Family Floater is one single policy that takes care of the hospitalization expenses of your entire family. 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. Quite often Family floater plans are better than buying separate individual policies. Family Floater plans takes care of all the medical expenses during sudden illness, surgeries and accidents.

Some health insurance policies pay for specified expenses towards general health check-up once in a few years. Normally this is available once in four years.

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.

Yes. The Insurance Regulatory and Development Authority (IRDA) has issued a circular making it effective from 1st October 2011, which directs the insurance companies to allow portability from one insurance company to another and from one plan to another, without making the insured to lose the renewal credits for pre-existing conditions, enjoyed in the previous policy. However, this credit will be limited to the Sum Insured (including Bonus) under previous policy. For details, you may check with the insurance company.

Age is a major factor that determines the premium, the older you are the premium cost will be higher because you are more prone to illnesses. Previous medical history is another major factor that determines the premium. If no prior medical history exists, premium will automatically be lower. Claim free years can also be a factor in determining the cost of the premium as it might benefit you with certain percentage of discount. This will automatically help you reduce your premium.

Health insurance comes with attractive tax benefits as an added incentive. There is an exclusive section of the Income Tax Act which provides tax benefits for health insurance, which is Section 80D. Currently, purchasers of health insurance who have purchased the policy by any payment mode other than cash can avail of an annual deduction of Rs. 20,000 from their taxable income for payment of Health Insurance premium for self, spouse and dependent children. For senior citizens, this deduction is higher, and is Rs. 25,000.

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 without having to pay the hospital bills as the payment is made to the hospital directly by the Third-Party Administrator, on behalf of the insurance company. However, expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy must be settled by you directly with the hospital. Cashless facility, however, is not available if you take treatment in a hospital that is not in the network.

All of us should buy health insurance and for all members of our family, according to our needs. Buying health insurance protects us from the sudden, unexpected costs of hospitalization (or other covered health events, like critical illnesses) which would otherwise make a major dent into household savings or even lead to indebtedness. Each of us is exposed to various health hazards and a medical emergency can strike anyone of us without any warning. Healthcare is increasingly expensive, with technological advances, new procedures and more effective medicines that have also driven up the costs of healthcare. While these high treatment expenses may be beyond the reach of many, taking the security of health insurance is much more affordable.

The term health insurance is a type of insurance that covers your medical expenses. A health insurance policy is a contract between an insurer and an individual /group in which the insurer agrees to provide specified health insurance cover at a “premium”.

You must check and see whether there is availability of guarantee of return, what the lock in period is, details of premium to be paid, what would be implications of premium default, what the revival conditions are what the policy terms are, what are the charges that would be deducted, would loan be available etc.

The disclosures made in a proposal are the basis for underwriting a policy and therefore any wrong statements or disclosures can lead to denial of a claim.

After premiums are paid for a certain defined period or beyond and if subsequent premiums are not paid, the sum assured is reduced to a proportionate sum, which bears the same ratio to the full sum assured as the number of premiums actually paid bears to the total number originally stipulated in the policy

Surrender Value is allowed as a percentage of this paid-up value. Surrender value is calculated as per the surrender value factor, which depends on the premiums paid and elapsed duration.

Usually the Insurance Company will send intimation attaching the discharge voucher to the policy holder at least 2 to 3 months in advance of the date of maturity of the policy intimating the claim amount payable. The policy bond and the discharge voucher duly signed and witnessed are to be returned to the insurance company immediately so that the insurance company will be able to make payment. If the policy is assigned in favour of any other person the claim amount will be paid only to the assignee who will give the discharge.

Settlement option means the facility made available to the policy holder to receive the maturity proceeds in a defined manner (the terms and conditions are specified in advance at the inception of the contract).

A. Surrender value in Unit Linked Policies is usually expressed as fund value less the surrender charge.

The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policyholders are pooled together to form a Unit fund.

Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and time horizons. Different funds have different risk profiles. The potential for returns also varies from fund to fund.
The following are some of the common types of funds available along with an indication of their risk characteristics. General Description Nature of Investments Risk Category Equity Funds Primarily invested in company stocks with the general aim of capital appreciation
Medium to High Income, Fixed Interest and Bond Funds Invested in corporate bonds, government securities and other fixed income instruments Medium Cash Funds Sometimes known as Money Market Funds — invested in cash, bank deposits and money market instruments
Low Balanced Funds Combining equity investment with fixed interest instruments Medium

Investment returns from ULIP may not be guaranteed.” In unit linked products/policies, the investment risk in investment portfolio is borne by the policy holder”. Depending upon the performance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses on his/her investments. It should also be noted that the past returns of a fund are not necessarily indicative of the future performance of the fund.

