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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information., its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
If you’re confused about the entire buzz around insurance, don’t worry – you’re not alone. With multiple companies, categories and plans, it is difficult to not get lost in the maze of over-information. It is a simple tool that provides financial aid to your family in the unfortunate event of your death. And fortunately, with new innovations, insurers bring you better benefits than ever before. If you are wondering why you should buy an insurance policy, here are some Compelling reasons

Stable Income Source For Your Loved Ones

A pivotal reason to apply for any life insurance policy is to ensure that your untimely demise does not in any way lead to financial instability for your loved ones. From their day to day expenses, to an unexpected contingency, you want to secure their interests in the best way you can.

Dealing With Debt

Typically, most of us have outstanding financial liabilities like a home loan, auto loan or credit card purchases. In your absence, paying off these liabilities could become an unnecessary financial burden on your family. Having a life insurance policy will ensure that you do not pass on the liabilities to your loved ones and are taken care of.

Retirement Benefits

Indians by nature are mindful of retirement planning. Having a retirement corpus will ensure that you are financially dependent even after the age of 60 or retirement (whichever comes first). Several insurers offer pension plans that help steadily build your wealth over the years.

In Case Of Illness

There has been a significant improvement in the overall life expectancy, thanks to the medical advancement that has made treating critical diseases possible. But, these treatments come at a steep cost. Insurance serves as an ideal tool to mitigate such costs.

To Save For One’s Dreams

Saving is the gateway to financial independence. A life insurance policy instills this financial discipline through the mandatory premium payments. And through regular savings, your dream vacation or personal home is not so far.

Rohan is a marketing guy who is a very smart professional when it comes to marketing his company’s products. Lately, he has got hospitalized due to the dengue fever in a private hospital near his place. The cost came out to be Rs 65,000 which unfortunately has to be borne by him only as he did not have a health insurance policy. However, this incident made him understand the importance of a financial back up for his health in the form of a “Health Insurance Plan”. He decided to buy a one for himself and his family. But being a layman, he did not know what are the important things to be considered before buying a health insurance plan.

Here is a guide which emphasizes on the 5 important parameters to be looked upon before you actually make a final buy of a health insurance plan.

1. Scope of Coverage
It is important to assess and evaluate the scope of coverage. Buyers may assume that purely buying a health insurance is enough and suffice their healthcare requirements. Buyers buying a health insurance plan simply on the basis of premium, assuming “cheaper is the better” might end up limiting their scope of coverage. It is important to have a health insurance with a robust sum insured which is the maximum limit of getting a benefit under a health plan. Rising medical costs can be combatted by opting for a sum insured large enough to substantiate the claim amount without making you pay out of your pocket. Also, the scope of coverage needs to be looked upon as per your need, requirement, existing cover (if any), family size, previous medical history, etc. Look for the comprehensive coverage which offers you benefits suiting your specific case. Like for example, in case you are opting for a family floater plan, look for the benefit of the sum insured restoration (recharge of your sum insured in case it gets finished in a policy year), if you are looking for a maternity benefit, look for a health plan offering maternity benefits and so on.

2. Room Rent Capping
It is important to check and assess the restrictions or upper limits in the form of capping and sub-limits before you buy a health plan. There are certain restrictions with regard to the benefits payable related to the coverage under the health insurance plan. Room rent is the per day benefit is given to you when you are hospitalized as per the eligibility under your health insurance plan. Traditionally, the capping of the hospital room rent is 1% to 2% of the sum insured on a per day basis. Health insurance plans lately do offer “single private room” or the option to “upgrade your room” or some plans offer “no capping” on the room rent. Usually, health insurance plans with higher sum insured, offer the latter two options. Thus, it is important to ascertain the room rent eligibility under your health insurance plan before you finalize the plan. With medical inflation skyrocketing, getting treatment in private hospitals has become expensive and so is the hospital room charges. Try and check the hospital room rents for your preferred hospitals and match up with the room rent eligibility under your shortlisted health insurance plan which will give a fair idea.

