(Photo: iStock)
(Photo: iStock)

Valuation report is used as the basis of settling claim for jewellery insurance

  • The agreed value is ascertained by the insurer via an independent valuer
  • When a pension plan vests, you can withdraw one-third of the accumulated corpus as lump sum

I keep my jewellery at home. Will a home insurance cover theft or loss of jewellery?

Vedika Sud

Yes, few home insurance cover theft or loss of jewellery that you keep at home. Jewellery is insured on agreed value basis. The agreed value is ascertained by the insurer via an independent valuer. At the time of claim, this valuation report becomes the basis of settlement. The typical cost of jewellery insurance is around 1% of the sum assured.

I am 45 years old and have invested in a insurance pension plan with a tenure of 20 years. What are the options of availing vesting benefit when the plan matures? Also, what would be the tax treatment of the benefits which I receive?

Varun Sachdeva

When a pension plan vests, you can withdraw one-third of the accumulated corpus as lump sum. This is called commutation of pension. The remaining two-thirds of the corpus should be used to avail annuity payouts. Types of annuities vary between insurers. A common annuity type is a fixed monthly income till the death of the insured. Nothing is paid at the time of death. Another popular option is the annuity with return of premium where you get an annuity and on death your nominee is returned the premiums paid.

The commuted pension that you withdraw in lump sum is allowed as tax-free income. The annuity payments, however, will be considered as income in your hands and will be taxed at your income tax slab rate.

What is co-pay clause in senior citizen health plans?

Apoorva Nambiar

In most health insurance plans, which cover individuals aged 61 years and above, there is a co-payment clause. It states that a portion of the claim would be borne by the policyholder and the remaining claim would be paid by the insurer. Even if the claim is within the sum insured chosen by the policyholder, co-pay would be applicable in each and every claim. The co-pay ratio usually ranges between 10% and 25%.

Average claims frequency is higher for senior citizens. As a measure to control claims, insurers apply co-pay. This enables them to charge a lower premium upfront. In some policies, co-pay could be as high as 50%. Premiums for such plans, accordingly, are much lower.

Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries and views at mintmoney@livemint.com


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