Life Insurance: V Philip

Last Updated: Mon, Mar 19, 2012 20:20 hrs

I am 42 and a non-smoker. I am planning to buy a term insurance of Rs 1 crore. Hence, I want to choose a plan carefully. Is it advisable to go for an online plan? What are the disadvantages of such policies?
Online term plans are hassle-free and usually offer large coverage at an economical price.

But, before choosing a term plan, check on the claim settlement procedure of the insurer and claim settlement track record, available on their website.

Also, consider the ease of making alterations in your policy, like change of mode, nominee and address.

When applying for a term plan, disclose all the facts about your health clearly in the proposal form.

Also, disclose the facts about your health which are not asked in the form, but should be informed to the insurer. Disclose habits, if any, like smoking and drinking. Another important aspect to keep in mind is to always provide the name of nominee(s), as the nominee will be the person to whom the proceeds of your policy will be payable in case of your death.

When choosing a term and an investment plan, what are the points I should look for before selecting one?
First, define your financial goal — wealth creation for your family, child's future planning and post-retirement corpus.

Then, decide in how many years would you want to achieve these financial goals (say 5-10 years)?

How much can you contribute towards these objectives every year?

Last, your risk appetite: How much return do you expect from the investments?

It is also important to check the insurer's background before buying any product.

Check for claim settlement records, customer-centric services, financial standing and branch network of the insurer.

I run a business and have employed 15 people. I don't qualify for the Employee Provident Fund Organisation's (EPFO) criteria. Can I buy a group pension product for my employees? What are the requirements? Is a defined benefit product better or a defined contribution one?
Usually, the minimum number of members required in a group policy is defined by the individual insurers as 10-50 or more.

You would need to check with various insurers if they could consider 15 people under a group policy.

However, in this case, you can arrange for individual pension plans, the premium for which can be either borne by you or by your employee or can be shared between you (employer) and the employees.

The writer is the CEO of Bajaj Allianz Life Insurance. Views expressed are his own. Send your queries at  

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