Readers' Corner: Life Insurance

I have an 11-year-old money back policy. Is it possible to change the due date of the premiums?

No, you will not be able to change the due date or the premium paying date for the policy. A life insurance policy is a contract where the date of the premium is sacrosanct, and the policy is renewed every year on the same date. You can, however, change the premium paying frequency.

My friend’s father passed away two years back. My friend has just discovered that his father had a life insurance policy for which he is a nominee. What is the process of claiming such unclaimed amount?

Your friend needs to intimate the nearest branch of the life insurance company immediately. He would be required to submit  five mandatory documents. They include a copy of the death certificate; claimant statement form declaring details about his father (life assured) and himself (nominee); know your customer (KYC) documents establishing his identity; relationship proof with the life assured and a cancelled cheque or bank statement for the insurer to make NEFT payout of the claims. Your friend will also need to submit the original policy documents. In case he does not have the same, he can give an indemnity bond for the loss of policy. The insurance company will further evaluate these documents before paying out the claim.

I have paid the premium for my policy for seven years. However, for the past two years, I missed paying the premiums. Has the policy lapsed? Will I be able to renew the policy?

Considering that your policy is nine years old for which you have paid premiums for seven years, the policy should continue until its maturity. However, the policy will go into a reduced paid-up status which means that the benefits of the policy will also reduce proportionately. To renew the policy, you should immediately check with your insurer, and you may still renew it within two years from the last premium payment.

I have purchased a life insurance policy online for which the insurer hasn’t done any medical examination. Can this impact the claims payout?

Medical examination during the purchase of a life insurance policy depends on various factors like the proposer’s age, risk cover of the policy, sum assured, and the policy type. The insurer may not need you to go through medical examination for the cover you desire. It will not impact the claims payout. The payout of claims is a function of several factors like the reason behind the claims, company’s claim settlement ratio etc. If you have truthfully filled up your proposal form declaring the accurate status of your health condition, it should not impact your claims.

 

My granddaughter is turning one soon. As a gift for her future can I gift her a life insurance policy? The idea is to start creating a corpus for her education. Which plan will be most suited? Also, will her parents be able to pay the future premiums?

You can opt for a child insurance plan which will help in saving the desired sum for your granddaughter’s future. You can be the proposer of the policy and your granddaughter will be the life to be insured. However, since there is a limit for the proposer’s age (varies from policy to policy and for insurance companies), you can be the payer, while her parents will be the proposer. A no objection certification will be needed so that the parents will be able to pay the future premiums for the policy.

I am 37 -year-old working professional. I am willing to purchase a ~15 million term policy but am unable to decide on the duration. What should be the ideal premium paying term for such policies?

The duration of such plans, solely depends on when you see yourself accomplishing your major financial goals. The thumb rule is to have your term policy active until your 

retirement age. The writer is MD & CEO, Aditya Birla Sun Life Insurance and Deputy Chief Executive, Aditya Birla Capital. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in