Published in Mint on 15 December, 2015, Written by Abhishek Bondia
Will my life insurance policy be in force when I travel abroad?
Yes, life insurance policies issued in India have worldwide coverage. So, if a policyholder dies while travelling abroad, the nominee will be eligible to get the benefits under the policy. The policy sum would, however, be payable only in India. All the documentation, including claim form, death certificate, and certificates from authorities, will have to be submitted with the insurer in India. Thereafter, the claim will be settled in Indian rupees.
Do note that insurers ask for a travel questionnaire to be filled by an insurance applicant. This is to understand their risk profile. For example, executives who frequently travel to geographies such as Afghanistan may be considered as high risk. Insurers may decline such a proposal. However, if the policy is issued, it is for a worldwide cover.
What details are needed to change or add a nominee?
If you want to change or add a nominee, you would need to fill a nomination change request form. Every insurer has a customised form, but broadly, you need to declare the nominee’s name, address and date of birth, relationship with the nominee, and share of nomination. The insurer may ask for proof of nominee’s date of birth, and your relationship with her. If the nominee is a minor, the insurer would ask for an appointee, who would act on behalf of the minor.
Should I buy a joint life policy to cover my wife along with me, or would it be better to get another plan?
I prefer individual rather than joint life insurance. First, only a few insurers offer joint life policies, because of which choice is limited. Second, the cost of individual insurances is not very different from joint life policies. When you compare prices, compare joint life with the lowest individual insurances available. Third, if in the future you want to discontinue the joint life cover, then both lives will be uninsured. You cannot leave out just one life.
However, if you do want to buy a joint life policy, evaluate two options: death only, and dual death. Death only policy lapses after the first claim is made. Though the premium is charged for both, after the first death, there is no coverage for the second person. In a dual death policy, coverage continues for the second insured life. So, in case of death of both parents, the children would receive the dual sum assured proceeds.