Author: Rupanjali Mitra Basu

Rural Postal Life Insurance – Eligibility, Premium Table (Govt. of India) (2021 Updated)

Rupanjali Mitra Basu

In India, the majority of the population lives in Rural area. Insurance plays an important role in giving them economic protection against losses that may arise due to an uncertain event. In order to make insurance affordable and accessible for rural people, the Government of India had initiated multiple reforms.

Malhotra Committee formed for the reforms in the Indian insurance sector has observed that only 10% of Indian household savings constitute of life insurance in the year 1993. On the basis of the Committee’s recommendations, Rural Postal Life Insurance scheme was introduced in the year 1995 in order to spread insurance awareness and for the welfare of women workers and weaker sections of rural India.

What is Rural Postal Life Insurance?

Rural Postal Life Insurance scheme was introduced in the year 1995 with a view to offering life protection to the larger population of rural India at minimal premium rates. The prime focus of the scheme is on weaker sections and women workers as recommended by the Malhotra Committee.

Benefits of Rural Postal Life Insurance

RPLI policies offer various benefits and facilities to the policyholder. Following are the benefits offered by Rural Postal Life Insurance:

  • The policyholder can change the nomination at any time during the policy
  • RPLI policies provide the benefit of assignment
  • The policyholder can avail loan against RPLI policies. However, endowment assurance plans need to complete three years and whole life assurance plans need to complete four years to pledge the policy for the loan
  • The lapsed RPLI policy can be revived. It’s important to note that if the policy is in force for less than three years, the policy will lapse after six unpaid premiums. If the policy is in force for more than three years, the policy will lapse after twelve unpaid premiums
  • Conversion of policy from endowment assurance to whole life assurance and whole life assurance to endowment assurance is also possible as per the rules
  • If the original RPLI policy bond is lost, torn, burnt or mutilated, the policyholder can request for issuance of duplicate policy bond

Schemes under Rural Postal Life Insurance

Following are the six types of RPLI policies offered:

  1. Whole Life Assurance (Gram Suraksha) Plan
  2. Endowment Assurance (Gram Santosh) Plan
  3. Convertible Whole Life Assurance (Gram Suvidha) Plan
  4. Anticipated Endowment Assurance (Gram Sumangal) Plan
  5. 10-year RPLI (Gram Priya) Plan
  6. Children Policy (Bal Jeevan Bima) Plan

Let’s learn more about these RPLI policies. Amount of premium chargeable for all RPLI policies may vary depending on the age, time period chosen and many other factors. There is flexibility offered on the mode of premium payment. It can be, yearly/half-yearly/quarterly/monthly depending on the specifications of each policy. Let’s take a look at some key features offered by each RPLI policy.

  1. Whole Life Assurance (Gram Suraksha) Plan
    The main objective of the policy is to provide financial protection to dependent family members on the death of policyholder along with maturity benefits to the policyholder. As per the policy conditions, the sum assured along with accrued bonus will be payable to the policyholder on attaining the age of 80 years or to the designated nominee in case of death of the policyholder, whichever is earlier. However, the policy should be in force to receive the benefits. Following are the key features and eligibility requirement for Gram Suraksha:

    1. Individuals between the age of 19 years and 55 years can apply for the scheme
    2. Sum assured offered under the scheme is from minimum INR 10,000 to a maximum of INR 10 lakhs
    3. The policy can be surrendered after completion of three years
    4. Loan facility can be availed by pledging the policy to Head of the Circle/to the President of India provided policy has completed four years
    5. Last declared bonus is INR 65 per INR 1,000 sum assured per year
  2. Endowment Assurance (Gram Santosh) Plan
    Gram Santosh scheme is aimed to fulfil the insurance needs of individuals by giving protection for the pre-specified period. In case of policyholder’s demise during the policy period, the sum assured and accrued bonus will be payable to the designated nominee. Following are some of the key features offered and eligibility conditions applicable for Gram Santosh RPLI policy:

    1. Individuals between the age of 19 years and 55 years can apply for the scheme. Maturity of the policy may range from 35 years to 60 years
    2. Sum assured offered under the scheme is from minimum INR 10,000 to a maximum of INR 10 lakhs
    3. Policy can be surrendered after completion of three years
    4. Loan facility can be availed by pledging the policy to Head of the Circle/to the President of India provided policy has completed three years
    5. Last declared bonus is INR 50 per INR 1,000 sum assured per year
  3. Convertible Whole Life Assurance (Gram Suvidha) Plan
    Gram Suvidha policy is aimed at providing financial protection in the event of the death of policyholder to his/her legal heirs. It is a flexible RPLI policy that comes with a main feature of convertibility, wherein policyholder can convert Whole Life Assurance plan into Endowment Assurance plan after five years of taking the policy. The policy assures to provide sum assured with an accrued bonus at the time of death till the policy attains maturity age. Compensation will be payable to designated nominee/assignee/ legal heir of the policyholder. Following are the key features of Gram Suvidha:

    1. Individuals between the age of 19 years and 45 years can apply for this RPLI policy
    2. Sum assured offered under the scheme is from minimum INR 10,000 to a maximum of INR 10 lakhs
    3. Policy can be surrendered after completion of three years
    4. Loan facility can be availed by pledging the policy to Head of the Circle/to the President of India provided policy has completed four years
    5. Last declared bonus is INR 65 per INR 1,000 sum assured per year (for policy that is not converted to Endowment Assurance Policy)
  4. Anticipated Endowment Assurance (Gram Sumangal) Plan
    Gram Sumangal is a policy that aims to provide periodical returns along with protection cover. Basically, it is a money-back plan that pays survival benefits in periodical instalments. Apart from survival benefits offered, if the policyholder dies anytime during the policy term, the full sum assured along with accrued bonus will be payable to the nominee/legal heir/assignee. Following are the key features of Gram Sumangal policy:

    1. Individuals between the age of 19 years and 40 years can apply for this scheme with 20 years term and up to 45 years for the scheme with 15 years policy term
    2. Maximum of INR 10 lakhs can be offered as the sum assured under the scheme
    3. The policy comes with the benefit of assignment
    4. Policy term can be chosen between 15 years and 20 years
    5. Survival benefits periodically payable are as below:
      1. For 15 years policy term – 20% of the sum assured payable each time on completion of 6 years, 9 years and 12 years and the remaining 40% will be paid on maturity along with accrued bonuses
      2. For 20 years policy term – 20% of the sum assured payable each time on completion of 8 years, 12 years and 16 years and the remaining 40% will be paid on maturity along with accrued bonuses
    6. Last declared bonus is INR 47 per INR 1,000 sum assured per year
  • 10 Years RPLI policy (Gram Priya) Plan
    RPLI policy is one of kind money-back policies that aims to provide benefits within a short span of 10 years only. The policy pays out survival benefits periodically and also assures to provide financial protection in the event of the demise of the policyholder. Sum assured is payable on the death of the policyholder to the designated nominee.

    1. Individuals between the age of 20 years and 45 years can apply for this RPLI policy
    2. Sum assured offered under the scheme is from minimum INR 10,000 to a maximum of INR 10 lakhs
    3. The policy term is 10 years
    4. Survival benefits payable periodically are – 20% of the sum assured payable each time on completion of 4 years and 7 years and the remaining 60% will be paid on maturity along with accrued bonuses
    5. In case of natural calamities like earthquake, drought and cyclone etc, interest will not be chargeable up to one year on unpaid premium
    6. Last declared bonus is INR 47 per INR 1,000 sum assured per year
  • Children Policy (Bal Jeevan Bima) Plan
    Bal Jeevan Bima policy aims to provide financial security to the children of rural India, specifically the ones who belong to the weaker section of the society. Insurance coverage under this RPLI policy is provided to children of the policyholder. Following are the key features of Bal Jeevan Bima plan:

    1. Children between 5 years and 20 years can be covered under this RPLI policy
    2. A parent who is the policyholder should not be older than 45 years
    3. Maximum of two children of a policyholder is eligible for this scheme
    4. Risk cover will start from day one of the policy issuances. A medical check-up is not required for children
    5. On the demise of the policyholder, further premium payments are stopped. That means premiums will be waived off. However, the benefit of sum assured and accrued bonus will be paid on completion of the policy term
    6. Last declared bonus is INR 50 per INR 1,000 sum assured per year

RPLI policy registration process

RPLI policy registration can be done online. Following are the simple steps to follow

  • Visit India Post’s postal life insurance portal
  • Click on ‘Rural Postal Life Insurance’ under ‘products/schemes’ tab
  • Click on ‘buy policy’ option and fill in your details and coverage requirement and obtain a quote
  • Proceed for application. Start filling the application form by mentioning all the relevant details. Further, you can provide your employment history, nomination details, insurance history and medical history
  • Choose the base coverage, provide a declaration, confirm and proceed for payment
  • You can make a payment online or skip the payment if you are going to pay offline
  • You need to take the print out of the filled application and submit it at the nearest Indian Post Head Office along with relevant documents
  • Once the application is processed customer ID will be issued for further online tracking of your RPLI policy.

Documents required for registration of RPLI policy

Following are the documents required for registration:

  • Age proof- Birth certificate/SSLC mark sheet/Voter ID/Passport etc.
  • Identity proof – PAN card/ driving license/voter’s ID/ Passport/ Adhaar card, etc
  • Address proof – Driving license/passport/latest electricity bill/ telephone bill etc
  • Declaration of the medical examiner
  • Declaration in case the proposer is illiterate

Frequently Asked Questions (FAQs)

  1. What do you mean by ‘surrender value’ of RPLI policy?
    Surrender value is the amount or sum of money that is payable on cancellation of RPLI policy.
  2. How to initiate the claim in Rural Postal Life Insurance policies?
    The claimant can visit the nearest post office and obtain the claim request form and initiate the claim process by submitting necessary documents along with the form.
  3. What is ‘assignment’ in RPLI policy?
    Assignment means transferring of rights from the policyholder to another person. In this case, when assignor (policyholder) dies, compensation will be paid to assignee.
  4. How can I pay a premium for RPLI policy?
    Premium payment for RPLI policies can be made by visiting any of the nearest post offices. If you are a registered online customer having access to the customer portal with the customer ID, you can pay premiums online also.
  5. What is ‘policy number’ in RPLI policy?
    The policy number is a unique 13-digit number issued to the policyholder. This number needs to be quoted in any correspondence relating to your RPLI policy.

Keyman insurance guide

Rupanjali Mitra Basu

Businesses do not run themselves. They need experienced and skilled individuals to plan, execute and implement business decisions so that the business can grow. In fact, the expertise and the intrinsic talent of an individual can act as the key to the success of the business. In such cases, if the key employee who is responsible for the growth of the business dies, the business faces substantial loss. The business loses the technical knowhow and skill of the employee which helped its growth. Moreover, hiring another individual to replace the deceased also involves considerable expenses. To cover this loss suffered by the business, Keyman insurance policy is available in the market. Let’s understand what the policy is all about –

What is Keyman insurance?

