6 Reasons For The Rise Of Health Insurance Premiums In India

Have you recently renewed your health insurance policy and suddenly seen a rise in the premiums? Well, let’s just say, you are not alone. There is an increasing trend in health insurance premiums in India. Here’s why:

  1. Higher instances of illnesses

    The environment has become increasingly unpleasant for human life to thrive, from climate change to increased pollution, we are all seeing the worst happening to the environment. This has led to a rise in diseases and critical illnesses. 

    Heart attacks and cancer cases in today’s times are much higher than what it was during the earlier years. It has also become increasingly prevalent among younger individuals, you hear of young individuals as less as 30 years losing their lives to heart attacks. The instance of hospitalisation among the younger population is also on the rise. The illnesses could also stem from increased stress levels, with the advent of social media, there are also increased mental health issues. Health insurance plans are slowly recognising this aspect and offering coverage for such illnesses as well. 

  2. Increasing lifestyle diseases

    There is the curious case of, ‘sitting becoming the new smoking’, with desk jobs being the trend these days, the number of people actively exercising is very low. This has also caused many lifestyle diseases such as thyroid, obesity, cholesterol, and diabetes. India is among the top nations in terms of the number of diabetic patients.

    Many youngsters fall prey to lifestyle diseases and are put on medication at a very young age. The increase in lifestyle diseases has led to more outpatient disposition/treatment instances. Many health insurance plans offer coverage for OPD treatment as well. The increase in claims has also led to an increase in health insurance premiums. Almost 75% of one’s medical treatments are usually OPD related, hence, there is a need for health insurance policies to offer coverage for lifestyle diseases. 

  3. Medical inflation

    Medical inflation in the last couple of years has hovered around 7.5% p.a to 8% p.a which is much higher than the regular inflation rate. However, in the year 2021, India saw medical inflation shoot up to 14% as per a report on Indian Health Insurance by Motilal Oswal Financial Services Limited (MOFSL). The inflation rate was the highest among Asian countries.

    In fact, among all Education costs and medical inflation costs are the two expenses where the inflation rates are rising at an unprecedented pace. The entire medical system including hospitals, research labs, lines of treatments, pharma etc., are all experiencing a very competitive environment. There is increased effort to stay competitive and manage to hold the market share, this has resulted in increased incurrence of cost due to advanced tech investments, higher / better customer service practice, and better marketing etc. This results in an increase in overall medical costs as the companies are eventually pressured to pass on the costs to the end consumer. 

  4. Claim statistics

    As per the report by MOSL, the covid related claims went up sharply, the claims accounted for 6% of the total claims paid out by all health insurance companies in India in the year 2020-21. The number is expected to be around 12% of total claims in the year 2021-22.

    These statistics indicate that Covid has been a game-changer and has exposed the vulnerability of people in terms of them being exposed to health hazards. It also made the health insurance companies relook at their risk factors, during the covid waves, several otherwise healthy individuals had to undergo hospitalisation and extreme lines of treatment.

    The risk factors were reassessed and the risk premiums were revised to accommodate these new environmental factors. Thus, increasing premiums across the board.

  5. Higher hospital charges

    Hospitals are constantly innovating and upgrading to provide best-in-class experiences to their clientele. A stay in the hospital has become synonymous with a stay at a luxury hotel with healthy and sumptuous food at its disposal.

    Hospitals are also investing heavily in technology to ensure that they cater to customers in the best possible way. The space is becoming extremely competitive, and with increased demand, the hospitals are also able to up the price of the services which are in limited supply.

    This calls for a higher quantum of the sum insured for the individual to ensure that he is adequately covered for any unforeseen hospitalisation. This results in the payment of higher premiums. 

  6. The increasing cost of sophisticated treatment

    The focus has always remained on a better line of treatment which eventually translates to a better patient success rate. The treatment costs are quite huge, compared to the earlier days. To be able to afford such treatment, there is a need to avail a higher sum insured for the policyholder.

Further, there are many alternate treatment lines like AYUSH which are undertaken in parallel to ward off any possible side effects from the mainline of treatment, especially in cases of critical illnesses. Many health insurance plans allow such parallel claims, these factors have contributed to the increase in premiums. 

These are only some of the factors which have contributed to the increase in premiums of health insurance plans. There is a major chasm between medical treatment accessibility and the general, middle-income public without health insurance. There are efforts to address this gap by the Government. However, all these aspects only point to one thing, the growing need for health insurance. There are different types of Health Insurance available as per your needs and if you have not hedged your health risk comprehensively, then it is time to do so!

Contact Turtlemint Health Insurance Advisor to get protection from rising costs and help you with your insurance needs now!

DISCLAIMER
This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs.

Everything First-Time Car Buyers Must Know About Car Insurance

Your first car always brings a sense of euphoria, it brings a sense of freedom and independence. It also means that now you are responsible to inculcate good driving practices and ensure the upkeep of your car. Among the many decisions that you need to make, one additional decision would be regarding the car insurance that you need to avail yourself of. Insurance is a very vast world with multiple technical terminologies. We first decipher the technical terms and then get into the nuances of car insurance for your benefit. 

