Life insurance: Deepak Sood

Which is more important while travelling (abroad or domestic), life or a health insurance cover?
Both are equally important. Health insurance covers unforeseen medical expenses in hospitals within the country.

When travelling abroad, one needs to obtain travel insurance for that duration. It covers, normally, medical expenses, inconveniences such as loss of passport and/or baggage, repatriation expenses etc.

Life insurance obtained in India covers death here and abroad.

What should be the ideal duration of a life insurance policy?
Policy duration should depend on need and purpose. Like, the duration of a children’s endowment plan should coincide with the age at which the child will go for higher education. Similarly, the maturity of a policy availed to build a retirement corpus should coincide with the retirement age.

While seeking a term cover, follow the thumb rules:

- The cover should be bought as one starts earning and is in good health, so that it is bought cheap.

- The cover (amount) should be calculated considering the work life and future earnings.

- The tenure should cover the work life or even the entire life.

Why are pure life insurance plans cheaper than plans that give a return on investments?
Term insurance is payable on death. Nothing is payable during living until the end of the policy term. Whereas, investment plans give returns during living, besides paying on death. The premium charged is on risk and investment benefits. Term insurance does not have the investment element. It is, therefore, cheaper.

The writer is the MD & CEO of Future Generali Life Insurance.