Terms to Know

Consumer Voice - - Insurance For Critical Illnesses -

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.

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