Friday, May 16 2025
Source/Contribution by : NJ Publications

Health insurance is a financial safety net that protects you and your loved ones from unexpected medical expenses. Despite its undeniable importance, many individuals postpone purchasing a health insurance policy, assuming that they are healthy and do not need it immediately. However, delaying this crucial decision can have severe financial and medical consequences. 

Many young, fit, and health-conscious individuals often question the need for health insurance. They believe that their active lifestyle protects them from illnesses, making insurance an unnecessary expense. However, the truth is that the best time to buy a health insurance policy is when you are young and healthy. Investing in health insurance early offers financial security, wider coverage, and several long-term benefits. Here’s why you should act now and secure your health insurance at the earliest, regardless of your current age & health condition.

Health Risks are Unpredictable

Life is uncertain, and health issues can arise at any time, regardless of age or fitness levels. Accidents, chronic diseases, or sudden medical emergencies can lead to significant financial burdens. Having a health insurance policy ensures that you receive quality medical care without worrying about hefty hospital bills.

More Options, Better Coverage

When you are young, you have access to a broader range of health insurance plans, both basic and comprehensive. As you grow older, the risk of chronic diseases such as asthma, diabetes, hypertension, and cancer increases, restricting your insurance options. Many insurers impose limitations, higher premiums, or outright deny coverage to individuals with pre-existing conditions.

Additionally, young policyholders can opt for higher sum insured amounts, such as Rs. 50 lakhs or Rs. 1 crore, at lower premiums. In contrast, older individuals may struggle to find high coverage amounts due to increased health risks, making comprehensive insurance costlier and harder to obtain.

Maternity Benefits for Future Planning

For young couples, purchasing health insurance early is a smart move, especially when considering family planning. Many health insurance plans offer maternity benefits, covering prenatal care, delivery, postnatal care, and medical expenses for newborns.

However, most maternity benefits come with a waiting period ranging from 9 months to 3 years. By investing in health insurance early, you can serve this waiting period in advance, ensuring coverage when you need it without financial strain.

Beat the Waiting Periods

Health insurance policies come with specific waiting periods before claims become eligible. Some key waiting periods include:

• First 30 days: No claims allowed except for accidents.

• Initial 2 years: Waiting period for specific diseases/treatments like cataracts, hernia, and joint replacements.

• Maternity waiting period: Typically between 9 months and 3 years.

• Pre-existing diseases waiting period: Usually 3 years.

By purchasing a policy early, you can serve these waiting periods when you are less likely to require claims, ensuring uninterrupted coverage when needed.

Enjoy Wellness Benefits

Many health insurance policies now include wellness benefits that promote a healthier lifestyle. These may include annual health check-ups, vaccinations, and preventive screenings. Such services not only help in early detection of medical conditions but also reduce long-term healthcare expenses.

Moreover, insurers reward policyholders who maintain an active lifestyle. Regular exercise, yoga, swimming, and running can earn wellness points under certain plans. These points can then be redeemed for discounts on renewal premiums, ranging from 5% to 50%, making insurance even more cost-effective.

Lower Premiums: Save More in the Long Run

Age is a crucial factor in determining health insurance premiums. The younger you are, the lower your premiums, as insurers consider younger individuals to be at lower health risk.

Existing ailments also lead to higher premium rates. By purchasing insurance early, you can lock in lower premiums and enjoy long-term savings. Over time, these savings accumulate significantly, making early investment in health insurance a financially prudent decision.

Skip the Pre-Policy Medical Tests

As you age, insurers require pre-policy medical tests to assess your health status before issuing a policy. Individuals over 45 or those with a pre-existing condition often have to undergo these tests. If any medical issues are detected, insurers may increase premiums or deny coverage.

However, young individuals usually do not require medical tests, leading to hassle-free and quicker policy issuance. By getting insured early, you can avoid these extra medical requirements and secure a policy without complications.

Maximize No Claim Bonus & Guaranteed Cumulative Bonus

Health insurance providers offer a No Claim Bonus (NCB) to policyholders who do not make claims during the policy year. This bonus increases the sum insured at no additional cost, typically ranging from 5% to 200% of the initial sum insured.

For example, if you start with Rs. 5 lakhs, your sum insured can increase to Rs. 20 lakhs, Rs. 25 lakhs, or even Rs. 50 lakhs over the years without extra charges.

A Guaranteed Cumulative Bonus (GCB) works similarly but applies regardless of claims made. This means your coverage continues to increase over time, offering better protection against unforeseen medical emergencies. When you don't delay in buying health insurance, you can take full advantage of these benefits to maximize your health coverage.

