Frequently Asked Questions: Term Insurance

TERM OR HEALTH INSURANCE

24) I am a 22-year old single and I would like to know whether I should go for a normal health insurance or a term plan. Some of the companies claim paying Rs. 50,000 pa will get me a return of 65 lakh after 30 years and with a cover of 12.5 lakh in this period?

It seems you have mixed up 3 different policies :
1. Health Insurance
2. Term Insurance
3. Endowment Life Insurance

Under Health Insurance -your hospitalization needs will be fulfilled Under Term Insurance -your nominee will get sum as per sum assured.You will get nothing if you will survive till the maturity date of Term Insurance Policy Under Endowment Life Insurance you will get sum assured with bonus declared by the insurance company during 30 years .The exact calculation can be done after allocating funds out of Rs50000 for policy no 1& 2. Broadly speaking if the sum assured is Rs 12.5 lakhs you will not get Rs 65 lakhs.

25) I have two sons aged 6 and 12. I want to buy term insurance for them, but am told that no such plans are available. What should I do?

As the children are not adults and are not earning therefore no term insurance can be issued to them. You can do nothing.

26) I have three unit-linked Insurance plans or Ulips- total sum assured is Rs 35 lakh. A friend is asking me to buy another endowment plan, which gives a cover for life. Should I buy?

No, you should not buy. It will be better for you to buy term insurance of say Rs 50 to 100 Lakhs. This will provide good security to your family, which they need.

27) My brother suffers from asthma. Will life insurance be expensive for him?

He should reveal this fact in the proposal form and let insurance company call for medical examinations. Do not hide the facts. Life Insurance Company can do loading, if they wish. This protects your interest as there can be no repudiation of claim, when lodged.

28) I am 46 years old and own 50% shares in a private limited company with a turnover of Rs 10 crore. I draw Rs 50 lakh per annum. Should I buy a term plan or Keyman Insurance?

If both partners are ready then you can go in for Keymen Insurance for both of you. You should keep in mind that in the event of claim money will be given to your company and not to your nominee.

29) HDFC Standard sold me a savings assurance policy in January 2010. The monthly premium was Rs 10000 and tenure was 10 years. The premia was remitted for 16 months. Only later did I realize the information given by the company’s executive when selling the policy was false and misleading. The company has also not accepted my request for adding my daughter’s name to the list of nominees saying I already have my mother named as the nominee. The grievance cell said I should have returned the policy within 15 days of receiving the documents if I had not wanted to continue with it. Now, if I stop servicing the policy, I will lose all the money I have invested. What should I do now?

You should write to Chairman HDFC Standard and if no solution comes out then submit your grievance to Insurance Ombudsman of your state. Do not be disheartened ultimately. You will succeed.

30) My age is 38 years. I want to have Life Insurance for Rs. 25 Lakhs but I am scared of Medical examination. What is the option?

You can go in for Aviva Life Shield Advantage, which has benefit of
a) Term Insurance
b) Return of Premium on expiry of the policy
In this policy no medical examination is required for those who are in age group of 36 to 45 years provided sum assured is Rs 25 Lakhs or less.
As you are looking for sum assured of Rs 25 lakhs –your wish can e fulfilled.

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