SMART WAYS TO SAVE TAX





Choose the tax-saving instrument that best suits your needs and financial goals

Do-it-yourself tax planning can be rewarding and challenging.

Rewarding, because you can choose the tax-saving instru ment that best suits your needs. Challenging, because if you make the wrong choice, you are stuck with an unsuitable investment for at least 3-5 years. This is where our annual ranking of best tax-saving options can prove helpful. It assesses all the investment options on seven key parameters--returns, safety, flexibility, liquidity, costs, transparency and taxability of income. Each parameter is given equal weightage and a composite score is worked out for the various tax-saving options.

While the ranking is based on a robust methodology, your choice should also take into account your requirements and financial goals. We consider the pros and cons of each option and tell you which instrument is best suited for taxpayers in different situations and lifestages. We hope it will help you make an informed choice. Happy investing!

ELSS FUNDS

ELSS funds top our ranking because of their tremendous potential, high liquidity and transparency . The ELSS category has given average returns of 17.8% in the past 3 years. The 3-year lock-in period is the shortest for any Section 80C option.If you have already fulfilled KYC requirements, you can invest online. Even if you are a new investor, fund houses facilitate the investment by picking up documents from your house and guiding you through the KYC screening. ELSS funds are equity schemes and carry the same market risk as any other diversified fund.Last year was not good for equities, and even top-rated ELSS funds lost money.However, the funds are miles ahead of PPF in 3and 5-year returns.

The SIP route is the best way to contain the risk of investing in equity funds.However, with just three months left for the financial year to end, at best, a taxpayer will manage 2-3 SIPs before 31 March. Since valuations are not stretched right now, one can put in a bigger amount.

SMART TIP Opt for the direct plan. Returns are higher because charges are lower.

ULIP

The new online Ulips are ultra cheap, with some of them costing even less than direct mutual funds. They also offer greater flexibility. Unlike ELSS funds, where the investment cannot be touched for three years, Ulip investors can switch their corpus from equity to debt, and vice versa. What's more, there is no tax implication of gains made from switching because insurance plans enjoy exemption under Section 10 (10d). Even so, only savvy investors who know how to use the switching facility should get in.

SMART TIP Opt for liquid or debt funds of the Ulip and gradually shift the money to the equity fund.

NPS

The last Budget made the NPS attractive as a tax-saving tool by offering an additional tax deduction of `50,000. Also, pension fund managers have been allowed to invest in a larger basket of stocks.Concerns remain about the cap on equity exposure. Besides, the taxability of the NPS on maturity is a sore point. At least 40% of the corpus must be put in an annuity . Right now, the income from annuities is taxed at the normal rate.

SMART TIP Opt for the auto choice where the equity exposure is linked to age and comes down as you grow older.

PPF AND VPF

It's been almost four years since the PPF rate was linked to the benchmark bond yield. But bond yields have stayed buoyant and the PPF rate has not fallen. However, the government has indicated that it will review the interest rates on small savings schemes, including PPF and NSCs. If this is a worry, opt for the Voluntary Provident Fund. It offers that same interest rate and tax benefits as the EPF. There is no limit to how much you can invest in the VPF. The contribution gets deducted from the salary itself so the investor does not even feel it go.

SMART TIP Allocate 25% of your pay hike to VPF . You won't notice the deduction.

SUKANYA SAMRIDDHI SCHEME

This scheme for the girl child is a grea way to save tax. It is open only to girls below 10. If you have a daughter tha old, the Sukanya Samriddhi Scheme is a better option than bank deposits, child plans and even the PPF account. Ac counts can be opened in any post office or designated branches of PSU banks with a minimum `1,000. The maximum investment in a financial year is `1.lakh and deposits can be made for 1 years. The account matures when th girl turns 21, though up to 50% of th corpus can be withdrawn after sh turns 18.

SMART TIP Instead of PPF, put money in the Sukanya scheme and earn 50 bps more.

SENIOR CITIZENS' SCHEME

This is the best tax-saving instrument for retirees. At 9.3%, it offers the highest interest rate among all Post Office schemes. The tenure is 5 years, extendable by 3 years. Interest is paid quarterly on fixed dates. However, there is a `15 lakh overall investment limit.

SMART TIP If you want ot invest more than `15 lakh, gift the amount to your spouse and invest in her name.

BANK FDS AND NSCs

Though bank FDs and NSCs offer assured returns, the interest earned on the deposits is fully taxable. They are best suited to taxpayers in the 10% bracket or senior citizens who have exhausted the `15 lakh limit in the Senior Citizens' Saving Scheme.

SMART TIP Invest in FDs and NSCs if you don't have time to assess the other options and the deadline is near.

PENSION PLANS

Pension plans from insurance compa nies still have high charges whic makes them poor investments. The also force the investor to put a large portion (66%) of the corpus in an an nuity . The prevailing annuity rates ar not very attractive. Pension plan launched by mutual funds have lowe charges, but are MFs disguised as pen sion plans. Moreover, they are debt oriented plans so they are not eligibl for tax benefits that equity plans enjoy for tax benefits that equity plans enjoy.SMART TIP Invest in plans from mutual funds.They offer greater flexibility than those from life insurers.

INSURANCE POLICIES

Traditional life insurance policies re main the worst way to save tax. Still millions of taxpayers buy these poli cies every year, lured by the "tripl benefits" of life insurance cover, long term savings and tax benefits. Actu ally, these policies give very little cover A premium of `20,000 a year will ge you a cover of roughly `2 lakh. The re turns are very poor, barely 6% if yo opt for a 20-year plan. And the tax-fre income is a sham. Going by the index ation rule, if the returns are below th inflation rate, the income should any way be tax free. The problem is tha once you sign up for these policies, the become millstones around your neck

-SMART TIP If you can't afford to pay the pre mium, turn your insurance plan into a paid-up policy.

