Friday, April 22, 2016

Guidelines for taking Health Insurance Policy in India

Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. 

The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. According to the Health Insurance Association of America, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. Includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment" 
Source and for more details on Health Insurance policy :

Coverage of Health Insurance Policies in India:

What a Health Insurance policy would normally cover A Health Insurance Policy would normally cover expenses reasonably and necessarily incurred under the following heads in respect of each insured person subject to overall ceiling of sum insured (for all claims during one policy period). 
a) Room, Boarding expenses 
b) Nursing expenses 
c) Fe e s  o f  s u r g e o n , a n e s t h e t i s t , p h y s i c i a n , consultants, specialists 
d) Anesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines, drugs, diagnostic materials, X-ray, Dialysis, chemotherapy, Radio therapy, cost of pace maker, Artificial limbs, cost or organs and similar expenses. 

Sum Insured 
The Sum Insured offered may be on an individual basis or on floater basis for the family as a whole. 

Cumulative Bonus ( CB) 
If you have a special condition, such as cancer or diabetes, add the third layer of a special cover, such as a cancer plan or diabetes cover. Health Insurance policies may offer Cumulative Bonus wherein for every claim free year, the Sum Insured is increased by a certain percentage at the time of renewal subject to a maximum percentage (generally 50%). In case of a claim, CB will be reduced by 10% at the next renewal. • Cost of Health Check-up Health policies may also contain a provision for reimbursement of cost of health check up. Read your policy carefully to understand what is allowed. 

Cashless Facility 

Insurance companies have tie-up arrangements with a network of hospitals in the country. If the policyholder takes treatment in any of the net work hospitals, there is no need for the insured person to pay hospital bills. The Insurance Company, through its Third Party Administrator (TPA) will arrange direct payment to the Hospital. Expenses beyond sub limits prescribed by the policy or items not covered under the policy have to be settled by the insured direct to the Hospital. The insured can take treatment in a non-listed hospital in which case he has to pay the bills first and then seek reimbursement from Insurance Co. There will be no cashless facility applicable here. 

The following are generally excluded under health policies: 
a) A l l  p r e - e x i s t i n g d i s e a s e s ( t h e p r e - e x i s t i n g disease exclusion is uniformly defined by all non life and health insurance companies).  
b) Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease. This is not applicable for accidental injury claims. 
c) During first year of cover – cataract, Benign prostatic hypertrophy, Hysterectomy for Menorrhagia or Fibromyoma, Hernia, Hydrocele, Congenital Internal diseases, Fistula in anus, piles, sinusitis and related disorders. 
d) Circumcision unless for treatment of a disease
 e) Cost of specs, contact lenses, hearing aids 
f) Dental treatment / surgery unless requiring hospitalization 
g) Convalescence, general debility, congenital external defects, V.D., intentional self-injury, use of intoxicating drugs / alcohol, AIDS, Expenses for Diagnosis, X-ray or lab tests not c o n s i s t e n t w i t h t h e d i s e a s e r e q u i r i n g hospitalization. 
h) Treatment relating to pregnancy or child birth including cesarean section 
i) Naturopathy treatment. 

The actual exclusions may vary from product to product and company to company. In group policies, it may possible to waive / delete the exclusions on payment of extra premium.

Source and for more details:Handbook on Health Insurance issued by IRDA


Life Insurance Corporation (India) (LIC) is an Indian state-owned insurance group and investment company headquartered in MumbaiLIC offers a variety of insurance products to its customers such as insurance plans, pension plans, unit-linked plans, special plans and group schemes.

Some of the  Health Insurance Policy providers in India in addition to Life Insurance Corporation of India:

In Policy brief details of 28 Health Insurance Policy providers and their website links are provided which the readers can refer to get full details.

Link for :Policy

Now we come to the Guidelines for taking a Health Insurance policy and precautions  for claims:

The timing of the Policy: 

Buy a cover as early on in life as possible and definitely before you turn 45. If you procrastinate, diseases could surface and get excluded from your cover under the 'pre-existing disease' clause.

