Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
The best time to start investing is today You are different and so are your needs Why your returns are not the same as the market’s return? Understanding Taxation in Mutual Fund Investments

Brife:
It is better to revive a lapsed policy rather than buying a new one

Frauds related to lapsed life insurance policies are on the rise with spurious calls being made to policyholders to help revive such policies. While insurers are putting in place various measures to handle complaints regarding such spurious calls, individuals must ensure that their life policies remain active and the premiums are paid on time. In case the policy lapses, one must approach the insurer directly to revive the policy after fulfilling all the conditions.

Fraudulent calls

Dubious agents make calls promising to revive a lapsed policy if the policyholder pays a certain amount or even claim that the insured will receive the amount of the lapsed policy if they buy a new insurance policy. As it is difficult to ascertain whether a call is authentic or not, the policyholder must call the customer care numbers of the insurer and seek an email from them with all details. All the payment must be done to the insurer’s account.

There have been several cases of spurious calls related to lapsed policies. Thus, policyholders must be vigilant against revealing any personal or policy information on the call or making any payments.In such situations, the policyholders should first check with the insurance company. This would save them from losing any money. Unscrupulous callers might also claim to be from the Insurance Regulatory and Development Authority of India (Irdai) and hence awareness is necessary to ensure that customers lodge a complaint with the police instantly.

Never let your policy lapse

If the premium is not paid within the due date, the insurance company will give a 15-day grace period for premiums paid in monthly instalments and 30-day grace period if the premium is paid on a quarterly, half-yearly or yearly basis. If the premium is not paid within the grace period, the policy will lapse and the insured’s nominee will no longer be able to get any benefits of the term plan. In case of endowment and unit-linked insurance plans if the policy lapses in the lock-in period, then all the premium paid will get forfeited and the policyholder will not get any benefits, not even the bonus accumulated in the lapsed policy.

Reviving lapsed policy or buying a new policy

It is better to revive a lapsed policy as buying a new one will require you to undergo the entire application procedure and the medical tests. You will have to pay a higher premium which will be based on your current age and health conditions. However, reviving a lapsed policy, provided the company accepts the lapsed policy for revival, will entail certain costs.

You will have to pay the premium for all the years since the lapse of policy along with interest on outstanding premiums, applicable taxes and even penalty amount for non-payment of premiums. As per Irdai norms, life covers issued before 2019 have a maximum revival period of two years and policies issued after that have a maximum revival period of five years. Once the revival period expires, the policy is terminated.

Most life insurance premiums are a level premium for the policy’s lifetime and younger the age, lower is the premium. Nayan Goswami, head, General Insurance, Sana Insurance Brokers, says when you revive or continue a policy, you have the advantage of paying a lower premium based on your younger ‘age at entry’ and for life insurance policies with an investment-linked feature, the longer you stay in the policy, the better the return. “If you let a policy lapse or discontinue it, you may only get the surrender value. The insurer will also levy a penalty as you opt out earlier than the maturity date,” he says.

REVIVAL RULES

  • Approach the insurance company directly to revive the policy. Be vigilant against spurious calls
  • Life covers issued before 2019 have a maximum revival period of two years. For those issued after 2019, it is five years
  • Reviving a lapsed policy entails certain costs, including interest on outstandings, taxes and even a penalty fee

Brife:
OPD subscription plans are not eligible for any tax sops. Read this article to know more..

While individuals buy a health insurance policy for financial protection and benefit from the tax deductions, they must comply with the conditions laid under Section 80D of the Income Tax Act. The premiums paid for self, spouse and children are deductible up to Rs 25,000 if all of them are below the age of 60, including the preventive health checkup. Those above 60 years of age can claim tax deduction of up to Rs 50,0000.

Moreover, one can avail tax deduction for health insurance premiums paid for parents. Tax deduction can be availed for both types of policies — defined benefit where a fixed amount is paid as claim and indemnity plan where the claim is paid based on the medical expenses subject to the overall sum insured.

Conditions for tax benefits

However, tax deduction on health insurance comes with certain conditions. If they are not followed, then the insured will not be able to claim any tax exemption and the exemptions can be reversed.

Cost benefit

For one, the health insurance premium must be paid by any mode such as cheque, or money transferred through NEFT or UPI other than cash. However, cash payment on account of preventive health check-up is admissible for tax benefit.

If the premium is paid by another person on behalf of the individual claiming the tax deduction, then the latter will not be able to claim any tax exemption. The premium has to be paid from the taxable income of the person who wants to claim the tax benefit. Even in a floater plan, the tax benefit cannot be shared.

Those buying a multi-year policy can claim tax deduction proportionately over the policy term. The individual will have to take a certificate from the insurer mentioning the amount that can be claimed.

However, one cannot claim any tax benefit on the health insurance premium paid for in-laws and siblings, even if they are dependent on them for finances.

