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Activist to PMO: Why is health insurance charged 18% GST?

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With the financial year coming to an end, tax-saving is on everyone’s mind. Taking this a step ahead is MP activist Chandrashekhar Gaur who has written to the Prime Minister’s office and asked that the 18 per cent GST on healthcare insurance be removed, citing healthcare to be a basic need.

While over 2.43 crore people have been registered under Ayushman Bharat — the world’s largest healthcare scheme — those who are not covered under the government scheme will have to turn to the private sector and pay heavy premiums with high GST, said Gaur, an RTI activist from Neemuch.

“Health is every person’s basic right. With its Ayushman Bharat Yojana, the government has covered the vulnerable groups, which I understand is required. But what about the huge population that is middle class? Why are they forced to pay a whopping 18 per cent GST on healthcare insurance?” he said, adding, “With inflation in medical treatments, mediclaims are the need of the hour.”

In his letter, he has pointed out the degrading healthcare facilities at government hospitals, which force common man to move to private hospitals. With no regulation on prices at private healthcare institutions, a middle-class man is forced to buy health insurance, now with huge premiums including 18 per cent GST.

While the GST on healthcare insurance qualifies for a tax benefit, but it totally depends on the salary slab, said Jinendra Surana, a finance expert.

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Nisha Shiwani hails from the pink city of Jaipur and is a prolific writer. She loves to write on Real Estate/Property, Automobiles, Education, Finance and about the latest developments in the Technology space.



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Everything You Need To Know About ULIPs

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Everyone wants a sizeable amount of money that could be utilized to live the life they desire. In this world of technology as well as competition, you have only two options of making money; work either for someone else or start your own business. Furthermore, earning money isn’t even sufficient. The inflation burns a big hole to your pocket, where savings and investment become crucial in order to survive the financial catastrophe.

Investing your hard-earned money helps you build wealth. However, it is always essential to invest in something that helps you secure your family’s financial future, even if you are not there. Here, life insurance policies with investment provision help you in financial goal planning, and ultimately receiving a considerable amount at the end. Though traditional life insurance investment plans have limited advantages, you also have a better option of Unit Linked Insurance Plans that help you avail a wide range of benefits.

What is ULIP Insurance Plan?

A ULIP or Unit Linked Insurance Plan is a type of life insurance that offers you a life coverage along with some qualified investment tools such as stocks, bonds, etc. Unlike traditional investment insurance plans like an endowment policy, here you can manage your life coverage and the investment part separately, basis your financial needs.

Benefits of ULIPs

ULIP, as a product, offers you not just one or two, but three benefits- savings, investment, and insurance. Let’s see what the other benefits of a ULIP investment plan are:

Life Cover

ULIP insurance plans offer you an adequate amount that takes care of your family’s financial needs behind you. Usually, death benefits provided under a Unit Linked Insurance Plan are maximum of the fund value that has been accrued, or sum assured, or 105% of total premiums paid till the event of demise.

Maturity Benefits

If you survive the policy tenure, you can avail of maturity benefits in the form of a lump sum or installments. In most of the cases, you can also set a frequency of pay-out and the settlement term up to 5 years.

Returns from Market-Linked Investments

Usually, in a regular life insurance policy, the premiums you pay are utilized for the life coverage. Whereas, under a ULIP scheme, a part of the premiums is invested in market-linked products such as debts and equities. Here, you can control the proportion of investment in different products or even a blend of multiple products. This is why financial goals with ULIP suit your needs best.

Flexibility

By opting for a ULIP scheme, you have the flexibility of choosing the fund that aptly suits your financial planning. If you notice volatility in the market and a particular fund doesn’t perform well, you always have a choice of switching to another one.

Transparency

In traditional investment plans, you don’t get any clue of where your money is being invested. Well, ULIP as a product helps you stay updated with all the charges levied along with the Net Asset Value of each fund that you are investing in.

Partial Withdrawals

If you come across a financial crunch during the policy tenure, you can withdraw some amount partially from the funds accrued. Here, the insurer may levy particular charges for the same. You cannot make any partial withdrawal during the lock-in period or settlement term.

Tax Benefits

You can avail of tax benefits under ULIP insurance plans. The maximum of Rs. 1.5 Lakh can be exempted towards the premiums you pay under Section 80C, and for the maturity benefits under Section 10(10D) of the Income Tax Act.

How to Get the Best ULIP Investment Plan

Identify your goals and analyze the financial needs that you seek after a certain period. Remember that the financial goals you set must be long-term goals.

Don’t ignore life insurance benefits while going for investments. If you are young, make sure that your current, as well as future financial planning, is made properly. Here, a number of dependents, personal financial desires, education of your children and so many such aspects need to be considered.

Your investment goals may differ basis the financial planning you do. E.g., if you are planning to get a sizeable corpus for your children’s higher education or their marriages, the planning has to be done accordingly. Similar to be considered for post-retirement provisions, foreign tours, or even buying a new property.

Risk appetite plays a vital role in choosing the right ULIP scheme. Equity investments are best suitable for the people with high-risk appetite, whereas, debts come with lesser risk when returns are concerned. You can also choose a blend of both if you have a moderate risk appetite.

Always compare multiple plans, analyze which plan is best suitable for your needs and then go for it. Comparison certainly helps you get a better idea of which plan be more beneficial. The comparison can be made basis on several aspects such as sum assured, choice of funds, flexibility, systematic withdrawal provisions, and so on.

