Ask Mint | Evaluate costs before replacing life policies

Ask Mint | Evaluate costs before replacing life policies

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 have seen advertisements for term insurance at much lower rates than the policy I am now paying for. Is it advisable to discontinue my current policy and buy a new lower-cost policy?

Term life insurance rates tend to be very competitive and have seen a decline over the years.

If you find that your needs for insurance could be met by a new, lower-cost term life policy, you might consider dropping the older policy and getting a new lower-cost policy. However, before you do this, you should make sure that the newer policy has the appropriate coverage because a policy with different features might be lower-cost but not have the type of coverage you require.

Also, keep in mind that you are older than when you bought the original policy, and your health status may have changed. Please note that the rates offered in a term life policy depend on various factors such as age and health condition.

My brother recently died in a car accident. He had invested in a unit-linked insurance plan about four years back. How does the nominee/legal heir make a death claim in a unit-linked policy?

In case of a death claim, the claimant (nominee/legal heirs) must submit the following:

• An intimation of the death of the life assured

• Death certificate issued by the local health and medical authority

• Completed claim forms

• Policy of life assurance

• Medical evidence in case of health and disability rider claims

• Other forms as required by the company

As per the insurance regulator’s directive, the claim has to be settled within 30 days from the date of receipt.

In case the claim warrants an investigation, then the insurance company has to complete the investigation not later than six months from the time of lodging the claim.

Readers are welcome to write in with their queries to The questions will be answered by senior executives from leading insurance firms.

This week’s expert is T.R. Ramachandran, managing director and CEO, Aviva India.

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