Akbar Badruddin Jiwani
Mobile: 09323500008 Email: abjiwani@gmail.com Website: bhanudevelopers.blogspot.com

"Success is the ability to go from one failure to another with no loss of enthusiasm." - Winston Churchill

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Take cover against disasters





You can't stop calamities but you can minimize their impact on your finances

It has taken a devastating earth quake to shake homeowners in In dia out of their slumber. Seeing the trauma and destruction in Nepal, everyone wants to know whether they can insure homes against earthquakes and how much would it cost.

Very few people take home insurance in India. "Even though it is very cheap, less than 1% of people who can afford home insurance actually buy this cover," says Tapan Singhel, Managing Director and CEO, Bajaj Allianz General Insurance Company .

This is surprising because India is disaster-prone. As much as 30% of the Indian landmass is prone to earthquakes of severe intensity. Another 27% is prone to moderate earthquakes.Nearly 12% of India is prone to floods and 76% of its coastline is prone to cyclones and tsunamis. "Even if someone buys home insurance, it is for a very short tenure. There is a greater need to buy a cover against disasters," says K.K. Mishra, Managing Director and CEO, Tata-AIG General Insurance.

How much it costs

A 1,500 sq ft house can be covered for `50 lakh against fire and other perils for less than `1,700 a year. If contents worth `10 lakh are included, the cost will go up by `400. You don't need to take a cover for the market value of the property but only for reconstructing it.Construction costs vary from `1,000 per sq ft for a no-frills structure to almost `3,000 per sq ft for premium.

Some companies offer discounts if you buy a comprehensive policy with additional coverage. We like the Householder Policy from Oriental Insurance that offers an array of 10 covers and gives discounts to buyers who tick on more than four. The policy covers nearly all the risks that your house and valuables are exposed to. A basic cover of `50 lakh for the building and `10 lakh for the contents is as cheap as `2,100 a year (see table). It can be bought online, though you might have to spend 40-50 minutes on drawing up an inventory of the items you need to cover.

As the cost of reconstruction keeps rising, you might have to increase the insured amount every few years. Some insurers offer discounts if you take a multi-year policy . If the premium for a `50 lakh cover is `3,800 a year, it will be 18% lower at `15,590 if you buy a fiveyear policy . If the escalation of rebuilding costs is a worry , HDFC Ergo has a policy where the sum assured goes up every year. The basic insurance cover rises 10% every year. The premium of the escalation option is higher at `19,100 compared to `15,590 charged for a normal `50 lakh cover for five years.

What gets covered

While all home insurance policies offer cover against earthquakes, some insur ers have a compulsory 5% deductible in case of damage due to an "act of God". An act of God is any event, especially a natural disaster, for which no individual can be held responsible. The deductible means that if your house is insured for `50 lakh, and it suffers a damage worth `20 lakh, the first 5% of the claimed amount (or `1 lakh) will be borne by you. Some insurers don't even have such deductibles. "Policies covering individual residences or dwellings with individual owners do not have compulsory deductibles. However, policies covering housing societies are subject to deductibles depending on the sum insured," says Subrahmanyam B, Head, Health & Commercial Underwriting, Product Development and Reinsurance, Bharti AXA General Insurance.

In some policies, this deductible can be customised. Raise the deductible, and the premium goes down.

What is not covered

While you can cover the contents of the house against damage and theft, some valuables are not covered. Cash, documents, share certificates and debit or credit cards are not included. Jewellery and other valuables are covered, but subject to ceilings. Some policies specify that the cover for jewellery will not exceed 25% of the total contents insurance cover sum insured or `1 lakh, whichever is lower. The individual responsible for the theft is also critical to the claim getting passed. "If the contents have been stolen by a relative or a household help your claim will not be admitted," says financial planner Pankaj Mathpal. When covering appliances and gadgets, ascertain the cost of replacing the item. An item is insured for its market value after depreciation. The insurance company will pay the amount required to restore an item to the condition it was in before damage.Simply put, a refrigerator or an airconditioner might have cost you `40,000 about five years ago, but its depreciated value will now be Rs 20,000-22,000.





Claim halved as biker didn't have helmet on





The Motor Accident Claims Tribunal on Wednesday halved the compensation to be paid to the kin of a biker who died on being hit by a cab in 2009, after it found he was not wearing a helmet at the time of the mishap. While the actual compensation worked out by the tribunal amounted to Rs 12.30 lakh, owing to the biker Jamil Shaikh's (23) contributory negligence, his family was awarded a compensation of Rs 6.15 lakh. The fleet cab company and the insurance firm will additionally have to pay Rs 2.30 lakh in interest.

Observing that the cab driver was not solely responsible for the accident , the tribunal said, "The unfortunate death of the deceased must be attributed to the non-wearing of a protective headgear by him, as his death has been found to have been caused by haemorrhage and shock due to head injury. The deceased should be held to have definitely contributed to his death by not wearing protective headgear while riding a motorcycle on a public road." Shaikh is survived by his wife, mother and a five-yearold son, all of whom filed the application before the tribunal in November 2009. The family alleged that on August 28, 2009, at about 6.15am when Shaikh was riding his bike at Vikhroli, he was hit by the cab, which the family claimed was driven negligently and was speeding.

A case was registered against the driver with the Vikhroli po

lice. The family said that Shaikh worked at an amusement park at Thane and earned a monthly salary of Rs 8,000.

The insurance company submitted that it was not liable to pay the amount as Shaikh had brought upon the accident himself, as he halted without giving any signal or any indication. It alleged that he gave virtually no chance to the driver of the cab to maneuver the vehicle to avert the impact.

The tribunal however, relied on the statement of the

witness who had found Shaikh lying injured by the side of his motorcycle. The witness said the bike was badly damaged at both ends and the cab was damaged in the front. The tribunal observed that the FIR clearly pointed to rash and negligent driving on the part of the cab driver. "I must, therefore, hold that the accident in question was caused on account of the rash and negligent driving of the offending motor taxi and non-wearing of protective headgear by the deceased in breach of the provision of the Motor Vehicles Act," the tribunal said.





