Life insurance: Deepak Sood

I have two term plans. 1) Sum assured = Rs 10 lakh; bought in December 2006, maturing in 25 years; premium = Rs 3,755. 2) Sum assured = Rs 40 lakh, accident rider = Rs 8 lakh, bought in February 2008, maturing in 20 years; premium = Rs 11,554. Premium for term plans have fallen drastically since. Should I buy a single plan with a sum assured of Rs 50 lakh and terminate both policies. Or, should I buy an online term plan? Also, should one immediately intimate the insurer if he/she contracts a disease after the policy has come into force?
Generally, insurance firms increase benefits under an existing non-profit traditional plan whenever premium rates are reduced for new customers. You may, therefore, write to your insurers to do this if they have not. If they don't agree and you still maintain good health, you may take a new policy of a desired cover from any insurer, discontinuing the existing ones. As for online term plans, they are cheaper compared to term plans and are very reliable.

Any changes in health conditions of the life to be assured between the date of signing of the application (proposal) form and issuance of the policy needs to be communicated to the insurer. However, it is not required to do so if the change in health conditions happens after the date of issuance of the policy.

I had bought a Ulip in July 2008. Afterwards, Irda revised the guidelines for Ulips. Would the terms and conditions applicable to me be according to the policy document in July 2008 or according to the Irda notification of September 2010?
The changes are effective prospectively and, hence, applicable for policies issued subsequently. In your case, since the policy had been issued earlier, the terms and conditions applicable will be according to the policy document issued to you in 2008.

I wish to take a cover of Rs 25-50 lakh. How much will I need to pay for it? On what basis can I select a plan. Can you suggest a suitable plan for the sum assured? Are there any terms and conditions like Mediclaim not covering existing illness and so on?
Though a multiple of 8-15 times of annual income is a thumb rule, life insurance needs depends more on circumstances: Age, expected growth of income, number of dependants, etc. For example, if a person does not have any dependant, he does not need a cover.

The premium would depend on the type of plan (term or savings), age, occupation, present and past health history. Premium under the pure term plan should be the lowest.

Life insurance is considered a safe and dependable asset for an individual and, hence, if you want to save for other needs, go for a suitable savings plan, too.

If a person is suffering from some illness, he can still get a medical cover by paying a higher premium. Life insurance is a contract of 'good faith' and, hence, while filling the application form, answer the questions honestly.

The writer is the MD & CEO of Future Generali Life Insurance. Views expressed are his own. Send your queries at yourmoney@bsmail.in