Published in Mint on JUL 19 2016, Written by Abhishek Bondia
What are the important riders that can be bought with a basic term life plan?
—Kunal Gupta
Common riders available with a term life plan include: accidental death, permanent disability, and critical illness. Critical illness rider with a term plan is recommended. This helps avoid a separate pre-issuance medical check-up for a critical illness plan, and the premium is fixed for the term of the policy. The other two benefits—disability and accidental death—are better bought independently, in an individual accident insurance policy. Individual accident insurance policies have several advantages—no pre-issuance medical tests, fixed premium at any age, and lower rates than rider premiums charged by life insurers.
My father had bought a term plan in my name. He passed away last month. How do I make the claim?
—Rupali Beohar
You need to first inform the insurer about your father’s demise. You should mention the date, place and cause of death. Intimation via email is considered valid. Send the following documents to the insurer: filled-up claim form, death certificate, policy document and nominee details. Insurer may ask for more documents based on the stated cause of death. Other documents that are sometimes asked for are: hospital discharge summary, postmortem report, and copy of first information report (FIR), in case of unnatural death.
What is a free-look period? Can I get the terms changed in it?
—Ravi Sinha
The Insurance Regulatory and Development Authority of India (Irdai) allows the policyholder to opt out of a policy after its purchase, within 15 days from the date of receipt of policy document. In this period, the insured can examine the complete policy documents, and if the terms do not meet her expectations she can cancel the policy. The entire premium will be refunded after deducting stamp duty, administrative charges, and mortality charges.
This period d oes not allow an insured to alter the terms of the policy. Any modifications, if required, would be done with a new contract. Under a free look period, the insured can either accept or cancel the policy.
We are a start-up firm run by 5 co-founders, all in their 40s. We wanted to buy life insurance. Is it better to buy a group or individual cover?
—Sarthak Sharma
There are three advantages of a group policy: it’s cheaper than buying individually; at low sum assured, some of you may get a waiver for pre-issuance medical check-up; and in the future you can expand the group to cover other employees. The disadvantage is that premiums can be revised annually. So, premium may rise in subsequent years. But you are better off opting for a group cover as it’s usually cheaper than individual covers.
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