Pay Ulip premium regularly for 5 yrs

A single premium plan is a one time investment plan where the objective is to invest surplus funds,and where one is not keen to commit for regular premium payments over five or more years. It provides range of funds under Ulip platform like pure equity,debt,hybrid along with tax free switches. The maturity proceeds are tax free where cover is five times of first year premium. I would recommend investing in single premium Ulip for five or more years while choosing the fund basis the risk return expectation.

Can an insurance company cancel a Ulip if the premium is not paid for a year? And if yes,what are the ways to revive it?

Achutam Gopal

In case of regular premium Ulip plans,the premiums need to be paid regularly for minimum five years or else the policy lapses. And where a policy has lapsed as a result of not paying the premiums due within grace period,the customer can revive the policy within stipulated period by paying the premiums with delayed charges otherwise the lapse fund moves to a separate account (after applying a surrender penalty/charge) and whatever is the fund value after five years shall be returned to customer.

Is the premium paid for health insurance covered under Section 80C of the I-T Act? Also what is the maximum benefit that I can claim in a given year under health insurance ?

Deepak Kapoor

Any medical insurance or health insurance plan are subject to income tax deduction under section 80D. The maximum deduction allowed is Rs 15,000.

I would recommend you to buy a health insurance plan now as the medical costs are rising and with increasing age the premiums shall also go up.

I have taken a home loan two years ago. Is it advisable to take a loan insurance cover and how does it work and how is the premium decided by the company?

Preeti Dabral

Yes,I would always recommend you to take insurance cover against the loan amount. The objective is to leave behind a debt/mortgage free home for our family members in our absence. It provides us peace of mind that our family shall not have to face any legal or repayment issues subsequent to our death. The premiums are decided depending upon the insurance cover,your current age and tenure of loan.

I have heard that the insurance regulator is planning to introduce insurance portability. Will the premium be same across all companies and will I get the same pre-existing disease coverage?

MG Rao

The insurance regulator,Irda is coming out with a new guideline regarding insurance portability facilities (only for health insurance) which enables Health Insurance Policy holders to switch to another insurer and under this option the financial bonuses,pre-existing disease requirement will also get switched.

This is only for Health Insurance policy holder and not for Life Insurance policy holders.

* The writer is executive vice-president,Kotak Mahindra Old Mutual Life Insurance

* Send your queries at fepersonalfinanceexpressindia.com