Each week, I try and answer generic questions from readers. Here is this week’s edition. You can use the form below to ask your question. The tougher the question, the more I learn and hopefully more the benefit for readers. This week we consider questions on the PE of a mutual fund, health insurance for parents, renting forever and more.
Sanjay: I came across your website and got a lot to learn. I would classify me as an informed investor. I am travelling next week so bought your book on Amazon so that i can read it in my spare time. Faced a tough question so thought of asking you. My senior citizen parents had a New India insurance policy of 1.5L cover each at a total premium of Rs. 11000. In addition to this my employer has a family floater of 5L, my wife’s employer has a family floater of 6L – both of these cover my parents. Also my mom is a retired bank employee so her bank’s retiree organisation has a group mediclaim of 3L floater (for both parents) for which they pay a premium of Rs. 15000 I understand that an individual mediclaim is required for parents in case i change my job, blah blah blah…, hence had kept their personal mediclaim active. However New India sent a letter saying they are closing their Mediclaim 2007 policy and it won’t be renewed. They are giving an option to migrate to their current Mediclaim policy at existing rates. Now I doubt all the 3 group mediclaims would terminate parallel. Does it make sense to buy a costly personal individual mediclaim for my parents ? Even if they make a claim, it will always go to one of our group mediclaims . So i don’t see them using their personal mediclaim. Senior citizen mediclaims from private insurers charge 25000 for a 2L senior citizen floater, which I feel is too high and if invested for 3-4 years would create a 2L corpus to be used instead of the personal mediclaim cover. Could you please send the link to the article where you answer my question?