Medical cover
Both Nikita and Abhishek were covered by their company. However, in the unfortunate event of job loss, they would have to fend for their medical expenses themselves; not just theirs but also their ageing parents' who were more prone to health hazards.
Hence a health cover was recommended. Sometimes, however, the cover provided also falls short in the event of any chronic health hazard and it is only prudent to have an additional cover.
Abhishek's mother was less than 60 years; so we suggested an independent medical cover to be taken for her to protect against any job loss situations. We also suggested a family floater plan for them, having a nominal premium. This also provided them a tax benefit.
Tax Tip: The premium paid towards medical insurance qualifies for deduction U/S 80D to the extent of Rs 15,000. Further, an additional Rs 15,000 is allowed for parents under the same section.
Life cover
This was another area which is often shunned. While availing a loan, one should look at life cover on a parallel basis. Abhishek & Nikita would have an outstanding loan (car + home) of Rs 42.5 Lakh (Rs 2.5 lakh on their car + Rs 40 lakh on their proposed home).
After evaluating the capital required for monthly expense, for needs and coverage of loans, we suggested an immediate term cover for about Rs 50 Lakh (for Abhishek) and Rs 30 Lakh (for Nikita). The split of life cover amongst Abhishek & Nikita was arrived at after careful consideration of their contribution pattern towards monthly expenses, loan liability etc.
Also see: Seven golden home loan rules
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