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Published in Mint on 11th December, 2017. Written by Abhishek Bondia

Do I get compulsory life insurance with my provident fund (PF)? Do I need to buy a separate life insurance cover if I am already a PF subscriber? What is EDLI insurance by an employer? Can I opt out of it if I don’t want to subscribe to it?

—Narendra Manchanda
Provident fund has a compulsory life insurance component that is linked to basic salary. However, the maximum sum assured offered under this scheme is Rs6 lakh. Considering that we recommend a life cover of at least 10 times annual income, you would have to buy a separate life insurance policy to get adequately covered.
PF authorities give an option to employers to subscribe to the Employees Deposit Linked Scheme offered by a life insurer (EDLI), instead of buying life cover through PF. Often, the EDLI scheme offered by life insurers is more cost-effective and efficient than that offered through PF. That’s why employers buy the EDLI scheme. It is mandatory for all PF subscribers to have this insurance. So, you cannot opt out of it.

My uncle passed away 2 months ago due to heart attack. We came to know of the life insurance policy (with his wife as nominee) he had bought when we opened his bank locker recently. Can the family still file a claim? What is usually the deadline to raise such claims?

—Karan Pande
Yes, the family can still file a claim. If the policy was in force at the time of death, the nominee will get the due amount without any deductions.
Insurers expects a death claim to be reported as soon as possible by the nominee. It is a good practice to intimate the claim within a month of the incident. However, there is no time limitation, as long as the delay can be reasonably justified by the nominee.

I had bought a life insurance policy in 2015 from a friend who is an agent. However, I have lost all the documents pertaining to that. What should I do? How can I check if the policy can still be renewed? Is there a way to track it?

—Praveen Tamble
You may have to do some ground work to trace the policy. In case you had shared an email ID in the proposal form, it is likely that insurer would have sent you a welcome mail after the policy was issued. This welcome mail, which the insurer would have sent to you, typically carries the policy number. You can use the policy number to fetch all linked details of the policy.
If not, then you can refer to your bank statement to trace the exact date of payment and insurer name. You can call up the insurer’s helpline and share your KYC details to try to trace the policy.
An alternate way would be to ask your friend to name the insurer branch he was associated with. You could visit this branch.
The branch may be able to look up the records of the policies booked by the agent and trace your policy there.

Till what age do insurance companies offer their policies? Is it age-based or does it depend on whether you are working or not? I am 60 years old but I work for an MNC as a consultant and will continue here for another 5 years. I don’t have any life insurance policy. Please suggest a suitable one that I can buy. Roughly how much will the premiums be? My annual salary is Rs65 lakh.

—L.K. Gupta
As entry age, insurers generally offer new policies till the age of 65 years. The coverage date of the policy could be up to 99 years of age. Premiums are higher for the older age group, and for longer term covers.
To buy a life insurance you need to establish a regular income stream. Income could be from salary, business or profession. Since you are a consultant and would have a regular income stream, financial underwriting would not be an issue for you.
At 60, you may look at a sum assured that is five times of your annual income. If you have outstanding liabilities, such as mortgage, you could look at a higher sum assured. A Rs3-crore life insurance for coverage till the age of 70 would cost about Rs1.25 lakh. In case you want to get a coverage till 80 years, the premium would be around Rs1.60 lakh. These rates assume that you are healthy and a non-smoker. Insurers tend to charge higher premiums in case you have chronic ailments such as hypertension and diabetes, or if you are overweight.