ULIPs offered by different insurers have varying charge structures. Broadly, the different types of fees and charges are given below. However, it may be noted that insurers have the right to revise fees and charges over a period. 
Premium Allocation Charge This is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses. 
Mortality Charges These are charges to provide for the cost of insurance coverage under the plan. Mortality charges depend on number of factors such as age, amount of coverage, state of health etc.
Fund Management Fees These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV). 
Policy/ Administration Charges These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate. 
Surrender Charges A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions. 
Fund Switching Charge Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge. 
Service Tax Deductions Before allotment of the units the applicable service tax is deducted from the risk portion of the premium. 
Investors may note, that the portion of the premium after deducting for all charges and premium for risk cover is utilized for purchasing units.

Yes, one can invest additional contribution over and above the regular premiums as per their choice subject to the feature being available in the product. This facility is known as “TOP UP” facility.

A Mutual Fund is a trust that pools the savings of several investors who share a common financial goal. It is essentially a diversified portfolio of financial instruments - these could be equities, debentures / bonds or money market instruments. The corpus of the fund is then deployed in investment alternatives that help to meet predefined investment objectives. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus, a Mutual Fund is a suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

To cater to different investment needs, Mutual Funds offer various investment plans. Some of the important investment plans include:

  • Growth Option: Dividend is not paid-out under a Growth Plan and the investor realises only the capital appreciation on the investment (by an increase in NAV).
  • Dividend Pay-out Option: Dividends are paid-out to investors under a Dividend Pay-out Option. However, the NAV of the mutual fund scheme falls to the extent of the dividend pay-out.
  • Dividend Re-investment Plan: Here the dividend accrued on mutual funds is automatically re-invested in purchasing additional units in open-ended funds. In most cases, mutual funds offer the investor an option of collecting dividends or re-investing the same.
  • Retirement Pension Plan: Some schemes are linked with retirement pension. Individuals participate in these plans for themselves, and corporates participate for their employees.
  • Insurance Plan: Certain Funds offer some schemes that offer insurance cover to investors.
  • Systematic Investment Plan (SIP): Here the investor is given the option of preparing a pre-determined number of post-dated cheques (or a direct debit of the bank account) in favour of the fund. The investor is allotted units on a pre-determined date specified in the Offer Document at the applicable NAV.
  • Systematic Encashment Plan (SEP): As opposed to the Systematic Investment Plan, the Systematic Encashment Plan allows the investor the facility to withdraw a pre-determined amount / unit from his fund at a pre-determined interval. The investor's units will be redeemed at the applicable NAV as on that day.

The sell price of schemes can be different from the NAV due to exit loads. For example, if the current NAV of a scheme is Rs. 10 and the exit load is 1.5per cent then the effective sale price will be INR9.85.

Generally, Mutual Funds do not offer guaranteed returns to investors. Although, SEBI regulations allow Mutual Funds to offer guaranteed returns subject to the Fund meeting certain conditions, most Funds do not offer such guarantees. In case of a guaranteed return scheme, the sponsor or the AMC, guarantees a minimum level of return and makes good the difference if the actual returns are less than the guaranteed minimum. The name of the guarantor and the way the guarantee shall be met must be disclosed in the offer document by the Mutual Fund. Investments in mutual funds are not guaranteed by the Government of India, the Reserve Bank of India or any other government body.

A Mutual Fund's performance can be benchmarked against other Mutual Funds of similar type - for example, the performance of a diversified equity fund should be compared to similar funds in the industry or against established market indices like the BSE Sensex or the NSE Nifty. One can also benchmark the fund against any other broad-based index for the particular asset class. The Investment Manager usually decides a benchmark index at the time of conceptualization of the scheme and this benchmark serves as a good tool for comparison.

The comparison period for benchmarking Mutual Fund schemes should be carefully decided. Equity funds should be ideally compared over a 1-2-year horizon. Any comparison over a shorter period would be distorted by short term, volatile price movements. Similarly, the ideal comparison period for a debt fund would be 6-12 months while that for a liquid/money market fund would be 1-3 months.

In Mutual Funds, the investments of investors are pooled to form a common investible corpus and the gain/loss to all investors during a given period are same for all investors. In the case of portfolio management schemes, the investments of a particular investor remain identifiable to him. Here the gain or loss of investors will be different from each other.