Of course, lately there have been products where pre-existing diseases are being covered, but that is subject to specific conditions. As you are likely to make no or few claims in earlier stages of life, you can get the benefit of no-claims bonus for every claim-free year. Do not rest assured in the fact that your employer covers your medical expenses. What if you fall ill between jobs? And buying a health cover without exclusions after you retire at, say, 60, will be much tougher.

The maximum renewal age

One of the most important things that one needs to look at the time of buying a health plan is the maximum age up to which the the insurer would allow renewals. The higher this is, the better, since your medical expenses are likely to increase with age. Changing insurer at a higher age has a high probability of being looked at as a fresh policy with no prior coverage.

Common oversights - 

Maybe because the maximum number of claims are made on health policies, possibly apart from motor insurance, the number of rejections, rendering a policy worthless, arising here is also quite large. Many of these arise because of the policyholder's lapses.

Things such as missing documents or late renewals can lead to rejection and, consequently, substantial medical debt. Here are the common oversights to avoid:
Pre-existing diseases. 
This is a common problem area since there was no standard definition of pre-existing illness earlier. In June 2008, the General Insurance Council said "the benefits (of health insurance) would not be available for any condition, ailment or injury or related condition for which the insured had signs or symptoms, and/or was diagnosed and/or received medical advice/treatment, prior to inception of the first policy, until 48 consecutive months of coverage have elapsed, after the date of inception of the first policy.

Four years is the maximum period prescribed by the Insurance Regulatory and Development Authority, but companies may offer products that could have a shorter waiting period under the 'pre-existing' clause.

When buying a policy, you should know:

From when claims on which pre-existing diseases will be allowed. The waiting period is not the same for all of them;

That the definition excludes all diseases arising out of earlier complications, such as obesity and hypertension;

That the period of four years does not include the track record from another insurer;

That the buyer should disclose the known pre-existing diseases at the time of application.

Claim problems. 

An insurance company cannot pay a claim unless it is in line with the agreed terms and conditions. If you provide incorrect information at the time of applying, your claims could be rejected.

To prevent that:

Keep the company informed. Limited information including illness and policy number is sufficient.

Give the correct papers when making a claim in a proper file. Keep in order the following:
(i) covering letter, original claim form and copy of the policy,
(ii) note from the concerned doctor describing the illness and the recommended treatment,
(iii) original prescriptions from the doctor for medical tests (investigation) and medicines and original medical test (investigation) reports,
(iv) sheet listing down bills and the amounts,
(v) doctor's and medical test bills,
(vi) hospital or nursing home bills,
(vii) medicine bills,
(viii) hospital bills, and
(ix) Original discharge card.
Get an acknowledgement of receipt of the claim before submitting the file and retain a photocopy of the complete set of documents submitted to the insurance company.

Keep the number of the third-party administrator and your insurer ready if you have a cashless policy. Try to inform them around 48 hours before the admission in general and 24 hours if it is an emergency.

Spell the name correctly. The patient's and his or her doctor's name should be spelled correctly, wherever required.

So you must:

  • Be careful in deciding the sum insured you need;
  • Be aware of the sub-limits under the policy for specified illnesses or expense heads, the waiting period, permanent exclusions, and so on.
  • Coverage. A family floater can be bought by an individual, who becomes the proposer, along with spouse, dependent children up to 25 years, or unmarried, divorced or widowed daughter, and dependent parents. Even parents-in-law can be covered.
A discount of 10 per cent is allowed on renewal premium by most insurers if there is no claim in the year immediately preceding the year of policy renewal. Similarly, in group health plans of your employers, you should know who are the ones it covers and the limit to which they are covered.

