insurance

Personal Accident Insurance – Should you opt for it?

2013-05-03T05:46:00Z

“Risk comes from not knowing what you're doing”
― Warren Buffett

True……but not always.

In our lives, there are thousands of situations, where we know what we are doing, however we cannot avoid risks. Imagine someone crossing the road on a pedestrian signal, and a drunkard hits him. The pedestrian could not avoid the risk despite following the traffic rules.

Risk is inherent in all our activities. In our last interaction, we had discussed how you could select a life insurance policy to cover the risk of death and a mediclaim policy as a safeguard against hospitalisation expenses. However, most of you must be familiar with these risk covers; but very few would have heard about personal accident insurance cover. Let us discuss this today!

Personal Accident Insurance denotes an insurance cover, which proposes compensation in case of death, bodily injuries, total/ partial disability or mutilation resulting from an accident. The types of events that are covered under personal accident insurance are rail, road and air accident, injury due to collision or fall, burn injury etc.

Your insurance portfolio would be incomplete without a personal accident policy. This type of policy provides financial support to the policyholder if he is disabled after an accident. Even minor accidents are covered by the policy such as breaking a leg or arm, falling from a cycle etc.

Where to buy?

All general insurance companies (ICICI Lombard, HDFC Ergo, Royal Sundaram, Apollo Munich, Tata AIG etc.) offer these policies. The agents, however, don’t try to pitch these policies much as these are quite low priced policies with lesser commissions.

Premiums

These policies cost you a low amount of premium for a decent cover. It costs you around INR 100 – INR 200 per lac of sum assured.

Coverage

The situations covered by personal accident policies are:

Death - In case of a death due to accident, the policy pays 100% of sum Assured to the nominee. Some companies also pay “Children’s Education Bonus” of 5000 or 10000 for a maximum of two children.

Permanent Total Disablement (PTD) – In a situation when the insured is disabled for life, the entire sum assured is paid. Some policies also pay 125% or 110% of SA depending on terms and conditions of the policy.

PTD includes loss of –

both hands or both feet
one hand and one feet
one (hand or foot) and an eye
loss of sight of both eyes OR speech OR Hearing of both ears

Permanent Partial Disablement (PPD) - In this case, a small percentage of SA is paid on weekly or monthly basis, i.e. 1% of sum insured is paid every week up to 100 weeks.

Includes –

Loss of Index Finger or thumb
Loss of hearing in one ear
Loss of one eye
Loss of one limb

Temporary Total Disablement (TTD) – In case the insured is not able to work due to the accident, for some weeks or months, the company will pay a part of SA.

Group and family accident policies are also available in the market where cover is available for the whole family / group under a single policy.

About the Author:

Sapna Tiwari is a Certified Financial Planner and Masters in Financial Management with over half a decade’s experience in the field of personal finance. The views expressed are personal. She can be reached at expert@investmentyogi.com.

Calculators:

Income based Life Insurance Calculator

Expense based Life Insurance Calculator

Householder’s Insurance Policy For Safety and Necessity

2013-05-01T09:50:00Z

A sense of satisfaction and comfort arises as soon as you enter your house. Your dream home is a place where you relax and wipe out your mental tensions. But have you given a thought that the home which you built or purchased with a lot of efforts is prone to risk of certain events? More often than not the answer is No! People live in a house but the precautions that need to be taken are ignored quite often. Only some are proactive while a large mass is still ignorant of causalities. It is necessary and precautionary that house owners cover their assets.

The house is prone to certain kinds of contingencies:

Some events that are out of your control and can bring huge losses to your home include Natural calamities, Fire, Earthquake, Tsunami and Terrorism, to name a few. Now the damage due to these events are not restricted to your home only, it clubs with it the household belongings. Your electrical appliances, Furniture and valuables can be lost in quick time along with your abode. The expenses to rebuild these things are enormous and next to impossible for middle class in today’s time. It is therefore necessary that you get a protective shield against such events.

What is the householder’s policy?

Householder’s policy saves you from uncertain events and provides you risk cover for your home. Insurance cover for household items and for a house is a sensible option. These covers can be of few types and can be taken as per capacity of the person and effectiveness of the policy. The premiums differ from scheme to scheme.

Structural Insurance:

This type of householder policy covers the entire structure of the house and any damage to the same. If your house gets damaged due to unforeseen event, the insurance company can bear the amount of expense. Individual policies can be taken in case of a house that was built after purchasing the land. In case of multistoried apartments, policy is taken by the society. However, in case such society does not have the insurance, a person can insure his own flat. In case the building collapses, the person who has cover for his house will get the loss amount.

Rental Insurance:

In case the house gets damaged by natural calamity and the insured has to live in rented premises, then the rent paid by the insured till the house gets repaired, is repaid by the insurance company.

Household insurance:

The householder’s insurance policy takes care of both house damage and to household valuables like furniture, jewelry, electronic appliances along with losses due to theft or pilferage.

Home insurance policies available in the country offer insurance on the basis of reinstatement value of property and don’t take the market value into account. The reinstatement value means the expense that will be incurred to rebuild the property at current cost. Market value includes location, construction cost and land value of the location. This means that the sum insured in the householder’s policy doesn’t take account of land value and location.

How the sum insured is calculated?

The sum insured is calculated on the basis of per square foot cost of construction multiplied by built up area. Insurance company calculates the value of household things like furniture, electronic gadgets and clothes after deducting the depreciation.

Replacement value Vs Depreciated value:

Replacement value is the cost of your product in the market while depreciated value is the worth after the amount of depreciation is charged on the product. A person has the option to either insure his product on the basis of depreciated value that will cost him less premium or he can take cover on the replacement value, which is the sum you will have to pay in case you purchase a similar product in the market.

What is not included?

Always make sure that you check all the exclusions in the policy. Make sure you are aware of all the factors because the whole purpose of the exercise is that one gets a cover. Ignorance is dangerous as you can lose your belongings and asset and also end up getting nothing from the insurance company. Always learn the exclusions before taking a policy. Some companies do not cover willful destruction of property or loss or damage due to wear and tear. In most of the cases, insurance amount is not cleared in case the house is unoccupied by the owner for a period of thirty days without notice or intimation to the insurance company.

Premium:

Premium paid differs from company to company and depends on the condition of the property insured but on an average, charges are Rs 60 to 65 per One Lac Rupees.

