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4 THINGS YOU SHOULD KEEP IN MIND WHILE INVESTING

on December 20, 2021 by Hazel Calvin

When it comes to investing in mutual funds, mere mutual fund comparison to choose the best mutual fund schemes for your investment portfolio might not be enough. There are certain things that you as an investor must be aware of. In this article, we will understand four such things that you as an investor must keep in mind before investing in different types of mutual fund investment plans.

Things to keep in mind while investing

Following are a few things that an investor must be aware about before investing in mutual funds:

Asset allocation strategy
The asset allocation strategy is determined by certain aspects of risk – how much risk an investor can afford to take? How much risk does an investor need? And lastly, how much risk is an investor willing to take? Once you are clear on these questions, it will be easier for you achieve the broad framework for asset allocation – i.e., where should an investor invest and in what proportions. Based on your investment horizon, you can break your investment portfolio into three or four components – short-term financial goals that need to be in investment options with low risk profile such as fixed-income instruments, medium-term financial goals that can be invested in securities with slightly higher risk profile such as mix of both equities and debt, and long-term financial goals that can be allotted to securities with high risk profile such as equities.
Portfolio diversification
Diversifying your investment portfolio is a way of allotting and investing your money across different types of securities, asset classes, and locations. This helps an investor to considerably reduce their risks without compromising too much on the returns. Hence, rather than putting all your eggs in one basket, diversify them across different types of investments.
Maintain liquidity
It is important to maintain enough liquidity that can easily protect an investor against loss of income or drop in income or any other type of emergencies. Hence, it is recommended that an investor has an emergency fund in place that can cater to any type of emergencies that might come their way during their investment journey. As a general rule, it is advised to invest at least three to six months of your living expenses in securities that offer high level of liquidity with decent rate of returns such as money market instruments or cash and cash equivalents.
Reviewing financial portfolio
It is extremely essential for an investor to conduct regular reviewing of their financial portfolio. This will help an investor to distinguish underperforming funds and reallocate their investment if the mutual fund scheme has been constantly underperforming as compared to their underlying benchmark indices and other peer funds belonging to the same category of the mutual fund scheme. Additionally, all long-term investments are likely to turn into mid-term investments and ultimately into short-term investments over time. And it is crucial to appropriately adjust your mutual fund investments when the financial goal is near completion.

Finance

10 best discount brokers in India

on December 20, 2021 by Hazel Calvin

For ages, all stock market investors had to endure one common burden – high brokerage charges. Thankfully the advent of new technology and rapid adoption of internet services has made discount brokers in India more widespread and accessible to retail investors than ever before in stock market.

Who are discount brokers?

As against a full-service broker, discount brokers undertake market orders for reduced commissions. On the flip side, they do not provide investment advice. A discount broker is suitable for those with limited capital capabilities and those unwilling to pay for trade guidance.

How are discount brokers helpful?

They may be called discount brokers but there is no compromise in the services provided. These discount brokers’ easy-to-use trading platforms provide state-of-the-art facilities. Another beneficial thing is that most of the discount brokers in India offer very attractive brokerage fees and complete transparency along with additional benefits like advanced charts, real-time news, and analysis.

The top 10 stockbrokers in India

Here is a list comparing the brokerages of different discount brokers in India:

