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Published in Mint, Written by Kapil Mehta
As a non-resident Indian (NRI), what are the various ways in which I can remit payment of premium to an insurer?
—Jay Nambiar
The two most prevalent ways of payment are: (a) electronic rupee transfer. This could be from your overseas, domestic or NRI account; (b) credit card transfer. If you send credit card details to the insurance company, it will automatically debit the account. You could also give standing instructions for premium payment to your credit card or bank.
What is accelerated death benefit with regard to life insurance?
—Vijay Mathur
Some life insurance policies allow a portion of the death benefit to be paid before death if the life insured has developed a terminal illness. This is an accelerated death benefit. The money received in advance helps the terminally ill person pay for daily expenses and hospital costs.
This benefit can be packaged into the main policy or as an add-on rider.
People who become eligible for the accelerated death benefit generally die within six months to two years of diagnosis. The benefit paid on death is reduced to the extent of accelerated death benefit that has already been paid out.
Is it possible to pay insurance premiums through my credit card? If so, will it have extra charges?
Payment through credit card is standard procedure. Credit card charges are always paid by the insurer. You will need to fill out a form authorizing the credit card debit and give a photocopy of your credit card. You can also use the net banking facility to make the credit card payment.
I am replacing my term insurance with a new cheaper insurance. Unfortunately, my old insurance has lapsed and the new policy is yet to be issued. Am I currently uninsured?
You are insured by the previous term plan if you are still within the grace period. This is 30 days for annual-pay insurances. If you die during this period, then the sum assured will be paid after deducting the due premium. However, if the grace period is over, then you are uninsured. Push your new insurer to quickly give a decision. If it takes inordinately long, then renew your previous insurance. It is not a good idea to be uncovered even for short periods.
Is death caused by drunk driving excluded in life insurance?
Death due to accidents while intoxicated is not excluded in regular life insurance. The only exclusion allowed in these products is suicide in the first policy year. However, drunken driving is excluded in personal accident insurances.