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I know I need life insurance, but cannot afford the coverage I need. Can I do anything to lower the cost? |
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The price you pay for life insurance depends on your age, health and your earnings. A basic policy gives you risk protection which is the minimum you need to pay. You can opt for a base policy with no riders that may be affordable to you. |
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Can I change my beneficiary on my policy? |
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This is a simple procedure. Beneficiary changes are usually in writing, on a form that your insurer will provide. However if you have designated an irrevocable beneficiary, you are not allowed changes without prior consent of the current beneficiary. |
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I am a 50 year old working in a private sector company? Do you think it is too late for me to invest in Pension funds? What is the right age to invest? |
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Most insurance companies offer Pension plans with the maximum entry age of 55 or 60, hence you are eligible to buy a Pension plan. The basic objective of a Pension policy is to create a corpus of savings over a period of time to ensure your financial security post retirement. It is therefore advisable to start saving for retirement as early in life as possible, as the amount builds into a significant corpus by the time the individual is 60 years old (regarded as the retirement age). To answer your question, you can start saving in a Pension fund even now, though the amount you keep aside for a significant corpus will be high as you may be working for another 10-15 years only.
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How would I ensure that I get the maximum benefit on a policy if I take the option of investing in a Unit Linked Fund? |
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A life insurance policy is a combination of protection and savings to meet your future needs. Aviva is one of the few companies offering the policyholder the option of two investment funds: a Unit Linked Fund and a With Profits Fund. In a Unit Linked Fund the unit value of the fund is based on the performance of the assets held.
To ensure that you get the maximum benefit from your Unit Linked Fund you should select a company which has a proven track record of delivering good investment return and fund management expertise. You should also seek information on the manner the company invests the money across different financial instruments in the fund. One of the key advantages of investing in a Unit Linked Fund is transparency – you can track the NAV and ensure maximum benefit return on your investment. |
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In case I have undergone surgery at some point of time in my life, would it negate my chances of buying a term policy at a lower premium? |
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The premium allocation by the insurance company depends on the kind of surgery the customer has undergone and the impact it has on the future health of the policyholder. Minor surgeries like gall bladder, hernia, reconstructive surgery, dental surgery, etc do not impact the premium. However if an ailment is serious, you could get rated up and the premiums will be higher. The final assessment is therefore based on a medical test which reveals your current medical condition. |
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Is a term policy more beneficial than a whole life policy? |
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The decision to purchase either a term or a whole life policy is dependent on your individual needs and requirements. A term policy only meets your protection needs. In case your liabilities are high and you cannot afford to invest a high amount of premium then a term policy which is usually a low cost option suitable for you. A whole life policy on the other hand is a combination of protection and savings. Apart from providing protection, a whole life policy offers you the benefit of withdrawing some part of the amount depending on your requirements during different stages of life. |
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Can I take legal action against an insurance company if it takes more than six months to clear my claims? |
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In case of any claim dispute the case can be represented to the insurance Ombudsman. The Ombudsman has judicial powers and can be challenged only in the High Court.
The IRDA (Insurance Regulatory and Development Authority) clearly articulates that a claim will have to be paid within 30 days from the date of receipt. In case the claim warrants an investigation then the insurance company has to complete the investigation not later than 6 months from the time of lodging the claim. Moreover, in case a claim is ready for payment but the payment cannot be made due to any reasons then such an amount will earn interest at the rate applicable to a savings bank account. |
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Is my money safe with an insurance company? |
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Most of the foreign partners in the Indian market are well-established global insurance players with a proven track record in the business. Some of them like Aviva have been in the business for almost three hundred years. This amply demonstrates their credibility and stability in the business.
All insurance companies in India are regulated by the IRDA which has laid down a very clear criteria defining the manner in which insurance companies can invest your funds. In fact every insurance company needs to have a minimum paid up capital of Rs 100 crore, which acts as a safety net. Further the insurance companies are also required to maintain their solvency margins depending on their volume of business. The minimum solvency margin required to be maintained by any insurer is Rs 50 crores. |
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How can I track my returns if I decide to invest in a Unit Linked product? |
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A unit-linked insurance policy provides you greater transparency than the traditional life insurance policy. In a traditional policy you are not aware of how your money is invested, where it is invested, what is the value of your investment, etc. In a Unit Linked policy the underlying investments made by the policyholder are clearly identifiable and determine its cash values (Net Asset Value). Most of the organisations publish their NAV listings on a regular basis in the mainline publications, which will help you check the performance of your fund. Companies also mail quarterly newsletters to their customers that provide them a detailed analysis of the Fund performance. |
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How often should I update my life insurance? |
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It's a good idea to periodically review your insurance portfolio — especially after a major event in life — to ensure it provides the protection you need. Over a period of time, your investment need also to change. At Aviva we advise our customers to take a “Financial Health Check” once in six months. The Financial Health Check is a need based analysis of the customer’s long-term savings and insurance needs. It is a free service administered by our expert Financial Planning Advisers. Depending on your life stage and earnings, the Financial Health Check assesses and recommends the right insurance product for you. I would advise you to go through a Financial Health Check before deciding on your investments. |
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