Ask Mint Money | There is an option to revive a policy but read the terms first

Ask Mint Money | There is an option to revive a policy but read the terms first
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First Published: Wed, Nov 30 2011. 01 24 AM IST

Updated: Wed, Nov 30 2011. 01 24 AM IST
I am 29 years old and have no dependents. Should I purchase a life insurance policy now or after I get married?
—T. Sunil
It is good to start early. I will advise you to spend some time with a certified financial planner to discuss your financial goals and the means to achieve them. Life insurance should be an important part of that plan. My suggestion would be to purchase a term insurance plan immediately if you haven’t already got one. As you go through personal milestones in life (such as marriage and birth of children), keep revisiting your financial plan to secure the future of your family.
My parents don’t have a life insurance policy. My mother is 50 years old and my father is 57. I would like to purchase retirement policies for them. Can you suggest the best ones for them?
—Rajesh Desai
For your mother, I would suggest to invest in a deferred pension plan with a term of 10 years to build up a corpus which may be used to purchase an immediate annuity when she attains 60. Simply put, you will invest annually for 10 years (accumulate phase) and at the end of the term, you will use the corpus to buy an immediate annuity that will give your mother a regular annual income stream. For your father, the accumulate phase won’t be long enough so I would suggest you set aside a lump sum amount and invest in an immediate annuity plan. This will help augment his post-retirement income with steady annual returns.
I bought a life insurance policy five years ago at the age of 30. It is a combination of whole-life and endowment plans but I had to discontinue it three years ago because of financial problems. My annual premium was Rs 54,000. What is the procedure to revive the policy?
—James Thomas
It is difficult to answer this without checking the specifics of your plan. Life insurance companies offer their policyholders an option to revive a discontinued policy. I suggest you get in touch with the customer services desk of the insurance company and verify if you satisfy the conditions for revival of your plan. Please read through the document that you would have received after purchasing the policy before approaching the company.
Amitabh Chaudhry MD & CEO, HDFC Standard Life Insurance Co. Ltd
Queries and views at mintmoney@livemint.com
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First Published: Wed, Nov 30 2011. 01 24 AM IST