Conclusion

Investing in ULIP investment plans is always suitable if you are chasing a long-term financial goal. Proper planning by analyzing the needs gives you higher returns, along with the flexibility of multiple investment options to choose from. Last but not least, when it comes to transparency, Unit Linked Insurance Plans are anytime better than traditional investment plans. Now that you have read this article carefully; be sure that you will be able to get the best ULIP that you are looking for.

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Cashless treatment is most sought after insurance benefit

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The demand for health insurance is increasing on account of the rise in lifestyle diseases and the growing health care cost, said a study by GOQii, a tech-enabled healthcare platform.
According to the GOQii IndiFit Report 2019, titled “Insurance: An Investment in Health’, 85% of people believe they should get health insurance before the age of 30. Of those surveyed, 90% of people believe healthier people should get a lower insurance premium and 70% are willing to share health data with insurance companies to get a discount on premiums.
“Overall trust in the healthcare system has deteriorated further with 96.5% of people not trusting the system, with 67.8% of Indians not trusting hospitals. To add to this, the rising cost of healthcare has prompted Indians to focus more on health insurance. 62.8% of Indians believe having a health insurance policy is an absolute necessity and approximately,’’ the report said.
The report is a year-long study of more than 7 lakh GQii users. According to the report, despite increasing awareness about the importance and need for an insurance policy, 20% of the respondents don’t own an insurance policy. “The common notion that continues to prevail is that insurance is confusing to understand, a prime reason that discourages people from buying one. The high cost of insurance also deters them,’’ the report said.
Respondents strongly believed cashless hospitalisation (87.9%) is the most sought-after health insurance benefit followed by medical bills reimbursement facility (67.7%) and better treatment in best hospitals (59.0%), the report said.
Among the reasons people look at while buying a particular health insurance policy were good quality hospital network – 42.3% and easy claim procedures – 41.9%. Low cost, good coverage and benefits, simple terms and conditions are some of the other convincing factors for people to buy health insurance.
The report also said that 38.3% people between the age group of 20-45 years suffer from at least one lifestyle disease ranging from diabetes, blood pressure, cardiac issues to thyroid, and acidity.
There has been an increase of lifestyle diseases in the last two years. Cases of cholesterol among people have increased from 10.1% to 14.1%, high blood pressure has increased from 9% to 12%, the GOQii report said.

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Most Indians prefer to use life insurance for their goals

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For Indians, life insurance is the most preferred financial instrument for planning major life goals, but at the same time about 30% of them don’t have any idea of how much life insurance cover is required. These were the findings of the 2018 Money Habits Survey published by Exide Life Insurance.
According to the survey, life insurance is the top instrument for life goals such as building a house (43%), children’s education (38%), retirement (49%) and legacy creation (50%). When it comes to planning for child’s marriage, Indians look at fixed deposits in addition to life insurance.
However, of those surveyed, 30% of the respondents admitted that they do not have any idea about how much life insurance cover is required. This brings out the glaring protection gap among Indians, the survey said.
The digital survey covered respondents from 12 cities including metros and emerging Tier II cities. The aim behind the survey was to understand how life insurance owners / intenders look at dealing with their money. Which financial instruments do they look at while planning for key life goals? How well are they securing their families? How much life insurance cover do they currently have versus how much they think they should have?
Mohit Goel, director – marketing and direct channel, Exide Life Insurance said, “Despite the thrust on financial literacy by the Government of India as well as insurance industry4, people still struggle to gauge the level of protection required for themselves and their family. 46% of those surveyed feel that they should have at least 10 times their annual income, but only 29% of individuals have such cover.”
Financial responsibility is more than saving
The idea of financial responsibility has a multi-pronged approach encompassing earning, saving, record keeping and sharing relevant information with the family. Despite the fact that it is essential to maintain records of your financial dealings so that they are accessible by you and your family in the time of need, nearly 38% of those surveyed do not maintain them and 15% feel it is not important to maintain a record.
The survey revealed Indians do not realise how important it is for their family to know about the finances. Of those surveyed, 37% of the respondents admitted that they have not informed their families about their financial dealings.
The survey findings also reveal that 55% of the respondents maintain a physical diary1 with important information on their financial dealings; 38% maintain an excel file; 15% maintain this information on a mobile app. 66% of those surveyed maintain a physical copy of their life insurance policy bond and only 8% have linked their policies to an e-insurance account.
Indians are not looking at another important aspect of financial responsibility, that is, preparing a Will. Of those surveyed, 72% of the respondents have not prepared a Will, despite knowing its importance. Even in the older age group of 45 and above, the penetration of Will is relatively low, the survey said.
Protection Gap
Indians prefer life insurance for goals like building house, kids’ studies, retirement
30% of Indians don’t know how much insurance is needed

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LIFE INSURANCE: Premium may fall if medical test shows you are healthy

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Is medical test mandatory while buying life insurance policy? Will my premium increase after I undergo the medical test? – Sajit Menon

The medical test requirement is dependent on the size of the insurance cover, and the product, and can differ from one insurer to the other. The outcome of the medical test does have a bearing on the premium rate, but does not necessarily mean you will have to pay more. If you are in good health, the premium payable is likely to be lower. It is advisable that you make a complete and factual disclosure about your health to the insurer. Full disclosure of medical information at issuance is essential for a seamless claims experience.

I purchased a life insurance policy before marriage and it has my maiden name. Now that I am married how can I change the name in the policy document? And how can I change the bank account that I had given for this policy? – Kimaya Patel

Both, name change and bank account details, can be updated anytime during the policy tenure. The proposer has to simply contact the insurer and submit the necessary documentation.

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