Can I include my brother as one of the dependants in a life insurance?

—Riji Thomas

You can add your brother as a nominee in your life insurance policy. Nominees need not be financially dependant on you. Nominees can be adults with an independent source of income and need not be of specified relationship.

However, your brother will not be a beneficial nominee. Legal heirs can claim insurance proceeds from a non-beneficial nominee. You need to assign the proceeds to your brother via a Will, so that the money eventually goes to him. As per insurance rules, parents, spouse or children can be beneficial nominees.

I have just started working and have an annual package of 8 lakh. How much life insurance cover should I aim for? I am 24. Please explain how do you calculate the amount required.

—Name withheld on request

A thumb rule is to take a cover of at least 10 times your annual income. Accordingly, you should take a sum assured of minimum 80 lakh. You should enhance this for any specific liabilities that you may have such as a mortgage or education loan.

I work with a travel agency and have to go abroad quite often to manage trips. Will my life insurance be applicable even while I am travelling outside India?

—Harsh Goel

Yes, life insurance policies issued in India have a worldwide coverage, round the clock. So, coverage will remain in force during your travel. However, claim would be settled in Indian rupees only. Your nominee has to submit all claim documents in India.

My agent is forcing me to buy a convertible term policy. I am a 35-year-old businessman with a wife and two children. Is purchasing a convertible term policy a good idea?

—Kishore Sinha

Convertible term plans allow you to convert a term plan into an endowment plan at a future date. The principal advantage of such plans is that at the time of conversion, the insured person does not have to go through a medical check-up or give a health declaration. If the convertible plan comes at the same cost as a standard term plan, then there is no downside. Conversion is only optional and not mandatory. However, I don’t recommend to pay extra premium for this feature. Endowment plans are investment oriented plans, and relatively easy to buy. The medical underwriting criteria for an endowment plan is less stringent. So you can still get a plan, even if you have a minor health condition.

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Abhishek Bondia is principal officer and managing director, Queries and views at