Health insurance age reform; NPS vs MF: Top personal finance stories

This week we report about how senior citizens should buy health insurance and what is a better retirement corpus

Indians could purchase health insurance only till the age of 65. The Insurance Regulatory and Development Authority of India recently removed this limit. In this week’s lead story, Sanjay Kumar Singh and Karthik Jerome assess the impact of this change. It also takes a broader look at the difficulties senior citizens face in obtaining health insurance and offers advice on overcoming these barriers.

The second article, by Sebi registered investment advisor Deepesh Raghaw, weighs the pros and cons of investing in the National Pension System versus mutual funds for building a retirement kitty.

While some debt funds attempt to generate higher returns by taking duration risk (investing in longer-duration bonds), others try to do so by taking credit risk (investing in lower-rated papers that offer higher yields). If you are searching for a fund from the credit risk category, look up Morningstar’s review of Kotak Credit Risk Fund.

Annuities provide lifelong payouts and are highly useful for retired people who no longer have an active income. If you are looking for one such plan, look up Policybazaar.com’s table on guaranteed pension plans.

Number of the week: Rs 1.04 trn, online spending via credit cards

Online spending via credit cards saw a new high of Rs 1.04 trillion in March, crossing the Rs 1 trillion mark for the first time. Online credit card spending rose 10 per cent month-on-month and 20 per cent year-on-year.

The number of credit cards in the country – it crossed the 100 million mark for the first time in February – stood at 102 million in March, up 20 per cent from 85 million a year ago.

Card users must be cautious about revolving credit. Interest rates on revolving credit can be high (going up to 3.5 per cent per month).

They must not exceed 30-40 per cent of the limit, as doing so affects the credit score.

Nowadays, many lenders allow credit card users to convert their outstanding dues into equated monthly instalments (EMI). Users must ensure that the sum total of all their EMIs does not exceed 40 per cent of their take-home salary.