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Age and adverse health history create challenges in buying health insurance for the first time.

Q. My mother is 59. She had breast cancer and is taking medicine for the same. My father is 70 and he has diabetes. They don’t have health insurance. I want to take health insurance for them, but not sure about which factors to look into while taking the policy. As per my research, public sector general insurance companies will not give them insurance due to their age and existing health conditions. Can you help me out with the factors to look into while taking the policy and recommend policies?

NIYATI SHAH

A. Age and adverse health history create challenges in buying health insurance for the first time. This is one reason why it is advisable to opt for it at a younger age, not only for coverage at a lower premium, but also a chance to work off the various waiting periods for coverage and be assured of life-long renewability which every company has to give.

Having said that, there is no blanket ban on insuring an older person or a person with a health incident behind them. In fact, almost all companies have senior citizens health insurance policies, including public sector insurers.

Coming to health insurance for a cancer survivor, you should look at specialised health insurance companies’ offerings of ongoing cover for cancer survivors, including cover for recurrence, metastasis and second malignancy.

You could find pilot products, which means they are being offered on a test basis for five years and could be withdrawn, modified or continued. The insurance itself would be for a year and renewable until the product is on offer and, if it is withdrawn, the company will offer to port you to a suitable alternate product.

Such products are being tested out in the market and would have more constraints than the usual products like longer waiting periods for certain types of claims. They will also have restricted sum assured which will result in your claim amounts being further restricted due to sub-limits.

With limited options you just have to choose the best of what is on offer.

Q. My insurance premium due date every year is the 23rd of March. However, I pay the premium before April 15th each year, within the grace period of 30 days offered by the insurance company. My question is since the premium due and the premium paid in my case always falls on two different financial years. In which financial year can I claim exemption for the insurance premium paid?

SANKARAN M

A. The date of payment of insurance premium is the basis for claiming income tax benefits regardless of when the premium falls due. If you paid the premium on April 15, 2021, you can claim the rebate under Section 80C or 80D, as the case may be, for the financial year 2021-22.

Q. We are a 26 years’ old couple and have been recently married. We have a family floater option for health insurance and I have a whole-life insurance policy in my name and my husband has a PPF account. Apart from this, we do a regular recurring deposit of ₹2,000 and have two different FDs amounting around ₹70,000.

As a young couple, we have had doubts as to the needs of an LIC policy and its gains. How much and if we can really get any sum assured.

Though we did talk to the agent, their language wasn’t understandable enough. As per the financial goals I have my education loan to repay. I am taking a break to prepare for my post-graduation entrance exams and my husband is the only one earning right now (₹6 lakh p/a). We wish to buy a house in coming four to five years and want to save at least ₹5 lakh for down payment and the like. What according to you should be our plan for improving our savings and right method of investment?

SRAAVYA LA

A. For a young couple migrating from two incomes to a single income, your risk protection appears well-planned. Periodically review the sum assured on your hospitalisation policy to ensure it is in line with medical costs on an ongoing basis.

Your whole-life insurance policy is a safety net and perhaps a term life policy for your husband would be an advisable addition. It offers a no-frills life insurance cover for a matching no-frills premium.

Your savings commitment in RD and PPF would account for up to ₹1.75 lakh of your ₹6 lakh annual income. You have to repay your educational loan and pay your health and life policy premiums.

It is best to buy insurance for risk cover, and it is not warranted to view it as an investment to maximise returns.

Yes, there are policies that offer both investment return and risk cover, but the correct way to analyse their benefit is to compare them with a combination of an investment option and a pure risk cover costing the same in total, and seeing which has a more efficient net return.

Apart from your living expenses, if you save ₹10,000 a month in the safest of fixed return options, that principal alone will amount to ₹6 lakh in five years. If you want to maximise returns and have the risk appetite, you can consider other investment options.

(K. Nitya Kalyani is a business journalist specialising in insurance & corporate history)

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