Published in Mint on 27th November 2017. Written by Abhishek Bondia
I have a critical illness rider with my life insurance policy. I was recently diagnosed with cancer and the doctors say that the tumor has spread to vital organs. In how many days can I get the payment? Will the money be paid along with my death benefit to my family or will it be paid only to me?
—Nandini Ray
You can file a claim immediately with the insurer. Critical illness riders in life insurance policies are fixed benefit add-ons. So, you need to submit the diagnostic report with a doctor’s prescription to support your claim. Your actual expenditure proof is not required.
The insurer will wait for the complete documents and the survival period to get over before making the payment. Typically, critical illness benefit requires the person to survive for at least 30 to 90 days after the diagnosis. To expedite your claim, you can submit proof of the first diagnosis of cancer. This rider is a survival benefit. So, payment would be made to you and not the beneficiary. Do note that riders can be accelerated for an additional benefit. In case your policy provides an accelerated benefit, then the sum assured paid for the critical illness rider will be reduced from the death benefit. Your nominee would then only receive the residual amount if you die.
I have an Rs1 crore sum assured life insurance policy, whose annual premium is due in August every year. Can I get this date changed to February or March? I am willing to pay the balance of the months between August and February.
—Wanaka Guha
Insurers do not allow for the policy start date to be changed. However, you can change the frequency of payment. This means that you can opt for monthly or quarterly payments instead of annual. These more frequent payments, work out a little more expensive but will reduce your lump sum cash outgo.
I am 30 and moving to Canada soon. If I go for a term cover in India will it cover me in Canada as well? Which insurance providers are offering this type of coverage and will the premiums be higher?
—Amey
Life insurance policies in India are issued with worldwide coverage. If the policy is bought in India and a claim arises when the insured is traveling outside the country, the claim would still be payable. This feature is common across insurers. Even if you relocate permanently, the claim will be paid. Do note that a claim will be paid in Indian rupees.
I am 25 years old. I plan to get married in 4-5 years’ time. Is it advisable to buy life insurance now or after I get married and have children?
—Vineet Lakra
With age and life stage, the dependents on your income increase. However, there are advantages to planning for life insurance early.
At 25, you can buy a life insurance policy for a 35-year term at a lower rate. This premium will get locked for the entire term of the policy. So, even as your family size increases, premiums will remain constant.
If you buy insurance at an older age, premiums for a new policy increase substantially. Also, there is the possibility that you will get ill or contract a chronic ailment in the future. If that were to happen, you would find it more difficult to buy insurance.
So, buy the insurance now. You can keep increasing the coverage by buying new insurance as your dependents and liabilities increase.
Why should I pay a higher premium for a different insurer, if the life insurance benefits are exactly the same? Are there any logical reasons for this or do some insurers charge primarily because of their brand popularity?
—Manoj Bansal
Some insurers do charge a premium for their brand. However, besides premiums, you should also look at the claim settlement track record before choosing an insurer. A slightly higher premium may be justified for claim settlement records of over 90%.
In life insurance, there are limited grounds on which a claim can be denied. Yet, many disputes arise in early claims when the insurer can question the authenticity or completeness of the information you provided in the proposal form.