Insurance claim's rejection due to `delay' not alright





`Treatment Went On For A Yr After Hospitalization'

A consumer forum has ruled in favour of a woman whose insurance claim was rejected by her insurer because it was filed 416 days after hospitalization instead of within the 30-day deadline.

The forum found that the complainant was under continuous treatment for her injury for more than a year.

It recently chastised National Insurance Co Ltd for repudiating the claim on technical grounds that "cannot be held as just and proper". "The insurance company adopted (an) unfair trade practice," said the South Mumbai District Consumer Disputes Redressal Forum, while directing the firm to pay Worli-based Jyoti Raut the insurance amount of Rs 39,439 along with compensation of Rs 12,000.

Raut was admitted in hospital on February 9, 2010, after she had a fall. When she was discharged the next day, Raut informed the insurer about the fall and the need for hospitalization and requested it for a claim form. She alerted it that as her treatment was on-going she would file the claim upon its completion. This point was iterated in letters on March 9, 2010, and March 7, 2011.

On April 25, 2011, Raut sent a letter claiming expenses incurred on the treatment that continued till March 31, 2011.

Two months later, however, the company repudiated the claim on the ground that the papers were not submitted within 30 days from the completion of the hospital treatment.

Raut lodged many protests with the insurer but when they were ignored she filed a complaint before the forum on July 11, 2012. The insurer, in response, argued there was no evidence to prove her continuous treatment till March 2011. "The last receipt of the doctor's clinic is dated September 9, 2010. It shows the treatment was completed," the company claimed.

The forum however pointed to bills showing that Raut had purchased medicines "on doctor's advice" on five different dates till February 2011.

"The evidence shows the complainant was under treatment till the end of March 2011 and that she incurred an expenditure of Rs 39,439 on treatment," it said.

It observed that Raut had informed the insurer that the doctor had advised her to continue treatment till March 2011. Thus, "it cannot be said that there was delay in submitting the claim on the part of the complainant," the forum said.





`Insurer can't deny claim citing lack of post-mortem'





A consumer forum has held that the absence of a post-mortem report cannot be a ground for repudiation of an accidental death insurance claim in cases where the police are sure about the cause of death and there is no confusion.

On Wednesday , the forum directed New India Assurance to pay the widow of a 45-year-old man who died of snake bite in 2008 the insured amount of Rs 5 lakh, along with a compensation of Rs 1.05 lakh. Holding the company guilty of indulging in unfair trade practice, the forum said, "Depending upon the situation and circumstances and reports of the medical officer, the hospital as well as the police, the claim should have been sanctioned on humanitarian grounds. There is no proof to show that there was any mischief or mala fide intention of the complainant in demanding the claim."

The forum rejected the insurance company's defence that it was not in the domain of the police to conclude the cause of death and that the job was of medical doctors, and that despite the advice of doctors, the woman--Dombivli resi dent Usha Bhoir--had failed to allow the post-mortem.

"The police are also a government and responsible investigative authority . As they were sure about accidental death, they did not go for post-mortem. So, merely saying that a post-mortem was not done and hence claim is repudiated is unfair," the forum said.

The forum observed that Bhoir could not have insisted on a postmortem and the final authority in the matter was the police. It pointed out that the police had recorded the statements of witnesses, conducted a panchnama and finally on July 10, 2008, had submitted a summary report to the sub-divisional magistrate, stating that the death was accidental.

Bhoir's husband Ashok had taken membership of a luxury club in Prabhadevi in 2007. The club had a tie-up with the insurance company and as per rules insured its members. In her complaint to the Central Mumbai District Consumer Disputes Redressal Forum in 2012, Bhoir said that on June 22, 2008, at 3pm, her husband had gone into the cattle shed on their premises, where he was bitten by a snake hidden in the grass. Ashok was taken to hospital, where at 9.15pm he suffered cardiorespiratory failure due to poisoning and died.





Weak monsoon may hit recovery India Inc Fears ‘Below Normal’ Rains Will Affect Demand, Sentiment

New Delhi: With the economic growth hovering around 5% and the job scenario remaining weak, a "below normal" monsoon will be the first challenge awaiting the new government that will take charge just before the rainy season sets in. The already-stretched finances of the Centre will only add to the pressure. 

    While economists warned that below normal rains do not necessarily mean a drought or significantly hit the growth rate, Corporate India is already talking about the monsoon further denting the already-battered sentiment and impacting sales at a time when it was sensing a reversal in fortunes. 
    Private agencies had warned of the monsoon being below normal and, on Tuesday, the India Meteorological Department (IMD) forecast that rains will be below the average level. Coupled with that is the fear of the El Nino weather phenomenon impacting precipitation further. 
    Videocon Group chairman V N Dhoot said that a bad monsoon may impact demand, especially in rural areas that depend on the farm sector. "It's not good news at all. Even though the dependence on monsoon has gone down, it will affect sentiments and it will come at a time when we are a little optimistic about a turnaround," added Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp, the country's largest two-wheeler maker. Rural areas account for 48% of the company's sales. 
    Pravin Shah, CEO of Mahindra & Mahindra's automotive business, said, "It doesn't have an immediate impact but it does impact sentiments." Hero's rival and former partner Honda isn't reworking its targets just yet, although Y S Guleria, the head of sales and marketing at HMSI, says that monsoon and economic growth are inseparable. 
    Economists are also not changing their forecasts just yet. "The government should be on alert, we should prepare ourselves to deal with the prospects of below normal rains but there is not need to panic," said Ashok Gulati, chair professor for agriculture at the Indian Council for Research on International Economic Relations (ICRIER). 
    There may, however, be some impact on inflation. While north-west India, which has better irrigation facilities, may not be affected significantly, Gulati said there may be some impact on the western region which grows oilseeds, cotton, sugarcane and onions. 
    With record food stocks, the government seems to be wellpositioned to deal with demand for grain. But a prolonged dry spell does impact milk production and may even hit prices of vegetables such as onions, which has been a political hot potato in recent years. 
    "It is early to assess the impact on growth, but it is a warning signal and there is a need to keep a watch on food inflation. It will be an important issue for the new government and it will have to take steps from day one," said A Prasanna, chief economist at ICICI Securities Primary Dealership. 
    But the impact on overall growth is not expected to be significant. "If the total rainfall is 95% of the average with even spread of space and time, then the impact will not be very significant on agriculture production," said D K Pant, chief economist and head (public finance) at India Ratings, while sticking to his forecast of 3% farm sector growth this year. 
    Dhoot cautioned that the government may have to increase spending in the rural areas to counter any negative fallout if the rainfall is highly deficient. Typically, in a raindeficient year, the government gets banks to restructure farm loans and spends more on job-generating schemes in areas where there is severe shortfall.

