I am unhappy with my current insurer and want to port my health insurance policy, which I have been running since 2004. How is the pricing done under portability and would I be able to retain the current benefits?
? Monica Sood
Under portability, you can transfer most credits, such as for the waiting period of pre-existing conditions and bonuses accrued, and also get a waiver of the no-cover period. However, features and sub-limits (for instance, the ceiling on hospital room rent) in the new plan need not be the same as your previous one. Costs could vary depending on plan conditions and features. Further, premiums could be impacted if your medical condition has changed in the period after you have purchased your previous plan.
I want to take a life insurance policy for my child, who is five years old. How much premium would I have to pay and what would be the policy tenure?
? Paritosh Sen
The premiums will vary depending on the age of the life insured, the extent of life cover and the corpus you seek to build. While some plans offer fixed tenures, others have flexible policy terms or milestone-based options (guaranteed payouts at specific milestones). Child plans are available both on the unit-linked and traditional platforms. In buying a child plan, you need to decide on the purpose of buying ? funding child?s higher education, marriage, etc. This will give you a fair indication of how much funds you need to meet each of these goals.
I have a housing loan with a 20-year tenure. Is it a good idea to take a cover under the Married Women’s Property Act? How would it act as a safety net in case of any eventuality?
? Amrinder Singh
If the purpose is to ensure that the policy covers the loan, then MWP does not help since, under the MWP Act, benefits at death can?t be paid to claimants, creditors, legal heirs, etc. If your objective is to ensure that in an unforeseen eventuality, the death benefit goes only to your wife and/or child, then taking a policy under MWP Act is advisable. Under the Act, benefits can only be paid to wife or children in a ratio pre-determined by the life insured.
Is it cheaper to buy insurance online? What are the factors that I should keep in mind?
?Pramod Kumar
As a thumb rule, they should be cheaper since the initial distribution costs are lower. Term plans online are, for instance, cheaper by about 10% than their offline counterparts. Depending on the cover, one may have to go for a medical test, which is conducted by a doctor authorised by the life insurer. Some companies also offer policies without the medicals, but they factor in the higher risk by loading the premium. At no point should one mislead the insurer about the medical condition, since non-disclosure or false disclosure of pre-existing conditions can lead to claim rejection.
n The author is executive vice-president, Kotak Mahindra Old Mutual Life Insurance
n Send your queries at fepersonalfinance@expressindia.com