What factors should be kept in mind while choosing a bank for senior citizens?
There are certain facilities that banks offer to senior citizens. Interest rates offered on fixed deposits to senior citizens are higher. Also, some banks have a special desk to assist senior citizens. Proximity of the bank branch/automated teller machine (ATM) to your home is one of the major factors that you should consider. Extended banking hours is another consideration that you should take note of. While there are only a few banks that offer 24-hour banking, 12-hour banking is gradually becoming a practice. In addition, look for core banking facility in the bank because it will help you deposit/withdraw money from any branch.
I made a purchase using my UTI (Axis Bank) Bank credit card for which I paid back the bank by cheque. But the cheque was not cleared even though I had enough funds in my account, nor did it bounce. Now, the bank is charging me late fees. I mailed them from June to December 2007 and also sent a registered letter with no positive reply. How can I resolve this problem?
—RAJESH D. SHENDE, EMAIL
The Reserve Bank of India (RBI) has made it mandatory for all banks to acknowledge the receipt of all cheques by putting the date stamp on them. One should make it a practice to follow this in order to avoid such incidents. In your case, if you have any such proof of deposit of the cheque, go to the bank with it. And then ask them why the cheque was not cleared. If you do not get any satisfactory answer or you do not have any such proof, then the only option left for you is to approach the banking ombudsman. You will need to attach all the paperwork (letters that you sent to the bank). You should also take a printout of the bank statement of the month when you had made the cheque payment to prove that the cheque was not cleared despite sufficient funds.
Is there a way by which I can prevent transactions being done from my debit card by someone else?
—P.K. MADHAVAN, EMAIL
When you shop offline, while swiping a debit card, a pin number is not required to validate the transaction. Online purchases with a debit card are much safer because transactions take place on the bank’s website rather than at the merchant’s. Here, only the customer identification number and the netbanking password are required, which are known only to the customer.
To protect your card, you should first keep it in a secure place and report loss of the card immediately to the bank and block it. At the same time, you should also put in a request for a fresh card so that you can resume your banking transactions immediately.
What is the procedure for shifting a pension account from one city to another?
—SAROD DE, HISAR
You have to apply in writing to the bank at which you receive the pension currently. The link branch, after keeping the requisite note, will forward the disbursers’ portion of the pension payment order (PPO) to the link branch at the new location for setting up payments through the new paying branch. Necessary intimation will be sent to the central pension accounting office (CPAO) by the new as well as old link branches in a prescribed format (Annexure XXI) for maintaining a note of the change in their records. On receipt of the pension documents, the receiving link branch will ensure the forwarding of the PPO to the paying branch within three days and inform you.
Before paying the disburser’s portion of PPO to the new paying branch/link branch, care will be taken to ensure that the month up to which the payment has been made is invariably indicated in the disburser’s portion of the PPO.
LIFE INSURANCE QUERIES
What are money-back and endowment policies?
An endowment policy covers life risk for a specified period. Under this, the sum assured is paid along with the accumulated bonus at the end of the term. Money-back plans are endowment plans that periodically return a certain percentage of the sum assured instead of paying a lumpsum at the end of term. The percentage, the number of instalments and the intervening period between instalments depend on the term and the policy. If a policyholder outlives the term, they get the remaining corpus with accrued bonus. However, if the policyholder dies within the term, the death claim comprises the full sum assured—any survival benefit that may have already been paid as a money-back component is not deducted. The bonus is also calculated on the full sum assured and because of the benefit of assured returns, the premium for money-back policies is higher.
What is a term insurance cover? Does one get any benefit when it matures?
—PAPPU CHAWLA, EMAIL
A term insurance plan is a pure risk cover, where a very low cost is paid towards the coverage of life risk for a specific term. If the insured person survives the term, then usually they get nothing. However, if the insured person does not survive the term, the legal beneficiaries receive the amount equivalent to the sum insured. However, some companies have devised term policies with the benefit of return of premium on maturity of the policy. Therefore, whether one gets the premium back or not will depend on the type of the policy. Premiums for policies that give a lump sum at the end of the term are higher compared with policies that do not promise any returns at the end.
If one pays the life insurance premium during the grace period offered by the insurance company, does it affect the risk cover under the policy?
—ABHIJIT AGGARWAL, EMAIL
Every life policy states the dates on which the renewal premium is payable. The policies also provide for a grace period for payment of premium. It is different for different modes of premium payment. The period usually is one month where the premium payable is yearly, half-yearly and quarterly.
It is 15 days in case the premium is payable on a monthly basis. During the grace period, the policy remains in full force, even if the due premium is not paid. Also, there is no additional interest charged on the premium paid during this time. Even in the case of a claim, on account of death of the insured during the grace period, the claim is payable in full. However, it is subject to the deduction of the unpaid premium amount.
GENERAL INSURANCE QUERIES
My housing society is looking to insure its staff, that is, night guards and gardeners. Which policy do you recommend?
Your society as employers of night guards and gardeners is responsible for any accident or unfortunate happenings while they are on duty. The liability in such cases is determined under the Workmen’s Compensation (WC) Act, 1923. Therefore, as employers, you should cover them under a workmen’s compensation policy. This policy will cover your society against any liability under the WC Act. Apart from this policy, you may cover them under a personal accident policy and a medical insurance policy. Any claim made under either policy will require at least 24 hours of hospitalization.
I want to sell my car, which was insured only last month. Can I ask the insurance company to refund me the premium amount for 10 months? Is the policy transferable and can I take the premium amount from the new owner?
—DEEPAK RAWAL, EMAIL
When you sell your vehicle, both the options—transfer of insurance policy to the buyer or asking the insurers to refund the premium—are available. If you transfer the policy to the buyer, you need to write to the insurer and enclose the ownership proof in favour of the buyer. Insurers charge a nominal fee for this.
The buyer, however, will not get the benefit of the accumulated no-claim bonus on the subsequent renewal of the policy. You can also ask your insurers to cancel the policy and refund the premium. In that case the insurers will refund the balance premium after charging the premium for the period when the policy was in force. The charge of premium in such cases is on short period scales, which is considerably higher than the pro-rata premium.
What points should be kept in mind before deciding in favour of any particular insurance agent or a broker?
—VIPUL NAGPAL, EMAIL
First, the insurance adviser must have the required qualification and a mandatory licence issued by the Insurance Regulatory and Development Authority (Irda). Second, the adviser should be capable enough to understand your needs and offer suitable products. Associate with an adviser who can provide the entire range of products.
Insurance companies offer a wide range of products and a good adviser needs to have thorough knowledge of all these. Moreover, they should be informed about the competitors’ products so as to provide unbiased and meaningful recommendations, regardless of how much they stand to gain by way of commissions.
An agent represents one insurer and therefore is bound to sell products of a particular company, whereas a broker represents a client and is authorized to sell all the products available. In this respect, brokers score over agents.
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(The views expressed on this page are not the newspaper’s opinion and are provided for information purposes only by Outlook Money. Readers are requested to do their own research. Neither Mint nor Outlook Money will be responsible for any actions and outcomes based on information provided here.)