So you need to be aware of:

  •  Who are included in a family floater health policy and till what age;
  •  What the inclusions and exclusions are (and for how long) for each of the insured as enumerated in the 'inclusions' section of the policy document; and
  •  The age till which the policy can be renewed.
  •  Gap in renewals. Renewal of the policy on time is very important for health covers. Apart from no-claim bonus, after a certain period it could start covering your pre-existing ailments. For every no-claim year, most plans add up to 5 per cent of the sum insured as cumulative bonus. So you need to:
  •  Renew your policy a month before the due date to to prevent a lapse so that waiting periods do not start afresh; and
  •  Read policy wordings every time it is renewed so that you do not miss out on new inclusions or exclusions.

Wednesday, April 20, 2016

My experience of Blogging.My 400th Post

I am glad to inform that this my 400th Post  in my blog 'KNOWLEDGE SHARING'. In this article I wish to share my experience in blogging which has become one of my hobbies after my retirement.

This Blog was created by me on 27.3.11.  As the name of the blog implies ,I started sharing information relating to various areas like computers,Health,Religion,Travel,Personality Development,General Knowledge,Tips etc.  I have to honestly tell that most of my postings are mainly compilation of articles from other sites like Wikipedia and articles received by way of emails from my friends. Only a few of them are my own articles.

Followers of my blog:

There are 74 followers as on date who joined to follow my blog in the initial years. I have no idea how many of them are still reading my posts. Further these 74 followers joined to follow my blog in the initial two or three years and thereafter no new followers joined. I am unable to find an answer for the abrupt stopping of followers to my blog. 

The blog has crossed Page views of 260000 recently but I think that this is not a good show. Some experienced bloggers adopt many strategies to increase the page views of their blogs which I have not tried so far.

Links to some of Popular posts in my blog:

I give below the links to popular posts in my blog, each of which has more than 1000 views:

Member of IndiBlogger Community:

After a few months of starting the blog, I  joined IndiBlogger, which is the largest and the most active Blogger community. This gave me an opportunity to network with many bloggers from different parts of India and some of them from other countries also.It is really a wonderful experience to go through the various articles covering a variety of topics by these friends in this Community which has helped me to acquire knowledge on those topics. But over these 5 years I have noticed many friends who were active are not active now but many new friends who joined the Group are very active.

My experience of Advertisement links in the blog:

In the initial stage of my blogging days,I tried to give links for some third party advertisements in my blog thinking that it will be a source of income. But after a period of time, I noticed that it was not a good strategy since to get even a minimum amount ,the postings have to be read by thousands of readers which will never happen in my case. As stated earlier it requires some strategies to gain more readers but I have not tried them so far.Further in the case of advertisements posted through some agencies, I noticed  that the time for loading the page took a lot of time and some of my friends and well wishers also reported that in some cases their systems were affected by malware associated with the advertisement. So I decided to stop giving links for third party advertisements in my blog. 

Blog in my mother tongue Tamil:

I have also another blog in my mother tongue Tamil titled என் இனிய தமிழ் உலகம் ( My Sweet world of Tamil) where I post articles on Computer,Tamil jokes,General Knowledge etc. I tried to write and post some poems in Tamil but after some time stopped the same with the realisatiion that I am not upto the mark in that field. I have limited followers and total page views has crossed 110000 recently. Frequency of my posting in this blog is less when compared to my posting in the blog in English.

I thank all the followers of my blog and ,regular readers,sources of my posts and my friends in IndiBlogger Community who find time to read my postings and encourage me by posting comments on the same.


Monday, April 18, 2016

Senior Citizen Savings Scheme

With the reduction of Interest rates on Fixed Deposit Schemes,concerns of senior citizens are where to invest and how they get regular income with safety. The answer to this is Post Office Senior Citizen Scheme or SCSS. Let us discuss about this scheme in detail.

Senior Citizen Savings Scheme
Post Office Senior Citizen Scheme or SCSS is 5 years one-time deposit scheme.

Who can invest in Post Office Senior Citizen Scheme or SCSS?

