The insurance business in India isn’t just growing, but also becoming more sophisticated in terms of product offerings. To help readers keep ahead of developments in this business, Mint features a Q&A on insurance every Monday.
I am 26, and am working with a manufacturing company. I have a group life insurance through my organization. Do I still need a personal life insurance plan?
Group life insurance is a benefit some employers provide to their employees. But no matter how good the benefit package is, it comes with the job with the employer, who is paying the premiums. The benefit ceases when you leave. In a dynamic economy, opportunities abound. When you move to another job, this could leave your family vulnerable. With an individual life insurance plan, the cover stays with you no matter where you work. So it is always advisable to have personal policies as the mainstay of coverage, with the company’s offering supplementing your protection provisions. Think of group insurance as a company leased accommodation in the city where you work, and personal insurance as your own house.
I am 25, and have just started working. I have been advised to buy an endowment life insurance plan. What are its advantages?
Endowment plans are essentially savings-cum-protection plans that may or may not guarantee a certain amount of cash at the end of a specified period. However, they would guarantee a certain amount of cash to your dependents in case of death during the specified period.
An endowment plan emphasizes safety and security along with reasonable returns. It can be used to save for specific purposes—planning for your children’s education or marriage, buying a house, taking a vacation, etc., with the added assurance that the plan will be realized even if the eventuality happens before the accumulation period ends.
Readers are welcome to write in with their queries to email@example.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Rajesh Relan, managing director, MetLife.