Technical terminologies you should know

  1. NCB (No claim bonus): 

    It is a discount offered when you renew your car insurance provided you have not made any claims during the previous policy year. NCB is extended for every claim-free year, it normally is given as a discount on the insurance premium (up to 50%) or may also be extended in the form of an increased sum insured in some cases.

  2. IDV (Insured declared value):

    This is the amount that your vehicle is valued at, in the first year of purchase of a new vehicle it will be valued at 95% of the ex-showroom price. This is also the value at which your car will be insured, also called the sum insured.

    As your vehicle ages, the depreciation catches on and the sum insured reduces. This is the amount which will be paid to you in the event of total loss or damage to the car that is insured.

  3. Deductibles:

    Under deductibles, there are two types:

    1. Compulsory Deductible:

      The minimum quantum of funds should be paid to begin an insurance claim.

    2. Voluntary Deductible:

      An amount that the policyholder is willing to pay during the occurrence of an unfortunate event. This would translate to policyholders sharing the financial burden.

To know more about the top Insurance Terms, click here. 

Types of car insurance policies

There are various types of car insurance which may often overwhelm you, here is a brief on each of these to help you understand what they cover. This will help you assess the suitability and accordingly choose the plan that best aligns with your requirement.

  1. Third-Party Insurance Plans:

    As per the Motor Vehicles Act, 1988, third-party car insurance is mandatory. This offers coverage for liabilities or claims that may arise out of any unfortunate incident like an accident where a third-party individual or property is involved. It is illegal to drive in India, without third-party insurance, you are likely to be severely fined or imprisoned.

  2. Own Damage Insurance Plans:

    This policy is to cover the damages that may be caused to the insured vehicle (own vehicle). Third-party insurance does not offer coverage to your vehicle, it covers the damage for the counterparty in an accident or unfortunate incident. You can avail of this plan only if you have a valid third-party-only car insurance plan.

  3. Comprehensive insurance:

    To put this in easy terms, it is both third-party insurance and own damage insurance put together. It covers damages to your vehicle and that of the third party. It also offers coverage against theft, fire, natural calamities, explosions etc.

    It is also termed the ‘all-in-one’ policy which offers complete coverage under a single policy with a single premium. There are add-on riders available to cover all bases. You can choose them based on your requirements.

Once you know about the basic terminologies and the type of car insurance that you need, it is time to consider other aspects such as:

  1. Assessment of insurance requirements:

    You must assess your requirement before you zero in on the type of insurance and the quantum of insurance that you may need. Two important considerations that you need to assess are the purpose of the vehicle, if you are likely to use the vehicle frequently for long-distance travel under heavy traffic or travel in accident-prone zones, then a higher quantum of the sum insured and wide coverage would be required. If you are likely to use it for short distances with minimal traffic, then lower coverage would suffice.

    Tip: All types of insurance, including car insurance, has to be budgeted, to ensure that you do not go overboard by adding riders unnecessarily. Insurance companies tend to upsell, hence, having an assessment and budget of your own always helps. Your insurance premium should be such that it aligns well with your requirement and does not hurt your monthly budget overtly.

  2. Product comparison:

    Before you buy any insurance policy, ensure to do a product comparison, there are umpteen websites which offer comprehensive comparisons across products. This is a cardinal rule that you should not miss. Further, whilst comparing, don’t just watch out for premium rates, ensure to go through every product feature to ensure that the product that you eventually choose aligns well with your requirement and offers optimal coverage for the premium rates.

    Tip: Read through the product features, understand the claim procedures, and also sift through the customer reviews and their experiences with claim settlement to gain a comprehensive idea about the insurer you wish to associate with.

  3. Inclusions and exclusions in the policy:

    A very important aspect that people tend to miss is understanding in detail the inclusions and exclusions. Complete and comprehensive coverage is what you typically should aim at. This can be achieved by understanding the gaps and evaluating if there are any add-ons which will help you bridge the gap. Of course, all this is based on your assessment of the need for such coverage.

    Tip: Try to pick car insurance which offers a wider coverage and has minimal exclusions, also one with no loose ends. In case you have inhibitions or doubts, do not hesitate to reach out to the insurer and clarify your doubts, always look for documents which substantiate the claims, this will help you keep them for future reference. 

Finally, you need to enhance the coverage of your car insurance plan with add-ons.

What are add-ons?

A host of add-ons are available for achieving comprehensive coverage of the policy by paying an extra premium.

Here are some add-ons that you may consider if it aligns with your requirement:

  1. Zero depreciation cover:

    This is also called the bumper-to-bumper or nil depreciation cover. The insured will not have to account for the depreciation value of the car or account for damages, replaced parts etc., the coverage is over and beyond the IDV.

  2. Roadside assistance cover:

    If you are stranded in the middle of nowhere, your insurance company will immediately send assistance. This is around-the-clock coverage.

  3. Engine protection cover:

    The engine replacement in your car can be an expensive affair, there is an add-on which helps you deal with this without any financial stress.