Keyman insurance is a life insurance cover which is taken by an employer on the life of its employees. The employer is the policyholder as well as the one responsible for paying the premium. The employee is the life insured. If the employee dies during the term of the policy, the employer receives a death benefit which compensates the employer for the financial loss suffered due to the death of the key employee. The employee covered under a Keyman insurance policy should be the key employee of the business who is instrumental for the success of the business.

How does Keyman insurance work?

The business might decide to buy a Keyman insurance policy on its key employees. Only term insurance plans can be bought under Keyman insurance. The term of the policy is such that the policy expires when the employee retires. So, if the employee is aged 35 years when the policy is being bought and the retirement age is 65 years, the term of the policy would be 30 years. Alternatively, if the employee has a fixed employment term, the term of the Keyman insurance policy matches the employment tenure of the employee. If the employee dies during the term of the policy, Keyman insurance policy pays a death benefit to the employer. If, on the other hand, the policy matures, no benefit is paid as it is a term insurance plan.

Eligibility criteria for the employee to be covered

An employee is considered to be a Keyman if he/she fulfils the following eligibility parameters –

  1. The employee holds less than 51% of the stake in the company in which he/she is employed
  2. The aggregate shares held by the employee and his/her family members should not be more than 70% of the total share capital of the company
  3. The role of the employee should be provided and it should be proved that such role is critical for the business

Sum assured under Keyman insurance policy

The coverage amount for Keyman insurance policy is determined to be the lowest of the following –

  1. 10 times the annual package of the employee
  2. 3 times the average gross profit that the company has earned in the last three years
  3. 5 times the average net profit that the company has earned in the last five years

Tax implications of Keyman insurance policy

There are different types of tax implications of a Keyman insurance policy on the premiums paid as well as on the benefits received. Let’s understand these implications for the employer as well as for the employee in details:

  1. Tax implications for the employer:
    1. On the premiums paid
      The premium paid for buying a Keyman insurance policy is considered to be a business expense. This expense is allowed to be deducted from the taxable profits of the company under Section 37 (1) of the Income Tax Act. This deduction, therefore, lowers the taxable profits of the company and reduces its tax liability.
    2. on the death benefit received
      The death benefit received by the company in case of death of the insured employee is fully taxable. The benefit is considered to be an income in the hands of the company and it is taxed as per the company’s tax slab rates. The exemption benefit under Section 10 (10D) is not available under Keyman insurance.
  2. Tax implications for the employee:
    1. On the premiums paid
      The premium paid by the employer is not considered to be a taxable perquisite in the hands of the employee as per Section 17 (2) of the Act. Thus, the employee incurs no tax liability on the premiums paid.
    2. On the death benefit received

      Since the death benefit is not received by the employee or his dependents, there is no tax liability. However, if the Keyman insurance policy is assigned to the employee when he quits the employer, the employee becomes the owner of the policy. The employee, then, nominates an individual to receive the policy benefits in case of his/her death. In this case, the death benefit is paid to the employee’s nominee. This death benefit would be taxable. No tax benefit would be allowed under Section 10 (10D).

Benefits of Keyman insurance policy

A Keyman insurance policy is considered to be very beneficial for the business because of the following reasons –

  1. The policy helps businesses face the financial loss incurred in case their key employees die prematurely
  2. The policy gives a boost to the morale of key employees as their importance is outlined through the Keyman insurance cover on their lives
  3. The price of the company’s stocks do not fluctuate wildly when the company has a back-up plan in the form of Keyman insurance even in case of death of its key employee
  4. The premium paid for a Keyman insurance policy is considered a business expense. Businesses can claim tax benefits on such expenses
  5. If the business has availed loans on the key employee’s guarantee, the death of the employee would result in substantial liability in the hands of the business. The policy proceeds of a Keyman insurance policy can help the business meet such liabilities and avoid a financial crisis
  6. If the company is being acquired by another company, the valuation of the company would be higher if it has a Keyman insurance policy covering the risk of premature death of its key employees

Drawbacks of Keyman insurance

Though a Keyman insurance policy is very beneficial, there are some drawbacks of the policy too. These drawbacks include the following:

  1. Since the death benefit is taxable, the company has to part with a considerable amount of benefit towards tax. This reduces the effective benefit received by the company for the loss of its employee
  2. Only term insurance plans are available under Keyman insurance which might not be suitable for every business

Things to remember about Keyman insurance

Here are some important things which you should remember about Keyman insurance policy –

  1. The company cannot choose riders under the plan
  2. The nominee of the policy would be the employer who is also the policyholder
  3. Loans cannot be taken under Keyman insurance plans
  4. The employee is neither required to pay the policy premiums nor does he/she receive any death benefit

How to buy Keyman insurance?

Businesses which want to buy a Keyman insurance policy would have to approach an insurance company and propose for insurance. The company would assess the insurance requirement of the business and offer coverage under Keyman insurance.

Businesses would have to submit the following documents to avail the policy –

  1. Copies of the Memorandum of Association and the Articles of Association of the company
  2. Copies of the audited financial records of the company of the last three financial years. The records include the Profit and Loss Account and the Balance Sheet
  3. A certified true copy of the board resolution which has been passed in a meeting of the Board of Directors of the company. The resolution should contain the following details:
    1. The required sum assured
    2. Name and signature of the employer who is authorised to act as a proposer for insurance and fill up the proposal form
    3. The seal of the company
  4. Copies of the income tax returns of the business of the last three financial years
  5. A consent by the company to place an endorsement on the insurance policy
  6. A keyman questionnaire should be filled and attached to the proposal form. The questionnaire should be signed by the proposer

A Keyman insurance policy protects the financial interests of the business if its key employee dies prematurely. Though the policy cannot replace the loss of skill, it can provide the business with the funds to deal with the loss and replace the employee with another. A Keyman insurance policy is, therefore, important and should not be ignored.

Frequently Asked Questions:

  1. What would happen if the keyman, on whose life the policy has been bought, quits the company?

    If the employee quits the company and Keyman insurance policy is in force, the employer has the following four options –

    • The employer can stop premium payments and let the policy lapse
    • The employer can assign the policy in the name of the employee
    • The company can continue the policy and avail the claim as to and when it falls due
    • The employer can transfer the Keyman insurance policy to the new employer on mutually agreed upon terms and conditions
  2. Which companies cannot buy Keyman insurance?

    Companies which are making a loss cannot buy a Keyman insurance policy.

  3. Can I buy unit-linked plans under Keyman insurance?

    No, only term insurance plans are allowed to be bought under Keyman insurance.

National Pension Scheme

Rupanjali Mitra Basu

Having a retirement corpus is very essential and that is why you contribute towards a provident fund scheme during your employment tenure. While salaried individuals have the backing of the employee’s provident fund scheme, self-employed individuals look to create their own retirement corpus through investment into different avenues. There are different investment avenues for both salaried and self-employed individuals. The National Pension Scheme is one such avenue which helps you create a retirement corpus when you are working and also gives you a tax benefit. Let’s understand the scheme in details –

What is the National Pension Scheme?

NPS scheme was first introduced in the year 2004 by the Government of India. The scheme was designed to be a pension scheme covering the employees of the Government. However, in the year 2009, the NPS scheme was made open to all. Today, you can invest in the National Pension Scheme to build up a retirement corpus and also earn additional tax benefits in the process. The scheme is a market-linked scheme where your investments are invested in the market as per your preference. You can contribute towards the scheme when you earn an income. Thereafter, when you retire, the scheme can be redeemed. You can get a lump sum amount as well as annuity payments from the scheme which would help fund your retirement.

Who is eligible to invest in the National Pension Scheme?

Anyone who is aged between 18 and 60 years can buy the scheme. You can be a resident Indian or an NRI and you would be eligible to join the scheme. However, if you are an NRI and your citizenship status changes after you have bought the scheme, the scheme would terminate on such change.

How to invest in NPS?

To invest in the National Pension Scheme you would have to approach an authorised financial institution through which investment is allowed. Nowadays, every Indian bank and non-banking financial companies accept NPS investments. These institutions are called Point of Presence (POP) and each POP has an authorized branch through which you can make NPS investment. These authorized branches are called Point of Presence Service Providers or POP-SPs.

Though all banks and financial institutions are registered POPs, you can still check the list of POPs at the official website of Pension Fund Regulatory and Development Authority (PFRDA) https://www.npscra.nsdl.co.in/pop-sp.php. The National Pension Scheme is governed by the PFRDA and so POPs have to get themselves registered with PFRDA before they accept NPS investments.

Besides investing offline, you can also invest online. The registered POPs allow their customers with online banking facilities using which you can invest in the National Pension Scheme. You just have to log into your online bank account, fill up an online application form and apply. You can then invest the desired amount in the NPS scheme.

Documents required to invest

To invest in the National Pension Scheme you would have to submit the following documents –

  • The Registration Form, filled and signed
  • Your identity proof like PAN Card, Voter’s ID card, passport, Aadhar Card, etc.
  • Proof of age like passport, voter’s ID card, PAN card, Aadhar Card, etc.
  • Proof of address like driving license, passport, Aadhar Card, etc.

Types of NPS investment accounts 

When you choose to invest in the NPS scheme, there would be two accounts to choose from. You can invest in only one account or in both accounts. The types of NPS accounts are as follows –

  1. Tier I AccountThis account is the compulsory account into which you would have to invest when you choose the NPS scheme. The minimum investment which you are required to do in Tier I Account is INR 500. You would also have to invest a minimum of INR 1000 into the account in one financial year.

    Once invested, you cannot withdraw from Tier I account till the NPS scheme attains maturity. However, to provide liquidity to investors in times of need, National Pension Scheme allows you to withdraw from your Tier I investments at specified events. These events are as follows –

    • If you are unemployed for a continuous period of 60 days and above
    • If marriage expenses are to be paid
    • If medical emergencies are to be financed
    • If you want to buy a house, etc.
  2. Tier II AccountTier II Account is a voluntary account. You might invest in this account or only in Tier I Account. The benefit of Tier II Account is the fact that the account is flexible. You can invest whenever you want to and even withdraw from the account at any time. There are no limitations on withdrawals from Tier II Account. However, Tier II Account would be available only if you have invested in Tier I Account. The minimum investment for Tier II Account is INR 250.

Things to remember 

  • You cannot have multiple NPS accounts in your name
  • If the minimum investment in any of the accounts is not done in a financial year, the account would freeze. To unfreeze the account you would have to visit the POP through which you invested in the scheme and pay a penalty of INR 100 along with the amount that you want to invest.

How do the investments in the NPS Account grow?

