For home insurance, choose a comprehensive plan with add-ons

The pictures of destruction caused by the earthquake in Turkey and Syria have shaken many. Frank

Hoogerbeets, a Dutch researcher who predicted the series of massive earthquakes, says the Indian- Pakistan –Afghanistan region is also susceptible to such tremors.

While natural calamities and the damage they cause are not under one’s control, one can pay a small premium and hedge the risk arising from such events.

“Home insurance is not as popular as other forms of insurance. But it makes sense to safeguard your home, one of your most important assets, with adequate insurance cover, especially if you live in a place prone to natural calamities,” says Tarun Mathur , co-founder & chief business officer general insurance.

What is covered?

A home insurance policy pays for losses caused by a verity of risks.”Most home insurance policies include coverage for fire, explosion, storm, flood, earthquake, impact caused by external objects such as falling trees, and theft,” says Rakesh Goyal, director, Probus Insurance Brokers. Terrorism is another risk that is covered.

Our homes are not bare shells. They contain many fixed and movable assets, such as smart phones, laptops, and other high- end smart devices. Most people also have some jewellery and other valuables at home. All these can be declared separately and insured by the home insurance policy.

Who can buy it?

An owner who lives in his own house, a tenant who has taken the house on rent, and even an owner who has given the house on rent, and even an owner who has given the house on rent can purchase this insurance. “While homeowners can purchase insurance to cover the structure and contents, tenants can only purchase coverage or their personal belongings. Home insurance for tenants can include liability and content coverage protects tenants in the event that they cause damage to the building, content coverage covers the cost of replacing lost or damaged possessions, “says Goyal.

Lender‘s nudge

When you take a home loan, the lender insists that you purchase a home insurance policy so that the house is protected against fire, flood and allied perils. The policy is assigned to the lender. In case the house gets destroyed before the home loan is repaid fully, the insurer reimburses the lender.

While buying a home insurance cover is a good practice, it is not sufficient. The borrower should also buy sufficient term cover. In case the borrower passes away before the home loan is repaid, the family can use the payout from cover to repay the lender.

The standard option 

Bharat Griha Raksha Policy, the standard home insurance policy, is one option that can be availed. The policy provides coverage against natural calamities, including fire, flood, earthquake and allied perils. House contents up to Rs. 5 Lakh too can be insured.”A standard home insurance policy simplifies coverage, making it easy to understand. Standardization also pushes insures to offer competitive premium. Given the low cost of such policies, it’s a good way to transfer risk to insurance companies, especially for those who live in hilly areas, flood zones, or seismic hazard zones,”says Aftab Chaz , associate director and business head at Elephant .in, Alliance Insurance brokers.

Mathur, however, points out that Bharat Griha Raksha policy doesn’t cover electrical breakdown, short-circuiting, and damage or destruction of glass fixtures, sanitary fitting, precious stones and manuscripts.

Should you go for add- ons?

Home insurance today comes with several add-ons. Public liability insurance or third-party insurance is one such add-on cover. Chaz suggests buying a comprehensive home insurance policy, where the basic policy is combined with several add-ons to provide holistic protection.

“Protection for portable electronic equipment such as cameras, audio- vishal, diagnositic and medical equipment, jewellery and valuables, loss of rent, extra protection against theft and burglary, and alternate accommodation are some of the add-on covers one can go for, “ says Chaz.

While home insurance may not offer tax benefits, it is a cover that one must buy to ensure peace of mind.

For More Details: Pooja Manoj Gupta, visit www.giia26.com
Email: pmgiia26.com Mobile 9868944340

Reduce your tax liability using deductions on medical expenses.

Besides 80D, benefits are also available on less known Sections like 80DDB, and 80U

The tax-filing season has arrived. While most taxpayers are aware of the deduction available under Section 80C, several other provisions of the Income-Tax (I-T) Act also let you save tax if you have spent on medical issues.

Section 80D

This section allows you to get a tax deduction on the money spent on paying health insurance premiums. This deduction can also be claimed for money spent on preventive health check –ups and  contributions to the central government health scheme.

 “Individuals can avail of Section 80D benefits for themselves and their family (consisting of spouse and dependent children). In the case of a Hindu Undivided Family (HUF), this deduction can be availed on the premium paid for its members.

The maximum deduction that an individual can avail is Rs.25,000/-. This limit gets enhanced to Rs.50,000/- for senior citizens (aged 60 years or more)

However, the aggregate deduction for a preventive health check-up for self, spouse, and dependent children is restricted to Rs.5,000. This Rs.5000 is included within the overall limit of Rs 25000 or 50,000, as applicable.

Surana informs  that senior citizens who don’t pay any health insurance premium can claim the maximum deduction allowed under this section on the medical expenses they incur.

Premium paid for top-up health plans and critical illness plans are also eligible for Section 80D benefit.

You can avail of this deduction if you pay in any mode other than cash. Cash payment is permitted only in case of preventive healthcare expenses.

Many people fail to avail of the preventive check-up benefit under Section 80D. If you have already got the check-up done, or have scheduled one before March 31, you can get this deduction.

Section 80DD

A deduction under Section 80DDB is allowed for medical treatment of a dependant suffering from a specified set of diseases. “ In this case of normal citizens, the deduction can be claimed for Rs.40,000 or the amount paid, whichever is less. In the case of a senior citizen or a super senior citizen, the deduction can be claimed for Rs.1,00,000 or the amount paid, whichever is less.” The list of diseases is prescribed under the I-T rules.

To claim the deduction under the section , an individual needs a prescription from a neurologist , oncologist, urologist, or  immunologist, as the case may be. Payment can be made in any mode. For this section, dependant means spouse, children , parents , brothers, and sisters of an individual .”This deduction  can be claimed by an individual or HUF and is only allowed to resident Indians. Surana Adds, “Any insurance claim received by the assesse would be reduced for the purpose of computing the deduction under the section.

Section 80U

Section 80U provides a deduction of 75,000 to a taxpayer who has been certified by a medical authority to be a person with a disability. “Deduction is provided based on the certificate. In the case of a severe disability, the deduction allowed shall be 125,000”. A person with a severe disability is a person with 80 percent or more of one or more disabilities.

For claiming this deduction , the individual needs to furnish a copy of the certificate of disability issued certificate of disability issued by the medical authority along with the return of income under Section 139.

Many people confuse Section 80U with 80DD. Section 80U offers tax benefits to an individual who suffers from a disability while Section 80DD offer deductions for bearing the medical costs of a dependant. Surana adds, “Deduction under this section can be claimed only when the taxpayer has not claimed any deduction under Section 80DD of I-T Act.”

Only resident individuals  can avail of this tax benefits. Goel says, “ The disabilities coverd are blindness, low vision, laprosy cured, hearing impairment, locomotor disability, mental retardation, and mental illness.”

Get the required certification :

Since most of the sections require a certificate from a medical authority, taxpayers should arrange for the certificate on time. “The certificate should cover the financial year for which the deduction is claimed.”

Remember you will not be able to claim the deduction if the certificate has expired.

Taxpayers can avail of enhanced tax benefits by making payments on the behalf of senior citizen.

  

For More Details: Pooja Manoj Gupta, visit www.giia26.com
Email: pmgiia26.com Mobile 9868944340