Donating Life Insurance: A Tax-Free Act of Charity

Ratan Tata needs no introduction. He has always used most of the wealth created by his firms for charitable purposes, from education to medical and rural development.

With 65% ownership of TATA Sons being held by various charitable organizations, Ratan Tata might not be a billionaire on paper but in reality, he is the richest person in the world, with his worth in reality being more than that of Bill Gates and Warren Buffet. He has created unmatched goodwill with his philanthropic deeds.

If you don’t have large amounts of money but philanthropy is one of your goals, donating your life insurance policy to charity can be a powerful strategy. When you buy life insurance online, you can get higher coverage for lower premiums, which in turn would allow you to make larger gifts than you might be able to otherwise afford, while also gaining from tax benefits.

Charitable Donation of Life Insurance: How it Works

If the thought of charity crosses your mind, buy a life insurance policy online. All you need to do is list the charity as the named beneficiary. It becomes a win-win situation for both you and the organization, since both can gain certain benefits. Of course, you will need to pay the premium on the policy as you normally would. So, what you are effectively doing is choosing an affordable amount that you can pay annually towards charity in the form of premium payments, although the charitable donation will occur only when the policy can be claimed.

After your demise, any proceeds from the policy will be contributed to the charity as a charitable gift. The reason is that life insurance death benefits that are paid to charities are not subject to taxation, hence the charity will be able to obtain the full sum assured, without worrying about paying taxes.

Benefits for You & the Charity

• The premium payments are deductible from your annual tax return, also known as itemized deduction.
• The charity fund will not be included in the overall value of your taxable estate, reducing the liability of your potential estate tax.
• In case you have a policy that pays dividends, you can assign those policy dividends instead to be paid to the charity.

A good option is to buy a life insurance policy online, since it is simple and easy, and then to transfer ownership. In return, the charity will then issue a receipt for that gift. Also, the charity that you are choosing must be a qualified 501(c)3 organization, which means that the entity must meet the IRS’s definition of a nonprofit organization.

Parenting Is a High Responsibility Job

Parenting is one of the most taxing, high responsibility but fulfilling jobs that one can have. Raising children does not only mean giving them proper food, good clothes or sending them to school, it also includes teaching them the right things so that they grow up to be good human beings, with a secure future. This can be achieved by saving for their future needs, investing in schemes like child insurance plans and teaching children the habit of saving a specific proportion of whatever money they have.

Fostering Social and Emotional Development

Parenting is not only about fulfilling the basic physical and financial needs of children, but is also about fostering the emotional, social and intellectual development of the child. This requires a lot of patience and understanding. While all parents love their kids, expressing it in the right manner is a very important component of good parenting. An effective parent is one who makes his/her child feel loved and cherished. This is possible by spending time with your child in doing what he/she wants to do and expressing your love. Loving, however, does not mean that you ignore their mistakes. Do correct them but try to avoid blaming and criticizing them or labeling them for it. Instead point out where they are going wrong and how they can correct it.

Parents need to be effective teachers and they can become so by following the same rules and habits that they wish to develop in their children. One should remember to be flexible and ready to modify the rules as the child grows or the situation changes. Inculcating the right values and trusting your children will go a long way in ensuring that your child grows up to be a good human being.

Providing Financial Security

Every parent wishes to provide the best of facilities for their children and is even ready to work extra for that. However, parents also need to think about the future financial needs of their kids and thus make the right investment decisions. These include investment in child insurance plans, opening recurring and savings deposit accounts or investing in bonds or other investment vehicles.

Right and timely investments will ensure that your children are financially secure in case of any eventuality. Buying the best child plan will ensure that the funding needs during a child’s growing years are not compromised due to any reason. It is advisable to make a correct assessment of your child’s future financial needs, after taking into account the impact of inflation and then choosing an investment option that offers the desired returns at the right time.

