Today banks have ventured into other financial products, besides the traditional banking. This includes insurance as well. So you are now in a dilemma whether to buy insurance from your bank or an insurance agent. Well, here are the pros and cons of both the methods.

Pros:

• Convenience: Your bank offers you lot of convenience like minimal paperwork and direct debit as they have all your personal data, and access to your bank account. This is not possible with an insurance agent.
• Consolidated portfolio: You can get a consolidated overview of your portfolio, including your savings account, loans, insurance and investments. This helps you get a clearer picture of your finances, which is not possible with an insurance agent.
• Customized products: Nowadays, insurance companies are offering insurance products specifically designed for the bank’s customers. This will help you get a good deal. You will not get any such deal with an insurance agent.

Cons:

• No personalized service: The bank will not come over to your door to fill the forms and collect payment. It will just set up a direct debit on your account and it is your responsibility to ensure that there are sufficient funds in your account.
• Lack of trust: There is a good rapport between you and your insurance agent. This is not possible in case of the bank.
• Poor range of options: Many banks offer limited range of insurance products. But an insurance agent can offer you a wide array of products.

So weigh the pos and cons of both the alternatives before buying your insurance.

Raju is an engineering graduate working in an MNC. He earns Rs 50,000 a month. His company has given him a platinum credit card that allows him to spend as much as he desires. Raju takes full benefit of this card and spends all his monthly income on clothes, mobiles and eating out. He has totally ignored the concept of investing.

So if you are in this situation, here is how to invest if you are in your 20s.

• Buy a health insurance: Today health care has become expensive. A simple visit to a doctor can set you back by as much as Rs 500. Hospitalization, medicines, medical examinations have all gone up. This is where having a good health insurance helps. Besides paying for any health expenses, you’ll also save money on premium, if you start early. It also gives you tax benefit under section 80-D.
• Invest in equity mutual funds: Equities are the best bet to make money and become wealthy over a long haul. Also earlier you start you can get more by investing smaller amounts due to the power of compounding. Moreover in your young age, you have higher risk appetite, thus allowing you to go for aggressive investments. But a word of caution: DON’T GAMBLE OR SPECULATE.
• Buy your own home: Earlier you buy your home, sooner you’ll find you have exhausted repaying the loan. E.g. if you take a home loan of 20 years, when you are 25, you’ll find you are debt-free by the time you reach 45. This means you’ll be debt-free by the time you retire.

These are some of the useful investment option for people in their 20s. follow them and you’ll grow healthy and wealthy in your old age.

The adage “Health is Wealth” is true. A couple of days in hospital will set you back by few lakhs of rupees and long-term illness can end up messing around with your finances Hence it is important for you to take care of your health by eating healthy, exercising and insuring it by buying a medical insurance. Here we discuss more about this type of insurance.

What is medical insurance?
Medical insurance is the insurance that compensates you for expenses incurred during hospitalization to treat the ailments suffered or accidental injuries experienced when the policy is in force. It means the insurance company bears the hospitalization expenses that you have to bear during the term of the policy.

Premium
To enjoy this benefit, you have to pay a certain sum as premium. Premium is computed using factors such as your age and health. As you grow older, the premium you pay goes up. However if you have not claimed any compensation and your policy is old, you can enjoy the benefit of either higher insurance cover without paying anything extra or by reducing the premium for later years.

Extra benefits
If you take medical insurance for your whole family, instead of only for yourself, you can get good discounts. Also since many insurance companies are offering the provision of cashless hospitalization by joining hands with third party administrators (TPAs), you don’t have to make any payment to avail of the medical treatment. Alternately, you can avail of the treatment, pay for it and then claim this amount from the insurance company.

Tax benefits
The premium paid is qualified for a subtraction from gross total income, and is Rs 20,000 for senior citizens and Rs. 15,000 for others.

Why be an early bird?
Earlier you take the insurance cover, the better as you can benefit from lower premium, since you are healthy and don’t suffer from any diseases. Most medical insurance products do not cover the existing ailments and so you can easily get a cover if you start early. Also medical check up becomes unnecessary at this time.

Points to consider when taking medical insurance:

• Find out which illnesses are exempted.
• Find out if the insurance cover pays for injuries caused by war, riots and terrorism.
• Find out the diseases that are excluded during the initial policy period.
• Find out if the policy offers cashless hospitalization and the hospitals that provide you with this facility.
• What is the compensation offered for disability (partial and complete)
• For dependents, find out the highest age for availing the cover.
• Be aware of the benefits you are eligible for, if you don’t file a claim.