Buying single life plans is more cost effective than a joint policy

Administratively as well, it is easier to discontinue or modify single plans compared to joint life plans


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Will claims be given in suicide cases? If not, are there are any exceptional clauses under which suicide cases will be considered?

—Harish Nair

Suicide is a standard exclusion for the first year in all individual term life insurance policies. After the first year of the policy, suicide is covered. Any kind of death, natural or accidental, becomes payable. There are no exceptions under which suicide is not covered after the first year. In the case of a group life insurance policy, suicide can be covered from day one itself with payment of some additional premium.

I am 35 years old and my wife is 36 years. I want to buy a policy for my wife. Should we buy a joint policy? We do not have any dependents at the moment.

—Adarsh Kapur

I recommend you buy separate individual policies rather than a joint life policy. It is more cost effective to buy two single life plans, as compared to the joint life plans available in the market. Administratively as well, it is easier to discontinue or modify single plans compared to joint life plans. Life insurance amount should be purchased to cover loss of income. You should plan her life insurance amount based on her income. This should cater to your requirements today and even in the future when you may have dependents.

I will be moving abroad for work soon. Do I need to surrender my life insurance?

—Jayshree K.

You need not surrender your life insurance while moving abroad. Life insurance plans have worldwide coverage. Though the claim payment happens in India, the insured can travel globally without restrictions.

However, you will need to pay future premiums in Indian rupee rather than in foreign currency.

What is the benefit of subscribing to a group gratuity plan?

—Kamlesh Jain

A group gratuity plan has two advantages. First, it helps you avail tax deduction for the yearly amount you set aside towards gratuity payments. Unless, you pay the amount to a gratuity plan, the amount set aside as a reserve is not tax deductible. Second, it often has better treasury management than managing the reserves yourself. The interest or income generated on the gratuity plan helps provision for future gratuity liabilities.

Will my life insurance premium increase with age? Also, is there an advantage of buying life insurance at a young age?

—Gargi Patel

Life insurance policies are long-term contracts. In a typical life insurance policy, premium remains same for the term of the policy; it does not change with age.

There is a definite advantage of buying it early. Other than getting lower premiums locked-in, the process of getting coverage at younger age is significantly easier than in later years.

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