As mentioned earlier, National Pension Scheme is a market-linked retirement scheme which gives you market-linked returns. Let’s understand how these returns are earned –

When you invest in NPS, you have a choice of two investment strategies. You have to choose a strategy based on your risk profile and investment preference. Let’s understand these strategies –

  1. Active choice –Under the Active Choice, you hold the reins on your investments. This strategy gives you a choice of different investment funds. You can choose any one or a combination of two or more funds. The available funds include the following-
    1. Asset Class A – whose portfolio is invested in alternative investment funds like REITS, MBS, AIFs, etc.
    2. Asset class C whose portfolio is invested in fixed interest instruments except for Government securities
    3. Asset Class E whose at least 50% of the portfolio is invested in stocks
    4. Asset class G whose portfolio is invested only in Government securities.

    Asset Class E has the highest risk and so you cannot choose to invest 100% of your investment in that class. You can invest a maximum of 75% in Asset Class E and rest in Asset Classes C and G in any proportion that you like. Asset Class A is optional. If you choose this fund, the maximum investment would be limited to 5%. Furthermore, under the Active Choice, the investments also depend on age. As you reach 50 years, equity exposure would start reducing. The reduction would be done @ 2.5% every year till your overall equity exposure reaches 50% when you are 60. Thereafter, in older ages, equity exposure would be restricted to 50%.

    However, if you do not choose Asset Class E the total investment can either be invested in Asset Class C or G without any investment restrictions.

  2. Auto choice –The Auto Choice strategy is a readymade strategy where your investments are managed automatically depending on your age. You just have to choose your risk profile from three available options – Aggressive, Moderate and Conservative. Thereafter, your investments would be split into different Asset Classes in the following manner –
    1. If you choose the Aggressive Risk Profile – Aggressive Life Cycle Fund:
      Age bracketAsset Class EAsset Class CAsset Class G
      Up to 35 years75%10%15%
    2. If you choose a Moderate risk profile – Moderate Life Cycle Fund:
      Age bracketAsset Class EAsset Class CAsset Class G
      Up to 35 years50%30%20%
    3. If you choose a Conservative risk profileConservative Life Cycle Fund:
      Age bracketAsset Class EAsset Class CAsset Class G
      Up to 35 years25%45%30%

    This is how your investment is initially placed. Then, as you age, equity exposure reduces in all the profiles. This reduction is redistributed between Asset Classes C and G in specific ratios.

    You can choose any investment strategy and investment fund. Moreover, you can also switch between the selected strategies and funds. Switching is allowed once every year.

Management of investment funds

The management of the funds invested in the NPS scheme is done by registered fund managers. Currently, there are eight fund managers who are registered with PFRDA to manage NPS investments. They are as follows-

  1. Reliance Capital Pension Fund
  2. LIC Pension Fund
  3. SBI Pension Fund
  4. ICICI Prudential Pension Fund
  5. DSP Blackrock Pension Fund Managers
  6. Kotak Mahindra Pension Fund
  7. UTI Retirement Solutions Pension Fund
  8. HDFC Pension Management Company

You can choose any of the above-mentioned fund managers for managing your investments.

Maturity of the National Pension Scheme: Annuity Options available

The NPS scheme matures when you reach 60 years of age. You also have the option to defer the maturity age by 10 years. If you choose this option, your investments would remain invested for another 10 years and the scheme would mature when you reach 70 years of age.

When the scheme matures, you can withdraw 60% of the accumulated amount in a lump sum. From the remaining 40%, you would receive annuity pay-outs. There are different types of annuity pay-outs provided under NPS scheme. These include the following –

  1. Lifetime annuity at a uniform rate
  2. A guaranteed annuity which is payable for 5, 10 or 20 years as you choose. Once the guaranteed period is over lifetime annuity would be paid
  3. Lifetime annuity at a uniform rate and on death the purchase price is returned
  4. Increasing lifetime annuity which increases at a simple rate of 3%
  5. Lifetime annuity paid at a uniform rate. In case of death, 50% of the annuity amount would be paid for the lifetime of your spouse
  6. Lifetime annuity paid at a uniform rate. In case of death, 100% of the annuity amount would be paid for the lifetime of your spouse
  7. Lifetime annuity paid at a uniform rate. In case of death, 100% of the annuity amount would be paid for the lifetime of your spouse. Moreover, when the spouse also dies, the purchase price would be refunded to the nominee

You can choose any of the annuity payout options and the amount of annuity would depend on the option selected.

If your accumulated fund is below INR 2 lakhs, annuity pay-outs would not be possible. In that case, the entire amount would have to be withdrawn in a lump sum.

Withdrawals from National Pension Scheme:

You can withdraw from the NPS scheme before the scheme reaches maturity. Withdrawals can be done in full or partially. If you choose to withdraw completely, you can avail 20% of the accumulated amount in a lump sum. The remaining would be paid in annuity pay-outs.

Partial withdrawals can be done from the NPS scheme provided the following terms and conditions are met –

  1. You cannot withdraw more than 25% of the accumulated corpus at once
  2. Withdrawals would be allowed only from the third year of opening the NPS account
  3. Withdrawals would be allowed only for special instances. These instances are the same as those in Tier I Account like for meeting marriage related expenses or medical expenses, etc.
  4. A maximum of three withdrawals are allowed over the entire duration of the scheme
  5. After one withdrawal there would be a gap of 5 years before the next withdrawal is done

The tax implication of NPS scheme

As mentioned earlier, National Pension Scheme investments give you tax benefits. The investment done, the amount withdrawn and maturity proceeds have different tax implications. Let’s understand these implications in detail –

  1. Tax implication on NPS investmentWhen you invest in Tier I Account of the NPS scheme, the investment that you do is eligible for deduction from your taxable income. This deduction helps in lowering your taxable income and, consequently, your tax liability. There are multiple deductions which you can claim which include the following –
    1. Under Section 80 CCD (1)If you are a salaried employee, NPS contribution of up to 10% of your basic salary plus dearness allowance can be claimed as a deduction under this section. For self-employed individuals, the deduction limit is up to 10% of annual income. The maximum deduction that can be claimed under this section is INR 1.5 lakhs which also includes deductions under Section 80C.
    2. Under Section 80 CCD (2)If you are a salaried employee, NPS contributions done by your employer would also be allowed as a tax-free deduction. Contributions up to 10% of your basic salary and dearness allowance would be allowed as a deduction.
    3. Under Section 80 CCD (1B)Investment into the NPS scheme, up to INR 50,000 would be allowed as a deduction under Section 80 CCD (1B). This deduction would be available over and above the deductions which you can claim under Section 80C.

    Tier II investments, however, do not give you any tax benefits. Those investments form a part of your taxable income and would be taxed at your income tax slab rates.

  2. Tax implication on the maturity benefitWhen the NPS scheme matures, the 60% lump sum withdrawal is completely tax-free in your hands. Annuity payments from 40% of the corpus would be taxable in your hands at your slab rate as annuities are considered an income.
  3. Tax implication on closing the scheme before maturityIf you exit from NPS before it matures, 20% of the benefit received in a lump sum would be tax-free. Annuities received from 80% of the corpus would be taxed in your hands.
  4. Tax implication on partial withdrawalsAny partial withdrawal done from the scheme would be tax-free in your hands provided you withdraw up to 25% of the corpus at any one time.

Benefits of National Pension Scheme:

The Indian Government launched the National Pension Scheme to help individuals create a retirement fund for them. The scheme, therefore, allows you to build up a retirement corpus. Besides this, the NPS scheme has other benefits which include the following:

  1. Investments into the National Pension Scheme allow you an additional tax benefit of up to INR 50,000. Thus, you can claim a total deduction of up to INR 2 lakhs through 80C investments as well as by investing in the National Pension Scheme. This deduction helps in lowering your tax liability
  2. Since the NPS scheme gives market-linked returns, you can create an inflation-proof corpus which would give you sufficient funds on retirement
  3. The investment strategy of NPS is such that equity exposure reduces as you age. This reduction helps in safeguarding the returns which you have earned from the scheme allowing you to build a safe corpus
  4. The investment amount required for National Pension Scheme is quite low making the scheme accessible to all

So, if you want to create a retirement fund for yourself and also save tax in the process, choose the National Pension Scheme. The scheme would help you build a good corpus with market-linked returns and also promise lifelong income through annuities.

Frequently Asked Questions

  1. What would happen to my investments if I die before maturity?In case of death, your nominee can withdraw the accumulated corpus from the NPS scheme in one lump sum. This withdrawal would be tax-free in the hands of the nominee.
  2. What is PRAN?PRAN stands for Permanent Retirement Account Number. This number is associated with your NPS account. In other words, your NPS account is identified through your PRAN number. The number can be used for making contributions or for withdrawals.
  3. Who pays annuities under NPS scheme?There are specific insurance companies who can pay annuities under the NPS scheme. You can choose any company as per your preference. The companies are as follows –
    • Reliance Life Insurance Company Limited
    • Bajaj Allianz Life Insurance Company Limited
    • Life Insurance Corporation of India
    • ICICI Prudential Life Insurance Company Limited
    • HDFC Standard Life Insurance Company Limited
    • Star Union Dai-ichi Life Insurance Company Limited
    • SBI Life Insurance Company Limited
  4. Are any documents required for making withdrawals from the scheme?Yes, if you want to withdraw from the scheme you would have to submit some documents which include your PRAN card, cancelled cheque of your bank account and attested copies of your identity proof and address proof.

Tractor Insurance: Complete Guide on Coverage, Add-Ons & More!

Rupanjali Mitra Basu

India is an agriculture-oriented country where more than 70% of its land is under agriculture. Agriculture, therefore, is the primary source of livelihood for most of the population of India. Tractors are an important component of the agriculture process as they help farmers in the cultivation and harvesting process. That is why tractors are very popular and in-demand among farmers and land-owners who use their lands for cultivation purposes. If the tractor faces damage, the farmers face a considerable financial loss. This is why tractor insurance policies become necessary.

Besides the need to cover financial loss, since tractors are a type of vehicle, they need a valid insurance policy on them due to the provisions of the Motor Vehicles Act. Tractor insurance policies are, therefore, compulsory for tractors. Tractor insurance policies are sold by many insurance companies. These policies fall under the commercial motor insurance policies and they offer coverage for farm or commercial tractors.

What is tractor insurance?

A tractor insurance policy is a commercial motor insurance policy which covers tractors against damages suffered. There is also a third party liability coverage wherein damages caused by tractors are also compensated by the policy.

Top 3 Features of tractor insurance policies

Tractor insurance plans have the following salient features –

  1. Usually, a comprehensive tractor insurance policy is offered by insurance companies as a commercial motor insurance policy
  2. The sum insured of the policy is calculated as the market value of the tractor after deducting appropriate depreciation based on the tractor’s age. The sum insured is called Insured Declared Value (IDV)
  3. The policy is issued for a period of one year

Who can buy tractor insurance?

Tractor insurance policies can be bought by legal owners of a tractor who want to secure the financial losses faced when their tractors are damaged and also fulfil the provisions of the Motor Vehicles Act.

What is covered under tractor insurance plans?

