No tax benefit on home loan if you aren’t

The home I’m purchasing has a loan against it and the papers are mortgaged with ICICI Bank. Is it possible that the bank to which I am applying for a loan can overtake it internally and pay out the rest of the amount to the party? If yes, how do I initiate it? I want to go for only nationalised banks. — B Kachru
Typically, if your own contribution is higher than the loan amount due to the seller’s lender (ICICI), then you can pay off ICICI Bank from your own funds and then submit the original papers received from them to your bank for the balance disbursement. Please make sure that your bank has agreed to make the disbursement before you make the payment to ICICI Bank. If your own contribution is less than the loan amount due from ICICI, you will have to request your bank to make up the difference amount directly in favour of the seller’s ICICI Bank account. It will do so once it receives a letter from ICICI Bank stating the amount on payment of which the entire loan will be paid off, as well as the number of days it will take to release the documents after it receives payment.

If your income is sufficient to justify the loan, the bank will finance up to 80% of the registered agreement value of the property, provided the physical condition of the house is good and the valuer of the bank certifies the value as well as balance life of the property being more than the loan tenure. Frequently, the valuation done by the valuer of the bank is lower than the actual cost and hence your effective down payment goes up.

I need to take a home loan for my parental house, which is in the name of my father, for building the first floor. How can I get tax rebate on the loan? I don’t want to spend on registration and all. —Yash Patil
You will need to apply for a home improvement/ extension loan based on your income. However, your father will have to be a co-borrower to the loan as he is the property owner. However, you cannot claim any tax benefit on the loan, as you are not the owner /co-owner of the property. To become an owner/ co-owner, you have no option but to get yourself registered as an owner/ co-owner and pay the necessary charges.

I need to buy a term insurance policy for myself. I am 30-years-old and got married five months back. My wife earns `25,000 per month, which is enough for our monthly expenses. I earn `40,000 per month. We only have a liability of `6,000 per month towards car loan premium. How much cover (sum insured) should I take? What should be kept in mind while deciding the value of cover? —Katepalli T
Currently, your life insurance requirement is not very high. However, both of you need adequate disability insurance and health insurance. For term insurance, it may not be a bad idea for both of you to take an insurance cover 10 times your annual income. The sum insured for the policy which you will take for yourself will take care of all your future goals of your family such as your children’s education when you have them, retirement planning of the surviving spouse, etc. Your wife’s income will continue to take care of the regular expenses and hence your life insurance requirement is much lower.

The sum assured for your wife will take care of the regular expenses and you continue to save your income towards planning your goals the way you are doing now.

Below are the premium rates mentioned for a 30-year-old male who is not a tobacco user for a term of 30 years, for a sum assured of Rs50 lakh.

I have taken a health insurance policy from a private insurer last year. To renew the policy, I have been asked to pay a higher premium as I have moved to the age group of 40-plus. I was not told this before and the policy documents also do not mention this. When contacted, the company said premiums of all insurance companies have gone up this year. It is also avoiding the claim-free bonus. Should I complain to Irda and not renew the policy?
Unlike life insurance policies where the premium is fixed for the entire term of the policy, premium for health insurance policies will increase with the increase in age. This is generally mentioned in the brochure of the plan or on the company’s website.

In case claim-free bonus is mentioned in your policy wordings, and you haven’t claimed anything in the last year, you are certainly entitled to get the no-claim bonus and the insurance company can’t deny it. However, if there is no provision for a no-claim bonus, then there can be no grievance. In case the policy brochure/ document mentioned a no-claim bonus, then you should lodge a complaint on the company’s official website and in case you don’t get a satisfactory answer within a month, you can lodge the complaint with the insurance ombudsman.

If you are completely disease-free, you can move to a company that allows you the credit of your one-year with your existing company and gives you a health policy.

You can compare all the health policies at http:// www.apnapaisa.com/i/health-insurance-india/comparison.html

The writer is CEO, Apna Paisa, a price & features comparison engine for loans, insurance and investments, and can be reached at hrdna@apnapaisa.com.