  4. Consumables cover:

    Any ad-hoc replacements, nuts and bolts purchases, engine oil replacement etc., can be claimed under this add-on.

    All these add-ons come at an additional cost, hence it is important to avail only those ride-ones that are necessary.

Also, read the 5 Best Add-on Car Insurance Covers in 2022

This is a comprehensive note intended to give a holistic picture of car insurance and its nuances. Hope it eases your anxiety as you embark on your journey to buy your first car insurance. If you need help in choosing the right policy, you can also contact Turtlemint’s expert advisor!

DISCLAIMER
This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs.

5 Reasons Why A Health Insurance Is The Best Father’s Day Gift

Fathers have always been the silent pillars of the family, protecting and fighting against all odds to support us. In fact, his endeavour has always been to safeguard the interests of the family much before his own. Now, with Father’s Day round the corner on 19th June 2022, most of you must be wondering what is the best Father’s Day gift to show your love.

There are many traditional gifting ideas including chocolates, flowers, greeting cards, and personalized items; but how to make this year unique? Why not try and safeguard your father’s retired life so that his health can be protected just the same way as he has been protecting your life forever?

The simple solution to this could be gifting a Health Insurance Plan to your dad this year which could be utilised by him forever. In fact, this could be your best Father’s Day gift to your dad, ever! Don’t just take our word for it. Here are five reasons that show why health insurance proves useful and fits the bill –

1. It offers a wide scope of coverage

Health insurance plans offer a wide scope of coverage against possible medical expenses. They cover hospitalisation costs, pre and post-hospitalisation costs, ambulance expenses, daycare treatments, organ donor treatments, and the like. 

Thus, in the case of a medical emergency, the health insurance plan would cover most of your father’s medical bills. This would help him avail of quality medical treatments without worrying about their costs.

2. It would cover both existing and potential illnesses

In their middle age, parents tend to develop various lifestyle illnesses like diabetes, hypertension, etc. These ailments can cause further medical complications for which health insurance coverage becomes important. Health insurance plans cover these existing ailments after a waiting period and provide an inclusive scope of protection.

Furthermore, health plans also cover unexpected illnesses or injuries giving your father the security of affordable healthcare in unforeseen situations too.

3. The plan offers lifelong renewals

One of the best parts about health insurance is lifelong renewability. Your father can enjoy coverage even in his golden years when illnesses become all the more common and frequent. All he has to do is renew his policy timely and the coverage would continue, uninterrupted, for as long as your father lives providing him with a comprehensive scope of protection.

4. It has tax benefits

When talking about health insurance how can one forget the tax benefits?

Health insurance plans prove tax-saving in nature. If your father pays the premium for his health insurance plan, he can enjoy a tax deduction of up to Rs.25,000 (Rs.50,000 if he is aged 61 years or above). This deduction can help him save a tax of up to Rs.7500 (Rs.15,000 if he is a senior citizen) if he falls in the 30% tax bracket.

Alternatively, if you pay the premium, you can claim this deduction over and above the deduction that you can claim for the health insurance plan for your family. In this case, thus, you can give your father comprehensive coverage and also save your tax in the process. A win-win!

5. It gives your father financial security

Lastly and most importantly, health insurance gives your father financial security in the face of a medical emergency. It is no secret that medical costs are increasing day by day. In such cases, a medical emergency might put an immense strain on your father’s finances. By taking care of the medical bills, health insurance can alleviate this strain and give your father the financial security that he needs. 

So, go a little unconventional this Father’s Day and choose a gift that would actually make a difference to your father. Opt for a health insurance plan and gift him financial security against unforeseen medical emergencies. 

Some tips to buy the right health insurance coverage for your father are as follows –

  • Opt for a sufficient sum insured so that most of the medical costs get covered
  • If your father has a pre-existing condition, choose a policy with a lower waiting period
  • Opt for a comprehensive scope of coverage complete with sum insured restoration, annual health check-ups, OPD cover, etc. so that your father can enjoy a 360-degree protection
  • Nudge your father to renew the coverage for lifelong protection

Compare and pick the right health plan for your father who has always been the knight in the shining armour and make this Father’s Day the best one. 

DISCLAIMER
This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs.

Top 5 Questions answered to ensure you get ‘Active’ on your Health Insurance NOW

The biggest reason for delaying your health insurance plan is procrastination! Most people keep “thinking” about the best health insurance without actually taking an action. Once the basic purpose of the health insurance plan is established, it’s much easier to choose the plan based on your needs.

So, here are the top 5 questions which you need to determine which would help you to opt for the best health insurance plan for yourself and your family.

  1. How much health insurance should you buy?

    Health insurance plans allow coverage from Rs.50,000 to Rs.2 crores or higher. As such, choosing the right coverage amount might stump many. Ideally, the choice of the sum insured should depend on your lifestyle, size of the family, estimated hospitalisation and treatment costs, age, etc. However, as a ready reckoner, there is a thumb rule for determining the optimal coverage amount. This thumb rule is as follows –

    Optimal coverage = 50% of your annual income + hospitalisation costs incurred over the past 3 years

    Many experts also recommend 50% of the income to be the starting point. So, if you earn Rs.20 lakhs a year, you need coverage of at least Rs.10 lakhs. Higher coverage is better as you can get sufficiently covered against rising medical costs.