Tractor insurance plans, under commercial motor insurance policy section cover the following instances of damages –

  1. Damages suffered by the tractor due to natural disasters like earthquakes, lightning, road slides or landslides, floods, storms, cyclones, etc.
  2. Damages suffered by the tractor due to man-made causes like fire, burglary, theft, strikes, riots, etc.
  3. Third-party liability faced when the tractor physically hurts another individual or when the tractor damages another individual’s property
  4. Personal accident cover for the owner/driver of the tractor which pays a lump sum benefit in case of accidental death and disablement

Add-ons under tractor insurance plans:

Under some tractor insurance plans, you can also find add-ons or optional coverage features. These add-ons are available at an additional premium. Common add-ons which you can choose include the following –

  1. Personal accident cover for a paid driver
  2. Cover for electrical accessories of the tractor
  3. Legal liability towards paid drivers and employees
  4. Coverage for bi-fuel kit
  5. Return to the invoice where the invoice value of the tractor is paid in case of theft or total loss
  6. Protection of the no claim bonus in case of a claim

What is not covered under tractor insurance plans?
The following instances are commonly excluded from the scope of coverage of most commercial motor insurance policy, especially tractor insurance policies:

  1. Depreciation and normal wear and tear of the tractor and its parts due to usage
  2. Any type of electrical or mechanical breakdowns
  3. Violating the limitations of using the tractor and suffering damage due to such violations
  4. Damages suffered when the tractor is being driven without a valid driving license
  5. Damages suffered when the tractor was driven under the influence of alcohol or drugs or if it was driven outside India
  6. Consequential losses suffered after a damage
  7. Losses incurred due to war, rebellion, mutiny and similar perils

How are premiums for commercial motor insurance policy, i.e. tractor insurance plans calculated?
Premiums of a tractor insurance policy are calculated depending on the following factors –

  1. IDV of the policy
  2. Make, model and variant of the tractor
  3. Fuel type
  4. Modifications are done
  5. Age of the tractor
  6. Place of registration
  7. No claim discount in case no claims have been made and the policy is being renewed

How to make a claim under a tractor insurance policy?
To make a claim under your tractor insurance policy, the following steps should be followed –

  1. You should inform the insurance company immediately after a claim occurs
  2. In case of own damage claims, the insurance company usually arranges for an on-the-spot survey of the damages by sending a surveyor. You should not move your vehicle before the survey has been done
  3. Alternatively, the insurer can ask you to take your vehicle to the nearest networked garage where the survey would be done
  4. After the survey has been done the insurer would approve your claim and you can get cashless repairs done
  5. In the case of third party claims, you have to inform the insurance company and also file a police FIR. The claim would then go to the motor accidents tribunal which would specify the financial liability. The liability would, then, be paid by the insurance company
  6. If the tractor is stolen, you should file a police FIR and inform the insurance company. If the police are not able to trace your tractor, the insurance company would pay the IDV and settled your tractor insurance claim

Documents required for commercial motor insurance policy, i.e. tractor insurance claims:

To make a valid claim under your tractor insurance policy, the following documents need to be submitted:

  1. The claim form which should be filled in and signed by the policyholder
  2. RC book of the tractor
  3. Driving license
  4. FIR copy (in case of a third party or theft claims)
  5. Repairs bills in original
  6. Photographs of the damaged tractor
  7. Subrogation letter
  8. Discharge voucher issued by the garage, etc.

Claim settlement under commercial motor insurance policy, i.e. tractor insurance plans

Tractor insurance claims would be settled on a cashless basis if the tractor is repaired at a garage which is tied-up with the insurance company. However, if the repairs are done at a non-networked garage, then you would have to bear the repair expenses initially. Thereafter, when you submit the original bills and claim form, the costs would be reimbursed by the insurance company within 7-10 days of submission of your claim.

How to buy tractor insurance?

To buy commercial vehicle insurance for your tractor, you can approach any insurance company offering the policy. You can buy the policy through the branch office of the company by submitting all the documents of your tractor like the RC book, PUC certificate, invoice, etc. and your KYC documents. The plan can, alternatively, be bought online from the website of the insurance company. To buy online you would have to fill up the application form and pay the premiums online. Once the premiums are paid, the policy would be issued.

Currently, some of the companies which offer tractor insurance in India include the following –

  1. IFFCO Tokio
  2. HDFC Ergo
  3. SBI General Insurance
  4. Magma HDI

Renewing tractor insurance policies

Renewing your tractor insurance policy is quite easy. You can get the policy renewed from the same company by paying the renewal premium. You can also switch insurers and opt for another policy for your tractor. When renewing, you should utilise any no claim bonus that you have under your policy. No claim bonus is a premium discount which the insurance company allows if you have not made any claims under your policy. The discount is allowed after each claim-free year and if there are consecutive claim-free years, the discount also multiplies. This discount lets you avail a discount on the renewal premium and make it more affordable.

 

So, a tractor insurance policy is a popular commercial insurance policy for tractor-owners which covers the damages caused as well as faced by the tractor. The policy pays the financial loss suffered by the owners of a tractor and gives them financial security. So, if you have a tractor which you use for commercial purposes insure it and protect yourself from possible financial losses in case of a contingency.

 

Frequently Asked Questions:

  1. How do I find out the name of the networked garage for cashless repairs?
    The details of the networked garages in your area can be checked online on the insurance company’s website. You can also call up the claim helpline number of the insurance company and find out the closest networked garage for cashless repairs.
  2. Can my tractor insurance claim be rejected?
    Yes, your tractor insurance claim can be rejected by the insurance company. Rejection of claims usually occurs when your policy has lapsed, when you claim for an excluded cover or when the claim process is not properly followed.
  3. Is renewing tractor insurance compulsory?
    As per the Motor Vehicles Act, you need a valid insurance cover on your tractor. So, buying and renewing a tractor insurance policy is necessary to comply with the traffic laws.
  4. If an individual is killed by the tractor, would the insurance company pay a claim?
    Yes, death of a third party is covered under third party liability coverage which is available under tractor insurance plans. Thus, in case of death of an individual, the insurance company would pay the claim as directed by the motor accidents tribunal.

ULIP vs ELSS: Which one is for you?

Rupanjali Mitra Basu

When it comes to investing your hard-earned money most of you look for avenues which promise the best returns. This is where the capital market holds attraction as it allows you to avail good returns which are inflation-adjusted to fulfil your financial goals. Besides the attraction of good returns, capital market instruments also gives you flexibility in managing your investments. Given these benefits, many of you invest in different types of investment avenues which are market-linked.

Capital Market is a portion of the financial system that usually deals with the equity market, stocks, bonds as well as other long-term investments.

Two of the most popular market-linked investment avenues are Unit Linked Insurance Plans (ULIPs) and Equity Linked Savings Schemes (ELSS). While ULIPs are offered by life insurance companies, ELSS schemes are mutual fund schemes which are offered by mutual fund houses. Both these avenues work in a similar manner wherein the money that you invest is invested in market-linked funds which give you market-linked returns. But does this similarity make ULIPs and ELSS same?

No, it does not. ULIPs and ELSS are completely different from one another even though they are both market-linked investment tools. Let’s understand how –

 What are ULIPs?

ULIPs are a type of life insurance plan offered by life insurers. Under this plan, the premium that you pay is invested in a fund that you choose. There are different funds with different risk profiles and you can choose any fund as per your investment needs. The funds, in turn, invest their portfolio in different securities of the capital market. After you buy a ULIP, your invested premiums grow as per the performance of the market. In case of death during the policy tenure, you get higher of the sum assured or the fund value. If, on the other hand, you survive the policy tenure, you get the maturity benefit which is the fund value.

Salient features of ULIPs

ULIPs have the following salient features –

  1. They provide both market-linked returns as well as insurance cover
  2. You can withdraw from the policy partially after the first five years have been completed
  3. You can also change the investment funds whenever you want through the switching facility available under the policy
  4. Premiums can be paid at once, for a limited period or for the entire policy tenure
  5. You can also pay additional premiums through top-ups
  6. You can decide the amount of premium that you want to pay, the policy term and the investment tenure. The sum assured is decided based on your age and premium amount
  7. On maturity, you can choose to receive the maturity benefit in instalments over a period of 5 years
  8. Different types of ULIPs are available for different financial needs like child ULIPs, pension ULIPs, savings ULIPs, etc.
  9. The premium that you invest in ULIPs is allowed as a deduction under Section 80C of the Income Tax Act up to INR 1.5 lakhs
  10. The maturity or death benefit received is also allowed as a tax-free income. The full income is exempted from tax under Section 10 (10D)

What is ELSS?

ELSS schemes are mutual fund schemes which also invest in the capital market. They are equity-oriented funds wherein at least 65% of the fund portfolio is invested in equities. The objective of the scheme is to yield equity-oriented returns and also give a tax advantage.

Salient features of ELSS schemes

ELSS schemes have the following salient features –

  1. There is a lock-in period of 3 years from the date of investment. You cannot redeem your investment within this lock-in period
  2. The money invested in ELSS schemes is allowed as a deduction under Section 80C up to INR 1.5 lakhs
  3. You can invest in ELSS schemes through a lump sum investment or through regular monthly investments in the form of Systematic Investment Plans (SIPs)
  4. The returns that you earn are exempted from tax if they are up to INR 1 lakh per annum. For returns exceeding INR 1 lakh a flat tax of 10% if charged on the excess.
    This basically means, if you redeem your investments in a particular financial year where the returns are upto INR 1 lakh, then you do not need to pay any tax. However, if your returns (i.e. capital gain over investment) is more than INR 1 lakh, in that particular year, then you need to pay 10% on the amount over INR 1 lakh.
    For example, your investment amount is INR 5 lakhs and when you want to redeem the same, the amount is INR 6.5 lakhs. So, INR 1.5 lakhs is considered as “returns” and if you redeem the entire amount, then you would have to pay 10% of INR 50,000 (excess of INR 1 lakh).
    However, if you redeem the amount is 2 financial years, i.e. INR 75000 of returns in 1 year and the remaining INR 75000 in the next, then you would not have to pay any taxes.

ULIPs vs ELSS – the tax perspective

Though ULIPs and ELSS are very different, the one thing that truly sets them apart is their individual tax implication. Let’s understand how –

    1. ULIPs vs ELSS – tax implication on investmentWhen it comes to investments, both ULIPs and ELSS schemes allow deduction under Section 80C. So, in both cases, your investment amount would be considered as a tax deduction U/C 80C upto INR 1.5 lakhs a year.This is the primary reason why many investors choose these two investment options to reduce their tax outgoes.
    2. ULIPs vs ELSS – tax implication on returnsThis is where the difference is marked. While ULIPs allow you completely tax-free returns, ELSS schemes don’t. As per the latest changes made in the Union Budget of 2018, returns exceeding INR 1 lakh would be taxed at 10% for equity-oriented investment schemes. Since ELSS schemes are equity-linked, if your returns are more than INR 1 lakh, you would have to pay tax on the returns exceeding INR 1 lakh. So, if you earn a return of INR 1.5 lakhs on your ULIP investments, no tax would be payable on it. However, the same return under ELSS schemes would result in a tax of INR 5000 (10% of INR 50,000).