DARK CLOUDS OVER GROWTH?

Insurance firms now paying for bariatric surgery for diabetes

Mumbai: After years of looking at bariatric surgery as a cosmetic weight-loss procedure, Indian medical insurance companies seem to have changed their minds. They have begun reimbursing some patients who have undergone bariatric surgery — now classified as a metabolic operation that involves cutting or bypassing parts of the stomach and intestine — to control or even get rid of their diabetes. 

    K Satishan (name changed), a 62-year-old businessman from Pune who was a diabetic patient for 15 years, got Rs 5 lakh reimbursement from Bajaj Allianz after he and his doctors explained that the surgery was literally his last option. “I was on high doses of insulin and oral medication and yet my sugar levels were four times the normal one,” said Satishan. 
    While bariatric surgeries essentially lead to weight loss, a welcome side-effect has been the control of diabetes and hypertension. 
    These surgeries were initially recommended for morbidly obese people, but in the last five years, they are being offered to diabetic patients who are not obese. 
    “Satishan was weighing 90-odd kilos. His weight was not as much a problem as his diabetes and hypertension were,’’ said Dr Shashank Shah, the metabolic surgeon from Pune who operated on the businessman. 
OPERATION SUCCESSFUL 

• There are 60 million people with diabetes in India 

• Bariatric or metabolic surgery is considered appropriate treatment for people suffering from type 2 diabetes and obesity 

• The surgery involves cutting or bypassing a portion of the stomach 

• Doctors say it triggers hormonal changes, makes the intestine work harder and faster, leading to reduction of weight and blood sugar ‘Payout on case-to-case basis for op’ 
    Another of Shah’s patients, Somnath Holkar, got reimbursed from United IndiaInsurance after six months of explanations. “I underwent the operation seven months ago and got the reimbursement last month,” he said. 
    Satishan recalled how he took his blood sugar and pressure readings every day and showed the three-month chart to the insurance company. “I don’t take any diabetic pills now. The company even interviewed my doctor before agreeing,” he said. He was operated in May 2013 and got his reimbursement recently. 
    Incidentally, the Central Government Health Scheme (CGHS) in December declared that it would fund bariatric surgeries for current and former government employees. Dr Ramen Goel, a metabolic surgeon from Mumbai, said if CGHS can fund surgeries for its employees, insurance companies should take the cue. 
    Sanjay Datta from ICICI Lombard said medical insurance companies have begun reimbursing bariatric and metabolic surgeries on a case-tocase basis. Metabolic surgery for diabetes is still in the trial stage, with many medical associations admitting that longterm studies are needed before accepting surgery as a cure for diabetes. Hence, many patients who have undergone metabolic surgeries in the last five years have got reimbursements only after moving consumer courts. “Many of my patients moved the consumer courts to get insurance reimbursement,” said Goel. 
    Doctors hope insurance payoffs will become the trend, especially because India has over 60 million diabetes patients. Shah, who has operated on 800 patients for diabetes, said many of them are now approaching insurance companies. “A patient who is scheduled to undergo surgery in Fortis Hospital in Mulund is awaiting hisinsurance company’s decision,” he added. 
DOC’S ADVICE 
    The International Diabetic Federation (IDF) says surgery can be offered for people with a body mass index of 35 kg/m2 or more 
    Among Asians, especially Indians, BMI points may be reduced by 2.5 kg/m2 
    IDF says surgery should be considered as an alternative treatment option in patients with a BMI between 30 and 35 kg/m2 when diabetes cannot be adequately controlled by optimal medical regimen, especially in the presence of other major cardiovascular disease risk factors

'If insurance policy is unclear, benefit must go to consumer'

Chennai: If there is any ambiguity in the terms of an insurance policy, the benefit should go to the consumer, a consumer forum here has ruled, asking aninsurance company to pay the entire medical claim amount to a man who underwent a surgery. 

    Manicklal Rathi, 69, took a mediclaim policy from National Insurance Company Ltd at an annual premium of Rs 28,000 under which he was covered up to a medical expenditure of Rs 4 lakh. Rathi, who had a policy for Rs 2 lakh since 2000, enhanced the cover to Rs 4 lakh in February 2010. Two months later, he underwent a knee replacement surgery, incurring an expenditure of Rs 2.69 lakh. 
    However, the company did not settle the full amount and withheld Rs 79,131. The company did not respond to his representations, prompting him to approach the Consumer Protection Council, Tamil Nadu, which filed a complaint on his behalf at the district consumer disputes redressal forum, Chennai (North). 
    In its reply, the company said that according to the terms of the policy, it could not reimburse the entire amount during the initial four years of the policy period. Further, it argued, Rathi had “already submitted a discharge voucher” for the sum he received and hence cannot stake claim for more. 
    Quashing the company’s arguments as “unsustainable” recently, the bench comprising president R Mohandoss and member T Kalaiyarasi found it guilty of negligence and deficiency in services. It directed the company to reimburse Rs 79,131 along with an interest of 9%. The forum also slapped a fine of Rs 5,000 on the company for deficiency in services and awarded Rathi another Rs 2,000 as case costs.

