How Much Insurance Do I Need !!!

How-Much-Life-Insurance-Do-I-Need??Do all of us require life insurance?? My answer is "YES" Because, Health of elderly parents, Education of Children and life of Spouse are put under a big question mark when bread earner dies. Not only losing the loved ones, most of the times families get into serious financial crisis. Now the question is " How Much Life Insurance Do I Need To Secure My Family?" But first you realize that whether you need any life insurance to take. If so, then here are some parameters on calculating how much life insurance you really need.

1. Earning Power: Life insurance amount must cover at-least the earning power of the person. For Example you earn Rs.50 thousand per month then your expenses ratio would around this amount. Now if something happens, interest income from insurance policy claim proceeds must be around or more than Rs.50 thousand, considering the fluctuation in money value due to inflation.

2. Dependents: If you are young and single you do not worry much about this. Mostly liability started arise once you get married. But after marriage this is must. Your Spouse and your children or your parents requires it more in your absence, because they depends on you.  If you are only earner in the family then you need higher insurance coverage.

3. Having Loan: If you have some loan/debt then the policy coverage must be higher to cover your loan/debt amount. Imagine the situation when the person had a bulk house loan to pay and there is no earner. Remember when you have loans or other debts, consider taking a policy with higher coverage after checking your affordability to pay the premium along with EMI.

Life insurance is not necessary if you do not dependents. Having surplus resources to take care of dependents. No debts/Loan, You are single and just started earnings.

There are some basics to check it like Take all your insurance policies and calculate total insurance cover you have. Now analyze and compare it with your earning in your absence and ask yourself "will this amount fulfill / protect family's lifestyle forever in my absence". If your earning does not allow much to take regular insurance cover then go for some Term Insurance.

Calculate and take the right insurance cover for you and protect your family's lifestyle forever. 

Register and Get Facility with LIC eService Portal

LIC has comes up with some new features with Lic’s e-service. You can register your policies at LIC portal with some simple steps and save lots of time.
Lic’s e-service is an initiative is to provide you with on demand service within a few clicks! You can now have many of the functionalities that were available only at branch office, Now it will be online at your fingertips. To avail this facility you have to get register as customer on LIC portal.
How to get Register on LIC Portal:
Register-and-Get-Facility-with-LIC-eService-PortalFirst you have to visit www.licindia.in  , click on the tab “New User “ , select your own USER ID & Password and provide all the other necessary information . Now you are a registered customer portal user.

LIC’s e-services portal for customers has come up with a lot of new facilities. Now if you register you can avail the following benefits: 


1.  Online Payment Facilities:
This facility provided to pay renewal premium dues, payment, repayment and loan interest due of loan through net banking, debit card, credit card, BHIM, UPI
2.   POLICY Schedule:
First page of policy bond which constitutes policy schedule will be displayed.

3.   Policy Status :
Basic detail of policy will be displayed such as plan, term, sum assured, date of commencement, first unpaid premium etc.

4.  Bonus Status :
     Total bonus accumulated under the policy will be displayed.

5.  Loan Status :
Present loan position will be displayed such as total loan outstanding under the policy, due up to which loan interest paid etc.

6.  Claim Status:
This option will display date of survival benefit (if any) or maturity benefit due under the policy during the policy term.

7.  Revival Quotation:
Revival quotation will be provided in case of lapse  policies.

8.  Premium Due Calendar:
Detail of premium due during the year (month wise) will be displayed.

9.  Premium Paid Certificate:
Individual policy – it provides history of premium paid under a single policy during the financial year.
Consolidated – it provides history of premium paid under all the registered own life policies of the user.

10. Claim History:
 This option will provide details of any claim paid under the policy with NEFT/  Cheque details, date of payment and amount of payment.

11.  Policy bond/proposal form image;
 Scanned image of the policy bond as well as proposal form will be displayed for enrolled  policies.
12.  Grievance registration:
Facility to register a complaint /grievance with insurer.

In future the benefits will further be enhanced. If you face any problem in registering, you may contact us/your Agent or to your nearest LIC Branch.


Health Insurance And Tax Benefit

Health-Insurance-And-Tax-Benefit
Health is Wealth or You may say Health is the greatest assets for a human being. Our overall health is severely affected by our lifestyle. Unhealthy Eating Habits, Lack of Adequate Sleep, Stress can affect our health. A Mediclaim policy acts as savior & it protect you from facing a financial crunch in a medical emergency. Since Inflation has made medical bills costlier, having a heath insurance policy is necessary as other necessities.

There are dual benefits of the health insurance. First it ensures your financial stability and give coverage against expensive medical bills and also offer you benefit of Tax Deduction under section 80D upto Rs.25,000/- to Rs.30,000/- (for Senior citizen).

In order to enjoy tax deductions along with health coverage, you need to check which policy suits you & your family and how much premium required for. The premium amount paid by you can be utilize as Tax Rebate Tool. Remember, if the premium paid by your employer, you will not be eligible for tax rebate. Under the IT Act, 1961 medical allowance is not considered as an allowance, which is exempted. 

Generally, medical allowance is confused with medical reimbursement. Medical reimbursement is paid by an employer to their employees when they submit medical bills. 

When it comes to tax planning, people generally don't consider their parent's health insurance as a tax saving tools. If you are paying for your parents health insurance, you can claim upto Rs.30,000/- as tax deduction benefit in your annual income tax return. 

