Answer to your queries about Insurance

Q1. What is an insurance?

Ans. In layman's point of view, insurance can be a protection against financial loss arising on the happening of an unexpected situation like death of the person, permanent disability, loss in the business venture, accident, etc.

Q2. How insurance works for an insurance provider?

Ans. Insurance companies collect premiums to provide protection for these unforeseen conditions. The claims are paid out of the premiums collected from the persons who are buying these policies and the Insurance Companies act as trustees to the amount collected as premium.

Q3. Can I change the beneficiary on my insurance policy?

Ans. Changing the beneficiary on an insurance policy is a simple matter. All you need to do for this purpose is to contact your insurance company and follow its instructions for executing a change in beneficiary.

Q4. Can someone other than a relative be named as the beneficiary of my insurance policy?

Ans. Yes. Although it is typical for an individual to name his or her spouse, child, parent, or other close relatives as the insurance beneficiary, non-relatives, estate, trust, business partners, lender, or domestic partner can also be designated as beneficiary of your insurance policy.

Q5. Can the insurance policy be donated for charity?

Ans. Yes, you can donate your insurance policy for charity purpose.

Q6. I'm single. Do I need an insurance policy?

Ans. Single people often think they don't need insurance policy. However, there are many factors that determine your need for insurance. Even if you are enjoying a sound source of income, there are certain things in life that are unexpected. Insurance policies prepare you against these unexpected happenings.

Q7. Do I need to buy a separate insurance policy for my child?

Ans. If you want to insure your child, you may buy a separate policy on your child's life. This step will add value to your investment.

Q8. When should I buy an insurance policy?

Ans. When to buy insurance policy depends more on your individual circumstances. There are no hard-and-fast rules for this. It is correctly said that it is never too late to start anything good.

Q9. How much does taking an insurance policy cost?

Ans. It depends upon the nature of protection and the object you want to protect. In order to buy an insurance policy, you have to pay premiums to the insurance company. The amount of premiums payable depends upon various aspects like the type of policy, term of policy contract, sum assured and your age.

Q10. Can I use insurance policy as a tool of financial planning ?

Ans. Most insurance plans available today come with the savings aspect. These policies allow you to meet your financial goals of protection against unforeseen future.

Q11. Do the insurance policies help to save tax?

Ans. Yes, you can save tax by buying insurance policies. Tax benefits are available under Sec.80C, Sec.80CCC of the Income Tax Act.

Q12. What is the advantage of an Endowment Policy?

Ans. An Endowment Policy is a combination of savings along with protection against risk. These policies are specifically designed to accumulate wealth, and at the same time, cover the unforeseen future simultaneously.

Q13. Is there any flexibility in premium payment?

Ans. It depends upon the nature of the policy. Generally, insurance policies provide yearly, half yearly and quarterly modes of premium payment.

Q14. What will happen to the policy if I miss premium payment on the due date?

Ans. Always try to be regular in premium payment. The insurance companies offer a grace period after the premium payment becomes overdue. If you fail to pay the premium within this grace period, your policy lapses.

Q15. Is there any penalty for late payment of premium?

Ans. Yes, there is. But, the amount is not that big.

Q16. What will I receive on maturity of my insurance policy?

Ans. It depends on the nature of insurance policy you have. If it is a life insurance, on maturity, you will receive the sum assured or the Accumulation Amount, whichever is higher. If it is auto insurance, you get no benefits after maturity except the no claim bonus on renewal of your policy, if applicable. You have to remember that some insurance policies are meant to cover risk only.

Q17. What factors affect the amount of the premium?

Ans. It differs from policy to policy. In case of life insurance policies, your age is a vital factor.

Q18. What to do if somebody does not receive or lose Certificate of Insurance?

Ans. Duplicate insurance certificate can be received from the concerned company after reporting the loss or non-receipt status.

Q19. How do I buy an insurance policy?

Ans. Now, there are many players in the Indian insurance sector. Due to the growing competition, these companies are trying their best to make their presence felt. You can buy a policy by both online and offline modes.

Q1. What is life insurance?

Ans. Life Insurance is a protection against financial loss resulting from the demise of an insured person. The insurance company promises to pay a specific sum of money at the end of a fixed term or on the death of the person insured. Anyone who wants to be covered by life insurance has to pay premium to the insurance provider.