  2. How to buy the policy?

    There are more than a dozen health insurance providers in India. As such, you might be spoilt for choice when it comes to finding the right plan and buying it. The ideal way to buy a health plan is to compare and then buy. There are leading online platforms that allow you to compare the health plans of leading companies. Assess your coverage needs and then compare the plans offering the desired coverage. Compare the coverage features vis-à-vis the premium and choose a suitable plan.

    As far as buying is concerned, the online mode allows you to buy the policy instantly, without hassles. So, you can easily compare on https://www.turtlemint.com/health-insurance/ and buy the policy online.

  3. Would the premium be affordable?

    Many individuals are concerned with the affordability of health insurance premiums. Truth be told, the premiums are affordable. You can also avail of different discounts that insurance companies offer and reduce the premium further.

    Furthermore, to make the premium even more affordable, insurers allow you the facility of instalment payments. You can pay the premium quarterly, monthly or half-yearly so that it becomes affordable in your pockets. So, avoiding a health plan by simply worrying about its affordability is no longer an excuse to skimp on health insurance coverage.

  4. What benefits to choose while opting for your health insurance plan?

    Health insurance plans can have a variety of benefits for you to choose from. This is the problem of abundance and you might get confused. Choose your plan according to your needs.

    For example, if you suffer from any illness before you buy the policy, such an illness would be called a pre-existing illness. The illness would usually be covered under the policy but after a waiting period. Health insurance companies usually impose a waiting period ranging from 12 months to 48 months after which your pre-existing illnesses get covered.

    So, if you suffer from any illness, you can opt for a plan with a low waiting period so that you can avail of the coverage quicker.

    Along with the regular hospitalisation benefits, here is a list of benefits that you can opt for:

    1. Must-Have benefits:
      1. Good coverage of pre-and post-hospitalisation expenses
      2. Maternity coverage for a young family
      3. Low waiting period for any pre-existing ailments
      4. Day-care coverage
      5. Annual health check-ups
      6. No copay, especially zonal
      7. Home care treatment or domiciliary cover
      8. AYUSH (Ayurvedic, Homeopathy, Unani, Siddha treatment coverage) benefit
    2. Good-to-have benefits:
      1. No room rent capping where there are no sub-limits for claim
      2. Restoration benefit, where the sum assured would be restored in case of claim
      3. Hospital cash benefit
      4. Critical illness benefit
  5. Would your claims be settled?

    Wondering if your health insurance claims would be settled or not? If you are, you can relax. Health insurers have simplified their claim processes so that you can get your claims settled quickly.

    You just have to follow some claim-related steps and your claims get settled easily. You can also seek expert help for claim settlement for a smoother experience. So, if you make a valid claim on your policy, your claim would be settled else the experts at Turtlemint would assist you with the same.

Once you have answers to these 5 questions, you will have an idea of which type of health insurance plan you need. Then all you need to do is opt for the plan at your earliest without contemplating further. In case you come across a better plan later, you can always choose to port it while continuing the benefits. Thus, it is wise to opt for a comprehensive plan so that your out-of-pocket expenses are minimised and you can avail all-round protection.

5 Best Add-on Car Insurance Covers in 2022

Comprehensive car insurance plans allow all-around protection for your beloved car. These plans cover the mandatory third-party liability and also give financial assistance if your car is damaged or stolen. To add icing to the cake, comprehensive car insurance plans also offer optional add-ons so that you can further widen the coverage as per your needs. Do you know about these add-ons?

What are add-on car insurance covers?

Add-on car insurance covers are optional coverage benefits that can be added to your base policy. There are different types of add-ons available in the market and each add-on offers a specific type of coverage. Add-ons cover different types of emergencies that you might face when using your car and enhance the claim amount. Each add-on comes at an additional premium and you can choose the add-ons depending on your coverage needs. 

Best add-ons for 2022

There are different types of add-ons available in the market for 360-degree protection in your car insurance plan. Among the available options, five of the best add-ons that you can opt for include the following –

  1. Zero depreciation add-on

    This is, by far, the most useful and relevant add-on that you can opt for in your car insurance policy. To understand this add-on, you need to understand the concept of depreciation. As you use your car, its parts suffer regular wear and tear which is not covered in your car insurance policy. As such, in the case of damage, the depreciated part of the car might get repaired or replaced. Since car insurance does not cover depreciation, the cost of depreciation is deducted from the repair or replacement cost of the part. This deduction depends on the type of part that is damaged. While the garage charges the full amount, the insurance company pays a fraction of the cost after deducting depreciation. The cost of depreciation, thus, becomes your out-of-pocket expense.

    This is where the zero depreciation add-on comes into the picture. If you choose this add-on, depreciation is considered to be nil. Thus, no depreciation is deducted by the insurer and you get the full amount charged by the garage for repairing the damaged part.

