Can an insurance company increase the amount of premium on the commencement of the policy?
Insurance is a legal contract and, hence, the insurer should charge premium according to the terms of the contract. However, the company can increase or decrease the premium under the following circumstances:
(a) There is a human error while calculating the premium
(b) If the policy lapses and is revived, leading to fresh underwriting/risk assessment and higher/lower premium
(c) If a rider such as critical illness is attached to the policy, where the premium is guaranteed for a certain period, say five years, the premium may change at the end of the guaranteed period.
Further, the policyholder’s consent may be necessary if the premium is being revised upwards.
What is a mortgage redemption plan?
These policies are useful in discharging the liability of loans in the event of death/disability/critical illness of the borrower during the loan term. These policies reduce the repayment burden of the borrower's dependent(s). Usually, they cover the outstanding loan, which decreases with every repayment made towards the loan principal.It is to be noted that in case of mortgage insurance policies, the cover is on the life of the borrower and not the property.
Are there any differences between health policies offered by life insurance companies and non-life ones?
The main differences lies in the term, guarantee of premium and the fixed/indemnity nature of covers.
Health policies taken from non-life companies are, typically, one year contracts with indemnity covers. They reimburse the actual expenses incurred owing to hospitalisation to some limit. They cover the expenditure on the actual treatment of the disease or illness.
On the other hand, health policies offered by life insurers provide cover for a longer period, with guarantee of premium rates for at least three-five years. Generally, these policies pay a fixed amount on various heads such as hospitalisation, surgical operation, diagn osis of critical illness, etc, depending on the covers sought. Health policies from life insurers may also offer life cover and savings on the survival of the policyholder till the term ends.
What is a double accident life insurance policy? How can one get this benefit in the existing life insurance policy?
A double accident life insurance policy provides for the payment of an additional amount equal to the sum assured, in case of the policyholder’s death due to an accident. Such a cover is provided either as an optional rider or as an in-built benefit.
If it is a rider, the policyholder has to pay an additional premium. If it is an in-built benefit, the premium for the base policy includes that for this benefit. Most insurers offer double accident benefit as a rider on an existing policy, from the policy anniversary.
The writer is managing director and chief executive at Future Generali Life Insurance. The views expressed are his own. You can send your queries to yourmoney@bsmail.in