Service Tax Paid on Insurance Premium U/s.80C

Service-Tax-Paid-on-Insurance-Premium-U/s.80C
Many question arise about "can we take benefit of paying service tax paid on Insurance Premium!" If we check insurance premium receipts properly we get that the we pay three cost heads; Net Premium + Service Tax + E. Cess. On this basis final gross premium is calculated.

Now question is "can we take claim under section 80C of service tax paid along with insurance premium?"

The current tax rules states that "any amount paid to keep in force a life insurance policy qualifies for a tax deduction under section 80C." It is a common perception that Premium Paid all Life Insurance Policies are qualifies for deduction under section 80C of Income Tax Act, 1961. 

As per Section 80C(2) of the Income Tax Act, 1961 any amount paid to an insurer to buy or to keep a life insurance policy in force can be claimed as a deduction from gross total income by the policy holder. This implies that premium paid for a life insurance policy can be deducted from gross total income before arriving at taxable income subject to certain condition.

Section 80C(2) also clarifies that in order to claim the deduction from gross total income fro a particular year the gross amount of premium must be paid or deposited in that particular financial year itself.

But when you ask insurance provider to provide Total Insurance Premium Paid Statement then they will provide you only statement of net premium paid

Tax experts interpret this to mean that the entire premium inclusive Service Tax and Cess, qualifies for a tax deduction.

Ideally, you need to mention the entire premium or gross premium for the purpose of availing a tax deduction under section 80C.

Which is better Paid-Up or Surrender?

Which-is-Better-Paid-Up-of-Surrender-of-LIC-Policy !!
A life insurance policy in which if all the premium payments are complete till some specified period and insured person is free of all payment obligations and the policy stays intact until insured's death or termination by its maturity or Surrender of the policy is called Paid-Up Policy.

Life Insurance Policies usually last the insured person's lifetime or maturity period, but some some policies can be paid up completely till a specified period. Only Traditional Life Insurance Plans can be a Paid Up Policy. 

It is calculated as the ratio of number of premium paid to the total number of premiums payable multiplied by the Sum Assured value.

 i.e. Paid-Up Value = No. of Premium paid /No. Premiums Payable X Sum Assured.


For Example:  Pradip has one traditional Endowment Policy having Sum Assured Value Rs.2,00,000/- and the policy tenure is 16 years. Unfortunately Pradip did not able to continue his policy after continuing is upto 8 years full premium paid. 
Now from very next year he did not paid any due premium to make it continue, hence very next year this policy become automatically a Paid-Up policy.

Which is better Paid-Up or Surrender of Policy?
Now, Pradip has two option either he can go and surrender his policy by providing all necessary documents to the branch or let it become Paid-Up.

Also Read : How To Surrender An LIC Policy ??

A Policy can be paid-up from next premium due. Suppose I continue my policy up-to 8 years and from next year I fail to pay premium then it become automatically Paid-up to its proportionate to its  premium paid ; Payable And Sum Assured.

Every Insurance Plan has it surrender value which can be known from servicing branch. Its is approx 30% of Sum Assured in regular plan and up-to 90% in single premium plan.

If we calculate in both condition then we can make comparison itself and understand which is better. For Example you have S.A.=2,00,000/-; Tenure - 16 Years; Premium - Rs.13000 (Approx); Premium Paid up-to full 8 years.

Surrender Value : Rs.2,00,000 X 30% = Rs.60,000/-  (Immediate Payment)

Paid-Up Value : Rs.2,00,000 X 8/16 = Rs.1,00,000/- + Vested Bonus  (Payment after death or maturity)

You can decide which is better. On Surrender you will get immediate payment while on letting Paid-Up of Policy you will get after death or maturity which ever is earlier)

How To Make Claim in Insurance ?

How-To-Make-Claim-in-LIC ?
What is Claim in Insurance?
Let’s talk about claim. Claim is the demand that the insurer (i.e. LIC of India) should redeem the promise made in the contract. Then the insurer settle the claim after satisfying himself that all the conditions and requirements for settlement of claim have been complied with.
Types of claims:-
An insured person can make claim according to condition complied to contract between Insurer & Policyholder. Claim can be made against Maturity; Death or by Surrendering a policy.
In Money Back Policy, LIC or other Insurance company also pays Survival Benefit Payment before the date of maturity.
How to Make Claims and what are the documents required for?
(A)Maturity Claims:-
When Life Insurance Policy is maturing, the insurance company will usually send intimation prior to due date at least two to three months in advance of the date of maturity with maturity amount payable details.
Policy holder should contact his servicing branch to know about claim procedures & sets of documents required. The Insurance Company asks for following documents:
(          1)Maturity Claim Form No. 3825
(          2)Original Policy Bond
(          3)Discharge Voucher with witness sign
(          4)NEFT Details with cancelled Cheques
(B)Death Claims :-
When a person with life insurance policy dies, claim intimation should be sent to the insurance company as early as possible. The Assignee or the Nominee under the policy can do this with the help of his agent or relative.
The claim intimation should contain information like Date, Place and Cause of Death. The Insurance Agent should help the Insured Person Family or Assignee to deal with the Insurance Company. The Insurance company will respond and ask for the following document :
(       1)Maturity Claim Form No. 3825
(       2)Certificate of Death
(       3)Original Policy Bond
(       4)Discharge Voucher with witness signature
(       5)NEFT Details with cancelled Cheques
*If the policy has been assigned in favour of any other person or entity like any Loan provider company – the claim amount will be paid to the assignee who will give discharge.

(C) Surrender of Policy : - Please visit post How to Surrender LIC Policy?


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