Home > Business & Investment > Hospital cash benefit riders are good...

Hospital cash benefit riders are good...

Monday, October 25, 2010

Can you tell me the key factors or points that determine the amount of insurance one should avail?
Sonal Pandit, Santacruz West

There are many calculators available, in addition to the life insurance calculator of each of the insurance companies. However, the basic underlying factors for calculating life insurance of an individual are:
1) Present age
2) Assets held
3) Current Annual income
4) Current Outstanding liabilities
5) Future obligations or desired expenditures

I am 27 years old and I save around Rs.5000 per month. I am running a couple of ULIPs from the past 4 years. Should I top up in those regularly or go for some new ULIP plans? Also would you suggest investing in money-back plans?
Ritesh Chauhan, Kanchpada, Malad West

First, buy a term insurance plan. At low premiums you will have a high amount of cover. If you already have term cover then you may consider new ULIPs, as the policy charges post September 1, 2010 are very low. You could also invest this surplus money as top-up premiums in your old ULIPs, but please check the charges and existing cap on the amount you can invest as top-ups. More importantly you should also check the performance of the funds your premiums are invested in. Another option is invest in mutual funds through SIP (systematic investment plan), however please consult a certified financial planner or expert before you make your investments.

What is a hospital cash benefit rider in the insurance policy? My agent tells me to add this rider to the policy. Is it really good or is it one of the add-ons which insurance companies and agent push for collecting higher premiums?
Nandita Mahajan, Sion West

The hospital cash benefit rider, is a benefit given to the insured to pay daily expenses incurred during his/her hospitalisation. It is usually a percentage of the total sum assured opted by the policy holder, say for example, 1% or 0.5% of the sum assured per day. In a year the insured can avail this benefit up to 45 or 60 days of hospitalisation. This is a good rider and increasingly people are adding it to their policy. But in case you do not wish to add this rider then you may skip it. Nowadays there are standalone health insurance policies that provide this benefit of hospital cash benefit. So in future if you feel the need to have this cover you may take this insurance policy.

Where do insurance companies actually invest the money in ULIPs and why are the charges too high for the same? I don’t think any other financial product charges such high commission rates (or charges) to invest your money.
Tanmoy Sen, Mulund West

Broadly, there are 3 venues where insurance companies invest the policy holders’ premiums – equity, debt and money market. They design their own funds with combinations of these 3 venues. Equity fund as the name suggests is when the premium is invested in stocks and shares of companies. This is where the risk is very high and so the expected rewards are high too. Hence, the charges for this fund will be very high. Debt Fund largely invests money in government securities, bonds and other fixed income instruments. Risk is low and hence this fund provides low or moderate returns. Money market or cash is when the premiums are invested in bank deposits, money market instruments and cash instruments.

(The author is Vice President at www.MyInsuranceClub.com, insurance comparison website in India. You may write to him at )

Facebook   Delicious   Delicious   submit to reddit reddit
No Comments Posted
City news
Training workshop Cancer Patients Aid Associatio
The Mumbai Metropolitan Region Development Author
The girl, Sugandhi Sandesh Tripathi, now loves Mu
History Need Not Repeat Itself
Dr. Rajan B. Bhonsle, M.D. (Bom)
Consulting Sex Therapist & Counsellor
Dr. (Mrs.) Minnu R. Bhonsle, Ph.D.
Consulting Psychotherapist & Counsellor
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)A meeting scheduled for today is bound to have good results that lead to further gains for you. Rapport with colleagues and associates improve. A visit to a club or public seminar will turn out to be both enjoyable and enriching. This is a good time to extend a hand of friendship to a person who may have a few grudges against you.
Tarot for Love
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)What the cards say: You will have an advantage over your loved one Path: Use this opportunity constructively to make him understand your perspectives and needs. Don’t misuse or exploit this to an unfair advantage. Ally: Take help from Virgo who will be objective. Avoid advice from Leo. Card for the week: Is the Tarot key no X The Wheel of Fortune. It is spinning in your favour.
- Advertising -
Education or other fields are all somehow control
"Thought is the original source of all wealth, al
Let your hair down, go wild, and be the one with
Read More