Life Insurance is Something that You Can't Ignore

On March 12, 2015, the Government of India passed an Amendment to the Insurance Laws Bill, increasing the FDI limit within the Indian insurance sector from 26% to 49%. According to Timetric’s report, “Life Insurance in India, Key Trends and Opportunities to 2019,” this increased FDI allowance is likely to attract global insurers to the country, intensifying competition within the industry. This can only mean good news of buyers of life insurance in India. In the race to win customers, insurers are likely to try to outdo each other in the benefits they offer policy holders, while lowering premium amounts. There could never have been a better time to invest in protection for yourself and your loved ones. Here are some more reasons why life cover is one investment you should not ignore.

Does Life Insurance Really Help?

While most of us are aware of the death benefits that life insurance plans offer, the reality is that such cover also offers a lot of advantages for the living.

·         Tax Benefits: Buying whole life or term cover is an excellent way to save on taxes. The premiums you pay are tax deductible under Section 80c of the Income Tax Act to a maximum of Rs 1.5 lakhs. Maturity benefits are also tax free under Section 10(10D) and Section 10(10A)(iii) of the Income Tax Act of India.

·         Retirement Planning: If you want to continue to maintain your standard of living even when you are no longer actively employed, you need to start planning early and build a corpus. A life insurance policy can help you with disciplined savings for life after retirement. You pay the premiums while you earn and reap the benefits post retirement.

·         Diversifying your Investment Portfolio: With a good mix of high, low and medium risk investment vehicles, you can be sure that you have a well balanced portfolio that can withstand even a volatile economy and the ups and downs of the markets. For those with lower risk appetite, life cover could be a good option to add to one’s investment portfolio.

·         Loans and Loan Repayment: Did you know that you can use your policy as collateral when you apply for a loan? So, not only does life insurance in India help you save, it can help you get funds when you need it the most. In addition, this is one investment instrument that can also help you repay for loans or help your family repay any debt that may outlive you.

·         Peace of Mind: Not only for you but also for your loved ones, knowing that you have planned ahead to ensure that the family remains financially secure even under the most unfortunate circumstances can do a lot to relieve stress. It also works wonders on strengthening the bond in relationships, knowing that you care enough to make sure that even when you aren’t there to take care of them, you will actually be taking care of them through a good policy.

Senior Citizens – Should They Buy a Health Plan?

Insurance companies are less than willing to offer medical insurance to senior citizens, owing to the simple fact that chances of claims increase due to increasing risk of falling ill as you age. An amendment to the IRDA 2009 guidelines enabled Indian citizens up to the age of 65 years to buy a medical insurance policy and get it renewed without any exit age, according to an article published in Money Today in July 2012. Insurers also have to state the reason for rejection in written.

Why Should Senior Citizens Get Health Insurance

Life expectancy has increased due to healthcare advancements but the cost of availing these services have also increased with rising inflation. Medical coverage becomes a necessity in today’s age if you want to avail the best services. If you are a senior citizen living off your pension, then it becomes all the more important to save yourself from future financial crises. However, healthy you may be, diseases can come knocking on anybody’s door. Don’t wait to fall ill to get yourself medically insured.

You might be covered under an employee’s health insurance plan of one your children but taking a personal individual policy can help you reap more benefits. Although premiums may be higher for senior citizens, there is a lot you can do to ensure lower premiums. Medical insurance plans do not cover pre-existing diseases and if they do, they charge an extra premium to cover the additional risk. Some insurers never cover pre-existing illnesses, while for others, the cover starts after a certain period of the policy having been taken.

How to Choose a Policy

You must choose a policy according to your current health and financial condition. You may also undergo a medical test to evaluate your needs. Insurers reward individuals with a healthy lifestyle with lower premiums. You can either take medical coverage that offers protection for specific diseases or you can take a normal medical insurance plan and buy an additional critical illness rider. Generally, the minimum cover that any plan provides is hospitalization and surgery costs. It is essential to read the policy documents carefully and choose a plan according to your needs.

You can also avail tax benefits of up to Rs 15,000 on premium payments under section 80 D of the Income Tax Act. Individuals who are paying premiums for their parents as well can avail tax deduction of up to Rs 35,000 (Rs 15,000 for one’s own policy and Rs 20,000 for parents’ premium payments).