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| Life insurance: Deepak Sood |
| Deepak Sood / Sep 08, 2010, 00:38 IST |
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 If both policyholder and nominee in a life insurance policy die around the same time, who will be entitled to the proceeds?
A nominee provides valid discharge to the insurer to receive the policy money, if policy becomes a claim, owing to policyholder’s death during the term of the policy. In case the nominee dies before the life assured, or both deaths are simultaneous, or the nominee dies after the death of the life assured but before collecting the claim amount, the policy becomes intestate.
In the absence of a will covering the life insurance policy, the claim proceeds are payable to the Class-I legal heirs of the life assured.
I was misguided by an agent to buy an inappropriate unit-linked insurance plan (Ulip). I was not told that fund management costs are charged every year. I have been reading about new improved Ulips in newspapers. Should I terminate this plan and take up a new one? Do I stand to benefit with new policies vis-a-vis old ones? Where can I buy these from?
The Insurance Regulatory and Development Authority (Irda) guidelines mandate that, before taking a Ulip, a benefit illustration has to be signed by the customer. This illustration is based on two gross returns of six per cent and 10 per cent a year, and gives the net returns at the end of the term. This helps you decide on how much return has been reduced due to various charges.
Check whether the same has been done in your case. If a benefit illustration was not signed by you, you can file a complaint with Irda’s grievance cell.
New Ulip guidelines and the discontinued linked insurance policy regulations, which came into effect from September 1, put a cap on various charges, including premium discontinuance charge. They are lower than what insurers have been charging earlier, making these more beneficial to the customer.
Regarding the termination of your policy, we will advise you to not terminate it if it has been issued in a truly compliant manner. If discontinued in the initial years, the policy may be subjected to a surrender charge, which is deducted from the policy fund. Also, old Ulips have a lock-in period of three years (if Ulip was purchased between July 1, 2006 and August 31, 2010).
In this case, you may not get your money immediately. We recommend you to go through the product brochure and the policy terms & conditions to understand the charge structure on your policy. This will help you take an appropriate decision, whether to continue with the policy or buy a new one.
All life insurance companies have launched new Ulips. You can visit their respective web sites, or contact their agents, and take an informed decision. Premium calculator and benefit illustration are also available on these websites.
I am planning to buy an online term plan. Will I have to undergo a medical check-up? If the entire procedure happens online, how do I submit my reports?
You can buy a life insurance term plan online. Many insurers offer this on their websites & web portals. In any online process, the system prompts if there is any adverse medical history, or if the sum assured is beyond the non-medical limits of the company, in which case the customer will have to undergo a medical check-up. The software will redirect the query to the back-end support of the company to complete the health check-up and the other formalities.
In India, since people do not have a digital signature, the formalities of ‘know your customer’ is completed by the back-end operations of the insurance company by sending a representative to the location to get the proposal form and other documents signed.
The writer is the managing director and CEO of Future Generali India Life Insurance. Send your queries to yourmoney@bsmail.in
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