Do I need critical illness insurance?

Critical illness (CI) insurance is a long-term insurance policy to cover specific serious illnesses listed within a policy.

If diagnosed with a serious illness, the insurance company will provide single lump-sum payment.

The payment is made when you survive a certain period (typically a month) after confirmation of the diagnosis.

You can buy a CI cover either for yourself or jointly with your spouse.

What is covered?

The number of critical illnesses varies from insurer to insurer. Most insurance companies cover:

• Cancer of specified severity
• Angioplasty
• Heart attack of specified severity
• Open heart replacement or Heart valve surgery
• Surgery to aorta
• Cardiomyopathy
• Primary Pulmonary hypertension
• Open chest CABG
• Blindness
• Chronic Lung Disease
• Chronic Liver Disease
• Kidney failure
• Major organ/ bone marrow transplant

• Apallic Syndrome
• Benign Brain Tumour
• Brain Surgery
• Coma of specified severity
• Major Head Trauma
• Permanent paralysis of limbs
• Stroke resulting in permanent symptoms
• Alzheimer’s Disease
• Motor neurone disease with permanent symptoms
• Multiple Sclerosis with persisting symptoms
• Muscular Dystrophy
• Parkinson’s Disease
• Poliomyelitis
• Deafness
• Loss of Speech
• Medullary Cystic Disease
• Systematic lupus Eryth. w. Renal Involvement
• Major Burns
• Aplastic Anaemia

 

What is excluded?

• Death within 30 days of diagnosis of CI or surgery.
• CI diagnosed within first 90. days from the inception of policy.
• HIV/AIDS infection
• Illness due to smoking, tobacco, alcohol or drug intake.
• Any dental care or cosmetic surgery

• Illness occurring due to internal or external congenital disorder.
• Critical conditions or consequences due to pregnancy or childbirth, including caesarean.
• Infertility treatment
• Hormone replacement treatment
• Treatment done outside India
• War, terrorism, civil war, navy or military operations

 

What are the benefits of CI plan?

CI benefit irrespective of hospitalization

Hospitalization is not required because diagnosis is enough to get CI benefits.

On submitting medical documents confirming diagnosis, you will receive a single  lump sum amount.

Financial support

You can spend the money to pay for cost of your treatment, recuperation expense, clear any debts, pay your rent or mortgage, pay for medical bills or to adapt your home to your particular needs.

Tax-free payout

The one time lump sum amount paid on diagnosis of a serious illness is tax-free.

 

Protection against untimely death

In case of an untimely death, your nominee will receive the lump sum payout. However, this amount is paid only when you survive the 30 day period after diagnosis of an illness.

What to consider before you buy a CI plan?

CI plan does not cover hospitalization costs. The lump sum paid is as per your policy amount.

So you will still require a health insurance plan to meet these expenses.

Also, the policy has well-defined terms and conditions for diagnosis of an illness.

For instance, you need to undergo specific tests, by specific physician to confirm diagnosis of the illness.

Payout is made only for the specific illness (as per the severity mentioned in the policy). There are many illnesses which are excluded.

Do consult your financial advisor to help you understand the policy details before buying a critical illness plan.

For more information please visit http://www.fortunawealth.in

 

Your guide to health insurance

“I am fine today. Why should I buy health insurance? I haven’t visited a doctor till today.”

This is a basic question most young people have while considering buying a health insurance.

But you must realise that as you age your health changes. You might exercise regularly, follow a balanced diet and maintain a healthy lifestyle. But life is uncertain and you might have to bear an unexpected health expense.

            

A health insurance plan will help you cover medical expenses such as hospitalization costs, cost of medicines or doctor consultation fees which arise due to an illness.

The insurance company covers these expenses by:

• Cashless transactions- the Company directly pays the expenses to the hospital.
• Reimbursement– you get the expenses reimbursed later as a claim by submitting the original bills of the medical expenses incurred.

Types of health insurance

1. Benefit policies

Benefit policies are generally traditional health insurance policies. A pre-determined sum insured is paid in case of an accident or diagnosis of any of the illnesses, diseases, conditions, etc. which were insured in the plan. These policies provide the financial benefit as mentioned in the plan.

2. Indemnity policies

Indemnity policies cover the medical expenses incurred during hospitalization. You can claim expenses up to the limit mentioned in the policy by cashless claim or reimbursement. The most common type of indemnity policy is Health insurance plan.

Types of Health insurance:

Individual Health insurance covers only the individual insured.

Family Floater covers your entire family.

Critical Illness Health insurance covers specific life threatening diseases which could require prolonged treatment or even change in lifestyle. You can choose the critical illness cover as per your requirements. It can be used for any expenses such as hospitalization, medicine, lifestyle maintenance or you can simply use it as income till you work.

Group Health insurance is health insurance provided by the employer for its employees.

Overseas Health insurance covers healthcare expenses during your travel outside India.

Senior Citizen Health insurance is offered by few insurance companies specifically for senior citizens at competitive premium rates.