About the Author:

Amit Sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent over 10 years in Equity research, Stock broking and Financial Consultancy Sector. He can be reached at expert@investmentyogi.com.

Calculators

Home loan EMI Calculator

Future Value Calculator

Benefits of Bonus in Life Insurance

2013-05-01T07:32:00Z

‘Bonus’ is simply the additional amount or reward that a person is entitled to get in excess of the base amount. On the same pattern, the Insurance industry also provides a bonus to its policy holders. In this framework, bonus is the extra sum which gets accumulated to any insurance policy on a yearly basis which will be paid to the policyholder on the maturity of the plan or in the case of his death. This will be paid on successful completion of all the premiums due for a particular number of years. To get this bonus, it is mandatory that your policy should be ‘with – profits’ type, which is known as a participatory policy as well.

How is Bonus Calculated?

All the premiums given by the policy holders get accumulated in the corpus of insurance company which they utilize in the pay out of claims. A huge portion of this fund is invested in government – secured debt instruments and little portion is invested in equities to attain a potential return. On the basis of earnings from these investments and claims experience, the insurance company plans to distribute the profits to ‘with – profits’ policyholders in the form of bonus. The rate of bonus is determined after taking into account several factors like return on fundamental assets, level of bonus announced in preceding years and other actuarial suppositions. This bonus is offered on the basis of conventional plans build in plan structure.

Types of bonuses offered by insurance companies

Simple Reversionary Bonus: Under this type of bonus the calculation is done on the basis of simple interest. At the end of each policy year, an annual bonus is declared and it is accumulated to be paid at the time of claim or at maturity. The interest of the bonus which has been accrued, does not earn cumulative interest and only principal amount is considered in the interest calculation. For example, Mr. Ankit has a policy of Rs 5 Lakhs and company declared SRB of Rs 25 per 1000 of sum assured which is Rs 12500 only which will be accumulated and paid at the time of maturity or claim.

Compound Reversionary Bonus: In this type of bonus the calculation is done on the basis of compound interest. In the calculation, the bonus will be computed as a percentage on the sum assured and on all preceding accumulated bonuses. The bonus of every year is added in the sum assured and the next year’s bonus is determined on the new increased amount. For example, Mr. Rohit has a participatory policy of Rs 5 lakhs and the company announced a bonus of 3 % throughout the policy term which will be Rs 15000. This amount will get added to the sum assured and earn interest from very next year on increased amount.

Terminal Bonus: Terminal Bonus is also known as persistency bonus which is paid once, i.e. at the time of maturity of the policy. It is a sort of loyalty bonus given to a policyholder for maintaining the policy till maturity. Its value is not guaranteed and will be disclosed only at the time of policy maturity.

Interim Bonus: This type of bonus is payable only for those policies which mature or are claimed in between two bonus announcement dates. While the policy has already accumulated the bonus of last financial year, there is a short period between the bonus declaration date and maturity date. In such cases, a bonus is added on the basis of interim policy rates announced by the company. Such policies ensure that the policy holder who claims for reimbursement will get the credit for keeping policy active for that period of the year.

Cash Bonus: The insurance company makes a decision to pay cash bonus. In such instances, the bonus accumulated in a year will be paid at the end of the year. This provides an opportunity for the policy holder to get bonus year after year rather than at maturity.

These are various types of bonuses offered by insurance companies. It is advised to check the type of bonus your plan actually offers. It would be clearly written in the plan brochure or you can confirm it with the agent of the insurance company. Also check the bonus rate of your policy which will give you a clear idea about the benefits which you will get from it.

About the Author:

Amit Sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent over 10 years in Equity research, Stock broking and Financial Consultancy Sector. He can be reached at expert@investmentyogi.com

Calculators:

Income based Insurance Calculator

Expense based Insurance Calculator

Demystify Misconceptions Before Taking Life Insurance

2013-04-08T10:48:00Z

We are not sure about what’s going to happen next and that’s why every one of us has to plan for the contingencies. Tackling issues related to Death and Hospitalization are the two most important aspects of our future planning. Taking a life insurance cover offers financial support to the bread earner’s dependents after his or her death. Life Insurance is a very complicated product, if not understood properly. There are many elements of thorough consideration in a mere Term life policy in order to decide the amount of coverage as well as suitability of proper products. However, there are many misconceptions linked with life insurance which should be demystified before one can decide on the life cover needed to protect his/her dependents. Some of them are as under:

· I don’t need life insurance as I am single & don’t have dependents: Every single person thinks in the same way regarding life cover but even a single person requires sufficient life insurance to cover the expenses of personal debts, medical as well as funeral bills. In case you are uncovered, you may pass on the legacy of unpaid expenses to family or relatives.

· Term insurance coverage at workplace is adequate: If you are single, then term insurance provided by your employer may or may not be sufficient. However, in case you have dependents, additional life coverage is advisable to pay off all your debts after your demise if your term policy doesn’t meet all your requirements.

· Life insurance cover needed is only twice my annual salary: Insurance coverage varies from person to person depending on their financial conditions. One should repay his loans or debts apart from medical & funeral expenses. So, if you have to repay loans, you should execute a cash flow analysis to get the actual amount of insurance required to buy.

· Must have life insurance at any cost: This concept is true up to some extent. However, if you are single with good assets and don’t have any dependent or debts then you can choose to be un – insured. Your coverage will become optional if you have medical expenses covered.

· Only working people need a life cover: It is a big misunderstanding that only working people need a life cover. Even a homemaker needs a life cover because the cost of replacing the services of the deceased person with a professional is much higher than your imagination. Today, the cost of cleaning and children’s tuition & day care are very high. So, insuring against the loss of home maker will provide the cover for these expenses.

· Buy a term and invest the difference: It is not right to buy a term policy in place of full insurance policy as there are very many differences in term policy and permanent insurance policy. A permanent life insurance policy provides cover until your death on the other hand term policy provides cover for certain number of years i.e.1 to 30 years. Under the term insurance, premiums are low, but there is always a threat of price hike linked with a term policy after a certain time to an unreasonable rate. So, it is advisable to buy a costly permanent insurance policy with fixed premiums rather than a term policy whose premiums could sky rocket at the time of renewals.

· The Variable Universal Life Policy is more advanced than Straight Universal Life Policy for a long run: A Variable Universal Life Policy (VUL) provides a life cover along with the investment opportunity. In such a policy, in addition to the death benefit, here one should get the cash value account. Anything paid more than the premium above the current cost of insurance is deposited in that particular cash value account. This account is credited every month with interest. It should be kept in mind that a certain amount of fees is charged for both the insurance as well as cash account of the policy holder.

