Does drinking alcohol affect life insurance? How does an insurer ascertain whether one is alcoholic or not?

—Kunal Kishore Jha

Yes. Since consumption of alcohol can have an adverse effect on a person’s health, it affects the premium that you pay for the cover. The insurer ascertains whether a person is alcoholic through two ways. One, the proposer’s replies in the form. Two, from specific medical tests, which may be asked for in case of doubt, or where the existing medical test gives an adverse finding.

The salaries of my wife and mine are equal. Is it sufficient if one of us takes a life insurance? Should we go for a joint cover?

—Prantesh Mehra

Both of you should have a separate life cover. In case one of you meets with an unfortunate event, the spouse would be covered well to meet all liabilities. You can also consider a joint life policy, where the life of both husband and wife are covered. There are different types of joint life policies available today. Evaluate well before buying one.

I want to buy a life insurance cover. What all should I consider before choosing one?

—Meetu Das

Before buying a policy, you must do a complete “needs analysis”. This means that you should assess what type of insurance plan you require—a term plan, children’s plan or pension plan. This would be based on your goals. You should then assess how much premium you can afford to pay and finally choose a plan that offers you maximum coverage.

My life insurance cover also has accident cover. Will the insurer compensate me if I meet with an accident overseas? What proof they may ask for? What happens if I die overseas?

—Sudip Chetri

The cover is applicable even if the person meets with an accident overseas. The insurer requires a report from the authorities explicitly stating the occurrence of the accident and the hospital document detailing the medication or treatment and the nature of accident.

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