  • An individual who attained the age of 60 years of age or above on the date of account opening.
  • An individual who attained the age of 55 years or more but less than 60  years of age and has retired on superannuation or under a voluntary or special voluntary scheme. But they can open this account only on a condition that the account is opened within one month of receipt retirement benefits and amount should not exceed the amount of retirement benefit.
  • Retired personnel of Defence Services (excluding civilian Defence employees) without any age restrictions. But they have to fulfil other limits specified in the rules.
  • NRIs and HUF are not eligible to open this account.

Where to open Senior Citizen Savings Scheme or SCSS?

You can open Senior Citizen Savings Scheme either in post office or with recognised 24 PSU banks and one private bank.

The list of 24 nationalised banks are :
State Bank of India, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Mysore, State Bank of Travancore, Allahabad Bank, Andhra bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank and IDBI Bank. 

One private bank allowed to open this scheme is ICICI Bank.

How to open Senior Citizen Savings Scheme or SCSS?

  • Fill the Form A of account opening.
  • Deposit Amount-If deposit amount is less than one lakh, then it is accepted in cash. If it is more than Rs.1 lakh then either in cheque or DD.
  • Two passport size photographs.
  • Age Proof like Passport, Senior Citizen Card, Birth certificate issued by MC/Gram Panchayat/District office of registrar of births and death, Voter ID card, PAN card, Ration card, Date of birth certificate from the school or Driving license.
  • Address and Identity Proof like passport or PAN card.
  • You must carry original documents for KYC verification purpose.

How much one can invest in Senior Citizen Saving Scheme 0r SCSS?

  • Minimum of Rs.1,000 and in multiples of Rs.1,000.
  • Maximum of Rs.15 lakh.
One can open multiple accounts either in an individual capacity or jointly with spouse. But the maximum limit including all his accounts must not cross the maximum limit of Rs.15 lakh.

What is the rate of interest of Post Office Senior Citizen Scheme or SCSS?

Earlier, the interest rate on SCSS used to be declared once in a year. But not it is declared on a quarterly basis like April-June, July-September, October-December, and January-March. Refer my earlier post for the recent changes done in interest rates at “Post Office Savings Schemes -Changes effective from 1st, April 2016“.

So as per this, the interest rate for April-June quarter of 2016 is 8.6%. But in many posts, articles or even RBI mentioned that SCSS compounding frequency is on quarterly. However, when the depositor getting the whole interest earned on quarterly base then where comes the quarterly compounding effect.

How they pay the interest for Post Office Senior Citizen Scheme or SCSS?

Interest will be payable on the quarterly basis on 1st working day of April,  July, October and January. If you fail to claim such quarterly interest, then this interest amount will not earn any further interest. It will be kept idle. For the first time it is paid from the date of deposit to 31st March/30th June/30th September/31st December and then every quarter.

Interest is rounded off to a rupee. Like if the interest is less than 50 paisa is ignored and more than 50 paisa is rounded off to a rupee. There will not be any compounding. So for example, if you deposited Rs.1,00,000 and interest rate at 8.6%, then for a year it fetches Rs.8,600. This they divide into 4 (because they pay it in 4 quarters) and pay you Rs.2,150.

Duration or maturity of Post Office Senior Citizen Scheme or SCSS

It is 5 years fixed deposit kind of product. After the completion of 5 years, you have to submit the written application along with passbook and Form E.

In case you not close the account after maturity and also does not extend  the account, the account will be treated as matured and you will be entitled to close the account at any time. However, post-maturity interest at the rate as applicable to the deposits under the Post-office Savings Accounts from time to time will be payable on such matured deposits up to the end of the month preceding the month of the closure of the account.

What happens in case of death of depositor?

In case of death of the depositor before maturity, the account will be closed and deposit refunded along with interest to nominees or legal heirs if the nomination was not made or in case of death of nominee.

If the total amount including interest payable is up to Rs.1 lakh, it may be paid to the legal heirs on production below documents.

  • Letter of indemnity
  • An affidavit
  • A letter of disclaimer on an affidavit
  • A certificate of death of the depositor on stamped paper in the form as in Annexure to Form F.

Whether Pre-mature withdrawal allowed?

