Take A Super Top-Up Plan To Enhance Health Cover 

Jeebyam Borah

Can I get a super top-up health insurance plan on my existing health cover?

Yes, you can get a super top-up health insurance on your existing health plan, based on your age, medical history and current health.   
Here are some points to keep in mind while going for a super top-up plan:

1. It will have all the terms and conditions of starting a new health insurance policy, including the waiting periods (those that apply initially, for specifics and for existing diseases).  

2. With individual health insurance, an individual super top-up policy is available; with floater health insurance, you need to go for a floater super top-up policy.  

3. One needs to have at least a Rs 5 lakh-cover individually, and Rs 5 lakh multiplied by the number of members if it’s a floater plan. However, you can have higher cover depending on your income, lifestyle and paying capacity, and/or location.  

4. The existing health cover or lower can be considered as the deductible amount in the super top-up policy.  

5. Ideally, take the super top-up policy from the same insurer from where you have the existing policy for reduced paperwork and co-ordination.  

6. If you take the super top-up policy from another insurer, you may not get a cashless facility as the other insurer may not have a tie-up with the specific hospitals. Only if it is not feasible to take a super top-up from the same insurer should you go to another company. Or, you can consider increasing the coverage in the existing policy.  

7. Super top-up will be applicable once the deductible is exhausted during the policy period. Ideally, the super top-up policy issuance date should be on the policy anniversary of the existing policy. This is because of the way the deductible is considered to be eligible for a claim from the super top-up policy.

Uma S. Chander, CFP CM, Handholding Financials
To read the answer in more detail, go to bit.ly/Health-topup

Kapila Suraj

We as a couple plan to buy an apartment jointly in Bengaluru and want to apply for a home loan. Should we apply as co-borrowers?

There are various tax benefits available on housing loans to encourage people to buy their own home. Here are two:

Tax deduction of up to Rs 1.5 lakh on home loan principal repayment under Section 80C of Income-tax Act, 1961, and up to Rs 2 lakh on interest payment under Section 24(b).  

If both of you are earning, it is beneficial to apply as co-borrowers for a self-occupied house so that both of you get tax benefits (in proportion to share in EMI) on the principal amount repayment and the interest payment. Moreover, applying for a joint loan helps increase the eligible loan amount.

When taking a housing loan, keep in mind the following: the debt-to-income ratio should not be more than 20-35 per cent of pre-tax income, including all loans. If one person stops working, can the other pay the EMI alone, and what will be the debt-to-income ratio? Will the burden derail other life goals?

There are many other factors as well to look at before getting into long-term debt.

Hina Shah CFPCM, Financial Coach, LUHEM

Mohanlal Desai

An equity growth mutual fund has been giving low returns for two years—8 per cent average versus 10 per cent by other funds in the same category. Should I retain the fund or exit?

Investing in mutual funds depends on your goals and risk profile. Ask yourself, what is the purpose of this investment? This becomes the main criteria for choosing a fund.  

All mutual fund guides come with a disclaimer that past performance is not an indicator of future performance. Portfolios need to be monitored so that you can make well-informed decisions that lead to more risk-adjusted returns.  

Mutual fund returns depend on investment strategy and underlying securities, financial ratios and other factors. This data can help you check how the fund has fared across different market cycles. Also check for consistent performance. Every fund expects and assumes certain risks. So, risk-adjusted returns means that the fund makes strategies in such a way that it makes more returns against anticipated risks and downside. Look beyond absolute returns of the last two years and then decide.

See if the fund is performing better than the benchmark and the average of its peers. Review your portfolio at least once in six months based on the goals.

Hina Shah CFPCM, Financial Coach, LUHEM