Published in Mint on 26th March 2018. Written by Abhishek Bondia.
I am 43 years old and have a pet African macaw (a parrot). They have a lifespan of over 50 years in the wild. It is currently 5 years old. Is it possible to make that parrot a beneficiary of my life insurance policy? Or should I go about setting some money apart for it in my Will, in case I am no longer able to take care of it?
—Shashank Ujjwal
You can nominate only a relative or a friend for your life insurance policies. It is not possible to make your pet a nominee in a life insurance policy. However, you can assign your policy to a Trust. This Trust could be entrusted with the welfare of the pet. You could also entrust your nominee to take care of the macaw, but that needs to be enforced separately through a Will.
I want to change the date when I pay the annual premium for my life insurance policy. How should I do this?
—Pramod Acharya
It is difficult to change the annual anniversary date of a life insurance policy. If an insurer agrees to do this, it may require a fresh underwriting of the life assured. It is easier to change the frequency of payment. In case you do not want to make a lump sum payment on a particular date, you could opt for a semi-annual or monthly payment option.
I have a life insurance cover of Rs25 lakh. In case of an accident in a train, if any amount is paid to my family from the travel insurance scheme of India Railways, will that impact the amount that is due to me from my insurer?
—Devansh Goyal
No. Life insurance policies are fixed benefit policies. Every policy works independently. Claims are not interlinked to other policies on the same life assured. In case of a death claim, the insured will receive the full sum assured across all life policies.
I work in a private sector company and my company covers me under a group life insurance policy. Is there a provision to transfer this cover to me, by paying a premium? Would the premium be different as I am porting from a group?
—Shashwat Goswami
Life insurance policies currently do not have a portability feature. So, it is not possible to transfer a group policy to an individual policy. Such a transfer would also have limited benefits. Generally, the main advantage of porting is to carry forward the lapsed waiting periods in prior policies. This allows an insured to make a claim early if required. Individual life insurance policies do not have any waiting periods except for suicide. In individual-term insurance, suicide is covered after the first year. Even if you were to buy fresh individual-term insurance, you would not be at a substantial disadvantage from a coverage perspective.
Whether or not portability is allowed for a product, the price for an individual product will remain the same.
Why should I buy an accident insurance policy if I already have a life insurance policy? Does life insurance cover death due to accidents?
—Abhinav Shah
Life insurance policies cover death due to all reasons including natural and accidental death. Buying an accident insurance policy in addition to a life insurance policy has two key advantages. First, accident policies are cheaper than life insurance policies. This helps in increasing cover for accident-related risks at a relatively lower cost. Second, standard accident policies cover disability as well. In case the insured suffers from a permanent disability, a proportion of the sum assured is paid depending on the extent of the disability.
A personal accident plan should be a supplement to a life insurance policy and not a replacement.
