Opt for a term plan that pays sum as­sured as lump sum

Mint ST - - PERSONAL FINANCE - Ab­hishek Bon­dia

I am 26 and my CTC is ₹5.8 lakh. I am un­mar­ried and my only de­pen­dant is my fa­ther as my mother is still work­ing. I want to take a term plan for my­self. What should be the ideal amount? I plan to get mar­ried in two years.

—Jee­vika Birla As a thumb rule, one should buy a min­i­mum term cover of 10 times one’s an­nual in­come. At younger age groups, in­sur­ers are com­fort­able in grant­ing cov­er­age of up to 20 times of an­nual in­come. Since you do not have sub­stan­tial li­a­bil­i­ties, you should buy a term cover of at least ₹75 lakh. As your in­come in­creases, you should re­vise the sum as­sured up­wards. Opt for a plan that pays the sum as­sured in a lump sum. Se­lect an in­surer with a claim set­tle­ment track record of at least 90%.

I get a health in­sur­ance cover of ₹5 lakh from my of­fice. It doesn’t have any OPD (out-pa­tient depart­ment) cov­er­age. My par­ents and I spend con­sid­er­ably on OPD ex­penses. Is there any pol­icy which pro­vides OPD cov­er­age? I don’t mind pay­ing higher pre­mi­ums. Else, please tell us what cover we should opt for?

—Pratishtha In­gale A num­ber of in­di­vid­ual health plans pro­vide OPD cov­er­age. The sum as­sured in most of these plans range be­tween ₹5,000 and ₹20,000 but there are plans that go much higher as well. Some in­sur­ances have ded­i­cated sub-lim­its within the OPD sum as­sured for spe­cific treat­ments such as phys­io­ther­apy.

OPD cov­er­age is typ­i­cally linked to the over­all sum in­sured of the plan. For ex­am­ple, for a sum in­sured of ₹5 lakh, OPD cov­er­age could be lim­ited to ₹5,000. For higher sum in­sured, say ₹30 lakh, the OPD limit may go up to ₹45,000. Your pre­mi­ums will de­pend on the over­all sum as­sured and the OPD ben­e­fit.

The in­cre­men­tal pre­mi­ums due to OPD are be­tween 70% and 100% of the to­tal OPD limit. This means that the level of in­sur­ance in OPD plans is not high. At this time, it is bet­ter to think of health in­sur­ance for hos­pi­tal­i­sa­tion and day care pro­ce­dures rather than OPD. How­ever, that land­scape is chang­ing as many in­sur­ers are de­vel­op­ing in­no­va­tive OPD prod­ucts.

You can also con­sider buy­ing a well­ness card. These cards can be used to avail dis­counts on phar­ma­cies, di­ag­nos­tics and doc­tor con­sul­ta­tions. If you do not have per­sonal health in­sur­ance cover, other than em­ployer pro­vided cover, you must buy one.

Ab­hishek Bon­dia is prin­ci­pal of­fi­cer and MD, Se­curenow.in. Queries and views at mint­[email protected]

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