· It’s better to invest money than buying a life insurance: It is a risky process as returns on investment are very much volatile while in insurance you will get near guaranteed returns. This strategy is not advisable especially while in the early years of your life, if you have dependents. This is because after your death, they can’t survive without a life cover because assets cannot make up for the millions of expenses to be incurred.

These are general myths related with life insurance which people face nowadays. There are many more questions you should ask yourself. Hence, it is recommended not to leave life insurance out of your pocket even if you have ample of assets for the family to cope up with all expenses after you are not there!

About the Author:

Amit Sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent over 10 years in Equity research, Stock broking and Financial Consultancy Sector. He can be reached at expert@investmentyogi.com

Health Insurance – Most important points to note before buying it

2013-03-14T08:46:00Z

A wise man once said, “Health is Wealth”. But now a days Health needs Wealth. We always insure things which are Uncertain. Health is Certainly Uncertain. One bad medical emergency can destroy our financial life. This is the very reason why Health Insurance has gained a lot of attention Of late.

Now that buying health insurance seems mandatory to most of us, let us look at most important aspects before choosing a health insurance company/policy:

1) Third party administrator (TPA) – With a whole lot of insurance companies in the market, it’s confusing as to which one to choose. Some insurance companies have a Third Party Administrator (TPA) who act as intermediary between Insurer and Insured and are responsible for Claim settlements. Having a TPA can sometimes increase the claim settlement time. Hence, it is better to choose an Insurance company which operates without a TPA since we can directly interact with them and claim settlement would be faster and hassle free.

2) Network hospitals – It’s important that an Insurance company has a lot of network hospitals in place. It will enable us to choose one which is reputed and also accessible to us. Distance of the hospital becomes very important especially when there is an emergency.

3) Sum assured needed – Unlike life insurance, there is no specific formula to calculate the amount of sum assured needed in a health insurance policy. However, with medical inflation at more than 15%, we would better be over insured rather than under insured. At this inflation, a surgery which costs us INR 2 lakh today would cost us INR 4 lakh after 5 years. Also, with more and more hospitals resembling five star hotels we need to choose an amount which will suffice for the next 15-20 years.

4) Guaranteed renewal benefit – One of the most important things to note is whether the insurer is ready to offer us a guaranteed renewal of the policy for life. This clause obligates the insurer to continue the coverage as long as premiums are paid on the policy. However, premiums can rise based on the filing of a claim, injury, or other factor that could increase the risk of future claims.

5) No claim bonus – Usually, insurance companies offer a bonus if there has been no claim made in the previous year. The bonus would be a discount in the next year’s premium. The common discount offered is 5% for a claim free year and can go up to 50% for 10 consecutive claim free years. This is good for a person who is healthy and doesn’t make claims often. But, it doesn’t really suit someone who suffers from illnesses quite often and requires making claims.

6) Cashless hospitalization – Cashless hospitalization is an excellent facility which takes away stress from us during hospitalization, especially during emergencies. Such a clause would help us in emergency hospitalization wherein we need not run for money. However, such facility would only be available in network hospitals. In case of non-network hospitals, we need to pay first and then claim for re-imbursement.

7) Sub limits – Quite a lot of health insurance companies have scrapped the sub limits on room rents, doctor fees and so on which they started imposing three years ago. But, how about the existing policies which we have been renewing since the past few years? There is a definite need to know the sub limits in our policy document. In case there are sub limits, we need to make sure that we know the network hospitals near us whose cost structure is in line with these limits.

Apart from these, we can also look for personal accident or critical illness policies which cover us for treatment towards temporary/permanent disablement, loss of income due to disablement, death benefit. An individual/family health insurance is highly recommended despite of being covered under a group health insurance from the employer, primarily because of uncertainties in jobs. We can also opt for a top up insurance which will make sure that any claim above the limit offered by the employer would be taken care of.

Finally, “Buy Health insurance when you don’t need it. When you need it, you might not get it.”

About the Author:

A.V.Suresh is our in-house Financial Planner. He is a Certified Financial Planner(CFP) and also has an MBA in Finance.

Are you adequately insured?

2013-03-14T08:00:00Z

“Insurance is subject matter of solicitation.”

How many of you actually understand the meaning of this statement shown frequently during TV advertisements of insurance products!

In simple words, this statement means that the person who requires insurance is supposed to request the insurance cover from the insurance company. However, all of us know very well, that insurance is ‘SOLD’ in most of the cases not purchased.

Insurance actually is an unavoidable need for any individual who has a family to support. It is not meant to be an investment or tax saving instrument, but it is a risk cover to protect your family financially in case of any mis-happening. I’ll not take you into technical details of how insurance industry works, however I strongly believe that you should understand the basic concept of insurance and use this amazing tool effectively.

None of us will deny that we live in a risky world, any moment; any incident might cause something undesirable to you. I know many of you will hate me for saying this, but life of your beloved ones will not stop after you. Of course, the emotional grief will be there, however if financial crisis also arises, that will make the situation unbearable. I am sure you would not want that to happen to your family after you. Insurance can help you to prevent this kind of a situation for your loved ones. I hope now you understand the criticality to have an insurance cover.

The questions now arises is how much insurance you should buy and what type of cover?

Let us discuss about that now.

There are to approaches to calculate the required insurance cover:

1) HLV – Human life value

2) Need Based Method

Under HLV, the required insurance cover is calculated based on income of an individual. In other words the insurance cover, according to this approach, should be equal to the present value of the cash flows, which the individual is supposed to earn during his remaining earning life span.

On the other hand, the need-based approach, takes into account the living expenses of dependants to calculate the required insurance cover. According to this approach, your insurance cover should be an amount, which is sufficient to meet the expenses of your dependants throughout their lives.

You can opt for any of the two methods to know how much risk cover you need to buy.

What type of cover?

Don’t let thousands of policies available in the market confuse you. Be very clear about your objective behind buying insurance cover.

Here are a few ideas, which might help you take a decision for buying the right cover:

1) Try to buy insurance cover at an early age. You will be able to get a very good deal.

2) If you are in your 30’s and starting a family, ideal insurance for you would be a term insurance plan. For a very less amount of premium, you’ll be able to buy sufficient cover for your family.

3) Do not ever get into traps of insurance agents. Always go with the plan that fits your needs in the best possible manner.

