http://economictimes.indiatimes.com/Personal_Finance/Insurance/Insurance_news/ICICI_Lombard_to_expand_Nirmaya_scheme/articleshow/3468650.cms

Nirmaya, the new health insurance plans for the mentally disabled launched by ICICI Lombard, sounds like very unique product. This scheme will not need a medical test for anyone who is looking to buy the policy. The annual premium charged is also quite low which covers routine medical check up, therapy to corrective surgery, and transportation.

The policy is specially designed for the welfare of people suffering from autism, mental retardation, cerebral palsy, as well as multiple disabilities. Family members of the mentally disabled person can reduce their financial load by buying such policies.
In all the policy looks very good and may be a major hit among people who are looking out for these kinds of policies for any of their family members or friends. Many NGOs will also make use of this policy for people who are mentally disabled. It is a great step taken by ICICI Lombard to benefit a part of society that is criminally overlooked when it comes to such matters.

Here is a story about Islamic organizations terming health insurance policies as illegal and issuing a fatwa asking Muslims to keep away from them.

http://economictimes.indiatimes.com/Personal_Finance/Insurance/Health_Insuarance_illegal_Islamic_body/articleshow/2930737.cms

This has raised a doubt in my mind as to how Islam cannot allow taking health insurance. I have a valid reason. At the time of Holy Prophet (s.aw.s) whenever there was any war, soldiers used to cover themselves with armor to protect them. In my opinion the Holy Prophet (s.a.w.s) has shown that one has the right to protect one self against any uncertain event. No matter that the ultimate protection lies in God’s hands.

In the same vein, whether your health cover will help you or not is ultimately in God’s hands; but it IS your responsibility to make sure that you are adequately protected.

The point I want to make is, please provide proper daleel (proof) why it has been declared illegal so that if I am wrong I may correct myself. If possible, quote Quranic ayat and tradition or precedent supporting it.

Is life insurance necessary, considering the fact that one has to pay premiums regularly? May be not that important now, but will be a great help in future. Insurance is often mistaken as an investment product. It is a product which gives protection benefit. On buying a life insurance policy you feel that your life is secured. It helps you when you need the financial support during crisis. While parking our surplus funds for retirement we only consider those products which give returns at regular intervals. Most of the times we forget to insure our life.

Is life insurance needed for women? A woman needs to be monetarily independent, as she has to manage her career, bring up her family, and take care of her aging parents. A woman who is the single parent taking care of her children must be insured. In her absence her child will not be financially deprived. A working woman who financially supports the family must also be insured. The insurance policy will help to fill the financial gap in her absence. And a home maker must be insured as her services are priceless.

However, not many women are insured. There are only two companies in India which offer life insurance policies for women. The two companies are Bajaj Allianz Life Insurance Co. Ltd. and Life Insurance Corporation of India. Bajaj Allianz Life Insurance Co. Ltd. offers two different policies for women - Bajaj Allianz House Wives and Bajaj Allianz Working Women where as LIC offers Jeevan Bharathi.

Both these policies are designed specially for women. Bajaj Allianz Life Insurance Co. Ltd. covers Critical Illness Benefit, Reconstructive Surgery Benefit for Breast (s) due to Breast Cancer, Congenital Disability Benefit and Complications of Pregnancy Benefit. LIC of India covers Female Critical Illness Benefit and Congenital Disability Benefit.

Another advantage that women get is they have to pay low premium on life cover as compared to men as the mortality rate is higher in the former.

Women in India must insure their life as tomorrow is uncertain. Insurance helps to live a carefree life.

During a stint at a financial planning company, a gentleman asked to be guided on goal planning. I asked him to list down all his goals and to prioritize them. To my surprise he placed buying a Honda Accord above his child’s education. I asked him if he was sure of what he was doing. He replied that it would be a matter of around Rs. 5 lakh for the kid’s education – a sum that he could easily manage in the next ten-twelve years (his son was around 5 at the time). So I asked him if he had accounted for inflation. To which query he replied that the difference would hardly be enough to make it that big a deal. I showed him some simple spreadsheet calculations and he was quickly surprised to know that Rs. 5 lakh at present, adjusted for inflation at 5%, would amount to Rs. 11 lakh 16 years. At an average inflation rate of 8%, the amount would grow to Rs. 17 lakh.

He reprioritized. Quickly.

Children’s education is becoming more and more challenging as the years go by. Hence it should be the most integral part of financial planning. It should be at the top of any list of goals while preparing a financial plan. The earlier you start, the better it will be. Luckily for the above-mentioned gentleman, he realized it very early, rejigged his priorities and started planning accordingly.

There are two main pillars when we talk about children’s education.

The first is life insurance cover for the earning parent (or parents).

The question arises as to why this insurance is so important. In the event of any mishap and the parent (s) passing away, it would become very difficult for the child to get the otherwise promised good education. The life insurance payout can then help to keep the child’s educational aims intact. In this regard, a pure protection term insurance policy would meet the needs.

The parent (s) could, in addition, opt for personal accident cover. As the name implies, the risk of death by accident is covered here. Again, this is to ensure that the child’s education does not suffer if any of the parents pass on before their time in unfortunate circumstances.

The second pillar is investment. That is, investing present available funds in such a manner that will allow parents to provide the best education for their children.