Broker	Equity Delivery	Equity Intraday	Equity Futures	Equity Options
Zerodha	Nil	0.03% or Rs.20/ executed order, WIL	0.03% or Rs.20/ executed order, WIL	Flat Rs.20/ executed order
Upstox	2.5% or Rs.20/ executed order, WIL	0.05% or Rs.20/ executed order, WIL	0.05% or Rs.20/ executed order, WIL	Flat Rs.20/ executed order
Angel Broking	Nil	0.25% or Rs.20/ executed order, WIL	0.25% or Rs.20/ executed order, WIL	0.25% or Rs.20/ executed order, WIL
Groww	0.05% or Rs.20/ executed order, WIL	0.05% or Rs.20/ executed order, WIL	Flat Rs.20/ executed order	Flat Rs.20/ executed order
5paisa	Flat Rs.20/ executed order	Flat Rs.20/ executed order	Flat Rs.20/ executed order	Flat Rs.20/ executed order
Kotak Securities	0.25% of transaction value	Nil	Intraday – Nil Others – Rs.20/executed order	Intraday – Nil Others – Rs.20/executed order
PayTM Money	Rs.0.01/ executed order	0.05% or Rs.10/ executed order, WIL	0.02% or Rs.10/ executed order, WIL	0.02% or Rs.10/ executed order, WIL
Alice Blue	Nil	0.05% or Rs.15/ executed order, WIL	0.05% or Rs.15/ executed order, WIL	Flat Rs.15/ executed order
Samco	0.20% or Rs.20/ executed order, WIL	0.02% or Rs.20/ executed order, WIL	0.02% or Rs.20/ executed order, WIL	0.02% or Rs.20/ executed order, WIL
Fyers	Nil	Flat Rs.20/ executed order	Flat Rs.20/ executed order	Flat Rs.20/ executed order

Zerodha remains the most popular broker. Other players like the new entrant PayTM Money, Alice Blue, Samco, and Fyers also round up the record of top 10 cheapest stockbrokers in India.

Summing up

The current market scenario has the investor spoilt for choice. Depending upon the strategies used, participants now have various options to choose their partner in their stock market journey. To simplify the process of investing and reach your goals faster, you can also consult a financial expert. They can help you map out your investing strategy and this is especially useful at the beginning of your investing journey.

Investment

Here’s all you need to know before choosing debt funds

on December 18, 2021 by Hazel Calvin

When Indians think of investing a majority of them think of putting their money in conservative instruments like banked fixed deposit, public provident fund, post office, or any such similar fixed income avenues. However, the Indian debt market has witnessed a drastic fall in interest rates which is why investors are now reconsidering their choice of investments. Most investors are now turning to mutual funds as an alternative and there isn’t a reason why they shouldn’t.

Mutual funds today are only of the most sought after market linked schemes. Investors prefer mutual funds over direct stock market investments because mutual funds offer diversification through a single investment. But a lot of investors refrain from investing their hard earned money in mutual funds because they believe that all mutual funds invest in the equity market. The truth remains that under the mutual fund gamut, there are multiple subcategories as well. Some of the most common categories of mutual funds are equity, debt, and hybrid. Investors who do not wish to invest in equity mutual funds simply because of the scheme’s volatile nature, such individuals may consider debt mutual funds.

Let us find out what debt mutual funds are and some of the things which investors must emphasize while choosing a debt scheme.

What is a debt fund?

A debt fund is an open ended mutual fund scheme whose main objective is to generate stable returns and protect the investor’s capital. Unlike equity funds that have a high risk returns trade-off, debt funds do not invest in equity markets and have a portfolio comprising of fixed income securities and debt related instruments. A debt fund’s portfolio usually comprises government and corporate bonds, commercial papers, debentures, CBLO, certificates of deposits, etc.

Things to know before investing in debt funds

Debt fund returns are not linked to equity markets

Debt mutual funds invest the majority of their portfolio in debt related instruments and fixed income securities depending on the nature of the scheme and its investment objective. They invest the majority of their investible corpus in debt securities like commercial papers, government back securities, debentures, etc. Since they have a minimum of almost zero exposure to the equity market, any upheavals in the equity market are less likely to create any impact on the performance of the debt fund portfolio.

Debt schemes have high flexibility

Debt funds are considered as diversification by a large number of equity heavy investors as these funds offer immense liquidity. Investors can redeem their debt fund units at any given time and the money is transferred to their registered savings account. Some debt funds like liquid funds even offer instant redemption options whereupon withdrawal, the money is transferred to their registered savings account within 24 hours. This is also the reason why investors use debt funds with a low maturity period for building an emergency fund.