4) Do not mix insurance with investments. Insurance has a specific and unique purpose of protecting your family. Let it be that way.

5) If you are approaching towards your retirement, make sure you have a medical insurance. This will give you a protection against increased medical expenses during your retirement years.

Hope from now on, you will look at insurance with the right perspective and use it effectively the way it should be used.

About the Author:

Sapna Tiwari is a CERTIFIED FINANCIAL PLANNER and masters in Financial Management with over half a decade’s experience in the field of personal finance. The views expressed are personal. She can be reached at sapna3031@gmail.com

Investsurance – Stay away from it

2013-03-06T11:46:00Z

Investment and Insurance are two words which you can’t escape from these days. There are N number of insurance policies and investment options today, which have only increased the confusion among the investors. Which policy to take? What Investment to make? These are some of the common questions that an average investor is faced with.

I have a friend who used to tell me that traditional policies are the best since they gave protection as well as returns in a single go and that Term insurance was useless. I knew that he was a man of stats. So, I decided to prove him wrong with some stats. I gave him a simple comparison of two people named Rajesh and Mahesh who are 29 years old.

Rajesh had taken a traditional policy. The details are as follows:

Sum assured: 1,00,000

Yearly premium: 4346

Bonus: 1,37,500

Policy term: 25 years

Payment term: 25 years

Rajesh would be paying a total amount of 1,08,650(4346*25). On maturity, he would be getting a total amount of 1,00,000 + 1,37,500 i.e; 2,37,500.

Now, let us have a look at Mahesh who has taken a term insurance and invested in various equity and debt financial instruments. The details are as follows:

Sum assured: 25,00,000

Yearly premium: 3472

Policy term: 25 years

Payment term: 25 years

Mahesh would be paying a total amount of 86,800. Remember, he is also able to save some amount by taking this cheaper term plan. He is investing that balance amount of 874(4346 - 3472) in various equity and debt financial instruments. Even assuming a most conservative return of 10% p.a in 25 years, he is able to accumulate 11,59,652 which is about 4.88 times the maturity amount which Rajesh got in his traditional policy.

Finally, my friend agreed to my point that Insurance is meant for protection but not investment just like apples are meant to eat but not to play. Hence, stay away from Investsurance. Hope this would help you in not falling for your insurance agent’s magical words.

By A.V.Suresh , Our In-House Financial Planner

How do I choose the right Life Insurance Policy for me?

2013-03-06T03:55:00Z

Identify your needs!! When you go shopping to a mall, you pick up things knowing you have a use with them, right? Sometimes, you also purchase things you don’t actually need (it’s called impulsive buying). Insurance is not different.

Although impulsive buying of insurance policy (or buying solely on recommendation from your agent or even buying solely to save tax), can prove quite expensive.

Each life insurance policy serves a unique purpose – only life cover, only wealth creation and both.

If you find it hard to figure out your exact purpose to buy a life insurance policy, the below illustration will be handy.

Protection for Dependants – Traditional term Plan, Traditional term Plan (with decreasing term cover for loan liability), TROP (Term Plan with Return of Premium), Joint Life Plan (for couples);
Children’s Education & Marriage – Endowment Policy, Whole-Life Policies, Child ULIPs, Type II ULIPs;
Periodical income for miscellaneous expenses – Money-Back Plans;
Retirement Corpus – Endowment Policy, Type II ULIPs;
Regular income during Retirement – Immediate Annuity Pension Plans;

Once you have decided on the right kind of insurance, do a comparative study of similar policies being offered by different insurance companies.

Want to know the popular policies under the above categories? Click here!

Secure your Home – Insurance policies that you should look at!

2013-03-05T08:01:00Z

Buying a home is a big investment decision and also has an impact on cash flows. The intent behind building a home is creating an asset for present and future generations. Most of us, will take up a home loan to fund the purchase and while doing this we also create a liability in terms of the loan re-payments. Unless the last paisa is repaid, it remains a liability.

It is therefore important that along with creating that asset, we insure our family and ourselves against the impending liability. This is where insurance for home loans and homes comes into the picture.

Insurance for Home Buyers

In case of many home loan companies, this is a mandatory insurance policy. This is a credit shield policy, which insures the life of the borrower for the tenure of the loan. It is a term policy which is for the term of the loan and matching the tenure of payments.

For e.g. if you have purchased a home loan worth Rs. 50 lakhs for 20 years, then this credit shield policy will insure your life for Rs. 50 lakhs. Should anything happen to you say 5 years from now, the entire outstanding of your loan will be paid off by this policy. This will ensure that the House remains an asset for your family.

Insurance for your Home

A lot of effort goes into setting up that new home and effort begets investments. But a freak of nature can destroy what was built with so much care. This insurance policy protects your home and its contents. This is popularly known as Householder’s policy.

The policy has two components to it and you can choose whether you want to go in for both or any one. One part insures the building viz. the brick and mortar portion of your home, the other part insures the contents viz expensive art work, jewellery etc.

Home Building Insurance

This insurance policy provides complete coverage against damage to the building or the structure in the event of its destruction subject to a maximum of the Sun Insured. Home Building Insurance covers Fire and Allied perils including Earthquake.

Fire and Allied Perils include

Fire
Lightning
Explosion/Implosion
Aircraft Damage
Riot, Strike and Malicious Damage
Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
Impact Damage
Subsidence and Landslide including Rockslide
Bursting and/or Overflowing of Water Tanks, Apparatus and Pipes
Missile Testing Operations
Leakage from Automatic Sprinkler Installations
Bush Fire (excluding Loss or Destruction Caused by Forest Fire

Some insurance companies also offer you an extra benefit of covering expenses on Architect’s, Surveyor’s and Consulting Engineer’s fees upto a certain percentage (approx. 2-3%) of the claim amount and expenses for debris removals upto a certain percentage (about 1%) of the claim amount. Both of these are included in the premium charged and provided at no additional cost.

Real estate also means that there is periodic escalation in the costs. The insurance companies also offer an escalation benefit of around 10% in the sum insured. For example, if the original Sum Insured is Rs. 10 lakhs, in the second year the Sum Insured will be Rs. 11 lakhs and in the third year the Sum Insured will be Rs. 12 lakhs. This escalation comes to you at no additional cost. The biggest advantage of this Escalation benefit is that, since the Sum Insured gets automatically increased by 10% of the original Sum Insured every year, it matches the expected cost of Reconstruction for subsequent years.