Conclusion: Act Now, Secure Your Future

Health insurance is a crucial part of financial planning and long-term security. Delaying the decision to buy health insurance can prove costly in the long run. Whether you are young and healthy or have an existing medical condition, securing health insurance today ensures financial protection and peace of mind for the future. 

By investing in a plan today, you safeguard your future, protect your finances, and ensure access to quality healthcare when needed the most. Waiting too long can lead to limited options, higher costs, and restricted coverage due to age-related medical conditions.

Don’t wait until an emergency strikes-act now and safeguard your health and finances.

Make the right choice today. Buy your health insurance now!

Friday, April 18 2025
Source/Contribution by : NJ Publications

Introduction

Traveling abroad can be an exciting and enriching experience. However, unforeseen events such as medical emergencies, flight cancellations, or lost baggage can turn a dream vacation into a nightmare. Travel insurance acts as a safety net, ensuring that unexpected financial burdens do not ruin your trip. Many travelers underestimate its importance, often learning the hard way. This article highlights real-life scenarios where travel insurance proved invaluable, reinforcing why no one should travel abroad without it.

Why Indian Travelers Need Travel Insurance

Many Indian travelers believe that travel insurance is an unnecessary expense. However, the reality is quite different.

Travel insurance covers a wide range of risks, including medical emergencies, trip cancellations, baggage loss, flight delays, personal liability, and even emergency evacuations. Depending on the policy, it can save travelers from massive expenses and logistical nightmares in a foreign land.

Here’s why every traveler should invest in a travel insurance policy:

• High Medical Costs Abroad: Medical treatment in countries like the US, UK, and Europe can be exorbitant. Even a minor injury can result in bills worth lakhs.

• Unforeseen Travel Disruptions: Flight cancellations, delays, and missed connections are common, leading to additional expenses.

• Theft and Loss of Belongings: Pickpocketing and luggage mishandling are frequent issues in tourist hotspots.

• Legal and Liability Issues: Accidents or misunderstandings in foreign countries can lead to legal troubles, which can be expensive to resolve.

Here are some real-life cases where having travel insurance made all the difference.

Real-Life Claim Scenarios

1. Medical Emergency in the United States

Ravi Sharma, a businessman from Delhi, traveled to the United States for a conference. A few days into his trip, he suffered a heart attack and was rushed to the hospital. Without travel insurance, he would have had to pay nearly $150,000 (INR 1.25 crore) in medical bills. However, his comprehensive travel insurance covered hospitalization, surgery, and even post-treatment care, saving him from financial disaster.

2. Lost Luggage in Europe

Ananya Mehta, a solo traveler from Mumbai, landed in Paris, only to discover that her checked-in baggage was missing. Her bag contained essential documents, expensive gadgets, and clothes. Thanks to her travel insurance, she was compensated for the lost items and received an emergency cash allowance to purchase essentials, ensuring her trip continued smoothly.

3. Trip Cancellation Due to a Family Emergency

Vikram Patel and his family planned a trip to Australia. Unfortunately, just a week before departure, his father fell critically ill, forcing him to cancel the trip. With a non-refundable hotel booking and flight tickets, he stood to lose over INR 3 lakhs. Thankfully, his travel insurance covered trip cancellation due to medical emergencies, reimbursing him for the losses.

4. Accidental Injury in Thailand

Priya and Raj, a couple from Bangalore, went on a honeymoon to Thailand. During an adventure activity, Raj slipped and broke his leg. His travel insurance covered the medical expenses, hospital stay, and even the cost of extending their stay while he recovered. Without it, the couple would have had to pay over INR 5 lakhs in hospital bills and accommodation charges.

5. Flight Delays and Missed Connections

Siddharth, a software engineer from Hyderabad, was flying from India to Canada with a layover in London. Due to a flight delay, he missed his connecting flight and had to stay overnight. His travel insurance covered the cost of the hotel stay and rebooking fees, preventing unnecessary financial stress.

6. Emergency Evacuation from Japan

During a business trip to Japan, Pooja Kapoor contracted a severe respiratory infection, requiring immediate specialized treatment in India. Her travel insurance covered the emergency evacuation, which otherwise would have cost her INR 20 lakhs. The quick response and financial assistance ensured she received proper care without delay.

7. Legal Assistance in Dubai

Arun Verma, a tourist in Dubai, was wrongly accused of damaging property at his hotel. With travel insurance that included legal assistance coverage, he was able to hire a lawyer and prove his innocence, avoiding a hefty fine and legal troubles.

Travel Insurance is Affordable and Worthy of each Rupee

One of the common misconceptions is that travel insurance is expensive. However, in reality, it is highly affordable compared to the financial risks involved. For instance, a Travel policy offering coverage of $250,000 (USD 2.5 lakh) for a 15-day trip to the United States for a 40-year-old individual could cost around ₹2,500 - ₹3,500. This small investment provides immense protection against medical emergencies, trip cancellations, lost baggage, and legal issues.