Last, but not the least, is to inculcate in your children the habit of saving a small portion of their funds from a young age itself. This will ensure that they remain disciplined even when they grow up. You have done your bit if you have made the right investments in banks and child plans, besides teaching your children the advantages of saving.

The no-hassle cashless insurance policy – and why you need it

Cashless health plans are a blessing when you need hospitalisation urgently. Let’s take a look at how they work.

The biggest fear for any person today is to suddenly fall ill and require hospitalisation. Medical treatment costs are quite prohibitive in India, and they continue to rise every year. Also, many hospitals force patients to first pay admittance fees before starting treatment – if you are short of money at that time, this can result in loss of valuable time for you or your loved one.

Health insurance companies realise the gravity of a patient losing precious minutes of treatment. Hence, they have devised the cashless health insurance plan, which is a wonderful solution for policy holders: they can get admittance at once after giving the policy details to the hospital, and the patient starts receiving treatment. The bills are settled by the insurance provider directly with the hospital.

How the cashless health plan works

Cashless health insurance makes access to quality treatment possible in the shortest span of time. On requirement, the policy holder makes their way to the nearest network hospital (the insurer has tie-ups with hospitals in every city) and submits the policy details. On confirming the details, the hospital admits the patient and fills out a form for the Third Party Administrator (TPA). The TPA then checks the policy terms and communicates whether the cashless claim may be entertained or not. The TPA may also set an upper limit on expenses to be borne by the hospital – the difference must be paid by the policy holder.

The benefits of the cashless health insurance policy

The best cashless policies today provide the following benefits, among many others:

• No medical test is required for enrollment, and you can get a sum assured of up to Rs 5 lakh
• There are no sub limits on hospitalisation coverage
• Charges are paid for room hire, ICU, day care procedures, domiciliary treatment, organ donor expenses
• Premiums on the policy are liable for tax benefits under Sec 80D
• Possibility to increase sum assured while renewing the plan

In addition, a policy holder may even time a surgical procedure for themselves or a loved one basis their own convenience, and if the procedure is entailed in the policy terms. Thus, cashless health insurance is the best answer to both emergency and timed medical calamities, and it helps policy holders save a lot of money while providing immediate treatment.

AVIVA's all new health care programme: The eligibility criteria you must know

AVIVA’s insurance plans take health insurance to the next level with superior products and easy eligibility criteria.

In times of rising inflation and high living costs, people are under tremendous pressure to create wealth for themselves and their loved ones. Single income families, especially, find the going very tough every month. Many people try to make an additional income by getting freelance work or getting part time assignments over the weekend.

But overwork and constant deadlines can take a toll on one’s health. Stress, anxiety, pollution, lack of exercise, consuming junk food, erratic sleeping hours, etc. contribute to ill health. Soon, one may be diagnosed with a critical illness that takes a lot of money out of their precious savings. Hence, it is prudent to take health insurance to save the high future cost of treatment, especially when dealing with critical illnesses.

Health insurance provides coverage against the risk of spending a lot of money for emergency medical procedures and diagnosis. Currently, the medical treatment and hospitalisation costs in India are quite prohibitive – thus, a reliable health plan such as those provided by AVIVA Health Secure range of health care can help pay medical bills and diagnostic charges. The policy pay-out is paid as a lump sum once the critical illness diagnosis is confirmed. Thus, the policy holder can start treatment at once, and also consult with the best specialists.

Thus, AVIVA health insurance provides the best ever solution to help you get timely access to good medical care. Consider the following eligibility criteria for AVIVA’s health care programme:

• Entry age for the policy: 18 years minimum and 55 years maximum
• Maturity age: 65 years
• Premium payment frequency: Half-yearly or yearly
• Tenures: Minimum 10 years and maximum 30 years
• Sum assured: Rs 5,00,000 minimum and Rs 50,00,000 maximum. This includes the critical illness cover that you take under another policy.
• Rebates: The policy gives you a tax rebate if you have a sum assured of Rs 10 lakh or more. 

* Refer to the premium quotation to calculate the instalment premium.