Home Contents Insurance

This insures the contents, expensive items, jewellery, appliances from Fire and Allied perils, Burglary and Machinery breakdown wherever applicable.

You have to originally declare the value of the items that you intend to cover and based on this, the insurance value is decided.

Typical Exclusions

The typical exclusions for the policy include.

Damage or destruction to the building due to perils like war, ionising radiations, contamination by radioactivity from nuclear fuel or waste, pollution or contamination.
Damage or destruction to building or compound wall made of Kutcha/ Temporary Materials.
Damage or Destruction to the building due to an act of Terrorism
Loss or damage due to war and allied perils, nuclear and pollution related perils
Depreciation, wear and tear and consequential loss of any kind
Scratching, Cracking, accidental breakage
Item more than 10 years old are excluded under Electrical & Mechanical breakdown cover

These are single premium policies, and will cost you around Rs. 10,000 for a Rs. 10 Lakh cover and an additional cover of Rs 10 lakhs for Home contents will cost about Rs. 2500.

Almost all General Insurance companies have this product readily available and you can also purchase it online on your own. However the important requirement is to know your current market valuation of you property to insure your property adequately.

About the Author:

Daisy Fernandes is a personal finance enthusiast who is also pursuing her Certification in Financial Planning

What You Need To Know About Travel Insurance

2013-03-05T07:47:00Z

Until now, we have covered 4 types of insurance covers available – Life, Health, Motor, and Property. Today we shall cover the last type of insurance cover available – Travel Insurance.

Travel Insurance is a must-have for a globe-trotter – whether you are visiting family/friends abroad, flying abroad for further studies or simply holidaying.

Travel-related hazards are increasing day by day. More and more people are flying frequently for office or business related work, and vacationing. When you travel, remember that a foreign country is not designed to make you comfortable. It is designed to make its own people comfortable. The fact is that you are in an unfamiliar territory.

So while you buckle up and gear on for your travel, let not unforeseen events like a lost belongings/passport, flight delays, and medical emergencies etc. dampen your enthusiasm. Travel insurance provides you comfort and removes financial worries during travel.

What does travel insurance cover?

Travel Insurance is designed to protect your health, belongings, and your financial investment in your trip, for you and your family. A typical travel insurance policy would cover the following –

Medical emergencies
Loss of belongings (including passport)
Distress allowance if your plane is hijacked
3^rdparty liability coverage
Emergency Cash in case of theft; among others

What is not covered under a travel insurance cover?

The typical exclusions in a travel insurance cover are –

expenses incurred (directly or indirectly) while travelling against the advice of the physician
pre-existing ailments & complications arising out of them
Suicide or attempted suicide
War, act of terrorism, illegal acts, dangerous sports etc.

How many types of Travel Insurance Covers are available? There are broadly 4 types:

1) Individual Travel Insurance – Domestic & Abroad

2) Family Travel Insurance

3) Senior Citizen Travel Covers

4) Student Travel Insurance

So how much does the premium cost?

The best part about travel insurance is that it doesn’t cost you much! The premium on a travel insurance policy would be a fraction of the total travel-related expenditure.

How do I buy travel insurance?

You can buy a travel insurance cover that suits your need just the same way you buy your ait-ticket online…fast and simple!

You can buy travel insurance cover when you buy your air ticket online. Alternatively, you can buy it online at the insurer’s website.

Some popular online policies

Here are some popular travel insurance provider links along with the different types of travel insurance covers they offer:

ICICI Lombard: https://www.icicilombard.com/travel-insurance/Single-Round-Trip.cms
TATA AIG: http://www.tataaiginsurance.in/travel-insurance/travel-guard-overseas-travel.html
RELIANCE GENERAL: http://www.reliancegeneral.co.in/insurance/travel-insurance/travel-insurance.aspx
BAJAJ ALLIANZ: http://www.bajajallianz.com/Corp/travel-insurance/travel-insurance.jsp

[Note: It is always required that you’re read the policy documents very carefully before making a choice of the plan and the premium}.

By Priya Rao, Certified Financial Planner (CFPCM) at InvestmentYogi.

Critical Illness Policy : A critical addition to your medical insurance planning!

2013-02-20T06:35:00Z

2012 was a unique year for me, and scary too!

In the second half of the year, atleast 5 people I know were diagnosed with cancer. After the emotional impact of the revelation, came the financial blow. Take the case of my aunt, who was diagnosed with *** cancer, atleast Rs. 5 Lakhs was spent in diagnosis, surgery, hospital costs. Chemotherapy, radiation and the medication took up the other Rs. 2 -3 lakhs. While the immediate danger is averted, preventive check –ups, scans will be an on-going feature.

Those medical costs are rising and we must have a minimum mediclaim cover of Rs 5 Lakhs. This is something which we all are aware of. But what is clearly emerging as an important threat is a set of maladies which insurance companies term as critical illness.

Diagnosed with any one of them, can mean a significant outflow in terms of pre and post hospitalisation care which a regular mediclaim may not be able to cover adequately.

About the Coverage

Typically any critical illness cover offered by General Insurance companies provides protection against 12 major critical illnesses .The illnesses covered are: Heart Attack, Stroke, Cancer, End stage kidney failure, Major organ transplant, Coronary artery bypass surgery, Benign brain tumor, Heart Valve Surgery, Motor Neuron Disease, Multiple Sclerosis, Coma, Paraplegia. It is important to note that the coverage terms may differ between different insurance companies and it is important to go through the brochures and policy wordings.

Since the terminology is medical lingo, it may not be easily understood by us, it will also be beneficial to consult a medical practitioner to understand the coverage terms and the extent of coverage before investing in it. This will avoid any issues and untoward experience at a later stage.

The cover ranges from Rs 3 Lakhs to Rs. 10 Lakhs. If you are covered under this policy for Rs. 5 lakhs, and diagnosed for any of these illnesses, then you will receive a lumpsum amount of Rs. 5 lakhs which can be used towards your treatment.

Typically for insured who are less than 45 years of age, a medical test is not needed. However it is important to disclose any pre-existing condition that you may have.

Must remember

· The insured needs to survive for atleast 30 days after diagnosis to be eligible for the payout.

· The policy is eligible only for a one time payout during the lifetime of the policy after which it expires.

