Independent term plans are more flexible than joint plans

Also, often, the independent plans work out to be cheaper


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I have a company life cover of Rs.65 lakh, which will increase as I gain seniority in the organisation. I recently got married. Do I need to buy a term cover?

—Rahul Khatri

You should always own your own personal term insurance, independent of the company where you work. This ensures that if you change companies or if the company withdraws this benefit, you are still insured. The amount of insurance should be at least 10 times your income. If that condition is met in your case, then the sum assured is adequate.

The other considerations in determining sum assured are that the death benefit should pay off all your loans and cater to the major milestones of your dependants. Buy term insurance now because as you grow older, prices increase and there is a greater likelihood of insurance cover being denied.

I want to extend my life insurance cover to include my husband. What’s the process?

—Ranjana Singh

I would suggest that you buy a separate term cover for your husband and keep the two independent. This offers you more flexibility because you can have different sum assureds linked to the income of each person. In the future, if you are financially secure, you could lapse any one of the insurances.

There are some joint-life insurance plans available but I prefer independent plans for their flexibility. Also, often, the independent plans work out to be cheaper.

I want to buy a term cover. I have read that smokers have to pay a higher premium than non-smokers. Is that true (I am a smoker)?

—Kushanu Sinha

Yes, premiums are higher for smokers. Insurers expect less longevity and more diseases with smokers, which is why premiums are higher.

However, there are a few insurers that do not differentiate for smokers or they charge smaller loadings for cigarette smoking. You could opt for those.

Insurers will charge higher rates even if you smoke occasionally. They also do cotinine blood tests that identify if you have smoked in the recent past.

Should I consider buying a disability rider with my term insurance policy?

—Yatish Gupta

An accidental death or disability rider along with a life insurance policy is more expensive than a similar plan offered by general insurance companies. The plans offered by general insurers are more comprehensive as well. The only advantage of a rider in a life insurance policy is the ease of administering a single plan.

In case you plan to buy a rider with a life insurance policy, do make sure that the benefit is defined as a ‘stand-alone’ benefit and not an ‘accelerated’ benefit. Under the latter, in case of a claim on the rider, the base sum assured gets reduced by the claim amount. A stand-alone benefit is an add-on benefit.

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