With premiums being this economical, skipping travel insurance is a risk not worth taking.

What to Look for in a Travel Insurance Policy

Before purchasing a travel insurance policy, travelers should consider the following aspects:

• Medical Coverage: Ensure it includes hospitalization, emergency treatment, and medical evacuation.

• Trip Cancellation and Interruption: Covers non-refundable expenses due to unforeseen circumstances.

• Baggage and Personal Belongings: Compensation for lost, stolen, or damaged luggage.

• Flight Delay and Missed Connection: Covers expenses incurred due to unavoidable delays.

• Personal Liability and Legal Assistance: Protection in case of legal disputes or third-party damage claims.

• Consult Your Insurance Sales Person: Professional advice helps in selecting the right policy tailored to individual needs.

• Claims Services: Ensure the insurance company has a strong claims assistance network abroad for seamless claim processing in case of emergencies.

Conclusion

Travel insurance is not just an additional cost-it is a vital safety net that protects travelers from unpredictable financial setbacks. Real-life cases highlight how travel insurance has saved people from distressing and expensive situations. Whether for leisure or business, no traveler should venture abroad without comprehensive travel insurance. It provides peace of mind, ensuring that an enjoyable trip does not turn into a financial nightmare. So always discuss your travel insurance requirements with your Insurance Sales Person while planning for a trip abroad.

Friday, December 20 2024
Source/Contribution by : NJ Publications

As we age, our bodies become more susceptible to various health ailments. While the future is unpredictable, we can definitely prepare for any untoward event. One such preparation is buying a comprehensive senior citizen health insurance plan. This specialized type of insurance is designed to meet the unique healthcare needs of older adults, offering financial security and peace of mind during times of medical emergencies.

The Need for Senior Citizen Health Insurance

As we age, our healthcare costs tend to rise due to increased frequency of illnesses, lower immunity and the need for more specialized treatments. Senior citizen health insurance plans are specifically designed to address these concerns.

• Rising Healthcare Costs: Medical expenses continue to escalate, making it increasingly difficult for seniors to afford necessary treatments without stable & continuous financial assistance.
• Increased Health Risks: Older adults are more prone to age-related diseases, such as heart disease, stroke, diabetes, and cancer. These conditions often require specialized care and medication, which can be expensive.
• Chronic Conditions: Many seniors face chronic conditions that require ongoing management and treatment, leading to recurring healthcare costs.
• Unexpected Medical Emergencies: Even the healthiest seniors can experience unexpected medical emergencies, such as accidents or sudden illnesses, that can result in substantial financial burdens.
• Limited Financial Resources: Retirement savings may not be sufficient to cover unexpected medical expenses, especially if they are prolonged or require specialized care.

Key Features of Senior Citizen Health Insurance

• Coverage for Pre-existing Conditions: Most senior citizen health insurance plans offer coverage for pre-existing conditions, which are common among older adults. This ensures that seniors can receive treatment for underlying health issues without worrying about high costs.
• Cashless Hospitalization: This feature allows seniors to receive medical treatment in network hospitals without paying upfront. The insurance provider directly settles the bills with the hospital, providing convenience and reducing financial stress.
• Comprehensive Coverage: These plans typically cover a wide range of medical expenses, including in-patient hospitalization, pre and post-hospitalization expenses, ambulance charges, and day care treatments.
• Lifetime Renewability: Senior citizen health insurance plans offer lifetime renewability, ensuring that coverage continues as long as the policyholder is alive.

Benefits of Senior Citizen Health Insurance

• Financial Protection: By covering medical expenses, senior citizen health insurance provides a financial safety net, protecting individuals from the potentially devastating costs of illness.
• Peace of Mind: Knowing that their healthcare expenses are covered can provide seniors and their families with peace of mind and reduce stress during difficult times.
• Access to Quality Healthcare: With the financial support provided by insurance, seniors can access quality healthcare services, including specialist consultations and advanced treatments.
• Tax Benefits: Premiums paid for senior citizen health insurance are eligible for tax deductions, providing an additional incentive to purchase health insurance.
• Tailormade Plans: Many insurers offer need based options to cater to the specific needs and preferences of individual seniors.

How to select a comprehensive Senior Citizen Health Insurance Plan

When selecting a senior citizen health insurance plan, consider the following factors:

• Coverage: Ensure that the plan covers the medical expenses you anticipate needing.
• Network Hospitals: Check if the insurer has a wide network of hospitals in your area.
• Claim Settlement Process: Look for an insurer with a reputation for efficient and hassle-free claim settlements.
• Additional Benefits: Some plans may offer additional benefits such as free health check-ups or discounts on preventive care.

