Terms to Know

Survival period: This refers to the stipulated period the insured person must mandatorily live after availing the benefits under the policy. Policy-term option: The policies offered in the market are available for tenures ranging from 1 year (minimum) to 3 years (maximum), thereby facilitating less frequent renewals. Family-floater option: As per this arrangement, each member is covered for the same sum assured under certain age restrictions. Family-floater plans are priced on the basis of the age of the seniormost member and as he/she gets older, the flexibility decreases and/or the cost increases significantly. The plus point is that premium is cheaper than that for individual cover plans.

If one takes a critical-illness rider benefit under an existing life-insurance policy, they will be eligible for tax benefit under Section 80 (C) only. Under Section 80 (D) of Income Tax Act, 1961, health insurance premium paid for self, spouse or dependent children is tax-deductible up to Rs 25,000. If any one of the persons specified is a senior citizen and insurance premium is paid for such senior citizen, then the deduction amount is Rs 30,000. Under Section 80 (C), a deduction of Rs 150,000 can be claimed from one’s total income.