When buying life insurance, most good advisors recommend that you go in for a pure term plan. A pure term plan is an insurance policy that offers life cover (with no investment component, bells or whistles – we’ll tell you why you don’t need those in a later article) for a specific ‘term’ or period of your life.
One of the very first questions you’ll be faced with after deciding to buy a term insurance plan, is – What’s the size of the term cover (what insurers call the sum assured) you’ll need?
Most folks don’t put much thought into this and go for the nice round number suggested by their insurance agent, which is usually Rs 1 crore. You can online calculators, but they can throw up widely diverging numbers.
Most of us buy insurance to make sure that our finances, or those of our dependants, are protected from fate’s sudden googlies. But what if the insurance company you’re relying on is in a shaky financial situation? This risk is not an outlandish one in India.
Recently, IRDA (Insurance Regulatory and Development Authority) asked Reliance Health Insurance Company to stop selling new health policies and to transfer its older policies to Reliance General Insurance Company, after finding that it was unable to maintain its solvency margins at statutory levels. In June 2017, IRDA had ordered Sahara Life Insurance to stop issuing new life policies and had directed its takeover by ICICI Prudential Life Insurance. The order was later overturned by SAT.
If you’re looking to buy a life or a general insurance policy, it is best to vet your insurer before signing up to avoid such uncertainties. What are the checks you can run to ensure that your insurer is in it for the long haul?
LIC’s annual bonuses come out of the valuation surpluses in policyholders’ funds. They are not guaranteed They are simple additions to your account and don’t compound. They are not comparable to other kinds of returns because they are calculated on your Sum Assured and not Premiums paid Are you staying with good quality funds? Use
If you’re sick and tired of relatives, friends and neighbours badgering you to buy insurance, you may be surprised to know that there’s one type of insurance that’s hardly ever hard-sold to Indian investors. Immediate annuity plans are often ignored by agents because they require clients to sign up for an over-large upfront premium. Financial