Debt funds have SIP and lumpsum option

Retail investors can either make a one-time investment or opt for the Systematic Investment Plan while investing in debt funds. A lump sum investment can be considered by those who have surplus money sitting idle with them. On the other hand, investors can even start a SIP (Systematic Investment Plan), in any debt scheme of their choice. SIPs come in monthly, weekly, quarterly, biannually, and yearly forms. Investors can even use an online SIP calculator, to compute the total returns that their SIP investment might fetch. However, the SIP calculator can only display assumed returns as it does not consider other factors like expense ratio or exit load while computing returns.

Finance

Should you invest in low-cost index funds to create wealth?

on December 16, 2021 by Hazel Calvin

Index funds are designed to replicate the performance of their underlying portfolio. These funds give investors an opportunity to spread their portfolio across securities of a specific index without changing portfolio composition. Index funds that invest in NIFTY have a portfolio comprising of the top 50 company stocks. Similarly, an index fund that invests in SENSEX will comprise of top 30 underlying stocks that form the index.

Because the fund manager of an index fund does not actively buy or sell securities from its underlying portfolio to generate capital appreciation, it is called a passive fund. The fund manager does not have to do intrinsic research to pick stocks for the index fund portfolio, neither do they have to manage the fund actively or decide which stocks to hold or which stocks to sell. This type of investment style is considered passive where the index fund aims to replicate the performance of its underlying securities rather than trying to outperform the benchmark like most other schemes.

Since these funds mostly invest in indexes that comprise of top 50 or top 30 company stocks, they give investors exposure to bluechip stocks. Blue-chip stocks consist of stocks belonging to large cap companies that are financially stable and have a solid reputation in the industry. Hence, investors who want exposure to a portfolio of securities that are less volatile than other equity oriented mutual fund schemes can consider investing in index funds.

Are index funds a low cost investment?

As mentioned earlier, index funds are passively managed. Although they have a fund manager overlooking the overall performance of the portfolio, there is very little participation involved. This makes index funds a cost effective investment option as opposed to other actively managed mutual funds that have a relatively high expense ratio.

The expense ratio of an index fund is usually below 1%, sometimes even less than .50%. For those who do not know, the expense ratio is the total recurring costs like management fees, operational costs, etc. which the Asset Management Company must take care for ensuring the smooth operation of the index fund. These expenses are recovered by the AMC by levying an expense ratio on the mutual fund. The expense ratio isn’t an additional charge but is a sum that is deducted from the investor’s total capital gains. In the long run, those who invest in mutual fund schemes with a high expense ratio might end up giving away a large portion of their capital gains.

Can you create wealth with index funds?

To create wealth with market linked schemes like index funds, investors need a long investment time horizon spanning over 5 to 7 years or more. That’s because even if you look at the stock market, you need to have patience to create wealth. Equity markets are volatile in nature and investments made in equity can generate negative returns in the short run.

Also, if you are planning on building a wealth corpus that can be Rs 1 crore or more, you need to start a monthly SIP in index funds. Systematic Investment Plan allows retail investors to save and invest a fixed sum regularly in index funds. Investors can decide an amount that they are comfortable investing and invest that sum regularly till their investment objective is accomplished. Investors who don’t know exactly how much to invest regularly to get closer to their ultimate financial goal can take the help of the online SIP calculator.

However, the key to long term wealth creation is systematic and disciplined investing and investors must ensure that they do not stop their investment journey midway.

Finance

What Is The Right SIP Amount?

on December 16, 2021 by Hazel Calvin

Thanks to the technological advancements in the mutual fund industry, starting a Systematic Investment Plan in any mutual fund scheme is just a few fingertips away. All an investor has to do is download a mutual fund app made available by the aggregator and choose from a wide range of schemes offered by various AMCs and fund houses, or they can even log on to the website of a particular AMC whose scheme they want to invest in and start a SIP immediately after completing a few pre-investment formalities.

But the real problem which many first time investors face is that they do not know how much the monthly SIP should be. To understand whether the monthly SIP amount that you will be investing is the accurate amount or an ad hoc amount you may have to first understand what is it that you want to achieve with these investments in the long run. Based on that you might be able to narrow it down to the right monthly SIP sum.