Yes, but with certain conditions. You are not allowed to withdraw within one year of account opening. You have to fill the Form E for this early withdrawal.

  • In case the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount 1.5% of the deposit shall be deducted and the balance paid to the depositor.
  • In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted and balance paid to the depositor.

Whether one can extend the Senior Citizen Saving Scheme or SCSS?

  • Account will not be extended automatically.
  • You can extend for a period of 3 years after 5 years maturity period. However, you have to submit Form B within one year from the date of maturity.
  • Also, such extended accounts can be closed after one year of extension without any penalty. Means after completion of 6th year, one can withdraw the amount without any penalty.
  • Interest rate during such extension period will be as per prevailing rate of interest after 5 years maturity.
  • Only one extension is allowed to the old account. Means after 5 years completion of SCSS, you can extend only for once. After that, the account will be matured.
  • However, you are free to open one more account during the old account tenure or after maturity of old account subject to the maximum ceiling of Rs.15 lakh.

Whether one can nominate?

Yes, you can nominate one or more than one persons. Also you can nominate, change, or cancel before the maturity as and when you wish. You have to submit Form C and present the passbook for registering, changing or cancelling the nomination. This service is totally free and there is no fee to it.

In case of joint account deposit. The nominee will come into picture only after the death of both joint account holders.

Whether loan facility is available?

No, you are not allowed to avail the loan by pledging it. Because this scheme is meant for regular income from your investment.

Whether transfer facility is available?

Yes, one can transfer Post Office Senior Citizen Scheme deposit from one office to another office. You have to fill Form G and enclose the passbook. If the deposit amount is Rs.1 lakh or above, a transfer fee of Rs.5 per Rs.1 lakh of deposit for the first transfer and Rs.10 per Rs.1 lakh of deposit for the second and subsequent transfers will be payable.

However, SCSS deposit can’t be transferred to others or it can’t be traded.

What if you break the Senior Citizen Saving Scheme or SCSS rules and deposited the amount?

Many may break the rules in lure of higher interest rate. So if banks or post office found that there is any break of rules from depositor, then the account will be closed immediately. Amount will be refunded after deducting the entire interest paid to such deposit from starting to till date.

Joint Account Rules of Senior Citizen Savings Scheme or SCSS–

  • You can open the Post Office Senior Citizen Scheme scheme jointly with spouse ONLY.
  • The age of first account holder will be verified for eligibility. But not the spouse of a first account holder.
  • In the event of a death of first account holder, then second account holder continue as primary account holder but with the condition that the maximum overall limit of the second holder must not cross Rs.15 lakh.
  • Even though it is joint account first holder is attributed to the scheme. There is no sharing from a joint holder.
  • Both individuals can open as many accounts as they can subject to the maximum ceiling of Rs.15 lakh based on their eligibility condition either individually or jointly.
  • In case the first holder dies and second holder continue the scheme but if his/her limit crossed the maximum ceiling of Rs.15 lakh from all accounts, then such over and above Rs.15 lakh will be refunded to him/her.
  • If both spouses holding individual accounts and either of spouse dies means the survivor can’t continue the account. They have to close the deceased spouse account.

Tax Benefits of Senior Citizen Savings Scheme or SCSS

  • During Investment-One can avail up to Rs.1,50,000 as a maximum benefit under Sec.80C by investing in SCSS scheme.
  • Interest Income-Interest income is treated as taxable income. Hence, there is no tax benefits. It will be taxed as per your tax slab. TDS can be deducted on interest earned if it exceeds the minimum limit prescribed by the Government which currently is Rs 10,000 and TDS is 10%.
  • If your income falls before basic exemption limit (Currently, if your age is below 60 years then it is Rs.2.5 lakh and for above 60 years it is Rs.3 lakh), then you can submit Form 15G (if your age is less than 60 years) or Form 15H (if your age is 60 years or above) to avoid TDS. However, in case the tax is already deducted, then you can file IT return on your own and claim the refund.