This tax implication tilts the scales in favour of ULIPs.

    1. ULIPs vs ELSS – tax implication on partial withdrawals and surrendersULIPs allow partial withdrawals and surrenders after the first five years of the plan are over. These partial withdrawals and surrenders are also tax-free in your hands.Under ELSS schemes, however, any partial withdrawal or surrender that you do is treated as redemption. This redemption would be taxable if the returns exceed INR 1 lakh, the same rule which is applicable on the returns earned from ELSS schemes.
    2. ULIPs vs ELSS – tax implication on switchingUnder ULIPs you can change the investment fund if the market is volatile. You would not have to pay any type of tax on the amount that you switch between funds.Under ELSS schemes, switching is also treated as redemption. If you are withdrawing from one scheme and investing into another, the amount withdrawn will be taxed if the returns are in excess of INR 1 lakh.

      So, while ULIPs and ELSS schemes give the same tax benefits on investments, it is in other scenarios when ULIPs prove to be a better investment option that ELSS schemes.

      ULIPs vs ELSS – other differences 

      Besides the all-too-important tax angle, ULIPs and ELSS schemes have other differences too. These include the following –

      Basis of differenceULIPsELSS
      Type of fundsULIPs offer all types of investment funds – equity, debt, balanced, money market, etc. You can choose any one fund or a combination of funds as per your risk appetite. ULIPs are, therefore, suitable for all types of investorsELSS is an equity-linked fund which is suitable for the risk-loving investors. You cannot invest in debt instruments when you choose ELSS schemes and so the scheme is not ideal for risk-averse investors 
      Lock-in duration5 years3 years
      Financial needs metULIPs can be issued as child ULIPS wherein they secure the financial future of the child even in the absence of the parent. There are also pension ULIPs which create a series of regular income after retirement. Thus, different types of ULIPs are available for fulfilling different types of financial needsELSS investments are not linked to specific needs. You can invest in ELSS funds and use the returns for meeting any type of financial need that you have
      Charges ULIPs include a range of charges like premium allocation charge, policy administration charge, fund management charge, mortality charge, etc.Only entry load and exit loads are applicable in case of ELSS funds
      Insurance coverageULIPs provide insurance coverage Insurance coverage is not provided under ELSS schemes
      Regulated byULIPs are offered by insurance companies which are regulated by the IRDAELSS are offered by mutual fund houses which are regulated by SEBI
      Risk Risk depends on the type of investment fund selected and how the fund is managed through switchingRisk is high since ELSS invests primarily in equity oriented securities

ULIPs vs ELSS – which one to choose?

Now you know the meaning and features of ULIPs and ELSS and also the points on which they differ. To choose you should assess your investment requirements. You can choose ELSS schemes when –

  1. You have a short-term investment horizon
  2. You don’t mind taking risks
  3. You want lower charges to be deducted from your investment
  4. You don’t need insurance coverage

ULIPs, on the other hand, prove suitable when – 

  • You need an insurance cover
  • You have a long-term investment horizon
  • You want to manage your investments as per the market movements
  • You want to save the maximum possible tax

So, assess these factors and then make your choice between ULIPs and ELSS. Both of these investment avenues give market-linked returns but they are quite different from one another. Understand their differences and see which avenue suits your investment strategy and then choose the best alternative.

Frequently Asked Questions

  1. Is there any charge on partial withdrawal?Partial withdrawals, up to a specified limit, are usually free under most unit linked plans. However, under some plans there might be a charge applicable. You should check the charges before making a withdrawal
  2. Can I surrender a ULIP before the completion of five years?No, ULIPs can be surrendered only after the completion of the first 5 years. If you surrender beforehand, the fund value would be transferred to a discontinued policy fund where it would remain till five years are over. Once the plan completes five years, you would get the fund value available in the discontinued policy fund.
  3. Are only ELSS returns taxed at 10% if they exceed INR 1 lakh?No, the aggregate return which you earn in a financial year from equity oriented investments like equity mutual funds, ELSS, equity shares, etc. are subject to a tax of 10% if they exceed INR 1 lakh.
  4. What are the entry and exit loads?Entry load is the charge which is deducted from your investment when you invest in a mutual fund scheme. Exit load is the charge which is deducted from your fund value when you redeem your mutual fund scheme.

80D Tax Benefits

Rupanjali Mitra Basu

Tax is a compulsory liability for any income-earning citizen of the country. System of taxation in India dates back to ancient times. There are two types of taxes levied in India –direct and indirect tax. System of taxation is based on the theory of maximum social welfare. In India, levying, administration, collection and recovery of tax is regulated by the Income Tax Act, 1961 which was passed in consultation with the Ministry of Law. Income Tax Act has provided various provisions for levying income tax for both incomes received and yet to be received.

Income arising to any person is classified under various headers for the purpose of taxation and treated differently as per the provisions of the Income Tax Act, 1961. There are also provisions for taxpayers to an avail tax deduction to bring down the total taxable income and reduce the payment of tax. In this article, let’s learn about tax benefits available under Section 80D of the Income Tax Act, 1961.

Applicability of Section 80D

Section 80D of the Income Tax Act, 1961 provides for the deduction of tax from total taxable income for the payment of medical insurance premium paid by an individual or a Hindu Undivided Family (HUF). The tax deduction under Section 80D is over and above the limit of deduction under Section 80C/CCC/CCD of the IT Act. For individuals, tax deduction under Section 80D can be availed for the medical insurance premium paid for insuring self, spouse, dependent children and parents. For HUF, tax deduction under Section 80D can be availed for the medical insurance premium paid for any member of the Hindu Undivided Family.

Quantum of tax deduction allowed under Section 80D of the Income Tax Act, 1961

Tax deductions allowed under Section 80D varies for each category. Let’s take a look

    • For individual: An individual can avail tax benefit under Section 80D of the Income Tax Act for the payment of medical insurance premium for self, spouse, dependent children and for parents. Up to INR 25,000 can claim for the medical insurance of self, spouse and dependent children. For insuring parents, an additional benefit of up to INR 25,000 can be availed if parents are aged below 60 years. In case, parents are above 60 years of age, the limit is INR 50,000.
    • For HUF: HUF members can avail tax benefit under Section 80D of the Income Tax Act for the payment of medical insurance premium of up to INR 25,000

Below table indicates the benefits available for each category in different scenarios.

ScenariosThe maximum premium for self, spouse and dependent childrenMaximum premium for parents (dependent/non-dependent)Total deductions available under Section 80D of the IT Act
All members of the family(self, spouse, children and parents) < 60 years of ageINR 25,000INR 25,000INR 50,000
Self, spouse and children < 60 years age

Either of the parents > 60 years age

INR 25,000INR 50,000INR 75,000
Self > 60 years age

Spouse and children < 60 years of age

Parents > 60 years age

INR 50,000INR 50,000INR 1,00,000
Members of Hindu Undivided FamilyINR 25,000INR 25,000

Let us understand this with an example:

Rahul is 37 years old:

Health Insurance Premium PaidTax eligibility U/S 80DRahul’s Tax Exemption
Premium for self/spouse/childrenINR 32000INR 25000INR 25000 (Upto the 80D limit)
Premium for his father (66 years)INR 37000INR 50000INR 37000 (Total premium paid since premium paid<80D limit)
TotalINR 69000INR 75000INR 62000

The tax deduction limit provided under Section 80D of the Income Tax Act, 1961 includes some more things mentioned below.

  • Preventive health check-up:
    Deduction of INR. 5,000 is allowed under the section for payments towards preventive health check-up. This includes the preventive health check-up expenses incurred for the individual himself or to his spouse, dependent children or for parents. However, the deduction of INR. 5,000 is within the overall limits of INR 25,000 or INR. 50,000 for senior citizens
  • Single premium health insurance policies: You can avail tax deduction benefits for single premium health insurance policies that provide long-term cover with a lump sum payment of premium. In this case, the appropriate fraction of the total premium paid is considered for the year for a tax deduction. Again, the limit applicable is same here also, which is INR 25,000 / INR. 50,000 depending on the age

Things to keep in mind before investing in medical insurance policies

With the tax perspective, below are certainly important things to keep in mind before investing in medical insurance policies:

    • To avail the tax benefit, payment of premium can be made in any mode other than cash
    • Premiums paid for insuring the health of grandparents, siblings, working children or any other relatives is not eligible for tax deduction under Section 80D of the Income Tax Act, 1961 Premiums paid for insuring self, spouse, dependent children and parents are only considered for tax deduction under Section 80D of IT Act
    • Tax deduction of INR. 50,000 limit is applicable for senior citizens who are 60 years and above and are residents in India
    • Service tax and cess portion of the premium are not considered for tax deduction
    • Employer sponsored health insurance schemes are not eligible for this deduction under Section 80D of the Income Tax Act, 1961

Tax deductions are allowed on various investment products under various sections of the Income Tax Act, 1961. Let’s take a look at some of the important investments that can qualify for tax deductions:

SectionInvestments eligible for deductionMaximum limit (FY 2018-19)
80CInvestment in Public Provident Fund, Life insurance, Sukanya Samriddhi Yojana, Five year bank deposit, Equity linked savings schemes, Senior citizen savings scheme, National savings certificate, home loan principal payment, Notified NABARD bonds and children’s tuition feesINR 1,50,000
80CCCFor amount deposited in pension plans or annuity plan of LIC or any other insurer
80CCD(1)Employee’s contribution to NPS account
80CCD(2)Employer’s contribution to NPS accountMaximum up to 10% of salary
80CCD(1B)Additional contribution to NPSINR 50,000
80CCGRajiv Gandhi Equity Scheme for investments in EquitiesLower of INR 25,000 or 50% of invested amount in equity shares
80EInterest on education loanInterest paid for a period of 8 years
80EEInterest on home loan for first time home ownersINR 50,000
80DMedical Insurance – Self, spouse, children > 60 years ageINR 25,000
Medical Insurance – Parents more than 60 years of ageINR 50,000

To claim a tax deduction, it’s important to produce the documentary proofs at the time of filing income tax along with other ITR filing documents.