· Most insurance companies have a 30 to 90 day waiting period (depending on the insurance company) before you can claim under the cover

Typical Exclusions

Some of the common exclusions under this policy are as follows:

War or any act of war, invasion, act of foreign enemy, war like operations
Criminal or unlawful act, or intentional self-injury or attempted suicide while sane or insane
Participation or involvement in naval, military or air force operation, racing, diving, aviation, scuba diving, parachuting, hang-gliding, rock or mountain climbing, Intoxicating drugs and alcohol
Venereal disease," AIDS” (Acquired Immune Deficiency Syndrome) and/or infection with HIV
Any treatment arising from pregnancy (including voluntary termination), miscarriage, maternity or birth (including caesarean section

For the complete list of exclusions please ensure you read the policy wordings adequately. All this literature is readily available on the company websites.

The claim procedures for claiming a benefit under this policy is much easier than that of mediclaim since this is a lumpsum payment and not based on actual costs.

How much does it cost

If you are 30 years of age, the policy for a coverage of Rs. 10 lakhs will cost you approximately Rs. 3000/-

That is about Rs. 250 per month, but ensuring this coverage is going to assure you and your family some respite from the financial stress that can come with these illnesses.

This is a good addition to your mediclaim cover since this is eligible for deductions under Section 80 D. You can avail upto Rs.15,000 as tax benefit under ‘Section 80D’. In case of senior citizens, you can avail upto Rs.20,000 as tax benefit under 'Section 80D'

About the author:Daisy Fernandes is a personal finance enthusiast who is also pursuing her Certification in Financial Planning

In Trend: Zero Depreciation Vehicle Insurance

2013-02-13T09:08:00Z

Zero depreciation policies are people’s hot favorite these days. Car holders nowadays ask for Zero depreciation or zero percent depreciation policies ahead of normal standard motor insurance policies. This type of insurance policies offers all-inclusive risk cover to the vehicle. Owner of such policy doesn’t have to worry for the write off in case of depreciation of the vehicle. Middle class buyers of such policies have been the major beneficiaries.

Mr. Ramesh Mehra, who works as a Sales Manager in one of the MNC in Dehi was totally shocked when he realized that he will have to pay a sum of Rs 30000 on his Honda City out of total repairs of Rs 90000. His vehicle was less than two years old and required immediate repairs. Mr. Mehra was covered under Standard Motor Policy that resulted in shredding out amount from his own pocket. Had he been covered under Zero depreciation policy he would have been relaxed as the entire sum would be then covered by the insurance company.

Earlier insurance companies took into account the depreciation of the vehicle that sometimes went up to 40 percent, although this depended on the age of the vehicle. However, as time changed, insurance companies have started offering top-up over regular car insurance. These types of top-up are known as depreciation reimbursements that offer the full claims on the car without deducting any depreciation.

Zero depreciation policies are very beneficial in case of old cars. The Insurance Regulatory and Development Authority (IRDA) allowed these policies in 2009 and since then they have been popular among vehicle owners.

What can your policy cover?

These policies generally cover repairs and maintenance cost of body parts in full. The costs of plastic, rubber parts in vehicles, fiber glasses were covered between 0 to 50 percent in standard insurance policies. The bar has now been raised to 100 percent in Zero depreciation policies.

Hassle-Free Driving

Nobody wants scratches, dents and repairs to the car. The challenge while driving is not only to drive safely but to safe, your vehicle from any scratches. Zero depreciation policies have let customers take a tension-free ride because these costs are covered. Car owners are not worried these days of even major repairs as they know that these will be compensated with the help of insurance policies.

Cost and Applicability

The only shortcoming with Zero depreciation cover is that they are more expensive than the normal car insurance policies. However, considering the value for services these policies are admired by middle class owners. The cars that are more than three years old are, by and large, not covered under zero depreciation policies.

What’s not covered?

Before taking the zero depreciation policies, one should be aware that wear and tear of the car, any mechanical breakdown and uninsured dangers and damage caused by these perils are not covered. Damage on CNG kits, tyres and accessories are normally not covered in such policies.

Claim Process

Claim process of most of the insurance companies these days are simplified as per the needs of the policyholders. The policy owner has to intimate his claim to the insurance company through customer car department or claim's mailing center. The claims department generates a customer claim number and provides it to the customer for future references. In case of repairs, the surveyor is assigned that visits at the preferred garage of the customer.

The customer is advised to take the claim documents at the time of sending or taking vehicle for repair. The surveyor conducts his inspection on the vehicle and in case of private insurance companies gives on spot approval after assessment. The process takes one working day these days. The vehicle is repaired and delivered after maintenances have been done.

Definite Plus

A car owner wants a policy that is fully covered for any expenses; Zero depreciation policies are more user-friendly than standard monetary policies as they don’t surprise your pocket with a hidden burden that the customer gets to know only at the time of repairs and maintenance

About the author:

Amit Sethi is an MBA (Fin) graduate and a Financial Consultant. He has spent 10 years in Equity research, Stock broking and Financial Consultancy Sector. He can be reached at amvilube@gmail.com

Oh My God!!! Are you insured against Act of GOD…??

2013-02-04T09:16:00Z

In 2012, there were many major natural disasters that rocked humanity across the globe. These disasters were Hurricane Sandy in New York, Cyclone Nilam in Chennai, Typhoon Bopha in Philippines, Flash flood in Uttarakashi, Flood in Assam and earthquakes at several other places. Due to these natural calamities many families lost lakhs and crores on their assets/property. Not all of them were insured, still there were few percentage of families with insurance coverage but didn’t get benefit. Since, their policy didn’t cover losses incurring due to “Act of God”.

Last year, most of us would have watched the popular Bollywood flick “Oh My God” and enjoyed the movie. The movie popularised an insurance term “Act of God” and conveyed us to insure our property / assets against Act of God. In this article, let us understand the term Act of God and how we can have insurance coverage against such natural disasters in future.

Meaning of the term “Act of God”

“Act of God” means natural calamities such as tsunami, floods, earthquakes, thunders or any other disaster caused due to the nature by Almighty (God).

Disasters covered under an Act of God policy

Presently, some insurance companies offer policies to cover property against Act of God. Natural disasters covered under Act of God are floods and hurricanes. Losses incurring due to earthquake is exclude from this policy. Discuss with insurance company / agent about coverage for earthquake with separate policy. Similarly, there will be other calamities which will be excluded initially but can be covered at additional premium under the policy. So, it’s highly recommended to read terms in the policy document in detail and discuss with insurance company before signing it.

Do all standard policies have coverage against Act of God?

