Ask mint money   8 may 2012
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Ask mint money 8 may 2012

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I am 28 years old and my parents and 16-year-old brother are my dependents. My monthly net income is Rs62,000. Should I calculate the amount of cover based on my income or on the number of dependents? ...

I am 28 years old and my parents and 16-year-old brother are my dependents. My monthly net income is Rs62,000. Should I calculate the amount of cover based on my income or on the number of dependents? Is insurance from a government-owned company better than that by a private one? If I get married in a couple of years, how can I increase the cover?

—Kishan Srivastava

Purchase a cover that is about 10 times your annual net salary, which comes to around Rs75 lakh. This will ensure that if you die prematurely, your family is financially secure for at least 10 years. At your age, a 30-year term plan will cost only about Rs8,000 per year. Term plans offered by private sector insurers are cheaper. Fill the claim form accurately and comprehensively.

When you get married, you can increase your cover by purchasing a new term policy for the incremental cover. If term rates continue to fall, then you can purchase a new policy for the entire amount.

I have a term plan with a sum assured of Rs40 lakh. Can I add the double accident benefit to my existing life insurance policy? How does this benefit work? When should one opt for it?

—Sreejith L

Accident benefit insurance covers death by accident. In addition, these policies could cover the following risks: total disability such as blindness, loss of two limbs; partial disability such as damage in one eye or loss of one limb; temporary disability when you are bedridden for some time; and permanent disability when the medical issue cannot be corrected. Buy an accident benefit policy that covers all the risks described above.

You should be able to add a rider to your existing policy on the policy renewal date. However, I would recommend that you buy a stand-alone accident policy from a general insurer. This cover is likely to be more comprehensive and will not lapse if you discontinue your term policy at any stage. A Rs40 lakh accident cover will cost about Rs6,000 per year.

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Ask mint money   8 may 2012 Ask mint money 8 may 2012 Document Transcript

  • Ask Mint Money | Critical illness riderpays claim even if mediclaim coversbillsWhen you get married, you can increase your cover by purchasing a newterm policy for the incremental cover. If term rates continue to fall, thenyou can purchase a new policy for the entire amountPublished in Mint Dated 8th May, 2012Kapil Mehta, SecureNow Insurance Broker Pvt LtdI am 28 years old and my parents and 16-year-oldbrother are my dependents. My monthly net incomeis Rs62,000. Should I calculate the amount of coverbased on my income or on the number ofdependents? Is insurance from a government-owned company better than that by a private one?If I get married in a couple of years, how can Iincrease the cover?—KishanSrivastava Purchase a cover that is about 10 times your annual net salary, which comes to around Rs75 lakh. This will ensure that if you die prematurely, your family is financially secure for at least 10 years. At your age, a 30-
  • year term plan will cost only about Rs8,000 per year.Term plans offered by private sector insurers arecheaper. Fill the claim form accurately andcomprehensively.When you get married, you can increase your cover bypurchasing a new term policy for the incremental cover.If term rates continue to fall, then you can purchase anew policy for the entire amount.I have a term plan with a sum assured of Rs40lakh. Can I add the double accident benefit to myexisting life insurance policy? How does thisbenefit work? When should one opt for it?—Sreejith LAccident benefit insurance covers death by accident. Inaddition, these policies could cover the following risks:total disability such as blindness, loss of two limbs;partial disability such as damage in one eye or loss of onelimb; temporary disability when you are bedridden forsome time; and permanent disability when the medicalissue cannot be corrected. Buy an accident benefit policythat covers all the risks described above.You should be able to add a rider to your existing policyon the policy renewal date. However, I would recommendthat you buy a stand-alone accident policy from a generalinsurer. This cover is likely to be more comprehensiveand will not lapse if you discontinue your term policy atany stage. A Rs40 lakh accident cover will cost aboutRs6,000 per year.
  • My agent is asking me to take a critical illness riderwith my life policy. I have a mediclaim for Rs1 lakh.Do I need the rider?—AshuYes. You should evaluate the critical illness rider. Thisrider has three benefits that supplement a regularmediclaim. First, the rider covers some diseases such asparalysis and cancer that may not require hospitalizationand would not be eligible for mediclaim. Second, the sumassured in critical illness would be paid even if mediclaimcovers the medical expenses. In such cases, this ridercaters to loss of income during a critical illness. Third, therider provides guaranteed premiums and benefitsthroughout the policy term. In contrast, mediclaimproducts are renewed annually and terms of renewal arenot assured.Kapil Mehta is the managing director & principal officer,SecureNow Insurance Broker Pvt. Ltd