Insurance firms now paying for bariatric surgery for diabetes

Mumbai: After years of looking at bariatric surgery as a cosmetic weight-loss procedure, Indian medical insurance companies seem to have changed their minds. They have begun reimbursing some patients who have undergone bariatric surgery — now classified as a metabolic operation that involves cutting or bypassing parts of the stomach and intestine — to control or even get rid of their diabetes.      K Satishan (name changed), a 62-year-old businessman from Pune who was a diabetic patient for 15 years, got Rs 5 lakh reimbursement from Bajaj Allianz after he and his doctors explained that the surgery was literally his last option. “I was on high doses of insulin and oral medication and yet my sugar levels were four times the normal one,” said Satishan.      While bariatric surgeries essentially lead to weight loss, a welcome side-effect has been the control of diabetes and hypertension.      These surgeries were initially recommended for morbidly obese people, but in the last five years, they are being offered to diabetic patients who are not obese.      “Satishan was weighing 90-odd kilos. His weight was not as much a problem as his diabetes and hypertension were,’’ said Dr Shashank Shah, the metabolic surgeon from Pune who operated on the businessman.  OPERATION SUCCESSFUL  • There are 60 million people with diabetes in India  • Bariatric or metabolic surgery is considered appropriate treatment for people suffering from type 2 diabetes and obesity  • The surgery involves cutting or bypassing a portion of the stomach  • Doctors say it triggers hormonal changes, makes the intestine work harder and faster, leading to reduction of weight and blood sugar ‘Payout on case-to-case basis for op’      Another of Shah’s patients, Somnath Holkar, got reimbursed from United IndiaInsurance after six months of explanations. “I underwent the operation seven months ago and got the reimbursement last month,” he said.      Satishan recalled how he took his blood sugar and pressure readings every day and showed the three-month chart to the insurance company. “I don’t take any diabetic pills now. The company even interviewed my doctor before agreeing,” he said. He was operated in May 2013 and got his reimbursement recently.      Incidentally, the Central Government Health Scheme (CGHS) in December declared that it would fund bariatric surgeries for current and former government employees. Dr Ramen Goel, a metabolic surgeon from Mumbai, said if CGHS can fund surgeries for its employees, insurance companies should take the cue.      Sanjay Datta from ICICI Lombard said medical insurance companies have begun reimbursing bariatric and metabolic surgeries on a case-tocase basis. Metabolic surgery for diabetes is still in the trial stage, with many medical associations admitting that longterm studies are needed before accepting surgery as a cure for diabetes. Hence, many patients who have undergone metabolic surgeries in the last five years have got reimbursements only after moving consumer courts. “Many of my patients moved the consumer courts to get insurance reimbursement,” said Goel.      Doctors hope insurance payoffs will become the trend, especially because India has over 60 million diabetes patients. Shah, who has operated on 800 patients for diabetes, said many of them are now approaching insurance companies. “A patient who is scheduled to undergo surgery in Fortis Hospital in Mulund is awaiting hisinsurance company’s decision,” he added.  DOC’S ADVICE      The International Diabetic Federation (IDF) says surgery can be offered for people with a body mass index of 35 kg/m2 or more      Among Asians, especially Indians, BMI points may be reduced by 2.5 kg/m2      IDF says surgery should be considered as an alternative treatment option in patients with a BMI between 30 and 35 kg/m2 when diabetes cannot be adequately controlled by optimal medical regimen, especially in the presence of other major cardiovascular disease risk factors

Buying a back-dated insurance policy? While it's legal to purchase an insurance policy with a back date, remember that it may not always be beneficial for the buyer

Wouldn’t it be great if you could turn the clock back? You could make a lot of money by investing in the right stocks. While you can’t go back in time when it comes to stock investments, you can buy certain lifeinsurance policies with a back date. Back-dating of a life insurance policy is a perfectly legal and standard practice in the insurance industry. So, the new plans launched by insurance companies in the past 1-2 months can be bought with any date in the financial year starting 1 April 2013.  Is back-dating useful?  Back-dating is useful in certain situations. A life insurance policy is not the best way to save tax and there are better, more flexible and lucrative options to do so. Even so, millions of taxpayers buy life insurance to save tax. If a taxpayer needs to exhaust his Section 80C limit through a life insurance policy this year but wants to pay the premium on a monthly or quarterly basis from next year, he will find back-dating useful. He can pay the premiums for this year at one go, and from next year, he can pay them whenever they are due.      It is also useful in case the buyer has just crossed the minimum age for buying a certain policy.      There are also sentimental reasons for back-dating. Sometimes, buyers want their insurance policies to be issued on an important date during the year. It could be a birthday, wedding anniversary or any other date with emotional value. This also ensures that the maturity of the policy coincides with that important date. It also sets a reminder for the premium.  Look before you leap  Going back in time also reduces the waiting period for the policyholder. If you buy a money-back policy in March 2014, you will get the first tranche (which is 20% of the sum assured) after five years in 2019. However, if you back-date the policy to April 2013, you will get the money in four years and one month, in April 2018.      Before you are led into believing that this is a great way to get your money back faster, do the math. The next premium becomes due in a month in April 2014. Also, you are charged a 10% interest on the premium you pay for the back-dated policy. “It makes little sense to pay 10% interest on a policy that earns you only 6-7%,” says a Delhi-based insurance expert.      If the back date is more than one month away, the buyer is charged a 10% annual interest on a pro-rata basis. So, if you want to back-date a policy by three months, be ready to pay an interest of 2.5%. The Anand Money Back package, a combo of two money-back plans and an endowment policy, being hawked by LIC agents, has one plan dating back to April 2013. The premium will be due next month.      Incidentally, the interest on the back-dating kicks in only after 30 September. Till this cut-off date, the LIC does not charge any interest even if the policy is back-dated by 5-6 months. There is also no charge if the back-dating is for less than a month.  Zero sum game  Insurance agents use back-dating to lure buyers. Insurance companies base their premiums on the policyholder’s age. LIC, for instance, goes by the last birthday of the buyer. If the policy dates back to before your birthday, the premium will be lower. However, this is a zero sum game. In your quest for a lower premium rate, you will end up paying extra premium. This is why back-dating works only in endowment and money-back plans. Back-dating a term plan is an exercise in futility because the coverage for the entire back-dated period effectively goes waste.

