Ques­tions One May Ask

Consumer Voice - - Insurance For Critical Illnesses -

If one al­ready has ei­ther a life-in­surance pol­icy or a health-in­surance pol­icy, what can be done to in­clude crit­i­cal-ill­ness cover? The strat­egy to fol­low is to first have a health­in­sur­ance plan with ad­e­quate cover or a life-in­surance plan with a size­able amount as sum as­sured. Once you have any of th­ese, you can add on a lump-sum ben­e­fit such as crit­i­cal-ill­ness cover as a rider ben­e­fit (by pay­ing ad­di­tional pre­mium). Which is a bet­ter al­ter­na­tive – an in­di­vid­ual pol­icy or a fam­ily-floater plan? A fam­ily-floater plan pro­vides for crit­i­cal-ill­ness cover of the sum as­sured (on an in­di­vid­ual ba­sis) to all the ben­e­fi­cia­ries un­der the pol­icy. Thus, if any of the ben­e­fi­cia­ries in­vokes a claim on the pol­icy, it will be set­tled sub­ject to the sum as­sured, while the sumas­sured cover will con­tinue the ben­e­fit for the other mem­bers of the pol­icy. Ad­di­tion­ally, the pre­mium also works out cheaper.

Un­der an in­di­vid­ual plan, the sum as­sured and the pre­mium are based on the in­di­vid­ual ages of ben­e­fi­cia­ries and the sum as­sured re­quired for cov­er­age if a claim is made on the pol­icy, then af­ter set­tle­ment of the claim, the pol­icy it­self comes to an end. Be­sides, the pre­mium is also more than that in fam­ily-floater plans. What are the tax ben­e­fits un­der a crit­i­cal-ill­ness pol­icy? In­come tax (IT) ex­emp­tion is avail­able with re­gard to this pol­icy un­der Sec­tion 80 (D) of the In­come Tax Act. IT ex­emp­tion un­der Sec­tion 80 (D) is also avail­able for an ex­ist­ing health-in­surance pol­icy where the rider ben­e­fit of crit­i­cal ill­ness is opted for.

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