Thus, taking the AVIVA healthcare plan helps to pay the high costs of treating a critical illness – thus protecting your savings for other purposes.

5 Useful Tips for Finding Yourself the Right Insurance Policy

India has 53 registered insurance companies out of which 29 are non-life insurers and 24 companies offer life insurance. Between April 2015 and February 2016, premium income of more than Rs.1 trillion (US $15 billion) was recorded in India. By the end of 2020, insurance companies expect to increase their penetration of the Indian market by another 5%. Most companies offer additional advantages, like loan against insurance policy, making it very popular in the country. Currently, India represents the largest life insurance market, with around 360 million policies in action. With the emergence of more and more service providers, policy holders are getting better deals but it has also increased the number of frauds. So, it is very important to choose the right company as well as policy for yourself. Factors like benefits and premium should be considered.

Things You Should Keep in Mind

1. Analyze and Plan: Before you go to shop for clothes, you analyze exactly what you need. In the winter, you don't go looking for shorts. Insurance works in exactly the same way. It is important you do your research and plan accordingly. For example, which family member do you want to cover? Do you aim for the long term or are you looking for short term cover? This will help you narrow down the options.
2. Set Priorities: You need to understand the concept of 'sum assured'. It is the maximum amount that you can claim in a policy year for medical coverage or as the payment at the maturity of another policy. If you want more coverage, then you'll have to pay a higher premium. So, set your priorities from the very beginning.
3. Read the Clauses: It is very important to understand your policy and for that you need to read the terms and conditions very carefully. Most companies have a number of clauses that are very often difficult to understand. If you have any doubts, don't be shy to ask the agent or the insurer.
4. Look for Extras: Some of the policies offer extra benefits, like loan against insurance policy, and even offer discounts on premiums for some time. You may not want to claim these offers right away but they can be beneficial in future.
5. Go for a Trusted Brand: Most of the new brands try to lure customers by offering discounts but on most occasions, it is a trap. Do not fall for such offers. Do extensive research about the brand and prefer to go for an already established firm. 

Are you running your own business? This is for you

As the owner of a business, you are responsible for the company’s performance and employee welfare. This can take a toll on your health – hence, you need health insurance.

As the world shrinks and the Internet makes global communities come closer together, aspiring entrepreneurs are taking the leap from salaried jobs to starting their own businesses. The time is ripe to embark on one’s own business adventure and connect with the world to network and rake in the profits. The Internet, especially, has spawned several web-based businesses that transcend borders of geography and language as well.

However, the business dream comes with its own unique challenges. A business owner must necessarily start small – with a lack of much funding at the start of operations, every level of operation is on a small scale. Many new companies also do not get immediate business, which can further strain already strained resources. Many business owners perform multiple roles when their businesses are new. All in all, it is a stressful situation to run one’s own company.

If you are a business owner, you must consider buying health care insurance.

Why you need health insurance

You are under constant stress. Expanding your company’s reach, getting new contracts, working round the clock to fulfil current obligations, making enough money to pay staff salaries and office overheads and a million other tasks…everything can combine together to cause tremendous stress for you. From this stress stem diabetes, hypertension, indigestion, migraines and several health issues. Stress is responsible for the slow shutdown of the body’s systems, so your health suffers every day. If you fall ill, your health care insurance plan can safeguard you. 

You are responsible for your own health. Unlike a salaried job set-up, you no longer have company-sponsored health care insurance to fall back on. Since you are the owner of the business, you must protect your health yourself – and taking health insurance is the first step towards doing so. You must also make the time to exercise daily and eat balanced, home cooked meals so that your overall health is maintained.

You are responsible for your employees. Apart from managing your business processes and revenues, you must also manage your employees. This means that apart from creating a supportive and motivating work environment, you must provide employee health care insurance. Employees who receive health insurance from the office are more likely to stick on at the job and work harder, than those who are not. Most businesses that see a high attrition rate cite the lack of employee insurance as a reason.