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Published in Mint on 1 September, 2015, Written by Abhishek Bondia
I have two-wheeler insurance. Can I cancel my policy midway? If so, how do I go about doing it? Is there anything I should keep in mind?
—Nidhi Ghoshal

You can cancel the policy mid-term. However, cancelling the policy can be expensive. The insurer will refund the premium on a short-period scale. In effect, you would be charged more than the proportionate period for which you utilised the policy.
In case the reason for cancellation is selling the vehicle, then you can transfer the insurance to the buyer of the vehicle. A nominal fee is charged for transfer of insurance along with pro-rata recovery of no-claim bonus from the date of transfer till the policy expiry date. Transfer of ownership in comprehensive policies has to be implemented within 14 days from date of transfer.
How do I decide the amount of travel insurance I require while travelling abroad? Does the insurance company decide it?
—Ravi Kumar

The amount of coverage in a travel insurance is decided by you. Most insurers offer several sub-plans under travel insurance. You can choose any of these. These options differ in terms of the sub-limits of the extensions. A typical travel insurance will have 8-12 extensions. Travel insurance excludes costs incurred due to pre-existing diseases. However, some insurers now offer a restricted cover if you have a medical emergency from a pre-existing disease. For instance, if someone has suffered a second heart attack.
You should decide on the sum assured based on your current health and expected medical costs in the other country. Costs in the US and Canada are extremely high, whereas in Asia it is more affordable.
Is there any waiting period during which my expenses will not be settled in case of a medical contingency?
—Shankar Nandagopal

A typical medical insurance has three kinds of waiting periods—initial, disease-specific, and for pre-existing disease. Under the initial waiting period, most insurers do not entertain any claims except accidental cases. The initial waiting period is generally 30 days, and with some insurers it goes up to 90 days. Disease-specific waiting period excludes named diseases for a few years. The time period can vary from one to four years. These are generally high frequency diseases such as cataract, hernia, and knee replacement, which can be planned. Finally, the pre-existing disease waiting period excludes any disease that was pre-existing before the policy was in place. Diseases that are the outcome of a pre-existing condition are also excluded. For example, if hypertension is pre-existing, insurers would reject a bypass surgery within the pre-existing waiting period. Pre-existing waiting period is generally for four years, with a few plans having one- and two-year pre-existing disease waiting period as well.