Frequently Asked Questions (FAQs)

  1. How income is classified for tax payment purposes?Income is classified under below mentioned header for tax payment purposes:
    • Salaries
    • Income from house property
    • Profit and gains of profession or business
    • Capital gains
    • Income from other sources
  2. Who can avail tax deductions under Section 80C of the Income Tax Act, 1961?Individuals and Hindu Undivided Family (HUF) can avail tax deductions on various investments under Section 80C of the Income Tax Act, 1961.
  3. I am paying INR 40,000 for mediclaim premium for the floater policy covering myself, spouse and school going child. I am also paying 30,000 premium each for my parents aged 64 and 61 years. How much mediclaimdeductions I can avail under Section 80D of the Income Tax Act, 1961?You can avail mediclaimdeductions of 25,000 for self and family and INR. 50,000 for your parent’s mediclaim policy. Total mediclaim deduction that you can avail under Section 80D of the Income Tax Act, 1961 is INR 75,000 (25,000+50,000) in this case.
  4. What does Section 80DDB of the Income Tax Act, 1961 cover?Section 80DDB of the Income Tax Act provides for the tax deduction of medical expenditure incurred on self and dependent relatives for specified illnesses (in Rule 11DD). The limit of deduction for less than 60 years old is INR 40,000 or actual expenses incurred, whichever is lower. The limit of deduction for more than 60 years old is INR 1, 00,000 or actual expenses incurred, whichever is lower.
  5. What are the income tax provisions under Section 80DD of the Income Tax Act, 1961?Section 80DD of the Income Tax Act, 1961 provides for the tax deduction on medical treatment expenses for handicapped dependent or amount paid to specified scheme for maintenance of handicapped dependent. In case disability is 40% or more but less than 80%, the amount eligible for deduction is INR 75,000. In case disability is more than 80% then amount eligible for deduction is INR 1, 25,000.

Cheapest two-wheeler insurance India

Rupanjali Mitra Basu

A two-wheeler insurance policy is a mandatory requirement if you own a bike. This mandate was passed under the Motor Vehicles Act, 1988 and includes all the vehicles running in India. So, if you own a bike, you are required to own a valid insurance policy on it too. Though a bike insurance policy is mandatory, there are ways in which you can keep premiums affordable. However, before going into the premium of two-wheeler insurance, let’s have a look into the types of policies available and the coverage that they provide –

Types of two-wheeler insurance plans

There are two types of coverage options which are available under two wheeler insurance plans. These are as follows –

  • Third party liability coverage

Under this cover, the third party financial liability is covered which is incurred when you damage someone’s property or if any individual is physically hurt due to your bike. Third party liability coverage is the cheapest two wheeler insurance policy which is also mandatory as per law.

  • Comprehensive package coverage

Under comprehensive coverage, there are two coverage components. One is the mandatory third party liability coverage which covers third party financial liabilities. The other is the  cover for the damages suffered by the bike itself. It is called own damage cover and it covers the cost of repairs incurred in getting the damage repaired.

In both the policies, there is also a personal accident cover which is also mandatory as per law. Under personal accident cover, accidental deaths and disablements suffered by the owner/driver of the bike are covered. In case of accidental death and disablement, a lump sum benefit is paid under the cover.

Additional coverage benefits in two wheeler insurance by add-ons

In comprehensive bike insurance plans, there are optional coverage benefits which are called add-ons. These add-ons help in increasing the scope of coverage of the policy. You can choose one or more add-ons as per your requirement. 

The popular add-ons which are available under two wheeler insurance plans include the following –

  1. Zero depreciation  add-on
    This add-on removes the deduction for depreciation in own damage claims. When you make a claim for damages suffered by your bike, the insurance company reduces the claim by the expected depreciation on the parts of the bike which are repaired or replaced. This reduces the overall claim amount. However, with the zero depreciation add-on, you can get full coverage without depreciation
  2. Roadside assistance add-on
    If your bike breaks down and needs assistance the insurance company promises this assistance any time under the roadside assistance add-on. You can get assistance for flat tyres, empty fuel tank, jumpstarting the battery, etc.
  3. No claim protection add-on
    A no claim discount is allowed if you don’t make claims in a policy year. This discount also accumulates with every claim-free year. However, if a claim is made, the entire accumulated no claim bonus is lost. The no claim protection add-on protects the bonus even if a claim is made
  4. Personal accident cover for rider
    This add-on extends the personal accident cover to the pillion rider as well
  5. Medical expenses add-ons
    Under this add-on medical expenses incurred in case of a road accident involving the bike are covered
    Now that you know the coverage aspects of two wheeler insurance policies, let’s understand the premium aspects of the plan.

How are two wheeler insurance premiums calculated?

Premiums for two wheeler insurance policies are calculated using the following parameters –

  1. Step 1: The type of policy selected
    As stated earlier, third party plans are cheap bike insurance plans. They have limited scope and their premiums are determined by the Insurance Regulatory and Development Authority of India (IRDAI). So, if you choose third party plans, the premiums would be low. Comprehensive plans, on the other hand, have higher premium rates because they have a wider scope of coverage
  2. Step 2; Make, model and variant of the bike
    The make, model and variant determine the value of the bike. Higher the value, the higher is the premium rate and vice-versa
  3. Step 3: Year of manufacturing
    The year of manufacturing determines the age of the bike. As the bike ages, its value reduces and the premiums go down. Thus, older bikes have lower premiums than newer ones
  4. Step 4: Location of registration
    The place where your bike is registered also affects the premium rates. Premiums rates are higher if the registration is done is metro cities than in non-metro ones
  5. Step 5: Status of an existing policy</strong
    If you are renewing your two wheeler insurance plan, the premium would depend on the status of your existing policy. If your policy has expired, the premiums would be high.>
  6. Step 6: Premium discounts available
    There is a range of premium discounts in two wheeler insurance plans. These discounts affect the premium. The higher the discounts available the lower would be the premium payable. The discounts can be for choosing a long term policy, for installing safety devices in the bike, for choosing a voluntary deductible or if you have a no-claim bonus in your policy.

How to get cheap bike insurance premiums?

Now that you know how premiums are calculated for two wheeler insurance policies, there are ways in which you can opt for cheap bike insurance plans. Let’s understand how –

  • Look for discounts
    As mentioned earlier, premium discounts are available in two wheeler insurance plans. Look for these discounts and try to opt for as many discounts as you can. The higher the discounts that you avail the cheaper your bike insurance premium would become.
  • Use your no claim bonus discount
    If you have not made claims in previous policy years, you are eligible for a no claim discount. No-claim discount ranges from 20-50%.
    Let us understand with an example:

     No Claim Bonus that you are eligible for 
    No Claims in Year 120%
    No Claims in Year 225%
    No Claims in Year 335%
    No Claims in Year 445%
    No Claims in Year 550%
    No Claims after Year 550%
  • Don’t make small claims
    Claims wipe out your no claim bonus which gives you a discount on the renewal premium. So, if possible, try and avoid claims which are of a small amount. Pay for these claims from your own pockets to get cheap bike insurance premiums.
  • Choose voluntary deductible
    Voluntary deductible is the part of the claim which you opt to pay yourself. In case of a claim, you would have to pay the chosen limit of voluntary deductible and the insurance company would pay the rest. Since voluntary deductible reduces the burden of claim from the insurance company the company offers a premium discount. So, if you are a careful driver and don’t face too many accidents, choose a voluntary deductible to lower the premium.
  • Opt for a suitable type of policy
    Comprehensive plans are the best for an all-round coverage for your bike. However, if you don’t use your bike very often or if the bike is very old you can opt for only a third party liability cover. Since the cover gives you the cheapest two wheeler insurance premium you would be able to save money
  • Choose add-ons which are useful
    Bike insurance policies have a lot of available add-ons which you can choose from. Though the add-ons increase coverage too many of them would unnecessarily increase the premium. Assess your coverage needs and then select only those add-ons which you require.
  • Renew on time
    Expired policies are always dearer to renew than in-force ones. So, don’t let your existing two wheeler insurance policy lapse. Renew your policy on time every time so that you get low premium rates.
  • Compare before buying
    More than a dozen general insurance companies offer two wheeler insurance plans and each plan has a different premium rate. So, always compare the plans before buying. Compare the coverage vis-à-vis the premium and choose a plan which offers the best coverage features at the lowest premium rates. Turtlemint is an online platform which allows you to compare two wheeler insurance policies easily. Turtlemint is tied-up with the leading bike insurance providers in India allowing you to compare the best two wheeler insurance policies. On Turtlemint’s platform, you can compare and easily buy the cheapest two wheeler insurance policy for your bike.

Cheapest two wheeler insurance plans in India

Here is a list of some of the best and the cheapest two wheeler insurance plans which are available in India for you to choose from –  

Name of the planSalient features 
Magma HDI Two Wheeler Insurance Policy Package
  • Comprehensive coverage is available under the plan
  • Premium discounts for no claim bonus and for installing safety devices are allowed giving you a cheap bike insurance policy
  • Optional personal accident cover is available
ICICI Lombard Two Wheeler Insurance Policy 
  • Long term policy is available
  • Various add-ons are available under the plan
  • 3400+ networked garages in India allow you cashless repairs
New India Two Wheeler Insurance
  • Different types of policies are available for different coverage requirements
  • Four optional add-ons are available under the plan
Bajaj Allianz Two Wheeler Insurance
  • Long term policies are available which offer premium discounts
  • A range of add-ons are available under the plan
  • You get the promise of cashless claim settlements within 20 minutes
Go Digit Two Wheeler Insurance
  • Five optional covers are available under the plan
  • The plan provides comprehensive coverage
  • Up to 50% no claim bonus discount 

The law has mandated a valid two wheeler insurance policy on your bike but you can use the afore-mentioned ways to reduce the cost of the premium. So, get your bike secured and also keep your pockets happy by choosing the cheapest two wheeler insurance plan on https://turtlemint-stage.dreamhosters.com/two-wheeler-insurance and then opt for the best plan that suits your needs.

Best Cancer Insurance Plans – Buy Best Cancer Insurance Plans Online

Rupanjali Mitra Basu

Cancer is a life-threatening and dreadful disease affecting approximately 2.5 million people living in India. This disease is dangerous enough to affect the peace and happiness of one’s life. However, many effective medical technologies, treatments related to cancer have started giving a ray of hope in this case and this makes cancer insurance important.

Cancer Insurance is a special type of fixed benefit insurance plan which helps in the management of the financial crisis associated with the treatment of cancer. Cancer insurance policies are designed in such a way that they help in offering comprehensive coverage against cancer. This insurance plan will help the policyholder with financial support for treatment-related issues in case of a financial emergency.

There are two basic types of health insurance plans in India- Indemnity health plans and fixed benefit health insurance plans. Indemnity health plans pay for the expenses incurred by the insured on hospitalization and the fixed benefit health plans pay on the occurrence of ailment. Since cancer insurance plan is a Fixed Benefit health insurance plan, it can be taken alongside an indemnity health insurance plan for hospitalization coverage. This type of plan pays the entire sum insured after survival of 30 days from the diagnosis of a certain specified severity of cancer.

Cancer cover plan offers coverage against the various expenses which are associated with the various stages of cancer such as the diagnosis, treatment which can include hospitalization, chemotherapy, etc. The benefits associated with cancer policy can be availed at the various stages of the disease. In general terms, it is advisable to keep yourself prepared to face financial crises associated with such dreadful diseases by the purchase of cancer insurance.

