All About Health Insurance

There are many health insurance schemes available in the market. Policies from different insurers have different features, riders and premium, and to pick the right one that suits both your needs and your budget becomes difficult.


The first thing to ensure is that the health insurance policy you buy provides adequate coverage to you and your family. Premiums vary across different insurance companies for the same Sum assured. Instead of just going for the cheapest plan, compare the features. By paying a extra, you may be able to get good benefits.

Every health insurance company has a waiting period before it starts covering pre-existing diseases. According to the Insurance Regulatory and Development Authority (IRDA), a pre-existing disease is any condition, ailment, injury or related condition for which one had signs or symptoms, were diagnosed, or received medical advice or treatment within 48 months prior to the purchase of the policy. The waiting period for covering pre-existing diseases differs from one insurer to another and ranges from two to four years. I would advice that give preference to policies that have a lower waiting period.

Many health insurance policies offer a critical illness rider along with the basic policy. It covers a limited number of diseases for which usually the cost of treatment is very high. Closely scrutinize the diseases that are covered by the rider. Also remember that the waiting period for critical illness is usually 90-120 days and you must survive for at least a month after the procedure to get the claim.” A critical illness rider mostly covers expenses arising out of cancer, kidney failure, organ transplant, multiple sclerosis and coronary artery surgery.

Most health insurance companies offer both cashless (insurer reimburses the hospital directly) as well as reimbursement facility. It is better to go for the cashless facility as then you do not have to make any payments to the hospital out of your own pocket. It also involves less paperwork and hassle than the reimbursement facility. Check the network of hospitals in your city where the cashless facility is available.

If you have had a claim-free year, companies offer a 5 per cent bonus on sum assured the following year. The cumulative bonus could go up to 50 per cent of sum assured. Make sure that your insurer offers you this bonus.

Most health insurance companies place a cap on the daily hospital room rent they will pay. Insurance companies have a cap on room rent which is usually 1 per cent of sum assured per day. This figure varies from company to company.

Usually persons aged above 45 are required to go through a medical checkup before the insurance company agrees to cover them. If your medical report is adverse, the insurance company may not offer you a cover.The age limit at which a medical test becomes compulsory varies from company to company.

Some insurance companies have designed policies to cater to the needs of senior citizens.Some insurers offer policies renewable up to the age of 75 years, provided the insured had bought the policy before the age of 55. The longer period for which a senior citizen cover lasts, the better.

IFCI Long Term Infrastructure Bonds

IFCI is offering Long Term Infrastructure Bonds – Series 1.

This issue is open till 31st August 2010.

Investments upto a maximum of Rs.20,000 in this is eligible for deduction u/s 80CCF for the Financial Year 2010-11. An Individual or HUF can avail of this benefit in addition to the limit of Rs.1 Lakh u/s 80C. 

The details are as follows:

·        The tax benefit would be limited to a maximum of Rs.20,000 although the investor can invest any amount

·        The tenure of the bonds is 10 years. However, the lock-in period is 5 years if the investor chooses the buy-back option.In case the investor does not opt for buyback, the principal amount would be refunded back after 10 years, i.e. September 15, 2020

·        The bonds will be listed on BSE. It can be sold after a minimum holding period of 5 years.

  

Options	I
	Buyback/Non-Cumulative
Minimum Amount/FV (Rs)	5,000
In Multiples of (Rs)	5,000
Buy-back Option	Yes
Interest Payment	Yearly
Coupon	7.85% p.a.
Yield on redemption	7.85%
Coupon Payment Date	Sep.15 every year
Redemption Date	Sep.15,2020
Buy-back period	Every year between Aug.16 to Aug.31,starting from the year 2015 till 2019

II	III
Buyback/Cumulative	Non-buyback/Non-Cumulative
5,000	5,000
5,000	5,000
Yes	No
NA	Yearly
7.85% comp. annually	7.95% p.a.
7.85%	7.95% p.a.
NA	Sep.15 every year
Sep.15,2020	Sep.15,2020
Every year between Aug.16 to Aug.31,starting from the year 2015 till 2019	NA