Insuring against Act of God is an extension to fire insurance policy. You need to pay additional premium to insurance company for coverage under Act of God. Often, Act of God is excluded while taking a fire insurance policy so you need to inform your insurance agent / insurance company for add-on coverage at additional premium which you are ready to bear. Comprehensive motor insurance policy has the coverage for losses on our 4 wheelers due to such natural calamities. Also, now most home insurance packages now cover losses incurring due to Act of God.

Insuring for losses incurring due to earthquake

As discussed, insurance companies exclude losses incurring due to earthquake under home insurance or fire insurance. But, it will be covered in earthquake insurance which is priced separately depending upon seismic zone of a country and severity of damage which can incur.

How to claim for losses due to Act of God?

Whenever, natural calamity strikes and you are covered under a policy. Then first step, its mandatory to inform your insurance agent or insurance company about the damage and losses incurred. Second step, submit a claim in writing giving details of damages, details of other insurances on same property if any and estimated values of losses occurred within 15 days after occurrence of event. The claim must satisfy terms and conditions as specified in insurance policy document you had signed for processing and disbursement of claim amount.

We have already seen the adverse effects of such disasters in last couple of years which are too severe and can affect your life long assets built with shop, home, office, etc. So, we recommend insuring against Act of God and have a peaceful sleep at night with family. Let, your insurance companies take care of any losses incurred in future due to natural disasters.

Author

Hiral Thanawala is a PGDM (Finance) graduate and Certified Financial Planner. The views explained by him are personal. He can be reached at hiralthanawala@gmail.com

8 common blunders while buying a health insurance policy.

2012-12-27T06:59:00Z

While advising clients on health insurance, we come across some common blunders in their existing policies that cause major setbacks in their long term financial planning. If you are planning to buy health insurance, ensure you go through these.

1. Not filling the Proposal Form on your own:

You have finally decided to buy your own health insurance policy. Your trusted agent comes with the forms. You scribble your signatures at the sections crossed for you, and leave the remaining form blank, for the health insurance agent to fill in.

Remember, the health insurance proposal form, is not like a Savings Bank, FD, or a mutual fund application form. The health insurance proposal form requires many personal declarations, mostly regarding past and present health condition of each family member.

If you do not fill the form yourself, your health insurance agent will either strike off many of the fields as “not applicable”. This one act of ignorance and laziness combined is by far, the biggest regrets people have when their claims are denied in the later years.

Your proposal form is the basis on which your health insurance policy is issued. You need to take the pains and ensure you fill the form on your own. Also ensure you capture the information of your family members clearly. Cross check the information you are aware of with them, and ensure you have mentioned every possible detail you are aware of and required in the form. Your entire health insurance policy is based on the proposal form. Whether there is an omission or a misrepresentation, whether it is intentional or innocent, whether the claims are related to the specific omission or misrepresentation, you claims run the risk of being denied, or worse the insurance company cancelling your policy.

Ensure you fill your proposal form yourself. Ensure you consult your family members before you declare their details.

2. Getting influenced by unnecessary frills:

Health Insurance with OPD Covers, Free Medical Checks, Health Coupons etc. Don’t get fascinated by the small stuff. Costs of such expenses are affordable, and hence should be part of your routine expenses. What you buy when you buy health insurance, is a cover over the large unaffordable hospital bills. Bills which could run in thousands and lakhs burning an irreparable hole in your hard earned savings and investments, worse lead to debt with friends, family or your employer. So buy a health insurance which will cover such large risk. Buy a Health Insurance which will save you from any compromise on the quality of treatment you want for your family members.

Get your priorities right. Focus on the core cover over long term healthcare expenses first, and then look at the frills and freebies.

3. Buying a low sum insured policy now, and depending on an upgrade later.

If you are 35 years today, and say you enjoy average health today, in all probability, you will really need your health insurance cover only after the age of 50 years. This is a good 15 years from now. With an annual healthcare inflation of 10-15%, Hospital Charges are doubling every 5-6 years. At the age of 50 years, you need a healthcare cover at least 3 times what you need today. Coverage/Sum Insured as per today’s healthcare costs would not cover you for your retirement and beyond.

You can depend on upgrades as an option only if your entire family is in perfectly good health, at the time when the upgrade request is made. If any of the members in the policy suffer from any ailment, there are almost no chances your upgrade request would be accepted. Moreover, let’s face it most of us turn busy, once we have dumped the policy in a file. The need for upgrade would be realized only at the time of a large claim, a time when most insurance companies would reject your upgrade request.

Buy as high a sum insured, as you can afford. Target to increase your cover to at least 10 lakhs before you cross the age of 40.

4. Not looking at the future premium slabs:

Unlike Term Insurance, Health Insurance premiums change as you grow older. Also, since Health Insurance is a free market product, the Premium charts are decided by each Insurance company depending on their internal risk philosophy. How every Insurance company wants to charge and increase their premium is their own internal policy and philosophy. Our observations and analysis have shown steep rise of premiums in the age brackets of above 45 years. Go through the premium chart of the product you have short-listed, and get a hang of the premium movement. This will save you from a jolt, when the renewal notice of your health insurance arrives.

Ensure you get hold of the premium chart, and have a look at the higher age premiums. This will help you get a flavour of how premiums would move in the higher age groups.

5. Overlooking the changing terms in old age:

There are certain products which change their terms when you grow old. This is one thing that shocks the hell of so many customers when they cross above 60 years. You invest in a health insurance policy with certain terms, and when you want to or plan to use it, the terms are different. For instance, Max Bupa applies 20% co-pay after the age of 65 years, even if you have entered the policy at 25. Similarly, Bajaj Allianz does not have a cover more than Rs. 5 Lakhs for the age groups above 55 years. Hence, even if you have a Rs. 10 Lakhs cover with Bajaj Allianz, this will reduce to Rs. 5 Lakhs after you cross 55 years of age. Note, these are just examples, you need to check with your chosen health insurance product, before you sign on the dotted lines.

Ensure you read through the entire policy wordings, and understand how age could impact your coverage under the health insurance policy. Ask your health insurance advisor to take you through terms, clauses you did not understand.

6. Ignoring the Renewal ceasing age.

Some medical insurance policies come with an expiry date. Renewals are available only till you reach a particular age, after which the policy coverage ceases to exist. Most of us buy health insurance policies, so that we can cover medical expenses in our old age. There is no point of investing in a health insurance policy if it discontinues cover when you need it the most.

