Page 29 - Insurance Times December 2022

Banks/post office savings instruments, upto 10k interest challenge as the stress levels, and risk of lifestyle-related
amount he does not require to pay tax as such the saved diseases are increasing every day. With the rising medical
amount is inflation, securing a required health insurance policy must be
an integral part of efficient financial planning. Having a
U/S 80TTA
comprehensive health insurance policy allows to provide the
Savings interest = 10000X30%=3000X104% = 3120/-
best medical treatment facilities to the family without
worrying about the expenses. Now-a-days health insurance
However the interest earned over and above 10k would be
policies are available with life time renewability option - means
taxed at the appropriate slab of the assessee ( for e.g. 30% ).
you can renew your policy till you are alive.
One can plan his finances in such a way that his investment in
This also saves the person from depleting his own savings in
banks/post offices should be restricted to get an annual
case of sudden sickness of himself or of any of his family
interest of 10 k and the balance amount can be invested in
members. The premium paid under a health insurance policy
Equity mutual funds or Stocks so that the tax payable would
is eligible for tax benefit under Section 80D of the Income
be 15% only under STCG (short term capital Gains) tax. instead
Tax Act up to a maximum amount of Rs. 25,000.
of saving in bank/post office accounts and paying interest.
If parents of more than 70 years old, an additional tax benefit
The third of this principle is Insurance - how to use insurance
of RS.50,000/-is available.
as a better tool for financial planning. Whatever be the
amounts one had saved in Inflation planning and Income-tax
Thus, a health insurance plan helps you save on medical
planning, that can be invested in various life insurance
expenses and reduces annual tax outgo.
instruments to complete the financial planning for different
future financial needs. U/S 80 D
Mediclaim for self and family = 25000X30%=7500X104%=
Insurance planning involves building a plan of action that 7800/-
provides adequate insurance against FOUR D's viz., Death,
Mediclaim for parents (senior) = 50000X30%=15000X104%=
Disease, Disability, and Dependence. This involves creation
15600/-U/S 24(b)
of an estate with small amounts pooled over a longer period.
Hence the Insurance planning should be started early in the Interest on housing loan = 2,00,000X30%=60000X104%=
life with amounts invested in an appropriate insurance plan 62400/-
as per the risk to be covered - any or all the 4D's mentioned
above. These amounts saved from paying income tax can be invested
for future financial needs like children education/marriage/
Protection against the untimely death is available with TERM business capital or for buying own house/flat or for retirement
plans. In the market, currently there is so much demand for planning.
these products thanks to the COVID-19 pandemic. The
demand has been so high since the year 2020, that all the The third D is disability insurance - Disability due to accident
insurance companies have enhanced the premium rates of or disease may prevent a person from working - business or
their TERM plans by 20% on an average. Many companies job - and stops his income.
have already announced their plans of further increasing of
these premium rates in the second part of 2022. This shows Disability insurance replaces lost income when an individual
the demand for these plans in the market. is unable to work because of an accident or illness.

Similar trends were also observed in Health insurance sector Without disability coverage as part of the financial planning,
that provides protection against Diseases through medical the savings accumulated for the purpose of child education
support systems. Although the awareness of having a health and retirement , get depleted . The disabled person who was
insurance policy has significantly increased thanks to the once the breadwinner becomes the dependent.
COVID pandemic, many people still don't understand its
importance. Today, maintaining a good health is a big Life insurance companies are providing different riders to

The Insurance Times December 2022 25