term Insurance?
A person should get term insurance if he has any dependents, it could be children, wife, parents. Term plan also protects your dependents against any loan payments or liabilities you might have. With a nominal premium, you can get excellent coverage. Term plan is certainly the best means to financially shield your family.
Insurance is promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest.
Term Insurance is a form of Life Insurance which provides a stipulated cover for a certain period under contractual agreement. Simply put, Term Plan is financial cover in case if the insured dies; death claim is given to the beneficiary.
Why Term Insurance?
A person should get term insurance if he has any dependents, it could be children, wife, parents. Term plan also protects your dependents against any loan payments or liabilities you might have. With a nominal premium, you can get excellent coverage. Term plan is certainly the best means to financially shield your family.
Insurance is promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest.
Sunday, July 17, 2011
Wednesday, July 06, 2011
Basics of a Health Insurance Policy
You really want to get your health insured but you dread the claims processes, the kind of documentation required, the uncertainty associated with reimbursement, the complexities surrounding pre existing diseases and the endless waiting period associated with buying a health insurance policy. We simplify facts for you, and answer some of the most basic questions that have been troubling you….
What is Health Insurance?
Health Insurance is the medical insurance provided to you by an insurance company, wherein it reimburses the medical expenses you incur as a result of your valid hospitalization. All you do is to pay a certain amount (subject to conditions) once each year, known as premium, which keeps your health insurance policy active. So, health insurance helps you get a good medical treatment and a smooth hospitalization recovery.
Who needs Health Insurance?
Well, a better question would be, ‘Who does not need Health Insurance?’ and the answer is everybody needs it, but few are aware and realize its importance. While you may not suffer from any ailments and this may give you the impression that you may never need to be hospitalized, life may surprise you any moment with accidents and illnesses. And if you do get hospitalized, then over-the-top healthcare expenses may be difficult to pay from your own pocket.
What does Health Insurance cover and what does it exclude?
As health insurance in India is synonymous with “hospitalization”, your health insurance policy will mainly cover hospitalization expenses provided, you undergo treatment in the hospital for at least for 24 hours. The expenses for hospital bed, nursing, surgeon’s fees, consultant doctor’s fees, cost of blood, operation theatre charges are all covered. While, certain diseases that are specified under the policy’s terms and conditions may be excluded from coverage or may be covered only after one or two years of the policy issue date. Also, cosmetic treatments, and those that do not involve hospitalization, are not covered.
What are pre-existing diseases?
Pre-existing diseases are those that a person may have suffered from, or sought treatment for, or even such a disease which he may have had, but may not have been aware of, before the date of issue of the Health Insurance policy. Normally there is a waiting period of two to four years before which preexisting diseases are covered under health insurance policies.
What’s the difference between individual insurance policy and family floater policy and which one is better?
An individual health insurance policy means that a particular policy can cater to one particular individual only, namely the holder of the policy. So, in case the individual has taken a policy for a coverage amount of 1,00,000, then he will be covered for one lakh only, and in case the expenses go over this limit, he would have to pay by himself. As against this, with a family floater policy, if a family of three is covered for Rs 3,00,000 in all, then each member is eligible to use the entire amount of three lakhs as hospitalization expenses. Hence, a family floater policy gives you a benefit of additional coverage, which is absent in case of individual health policies.
The disadvantages of a family floater policy
The family floater plan offers flexibility in terms of utilizing the overall insurance coverage among the family as a group. However, there are certain clauses which you need to be aware of. First, the policy will be renewed only till the senior most member reaches the maximum age of renewability allowed by the particular insurance company, after which other family members will need to take a fresh policy without having the benefit of their claim history and pre-existing disease coverage that comes from continuous renewal of the policy. Second, children who reach 25 years of age, will need to buy a separate policy for themselves without the benefit of the earlier continuous coverage that they have got under the family floater plan. Third, in case of an accident or any kind of illness, where all the members have to hospitalized, the cover amount may be insufficient.
When is the right time to buy a health insurance policy?
It is better to be insured at an early age when your chances of being prone to ailments and diseases are less. This can be advantageous, if you buy health insurance at a time when you are healthy, your years will be claim free and you will be eligible for a discounts in premium rates, also your chances of getting stuck with a pre-existing disease and being denied claim, would be nil. Hence, it is advisable to buy a policy before you enter late 30s. Go for an independent health insurance policy even when you are covered by your employer, so that you’ll be sufficiently covered even if you change your job. Buying a health insurance policy, just when the disease strikes is a bad, irresponsible move, which may not even guarantee reimbursement.
What is cashless facility?
Cashless Service is a service through which all the medical bills are paid by the Insurance company directly to the hospital, and the insured has not to pay anything at all. Basically this service is only applicable in hospitals which are in the insurance company’s “network hospitals” list. Every insurance policy has a list of hospitals where the insured can avail of this service. The policy holder simply has to call the toll free number present on the Health Card and then the co-ordination between the hospital and the company takes place.
Does health insurance have a tax benefit?
The maximum deduction for an individual, spouse and children is Rs 15,000 per year. Senior citizens (65 years old or higher) get a tax exemption upto Rs 20,000. The premium is allowed as deduction from the total income of the assessed. Hence if you are paying medical premium for yourself, your family and parents you can get a tax benefit up to Rs. 35,000.
How do I claim Health insurance?
You can make a claim in two ways: Firstly, if the nursing home or the hospital you get treated in, is in the “network hospitals” list and provides cashless service, then you need to give details of your policy to the nursing home and the nursing home will claim the money directly from the insurance company. You, don’t need to pay the bills in this case.
But if the nursing home does not provide cashless service, then you need to pay the medical bills first and later get the money reimbursed from the insurance company by submitting the relevant documents and the original bills and receipts. The insurance company will then refund the money to you.