In times of unforeseen medical emergencies, health insurance plans provide security by covering healthcare expenses and thus reducing a lot of distress.

For more information please visit http://www.fortunawealth.in

Do I need insurance?

Most people have this question while buying insurance.

We are well aware that life is uncertain and unpredictable. A contingency or adversity can happen at any point in life. Insurance protects you and your family in such unseen circumstances.

“Insurance is not for the person who passes away, it is for those who survive,” goes a popular saying.

We cannot predict when insurance will be needed. However, with insurance planning, we can ensure that we are adequately covered against insurable risks.

Some possible risks could be:

Loss of a loved one

It is difficult to imagine, but loss of the breadwinner of the family could have a major impact on the financial situation of the family. An insurance policy can help in paying various household expenses, repay loans or simply act as financial security for the family.

Medical contingency

An unexpected injury or illness could deplete your wealth considerably if you are not adequately insured. You might save money by not opting for a health insurance plan. However, in the long run you might have to pay a very high cost for being uninsured.

Risk to assets

All assets carry a risk of damage by natural disaster, theft or any other calamity. Replacement of these assets can have tremendous financial implications. Insurance can help restore these assets.

Insurance planning takes into account these risks and provides adequate coverage against them. There is no risk not worth insuring yourself against. Insurance is a measure to guard against these risks – the risks of your dreams going awry due to events beyond your control.

Few benefits of insurance are:

• Financial security of life and assets in case of an unfortunate event
• Long-term wealth creation
• Tax saving by way of deductions from income
• Financial Planning for specific goals such as buying a new house, planning for the education or marriage of children, retirement planning, etc.
• Security to obtain a loan
• Retirement income throughout old age
• Covers health and medical costs

This is exactly how insurance works. When you buy insurance, it is like sand. But it turns into gold when it impacts you. And so you wish you had some more!

For more information please visit http://www.fortunawealth.in

9 Tax saving tips

 

At the end of every financial year most individuals seek options to minimise taxes.  Here are few tax saving tips:

1. Avoid the last minute rush

Due to various reasons, many of us keep postponing our tax planning and do it in the last few months of the financial year. In this last minute rush, you might not choose the right tax saving scheme/investment.

In fact the right time to do the tax planning is the beginning of the financial year.

2. Salary Restructuring

Restructuring of salary (permitted in few Companies) includes restructuring of few components of the salary which could reduce your tax liability.

Perks and expenses such as medical allowance, transport allowance, education allowance, uniform expenses (if any), and telephone expenses can be included as part of the salary.

Bills of the actual expenses incurred for these allowances need to be submitted.

You can also opt for food coupons instead of lunch allowances.

3. House Rent Allowance (HRA)

If you reside in a rented house, you can claim HRA, which could be partially or completely exempt from taxes.  

House rent expenses are deducted from the gross taxable income.

The deduction available is the minimum of the following amounts:

• Actual HRA received
• 50% of [Basic salary + DA] for those living in metro cities (40% for non-metros)
• Actual rent paid less 10% of salary

4. Section 80C and other deductions

 

 

4. Leave Travel Allowance (LTA) and Medical Expense

Tax exemption on LTA can be claimed when you apply for leave from your company for travel and have an actual journey.

Only the cost of travel for the trip is included in LTA. Hotel accommodation, food, etc. cannot be claimed for this exemption.

LTA exemption is limited to two times in a block of 4 years.

Other prominent exemption is medical expenses incurred by self and his/her family in a financial year.

This implies you do not have to pay tax on the amount of medical bills submitted in a financial year.

You can claim tax exemption only up to Rs.15,000 per year.

6. Tax planning as per financial goals

Identifying your financial needs/goals is important.

Your financial goals could be your children’s higher education, buying a home, retirement planning or buying a car.

Tax investment planning can be done in a manner that aligns with your financial goals. This would mean your tax investments can provide tax relief as wells as help you to achieve your future financial requirements.

7. Understanding future commitments in tax saving schemes

Before choosing a tax saving scheme, understand your future financial commitments.

Tax saving options like NSC and Mutual fund tax saving (ELSS) need only one time investment. However, PPF  and life insurance require periodical investments year after year.

You need to check if you will be able to meet the future commitments at ease, if you need such a future commitment, if you can commit for periodical future payments, etc.

If there is a change in law, you may not get any tax exemption for your future payment. so, you need to consider if you want to buy the scheme irrespective of tax benefit for future.

8. Income changes- Redo your tax plan

If you change your job or there are any changes in your income, you need to change your tax planning accordingly.

9. On time tax declarations

One of the most vital tips for tax saving is timely tax declaration.

Employers need to pay advance tax every quarter. Therefore, they deduct TDS every month from your salary.

If the planned tax saving, investment and expenses of the year is not declared, the projected tax will be higher. The employer would deduct TDS according to this projection.

While filing your income tax return, you can claim a refund for these extra taxes paid. However, to avoid tax deduction, it is always better to submit a tax declaration to your employer at the beginning of the year.

For more information please visit http://www.fortunawealth.in