When should one buy a life insurance term plan? Expert answers all queries

I have two term policies of Rs 50 lakh each from different insurers. I also have a moneyback policy for Rs 20 lakh. In case of a claim, would all the three policies be enforceable?

Multiple life insurance policies help provide additional protection for your family’s life goals. In case something were to happen to you during the tenure of your insurance policies, your nominee can make a claim on all the three insurance policies at that point of time. On the other hand, if you survive the term of the money-back policy, then, maturity benefit, if any, shall be provided by the insurance company. Just make sure your existing insurance policies were disclosed to the new insurer at the time of buying another policy.

At what stage in life should one buy a term plan? I am 25 and have just started earning. I am healthy, unmarried and do not have any liability.

It is best to purchase a term plan early in life when one is young and in good health. This way you can reap the benefits of lower premiums and comprehensive protection, in addition to tax savings. As you are young and have just started working, it is essential that you purchase an adequate life cover and keep reviewing it at every life stage that you cross. It could be at the time of your marriage, promotion, having a child, etc.

I am 37 and plan to purchase a life insurance policy. Does it make sense to opt for waiver-of-premium rider? 

Riders are an add-on to the life insurance policy, providing additional benefits at nominal extra cost. Adding riders to your life insurance plan will help in getting additional benefits in case of contingencies like critical illness or disability etc. Opting for a waiver of premium rider will enable all future premiums to be waived off in the event of earlier occurrence of policyholder’s death, accidental permanent total disability, or diagnosis of specified critical illnesses covered under the rider. 

Can non-resident Indians purchase a term plan in India? Will the cover be in force if they die while living abroad?

NRIs can purchase a term plan in India to meet their own and their family’s life goals. They need not be physically present in India to purchase a life insurance policy as most insurance companies provide NRIs the convenience to buy policies online after submission of required documents. NRIs also have the option to purchase policies from an insurance web aggregator’s website after comparing policy features and benefits. In cases where the policy requires medical check-ups, the NRI customer can either get the medicals done in India, or at the insurer’s empanelled medical centres in the country of his residence. 

I quit smoking last year and want to purchase a term policy. After how many years will I be considered a non-smoker for insurance purpose?

Disclosing your smoking habits to the insurance company is critical as it has a direct impact on your insurance premiums, and also allows for hassle-free claims experience. While it varies from one insurer to another on how they decide whether you are a smoker, generally if you have quit smoking for at least 12 months and a medical test shows that you are free of nicotine, you can apply as a non-smoker and also qualify for non-smoker life insurance rates.

The writer is MD & CEO, Bajaj Allianz Life Insurance. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in