But what exactly is SIP?

A Systematic Investment Plan (SIP) is one of the easiest ways to invest in market linked schemes like equity mutual funds. Since equity funds expose the majority of their portfolio to equity markets, their performance keeps fluctuating from time to time. In such a scenario, a SIP makes more sense as investors do not have to time the market and can instead small, fixed sums regularly. However, SIPs are not limited to equity fund investments and are available for all types of mutual fund schemes.

How can SIPs help target financial goals?

Investors who exactly know what they want to achieve and by what time find it simpler to strategize the SIP investments. SIPs are best suited for those who wish to invest for a longer duration and want to accumulate a commendable corpus through systematic and disciplined investing. However, that does not mean that you cannot start a SIP for a goal that needs to be achieved in the next 12 months. However, SIPs that carry on for longer durations allow investors to manage market volatility and give their investments to generate returns across various market cycles.

Now let us assume that you have two different goals, goal A needs to be achieved in 3 years and goal B needs to be achieved in 10 years. Goal A requires you to build a corpus of Rs 5 lacs whereas goal B requires you to build a corpus worth 15 lakhs. Let us assume the mutual fund scheme delivers an average of 8 percent returns.

To achieve goal A, you will have to start a monthly SIP of Rs 12,355 whereas to achieve goal B, a monthly SIP of Rs 8,199 should suffice. If you want to make such calculations to understand the SIPs that you must be starting on a monthly basis, you can take the help of the online SIP calculator. This is an easy-to-use tool that any individual can take help of to solutions to their investment woes.

Finance

Things you need to know about hybrid funds or balanced funds

on December 16, 2021 by Hazel Calvin

When it comes to mutual fund investing, investors are expected to keep a balanced investment portfolio by spreading their investments across asset classes. However, these days it is possible to gain the benefit of more than one asset class through a single mutual fund investment. Although equity and debt as an asset class have their own merits and demerits, by investing in a hybrid fund, you can get the best of both these asset classes.

What is a hybrid fund?

A hybrid fund (also referred to as a balanced fund at times), is a mutual fund scheme that spreads its investible corpus across equity and debt. Every hybrid scheme has a different portfolio composition of these asset classes depending on what the investment objective and risk profile of the fund is. For example, equity oriented hybrid schemes predominantly invest in equity related securities as opposed to debt oriented hybrid funds that invest a minimum of 65% to 80% in fixed income securities.

Things to know about hybrid schemes

Different types of hybrid schemes

If you are planning on investing in hybrid funds, it is essential for you to know all the different types of schemes available for investment so that you can consider choosing one that is ideal for their financial goals –

Conservative Hybrid Fund: A conservative hybrid fund is an open ended mutual fund scheme that invests a majority of its investible corpus in while debt.

Balanced Hybrid Fund: A balanced hybrid fund is an open ended scheme that must invest a minimum of 40% to 60% in each of the two asset classes (equity and debt).

Aggressive Hybrid Fund: Of its total assets, an aggressive hybrid fund must invest a minimum of 65% to 80% in equity and equity related instruments, and the remaining in debt.

Dynamic Asset Allocation Fund: This hybrid fund has the leeway to shift its investment portfolio dynamically between asset classes to suit the existing market conditions.

Multi Asset Allocation Fund: This is an open-ended hybrid scheme that invests a minimum of 10% in each of the three asset classes (typically equity, debt, and gold).

Arbitrage Fund: This fund tries to leverage arbitrage opportunities by investing a minimum of 65% of its total assets in equity and equity related instruments.

Equity Savings Fund: An equity savings fund is an open ended mutual fund that tries to generate returns by investing in equity, debt, and arbitrage opportunities

Offers true diversification

A hybrid fund is able to offer retail investors diversification like no other mutual fund scheme. Other schemes like equity and debt funds can offer diversification within the asset class, however hybrid funds invest across asset classes, thus balancing the investor’s portfolio across fluctuating market cycles. The equity component of the hybrid funds tries to take higher risks to take risk adjusted returns whereas the debt component tries to protect the portfolio from market volatility and otherwise generates stable returns.

