—Title withheld on request

There isn’t any particular provision within the Revenue Tax Act concerning the exemption for profit proceeds from fastened profit insurance policies. Reimbursement of medical health insurance claims is extensively thought of tax-free, as this can be a reimbursement of bills and never an earnings. Additionally, loss of life profit beneath life insurance coverage insurance policies are particularly exempt beneath Part 10(10)D.

If an individual who purchased a brand new automotive with complete insurance coverage of three years has died, can the kin shut the insurance coverage and declare refund (with the brand new proprietor buying recent insurance coverage) or ought to or not it’s transferred to the brand new proprietor with a reputation change endorsement?

—Vivek Jain

Should you promote your automobile, you’ll be able to cancel your coverage and declare a refund. Within the case of a three-year coverage, you may be entitled to get a whole refund of premium for the entire yr left within the block of three years. Moreover, if there was no declare, you may be entitled to a short-period refund for the unexpired partial yr for the personal harm part. The quick interval scale is a pre-defined desk of the proportion of premium to be charged for part-year. Refund as per quick interval scale shall be lesser than that on a pro-rata foundation.

What’s the position of ratios in a life insurance coverage coverage? How can they show you how to purchase the proper well being coverage?

—Vishal Kant

Ratios are efficiency indicators that you should use to guage insurers. The Insurance coverage Regulatory and Improvement Authority of India (Irdai) in its annual report publishes these metrics for all insurers. Declare settlement ratio is one good metric to shortlist insurers. Insurers with greater than a 95% declare settlement ratio are more likely to provide a greater claims expertise to policyholders.

Abhishek Bondia is principal officer and managing director, SecureNow.in.