Readers’ Corner
I am currently earning ~80,000 per month. I don’t have any life insurance. But I am getting married next month and plan to buy a term plan soon. What are the factors that determine the amount of cover? How do I calculate my requirement?
Your present income and liabilities are key deciding factors for the amount of cover you need. Use the need analysis calculators available on life insurance companies’ websites to find out the cover that you should take to meet your financial requirements.
Given your income and expected working life you should opt for at least ~50 lakh cover.
My daughter recently gave birth to a child. I want to invest some money in the baby’s name. I am considering buying a life insurance policy since the money can be used later on. Are grandparents allowed to buy insurance for children? Can I buy a single premium policy?
According to the insurance principles, you can only buy life insurance for your spouse or children. Buying insurance for your grandchildren is not permitted. We suggest that you use some other avenues to buy an investment product for your grandchild.
Can I buy insurance for my driver and maid? Since I will be paying the premium can I claim tax exemption on it? What kind of policies can I buy for them?
You are not allowed to buy life insurance for your driver and maid. However, there are other ways of providing for their future.
If the insurance company has given good bonus in the past, will it continue doing so in future? Should I look at this condition while choosing an insurance policy?
While choosing an insurance plan, bonus rates should not be the only criteria. You have to evaluate among other things the premium charged for the given sum, nature and suitability of life cover offered.
Bonus rates depends on many factors like interest rates, mortality experience of the company, hence the present bonus rates may not necessarily indicate the future bonuses.
I am planning to buy a pension plan. If I buy it from one life insurance company do I need to compulsorily buy annuity from the same insurer?
According to the Insurance Regulatory and Development Authority of India’s guidelines, annuity can only be bought from the insurance company whose pension plan you hold. Hence it becomes necessary for you to buy both from the same company.
If I have a term plan of ~1 crore, do I still need to buy personal accident cover?
The premiums charged for accidental cover are inexpensive and though chances of tragedy are low it is advisable to buy an accident cover along with life cover. Double accidental death benefit rider is offered by many insurance companies and you may consider choosing this rider while buying the life policy.
Can diabetics and cardiac patients buy life insurance cover? Will premium be very high for them?
A life insurance company’s decision to offer you a cover will depend on how wekk you have kept the disease in control and compliance of the treatment. If your record on both these counts is good you will get a life cover. However, premiums charged to you are likely to be higher than for person without these ailments. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in