Readers' corner: How do you decide on the right life insurance policy?

I am 24 and have just started earning. My father is advising me to purchase a life insurance policy as a tax-saving tool. How do I decide on the right policy? Will the policy serve any purpose five years down the line when I earn more and am married?

Financial protection decisions taken early always prove to be wise. As you have just started your career, it is absolutely the right time for you to purchase a life insurance policy. Identify your financial goals and the lifestyle needs you would like to achieve at different stages of your life and then opt for a suitable plan. As you mentioned rightly, your responsibilities and expenses will only go up in the future. To ensure that your loved ones and you are adequately protected at all times, you should opt for an increasing term plan, which will increase your insurance cover by a certain percentage every year. Besides offering tax benefits, early purchase of policy will ensure that you pay much lower premiums.

My friend purchased a policy four years ago for which he pays monthly premiums. It is difficult for him to keep tab of this payment. Can he start paying the premiums annually?

Yes, your friend can change his premium paying mode from monthly to annual at the time of policy purchase anniversary. However, the change will be subject to the particular product’s guidelines. These can differ from one insurance company to another.

I am planning to purchase a policy online and not through an agent. However, my concern is that there will be no agent to assist my family at the time of the claim, in case they need any support.

You should not worry about the servicing of your policy if you have purchased it online. Most insurers today offer instant online help through chatbots and call centres. Either a representative is available for an online chat or an artificial intelligence enabled chatbot takes down all your details and then a representative gets back to you. Life insurance companies also extend customer care services through their call centres. You can connect with them anytime to discuss your queries, or for any help that your family or you seek. To ensure that the process is hassle-free, keep the policy documents, website and call centre details handy, updated and in a place where they are easily accessible to your family members.

I am 58 and have a life insurance policy for which my wife was the nominee. Now she is no more. I do not keep well either and my childhood friend and his family take care of me. Can I make him the nominee for my life insurance policy?

Yes, you can appoint your friend as the nominee for your life insurance policy. The nominee holds the money in trust for the actual legal heir, if any. Section 39 of The Insurance Act, 1938 allows the holder of a life insurance policy to nominate a person or persons to whom the money shall be paid in the event of his death. This can be done while purchasing the policy, or at any time before the policy matures for payment. 

My brother has worked in a company for 15 years and is about to quit in order to start his own venture. His organisation covered him under a group life policy. Will it be possible for him to transfer the group policy into an individual one?

No, your brother will not be able to transfer the group policy into an individual policy. If need be, he can purchase an individual life insurance policy for himself.

I have purchased a critical illness policy. In case I am detected with one, how can I get my claims?

In case a policyholder is detected to be having a critical illness, the claim settlement for critical illness policies is relatively simpler than for life insurance. You will require the specialist doctor’s certificate and other medical reports citing the detection. Once you contact your insurer and submit all the documents, the claim will be settled.

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