I am a non-resident Indian aged 42. I am looking to buy a term insurance policy of ₹1 crore. Is a pure term plan sufficient or would you recommend add-ons? How do I choose from the different options like critical illness and accidental death plans?
Policy add-ons or riders can be beneficial as they allow you to widen the scope of coverage of your term insurance plan at very low premium rates. If you choose an accidental death benefit rider, you would get an additional sum assured in case of accidental death. Similarly, a critical illness rider covers specific critical illnesses and pays a lump sum benefit if you are diagnosed with any of the covered illness.
You should, however, evaluate the add-ons relative to the equivalent stand-alone plans available in the market. Stand-alone personal accident plans cover partial and total permanent disability, apart from accidental death. Many accidental riders in term insurance cover only accidental death. If the premium rates are similar, it makes sense to go for the stand-alone plan.
Similarly, some stand-alone critical illness plans cover more than 30 illnesses, while a critical illness rider in a term insurance may cover less than 10 illnesses.
A few term insurance riders are structured as accelerated benefit. If the rider is triggered, the base sum assured is reduced by that amount. You should opt for a plan that offers riders independent of the base sum assured.
I changed my car insurance provider in December 2019, but the previous cover continued for that month. During the period, I made a claim under my previous motor policy. By then I had got the no-claim bonus (NCB) for the new policy. Can I make a claim with the new insurer though my NCB is not valid anymore?
You should declare the claim made in 2019 to your current insurer. Since the claim was made after the renewal payment, the insurer is likely to recover NCB and continue the policy.
The insurance company may ask you to state the reasons for delayed intimation, and give the details of the claims made. Also inform the insurer of the fresh claim.
Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries at email@example.com