My daughter is getting married next year. We have taken a wedding planner on board to plan, decide and make all the wedding arrangements. The company asked us to take an insurance cover for the event. How feasible is this?
Wedding insurance products are available off the shelf. They cost about 1% of the overall sum assured. The insurance covers four primary risks—cancellation of the event, damage to property, personal accident and public liability. Cancellation of the ceremony due to fire, earthquake or burglary at the venue, is covered. Further, if the specified persons in the policy die, meet with a serious injury, or are hospitalised, the policy pays compensation. In such cases, the insurance indemnifies expenses already incurred including advances paid for cards, catering, decoration, and hotel.
In the damage to property section, physical damage to property due to fire, earthquake and burglary, gets covered. Property may include the cost of decoration, shamiana, jewellery, precious metals and stones. Finally, the policy covers accidental death and disability for the specified persons. And, liability towards third parties for loss suffered by them due to either injury or property damage.
I was supposed to pay the premium on my term policy last month but I missed the date. What can I do now?
Life insurance policies carry a grace period after the due date, by which you can pay premium. Typically, this is 30 days for premium payable in annual, semi-annual and quarterly mode. For monthly mode, it is generally 15 days. Within the grace period, you could pay the premium without interest and renew the policy without break. In case of death during the grace period, the insurer deducts the premium and pays the sum assured to the nominee.
If a policy is not renewed within the grace period, it is considered lapsed, which can be revived by paying overdue premium and interest. Depending on the period for which the policy is lapsed, fresh medical underwriting may be required. Generally, if a policy is revived within six months, no fresh medical underwriting is required.
I am 28 years old and I have a one-year-old son. My wife earns about ₹ 3 lakh a year. I earn nearly ₹ 15 lakh annually. We are planning to have a second child soon. How much health cover should we buy?
You should take health insurance of at least ₹ 15 lakh in line with the rule of thumb to take a cover equal to one’s annual income. It will cost around ₹ 12,000 plus taxes to cover yourself, spouse and one child. With the second child, the premium will go up to around ₹ 16,000 plus taxes. This is for a plan without maternity benefit. Note that premium increase for incremental sum assured is marginal. For example, the premium to cover yourself, spouse and two children for ₹ 10 lakh would be around ₹ 14,000 plus taxes.
My life insurance policy does not cover accidents. In case I die due to an accident, will my nominee get the sum assured?
All life insurance policies cover accidental death. The only exclusion is suicide, that too in the first year. So, your nominee will be entitled to get the full sum assured, irrespective of the cause of death.
A few polices carry an additional accidental death rider. Riders pay an additional sum assured in case death is caused due to accident.
Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries at firstname.lastname@example.org