A debt fund invests in fixed-income instruments. These include Commercial Paper, Certificates of Deposit, debentures and bonds. While the rate of interest on these instruments stays the same throughout their tenure, their market value keeps changing, depending on how the interest rates in the economy move.

A debt fund's NAV is the market value of its portfolio holdings at a given point in time. As interest rates change, so do the market value of fixed-income instruments - and hence, the NAV of a debt fund. Thus, it is a misnomer that the debt fund's NAV does not fall.

Third Party Liability insurance is mandatory for all vehicles plying on public roads in India. This covers Liability for injuries and damages to others that you are responsible for. In addition, it is prudent to cover loss or damages to the vehicle itself by way of Comprehensive/Package policy, which covers both “Liability” as well as “Own damage” to the insured vehicle. Liability Only cover is also known as Act Only cover.

Many factors determine the premium you will pay. For Own Damage cover different insurance companies charge different premiums for similar coverage. Shop around; getting three or more comparison quotes is worthwhile. Check various insurers’s websites; it will help you compare premiums. Do not forget to compare deductibles, coverage and IDV’s as premium may be lesser of one insurer but with higher deductibles, lower coverage and lower IDV, which will adversely impact you in the event of claim settlement.

Be prepared to give your agent information about the following items that are commonly used to determine your premium: Vehicle registration details with Engine No., Chasis no., Class of vehicle, cubic capacity, seating capacity, etc. (In fact, all relevant details are in the RC book/card and a copy of same may be handed over) Tax paid details; Certificate of fitness, Driver details - age, gender, qualifications, licence validity Previous insurance history, if any. 

The Own Damage coverage is left to be rated by individual insurance companies after duly filing rates with the Insurance Regulatory and Development Authority. The same is determined  on following factors amongst others -- Age of vehicle; Discounts / loadings- Appropriate Bonus / loading/ discounts along with past claims experience are taken into account while calculating premium. IDV (Insured Declared Value). 

Third Party Liability Premium rates are laid down by IRDA.

In case of break in insurance, vehicle inspection would be required and extra charges will have to be incurred for the same.

The sum insured for the vehicle is called “Insured’s Declared Value” and should reflect the current market value of the vehicle. Under Liability insurance, Third Party Liability insurance is covered. There is unlimited coverage to Third parties injury and Third party property damage is covered up to a sum of Rs 7,50,000.

The Insured has the option to restrict coverage for Third Party Property damage to Rs 6,000 and this will result in a lower ”Liability Only” premium.

A motor policy is usually valid for a period of one year and has to be renewed before the due date. Pay the premium on time. No Insurer offers a grace period for paying the premium. In case of lapse of policy by even one day, the vehicle has to be inspected. Moreover, if a comprehensive policy is allowed to lapse for more than 90 days, the accrued benefit of NCB (No Claim Bonus) is also lost.

No Claim Bonus (NCB) is the benefit accrued to an insured for not making any claims during the previous policy period.  As per current norms in India, it ranges from 20% on the Own Damage premium (and not on Liability premium) and progressively increases to a maximum of 50%.

If, however, a claim is lodged, the No Claim Bonus is lost in the subsequent policy period.

NCB is given to the insured and not to the insured vehicle. Hence, on transfer of the vehicle, the insurance policy can be transferred to new owner but not the NCB. The new owner has to pay the difference on account of NCB for the balance policy period.The original owner can, however, use the NCB on a new vehicle purchased by him.

In addition to NCB, there are additional discounts available under Own Damage Premium for membership of Automobile Association of India, Vintage Cars (Pvt. Cars certified by the Vintage and Classic Car Club of India); Installation of anti-theft devices approved by Automobile Research Association of India (ARAI), Pune and whose installation is approved by AAI; Concessions for specially designed/modified vehicles for the Blind, Handicapped and mentally challenged persons, which are suitably endorsed in the RC by the RTA concerned; - opting for voluntary additional deductible/excess.

Under “Liability Only Section”, discounts are available for reduction in Third Party Property Damage (TPPD) from Rs. 750,000 to Rs. 6,000.

Yes, Service Tax is applicable and would be as per prevailing rule of law.

Deductible or “excess” is the amount over and above, which the claim will be payable. There is a normal standard/compulsory excess for most vehicles ranging from Rs 50 for two-wheelers to Rs 500 for Private Cars and Commercial Vehicles which increases depending upon the cubic capacity/carrying capacity of the vehicle. However, in some cases the insurer may impose additional excess depending upon the age of the vehicle or if there is high frequency of claims.

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