I am 45 years old and have a home loan for which I took insurance at the time of disbursement. Should I go for a term plan as well? How much would I need to pay for a R50-lakh cover?

Himashu Dave

We presume the home loan insurance is for covering the damage to the property due to the risk of fire and special perils like lightning, earthquake, riot, strike, malicious damage, storm, cyclone, flood, etc. One also needs to cover the mortality risk of the borrower to ensure repayment of the loan that may arise due to his death. Term plans of life insurance companies cover this risk. Now-a-days, online term plans are cheaper and you can ascertain the premium by visiting the website of the life insurance companies. The plan term should cover the loan period.

Should I take a health insurance policy online to save cost?

Sagar Mukherjee

Health insurance policies are available online and these are cheaper by 10-15% compared to offline plans. While answering the responses online, one should disclose all facts related to smoking habits, health status, family history of diseases and pre-existing illnesses. One may have to undergo medical tests if he/she is above 45 years of age. Any incorrect declaration at the time of taking the policy may create complications at the time of claim settlement.

As gold prices are falling, does it make sense to buy gold ETFs?

Chand Kishore

Diversification of investments and rupee-cost averaging are strategies to mitigate volatility risk. Before investing in any asset class, one has decide on the asset allocation to diversify risks. One can invest up to 5-10% of the portfolio in gold. SIPs are preferable over one-time investment to get benefit of rupee-cost averaging. Before investing in any asset, one has to factor in the goal for which the investment is being made, its time-horizon and the person?s risk tolerance. Historically, gold is considered a safe investment avenue. If your goal has a longer horizon, it is preferable to buy gold ETFs through SIPs. Investing in physical gold has risks of purity and security, although gold coins may be preferred for purity. Gold ETF is preferable over physical gold for investment.

What is the guarantee that, in a term plan, my wife will get benefits in case of my death?

Ramesh Rajshekhar

Insurance policies are contracts for promises by which the insurer promises to honour its obligations in the event of materialisation of the contingent event. It is also based on the principle of ?utmost good faith? by which the insured should disclose relevant material facts on income, state of health and family history on diseases at the time of taking the policy. So, it is always advisable to declare all material facts even if it may amount to some increase in premium at the time of taking the policy. Then, it becomes easier for the nominee to get the claim after the demise of the policyholder. In case of any difficulty, the nominee can resort to redressal of the grievance through ombudsman/Irda/consumer forum.

* The author is founder & chief

financial planner of Max Secure Financial Planners

* Send your queries at fepersonalfinance@expressindia.com