There are many health insurance products that provide Lifetime coverage. Ensure you go for such policies for your family. If there isn’t any such option available, look at the highest age cover you can get.

7. Not spending enough time, looking for a good Health Insurance agent.

Health Insurance as a product demands more intensive and more volume of services, than every other insurance product, say a Car Insurance or a Life Insurance. It cannot be just bought from a friend, a neighbour or over a call, without understanding their after-sales service infrastructure. Here’s why.

· Health Insurance as a product is much more complex in terms of the contract and usage, than other personal insurance policies you will buy.

· Since the service touches health and life of your family members, it is much more sensitive. Your car lying for 2 extra days in the garage, due to delayed claim settlement is not a big cause of worry, but one of your family members not getting smooth services, due to a delay of claims, can be a big cause of extreme stress, turning your entire world upside down.

· There could be multiple claims in a year, and across the lifetime of each family member. For instance, a person suffering from Cancer, could be require say 6 chemotherapy sessions, once a month, and hence make 6 claims spread across 2 years.

Such kind of complexities and intensity in services, demand a solid, experienced and long term service provider to support you through the lifetime of the policy. Ensure you take time out and finalize a good health insurance advisor or service provider.

The test of a good health insurance advisor would be one who:

· Provides unbiased advice, comparisons and reviews across various Insurance product options available, suitable to your requirement <AND>

· Has the right experience and qualification in professionally managing and coordinating your claims.

Mahavir Chopra is the Head of eBusiness and Personal Lines of Medimanage.com – a specialized health insurance services portal for individuals, families and businesses. The portal provides integrated services including expert advice and professional claims servi

Health Insurance FAQs

2012-11-14T09:23:00Z

1. What kinds of Health Insurance plans are available?

Micro-Insurance policies
Critical Illness plans.
Individual Health Policy
Family Floater Policy
Hospital Daily Cash Benefit Policy
Senior Citizen Health Policy

2. What are the forms of Health Insurance claims available?

Health insurers usually provide either cash-less facility (direct payment to hospital by insurer) or reimburses the full or part-payment of expenses related with hospitalization due to illnesses and injuries.

The forms of health insurance claim that will be covered by the health plan are specified in advance.

3. What is cashless facility?

Insurance companies have tie-up arrangements with several hospitals all over the country as part of their network. Under a health insurance policy offering cashless facility, a policyholder can take treatment in any of the network hospitals (with which the health insurer has tie-up) without having to pay the hospital bills. The payment is made to the hospital directly by the Health Insurer through a 3^rd party called the TPA (Third Party Administrator). The payment is made by the TPA to the hospital on behalf of the health insurer.

In case of senior citizen health policies, there are always sub-limits on the amount of claims payable. The sub-limits vary among the health insurers. The expenses beyond these sub-limits are not covered under the policy and the policyholder has to pay for these expenses from his pocket.

Cashless facility is not available if treatment is taken in a non-network hospital.

4. What are the tax benefits if I opt for a Health Insurance policy?

Under Section 80D of the Income Tax Act, policyholders who have made payment towards purchasing a health policy for self, spouse (dependent or not), and dependent children, by any payment mode other than cash, can avail of an annual tax deduction of upto INR 15,000 from their taxable income. For senior citizens, this deduction is upto INR 20,000.

In addition to the above, an additional tax deduction of upto INR 15,000 per annum is available for health insurance premium paid on behalf of dependent parents, which again is INR 20,000 if either of the parent is a senior citizen.

5. What are the factors that affect Health Insurance premium?

Being a health policy, age is a major factor that determines the premium. Previous medical history is another major factor that determines the premium. Lower age and no prior medical history means, lower premium.

6. What is not covered under a Health Insurance policy?

Generally, pre-existing diseases are excluded under a Health Insurance policy, for a limited period (the time period of exclusion varies among health insurers).

Other typical exclusions from a health policy are cost of spectacles, contact lenses and hearing aids, dental treatment/surgery ( unless requiring hospitalization), convalescence, general debility, congenital external defects, venereal disease, intentional self-injury, use of intoxicating drugs/alcohol, AIDS, expenses for diagnosis, x-ray or laboratory tests not consistent with the disease requiring hospitalization, treatment relating to pregnancy or child birth including caesarean section, naturopathy treatment.

Read the policy document carefully to understand what is covered and what is not.

7. Does the health cover start immediately on payment of premium?

No. When you get a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period claims will not be payable by the insurer.

However, this is not applicable in case of any emergency hospitalization occurring due to an accident.

For subsequent policies under renewal, waiting period will not be applicable.

8. What is pre-existing diseases/conditions in health insurance policy?

It is a medical condition/disease that existed before you obtained health insurance policy.

Pre-existing conditions/diseases are typically not covered for upto 2 years from policy inception date.

9. What happens if my policy is not renewed in time?

The policy will be renewable id the premium is paid within 15 days (called as Grace Period) of policy expiry date.

The policy will lapse if the premium is not paid within the grace period.

10. What is health insurance portability?

Policyholders are now allowed transfer of their health cover from one insurance company to another and from one plan to another, without losing out on the renewal credits for pre-existing conditions, enjoyed in the previous policy.

For details, you may check with your health insurer.

11. What happens to the Sum Insured in a health policy after a claim is made in a year?

After a claim is filed and settled, the Sum Insured is reduced by the amount of claim settled.

For example, In January, 2012 you start a policy with a Sum Insured of INR 5 Lakhs. Suppose you make a claim in July for INR 2 lakhs, and the claim is settled for INR 2 Lakhs.

The balance Sum Insured available to your family for the period August to December, 2012 will be INR 3 lakhs.

12. What is the maximum number of claims allowed over a year?

Any number of claims is allowed during the policy period unless there is a specific cap prescribed in any policy.

However the sum insured is the maximum limit under the policy.

13. What is “health check” facility?

Most health insurers pay for specified expenses towards general health check-up once in 4 years.

14. What do you mean by Family Floater Policy?

Family Floater Health policy is single policy that takes care of the hospitalization expenses of your entire family (self, spouse and children).

The policy has one single sum insured, which can be utilised by any/all insured persons in any proportion or amount subject to maximum of overall limit of the policy sum insured.

Family Floater plans are better than buying separate individual policies; the cover is for a minimum of 2 individuals.

Author

By Priya Rao, Certified Financial Planner (CFPCM) at InvestmentYogi.