Outlook English - Print Subscribers Copy Outlook English, 26 February 2018 | Page 61

Super Top-up premium for Senior Citizens (Two Individuals)
`7-lakh Cover
with `3 lakh
deductible
health Insurance product
HDFC ERGO Health Medisure Super Top-up Policy
`10-lakh
Cover with
`5-lakh
deductible
`25,960 `15,576
Apollo Munich Optima Super `31,807 `30,044
ICICI Lombard Health Booster `31,317 `29,498
a year, from the previous `10,000 a year. This is a useful
benefit that can result in a saving potential of `8,000
on taxes if the person falls under the 20 per cent tax
bracket. It is safe to say that majority of senior citizens
are big investors in fixed return-generating instruments
like fixed deposits and post office schemes, hence they
will benefit from this exemption.
The next important benefit is the deduction (under
Section 80D) available for medical insurance/medical
expenditure, which has been increased from `30,000 to
`50,000. This is a useful and timely increase as medical
insurance premium for a senior citizen couple comes
close to the `50,000-mark for a cover of
`5 lakh. Now is the time for senior citizens with low
health insurance covers to review and increase their
sums assured. This will be a prudent thing to do. If they
feel the need for a higher insurance cover, they can opt
for a super top-up cover on their existing basic cover.
For instance, if they have a basic cover of `3 lakh each
under a medical insurance policy, they may opt for a
super top up cover of `7 lakh with a deductible of
`3 lakh. This will effectively cover them for `10 lakh.
Now, the premium will exceed `50,000 per annum, but
they will also be covered for `10 lakh each. This could
be a good point to review, and they can increase their
medical insurance cover as per their requirements.
In times of low interest rates, senior citizens, essentially
those who depend on interest from bank fixed deposits
and similar investments for their sustenance, have been
in a fix. The Pradhan Mantri Vaya Vandana Yojana (
PMVVY ), which was introduced for senior citizens last
year, sought to address this to an extent. This scheme
offers 8 per cent interest to senior citizens, which is
better than many options available otherwise. But the
limitation was that one could only invest up to `7.5 lakh.
In this Budget, the limit has been doubled to `15 lakh,
which comes as a major relief for the elderly investors.
So, a senior citizen couple can now invest up to `30 lakh
in PMVVY, which looks like a good idea in the current
interest rate scenario.
The limit of investing in PMVVY has
been increased from `7.5 lakh to `15
lakh. This comes as a major relief to
senior citizens as a senior couple can
now invest up to `30 lakh in it
Then, there is the benefit of a standard deduction in
lieu of transportation and medical allowance. Till now
there was no such benefit available for senior citizens,
unlike salaried employees. Hence, for senior citizens,
the entire standard deduction benefit of `40,000 is now
available. But the limitation here is that it is available
only to the pensioners. This is unfortunate and it should
have been made available to everyone, irrespective of
whether they worked in government sector, private
sector or were self-employe d before their retirement.
This clause favours government employees, as they have
a regular mode of income in the form of pensions.
There is a concession available to those senior
citizens who are either disabled themselves or have
disabled family members, in the form of `60,000 for
senior citizens and `80,000 for super senior citizens
(individuals over 80 years of age). Now, this benefit
has been increased to `1 lakh for both the categories.
However, this clause may not apply to everyone. But if it
does, the amounts have been increased and will certainly
prove to be helpful in reducing their tax liability.
This Budget has been benevolent to senior citizens.
They should take full advantage of the provisions,
especially the medical insurance part and put a robust
protection net in place. PMVVY is another scheme that
they should go for, considering the low risk involved and
the relatively good interest they can earn.
Count thy blessings, seniors. You have worked all your
lives, and the years to relax and live a peaceful life just
got a bit easier with this Budget!
The Author is a Certified Financial Planner
26 February 2018 OutlOOk 61