You cannot avail tax deduction on outpatient department treatment (OPD) health subscription plans as they are not health insurance plans under Section 80D. However, cashless OPD treatment cover and riders such critical illness will entail tax benefits within the overall limit as per the insured’s age bracket.

Treatment for a dependent

A resident individual incurring medical expense of a dependent (spouse, children, parents, brothers and sisters) with a disability can claim deduction under Section 80DD. If the taxpayer incurs any expenditure, then a flat Rs 75,000 deduction is available. If the dependent person is suffering from 80% or above disability, then deduction of Rs 1,25,000 is available.



You would have heard health is wealth, but as you move ahead in your 40s, this proverb becomes more realistic. In your 40s, you are more susceptible to the possibility of critical illnesses compared to your 20s and 30s. This increases your medical expenses, and if you haven’t planned for this uncertainty beforehand, it can drain your savings and investments. Thus, you not only require health insurance but adequate health insurance coverage.

As you grow older, your health insurance premium increases, especially if the sum covered is large and you have certain medical conditions.

However, a great solution here is to get top-up insurance on your/employer-provided health insurance. Here is everything you need to understand about this and its benefits.

What is a health top?

A health insurance top-up plan is additional coverage you purchase on your existing insurance plan. Often if your health insurance coverage limit is exhausted, the difference has to be paid by you. A health top-up plan is one of the most viable solutions to avoid such a scenario since the insurance company covers the difference. Health top-ups are low-cost alternative plans to large-sum health policies. You have to choose a deductible amount. If the medical bills exceed this threshold, they will be covered by the top-up plan.

Your existing health insurance Rs. 10 lakh Health top-up insurance Rs. 30 lakh Health top-up deductible Rs. 10 lakh Medical bill Rs. 20 lakh

Insurers offer two types of restoration benefits — complete exhaustion or partial exhaustion. In the former, the benefit will be applicable only when the entire sum insured is exhausted. In the latter, it kicks in even after a part exhaustion of the sum insured.

Points to check

Check the terms and conditions on the restoration of the sum insured for related as well as non-related illness for the same cover, before deciding on the restoration benefit. See if it is an add-on which you can buy with the policy, and if two or more members of your family suffering with the same disease can claim for restoration benefit. .

Make sure you have a family health insurance cover of at least Rs 15-20 lakh. This should be in addition to any corporate health insurance coverage that you already have.

If buying a large cover is not feasible, then purchase a smaller base plan and enhance it with a super top-up policy. For instance, you can buy a Rs 5 lakh base cover and then a top-up policy of, say, Rs 20 lakh.



Have you ever faced a situation where you have a health insurance policy and your claim is not being processed?
There may be instances where the claim is denied due to the standard exclusions or waiting periods specified in the policy. It is therefore preferable to check “what is not covered by the policy” rather than “what is covered by the policy.” Let us understand some important points on standard exclusions in the health insurance policy:

Initial waiting period (30 days)

  • There is an initial waiting period of 30 days in the policy. This means, whenever you have taken a policy, you have to wait for 1 month to make a claim..
  • 30-day waiting period (Excl03) are the expenses related to the treatment of any illness within 30 days from the first policy commencement date shall be excluded except claims arising due to an accident, provided the same are covered.
  • Specified diseases (2 years)

    • There are certain specified diseases that are mentioned in the policy document and are covered after 2 years.
    • These are the expenses (Excl02) related to the treatment of the listed conditions, surgeries/treatments which shall be excluded until the expiry of 24 months of continuous coverage after the date of inception of the first policy.
    • This exclusion shall not be applicable for claims arising due to an accident.
    • The waiting period for listed conditions shall apply even if contracted after the policy or declared and accepted without a specific exclusion.
    • If the Insured is continuously covered without any break as defined under the applicable norms on portability stipulated by IRDAI, then the waiting period for the same would be reduced to the extent of prior coverage.
    • Pre-existing Diseases – (4 years)

      Many of us know, the existing ailment or disease is covered after 4 years in the policy. However, let us understand the same in more detail with the help of the wording in the standard exclusion clause.

      Pre-existing disease (Excl01) means any condition, ailment or injury or disease;

      1. That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement Or
      2. For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.

      In simple terms, before taking a health insurance policy, if you are under medication or have a certain ailment which is diagnosed 48 months prior to taking the policy, this is termed as a “Pre-existing disease” and the claims related to the same shall be covered after 4 years.

      Conclusion

      These are the standard exclusions so that no one can make a profit out of insurance, which defeats its purpose. Few people enter into the product only when they are triggered with any ailment and assume that they can claim in the policy immediately and cover the financial loss.

      One must hence, understand that “Insurance is to indemnify the uncertain loss covered in the policy and runs on the principle of “Uberrima Fides” (Utmost Good Faith) and “Principle of Indemnity”. It is a tool to save you from uncalled emergencies and should not be looked at for Profit making.

      Hope the above exclusions in the form of a waiting period shall help you understand the policy in more detail and the intent behind such standard rules.

Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.