I am 35 and have a term plan (cover Rs 25 lakh) with an insurance company. My annual premium is around Rs 8,500. I have come across companies that offer the same cover for less than half the premium I am paying. Should I switch? How do I discontinue my ongoing plan? What possible problems can I face if I have to switch?
The decision to switch to a different term plan will depend on various factors. One, if you have taken your present term plan at an early age. Second, if you wish to switch, you would most likely require to pay more premium, since the new insurer would underwrite your risk afresh. Under such conditions, and because you have grown older, you might have to undergo medical tests. And, in case deviations from normal health are detected, your premium may be higher. In some extreme cases, your request for cover may be rejected altogether.
It is important to point out that one should not judge the efficacy of the plan by just comparing their prices. For instance, a term plan with the feature of waiver of premium in case of accidental disability is certainly going to cost more and provide better comprehensive coverage than a term plan which offers only death benefit. So, a like-to-like comparison is to be ensured when taking the call.
If you decide to discontinue your ongoing term plan, you simply have to discontinue the premium payment and not reinstate it in future.
I have three unit-linked insurance plans (Ulips), including a retirement product. I am worried about these investments in the current regulatory environment. Do current events between the Securities and Exchange Board of India (Sebi) and the Insurance Regulatory Development Authority (Irda) affect my investments? Are there any changes made that will apply to existing customers?
Irda and Sebi have made it very clear that any new development will not impact existing policies. So, you need not worry about anything happening on the regulatory front. You should keep paying your due premiums to enjoy the benefits that Ulips offer as long-term financial products.
I had applied for a Ulip in December 2009. The agent told me that I would get a cover of Rs 19.90 lakh by paying an annual premium of Rs 15,000. My medical test reports were normal. However, when I got the policy document, the cover mentioned was only Rs 1.9 lakh. The policy document also had a photocopy of the form I filled. It clearly stated that I had opted for a cover of Rs 19.90 lakh. The company did not inform me about trimming the cover. It was because of the high sum insured I had taken this policy. Even the illustrations sent were based on the higher sum insured. What are my options?
For any mistake in the issuance of the policy, you should get in touch with the customer care centre of the insurer directly and point out the discrepancy. If you do not get a satisfactory response, you can escalate the issue to the Grievance Redressal Officer of the company or the ombudsman. If the policy is within the freelook period, you can also opt to cancel the policy.
The writer is MD and CEO of Bajal Allianz. The views expressed by the counselor are his own. Send your queries at yourmoney@bsmail.in
