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Published in Mint on 28th May 2018. Written by Abhishek Bondia.

We found a life insurance document among the papers of my grandmother who passed away recently. What documents will we need?

—Parakram Verma

To make a death claim, you will need to submit the death certificate issued by the municipal corporation, along with the original policy documents. In case it was a natural death, the insurer may ask for papers linked to the insured’s treatment immediately preceding death. In case of accidental death, police FIR and post-mortem report is required. Also, the nominee has to submit a photograph, with valid identity and address proofs.

Are the terms and conditions for riders the same across insurers? What should I look at for taking critical illness rider?

—Nitin Bhardwaj

Terms and conditions for riders vary across insurers.
There are a few points that you should pay close attention to with regard to a critical illness rider. First, the number of illnesses covered by plans vary between 4 to 40. Second, the rider payout could be either accelerated or stand-alone. In case of an accelerated rider, the sum assured paid for critical illness gets reduced from the base sum assured payable on death. Stand-alone riders pay an additional lump sum without affecting the death benefit. Third, there is a requirement of minimum survival period after diagnosis of the illness. If the insured dies before the survival period, only death benefit would be paid and not the critical illness benefit. Survival period varies between 30 to 180 days.

How do I know my returns from a money-back policy?

—Mishti Sen

Plans always have a benefit illustration. It shows the amount payable on death for every passing year. Also, it shows multiple illustrations on amounts payable on maturity. Illustrations typically carry two scenarios for maturity payouts. The first where the insurer earns a gross investment return of 4%, and the second 6% or 8%. You should have received an amount between the two illustrated values. Money back policies yield an average of 2-5%.

We are a young company and want to offer group term life insurance to our 9 employees. We were told that we cannot buy group term life insurance because of our size. We will grow into 15 employees next year. Please advise.

—Name withheld

Insurers generally require a minimum size of 10 employees to issue a group term life policy. At this stage, you could buy individual term life under the Employer-Employee scheme. The rates would be the same as individual insurance, but the company can pay the premium on behalf of the employees. Proceeds in the case of an employee’s death will accrue to the employee’s nominee. To keep your costs low, buy 5- or 10-year plans.
Next year, when you cross the threshold, you can buy a group term life insurance. The individual life policies could either be discontinued or you could ask employees to carry them forward on their own.