    Things to note 

    The zero depreciation add-on is usually available for cars up to 5 years old. If your car is older, you might not get the cover. Moreover, there might be a limit to the total number of zero depreciation claims that you might make in your policy. If the claims exceed the specified limit, the add-on would not apply for the exceeding claims.

  2. Roadside assistance add-on

    The roadside assistance add-on promises 24*7 assistance if your car breaks down in the middle of the road and you cannot tow it to the nearest garage. If you have the add-on you can simply call up the insurance company and the company would provide you with the necessary assistance so that you can complete your commute. 

    Under roadside assistance, add-on facilities such as tyre replacement, empty fuel tank, flat tyres, towing, etc. are offered.

    Things to note

    Under some car insurance plans, the roadside assistance cover might come as an inbuilt benefit. You should, thus, check whether the policy that you are considering allows an inbuilt coverage or an optional one.

  3. NCB protection add-on

    No claim bonus (NCB) is a benefit that you get if you don’t claim your car insurance policy. The bonus allows you to claim a discount at the time of renewals. Moreover, the bonus keeps on increasing after each successive claim-free year. However, a single claim wipes out the accumulated bonus and you lose the renewal discount. Not if you have the NCB protection add-on. The add-on keeps the NCB intact even if you claim your car insurance policy.

  4. Return to invoice add-on

    In the case of a total loss or theft of the car, the insurance company pays the Insured Declared Value (IDV) to settle the claim. The IDV is the depreciated value of the car depending on its age. It is lower than what you paid to buy the car. The return to invoice add-on, however, gives you the invoice value of the car if it is totalled or stolen. The add-on, thus, enhances the claim amount and helps you replace the car without any financial strain.

  5. Engine protection add-on

    Car insurance policies do not cover engine damages that might arise due to water seepage. To get coverage for such damages you need the engine protection add-on. The add-on covers engine damages caused due to water-logging and seepage.

    Things to note

    The engine protection add-on is highly recommended if you live in a flood-prone area or in an area where water logging is a major concern during monsoons.

These are some of the best add-ons that can give you more rounded protection in your car insurance policy. Keep these add-ons in mind when you buy or renew a car insurance plan in 2022 so that you can enjoy complete financial protection against car-related troubles.

Factors to be Considered by NRIs Before Buying a Life Insurance Policy in India:

Most Indians still consider traditional ways of investment to be the best and the one that tops most lists is life insurance. This is true even for people who are now NRIs. For them too, buying a life insurance policy is a smart move. So, if you are an NRI who is looking forward to purchasing life insurance plans in India, this might be the right time to do so. Here is a guide that tells you the various factors that NRIs must consider when buying a life insurance policy in India.

Explain the diff between NRI and PIO. Talk about an Indian citizen working abroad or a crew member on an Indian ship

NRI and Insurance:
Before we dig into insurance for NRIs let us quickly brush up on the meaning of NRI or Non-Resident Indians. An NRI can be defined as a citizen who:

  • Has resided in India for less than 182 days during the previous financial year
  • Stays out of India for employment purposes
  • Staying out of India for vacation or business purposes
  • Stays outside India for an uncertain period

It is important here to understand the difference between an NRI and a POI. POI or Persons of Indian Origin are those people who were born in India or have an Indian family. In addition to this, the people who live in other countries but are still Indian citizens and people who have Indian parents or grandparents also fall in the category of PIO. 

An insurance policy is a requirement of every individual which is why the laws of India allow an NRI as well to purchase a life insurance policy in India. The Foreign Exchange Management Act of India (FEMA), 1999 has made it possible for NRIs to get insurance policies in India. The insurance policies for NRIs are customizable, which helps them in addressing a number of financial needs. NRIs can take these policies and protect themselves and their families in times of financial crisis. 

If the NRIs are not present in India during the purchasing process, they will have to do all the medical examinations themselves and send reports to the company. In this case, the cost of medical examinations has to be borne by the NRI. On the other hand, if the NRI is in India during the purchasing process then the additional cost of a medical checkup has to be borne by the insurer. 

Life Insurance Policy for NRIs: Factors of Consideration

As some of the rules are different for NRIs when it comes to purchasing a life insurance policy, it is essential to check if you are eligible for the plan before you proceed further. The eligibility criteria include:

  1. The NRI must have possessed an Indian passport at some point of time in his life.
  2. The Indian Citizenship Act 1965, states that the NRIs parents or grandparents must have been a citizen of India.
  3. You must be married to an Indian citizen.

If you qualify these criteria, the next step is to look at some key factors that, as an NRI, you must not skip considering. These include:

  1. Cost of the Policy

    The cost of policy plays an important role and you must check and compare the cost of policy offered by various companies not only in India but in your residential country as well. It helps you in deciding the affordable cost and the one that suits you the most.

  2. Medical Test Cost

    Medical test is mandatory for every health insurance company. It helps them in deciding if or not an individual is capable of term insurance. For NRIs, it is not mandatory to be present in India to complete the medical test. They can either do it in their country and send the reports or visit India for the same. In India, the difference is that the expenses of tests will be carried by the insurance company.

