Choosing a health insurance plan is like making any other major purchase. You choose the plan that meets both your needs and budget. There are many different types of health insurance plans and each has its own pros and cons. A plan that works for one family may not be right for another. Hence it requires your attention to a few crucial things before committing to a plan. Ask yourself:

1 . Is the cover for you alone or your family? Is the value of the insurance sufficient? Are you covered under your employer's insurance policy?

If you and your spouse are both covered by health insurance at work, it may still be prudent for you to have an individual health insurance policy covering yourself and your family, since the amount of coverage (sum insured) provided by your employer may not be adequate. You could also choose a top-up option which means that you should look for a policy with a large deductible amount which can equal the coverage offered by your employer. Such top-up covers are offered at very affordable premiums.

When buying for a family, check multiple options. Whether you would like to go for individual sum insured or a floater sum insured. While floater sum insured policy may be cost effective as compared to individual sum insured, coverage may become inadequate if low sum insured is opted. When considering a floater policy, sometimes it is useful from a cost point of view for the oldest member of the family to have a separate policy.

Generally all insurance companies offer policies covering an individual, the spouse and up to two children under one policy. Some policies also extend the cover to include dependent parents in the same policy. As for the adequacy of the sum insured, do keep in mind the medical costs in your city and the inflationary impact on healthcare costs. A carefully considered sum insured along with the cumulative bonus of that policy should be sufficient to help you meet your hospitalization expenses to a reasonable extent.

2 . Understand what the policy covers and does not cover

Before buying an insurance policy, it is essential to be aware of the covers and exclusions. What your insurance does not cover is just as important as, and sometimes more important than what it does cover and what you are paying them to cover. Make sure you purchase a comprehensive policy. While reviewing the extent of cover of a health plan, do bear in mind the fact that your past health history is not really an indication of future events. Health problems are inevitable as you progress in the human lifecycle. Anticipate those unexpected scenarios and then prepare a checklist of your priorities.

It is important to choose a policy which is relevant to your needs. So it's best to evaluate, what you want to cover yourself for - is it just critical illness, or injuries resulting from an accident, all hospitalisation expenses or even OPD expenses? Make note to ask if the policy will cover inpatient and outpatient costs? If it is just critical illness, find out what critical diseases are covered and buy one depending upon your lifestyle.

Scrutinise the list of exclusions of the health insurance policy - both permanent and period-based. Exclusions describe the ailments and the conditions under which the health insurance cover will not be valid. For example, a common permanent exclusion is cosmetic surgery. Such surgery is generally not life threatening and is carried out at the insistence of the patient. Most of the insurance companies also do not cover pre-existing diseases in the first few years of purchase (waiting period). Pre-existing diseases are covered after a policy holder has been a customer for a few years. Other permanent exclusions could be maternity related expenses, (employer provided group insurance plans often cover maternity related expenses) or vaccination or an injury from adventure sports or expenses related to AIDS to name a few.

3 . Understand the premiums

It is important to carefully compare cost against the sum of the total cover provided before purchasing a health insurance. Ultimately, the optimal plan is the one that offers comprehensive coverage at reasonable cost. Compare the price vis-a-vis the features and do not compare the price alone between the companies. Also, look for co-payment option; it may be a good idea to go for it as it can bring down the premium rates significantly at a nominal cost.

4 . Understand the hospital network

Ensure that the list of network hospitals that accept the insurance policy from your preferred company includes good hospitals in your city and are at a comfortable distance from your home. This would help you get quality treatment using the cashless facility.

5 . Understand renewal terms and conditions

One cannot sufficiently reiterate the importance of buying and renewing health insurance to take care of medical emergencies. It is important to note that the waiting periods in health insurance policies reduce only in case of continuous renewal of the policy and also provide cumulative bonus in the event of no claims, subject to a maximum limit.

Understand the terms of the policy so that there are no surprises later. An insurance agent is always on hand to provide the best advice in terms of understanding the intricacies of the product. Do not shy away or hesitate in seeking answers to all your doubts before signing the purchase document.

The author is Managing Director, Royal Sundaram Alliance Insurance Company Limited. The views expressed in this article are his own

Your age being more than 80 years (super senior citizen), maximum amount up to which tax is not payable by you is Rs 5,00,000. Therefore, in case your total income, including arrears, would be Rs 5,00,000 only, you do not have to pay any tax. You would not need to seek any relief under Section 89 of the Act.

My son was working in Mumbai up to May, 2013 and Noida from June, 2013 to 31.12.2013. He is to file the I-T return for the A.Y. 2014-15. He filed the I-T return for the A.Y. 2013-14 in Delhi being his residence there. Now, he has gone to the USA for doing MBA on F-1 visa. Please advise how and where he should file the I-T return now. 
— vk kapur

On the basis of the facts given in the query, it is noticed that the permanent address of your son is in Delhi. He can, therefore, file the return of income for AY 2014-15 in Delhi.