3. Cashless Hospital Network
Cashless hospitalization is a seamless procedure which makes the hospitalization easy in your troubled time to seek health care. You just have to show your health card issued by the insurance company and hospital admission is almost done. But all hospitals may not be partnered with the insurance company to offer you such hassle-free treatment. Thus, to have a look at the list of cashless hospitals impanelled with the insurance company is important. Out of the list, it is crucial to see your preferred hospitals. List of cashless hospitals may include 6000 or 8000 plus hospitals, but such an exhaustive list is of no use until it includes the hospitals, which are nearer to your vicinity or your ideal ones for treatment. Treatment in a non-network hospital might attract co-payment (a specified portion of the claim amount to be borne by you) and cashless treatment will not be available. You have to spend the treatment expense from your own pocket and later claim reimbursement from your insurer by submitting all relevant bills and documents timely.

4. Claim settlement record
Claim settlement record is an important aspect which cannot be skipped. How many claims have been settled by the insurance company is important to be known as it reflects the inclination of the insurance company towards claim settlement of genuine claims and assures you that your claims and reimbursements would not be wrongly withheld. A consistent and healthy claim settlement ratio in which one must look for before finalizing an insurance plan from the respective insurance company.

5. Co-Payment
Co-payment is your co-share in the claim amount. Co-payments are of 2 types voluntary and mandatory. As the name suggests, voluntary co-payment is opted by you as an insured and mandatory is compulsive, co-payment which is there in the health insurance plan. Co-payment is expressed as a specified percentage of the claim amount. By opting voluntary co-payment, your premium will tend to be reduced by the insurance company as you are bearing a responsibility to share the claim amount in the predetermined percentage. Voluntary co-payment must be chosen if you are young, healthy individual as then the probability of claiming from a health insurance policy reduces. Don’t fall prey to the fact, blindly that your health insurance reduces by opting voluntary co-payment.  But, the surprise comes when you are unaware of the co-payment clause in your health insurance policy at the time of claim. So, it is imperative not to skip this clause. In a nutshell, the coverage amount needs to be assessed appropriately by the number of people that you want the policy to cover, your estimate of the health care costs and the existing coverage that you might have from other sources like employee provided group insurance. Healthcare inflation is increasing at a very high rate of 20% so go for a higher sum insured if affordable. Don’t fall prey to perceived value rather spend some time comparing plans and its coverage before you finalize your best buy.

The main function of a life insurance policy was originally to provide protective cover. However, life insurance is a far more versatile investment option nowadays, also giving policyholders the benefit of availing a loan against the policy. So, not only does it provide security, but it also helps when one is going through a cash crunch. What’s more, loans against life insurance are becoming a popular choice for customers, since a lower rate of interest is charged in comparison to a personal loan. One additional benefit is that the policy value does not change with the market as in the case of loans against gold or shares.

There are however a number of factors one needs to bear in mind before opting for a loan, as under:

Eligibility of Policy
You need to confirm whether your policy qualifies for a loan first and foremost, as all insurance policies do not provide this benefit. You can take a loan against the surrender value of permanent or whole life insurance but not against term insurance. Unlike other plans, term plans do not contain cash value and they expire at the end of the term without earning returns; hence the limitation. If you have paid premiums for at least 3 years and on time then you may avail of a loan, as far as non-term plans go.

When borrowing against an insurance policy, you are essentially borrowing from yourself. You can thus borrow the money for any kind of expense without having to provide an explanation, and you do not have to undergo intense scrutiny or a stringent approval process. Though the income of the borrower is also not a deciding factor for deciding their eligibility, their credit-worthiness is considered nevertheless.

Loan Amount
You need to check the amount you are eligible for, with the insurance company or the bank. The loan amount is a percentage of its surrender value. Loans can be up to 85-90% against traditional plans with guaranteed returns. Not all unit-linked policies provide loan facilities, but if they are provided, then the loan amount depends on the current value of the corpus and the type of fund.

Once the loan amount is decided, then the policy is assigned to the lender. This means that all rights of the policy are transferred to the lender, and the loan is sanctioned to the borrower thereafter. Furthermore, since the loan amount is not recognized as income by the Income Tax authorities, it is not taxable.