Investors can start a SIP in hybrid funds

One of the easiest ways to invest small sums for a longer duration with hybrid funds is via a Systematic Investment Plan. SIP is a simple and effective way to ensure that you are able to save enough at regular intervals and eventually be able to build a solid corpus. SIPs are highly flexible in nature which means the investor can decide the monthly investment SIP sum and then continue to invest this amount in the hybrid fund every month on a fixed date. Investors who aren’t sure about how much they must be investing in for long term wealth creation can also use the SIP calculator, a free online tool that any layman can use.

Finance

SIP calculator: How much you need to invest every month to accumulate Rs 5 crore in 15 years

on December 16, 2021 by Hazel Calvin

Wealth creation over the long term is not a simple task. You have to ensure that you continue to invest till your investment objective is accomplished. Continuing an investment journey for 10 years or longer can become difficult especially because during this time life may throw unforeseen exigencies upon us and we might have to either quit midway or temporarily put our investments on hold. However, to ensure that you continue your investment journey by investing small sums at fixed intervals you can consider starting a Systematic Investment Plan in mutual funds.

What is a Systematic Investment Plan?

A Systematic Investment Plan or SIP is an easy and disciplined way to invest, especially if you have a long term investment horizon. This way of investing is known to bring in the discipline for someone who is new and isn’t sure about how to remain invested for longer durations. All an investor has to do is decide which mutual fund to invest in and then decide the monthly SIP sum. After this, the investor has to decide whether he wants to invest in mutual funds via SIP weekly, monthly, quarterly, biannually, or yearly. After this, they can either make the SIP investments manually or automate their transactions post which every month on a fixed date, the predetermined sum will be debited from the investor’s savings account and they can buy units depending on the current mutual fund NAV (net asset value).

When you are investing for a long duration it is obvious that you would want to know how much your investments can potentially fetch in the long run. To find that out, you can use the SIP calculator.

What is a SIP calculator?

The online SIP calculator is a free tool that any layman can use. There are two unique ways in which the SIP calculator works and hence can help investors simply financial planning and help them is creating a foolproof investment strategy. All an investor has to do is put in a few details and within no time the SIP calculator computes all the intricate calculations and comes up with close to real numbers. Yes, these are just accurate numbers since the SIP calculator does not take certain factors such as mutual fund expense ratio or exit load into consideration while computing results

I want to build a corpus of Rs 5 crores in 15 years. How can the SIP calculator help me?

The online SIP calculator is a time saving tool as it computes complex calculations in just a few seconds which an average human might take a very long time to calculate manually using a pen and paper. So if your goal is to build a corpus worth Rs 5 crores in the next 15 years, you can use the SIP calculator to determine how much you monthly SIP investments should be so that at the end of your time horizon you have accumulated the desired corpus.

In the SIP calculator, enter –

Total wealth you want to earn – Rs 5 crores
Time horizon – 15 years
Expected mutual fund rate of return (Let us assume 10%)

The SIP calculator will display the following results –

Monthly SIP investment amount needed – Rs 1.2 lakhs
Total invested sum – Rs 2.16 crores
Total wealth created – Rs. 5. 01 crores

Thus, if you wish to build a corpus of Rs 5 crores in 15 years then you will have to start a monthly SIP of Rs. 1.2 lakhs to achieve the financial goal.

Insurance

Have an Expired Car Insurance Policy? Know How You Can Transfer Its NCB

on December 14, 2021 by Hazel Calvin

In the beginning of the 21^st century, cars were a sign of wealth and luxury. But as decade have passed, it is no longer a status symbol and indulgence, instead, it has become a necessity for safe and comfortable commute. With towns and cities having good road connectivity, workplaces have moved far away from home and people commute over such distances each day.