Features and benefits of cancer insurance

The major benefits of buying a cancer insurance plan can be listed below.

  1. Cancer cover plan offers comprehensive insurance associated with cancer.
  2. In the case of the purchase of cancer insurance, the insurance coverage will continue after the early stage of cancer has been diagnosed.
  3. There is an increased sum assured for Cancer insurance policies.
  4. There is a benefit of waiver of premium for the duration of around 3 years to 5 years during the entire policy term.
  5. There are some cancer insurance plans which tend to offer an income benefit up to 5 years for covering the cost of daily expenses of the household.
  6. On the diagnosis of cancer, a lump sum is paid to the policyholder.
  7. If there are no claims made during a year, then there is an increase in the sum assured by a certain percentage.
  8. Policyholders can avail tax benefits under Section 80D of the Income Tax Act, 1961.

Cancer insurance v/s critical illness insurance plans

Cancer insurance and critical illness insurance are both types of health insurance plans. Both the plans cover cancer and pay a lump sum benefit on its diagnosis yet they are quite different from one another. Let’s understand how these plans differ from each other –

Cancer insurance 

Critical illness insurance

This plan covers only cancer. If you suffer from any other illness, you would not get coverage 

This plan covers a range of critical illnesses, including cancer. If you suffer from any covered illness, you would get covered and a claim would be paid

Minor stage, mid-stage and advanced-stage cancers are covered by the plan

This plan covers cancer of a specified severity which is usually the major stage cancer

A part of the sum insured is paid in case of minor stage cancer and the premiums are usually waived off. The plan continues and if cancer advances, the rest of the sum insured is paid

If you are diagnosed with cancer, 100% of the sum insured is paid and the plan is terminated

These plans are generally offered by life insurance companies. However, there are some health insurers too who have launched a cancer-specific policy

These plans are issued by both life and health insurance companies 

So, critical illness insurance plans have a wider scope of coverage compared to cancer insurance plans. However, they might not cover minor stage cancers and this is where a cancer cover plan proves to be beneficial. So, understand your coverage needs and then opt for a suitable plan.

How to buy cancer insurance plans?

To apply for a cancer cover plan, there are two major methods.

  • Physical means of applying for insurance

Firstly, an applicant can visit the nearest insurance provider’s offices and find out about the various cancer insurance plans. Then he can obtain the application form and fill in the required details. The necessary documents need to be submitted and then on the premium payment cancer insurance purchase would be successfully done.

  • Online Method

Another convenient method is the online method of cancer insurance purchase. You can compare various cancer insurance plans online and then you need to choose between buying a new policy, renewing your existing health plan or porting the existing health insurance plan from your existing insurer to a new one.

Then, depending upon your requirements, you can fill in the details online. Then a list of possible health plans, based on your requirement along with premium, features and benefits would be displayed. You would then need to compare and choose the best plan that suits your needs. Then, on the payment of premium, the purchase of a cancer insurance policy is completed.

Documents needed while applying for cancer cover plan are listed below.

  1. Age Proof – Voter ID card, PAN Card, Aadhar Card, Passport, Birth Certificate, Driving License, etc.
  2. Identity Proof – a Voter ID card, Passport, Driving License, Aadhar Card, etc.
  3. Address Proof – Driving License, Passport, Ration Card, PAN Card, Aadhar Card, etc.
  4. Medical Reports
  5. Recent coloured passport-sized photographs
  6. Form filled and signed

Moreover, before you buy a cancer insurance plan, here are some of the major things which need to be considered-

  • High Sum Insured

Since the cost of treatment associated with cancer is very high, it is advisable to choose a cancer policy with a high sum assured. Usually, cancer policy will provide a sum assured between Rs. 10 lakhs to INR 50 lakhs. Policyholders should ensure that the sum assured provided must cover all expenses starting from the cost of hospitalization to the cost incurred for chemotherapy as well.

  • Cancer policy should cover multiple stages

Before a policyholder purchases cancer insurance, he should check out that the coverage provided by the cancer insurance plan should be for all the stages involved in cancer such as the minor stage, major stage, and the critical stage.

  • Free-look period and policy flexibility

The cancer cover plan which is chosen to be purchased should provide an adequate free-look period within which the policyholder can read or check the terms and conditions and even cancel the cancer policy on dissatisfaction.

The cancer policy should provide flexibility in terms of premium payment i.e. either on a monthly, quarterly or yearly basis. Also, the cancer policy should help the policyholder in availing tax benefits under Section 80D of the Income Tax Act, 1961.

  • Wide Term of policy

Since the procedure of diagnosis and cancer treatment is a long procedure, the policyholders should consider the term of the cancer insurance plan while the purchase of the plan. It should have a longer-term to cover the entire period of treatment of the disease.

  • Your medical history should align with your cancer policy

It is advisable that a policyholder should opt for the purchase of a cancer policy only when the genetic conditions or the environmental conditions make him prone to have cancer. Moreover, an applicant for cancer insurance should be aware that skin cancer and cancer caused by sexually transmitted diseases are not covered by the cancer policy.

Eligibility criteria for buying cancer insurance:

In general, the minimum age for being eligible to purchase a cancer insurance plan is 18 years and the maximum eligible age is 65 years.

Cancer insurance in India offers coverage for all types of cancer except for a few such as skin cancer or cancer caused due to sexually transmitted diseases. But, in case if an applicant for cancer insurance is having some pre-existing disease history then the insurance provider will not consider him eligible for the policy. Moreover, the eligibility for cancer insurance also depends on factors such as an applicant’s medical records, applicant’s lifestyle and his family history of cancer.

Furthermore, if a person applies for cancer insurance after being diagnosed with cancer then his application for cancer insurance would not be accepted by the insurance providers.

What is covered under cancer insurance plans?

Cancer insurance plans cover the illness of cancer. They usually cover all types of cancer and that too in all stages. In case of the mild stage, a part of the sum insured is paid, usually, 25%, to help you avail the treatments that you need. Future premiums are also waived off so that you can avail coverage without any financial burden. If, on the other hand, you are diagnosed with a major stage cancer, the full sum insured is paid so that you can avail the best treatments. Moreover, there are optional riders too which help in enhancing the coverage offered by the policy. Riders like family income benefit, hospital daily allowance, etc. can opt with critical illness plans for a good scope of coverage.

Cancer insurance plans are fixed benefit plans which pay the full sum insured irrespective of the actual medical costs that you suffer. Moreover, the plans are independent of other health insurance plans which you might have and pay the claim even if you are covered under another policy. So, you can buy a cancer insurance plan as a supplemental plan to avail a comprehensive scope of coverage against cancer.

What is not covered under cancer insurance plans?

Cancer insurance plans do not cover any other illness except cancer. So, if the insured does not suffer from cancer during the policy tenure, no claim would be paid. Moreover, the basic hospitalisation costs and other pre-existing conditions are not covered by the policy. So, know these exclusions when you buy a cancer insurance plan so that you know exactly what are you getting covered for. Other exclusions include the following –

  • Coverage for skin cancer is not available
  • Cancer suffered due to sexually transmitted diseases would not be covered
  • Congenital cancers would not be covered
  • Cancer due to nuclear and radioactive contamination would not be covered
  • Pre-existing cancers would not be covered

List of top #7 Cancer Insurance plans in India

Let us list down some of the Cancer Insurance plans available in India.

  1. Aegon Life iCancer Insurance Plan

    The major benefits which can be availed under the Aegon Life iCancer Insurance are listed below:

    • This cancer policy provides coverage against all categories of cancer except that of skin cancer
    • A policyholder can make multiple claims for different types of cancer
    • The Aegon Life iCancer Insurance provides coverage for all the stages of cancer i.e. major, minor and critical stages
    • Policyholders can avail tax benefits under Section 80D of the Income Tax Act, 1961
    • The minimum age for purchase of the Aegon Life iCancer Insurance is 18 years and the maximum age is 65 years. The maturity age of the Aegon Life iCancer Insurance is 70 years. The minimum term of the policy is 5 years and the maximum term is 70 years. The minimum sum assured is Rs. 10, 00,000 and the maximum sum assured is Rs. 50, 00, 00. The premium can be paid either annually or monthly and the term of premium payment will remain the same as that of the policy.
  2. Future Generali Cancer Protect Plan
    Some of the major features associated with the Future Generali Cancer Protect plan are mentioned below:
    • The sum assured for major lives can be Rs. 10 lakhs, Rs. 20 lakhs, Rs. 30 lakhs or even Rs. 40 lakhs
    • In the case of minors, the sum assured offered by the Future Generali Cancer Protect Plan is Rs. 10 lakhs
    • The eligibility age bracket for major lives is between 18 years to 65 years whereas for minors the eligibility age bracket is 1 year to 17 years
    • There are two modes for the payment of premium i.e. One- time payment mode or Annual and Monthly premium payment mode
    • In the case of Single premium payment frequency, the policy term is for 5 years. If the premium payment frequency is regular for major lives the policy term can be for 10 years, 15 years, 20 years or 80 years minus the age of entry into the policy. For minors, the policy term is 18 minus the age of entry into plan or 10 years whichever is higher
    • Maximum coverage is offered by the policy until the age of 80 years
  3. HDFC Life Cancer Insurance Plan
    The important features of the HDFC Life Cancer Insurance can be enlisted as below:
    • The HDFC Life Cancer Insurance offers 100% payment of Sum assured on the diagnosis of cancer
    • There are provisions for lower rates of premium if the sum assured is more than Rs. 10 lakhs
    • For those customers purchasing the Insurance policy online, there is a discount of 5.5% on the policy’s premium
    • The cancer policy has 3 options i.e. Silver, Gold, and Platinum. For all the three options, 25% of the sum assured is paid on the diagnosis of cancer in minors along with a waiver of the insurance premium for 3 years. Similarly, for the diagnosis of cancer in major lives 75% or 100% of the sum assured is paid on the diagnosis of cancer
    • The minimum eligible age for purchase of the policy is 18 years and the maximum age limit is 65 years
    • The minimum maturity age for the policy is 28 years and the maximum age is 75 years
    • The minimum term of the policy is 10 years and the maximum term is 20 years
  4. ICICI Prudential Cancer Insurance Plan

    In ICICI Prudential Cancer Insurance, a lump sum is paid to the policyholder on the diagnosis of cancer. However, the lump-sum payment is based on the condition of the patient and never exceeds 100% of the sum assured

    • In the case of minors, on the diagnosis of cancer, there is a provision of a waiver of insurance premium
    • The eligible age bracket for availing the benefits of the ICICI Prudential Cancer Insurance is 20 years to 60 years
    • The sum assured to be paid to policyholders on the diagnosis of cancer is from a range of Rs. 5 lakhs to Rs. 25 lakhs
    • The tenure of the policy can be from 10 years to 70 years and the premium payment can be done either annually, half-yearly or on a monthly basis
  5. PNB MetLife Cancer Insurance Plan

    The salient features of the policy include the following – 

    • The minimum age for the purchase of this cancer Insurance is 18 years whereas the maximum age limit is 65 years
    • The sum assured amount in the case of PNB MetLife Cancer Insurance lies between Rs. 5 lakhs to Rs. 40 lakhs
    • The term of the policy can be from 10 years to 70 years
    • The payment of premiums can be done either yearly, half-yearly or monthly
  6. SBI Life Sampoorn Cancer Suraksha Plan

    The salient features and benefits offered by the plan include the following – 

    • The minimum entry age for this cancer policy is 18 years and the maximum age is 65 years
    • The minimum sum assured amount is Rs. 10, 00,000 and the maximum amount is Rs. 50, 00,000
    • The tenure of the SBI Life Sampoorn Cancer Suraksha plan is from 5 years to 30 years
    • The premium payment for cancer insurance can be done either half-yearly, quarterly or monthly
  7. Birla Sun Life Insurance Cancer Shield Plan

    This policy has the following benefits for you – 

    • The minimum eligible age for this cancer policy is 18 years and the maximum eligible age is 65 years
    • The minimum sum assured amount is Rs. 10, 00,000 and the maximum amount is Rs. 50, 00,000
    • The tenure of this cancer insurance is for 5 years to 20 years
    • The premium payment for cancer insurance can be done either half-yearly, quarterly or monthly.