  3. Payment of Premium

    NRIs are offered convenient modes of payment. The premium can be paid via:

    1. Non-Resident Ordinary (NRO) Account
    2. Non-Resident External (NRE) Account, or
    3. Foreign Currency Non-Repatriable (FCNR) Account

    It must be noted that if the payment of the policy is done through foreign currency, the premium payment needs to be done via NRE or FCNR account.

  4. Benefits

    Different life insurance policies offer different benefits. Some offer death and maturity benefits both and some offer only death benefits. The life insurance policy taken by the NRIs from the Indian insurance companies covers death, irrespective of your geographic location when you die.

    The benefit that is received depends on the kind of policy that has been opted for. The maturity/ death benefit amount of insurance is paid in rupees or in the currency of the country in which the NRI was currently residing. The insured individual/ the nominee needs to submit relevant documents when a claim has to be raised. It is suggested that you and your nominee are well aware of the expected benefits and the claim procedure. 

  • Tax Benefits
    NRI’s can avail of a tax benefit on the premium paid u/s 80C for the premium paid upto INR 1.5 lakhs a year provided he files a return in India. If there is any income in India, from interest, rental, etc. then he can avail of tax deduction u/s 80C against that. The death benefit and maturity benefit is tax-free u/s 10(10D) as per the Income Tax Act. an amount over the sum assured, for instance, bonuses, will be taxable. 
    • As an NRI, you also need to be mindful of FATCA, Foreign Account Tax Compliance Act, which helps the governments in combating money laundering and tax evasions.
    • If you are an NRIs, you can provide the valid Form 10F and Tax Residency Certificate (TRC), then there will be no deduction of Tax at Source (TDS).
    • It is recommended that NRIs take into consideration the tax rules and laws that are prevalent in their resident country before they buy an insurance policy in India.
  • Company’s Review
    Before you finalize a health insurance company, it is essential that you check the company’s reviews and its market reputation. Public reviews and CSR of the past few years will help you analyze if or not you would like to purchase a term policy from a particular company.

Conclusion 

Based on your budget you can explore insurance policies that can cover the best for your and your family’s needs. Pen down your requirements and finalize accordingly. You must explore all the available options so you can get the best one for yourself. 

Top 7 Things You Need to Know about the Union Budget FY 2022-23

On 1st February 2022, India’s Finance Minister, Srimati Nirmala Sitharaman, unveiled the Union Budget 2022-23. The second digital budget of its kind, the Finance Bill 2022, focus on four major themes:

  • PM Gatishakti
  • Inclusive Development, Productivity Investment & Enhancement, Sunrise Opportunities
  • Energy Transmission and Climate Action
  • Financing of Fintech Investment

People have mixed opinion about the budget, but this has been presented more from a futuristic point of view for the next 25 years.

One key aspect is that there is no change in the direct tax slabs, exemptions and deductions available.

Broadly, the Budget can be analysed into 6 key areas, namely: 

  1. Payment of Life Insurance Benefit for the disabled:

    If the beneficiary of a life insurance policy is partially or fully disabled, the insurer will need to pay the beneficiary the life insurance amount once the parent or the guardian completes the age of 60.

    This exception is only applicable to specially-abled beneficiaries of both new as well as existing life insurance policies.

    Prior to this, insurance companies used to pay the beneficiary only upon the death of the parent or the guardian, which in the case of a disabled beneficiary adds to their challenge.

    Takeaway: Among the many highlights of the budget, this gained the maximum praise from industry observers. 

  2. Long term capital gain (LTCG)

    The surcharge on LTCG has been capped at 15% in this Union Budget FY2022 and is applicable across all asset classes. This is previously applicable only to listed equity stocks as well as equity mutual funds. Essentially this change makes unlisted stocks at par with listed stocks.

  3. Digital Rupee and Crypto-tax

    The finance minister announced plans of the RBI launching the Digital Rupee in 2022-23, which will be developed on the architectures of blockchain technology. Along with this, any profit derived from the sale or transfer of digital and virtual assets such as cryptocurrency, NFT (Non-Fungible Token) etc., will be taxed at 30%, with an additional 1% TDS being deducted at the source of the transaction. Lastly, the loss of any digital or virtual asset cannot be offset against any other income. 

  4. Inclusion of Post Offices

    In an effort to accelerate financial inclusion across the country, in the upcoming months, all 1.5 lakh post offices across the country will be brought under the core banking network.

    Aimed at improving and extending the coverage of the national banking network to last-mile customers, this transition will essentially bridge the gap between post office account holders and account holders at other financial institutions.

    Along with this, to earmark the celebration of Azadi Ka Amrit Mahotsav, 75 digital banking units will be set up across 75 districts by Scheduled Commercial Banks. Combined with the inclusion of post offices in the core banking network, experts predict that it will radically expand the horizon of India’s organized banking network. 

  5. Capital Expenditure and Electric Vehicles

    Another highlight of the Union Budget 2022-23 was the finance minister’s push to increase the government’s capital expenditure by 35.4% from the previous year’s ₹5.54 lakh crore to this year’s ₹7.50 lakh crore.