Since cars are essential for an easy travel, it is best to protect it using an insurance plan. While you can buy car insurance online as the bare minimum to ensure legal compliance, such policy offers a limited coverage. Hence, it is known as a limited liability cover. Contrary to such limited liability plans, you can purchase comprehensive policies that offer a broader coverage protecting your car against damages alongside the mandatory third-party coverage. Comprehensive policies, however, have one lesser-known benefit that helps keeps the premium in check—No-Claim Bonus or NCB.

What is the no-claim bonus?

No-claim bonus or NCB is a reduction in premium offered by the insurer at the time of car insurance renewal. Such NCB benefits are available only when no claims are made during the previous policy period. To simply state, it is a benefit that the insurance company passes because you do not make any claims during the previous policy tenure. Such NCB benefits can be accumulated over the years to further lower the car insurance prices.

When can you transfer the no-claim bonus?

Your car insurance policy’s no-claim bonus can be transferred in two scenarios—one, when your policy is expired and due for renewal and you want to switch your insurance company and second, when you sell your car to transfer it to a new car’s insurance cover. In both these scenarios, you need to obtain an NCB transfer certificate which remains valid for a period of three years from its date of issue. You can visit the official website of IRDAI for further details.

What is the process of transferring the NCB?

Your car insurance policy’s accumulated NCB can either be transferred during the policy period or at the end of its tenure. With an NCB retention letter shared with the new insurance company, your accrued and accumulated NCB can be transferred.

Here are the documents that are required to issue an NCB retention letter:

Request letter for policy cancellation in case of transfer during the tenure.
Original copy of the existing car insurance policy
Form 29 of the RTO that mentions the notice of transfer of vehicle’s ownership
Form 30 of the RTO which is an application for transfer of the ownership.
Amended registration certificate with name of new owners.
Copy of delivery note.

Apart from the above pointers for transferring the NCB, here are some addition considerations to keep in mind:

The no-claim bonus is linked to the policyholder and not the vehicle. Hence, even if you sell your car, the NCB still belongs to you.
Make sure to submit the NCB retention letter within its validity of three years to the new insurance company otherwise all accrued benefits will be lost.
Such NCB transfer is possible only among the same category of vehicle, i.e., your car’s NCB can be transferred to another car and not a bike and vice versa.

You can visit the official website of IRDAI for further details.

With these pointers discussed on how you can transfer no-claim bonus in your car insurance plan after its expiry, make sure to use a car insurance calculator to know its impact on the premium. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Finance

6 things to know about SIP

on December 13, 2021 by Hazel Calvin

Introduction

SIP stands for Systematic Investment Plans. It is a kind of mutual fund which allows you to invest a specific amount, that is pre-planned, on a regular basis at different intervals. It is quite a convenient and flexible form of investment wherein you don’t have to spend any extra amount than whatever is specified. Let’s have a look at a few things that you should know about SIP.

SIP returns are taxable or not-

A majority of the investors choose SIP because it is considered a great tool to save taxes. However, it depends upon the type of your mutual fund and the period of redemption as well. If you invest in equity mutual funds, its returns have no tax on them if you redeem the investment after a year. On the other hand, debt mutual funds are taxable and the rate is 20 per cent along with indexation benefit if redeemed after 3 years of investment.

How to choose a SIP-

The choice of investment varies and depends upon your particular requirements. You can invest in small and mid cap mutual funds if you do not mind the market risks. If you can bear risks to some extent then you should opt for large cap mutual funds. On the other hand, if you are someone who cannot handle risks or have low risk tolerance then you should go for debt mutual funds. You can also use different online calculators to determine the numbers such as SIP with annual increase calculator will help you find out the yearly increase for your investment.

SIP is a safe tool-

SIP is a great investment tool that is very much safe as compared to other tools. When you invest in a SIP, you do not need to spend a hefty amount. You can start by investing small amounts every month. Taking into consideration the longer period of investment, the invested sum is generally the average of high and low. Thus, there is no chance of paying a high amount for mutual funds.

