Life Insurance: Deepak Sood

Readers' Corner

I am 32, working and want to buy an online life cover of Rs 50 lakh. My wife (30) is a homemaker and we have a two-year-old daughter. What are the criteria I need to fulfil?
Several insurance companies offer online term insurance and has become popular due to their competitive premium rates. It's a wise decision to buy term insurance keeping in view your age and family composition. Usually, insurers allow term cover on the basis of age, income, occupation, and present and past medical history. You might be required to undergo a medical examination depending on internal guidelines of the insurer. Before finalising, you could consider comparing premium rates, additional riders offered and the insurer’s track record.

My father (56) bought a pension product few years ago. While going through the policy, I found it carries the benefit of commutation of pension. What does this means and how does it help a policyholder?
Pension products offer accumulation of corpus, which should be used to purchase annuity. The annuity purchased provides stream of regular income after the retirement of the person. Pension products provide for commutation up to one-third of the accumulated corpus before purchasing the annuity. For example, if the corpus accumulated at the time of vesting is Rs 10 lakh, then the customer can commute up to Rs 3.33 lakh and purchase annuity for the balance amount. Commutation benefit is an option and provides for tax free amount in the hands of the customer. The amount commuted will, therefore, be tax free. Whereas, the annuity payable will be taxed at par with salary income.

I am 25 and earn Rs 30,000 every month. I don't have any life cover and have no dependants. Will buying a life cover make sense?
Insurance covers the risk of untimely death as well as the risk of living longer. While the basic term insurance plans cover the risk of financial loss owing to death, there are a number of other options like endowment and pension products offered by life insurers, which provide financial freedom after the earning period. Endowment products offer a lump sum payment at the end of the policy term. Pension products help to build a sizeable corpus, which can be used to purchase annuity that provides regular income during the retirement period. Life insurers have a variety of products that would be useful to one and all. Contact your insurance advisor to determine the product best suitable for your profile.

Today, Deepak Sood, MD & CEO of Future Generali Life Insurance, answers your questions