1. Lifestyle
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    3. EXPERT ANSWERS SERIES - DAY 3 | Life and health insurance requirements [27th May 2020]

    Planning Finances for Family

    EXPERT ANSWERS SERIES - DAY 3 | Life and health insurance requirements  [27th May 2020]

    Planning Finances for Family

    EXPERT ANSWERS SERIES - DAY 3 | Life and health insurance requirements [27th May 2020]

    ParentCircle presents an exclusive Expert Answers 3-Day Series on Financial Planning during Uncertain Times. Post your queries anytime before 1:00 PM on 27th May. Our expert, Certified Financial Planner, Dr. A. V. Senthil will answer all questions by 5:00 PM on the same day. You may choose to post your questions anonymously too. ... more

    • Team ParentCircle
    • 169
    • 7
    • May 25 2020

    Comments

    Team ParentCircle May 28 2020

    Thank you so much Dr. A.V. Senthil for your valuable insights all these 3 days! Looking forward to more sessions with you!

    Team ParentCircle May 26 2020

    My company issues health insurance for employees. Is it advisable for me to separately also procure health insurance? Pls advice.

    Team ParentCircle May 27 2020

    @Team ParentCircle Great question.

    Not sure about Job Guarantee in today's situation. I always ask employees to take a 'Family Floater Policy' with a deductible of say Rs. 1,00,000 - By this even if you are going to start a new company (or) in between jobs, this medical cover will come in handy and your exposure is limited to the deductible (plus other non reimbursable expenses)

    Kindly go through the response given to other questions in this section. You may get more clarity.

    Krishnakumar May 27 2020

    At what age can I opt for life and health insurance for my children? They are currently 16 and 21 years old.

    Krishnakumar May 27 2020

    @Krishnakumar Dear Krishnakumar

    My suggestion is you take health insurance for both the kids immediately. I hope you are an Entrepreneur. If you are an employee, please check with your HR (or Employer) whether they provide medical cover to dependants.

    With respect to life cover, you should take only when the kids go to work and have financial responsibliities to fulfil. Assuming your first child is getting married in another 5 years, and he/she is an earning member, then take life insurance immediately upon marriage.

    Also upon marriage, it is important that a new health insurance cover is taken covering the spouse.

    For any questions, you can reach me via email or Whatsapp - Numbers are there in my website at www.avsenthil.com

    Team ParentCircle May 27 2020

    How much insurance is required?

    Team ParentCircle May 27 2020

    @Team ParentCircle Good evening Anonymous

    Here is the thumb rule. If you are an young parent, say around 30 years of age, suggest taking 10 times of your annual take home salary as "Term Insurance". Reach out to a Certified Financial Planner or Insurance Expert to know the insurance requirements, especially coverage.

    That means, if my take home pay is Rs. 30,000 then my insurance coverage should be Rs. 36 Lakhs. This should be taken until your age 55 (assuming that all your commitments would have been fulfilled by age 55)

    Please note, that insurance portfolio has to be reviewed annually and also when a major event happens.

    Team ParentCircle May 27 2020

    When should I review my insurance portfolio?

    Team ParentCircle May 27 2020

    @Team ParentCircle Another great question. You should review your insurance portfolio once every year.

    Also whenever there is a big event that happens in your family, like marriage, buying an house using home loan, starting a business with borrowed funds, arrival of a new kid, quiting the job, children's marriage etc.

    Here is the thumb rule. If you are an young parent, say around 30 years of age, suggest taking 10 times of your annual take home salary as "Term Insurance". Reach out to a Certified Financial Planner or Insurance Expert to know the insurance requirements, especially coverage.

    Team ParentCircle May 27 2020

    What is family floater health insurance policy?

    Team ParentCircle May 27 2020

    @Team ParentCircle Good evening

    Good question. This will save the parents couple of thousands per annum, and over a period of 20 to30 years, the Parent can save few lakhs for sure.

    A family floater is an health insurance policy (or plan) that shall extend medical coverage for the entire family rather than just an individual. It is like an umbrella cover. Our suggestion is to take two policies, one base policy for 1 or 2 Lakh coverage for every individual and floater policy for say 10 Lakhs with a sum deductible of Rs. 1 or Rs. 2 Lakh. By this way the total cost of health insurance can be optimized.

    You can reach out to me for any additional questions All details are available at www.avsenthil.com

    Shobha Mitra May 27 2020

    Thank you Dr for this session. Can you please shed some light on the COVID 19 health insurance policies?

    Shobha Mitra May 27 2020

    @Shobha Mitra Good evening Shobha Mitra,

    Happy to share that Government of India has instructed all Insurance companies to cover Covid 19 claims under the "Health Insurance Plans". So if you are working and the employer has given a Health Insurance, then be rest assured that "Covid 19" shall be covered under the existing policy.

    Having said this, considering the medical cost that is involved to treat Covid 19 patients (Ex: ICU Charges, Ventillator Charges etc), Insurance Companies have launched a new product recently called Covid 19 Health Insurance Cover (Example Star Health Insurance) at different pricing structures.

    For example, as a Breadwinner of the family, if you are looking at few lakh coverages, suggest reaching out to the Insurance Advisor and ask him (or her) to provide comparative quotes, terms and conditions, exclusions etc. You can also compare prices online.

    For Entrepreneurs, especially those who employ less than 10 employees, suggest they can take low cost coverage by paying Rs. 500 to STAR Health Insurance for Rs. 21,000 coverage. Here the assumption is they are not covered as part of ESI (Employee State Insurance).

    Hope I have answered the query from different perspectives Employee (or Professional), Breadwinner, Entrepreneurs.