Prajna Capital |
- What is the catch in Health insurance discount ?
- Insurance for Senior Citizens
- Principal Retail Equity Savings Fund Merged into Principal Growth Fund
| What is the catch in Health insurance discount ? Posted: 03 Mar 2014 04:11 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Many health insurance companies are offering discount on purchase and renewal of their policies, if insured pays 2 years premium in one go. Apollo Munich health insurance offers health insurance discount of 7.5% per year and Max bupa also offers discount of 10% is someone opts to pay for 2 years. Where it is clear that why Companies offers Health Insurance discount, as they get the lumpsum amount and confirmation that policyholder will stay with them for next 2 years, but does it make sense for insured to pay in one go. Lets understand the pros and cons for insured
Insurer’s View on Benefits of Health Insurance discount
Insurer is offering this health insurance discount benefits by pitching 2 advantages:
Health Insurance discount – Mathematical comparison
Though it is very much clear that monetary benefit is there in terms of discount, but one has to look at this benefit from tax benefit angle also. We all know that health insurance premium comes under tax deduction u/s 80D of income tax act. Paying premium for 2 years, results in forgetting with the tax benefit next year. So what difference does it make from net outflow point of view? Is it beneficial taking discount this year and ignoring the tax benefit next year or is it better to pay the premiums separately for each year and ignoring the health insurance renewal discount. I have done some mathematics over this specifically for Apollo Munich Health insurance discount offering of 7.5%, which I believe readers will also take benefit from.
The tax benefit in case of “case 2” is limited to only on Rs 15000/- as per section 80D of income tax act.
The above calculations make it very clear that even after availing health insurance renewal discount for 2 years, there’s hardly any difference in the net outflow of money if some pays it separately for different years.
Health Insurance discount – What should insured do?
From monetary point of view as shown in the above calculations it is not making much of a difference in the net cash outflow (after considering discount and Tax benefit), in fact in some cases the net outflow is more after considering discount then it is without discount. So, this tells that paying later is better. Moreover if you consider take time value of money then also paying later will be better.
Regarding the second benefit which insurance company offers of protection from the rise in premium doesn’t matter much, as rise in premium would be anyone’s guess and no one can predict this in advance
Paying Year on Year and ignoring health insurance discount will also keep the portability window open in case due to some reason you want to port out your policy to some other health insurance company.
So my take is Ignore any Health Insurance discount and keep paying the policy premium separately year on year.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
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| Posted: 03 Mar 2014 03:10 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
The scenario now is changing. The Insurance Regulatory and Development Authority in one of its recent directives had asked general insurance companies to keep at least 65 years as the maximum entry age for a health insurance policy. This has helped increase the number of health insurance products for senior citizens in the Indian market. Many companies have no come up with health insurance policy specifically designed for senior citizens.
For example, Star Health Senior Citizen Red Carpet Plan, Bajaj Allianz Silver Health and many more. Elaborating a little on these plans, Star Health Senior Citizen Red Carpet policy covers people in the age group of 60-69 years. Although there is copayment of 50%, there are no medical tests required at the time of the payment of the policy. Similarly, Similarly, Bajaj Allianz Silver Plan covers people till the age group of 75 years and the policy can be renewed till 80 years.
The Sum Insured options start from Rs 50,000 to Rs 5,00,000. Similarly, Oriental insurance’s plan called Hope states no upper age limit for health insurance and covers 11 specified critical illness diseases like Accidental Injury, Knee Replacement, Cardio Vascular Diseases, Chronic Renal Failure, Cancer, Hepato-Biliary Disorders, Chronic Obstructive Lung Diseases, etc. There are a couple of things that senior citizens should keep in mind while purchasing health insurance. Firstly, if you are confident about your health then take a health examination and show proof of your good health to a health insurance agent & company. This proves that you might be getting up there in age but there aren’t any high risks that they would have to take yet. Secondly, it’s imperative that good hospitals near the policy holder’s place of residence are under the network hospitals.
At the time of emergency, travelling long distance to reach the network hospital is not suitable at all. Waiting period for pre-existing conditions is also an important aspect to keep in mind when it comes to purchasing health insurance. Lesser the pre-existing cover, the better. Normally, it ranges between 3-4 years for senior citizens. Copayment options should also be considered as it reduces the premium to be paid by the policy holder. Finally, in case of senior citizen plans, it is very important that all the clauses are read and clearly understood. A seemingly normal looking clause can have certain hidden implications; hence, it is advised to consult the company representative to get a perfect clarity.
As the market is abound with options it gets important to go through all the options and then zero down on one to buy the best health insurance policy for the elderly. Ideally, try to compare senior citizen health insurance quotes online from a number of different providers. It allows you to pick and choose from policies and rates and get in touch with a representative of the insurance company to discuss risk and ways you can lower it. Before you decide on purchasing a certain policy, we would recommend you scan all the possible options and decide on the one that is best healthcare policy suitable for senior citizens.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
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| Principal Retail Equity Savings Fund Merged into Principal Growth Fund Posted: 03 Mar 2014 01:52 AM PST Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Principal Mutual Fund has announced the merger of Principal Retail Equity Savings Fund into Principal Growth Fund, with effect from February 28, 2014.
Investors who want to continue can do so without doing anything. However, investors, who want to exit from Principal Retail Equity Savings Fund, can redeem their units between January 29, 2014 and February 28, 2014.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
2. Franklin India Smaller Companies E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF |
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