Q2. Why should I avail life insurance policy?

Ans. You and your family get financial security in the event of your death, illness or inability to earn due to physical disability. Besides, you can use life insurance as a means to fund your old age, children's education and a tax-saving investment.

Q3. When should I opt for life insurance?

Ans. You should preferably buy life insurance at young age. The premiums increase as you get older.

Q4. There are different life insurance plans in the market. How should I decide?

Ans. You should choose the right life insurance plan after analysing your needs. Your priorities may be based on motives like financial protection in the event of death, long-term growth of your money, savings or post retirement pension. You can also take the advice of a financial consultant who will guide you better in choosing a life insurance plan.

Q5. How much life insurance cover should I take?

Ans. There are no hard and fast rules. Generally, a life insurance cover should be around 15 to 20 times your annual income.

Q6. What is nomination? How is it different from an assignment?

Ans. Nomination means designating someone who will be entitled to receive the benefits of life insurance policy in the event of your death. When taking life insurance policy, you are required to provide full details of the nominee. A policyholder can change the nominee during his lifetime.

On the other hand, assignment of an insurance policy means transfer of all the rights and liabilities of the insurance policy in favour of the assignee.

Q7. What is IRDA and what it does?

Ans. The Insurance Regulatory Development Authority (IRDA) is a statutory body established to protect the interests of the policyholders and to regulate and promote the growth of the insurance industry.

Q8. Are there any guidelines issued by the IRDA for claim settlement?

Ans. Yes. According to IRDA, the insurance company is required to settle a claim within 30 days of receipt of all the requirements needed for the purpose. If further verifications are required to settle the claim, the company should complete the procedure within 6 months from receipt of written intimation of the claim. Any settlement that takes more than 6 months will require the company to pay interest on the claim amount.

Q9. When a life insurance policy can lapse? What happens if a policy lapses?

Ans. Your life insurance policy lapses if you fail to pay the insurance premium even within the grace period allowed. You lose all benefits when the policy lapses.

Q1. Is it mandatory to insure my vehicle?

Ans. Yes. All motor vehicles are required to be insured.

Q2. What protection is offered by automobile insurance?

Ans. Automobile insurance provides cover against all losses or damages caused to the vehicle or its accessories. Loss or damage may arise due to natural calamities like fire and flood, or artificial calamities like theft and riot. Automobile insurance also saves you from third-party legal liabilities arising due to accidental damages.

Q3. Can I take insurance policy without being an owner of the vehicle?

Ans. Yes, you need not be an owner of the vehicle to take insurance policy.

Q4. What is No Claim Bonus?

Ans. It is a rebate given to the policyholders only if they do not submit any claim for a particular year. A policyholder becomes entitled to No Claim Bonus (NCB) at the time of renewal of a policy.

Q5. Am I entitled to NCB if I change the insurance company?

Ans. Yes, you are still entitled. The NCB rate remains the same provided you are able to show that you are entitled to NCB from your previous automobile insurance provider.

Q6. What damages should be reported to the police?

Ans. All losses or damages to the 'property' or 'body' - whether self or third party - should be reported to the police station having appropriate jurisdiction.

Q7. If my vehicle is damaged and I don't have enough money to get it repaired, what should I do?

Ans. If the insurance company provides cashless facility, you do not need to pay cash for the repairs done. However, insurance companies have tie-ups with few dealers only from where you can avail this facility.

Q8. How should I proceed if my vehicle is stolen?

Ans. The first step is to lodge a first information report (FIR) at the police station having proper jurisdiction. Intimate the insurance company and file insurance claim.

Q1. What is travel insurance?

Ans. It is a plan that provides protection against financial losses incurred during your overseas travel.

Q2. What is the need for travel insurance?

Ans. You may travel abroad for different purposes like holiday, education or your crucial business meeting. To cover you during that period, overseas travel insurance is available. This cover protects you from events like baggage loss, a medical emergency during travel, or an accident.

Q3. At what point of time travel insurance begin?

Ans. The travel insurance cover begins from the day mentioned in the policy or the time when you board the conveyance for overseas travel or the actual Contracted Departure Date as stipulated in the policy, whichever is later.

Q4. Upto when the travel insurance remains valid?