Brutal Arctic blast leaves 187m shivering in US At -16°C, NY Breaks 118-Yr-Old Record Of Lowest Temperature

New York: A deadly blast of arctic air that shattered decades-old records as it gripped the middle US moved eastward on Tuesday, cancelling thousands of flights, paralysing road travel and closing schools and businesses. 

    Forecasters said some 187 million people could feel the effects of the "polar vortex" by the time it spreads across the US. New York's Central Park 
hit a record low temperature for the day of -16°C, shattering a 118-year-old record, but with winds gusting to 51kmph conditions felt far colder, according to the US National Weather Service. The cold broke records in Chicago, which set a local record on Monday at minus -27°C, and elsewhere. 
    Shelters for the homeless were overflowing due to the severe cold brought by a polar air mass that produced the coldest temperatures in two decades and at least four deaths. 
    Temperatures were expected to be 14°-19° celsius below normal from the midwest to the southeast, the National Weather Service warned. 
    After running into unpassable snow and ice, three Chicago-bound Amtrak trains came to a halt on Monday afternoon, stranding more than 500 passengers overnight. They had heat, water, lights and toilet facilities, according to Amtrak. As of Tuesday morning, passengers on two trains, which spent the night on the tracks in Bureau County, Illinois were being transported to Chicago by chartered bus, an Amtrak spokesman said. More than 15,000 customers in Indiana remained without power. 
    In the normally mild south, Atlanta recorded its coldest weather on this date in 44 years, when the temperature dropped to -14°C. Wholesale electricity prices in the central and eastern US spiked far above their normal seasonal level as homes and businesses needed to use more energy to warm buildings. 
    The deep freeze snarled many Americans' morning commutes with icy or closed roads and flight delays on Tuesday, with some 1,987 US flights cancelled and roughly 1,028 delayed, according to FlightAware.com. Major US cities from the midwest to the east coast were in the grip of temperatures below freezing, with Chicago at -23°C, Detroit -24°C, New York -14°C, Washington -13°C and Boston -11°C. AGENCIES 
Oil prices shoot up 
    The price of oil rose to near $94 a barrel on Tuesday as unusually cold weather in the US was expected to fuel demand for energy. By mid- afternoon in Europe, benchmark US oil for February delivery was up 42 cents to $93.85 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 53 cents to settle at $93.43 a barrel. AP

FREEZE FRAME

NEW RULES Reliance Life to launch 25 products in 3 months

Mumbai: Reliance Life Insurance, part of the Anil Ambani-run Reliance Capital, on Thursday said that over the next three months it would launch 25 insurance products under the new rules that are applicable from January 1. Subsequent to that, it also plans to approach the Insurance Regulatory and Development Authority (IRDA), the sector regulator, for its nod to launch more products. 

    The company also said that it is increasing its focus on more customer-centric initiatives, some of which are being adopted from its foreign partner Nippon Life, the largest insurance company in Asia. "We have received most of 
the product approvals from IRDA and will be launching these over the next three months," said Anup Rau, CEO, Reliance Life Insurance. "We will largely focus on traditional plans and continue to provide simple and need-based solutions to customers." 
    The additional products would include online term 
policies, some health insurance, pension and ULIP products, which will help it expand its product suit. "Traditional plans will contribute 80% while the unitlinked plans will contribute around 20% to the top-line in the new product environment," Rau said. 
    The new guidelines have segmented life insurance products into three broad categories — traditional insurance plans, variable insurance plans and unit-linked insurance plans. 
    Rau feels that the new regulations would help serious distributors to remain in the industry, improve the quality of advice, take the market more towards long-term policies, and also keep a check on recklessness with capital that was visible in some cases. "People will be more prudent with their capital now," he said. As part of its increased focus towards customers, Reliance Life has started a pre-insurance verification process.

CEO Anup Rau

Your vehicle insurance details will soon be just an SMS away

HYDERABAD, NOV. 6:  

Soon, when a traffic policeman asks for your car or bike insurance, you won't have to worry if you do not have the papers with you. A simple text message from your mobile phone will retrieve the details instantly, thanks to an IRDA initiative.

"We will be providing vehicle insurance information to all the stakeholders through Short Messaging Service (SMS) and web-based applications of the Insurance Information Bureau,'' said M. Ramaprasad, Member (Non-Life), Insurance Regulatory and Development Authority (IRDA), speaking to Business Line on Wednesday.

The beta version of the service has already been launched while the web-based application can be accessed anytime on the portal of the Insurance Information Bureau.

The database of all insured vehicles across the country is now available in digitised form and regularly updated. Until now, verification was done only by checking a hard copy of the insurance policy.

The digital service is beneficial to all the stakeholders. . "In case of an accident, victims can get to know the insurance company details if they know the number of the vehicle,'' said the IRDA official.

"We are talking to Road Transport Authorities and police in different States to share data so it will be easy to track down uninsured vehicles,'' he said. Some components of motor insurance, such as third-party insurance, are mandatory.

It would also help insurers, which sometimes have to grapple with multiple claims in damage and theft cases. This can be brought down if data on claims are available.

POLICY DATABASE

As the system will have a database of insurance claims made/honoured, cases of bad or negligent driving can be ascertained by the insurers before deciding on the premium to be charged.

IRDA is monitoring the submission of data by each underwriting office on a daily basis to ensure the smooth functioning of the system.

