Insurers don’t classify smokers based on smoking intensity

The impact of smoking is most in pure term plans and less in investment insurances


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iStockPhoto

My father bought some policies on the suggestion of an agent who claimed to be a financial adviser from the Insurance Regulatory and Development Authority of India (Irdai). He said these policies are just one-time investments and took a total of Rs.6.16 lakh. He promised that after paying only one premium for each of the different policies, my father will get Rs.15 lakh on 15 November 2015, which did not happen. The agent has started pressurising my father to buy some more saying that he will otherwise not get the money back. I had registered complaints to the local offices of these companies, but was turned away with illogical reasons. What should I do?

—Richa Gupta

The insurance regulator, Irdai, does not call any individual with specific insurance proposals. It is clarified on their website and in public advertisements. There is also a link available allowing you to check an agent’s authenticity.

In your case, the first priority is to check what insurance you have bought, if any. Check if you have received a policy contract or premium receipt from an insurer and whether it is a regular annual premium product that was explained to you as a single premium. Go through your documents. If you don’t have an insurance policy, then it is a criminal case that needs to be taken up with police.

If you have a policy, then you will have to tell the insurer that the insurance was mis-sold. One argument is that your father’s annual income does not support an annual premium of Rs.6.16 lakh, so how was the insurance issued to him? If you don’t get a favourable response, consider approaching the insurance Ombudsman. It takes a strong pro-policyholder view of complaints. Also, inform Irdai, so they can take this up through their own processes.

I smoke two cigarettes a week. How will this impact when I take life insurance?

—Tanuj Garg

You will be considered a smoker for buying life insurance. Insurers do not yet classify smokers on their smoking intensity—there will be no difference between you and a heavier smoker. The impact of smoking is most in pure term plans and less in investment insurances. If you are purchasing a term plan, then select an insurer that has moderate smoking rates. Another way is to quit smoking and apply for insurance after six months to a year. Insurers may then consider non-smoker rates.

Will a claim be allowed if a person dies before she has paid the renewal premium?

—Shashank Bajpai

If premium remains unpaid after the due date but before the grace period ends, death claims are still payable. The insurer has a right to deduct the unpaid premium from the claim amount. But if the premiums are unpaid after this period, the policy lapses. No claim is payable after this. Grace period is 30 days, except premiums with monthly mode of payment of 15 days grace period.

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