I work in Malaysia but my wife and children live in India. I bought a family medical policy in 2010 when I was in India. Will I be eligible for treatment benefits if I fall ill here in Malaysia?
Please read your policy document carefully. Standard Hospital expense reimbursement policies (called Mediclaim in general parlance) issued in India will reimburse the hospitalisation expenses incurred within the country only. If the hospitalisation expenses were incurred outside India (Malaysia), the Indian insurance company will not entertain the claim. Please buy an overseas medical policy or buy a local Malaysian medical policy if available.

Do I get any rebate on an education loan if I pay the installments?
You can get tax deduction under Section 80E on the interest paid for the education loan taken by you for the purpose of higher education for yourself, your spouse or your children. The deduction is available only if the loan is taken from specified financial institutions or charitable institutions. Please note that there is no deduction available in respect of principle repayment of an education loan.

Can I get income tax rebate on Ulips purchased by taking loan on my existing endowment policies?
Yes, you can get tax rebate under Section 80C in respect of Ulip purchased by taking loan on your present endowment policies.
Currently, there is no stipulation that the payment or investment in the mode specified under Section 80C have to be made from the income chargeable to tax.

I am a 30-year-old employee working for a private organisation. I want to buy a life insurance cover for myself. Which product I should opt for — a money back policy or a term insurance? What else I could go for? Please explain the difference and benefits. How much will the product cost for an insurance (sum assured) of `25 lakh?

A term insurance plan is a pure insurance cover with no investment component. Under term insurance plan, there are no maturity benefits at the end of the policy term; if the insured person dies within the policy term then the insurance company will pay the stated sum assured to the nominee of the policy holder.

On the other hand, money back policy is an insurance plan with investment component. Under this plan, the insured person receives survival benefits as a percentage of sum assured during the term of the policy. In the event of the death at any time within the policy term, the death claim normally comprises full sum assured without deducting any of the survival benefit amounts, which might have already been paid. Similarly, the bonus is also normally calculated on the full sum assured.

Most traditional money back policies will provide very low returns around four to six per cent on your investments. You will be much better off if you segregate your insurance and investment requirements. We recommend to go for a term insurance policy as they are the cheapest form of insurance and based on time frame of your financial goal invests in debt and equity allocation.

Following are the premium quotation of term insurance plan, For a 30-year-old healthy individual, who is looking to take sum assured of Rs 25 lakhs for a period of 30 years.

* Kotak Life’s e-Term Plan: Premium Rs 3,833 per annum.
* Aviva Life Insurance’s i Life: Rs 3,565
* MetLife’s Met Protect: Rs 4,054
* ICICI Pru Life’s iProtect: Rs 4,881
These premium quotation is for non-tobacco users on online purchase only.

Harsh Roongta is the chief executive officer of Apnapaisa.com. You can send in your queries to
movingmoney@deccanmail.com