Interest Charged
The interest rate charged is based on the premium already paid and the number of premiums that have been paid. The more the premium amount and number of premiums paid, the lower the rate of interest charged.

Banks link the rate of interest with their base rate, in most instances. Since banks consider loans of this nature like an overdraft facility against pledging of the insurance policy, it can be more expensive in comparison to the loan provided by life insurance companies. The rates of interest of bank loans are between 10-14%, based on the type of insurance and the tenure of the loan.

Life Insurance Corporation of India currently charges a rate of interest at 9% that needs to be paid half-yearly. They have a minimum tenure of 6 months, so even if you want to repay the loan before 6 months you have to pay interest for 6 months.

Documentation Needed
The policyholder would have to contact the insurance company to inquire about the process and documents needed. A pre-prescribed form will have to be filled, and the original insurance policy will have to be submitted. The policyholder would also have to sign a deed of assignment which states that the benefits of the policy are being assigned to the lender during the loan tenure. The policy will act as collateral until the loan is repaid.

Upon taking a loan against a life insurance policy, policyholders need to continue paying premiums. In such an event where the policyholder desists from doing so, some insurers may terminate the policy.

Repayment of loan
The loan should be repaid during the term of the policy. The policyholder has the option of either paying back the principal along with interest or only the interest amount. If one pays only interest, the principal amount due will be deducted from the claim amount at the time of settlement.

Furthermore, if the policyholder should choose to pay back only the interest, in the event that they die during the loan term, the pending amount due will be deducted from the claim amount and only what remains will be paid to the nominee. One should bear in mind the fact that the dependents of the policyholder will not be the sole beneficiaries of the policy if the policyholder should die unexpectedly before the loan is repaid. Policyholders should thus exercise caution while taking up a loan against a life insurance policy because the policy is supposed to protect one’s loved ones in the event of their death. By using the policy to take up a loan, the nominees of the policy might be deprived of this benefit.

It is thus prudent to pay back the loan in a timely manner as the interest keeps getting added to the balance whether the loan is being repaid or not. This increases the risk of the loan amount exceeding the policy’s cash value, which can cause for the policy to lapse. In such a case, taxes might have to be paid on the cash value. In case of non-payment of the loan, the amount owed will be taken from the accumulated surrender value of the policy and the policy will be terminated.

Prime Minister Narendra Modi has Launched Sukanya Samridhi Yojna‘ (girl child prosperity scheme) with the vision to provide for Girl Child Education and Her Marriage Expense. Sukanya Samriddhi Account Scheme is a small deposit scheme for a girl child, as part of ‘Beti Bachao Beti Padhao’ campaign, which would provide income tax deduction Under section 80C of the Income Tax Act,1961 and exemption of Interest from Income Tax. In this article we have discussed Provisions of this Scheme along with tax and other benefits :-

Date of Commencement of Scheme- Sukanya Samriddhi Account Scheme is been notified by Ministry of Finance vide Notification No. G.S.R.863(E) Dated 02.12.2014. Scheme become operational by notification of rules namely ‘Sukanya Samriddhi Account Rules, 2014’. These Rules were subsequently amended vide Notification No.G.S.R.323(E) dated-18.03.2016 by which government has notified ‘Sukanya Samriddhi Account Rules, 2016’.  These Rules were  further  amended vide Notification No.G.S.R.617(E) dated-05.07.2018 by which government has notified Sukanya Samriddhi Account (Amendment) Rules, 2018. The Article Analyses these Rules for easy understanding of our readers.

Depositor– For this scheme, Depositor is an individual who on behalf of a minor girl child of whom he or she is the guardian and deposits amount in an account opened under this scheme. Under the revised rules definition of depositors also include Account Holder.

Who can be ‘Guardian’ under Sukanya Samriddhi Account Scheme:
In relation to a minor girl Child Guardian means
(i) either father or mother; and
(ii) where neither parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.
(iii) Under the Revised Rules, Guardian Includes Legal Guardian too, Which means Parents of adopted Child adopted are also Guardian under the revised rules.