IV
Non-buyback/Cumulative
5,000
5,000
No
NA
7.95% comp. annually
7.95% p.a.
NA
Sep.15,2020
NA

SENSEX SURGED ALONG WITH GLOBAL MARKETS

Indian markets saw biggest rally yesterday. The 30-share BSE Sensex closed at 17330.55, up 561.44 points and the Nifty rose 175.55 points to settle at 5193.60, which touched 5200 in late trade. All the global markets were upwards after European Union and International Monetary Fund (IMF) agreed a massive rescue package to control Greece's debt crisis spreading to other Euro zone countries.

The European Union ministers agreed an emergency aid worth 500 billion Euros (USD 670 billion) of loans and loan guarantees to any euro zone countries needing funds, plus about 250 billion Euros from the International Monetary Fund.

Income Tax Rates/Slab for Assesment Year 2011-12 (F Y 2010-11)

Individuals/HUFs

Upto Rs 1,60,000 - Nil

Rs 1,60,000 - Rs 5,00,000 - 10%

Rs 5,00,000 - Rs 8,00,000 - 20%

Above Rs 8,00,000 - 30%

Woman Resident

Upto Rs 1,90,000 - Nil

Rs 1,90,000- Rs 5,00,000 - 10%

Rs 5,00,000 - Rs 8,00,000 - 20%

Above Rs 8,00,000 - 30%

Present Tax Slab

Senior Citizen (>65yrs)

Upto Rs 2,40,000 - Nil

Rs 2,40,000- Rs 5,00,000 - 10%

Rs 5,00,000 - Rs 8,00,000 - 20%

Above Rs 8,00,000 - 30%

ULIP issue agreed to settle @ HLCC : RBI

Mr. D Subbarao today revealed that market regulator SEBI and insurance regulator IRDA had mutually agreed to settle the jurisdiction issue over ULIPs at the High Level Coordination Committee (HLCC).

Mr. Subbarao, who is also the chairman of HLCC disclosed that both the regulators-IRDA and SEBI-have mutually agreed to settle the issue bilaterally among themselves.

HLCC on the other hand is a high level forum chaired by RBI Governor and works as an interface among the various financial sector regulators. The forum constitutes representatives of the finance ministry along with banking, insurance, pension and capital markets regulators. Adding further on the settlement of the issue Mr. Subbarao said, What turned up is a legal issue. Perhaps there should be an agreement... to settle at the legal forum.

SEBI had been arguing that since the money raised through ULIPs is used by these companies for making investments into equity and debt markets, hence the same should fall under the regulation framework of SEBI and not IRDA. However, in its response to SEBI, IRDA had later asked the insurance companies to continue doing business on the usual lines.

Following the issue contradictory orders from the two regulators the Finance Ministry had intervened in an effort to persuade both SEBI and IRDA.The finance ministry's intervention was then followed by an issue of a fresh order by SEBI stopping the insurance companies from issuing any new unit-linked insurance products (ULIP). The 14 insurance companies that were affected under the ban by SEBI includes the likes of SBI Life, ICICI Prudential, Tata AIG, Aegon Religare Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life.

MARKET OUTLOOK

If we look at the Interest rate side, it should ideally go up. But it is coming down. If interest rate increases the corporate and big companies will be in trouble. So, they will not increase interest rate now. This is a very big factor.

On 29^th Jan 2010 Central bank surprised markets by raising banks' cash reserve requirements by more than expected and warned of mounting inflation, setting the stage for lifting interest rates in the coming months.

Banks worldwide will be restricted. US will come up with lot of restrictions for Banks. This can be a negative factor for the markets.

FII’s invest into India for Long term, Short term as well Medium term period. For FII’s India is small economy. We clearly don’t know for what Term they have invested in India. They can pull money from any one of the above as they have to pay back their loans and keep the money safe.

I believe that markets may see more downside in near-term. But things are unpredictable; you do not know how globally things pan out and in this to just map liquidity and say the markets will get supported because liquidity has a habit of chasing prices and vanishing when you need it most.