Ans. Travel Insurance remains valid till the end of the insurance period or till the time the insured person first disembark on return to India, whichever is earlier. However, many insurance companies extend the benefits of insurance policy if the completion of the insured’s journey is delayed under some circumstances.

Q5. Is travel insurance available for multiple trips?

Ans. Yes. You can choose a Single Trip or Multiple Trip travel insurance. In case of single trip policy, the protection will be valid for the duration of a specific trip only. In case of a Multiple Trip policy, the protection extends to all the trips undertaken during insurance period.

Q6. What is meant by TPA?

Ans. TPA is a Third Party Administrator, providing cashless medical services and the necessary information required in dealing with claims.

Q7. If I contract some disease during my overseas travel, is it possible to claim for the continued treatment in my home country for the same disease?

Ans. It depends on the advice given by the Third Party Administrator. If TPA advises, the company will pay the medical expenses continued in the home country following the transportation to India. The maximum period for which such treatment is allowed may vary from company to company.

Q8. Are travel insurance plans available without medical cover?

Ans. Yes, such plans are available for students going abroad for studying.

Q1. What is health insurance?

Ans. Health insurance is a cover against the expenses that you may incur on your medical treatment. The insurance cover is limited to the extent of sum insured.

Q2. Why should I opt for health insurance?

Ans. Health treatment can be very costly. Health insurance indemnifies the health treatment expenses should they arise during the insurance period.

Q3. Does health insurance allow me to save tax?

Ans. Yes, health insurance policies bring tax benefits as well. Under Section 80D of the Income Tax Act, a maximum deduction of Rs. 10,000 is allowed. Senior citizens can get a maximum deduction of Rs. 15,000 from their taxable incomes.

Q4. What is the maximum age for taking healthy insurance?

Ans. Health insurance companies provide cover for people upto the age of 50.

Q5. What is 'cashless hospitalisation'?

Ans. Now-a-days, the health insurance companies are introducing innovative concepts in their products. One of them is 'cashless hospitalisation'. Under this facility, the individuals are not required to pay for their hospital bills; the insurance company directly settles the bill. However, this facility is available only at those hospitals which have tie-ups with the insurance company.

Q6. Can a single health insurance plan cover entire family?

Ans. Yes. There are health insurance plans available in the market that covers all your family members. You get health protection for the entire family.

Q7. Is there any rebate for the policyholders if they do not make any claim during the year?

Ans. Yes, some banks provide rebate of 5% on the premium for the next year.

Q8. What is meant by 'First 30-day Exclusion'?

Ans. It means that any expenses incurred on hospitalisation during the first 30-day of the insurance period are not covered. However, an injury arising out of accident would be covered.

Q9. Are pre-existing diseases covered under the health insurance policy?

Ans. No, diseases which already exist before the commencement of the policy are not covered.

Q1. What is home insurance?

Ans. Home insurance is a cover that protects your home against natural and man-made calamities.

Q2. Can I get insurance for the contents of my home as well as the building?

Ans. Yes, both the structure and the belongings are insurable.

Q3. What losses are covered under home insurance policy?

Ans. Home insurance policy covers all natural and man-made calamities like Fire, Earthquake, Lightning, Floods, Riot, Strike, Malicious damage, Burglary, Terrorism, etc.

Q4. How can I calculate the sum to be insured?

Ans. For home structure: The sum to be insured can be calculated by multiplying the built up area of your home with the prevailing construction rate.

For home contents: All your belongings like furniture, clothes, utensils, jewellery, etc., are valued on market value basis.

Q5. I live in an apartment. The whole building is insured by the society. Do I still need to take Home Insurance?

Ans. Generally, the society insures the building/structure and not your home content. You can take insurance for your home contents to get full cover.

Q6. My home is partly used for commercial purposes. Does home insurance cover it?

Ans. No. Home insurance does not cover buildings that are used for commercial purposes.

Q7. What documents are needed to file a claim of loss?

Ans. You have to fill the Claim Form of the insurance company and submit it along with other documents showing the nature and extent of loss. The documents may the First Information Report, Fire Brigade Report, Estimate of the repairers in case of damage, etc.

Q8. I live in a rented apartment. Does my landlord’s home insurance policy cover the damage to my home contents?

Ans. No. The landlord's home insurance policy covers the actual building, but not your home contents.