04 KALEIDOSCOPE ERGO Monday, December 8, 2008

Rewind
Personal finance-related news
from last week
■ RBI reduced the repo rates and reverse
10 steps to manage
repo rates (rates at which RBI lends to banks,
and banks can lend to RBI respectively) by 100
basis point (1%) to 6.5% and 5% respectively.
The CRR & SLR remain the same. This will be
effective from Monday.
health insurance
■ The prices of petrol and diesel slashed.
The reduction is Rs.5 for petrol and Rs.2 for
diesel. The crude price in the international
market has dropped to $40, the lowest in four
years.
■ Vodafone’s request of no TDS has been
declined by Maharastra High Court. The com-
pany can appeal in the Supreme Court. The
tax liability can be as high as $2 billion if
turned down by the Supreme Court too.

Mini quiz
Winner gets a free Personal Fi-
nance Health Check up from
Finerva.
1. What is the maximum amount for tax
benefit for Health Insurance premium under
80D for a senior citizen?
Choice:
A. Rs.15,000/-
B. Rs.20,000/-
C. 20% of Rs.20,000/-
D. Rs.7,500/-
2. What is the tax on the claim amount of
health insurance?
Choice:
A. 0%
B. The claim amount is added to the income

I
n today’s world, it is a given that
and taxed accordingly health insurance is a necessity.
C. 10% of the claim amount The high impact of pollution,
D. 30% + surcharge on the claim amount work-related stress, odd and
Send your answers to finergo@goergo.in or long working hours, indifferent
SMS your answers to 92813 98889. For exam- food habits, sedentary lifestyle and
ple if you choose A as the answer to question 1 the commute to and from office
and B as the answer to question 2 type it as add to the health hazards.
1A2B and send it. Is there a way out in case you are
stuck with some illness? Yes, a
properly planned health insurance
scheme can take care of it. Here is
Golden calendar a ten step process for well-planned
health insurance management.
쑸 10-point checklist
An 1.a: Based on your family history
employee and your work style, plan for the
of Japan’s highest expense due to medical
jeweler emergency. It is ok to be paranoid
Tanaka when doing this estimation.
Kikinzoku 1.b: Do the same exercise for all
displays a members of your family. Include
ox mascot your children too (if you have any).
wearing a In fact children are the most vul-
gold foil nerable to contagious diseases.
calendar. 2. Check the cover available with
AFP PHOTO
your company’s health plan; check
for the amount; check for the dis-
eases covered; and finally check for
the emergency facilities covered.
3. Bridge the gap between your
estimation in Step 1 and the cover
in your company in Step 2. Some
companies may not have health in-
surance. Some others may even
cover pregnancy and child birth
(which is not normally covered by
insurance companies).
4. Look for a General Insurance
company to fill the gap with their
products. Consider the health in-
surance premiums as necessary ex-
penses. They are not investments.
One good thing is that the Govern-
ment also gives us Income Tax ben-
efits under Section 80D for all
health insurance premiums (slab is
Rs.15000/- per year). The premiums
generally change on a yearly basis;
increasing with age.
5. Take another health insurance
from Life Insurance companies for
Critical Illness only. There are sev-
eral products in the market. For
any Life Insurance based health
plan - choose the longest term pos-
sible and take the plan as early in
your life as possible. Here the pre-
miums are fixed throughout he
term and is dependent on the age
at entry.
6. Always read the fine print of
the proposal and the products.
Please don’t entertain telephone
calls where the sales person says
that the details will be available
when you say YES and they send
the document.
7. Cross check the document on
whether you have got the same
plan for which you applied.
8. General Insurance plans need
to be renewed every year. Don’t
forget the date for renewal. Writing
the renewal date on your diary’s
first page should be a good enough
reminder for this.
9.Don’t change the insurance
company – you get the advantage
of discounts (no-claim bonus - up-
to 50%; either in the form of re-
duced premiums or increased
cover) from general insurance com-
panies and fixed premiums for the
term from life insurance
companies.
10. Once every 3 years (lesser in
case there were any claims) review
the cover available. Do the Steps 1
to 3 and increase the cover as per
requirement. Never decrease the
cover (your next company may not
have all the goodies).
Karthikeyan Jawahar
Finerva Financial Solutions Pvt Ltd