Published in Mint on 21st Oct 2014, Written by Abhishek Bondia
A life term policy was taken in 2002 and premium was consistently paid till 2013. In 2014, premium, due in February, was missed. In September, the policy was revived by making the premium payment for 2014 without any penalty or questions asked with the same benefits and without change of terms. In August 2014, however, before revival, the insured was detected with a fatal disease. Now, if the insured dies, will the nominee be entitled to the insurance amount, or can the insurance company refuse to honour the claim, citing lack of complete information? Will the fact that the policy continued for 12 years but missed renewal just once affect the payment to be made to the nominee?
History of a policy is certainly appreciated at the time of claim decision on lapsed and revived policies. For instance, some insurers allow full payment of sum assured on a lapsed policy for 12 months, if the policy was continuously in force for the previous five years. You have a favourable history. However, since you knew about the disease before revival, your case can be classified as purposeful concealment.
Most insurers ask a good health declaration in their revival form. If you filled this form without disclosing the disease, the insurer would repudiate your claim. If there was no provision at all for you to disclose any additional information, then the insurer cannot repudiate your claim.
I am 60 years old and my life cover totals to around Rs.15 lakh. One of my insurance policies is maturing by the end of the year. Should I go for another policy then? What all should I look into when taking this decision?
Unless, you have dependants (other than spouse) or sizeable liabilities, I recommended that you focus on building a retirement income. You could do this by purchasing an immediate or deferred annuity pension plan, investing in secure mutual funds, the National Pension System or fixed deposits.
Can a non-resident Indian (NRI) buy a life insurance policy from an Indian insurance company?
Yes, an NRI can take life insurance from an Indian insurance company. She can have the insurance issued when visiting India. Some insurers have a provision to issue insurance online without requiring physical presence in India.
Such insurers typically lay down guidelines to select medical practitioners for local health check-ups. The underwriting norms for an NRI are generally the same as for a normal resident Indian.
A few insurers do not offer certain riders or products to NRIs but there is no blanket rule.