Med insurance: Can’t pre-declare rates, cos tell HC

Mumbai: The General Insurance Council (GIC) representing 27 non-life insurance companies told the Bombay high court on Thursday that it cannot pre-declare package rates for 42 standard ailments in policy documents.      A division bench of Chief Justice Mohit Shah and Justice M S Sanklecha was hearing a public interest litigation filed by activist Gaurang Damani on medical insurance woes faced by people. 'Pre-declare insurance rates for transparency'  Mumbai:An HC bench of Chief Justice Mohit Shah and Justice M S Sanklecha at a hearing on October 22, 2013 had made insurance companies parties to a PIL on medical insurance woes, seeking that they pre-declare their package rates.      Expressing the inability of the firms to implement the court's order, GIC's advocate Asim Vidyarthi said: "It is difficult to grade hospitals. Also, hospitals do not come under any common regulatory authority and do not accept package rates proposed by insurance companies."      He also said insurance firms cannot work out package rates for "so many ailments". This was contradicted by Damani, who said that the National Insurance Company has a contract with the state for the Jeevandayi Arogya Yojna, where they have declared package rates for 971 procedures. Vidyarthi sought time to file a detailed affidavit elaborating reasons for refusal to pre-declare package rates.      Damani submitted that package rates should be pre-declared in order to bring transparency to the consumer who will know the exact amount to be reimbursed. "Then the consumer can decide whether he can take treatment at a hospital like Breach Candy or a local nursing home," said Damani, adding that a dispute on this has been going on for several years between hospitals and insurance firms. "Insurance companies can declare package rates according to the policy's sum assured," he added.      The court also asked the Insurance Regulatory and Development Authority (IRDA) why it does not put a clause on pre-declaration in the regulation itself so that insurance firms have to comply. IRDA's advocate Paritosh Jaiswal said the authority accepts the court's order but insurance firms have expressed their inability to do it. "You are not doing it because you think it is the court's baby and not yours," remarked Justice Shah. The next hearing is on January 9, 2014.— Rosy Sequeira

WOMEN IN CHARGE ‘Social biases raise challenges for women’

Bangalore: "If you look at where I have been lucky, it is in my underlying drive to keep going when things become difficult, because I wanted to be a part of making something happen, of being involved in the healthcare world." 

    That's Terri Bresenham, president & CEO of GE Healthcare India. Bresenham came to India two years ago to take on this role. Prior to this, she was vice-president of molecular imaging for GE Healthcare globally, where she led the company's exploration into detecting disease earlier. 
    Bresenham joined GE, soon after her university, as an Edison Engineer. GE's Edison Engineering Development Programme is an intensive programme for college graduates who have a passion for technology, and a drive for technical excellence. She then progressed through engineering and product management roles, and went on to lead sales & marketing of GE's women health business for the introduction of digital mammography, and GE's Lunar Inc for solutions in osteoporosis and metabolic health. 
    Bresenham has three daughters. She says in her career, some of the most challenging times came when she and her husband decided to start a family. She had her first child four years into her career. 
    "That time, the insurance coverage was for 24 hours in hospital, not from the time you were admitted and up to the birth of the baby. Unfortunately, my first child had a long labour, so I didn't stay in hospital 
very long after I gave birth. I had a healthy baby. You never know how you feel about having a child, but I remember distinctly that after the third day I was feeling bored and wanted to go back to work. I did go back to work fairly soon after that," she says. 
    She also remembers an instance when a male colleague, whose wife was pregnant at the same time that she was, asked Bresenham, "So you're looking forward to staying home?" She replied she was coming back. He said his wife was looking forward to staying home. "I said it's good for her. I asked him whether he was going to stay home. He said of course not. I said that's how I feel." Social biases like these, she says, raises challenges for women. 
    She says the fastest career 
progression in the US happens typically between ages 30 and 40. But that's also the time when couples start families. 
    "I think this is why women have to stay in the workforce during that period even though it's challenging. So much of learning happens in that time frame, you get so many mid-tier roles and responsibilities. If you can survive that, you get enhanced opportunities, can go to whichever level you desire." 
    She said she was able to overcome the challenges partly because of the tremendous support from her husband. "We also had wonderful support structures. We didn't have the support of the extended family, but we had great caregivers who were like adopted family." 
    Bresenham says women in India perhaps face more challenges than women elsewhere. "The social structures are harder for women in India. There are expectations outside work. In Europe and US, there are support structures like day care centres in companies. There are a lot of areas where kids get support from more than just their parents. There is general acceptance of women not being primary caregiver at all times."

