Life insurance policyholders can pay advance premiums only within the year

Posted online: Tuesday, Apr 08, 2014 at 0000 hrs
How do I look at a child plan that has a balanced mix of equity and debt to protect the capital and also an insurance cover?

— Jeevan Prakash Singh

Typically, investments in equity carry higher risk, but deliver higher returns, while debt investments, which carry a lower risk profile, give moderate returns. Your plan may afford you the flexibility to choose the quantum of investment in equity and debt, a decision that should depend on your risk appetite.

A good child plan should either provide interim payouts at regular intervals or give the flexibility to access funds to meet interim requirements in your child’s development life cycle. In child plans, usually one of the parents is the life insured (often the principal breadwinner), so opt for sufficient cover to fulfil all your child’s life cycle needs in case of any adverse eventuality.

I am a manager at a private company. How do I take a keyman insurance policy in an individual capacity?

— Kunal Agarwal

Keyman insurance can be described as an insurance policy taken out by a business to compensate itself for financial losses that would arise from the death or extended incapacity of an important member. It is the organisation that pays the premium and, in the event of any adverse eventuality to the keyman, the proceeds go to the organisation. In your individual capacity, you could opt for a regular term plan, but not a keyman insurance.

I have not paid premium for my Ulip for two years as I was abroad. Can I revive the policy?

— Pradip Saxena

It would depend on the terms of policy contract between you and your insurer at time of its inception. You could look up the policy document or speak with your insurer for clarity.

Can I include my full-time domestic help in our family floater health insurance plan?

— Girish Rao

A family floater plan will not allow you to do this as, technically, the domestic help is not a part of your family. You could, however, get him/her a separate health cover. If your help falls under the below poverty line (BPL) category, you will be able get him/her a health cover under the Rashtriya Swasthya Bima Yojana, launched by the ministry of labour and employment. The scheme provides hospitalisation coverage up to R30,000. Some state-specific schemes also exist, such as the Rajiv Gandhi Jeevandayee Arogya Yojana in Maharashtra, which provides health cover up to R1.5 lakh. Several NGOs are active in this space and you could contact them for assistance.

If I pay my term plan premium six months in advance, can I claim some discount from the company?

— S Sundar Raman

As per a recent Irda guideline, policyholders can pay advance premiums only within the year. A discount may be given, though the policy varies from company to company. You are advised to check with your insurer in this regard.

Do insurers factor in all deduction before showing the daily NAV in Ulips? If no,t how do I know what is my fund value at a particular point of time?

— Ramesh Kumar

NAV of a fund on a daily basis is determined as follows: (market value of investment held by the fund + value of current assets – value of current liabilities and provisions, if any)/number of units existing on valuation date (before creation/redemption of units).

As some charges in Ulips are deducted on a daily or monthly

basis, on each day, the market value of the investment held is considered for the calculation of NAV along with other details.

Suresh Agarwal

The writer is executive vice-president, Kotak Mahindra Old Mutual Life Insurance

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