Conclusion

Investing in senior citizen health insurance is a wise decision that can provide significant benefits. By protecting against unexpected medical expenses and ensuring access to quality healthcare, these plans can help seniors live healthier, more independent lives. Don't delay in securing this essential coverage for your golden years.

Friday, December 06 2024
Source/Contribution by : NJ Publications

When it comes to life's significant moments like child education, marriage, retirement, etc., we probably have a plan in place. We even try to plan out our unplanned expenses by creating an emergency fund. But the fact is no matter how much planning we do, there will always be some unexpected expenses knocking at our door. Under such cash-strapped times, your first instinct might be to dip into your savings and sell off investments, even if it means taking a loss. Unfortunately, most of us prefer redeeming mutual fund units, considering the liquidity it offers.

Though this option might seem convenient in the short term, it may have a huge impact on the investors wealth creation journey in the long-run. So, is there any better option available? The answer is “yes”. Instead of liquidating your mutual fund investments, you can avail a loan against them. Similar to using gold or real estate as collateral, you can borrow money from banks or financial institutions using your mutual fund holdings and such facilities are called Loan Against Securities (LAS).

With LAS, one can continue his/her investment regardless of the circumstances he/she faces and continue to achieve his/her short term financial needs. Let us understand this with an example!

If one started an SIP of Rs. 10,000 monthly in Sensex TRI on 10th April 1999, his value after 25 years, i.e. as on 31st March 2024 would be Rs. 2,74,34,408 against the total investment of Rs. 30,00,000. However, during his investing journey if he had withdrawn Rs. 14,00,000 in total at different intervals for his unplanned expenses, the post-withdrawal value would be only Rs. 1,81,33,917 i.e. his overall wealth would have been reduced by almost 34%.

On the other hand, instead of withdrawing money for his unplanned expenses, if he had opted for LAS of the same amount @15%, he would have paid an interest of Rs. 5,98,353 in total. Even after paying this interest, he would be in a win-win situation because his SIP will continue to grow and his corpus would be more i.e. Rs. 2,68,36,055 (Rs. 2,74,34,408 - Rs. 5,98,353) even after adjusting the interest component.

Hence, one can earn more if he/she isn’t withdrawing rather choosing a loan against mutual funds. However, before opting for such loans one should consider a few important points which we will cover in this article.

How much loan can be taken?

Many banks set both a maximum and minimum limit on the amount of loan you can obtain. The limit of the loan depends upon the value and the volatility of the security that is pledged against the loan and this amount may differ from one bank/NBFCS to another as per their policy. For example, for equity or hybrid funds you can avail a loan of 45% to 50% of net asset value and in case of debt funds, the limit may exceed upto 65% to 80% of net asset value. However, not every mutual fund scheme can be pledged, one should check upon the list of eligible schemes with their respective banks or financial institutions in order to avail the loan.

At what interest rate?

Generally, the interest rate depends on the tenure of the loan and the institution from which it is taken. The interest rate on LAS is usually in the range of 11% to 16% per annum.

Any additional charges?

Generally, the processing fee is in the range of 0 to 1% of the loan amount or a fixed amount. Also, there can be additional document charges for the fresh loan and a top-up loan.

What will happen to the existing lump sum or SIP investments in mutual funds?

A loan against mutual funds does not impact your ownership rights over the mutual fund units, allowing you to capitalize on potential market appreciation and compound growth. The bank will only sell them if you fail to repay the loan as agreed.

Is it still really better than any other option?

Loan against mutual funds v/s redemption

An investor gets a choice between taking a loan against mutual funds or redeeming the mutual funds units. Early redemption of mutual funds units can lead to exit load. But in the case of loan against mutual funds, no such load would be charged to investors. Similarly, there are tax implications when equity or debt schemes are redeemed, while in case of LAS, no such question would arise for long-term or short-term capital gains. Moreover, your investment will continue to grow and you can benefit from the power of compounding in the long-term.

Loan against mutual funds v/s personal loans

Loan against mutual funds are backed by collateral which makes it less risky for lenders, hence, they charge less interest rates as compared to personal loans. The process of issuing such loans is comparatively quicker than that of other loans as the procedures are paperless in nature which can generate liquidity for investors when required. But, not every bank or financial institution provides a loan against mutual funds for every scheme like there are banks that provide loans only for a certain list of schemes selected by them.

Bottom Line

Any facility made available can be good as well as bad while financing it for oneself. With appealing interest rates, flexible repayment options and fast approvals, loan against mutual funds present an attractive choice for borrowers. However, it's crucial to consult financial advisors before making any financial decision, as achieving financial well-being depends on aligning your choices with your long term financial needs.