The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I am 33, and earn about Rs40,000 per month. There are no obligations or liabilities. I have already invested in a term plan and now intend to make provision for my three-year-old child. What is the best option? How expensive are the charges in an insurance plan?
Rajesh Relan
You can opt for specific children insurance plans meant for the benefit of children, to save money for their education and marriage. The benefits under these policies coincide with the requirements of children at different stages of life, that is, at the time of higher education, settlement in profession or marriage, among others. There are options under children insurance plans to insure the life of the parent or the child. It is advisable to opt for a plan where the life of the parent is insured, as it can make the child the beneficiary and hence, provide protection during the child’s growing years. A good child plan can be a vehicle to ensure a smooth, guaranteed and risk-free financial future for your child. Whenever you buy any insurance plan, please understand the charges. It is very important to truly understand them, so that there are no surprises awaiting you or your child, as the case may be.
My father has just been diagnosed with a critical illness. He has a life insurance plan with a critical illness rider. How will the policy operate in this case?
The critical illness rider attached with a life insurance policy provides coverage to the person insured for a critical illness listed in the policy. Usually, the entire sum insured under the rider becomes payable to the policyholder within a pre-decided time after the diagnosis of the illness. In your father’s case, the disease has been detected, so you can file your claim. After preliminary investigations, the company is likely to settle the sum insured against the rider.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Rajesh Relan, managing director, MetLife India Insurance Co.