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Buy a policy that is renewable for lifetime

Buy a policy that is renewable for lifetime
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First Published: Sun, Mar 13 2011. 09 52 PM IST
Updated: Sun, Mar 13 2011. 09 52 PM IST
Mint, along with the Hindustan Times and NDTV, brings you a personal finance show called Let’s Talk Money. The weekly call-in show, anchored by Monika Halan, editor, Mint Money, and Manisha Natarajan, editor and senior anchor, special programmes, NDTV, aims to answer viewers’ questions about money-linked issues. This is an edited transcript of the show that was aired over the weekend on NDTV Profit and NDTV 24x7.
Chetan Vyas, 24, information technology professional, Mumbai
I would like to take a medical insurance for my parents: father, 52 years old; mother, 43. So would you suggest me some insurance...
Natarajan: And you want insurance for yourself, too... We have a product for you for health insurance, but we want you to know what you should do before buying a health insurance and how to go about it... It will seem like a classroom sort of a pointer, but I think it is important for you to know first, when you buy an indemnity policy or when you buy one that made good that you spent, so that’s important that it should reimburse.
You need to top it up with a benefit policy like a critical illness, a plan that gives you a lump sum plan on the disease... Buy a policy that is renewable for lifetime and cover hospitalization expenses and it must have a less than four years of waiting period, not more than four years... It should be able to set the claims within and they have tie-up with the hospitals near your locality or the one you go to. These are a couple of things to keep in mind.
We will offer you a reasonable one—Optima Insurance Brokers’ happy family plan. Your father will be covered without any medical test, but I’m not sure if that’s a very good idea. Besides, the benefits are better than most plans, Premiums are quite affordable within your budget, so you can include your wife even... You should take up a Rs 5 lakh cover which will cost about Rs 9,398. Not a good idea though not to cover parents for a lifetime...
Halan: It becomes expensive at that age as most people find it difficult to give out every year. But go ahead, do it because longevity is increasing and at 80, when you want to switch, it is going to be very difficult...
Natarajan: I found two more insurances...Apollo Munich and Max Bupa. The two policies are expensive, or they might just seem expensive, but they may be worth it... if you want to cover your parents in lifetime you have got Apollo Munich premium plan and Max Bupa family silver plans. Sum insured Rs 5 lakh will give you individual cover and Rs 5 lakh floater as well. Max Bupa comes with a set of premium of Rs 35,946 and Apollo is higher to Rs 36,941... Everybody needs to understand that people will come and sell them policies. They need to do their own due diligence and ask the right questions...
Halan: Also, if somebody is telling you to suppress the disease or not to disclose what you have, it’s only going to harm you at the time of claiming. The agent is making his own commission and running away with it and they don’t intend to service you. Don’t do anything wrong when you are dealing with insurance. It’s a matter of faith...so just be truthful.
Natarajan: It will come back.
Halan: It really hits you badly. Particularly find out what the policy covers, what it doesn’t cover, what diseases are excluded, what the deductible could be, what hospitals are included in the plan, does the company have an in-house agency to do it... basic questions that...you ask when you buy the policy...
Natarajan: That’s a complete show on insurance... We will (now) focus on making some money with gold—10% of gold in your portfolio, something we have been recommending, yet we find very few people do it... Do people really invest in gold, and if they do, in what form? Let’s see...
...People do invest in gold through commodity and don’t know of ETFs (exchange-traded funds)... So they are not watching Let’s Talk Money to run a much larger campaign. Gold has given 20% returns in last decade and these are annualized returns... last year it has almost touched 30%. So why are you not looking at the gold return and an ETF product?
Halan: Just a little bit of a caution here. It doesn’t mean (since) it’s given 30% (last year) so in future it will give 30%. It’s only people who have a view of gold and buy gold, then only buy through ETFs. And a straight product is any day simpler, easier way to buy and store gold. The cut off is less—you lose less money when you buy it. There is no problem of storage... and when you want to redeem it you just hit a button on the laptop and the money flows back into your account, and that’s the way to hold gold only if you have a view. I’m not recommending gold to retail investors at current levels, but if you have a view on gold and you want to go through ETF...
Natarajan: But even if you are hedging with the view of 10%, why not initiate an SIP (systematic investment plan)... small quantities of ETFs can be bought... We have got a divergent view. I think one should have a gold portfolio 5-10%.
Halan: Value the jewellery in your locker... and if what you are wearing (is) less than 10% of the net worth of your gold portfolio, then buy through ETFs.
Natarajan: Gold exchange-traded funds—no storage cost, no safety worries, in small denominations, Buy it easily through a broker, initiate an SIP, unlock values, sell it in small quanities... Look up what are available in the market... Gold benchmark ETF, there is quantum gold ETF, SBI gold ETF, UTI gold ETF. Over the last 12 months they all have given 24%...
letstalkmoney@livemint.com
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First Published: Sun, Mar 13 2011. 09 52 PM IST