Age Restriction for Opening of Account under Sukanya Samriddhi Account Scheme:

The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of account under these rules. The scheme is been commenced from 02.12.2014.
Documents to Open the Account
  • Birth documents of the girl child (Birth certificate)
  • Address proof of the Guardian
  • Identity proof of the Guardian
  • 3 Photos of of the Guardians and 3 photos of the child
  • Pan card and Aaadhar card copies of of the Guardians

No Fixed Interest Rate- 

Under this scheme Interest rate is not fixed and Government will declare on yearly basis the Interest on accounts opened under these rules.

Sukanya Samriddhi Account Interest Rate Table with Minimum and Maximum Investment lImit
S. No.
Financial Year
Date Range
Interest Rate
Minimum Investment
Maximum Investment
01/04/2014 to 31/03/2015
9.1 %
₹ 1,000/-
₹ 1,50,000/-
01/04/2015 to 31/03/2016
9.2 %
₹ 1,000/-
₹ 1,50,000/-
01/04/2016 to 30/09/20166
₹ 1,000/-
₹ 1,50,000/-
01/10/2016 to 31/12/2016
₹ 1,000/-
₹ 1,50,000/-
01/01/2017 to 31/03/2017
₹ 1,000/-
₹ 1,50,000/-
01/04/2017 to 31/03/2018
₹ 1000
₹ 1,50,000/-
01/04/2018 to 30/09/2018
₹ 1000 (₹ 250 from 5th July 2018)
₹ 1,50,000/-

Where one can open account?:

 At any post office in India doing savings bank work and Branch of a commercial bank authorised by the Central Government to open an account under Sukanya Samriddhi Account Scheme.

Maximum and Minimum Deposit:
The account may be opened with an initial deposit of one thousand rupees [this has been amended to Rs 250 ] and thereafter any amount in multiples of one hundred rupees (this has been amended to Rs 250 wef 05.07.2018) may be deposited subject to the condition that a minimum of one thousand rupees (this has been amended to Rs 250 wef 05.07.2018) shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed one lakh fifty thousand rupees in a financial year. The amount has been amended from RS 1000 to Rs 250 wef 05.07.2018 via Notification no. G.S.R. 617(E) Dated 05.07.2018

Minimum – Rs, 2,50/- Per Year

Maximum- Rs. 1,50,000/- Per Year

Term Period – Deposits can be made till completion of Fifteen Years (Earlier it was fourteen years) from the date of opening of the account. The maturity of the account is 21 years from the date of opening of an account. In other words No Deposit for the period from 16th to 21st Year of account.

Tax Benefit:

The amount deposited towards Sukanya Samriddhi Account is deductible under section 80C of Income tax Act,1961 upto Rs.1.5 lakhs as notified by Notification No. 09/2015 dated 21.01.2015. The amount deposited in this account will be counted in overall limit of Rs. 1.50 Lakh under section 80C. Interest earned in this scheme, as well as maturity amount, is exempt from Income Tax wef F.Y. 2014-15. Also, Read- Interest on & withdrawal from Sukanya Samriddhi Account exempt from Tax

Comparison with PPF in respect of Tax Benefit:

Investment in Both PPF & Sukanya Samriddhi Account is eligible for deduction under section 80C of the Income Tax Act, 1961. Like PPF in Sukanya Samriddhi Account also Interest and Maturity amount is exempt from Tax.

Benefits of Sukanya Samriddhi Account Scheme:

1. Higher Interest Rate
2. Tax Benefit Under Section 80C
3. Payment on Maturity to Girl Child.
4. Flexibility in Deposits- Any Number of time amount can be deposited in Multiple of Rs. 250 subject to Maximum Limit of Rs. 1.50 Lakh per year.
5. Transferable Anywhere in India.
6. Even Girl Child can operate after she attains the Age of 10 Year.
Conclusion: It’s a good scheme started with a good motto by the Government with a long term vision.

Please do not reply back to this mail. This is sent from an unattended mail box. Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information., its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.