What are the different Waiting periods associated with a Health Insurance policy?
Firstly, there is a two-to-four year waiting period before which for pre existing diseases can be covered under the health insurance policy. Secondly there is a 30 day waiting period from the date of issue of the policy, within which you will not be reimbursed the hospitalization expenses, unless, the treatment refers to accidental injuries. Thirdly, certain specific diseases are not covered for certain periods of time, varying from policy to policy, for instance, hypertension may not be covered for two years from the date of policy, while joint replacement may not be covered before four years from the date of issue of the policy.
What is Health Insurance?
Health Insurance is the medical insurance provided to you by an insurance company, wherein it reimburses the medical expenses you incur as a result of your valid hospitalization. All you do is to pay a certain amount (subject to conditions) once each year, known as premium, which keeps your health insurance policy active. So, health insurance helps you get a good medical treatment and a smooth hospitalization recovery.
Who needs Health Insurance?
Well, a better question would be, ‘Who does not need Health Insurance?’ and the answer is everybody needs it, but few are aware and realize its importance. While you may not suffer from any ailments and this may give you the impression that you may never need to be hospitalized, life may surprise you any moment with accidents and illnesses. And if you do get hospitalized, then over-the-top healthcare expenses may be difficult to pay from your own pocket.
What does Health Insurance cover and what does it exclude?
As health insurance in India is synonymous with “hospitalization”, your health insurance policy will mainly cover hospitalization expenses provided, you undergo treatment in the hospital for at least for 24 hours. The expenses for hospital bed, nursing, surgeon’s fees, consultant doctor’s fees, cost of blood, operation theatre charges are all covered. While, certain diseases that are specified under the policy’s terms and conditions may be excluded from coverage or may be covered only after one or two years of the policy issue date. Also, cosmetic treatments, and those that do not involve hospitalization, are not covered.
What are pre-existing diseases?
Pre-existing diseases are those that a person may have suffered from, or sought treatment for, or even such a disease which he may have had, but may not have been aware of, before the date of issue of the Health Insurance policy. Normally there is a waiting period of two to four years before which preexisting diseases are covered under health insurance policies.
What’s the difference between individual insurance policy and family floater policy and which one is better?
An individual health insurance policy means that a particular policy can cater to one particular individual only, namely the holder of the policy. So, in case the individual has taken a policy for a coverage amount of 1,00,000, then he will be covered for one lakh only, and in case the expenses go over this limit, he would have to pay by himself. As against this, with a family floater policy, if a family of three is covered for Rs 3,00,000 in all, then each member is eligible to use the entire amount of three lakhs as hospitalization expenses. Hence, a family floater policy gives you a benefit of additional coverage, which is absent in case of individual health policies.
The disadvantages of a family floater policy
The family floater plan offers flexibility in terms of utilizing the overall insurance coverage among the family as a group. However, there are certain clauses which you need to be aware of. First, the policy will be renewed only till the senior most member reaches the maximum age of renewability allowed by the particular insurance company, after which other family members will need to take a fresh policy without having the benefit of their claim history and pre-existing disease coverage that comes from continuous renewal of the policy. Second, children who reach 25 years of age, will need to buy a separate policy for themselves without the benefit of the earlier continuous coverage that they have got under the family floater plan. Third, in case of an accident or any kind of illness, where all the members have to hospitalized, the cover amount may be insufficient.
When is the right time to buy a health insurance policy?
It is better to be insured at an early age when your chances of being prone to ailments and diseases are less. This can be advantageous, if you buy health insurance at a time when you are healthy, your years will be claim free and you will be eligible for a discounts in premium rates, also your chances of getting stuck with a pre-existing disease and being denied claim, would be nil. Hence, it is advisable to buy a policy before you enter late 30s. Go for an independent health insurance policy even when you are covered by your employer, so that you’ll be sufficiently covered even if you change your job. Buying a health insurance policy, just when the disease strikes is a bad, irresponsible move, which may not even guarantee reimbursement.
What is cashless facility?
Cashless Service is a service through which all the medical bills are paid by the Insurance company directly to the hospital, and the insured has not to pay anything at all. Basically this service is only applicable in hospitals which are in the insurance company’s “network hospitals” list. Every insurance policy has a list of hospitals where the insured can avail of this service. The policy holder simply has to call the toll free number present on the Health Card and then the co-ordination between the hospital and the company takes place.
Does health insurance have a tax benefit?
The maximum deduction for an individual, spouse and children is Rs 15,000 per year. Senior citizens (65 years old or higher) get a tax exemption upto Rs 20,000. The premium is allowed as deduction from the total income of the assessed. Hence if you are paying medical premium for yourself, your family and parents you can get a tax benefit up to Rs. 35,000.
How do I claim Health insurance?
You can make a claim in two ways: Firstly, if the nursing home or the hospital you get treated in, is in the “network hospitals” list and provides cashless service, then you need to give details of your policy to the nursing home and the nursing home will claim the money directly from the insurance company. You, don’t need to pay the bills in this case.
But if the nursing home does not provide cashless service, then you need to pay the medical bills first and later get the money reimbursed from the insurance company by submitting the relevant documents and the original bills and receipts. The insurance company will then refund the money to you.
What are the different Waiting periods associated with a Health Insurance policy?
Firstly, there is a two-to-four year waiting period before which for pre existing diseases can be covered under the health insurance policy. Secondly there is a 30 day waiting period from the date of issue of the policy, within which you will not be reimbursed the hospitalization expenses, unless, the treatment refers to accidental injuries. Thirdly, certain specific diseases are not covered for certain periods of time, varying from policy to policy, for instance, hypertension may not be covered for two years from the date of policy, while joint replacement may not be covered before four years from the date of issue of the policy.
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