Why choose Turtlemint for buying cancer insurance?

Turtlemint is an online platform which allows you the best choice of cancer insurance policy for your coverage needs. On Turtlemint’s platform, you can compare and find the best policy which not only offers the most comprehensive coverage benefits but is also light on your pockets. Here are some benefits which Turtlemint offers when you buy cancer insurance plans –

  • An option to choose the best policy as Turtlemint is tied-up with all leading insurance companies
  • Personalised assistance in buying the plan through Turtlemint’s dedicated customer care department
  • Step-by-step guidance in choosing the right policy by Turtlemint’s expert executives
  • Assistance at the time of claims ensuring that your claim process is simple and smooth

So, if you are looking to buy the best cancer insurance plan, choose Turtlemint and get the best policy.

Frequently Asked Questions

  1. Can a policyholder of cancer insurance policy avail tax benefits?

    Yes, cancer insurance policyholders can avail of a tax deduction of up to INR 25, 000 under Section 80D of the Income Tax Act, 1961. If you are aged 60 years and above, this deduction limit increases to INR 50,000

  2. Can cancer policy be applied by persons smoking cigarettes?

    Yes, cigarette smokers can avail of the benefits of cancer policy but on the payment of a higher premium.

  3. What are the exclusions in a cancer insurance plan?

    The exclusions in a cancer insurance plan are mentioned below:

    • Skin cancer is not covered under a cancer insurance plan
    • Any type of cancer has been caused by sexually transmitted diseases such as AIDS
    • Cancer which might have been caused due to pre-existing conditions, congenital conditions, nuclear contamination, contact with radioactive compounds, chemical contamination, etc.
  4. Can a policyholder include cancer insurance along with his existing health insurance plan?

    Yes, a policyholder can supplement his existing health insurance policy with a separate cancer insurance plan.

  5. Do cancer insurance plans have a waiting period?

    Yes, most of the cancer insurance plans have a waiting period of 30 days.

All you need to know about CM’s health insurance scheme in Tamil Nadu

Rupanjali Mitra Basu

The Government of India takes various steps and initiatives to promote social welfare among the Indian population. Among these initiatives are various insurance schemes which provide insurance coverage to the masses. These schemes are either provided free of cost or at nominal premium rates. While the Aam Admi Bima Yojana (AABY) is a health insurance scheme for the national population, there are several State sponsored health insurance schemes too. One such scheme is the Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS) which was launched by the State Government of Tamil Nadu. Let’s understand what this scheme is all about –

What is CM’s health insurance scheme CMCHISTN?

The Chief Minister’s Comprehensive Health Insurance Scheme Tamil Nadu (CMCHISTN) is a health insurance scheme designed for the underprivileged residents of Tamil Nadu. The scheme was launched initially in the year 2009 when DMK was in power. The scheme was, then, widened for a more comprehensive coverage in the year 2012 when the Government was replaced by AIDMK. The CMCHISTN is an indemnity oriented Chief Minister’s health insurance plan which covers the emergency medical expenses incurred by the insured.

Health insurance in India includes costs related to hospitalization and other healthcare expenses. Select the best health insurance plan for yourself and secure your future today!

What is covered under CM’s health insurance scheme CMCHISTN?

Coverage under Chief Minister’s health insurance scheme CMCHISTN is available for the following benefits –

  • Hospitalisation expenses incurred on general medical treatments as well as specified surgical treatments are covered up to INR 1.5 lakhs
  • Specific illnesses which are mentioned in Annexure D of the scheme are covered for up to INR 1.5 lakhs
  • Follow-up procedures are also covered. The coverage limit depends on the type of procedure done and is mentioned in Annexure E of the scheme
  • Diagnostic procedures are also covered up to specified limits which are mentioned in Annexure F of the scheme

As a Government scheme, CMCHIS offers a number of benefits. Private health insurers have also taken huge strides to make health insurance more affordable and also help you to plan for health-related contingencies and avoid unnecessary burden during critical times. With so many other health insurance plans available, we’ve made comparing top health insurance plans an absolute breeze, click here to get information and compare the features of top insurance providers.

Features of CM’s health insurance CMCHISTN

The Chief Minister’s health insurance scheme CMCHISTN has the following features –

  • The scheme is a family floater health insurance scheme where the coverage limits are applicable on a floater basis
  • Spouse, dependent parents and dependent children can be covered under the floater cover
  • The scheme allows cashless treatments at empanelled hospitals across the State
  • The Scheme works in tie-up with United India Assurance which offers the coverage
  • 1027 treatments, 154 follow-up procedures and 38 diagnostic procedures are covered under the scheme
  • Hospitals which are empanelled under the scheme also offer free medical health check-ups to the beneficiaries. These check-ups are conducted monthly in different districts of Tamil Nadu
  • A phone helpline has been established for any type of services relating to the scheme

Eligibility criteria for CM’s health insurance CMCHISTN

Individuals who fulfil the below-mentioned eligibility parameters can avail coverage under CMCHISTN –

  • The individual should be a resident of Tamil Nadu. The residency status can be proved by owning a family card issued by the State Government. If the family card contains the name of the dependent family members, the members would be covered without any additional proof
  • The annual income of the individual should be lower than INR 72,000. To prove the income the individual must avail an Income Certificate from the Village Administrative Officer
  • Refugees from Sri Lanka who live in camps can also avail cashless medical treatments under the scheme even when their income exceeds the income criterion of the scheme
  • Orphans can also be enrolled under the scheme
  • Migrants who have come from another State can apply for the scheme if they have lived in Tamil Nadu for the last six months. To apply for the scheme they would need request letter and a list of eligible members which is issued by the Labour Department

Unfortunately, not everyone is eligible for the CMCHIS scheme, but many private health insurers can cover the requirements at very competitive prices. You can easily compare insurance plans tailored to your needs after entering a few details here.

Documents required to apply to CM’s health insurance

To apply to Chief Minister’s health insurance CMCHISTN, the following documents would be required –

  • Income certificate of the individual issued by the Village Administrative Officer
  • Ration card, both original and a copy
  • Family card of the individual

How to avail coverage under CM’s health insurance?

To enrol under CMCHISTN, eligible individuals should follow the below-mentioned steps –

  • The individual should visit the district kiosk from where enrolment into the scheme is allowed
  • Submit all the relevant documents at the kiosk
  • The operator of the kiosk would verify the documents and if they are found to be in order, the biometric details of the individual and his family members would be captured
  • After the biometric details are availed, an ecard would be issued which would serve as a proof of insurance coverage. The card would contain the photographs of all the family members who are covered under the scheme

Smart cards under CM’s health insurance scheme

The ecard issued under the Chief Minister’s health insurance scheme is called a Smart Card. The Card is essential for the identification of the beneficiaries who are covered under the scheme. The card contains the details of the beneficiary, the family members covered and the available coverage level. In case of hospitalisation, the beneficiary is required to produce the Smart Card to avail cashless claim settlements. To check the details on the Smart Card, the following steps can be taken –

  • Go to the website https://www.cmchistn.com
  • Choose ‘Beneficiary’ and then choose ‘Member Search/ecard’. There would be a tab for ‘Instructions’ and you should choose it
  • On the ‘Member Search page’ you can enter the URN number mentioned in the Smart Card for checking the members who are covered under the Chief Minister insurance scheme and the sum insured available
  • The Ration Card number can also be entered to check the details of the beneficiaries

Linking the URN with Aadhar Card

Since Aadhar Linking has been made necessary in many instances, the CM’s health insurance scheme also allows beneficiaries to link their URN with their Aadhar cards for easier identification. The process to link URN with Aadhar Card is as follows –

  • The beneficiary should open CMCHIS online and enter his 22-digit URN number
  • Accept to enter the Aadhar number
  • Click ‘Enrol Now’ when a new page would open. In the next page the Aadhar Number and the mobile number of each covered family member should be entered
  • Enter ‘Submit’ when a OTP would be sent to the mobile numbers entered
  • Once the OTP is entered, the Aadhar card would be linked to the URN

Benefits of CM’s health insurance

The CM’s health insurance scheme is a good step towards the welfare of the people of Tamil Nadu. The benefits of Chief Minister insurance scheme are as follows –

  • The scheme offers free health insurance coverage to the economically weaker sections of the society
  • Surgical procedures, diagnostic treatments and even follow-up treatments are covered under the Chief Minister insurance scheme
  • The sum insured is decent allowing poor people to access quality healthcare facilities
  • The scheme can be easily enrolled into
  • Since the claim is settled on a cashless basis, the beneficiary does not have to shoulder the expensive medical costs himself

The CM’s health insurance scheme is a right step taken by the Government of Tamil Nadu. The scheme provides free health cover and helps poor people avail quality treatments for their medical emergencies. If you are also eligible, enrol under the scheme and enjoy good coverage.

With CMCHIS and other health insurance plans, you have a wide range of policies to choose from according to your needs. Choose the health insurance plan of your preference with Turtlemint today and be prepared for all future contingencies in a few easy steps below.

Frequently Asked Questions

  1. What is the helpline number of the scheme?Individuals can contact the toll-free number 1800 425 3993 for any queries that they have about the Chief Minister insurance scheme. An email can also be sent at tnhealthinsurance@gmail.com or cmchis@uiic.co.in for any queries.
  2. Do coverage limits vary for varying treatments?Yes, there are specified package rates for each type of surgical treatment, diagnostic treatment or follow-up procedures.
  3. Can grandchildren be covered under the scheme?No, coverage is available only for dependent children. Grandchildren cannot be covered under the Chief Minister insurance scheme
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