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Ask Mint | Cancelling existing insurance policies may lead to financial loss

Ask Mint | Cancelling existing insurance policies may lead to financial loss
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First Published: Sun, Oct 21 2007. 11 07 PM IST
Updated: Sun, Oct 21 2007. 11 07 PM IST
The insurance business in India isn’t just growing, it is 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 a 35-year-old man, and I am considering replacing my existing life insurance. Are there any risks involved in doing so?
Yes, and that’s why it is better to weigh the options carefully. Cancelling existing policies may result in some financial loss to you. Before replacing an existing policy, closely compare the two policies on price, guarantee periods, convertibility, financial strength of the insurance firms and available options. Most importantly, do not cancel any existing coverage until the new policy has been approved, paid for, and delivered to you.
I am 27 years old and I want to invest in a life insurance policy. Is there a policy in which I can receive regular money during the tenure of the policy?
Traditional money-back plans can help you plan effectively for critical milestones of your life. The plan not only covers your life, it also assures you a percentage of the sum assured as cash inflow at regular intervals. The risk cover continues for the entire policy term in spite of the instalments already paid. If you outlive the policy, the balance sum assured is paid back to you. This is suitable for you if you plan to use the funds received from the policy for your future anticipated needs.
I am 28 years old. I am planning to invest in a unit-linked insurance plan. How can I track the returns?
All life insurance companies are required by the Insurance Regulatory and Development Authority to publish the net asset values, or NAVs, of their funds on their websites. This NAV information is also available in the print media. NAVs help you to understand the performance of the fund you have chosen in your plan.
Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.
This week’s expert is Rajesh Relan, managing director, MetLife.
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First Published: Sun, Oct 21 2007. 11 07 PM IST