NEVER SAY DIE: GE Healthcare India president & CEO Terri Bresenham

Know thyself—the new mantra for lifeloggers

Wearable tech devices now track every move you make — from heart rate and footsteps to calories burnt. Even the number of times you slouch in the office chair is recorded by a sensor. An always-on society is busy converting life into bytes of data     British TV show 'Black Mirror' is about a dystopian future, one that illustrates the dark side of technology and where it can take us if we don't watch out. One of the episodes is set in an alternate reality in which an implanted grain records everything you do, hear, see or experience — creating the ultimate life log.      And we are well on our way there. A life log — or a daily diary — is nothing new but technology has taken the idea and sucked all approximation out of it. It has made it exact: life as a pie chart or a bar graph. How many steps did you walk today? How much time did you spend in transit this month? Did you play enough sport this week? What was your heart rate at 9 am today? What was your temperature? All these questions are being answered by numerous devices strapped on various body parts — from bio-sensing t-shirts and posturecorrecting straps to heart rate monitors and pulse-measuring watches. Taking lifelogging to a new extreme are tiny cameras that automatically take a photo of your existence every few seconds of the day.      "So, do you remember what you were doing this day last year?" asks Vishal Gondal, entrepreneur and angel investor who swears by his devices. "I do because I check in everywhere I go. I can just go to Facebook to see what I was doing. I have over 2,000 food photographs. I can tell you exactly where I was, who I was with, what I ate, how long it took me to get there and every detail of the rest of my day."      Gondal uses a water bottle that gives him a daily target of water intake, a Lumoback that reminds him to sit up straight every time he slouches, a Basis B1 watch that is a wristbased health tracker and a Fitbit Flex that measures his sleep and activity. He is eagerly awaiting Scanadu Scout that can measure all body vitals just by resting on the forehead.      The fascination with what has been described as "turning warm flesh into cold arithmetic" is now a movement — the quantified self movement . 'Numbers don't lie' is the primary motto behind self-quantification. And nothing is more satisfying to a number geek than a pattern. As most converts say — what cannot be measured cannot be managed. And much of self quantification's goal is self improvement. Asfaq Tapia, 30, who works in digital advertising in Mumbai, wanted to lose weight and sleep better. His Fitbit Flex helped him lose 6 kg in five months and change his sleep habits. "I like measurable results. My job involves numbers. I know how many people visit a website also, but I don't know anything about my body. That is the first thing I should be tracking." Tapia is also a member of the self-quantification group in Mumbai that now has 100 plus members.      Kuldeep Dhankar, 34, employed with a telecom company, has been tracking his life since 2005, much before self-quantification became a way of life. He converted his father, an ex-navy man, also. "I gave him this watch that measures heart rates and sends all information to the phone via Bluetooth," says Dhankar.      Gondal also converted his father to a heart rate monitoring watch after his recent surgery. "His resting heart rate went up to 100. When I took all the data to the doctor he was surprised that I could do this. Dad's HR went up in afternoons and evenings. So, they tried a different medicine which worked well," says Gondal.      Most of these self quantification devices veer towards health and lifestyle improvement. Some journaling apps do help users track their daily schedules — time spent with family, at work, in transit, in the park, on the phone — but most are geared towards health analytics. "There was a time when these would be only in the hands of doctors but increasingly these technologies will be in the hands of the consumer. By monitoring groups across geographies on their behavior we will be able to not only prevent but also to predict disease," says Prof Ramesh Raskar, MIT Media Lab, who believes that Fitbit-like devices are only the beginning. Gondal hopes that soon insurance companies also start linking such health measurements toinsurance premiums.      However, relentless quantification can be tiring. Skeptics say that such servility to gadgets erodes the spontaneity to life. Farzana Dudhwala, a 24-year-old PhD student at Oxford University who is studying the relationship between self-quantifying technologies and the self, says that she was bored of Fitbit in two months.      "The device was good to understand where I stood (baseline) compared to what the device said wasgood for me (10,000 steps). So, for instance, if I went for a long walk and didn't take the device with me, I saw that I would get demotivated from the walk and I didn't want that," says Dudhwala.      Self quantification converts understand this danger only too well. Dhankar uses a Withings smart body analyzer (like a weighing machine) that plots a weight curve on how things are progressing. The graph has helped him change his weekend pattern because he noticed that his sedentary weekends pushed up his weight on Mondays and Tuesdays. "But I treat all this data as background info. I am not always looking at it. And that is the self-quantification challenge. You have to see past the numbers," says Dhankar.      Dudhwala is tackling one of the most important aspects of selfquantification — about what it does to the 'self' and whether technology constructs our idea of ourselves and our wellness. "For examples, the Fitbit says that I 'should' take 10,000 steps a day. If you take 11K, do you think you have improved further? It only looks like numbers but it is a sort of self-knowledge through numbers. But I would argue that numbers are just a tool."      So, what could diligent, meticulous logging of every waking and sleeping second lead to? Converts say it could be any sort of life change that you need but cannot see. Gondal says life logs will also mean something to future generations. "Cave paintings were life logging for cave men," he says.

Going abroad? Pay for insurance from own a/c

Mumbai: Buying international plane tickets for family members online is a breeze, but buying overseas mediclaim cover for others now requires advance planning. Insurance companies are insisting that electronic payment for policies must come from the policyholder's own account. 

    Nikhil W, who was trying to buy a last-minute overseas insurance policy for his father, discovered that the online system was not accepting a payment from his account. His parents who were travelling on their own had not activated any electronic payment services. Earlier, he had paid for his parents when he was part of the group that was travelling. 
    Insurers are invoking the principle of 'insurable interest' for rejecting payment through third-party accounts. Insurance interest means that the person buying insurance needs to have a financial interest in the subject of insurance. 
    This restriction is a challenge for those who have not bridged the digital divide considering that online payments are becoming the norm for many categories of policies such as auto, health and overseas travel. Also, in cases of policies where the commission is low, the insurance agent is reluctant to make the effort to collect the cheque. 
    "Any person paying the premium needs to have insurable interest. The insurance policy is a contract between the insurer and the policyholder and third-party cheques are not accepted," said K K Mishra, MD, Tata AIG General Insurance. He added that in the case of people who do not have net banking or credit cards, the company sends across a representative to collect the cheque. 
    According to Sanjay Datta, head of underwriting and claims at ICICI Lombard, the company accepts cheques of family members in family floater policies, but unrelated parties cannot may payments in respect of individual policies. He, too, cites the principle of insurance interest for rejecting third-party payments. In the case of life insurance too, almost all companies — including LIC — require that the online premium be paid from the policyholder's account. 
    According to regulatory sources, the main reason behind the ban on third-party cheques is to avoid disputes. In the case of cheque payment, the insurance company is on risk from the time it receives the cheque. In case the cheque is not honoured, the company can commence recovery proceedings under Section 138 of the Negotiable Instruments Act. But if the cheque is paid by athird party, recovery becomes difficult. 
    However, a retired regulatory official said, "How does it matter if the payment is made by a third-party. The insurance company does not have any problem accepting a demand draft which could have been paid by a third-party or if a third-party has deposited funds in the buyer's account". SEEKING 'INSURABLE INTEREST' 

• Third-party payments are being rejected over the 'insurable interest' principle — person buying insurance needs to have a financial interest 

• So buying an overseas mediclaim for a family member who hasn't activated any e-payment system, like your parents, is becoming tougher 

• Even life insurers like LIC require that online premium payments originate from a policyholder's own account 
• But view in regulatory circles is that this is not needed as insurers do not know who deposited funds in the account