The simplest form of insurance to protect your family is called Term Insurance. Term Insurance offers a life cover to the insured at affordable rates. The insured can get a relatively higher amount of insurance by paying a very nominal premium. The benefit amount is paid to the beneficiary at the death of the insured.
Term Plans are not investment options and should not be treated as such. Term plans are meant to give protection to your dependents in the case of an eventuality. The premiums paid for a term plan do not give any returns except the insurance against any mishap.
Term insurances, as mentioned earlier, are affordable. This is because the entire amount you pay as premium is used to offer a life cover to you; no portion of the premium is used for investment or returns to you.
The policy term can be chosen as per your requirement from 5 years to 99 years depending on how long you feel that your family will be dependent on you.
The age of entry for a term insurance is 18 years and can be bought till the age of 65 years.
Since a Term Plan is a simple life cover, the only benefit is to provide financial protection to your dependents during the policy of the term, in case of any unfortunate event. However, there are policies that have the feature of return of premiums at the end of the term, if not claimed.
The age of entry for a term insurance is 18 years and can be bought till the age of 65 years.
Term plans come with rider benefits like critical illness, accidental death cover and waiver of premium in case of permanent disability.
The premium paid for your Term Plan can be claimed as a deduction under the Section 80C of the Income Tax Act ( 1960). If you have a health related rider attached to the premium of Term Plan, you can also claim deduction under Section 80 d of the Income tax Act (1960), for that part of the premium.
Cost of quality healthcare in India has been sky-rocketing for the past decade or so. Hospitalization for a serious health condition can set you back by Rs 5 to 10 lakhs, depending on the severity of the condition and treatment options. Health insurance provides insurance cover for comprehensive hospitalization expenses related to accident and illness. It typically covers the following expenses:-
Some health insurance policies may also cover pre hospitalization medical expenses e.g. tests, diagnosis etc, up to the limit of your health insurance cover (sum insured). If your health insurance sum insured is Rs 5 lakhs and your hospital bill is Rs 6 lakhs, the health insurance company will pay Rs 5 lakhs and you will have to pay Rs 1 lakh.
Health insurance claims can be cashless or on a reimbursed basis. In a cashless claim, you do not have pay from your pocket. Your medical bills are settled directly by the insurance company to the hospital. In reimbursement, you have to settle the hospital bills and claim reimbursement from the insurer after submitting the bills. Obviously, cashless claims are much more convenient but for cashless claims you have to go to a hospital which is in the hospital network of the insurance company.
Your health insurance premium will depend on the sum insured (amount of health insurance cover), your age / age of your family members (in case of a family floater plan), pre-existing medical conditions, the policy features you opt for e.g. what illnesses / procedures are covered, exclusions, type of room you are entitled to (single, sharing basis, deluxe etc), co-pay (what percentage of the expenses e.g. 20% you will have to pay in the event of an hospitalization) etc. There many points to consider when buying health insurance or Mediclaim. Your insurance advisor will be able to recommend the right health insurance product for you, based on your needs.