What is NAV in SIP-

NAV stands for net asset value. Since the amount of investment in SIP is pre-planned, investors buy more units when the net asset value is comparatively lower and vice versa. So, if the mutual fund NAV of any scheme is Rs. 10, you will have to pay the same amount to buy a unit of the scheme.

Save taxes-

If you invest in tax saving ELSS mutual funds via SIP, you will be able to claim tax deductions of up to Rs. 1.5 lakhs according to section 80C of the Income Tax Act. If you invest more than Rs. 1.5 lakhs, you will not get any additional tax-related benefits. This does not mean you cannot invest any further than the specified amount.

Lock-in period-

There is no lock-in period if you decide to invest in an open-ended mutual fund through SIP. However, there are a few mutual funds that have a lock-in period too. For instance, the lock-in period for ELSS mutual funds is e years. Any mutual fund that has a lock in period is known as a close ended mutual fund.

Conclusion

Systematic Investment Plans are one of the most popular forms of investment. Investors seem to like it very much because of all the features that it offers. There is less risk involved in this type of investment and you don’t need to invest a big amount to get started with it. This can be the perfect way of investment if you are someone who is just starting out.

Insurance

Factors to Check When Buying Health Insurance for Senior Citizens

on December 9, 2021 by Hazel Calvin

The medical inflation rates in the country have been seeing an uptick pushing up the cost of availing healthcare facilities. While healthcare cannot be ignored, health insurance is a way to ensure financial coverage is available to combat the soaring treatment costs. This becomes all the more crucial when you have elderly parents whose reliance on medical treatment is higher.

As age increases, the reliance on external medication increases and that’s when a health insurance policy comes to the rescue to cover the rising treatment costs. Even if your parents are covered in a group health plan or family health insurance, it may not be sufficient as these plans cater to different needs which may not be specifically focused on ailments for the elderly. Hence, a senior citizen health insurance plan is the right choice.

What is health insurance for senior citizens?

Health insurance for senior citizens is specifically designed to cover age-related ailments. The entry age for such plans is high thereby allowing elderly individuals to opt for a health cover. Other features of senior citizen policy include coverage for ailments that are mainly age-related, inclusion of pre and post hospitalisation coverage, day-care treatments, etc.

What factors to look for when buying health insurance for senior citizens?

There are myriad health insurance plans when it comes to choosing a policy for your parents. But, these are few pointers that you must keep in mind:

Cover for in-patient hospitalisation

It is termed as in-patient hospitalisation when the patient is admitted to the medical facility for a period of more than 24 hours. When buying a senior citizen health cover, it is essential to consider such facility as a part of the insurance plan as the treatment at such old age is often for a prolonged duration. Also, the treatment that are required at such age are often for a longer duration and hence must be included in the insurance coverage. In-patient hospitalisation covers all hospital expenses which include the surgeon fees, specialist fees, cost of medicines, nurses and the like. *

Fewer restrictions for post-treatment costs

While most senior citizen plans cover in-patient treatment, it is not enough. You must also keep consider the post-treatment cost of any ailment. It is not only essential to seek the right medication when admitted to the hospital but also later when discharged. Hence, a health insurance policy that offers post-treatment coverage comes handy. Generally, plans that offer post-hospitalisation coverage are valid for a duration of 60-90 days. *

Lower restriction on day-care treatments

Day-care procedures are those treatment that do not require a hospitalisation for more than 24 hours. Although most insurance companies offer coverage for day-care treatment in their senior citizen plans, it is important to know the ailments that are covered to not be restrictive in nature. *

Apart from the above factors, waiting period for coverage of ailments, co-payment terms for compensation, sub-limits on coverage of different ailments and exclusions in the policy must be kept in mind when selecting a policy.

* Standard T&C Apply

Bottom line

These are some of the crucial considerations to remember when buying a health insurance plan for senior citizens. While the different components of the plan impact the insurance prices, a health insurance premium calculator can be useful in estimating its impact on the premium. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

December 2021