    The ministry predicts that the effective capital expenditure for this financial year will stand at ₹10.7 lakh crores. The finance minister also invited investments from the private sector such that India can not only leap into its pre-pandemic growth trajectory but also pave the way for the next 25 years, leading to India at 100.

    On a separate note, the finance minister highlighted the government’s willingness to accelerate the growth of the homegrown electronic vehicle industry.

    The government has proposed manufacturers across the country to join hands and implement a standardized battery swapping policy such that more charging stations for EV (Electric Vehicles) can be developed.

    Along with this, the minister has also encouraged the private sector to innovate its business model such that battery as a service and energy as a service can be implemented in the future to significantly increase the efficiency of the entire EV ecosystem. 

  6. NPS (National Pension Scheme) & MAT (Minimum alternate tax)

    To extend equal social security benefits to employees of both state as well as central government employees, the finance minister has proposed that moving ahead, the compulsory contribution of both central, as well as state government employees towards their NPS (National Pension Scheme) accounts will be 14%. This amount will be directly debited from their earned wages to arrive at their net pay.

    Along with this, to offer a level playing field to both co-operatives and companies, the applicable MAT (minimum alternate tax) has been reduced to 15%.

    Additionally, the applicable surcharge will be reduced from the existing 12% to 7%, and this benefit will be applicable to all co-operatives having an income in the range of ₹1 crore to ₹10 crores. The ministry shared that this move will be particularly beneficial to the rural population, where most farmers are members of the aforementioned co-operatives. 

  7. Income Tax

    Lastly, the finance minister has not proposed a new tax slab for taxpayers; however, an additional provision has been added to the tax filing system.

    Moving ahead, taxpayers can file an updated return to voluntarily pay any missed amount in the earlier assessment year. This updated return can be submitted within 2 years of the assessment year in question.

    Along with this, in an effort to reduce multiple litigations, moving ahead, taxpayers will only be able to file one case with the income tax department regarding any discrepancy. Once the said case has been resolved, only then can a second one be filed. 

In Conclusion

There has been a lot of impetus provided to startups with extension of tax exemptions till March 2023. Although there are little alterations in this budget, it has futuristic approach and hence would prove to be growth oriented for the economy as a whole.

The Reference Shelf

  • MAT to be reduced for co-operative societies to 15%: FM Sitharaman [Link]
  • Budget 2022 Explained Highlights: Rs 5.25 lakh crore allocated for defence budget [Link]
  • Budget 2022 LIVE updates: ‘Pegasus spin budget’, says opposition; PM hails it as ‘people-friendly [Link]

Key Takeaways from NFHS Survey About Rise in Health Insurance Coverage

The National Family Health Survey is conducted periodically and it surveys the health conditions, insurance status, and other health related details of the Indian population. The fifth edition of the survey was published on 25th November 2021 and as per latest findings, the health insurance coverage among Indian households has gone up compared to the findings of the fourth edition. Let’s analyse what the survey concluded.

The key findings of the National Family Health Survey

The fifth edition of the National Family Health Survey was conducted between the periods of 2019 and 2021 compared to the fourth edition which was conducted between 2015 and 2016. Among the households surveyed, here are the three main findings –

  • 41% of the households surveyed were covered under a health insurance policy.
  • Health insurance coverage in India increased by 12.3% compared to the findings of the fourth edition.
  • The health insurance coverage in the rural sector was found to be 42.4% and that in the urban sector was found to be 38.1%.

The interpretation

A jump in health insurance coverage among the surveyed households indicated a success of the Pradhan Mantri Jan Arogya Yojana (PMJAY) or the Ayushman Bharat scheme. The additional secretary and the mission director of the National Health Mission attributed this jump in health insurance coverage to the PMJAY or the Ayushman Bharat scheme. Experts corroborated this theory and said that the jump was largely due to the successful implementation of the Ayushman Bharat scheme pan India. The rural sector dominated the findings because a large section of the BPL families live in rural areas.

What is the Ayushman Bharat scheme?

The Pradhan Mantri Jan Arogya Yojana or the PMJAY scheme, the official name of the Ayushman Bharat scheme, was launched in September 2018 by the honourable Prime Minister Mr. Narendra Modi. The scheme offered free health insurance coverage of up to Rs.5 lakhs to BPL (Below Poverty Line) families.

The objective of the scheme was to provide quality healthcare facilities at the grass-root levels. The economically weaker sections of the society need healthcare facilities but their limited incomes prevent them from accessing the same. As such, the scheme intended to provide treatments and medical assistance, free of cost, to such families. 

While the scheme was launched on a pilot basis in 2018, currently, it has panned out throughout India and has become popular. As such, many families are now covered under the scope of the PMJAY scheme which has caused a jump in the average health insurance coverage in India.

How does the survey prove relevant for you?

Though the survey contributed the jump in the health insurance coverage to the success and implementation of the PMJAY scheme, the scheme may not apply to you. It is available only for the identified families that constitute the EWS and BPL families. So, you might not be eligible to enjoy free health insurance coverage under the scheme.

