My daughter will travel next month for her PhD programme abroad. While applying for her student travel insurance plan, I was wondering if her asthma would be covered? She has asthma for the last 15 years. Should I declare it or will that hamper her policy?

—Manik Chandan

It is standard for universities to suggest a particular health insurance plan for incoming students. When you take the policy, you must declare the pre-existing conditions; in your daughter’s case, you should declare that she suffers from asthma.

The type of plan varies across universities. Most student plans would cover pre-existing conditions immediately. A few may put restrictive conditions such as a waiting period or co-pay on pre-existing diseases.

I have an endowment policy of 20 years for which the annual premium of 21,000 is paid for the first five years. The returns, however, are not good. Should I surrender the policy?

—Jay Ravani

Returns on endowment plans are generally low. Life cover in endowment plans when compared to term insurance is low as well. Since 15 years of premiums are yet to be paid, you could consider surrendering the policy.

You should first determine the accrued surrender value and ascertain if there would be any loss compared to the premiums already paid. Next, evaluate the expected investment return on this surrender value and future investments. If the expected corpus via the alternate investment is more than that of the life insurance policy, then you should surrender the policy.

Also, you should buy a term cover of at least 10 times your annual income. This will ensure that you get adequate life cover and a reasonable return on investment.

Is there a disease-specific cap in all group health plans or does it vary from policy to policy?

—Name withheld on request

A group health insurance plan gets customized for each corporate. A disease-specific cap limits the utilization of the sum assured for specific illnesses. This reduces the claim amount. So, insurers offer a reduced premium for policies with capping. Several companies get a disease-wise capping included in their policy to reduce claims and premium.

The number of diseases that are restricted to a specific amount and the amount itself can be customized.

Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries and views at mintmoney@livemint.com

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