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News & Views

Thursday, Dec 1, 2016

Reader's Corner: Life Insurance

[Source : Business Standard]

I had bought a couple of life insurance policies when I started working and did not have a nominee at that time. Could I now add a nominee? Could I have my wife as nominee in one of the policies and my mother as nominee in another one? Or should I have the same nominee in both policies?

Nomination is a process through which a life assured nominates a person to receive the policy money in case of his premature death. Nomination facilitates hassle-free settlement of a claim. Generally, a life insurer will not issue a policy without a nominee. A nominee can be changed anytime during the tenure of a policy and you can certainly have different nominees for different policies.

What is the procedure to change the account from which I am paying my insurance premium? How many days will it take?

You can certainly change the account from which you are paying the premium. You need to change the standing instruction given to the bank. Most insurance companies have a standard form for change in the bank mandate. You need to fill the form and submit it to the insurance company along with a copy of a cancelled cheque or bank statement. It is important to note that in case the existing standing instruction was not routed through the insurer, it needs to be deactivated before submitting the new mandate.

What happens if my agent changes mid-way?

If your insurance agent has left the company due to any reason, do not panic, as it does not change the nature of your relationship with the company. In many cases, a new insurance agent will take care of servicing the policy. In case a new insurance agent is not appointed, you can get in touch with the insurance company by visiting the nearest branch, their website or call them at the call centre.

My policy documents got misplaced while I was shifting residence. How can I apply for duplicate copy? What is the cost involved?

If you have misplaced the policy documents, it is advisable that the insurance company is informed at the earliest. Typically they will ask you to submit an indemnity on a stamp paper along with an administration fee. After verifying the documents, you will be issued a new policy document. However, the exact procedure would vary from company to company.

I underwent a medical check-up before buying a policy, but then I decided not to buy the policy. Will I get back the money I paid for the medical check-up?

The medical expenses are normally borne by the insurance company. In this scenario the question of a refund therefore does not arise.

Can I buy insurance for my new born child? What kind of insurance will give me money when she reaches college? Should I buy insurance in the child's name or in my name?

The earlier you set aside money for your child's education the better it is. Child Insurance Plans are a very good way for setting aside corpus for child's education in future. In Child Insurance Plans, to cover for any untoward events, the parent should be insured. Most Child Insurance Plans ensure the accumulation of corpus, even in case of an unfortunate event, by continuation of renewal premium payment by the insurer. Ideal investment horizon to allow accumulation of good corpus is 15 years. Hence if you anticipate that you would require funds for education when the child turns 18, you need to start saving as soon as she turns three years of age.

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