That being said, the value of health insurance coverage cannot be stressed enough. Awareness for the importance of health insurance plans is gradually increasing among the common population of India. Moreover, the pandemic has further underlined the necessity of the same. So, today, more and more individuals are opting for coverage. This might also have led to the jump in the health insurance coverage among families that are not covered under the PMJAY scheme. 

The road ahead

The next edition of the survey would be conducted in the year 2022 and its results would be published sometime in 2023 and 2024. The next edition would be able to shed light on the contribution of the PMJAY scheme in increasing the health insurance coverage in India. So, till the next survey results are out, the full measure of PMJAY’s success is pending to be seen.

What should you do?

Having optimal health insurance coverage has become important when medical expenses have become unaffordable and the pandemic continues to remain a cause of concern. You should, thus, opt for a health insurance policy for yourself and your family members. The policy would cover the medical expenses and provide you with the much-needed financial security in a crisis. If, on the other hand, you are insured under a health insurance plan, check its sufficiency. Ensure that the coverage is high enough to pay for the expensive treatments. If the coverage is low, supplement it by enhancing the coverage at renewal. Alternatively, opt for a super top-up policy which would boost the sum insured while keeping the premiums affordable. 

So, do your bit towards increasing the penetration of health insurance coverage in India. This would not only bump the survey numbers, but it would also be financially rewarding for you.

Do Multiple Life Insurance Policies Make Sense?

Did you know that you can buy more than one life insurance policy?

Even if you did, how many of you have actually invested in multiple insurance plans?

In a country where the insurance penetration (Source: Moneycontrol) is as low as 4.2% of the GDP in FY 2021 , the concept of multiple insurance policies is not usually seen. As per the Swiss Re Sigma report (Source: Moneycontrol), life insurance penetration in India stood at 3.2% in FY 2021 compared to 2.82% in FY 2021. So, while the penetration rates are low, the awareness about the importance of insurance is slowly increasing, especially after the pandemic. As per reports by the NITI Aayog, demand for life insurance jumped 21% between February 2020 and 2021. Even Swiss Re’s report shows a spurt in the penetration rates. So, amidst the rising awareness, the concept of multiple life insurance policies is also gaining traction.

But do multiple plans make sense?

Actually, they do. 

There are various benefits of having multiple life insurance policies in your name. Have a look yourself –

  1. Optimal coverage 

    The first reason why multiple insurance policies make sense is the optimal coverage that you can avail. Unless a life insurance policy has sufficient coverage to provide complete financial security to your family, its purpose is not served. So, if you have an existing policy and its coverage is insufficient, you can opt for an additional plan to supplement the coverage.

    Alternatively, if your financial responsibilities increase with age, you can opt for additional life insurance plans to enhance the existing coverage for your increased responsibilities..

  2. Different plans for different goals

    When you have created independent provisions for each financial goal, it becomes easier to fulfil each goal. Rather than pooling your investments for your financial goals, you should have an independent corpus for each. This is where multiple insurance plans can help. You can invest in different policies for meeting different financial goals. There are even goal-oriented life insurance plans which help you achieve this objective. For example, you can pick a child insurance plan for securing your child’s future and a pension plan for creating a retirement corpus for yourself. Similarly, an endowment or ULIP can be picked for creating funds for buying a home, a car or any other goal that you might have. Term insurance plans, on the other hand, provide the desired financial protection and help you secure your family’s finances.

    Different plans for different needs = multiple insurance policies

  3. The facility of availing of staggered pay-outs

    Multiple insurance policies also help you in availing of staggered pay-outs at different intervals. The process is simple. You can buy different policies at different time periods. However, by matching the tenure, you can choose to receive the maturity benefits at regular intervals. This creates staggered payments which help you meet your successive financial goals.

    For example, say you buy a policy at 30 years of age with a term of 30 years. 5 years later, you buy another policy with a term of 20 years. Another 5 years later, you buy a third policy with a term of 10 years. In this case, the pay-outs would be as follows –

    3rd policy

    Maturity pay-out at 50 years of age

    2nd policy

    Maturity pay-out at 55 years of age

    1st policy

    Maturity pay-out at 60 years of age

    In the case of death, your family gets the collective pay-out from all the three policies.

  4. Enhanced tax savings

    Lastly, multiple policies also help you save more in taxes. As you know, premiums paid, up to 10% of the sum assured, are allowed as a deduction from your taxable income. The deduction limit is INR 1.5 lakhs under the provisions of Section 80C. When you buy a single policy, you might not be able to claim a high deduction if the premium is limited. However, with multiple policies, the premium increases and helps you claim a higher tax benefit.

Given these reasons, multiple life insurance policies are definitely important, especially if you are not adequately insured. 

So, check if you have insured yourself or not. If not, start with one policy and then supplement it later on as your financial needs increase. If you do have an existing life insurance policy, assess its sufficiency. If the coverage is not sufficient, opt for additional plans and optimise the sum assured. An optimal coverage makes life insurance plans fulfil the need for which they were bought. So, ensure that your insurance portfolio is complete even if it means buying multiple policies.