Ans: It is important to be aware that a term plan is a pure protection cover, which works best as an income replacement tool, offering financial protection to life’s uncertainties. The policy term or the duration of such policies completely depends on when you see yourself accomplishing your major financial goals. It is best to opt for a term plan early and at a younger age, and you have made a prudent decision.
At a young age, like 25 years, the premium for a term plan will be much cheaper and will remain constant for the entire policy term. In turn, this will allow you to opt for a much longer duration or policy term and a shorter premium paying term. As a rule of thumb, it is beneficial to have your term policy active until your retirement age. You may further decide to opt for a policy term until the period you see yourself earning or to leave a legacy for your loved ones.
2. I had purchased a life insurance policy five years ago. My sister was the nominee in the policy. My sister has got married and I would now like to make my wife the nominee. How can I get the same changed? Would I require my sister’s consent?
Ans: According to Section 39 of The Insurance Act, 1938, a policyholder requires to nominate a person as the beneficiary of the insurance policy, while purchasing the policy or at any time before the policy matures for payment. The nominee receives all the money in the event of the policyholder’s death.
An individual is free to appoint anyone he/she desires as the nominee in the life insurance policy. Similarly, in your case, you will be able to revoke or change the existing nomination from your sister to your wife. This will not require any consent or signatures from the existing nominee i.e. your sister. You can write to your insurance company, fill up the required forms, and get the nominee changed.
3. I have purchased a term plan two years ago. This year I have been diagnosed with hypertension. Do I need to inform my insurance provider? Is it mandatory?
Ans: The business of insurance is based on the principle of utmost good faith and trust between the insurance provider and the insured. As per the principle, it is important that an individual opting for a life insurance policy discloses all the relevant personal information to the insurance provider. It is of utmost importance that the insured truthfully shares his/her current health condition and health issues of the past. Therefore, it is always prudent to keep your insurance provider updated about your health status.
For many insurers, it may not be mandatory to keep them updated about the insured’s health condition or issues developed post-policy purchase. However, informing your insurance provider will be beneficial, ensuring a hassle-free claims experience.
4. I have shifted to a new location permanently. Do I need to inform my insurance provider about the new address? The older address mentioned in my policy is of my native house. If my address isn’t updated, will it impact the claim settlement process?
Ans: It is important to ensure that your personal information always remains updated with the insurance company. This includes your address. To update your insurer’s records with the new address, you should write to your insurance company and update them about the change in your address along with the new address proof. This will ensure that all your correspondence with the insurance company reaches you at the desired address.
An incorrect address will impact communication between you and your insurer. Usually, change of address does not impact claim settlement. It will only have an impact in case the settlement amount is paid by cheque and an incorrect address will delay the process.
(The spokesperson is the MD and CEO, Aditya Birla Sun Life Insurance)