My son is a non-resident Indian (NRI). I wish to buy a life insurance policy for him from Life Insurance Corp. of India (LIC). Can I buy it in his absence, or do I have to wait till he visits India?
You can take the policy for your son while he is abroad or during his visit to India. NRIs are allowed to avail insurance policies in these situations in the following ways:
• They can take an insurance policy during a visit to India. All the formalities of proposal completion, medical examination reports, special reports and moral hazard reports are required to be completed during their stay.
• Alternatively, they can take an insurance policy from their country of residence through mail order. All the formalities mentioned above, medical and special reports have to be completed from the country of residence.
Once the papers are in place, you can propose a policy in your son’s name.
Are there any life insurance policies with term plans for short durations like, say, one or two years?
Most life insurance contracts are available for the long term (10, 15, 20 or 25 years). Term plan is also a type of long-term contract. But at times the insurer restricts the term to a shorter duration such as one-two years. This generally happens when lending institutions insist that the borrower must have insurance equal to the amount advanced for a short period.
In some cases, term plans are also available for three, five or six years with a fixed (level) premium payable each year. These can be renewed for equal periods till the life assured reaches a certain age, as stipulated in the policy conditions.
What does ‘double accident benefit’ mean?
—Prem Kumar Sinha
On payment of some extra premium, most insurance companies offer to pay double the sum insured if the death of the person insured is caused by an accident. This increased cover is popularly known as “double accident benefit”. For this benefit, the death of the person insured must be caused directly and independently of all other causes, and should have resulted from an accidental injury.
Further, the death of the insured must follow within a specified period of injury, which is typically 90-180 days. Usually, the compensation is subject to an upper limit stated in the policy.
My husband and I have separate bank accounts. Can we merge these into a single joint account?
Merging is not possible. You may close an account and become the second holder in another account. Alternatively, both of you can become joint holders in each other’s account. You will have to make this request to the respective banks in writing. If you are banking with public sector banks and have accounts in different branches or different banks, the process should take a while. As the tax liability vests with the first account holder, it would be better to become joint holders in each other’s accounts.
Do private banks also offer Public Provident Fund (PPF) schemes?
No, private banks do not offer PPF account schemes. However, you can open a PPF account with a minimum of Rs5,000 at any head post office or general post office. Alternatively, you can open a PPF account with any designated State Bank of India (SBI) branch. You may also open a PPF account in select branches of certain nationalized banks.
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