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- 15 May 2019

Smita Vashishth,


I have taken a term cover of Rs. 25 lakh. My annual income is about Rs. 4 lakh. I am planning to get married by early next year and my wife will also be buying a term plan. Can we opt for a combined term plan? How does a combined term plan work?

Unlike family floaters, combined term plans are not efficient. It would be better for you to take separate term plans for you and your wife. Given that your annual income is about Rs. 4 lakh, it would be prudent to increase your cover to at least 50 lakh, as the thumb rule is to have a cover that is 12- 15 times of your annual income.

Manik Nangia,

Director Marketing and Chief Digital Officer Max Life Insurance


jagan m., Bengaluru

I work in a firm and i get HRA like any other regular firm. I’m married and I end up staying separately from my mother. Need to pay rent for two houses which are near by and in same city. I’m the only earning member and mother is a pensioner. Mother and a paralysed(no job) younger brother stay together. please advise options to club both rental together to get complete tax exemption under HRA? is clubbing valid in this genuine case.

According to Section 10(13A) of Income Tax Act, House rent Allowance (HRA) is specifically granted to an employee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the employee. It is to be noted that the HRA is allowed in respect of residential house property “occupied” by the employee and not by relatives i.e. spouse, brother or sister or any lineal ascendant or descendant of that employee.

In the present case, the employee occupies only one residential property and hence the same would be considered for claiming exemption under section 10(13A) of Income Tax Act. Hence, we understand that the clubbing of rent will not be allowed under the present case. 

Dr Suresh Surana, founder of RSM Astute


 Neeru rangan, Gurugram

I have withdrawn my entire PF after 15 years of service. Is the amount withdrawn taxable? If yes, under which head?

According to Income Tax Act, Employee Provident Fund (EPF) withdrawn after 5 years of continuous service will not be taxable in the hands of employee. Since in the present case, the EPF has been withdrawn after completion of 15 years of service, the same is not taxable in the hands of employee.

Dr Suresh Surana, founder of RSM Astute


Ashish Aggarwal, New Delhi

Everyone seems to have their own strategies on directional trading. Would you prefer directional trading or volatility? Do you think it is important to have a guidebook or ratios to decide on what trades to make?

It is important to understand that when you are undertaking directional trading, you have to know about the stock, its earnings, and whether the company is going to make a presentation. You also have to be right about the direction of the stock and time period. In addition to these factors, you need to know about overall volatility of the stock as well as of the market. Due to these factors, people tend to think that directional trades are risky. However, the more factors you take into account, the less likely you will make an error. While non-directional trading strategies can minimise risk and loss potential, they also limit potential profit. Again, it is important to remember that we are not aiming to use directional trades to make high-risk bets. In fact, here is when your guidebook comes in handy; having information about your stock, its past and forecasted performance reduces risks and helps you to secure higher profits.

Rahul Jain,

Head Edelweiss Personal Wealth Advisory


Arpit Saxena, arpits@yahoo.com

I am a 30 years old smoker; can I get cancer protection plan? If yes, is there a difference in the premium amount between a smoker and non-smoker?

Yes, you can apply for a cancer protection plan. A person with a higher exposure to smoking would have a higher risk profile for cancer and hence would invite a higher premium amount than a non-smoker.

Manik Nangia, Director Marketing and Chief Digital Officer Max Life Insurance


Arushi Raje,


Would the premium of a term plan bought today, change in the future?

No, once you buy term plan, the premium remains largely unchanged over the premium paying tenure of the policy. The only increase or decrease in net premium could be on account of changes in taxes. In fact, that is the reason why it is advisable to buy a term plan early so that you can enjoy the benefit of low premiums throughout your life and cover against the uncertainties of life early. Term plan is considered as the foundation of any efficient financial plan of a household, hence it is advisable to buy a term plan the moment a person starts earning. 

Mr. Aalok Bhan

Director and Chief Distribution Officer,  Max Life Insurance


Swapna Raj, Swapna.Raj@gmail.com

Is Term Insurance Claim Successful in case of Accidental Death?

The life Insurer will pay the death claim in case of an accidental death as well. In addition, to protect against death and disability caused due to accident, one should opt for accidental death and dismemberment rider which will provide additional risk coverage on happening of death or permanent disability due to accident at a nominal additional cost.

Mr. Aalok Bhan

Director and Chief Distribution Officer,  Max Life Insurance


Rajat Vashishth, rajat.vashishth@gmail.com

Is Life Insurance considered valid, if death occurs outside India?

Yes, the life insurance policy issued in India entitles the nominee of life insured to get death benefit subject to term & condition of the policy and fulfilment of claim requirements, irrespective of where the death occurs. It is always advisable to inform the latest address if the policyholder has moved to another country so that communication and the process of claim is smooth. 

Mr. Aalok Bhan

Director and Chief Distribution Officer,

 Max Life Insurance


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