You should start investing early to take advantage of the power of compounding. To state an example, let’s assume the cost of an MBA for your kid after 15 years is going to be around Rs. 10 lakh. At the 8% rate of return provided by the Provident Fund (PF), you will need to start putting aside an amount of Rs. 37,000 every year to meet this goal. Investing that same sum in equities would fetch much better returns. This could be done directly, via mutual funds, or using the portfolio management services (PMS) route.

To corroborate this, let’s take the performance of the Bombay Stock Exchange (BSE) Sensex, a benchmark index of the Indian equity market. In 1992, it stood at 1957 at trading close, 01 January 1992. At trading close, 31 December 2007, the BSE Sensex stood at 20286 – a 936% jump. This is way better than anything a PF would give you.

Here are some interesting numbers - where you had to put away Rs. 37,000 every year at 8% in the PF to get your child that MBA, you would only have to invest Rs. 27,000 in equities every year at a 12% rate of return. And if the rate of return is raised to 17% per annum, your annual invested amount reduces to just Rs. 17,000.

The biggest dream of any parent is to see his/her children doing well in their lives. To achieve that goal, one needs to plan accordingly. The earlier one plans the better the plan will work out.

Do I need Mediclaim?

This is the question which comes to every one’s mind when we talk about Mediclaim. The first defending line is, “I am healthy and fit; why do I need a Mediclaim policy?” Well, in today’s world, every person is running around from morning to night ignoring his/her health, skipping meals, hectic schedules. Where do we have time to really take care of our health? Keeping diseases at bay is not always in our hands, so why not at least have a policy that will take care of our financial needs if, God forbid, something happens to us or our dear ones.

Who can be covered?
Well, any person in the age group of 5 to 75 yrs can be covered under this policy. Children between the ages of 3 months to 5 yrs can be covered along with their parents.
Group insurance schemes are also available for a homogenous group of more than 50 people.

What is covered in Mediclaim policy?
Expenses incurred by the insured for hospitalization for illness/diseases or injury sustained (domiciliary hospitalization also payable as per policy).

These include hospital charges ( room, boarding & operation theatre ) fees for surgeon, anesthetist, nursing, specialist etc., diagnostic tests, cost of medicines, blood, oxygen etc., cost of appliances like pacemaker, artificial limbs etc.

Benefits of Mediclaim?
You get an exemption under the Income Tax Act, Section 80D for premium paid by cheque.
There are also benefits for a family cover under a single policy. You can avail a 10% discount of the total premium under a family policy.
In group insurance the premium payable is relatively lesser than premium paid for a single person.
The sum insured will be increased by 5% cumulative bonus for every claims-free year. If there is a claim in a policy with cumulative bonus 10% of the sum insured will be reduced from the earned bonus.

The Mediclaim protection is available for illness/disease contracted anywhere in the world provided the treatment is availed in India.
And for those who cannot afford to pay the exorbitant hospitalization fees during admission there is cashless Mediclaim wherein the insurer pays the amount in advance.

Policy amount paid?

• The insurer pays the actual hospitalization expenses to a maximum of Rs.15000 to Rs.500000 depending upon the sum insured. The sum insured is the maximum what the insurer pays the insured.
• Actual domiciliary hospitalization expenses limited to Rs.3000 to Rs.50000 depending on the sum insured chosen at inception.
• Cost of health check up reimbursable at the end of 4 continuously claims-free underwriting years, limited to 1% of average sum insured of the four claims-free years.

Today awareness of health insurance is better than before. Still many of them do not translate it into action. People do not save enough to meet their medical emergencies. One has to understand that the cost of health care expenses like hospitalization, tests and surgeries are on the rise. A few are fortunate, who are economically sound, and can afford the rising costs of medical expenses. Health care is something one would never like to compromise on. So it’s vital enough to prepare ourselves to meet the unpredictable medical expenses to protect us.

It’s a widely accepted fact - To tackle the rising cost of medical expenses health insurance is regarded as the most cost effective route one can adopt. Let’s understand more about health insurance. Health Insurance offers a comprehensive range of covers. It covers all the medical expenses that one could incur such as routine checkups, surgeries, medical bills, treatment for critical illness, and hospitalization expenses. There are also plans available that take care of specific critical illness, which one may fear the most.

Before opting for a health plan one should take into consideration the following pointers:

• Cover - A health plan should cover the policyholder from all possible medical expenses.
• Term - Opt for a health plan which may offer the longest term.
• Sum Assured - Before deciding the sum assured on should take into consideration the lifestyle, kind of hospital one would prefer.
• Transparency - The underwriting of the policy must be clear. It should mention clearly the cover one has opted.

As people buy other kinds of insurance and investments to protect against unexpected financial cost, one should also buy health insurance as one’s health comes first. So that one can concentrate on recovery of heath rather than worrying about the medical bills.

Even in this rising inflation scenario health insurance helps the commoner to achieve:

• Saving money - With exorbitant costs of medical treatment, paying a nominal health insurance premium can save thousands, ten of thousands, or even more if one ever needs a medical treatment.
• Peace of mind - Even if you are healthy, accidents can happen. But when one knows that all unpredictable medical expenses have been taken care of, one attains a level of satisfaction and peace of mind that is immeasurable.
• It’s affordable: It’s less expensive and can be designed to meet your personal needs.

So, favor one self by taking a health insurance policy before any health problem arises.

The author is a Research Analyst at Apnaloan.com Services (P) Limited.