What are the steps for allowing relief under Section 89 of the Act? — a reader

(i) Find out the tax on total income of the previous year in which the additional salary income is received.

(ii) Find out the tax on total income as reduced by additional salary received in the previous year.

(iii) From the amount arrived at in (i), deduct the amount arrived at in (ii).

(iv) The resultant figure of (iii) is the tax on additional salary.

(v) Ascertain the previous years to which the additional salary relates and add the respective amount of additional salary in respective preceding previous years.

(vi) Find out the tax on total income as increased by the relevant additional salary in respect of each of such previous years.

(vii) Find out the tax on the total income without the addition of additional salary of each of the said previous years.

(viii) From the amount so arrived at in (vi), deduct the amount arrived at in (vii).

(ix) The resultant figure arrived at in (viii) is the aggregate tax on additional salary.

(x) The relief under Section 89 is the difference of (iv) & (ix).

Clarification

In reply to the query of Sanjay Motwani published in these columns on September 22, 2014, Mr Vasudeva has clarified that the figure of "Rs 2.50 lakh may be read as Rs 3 lakh". The error is regretted. 

Commodity trading involves trading in futures or options of physical commodities that are listed on the recognised commodity exchanges. Commodity exchanges & commodity trading have been in existence for decades. They provide the functions of efficient price discovery, hedging tool for farmers, traders and consuming industries. They also provide the basis of settlement of physical contracts and a robust mechanism for exchange of delivery, if required.

Commodity contracts are similar to equity contracts with fixed expiry dates, standardisation of quality specifications and risk management parameters. There can be some minor changes in contracts of the same commodity for e.g. there is Gold - 1 kg contract and Gold Mini contract (100 gm) on MCX. Both buyers and sellers of these futures contract need to post margins and also settle daily price fluctuations on day-to-day basis.

As commodity contracts are available for up to six months, farmers can also look at the forward prices and then plant the required crop in their fields based on estimation of the prices closer to harvest. At the same time, consumers who are buyers of these commodities, can also lock-in their prices for the forward months and thus insulate themselves from any increase in the prices closer to their actual consumption of the material. The prices on the exchange are thus determined on the basis of factors such as demand and supply, weather, geopolitical concerns in commodities such as crude oil etc., economic factors in commodities like gold which is sensitive to currency and interest rates, government policies such as export/ import duties etc.

Who can trade in commodity market?

Individuals, HNIs, corporates, hedgers, processors and other people related to physical markets can trade in commodities. Apart from them, financial participants such as banks, NBFCs, hedge funds, aggregators and other participants are also allowed to participate internationally. In India, they are not allowed in the commodity markets as yet. Internationally, the classification of clients is on the basis of commercials (who are hedging customers) and non-commercials who are speculative - trading type of clients.

What are the commodities being traded in commodity market?

Commodities that are being traded in the Indian markets can be categorised under the following heads:

Precious metals - gold, silver; Base metals - copper, nickel, zinc, lead, aluminium; Energy - crude oil, natural gas; Softs - sugar, cotton; Edible oil complex - CPO, soy bean, soy oil, mustard seed, castor seed; Pulses - chana; Spices - turmeric, chilli, jeera, dhaniya; Grains - maize, wheat; Others - mentha oil, guar seed.

Present scenario

Commodity markets have seen a dip in prices and volumes in 2014. Since their peak in 2011-12, precious metals such as gold & silver have seen a 30-60% correction in the prices. However, it was post an unprecedented run-up in prices from 2004 to 2011 where prices in gold went up from $400 to $1,900 & silver from $6 to $50. In India, commodity markets have seen an overall downtrend in volumes from Rs 80,000 crore to Rs 20,000 crore per day in recent times.

The fall in commodity volumes can be attributed to some factors such as booming equity markets, softness and lack of volatility in commodity prices, lack of new products and new participation, higher risk management practices and introduction of CTT (Commodity Transaction Tax). However, the outlook remains bullish since India is a predominantly agrarian economy and once the long-pending FCRA (Forward Contract Regulation Act) is passed, it will open up the market which will make the sector vibrant. In recent times, there has been a renewed push to getting more hedgers on the exchange platform. NCDEX has recently introduced a new hedge policy which allows domestic market participants to secure higher position limits on the basis of their past performance and projected sale/purchase of commodities.

This is a correct approach to increase participation on the futures market as it will cut the paperwork required to secure a higher limit and also get more companies to hedge their raw materials on the exchange platform and reduce their commodity risk. Such steps along with introduction of new products like forwards & options are required for the Indian commodities to achieve their true potential.

The author is Head — Institutional Business, Geojit Comtrade Ltd. The views expressed in this article are his own