Life Insurance: Kamesh Goyal

I went to buy a child plan from a life insurance company. After taking a cheque of Rs 30,000, the executives asked me to undergo a medical test. Two days later, I went to the hospital for the test but the officials there refused to conduct the test, as my insurance company had not intimated them. I informed the agent about the situation. A few days later, the agent left for his native place due to an emergency. Meanwhile, the insurance company encashed the cheque. I believe no policy has been issued yet. What do I do now?
The insurer should have intimated the hospital about your impending visit. It is always better to take the name and the contact number of the person concerned at the hospital and also check for an appointment before visiting the hospital or ask for an intimation letter from the insurer addressed to the hospital.

Coming to the second part of your query, since the cheque has been encashed, it either means that the policy has been issued or the cheque has been accepted as a proposal deposit. Contact your insurance company for details immediately with the cheque number.

I am 39 and have diabetes for the past five years. It is hereditary. Can I get a life insurance? What are the problems I can face? Are there special life insurance policies for someone with such a condition?
Yes, you can get life insurance even if you are diabetic. At present, there are no separate products for diabetic patients. You can purchase any life insurance policy, but some extra charges will apply.

However, when you buy a policy, you need to disclose your diabetic history in the proposal form and also fill an additional questionnaire providing details of all medical tests and treatments undergone, if any, in the past. Based on the assessment of medical reports and considering your diabetic history and the severity of the condition, you may be provided a policy with some extra loading, if found necessary.

Can you explain how does a loan against an insurance policy work? Do insurance companies lend money or is it an arrangement with the bank? What kind of policies are eligible for this? What is the scope of the loan?
Usually, loans are available against all non-linked insurance plans, commonly known as conventional and traditional plans. The scope of loan against an insurance policy depends on the surrender value of the policy. The loan amount is decided as a percentage of the surrender value, provided the policy has acquired surrender value. This surrender value is pre-determined and varies for different insurance plans. Such policy loans are provided by insurers at a pre-specified rate of interest, which is clearly mentioned in the offer letter when you apply with the insurer.

A policyholder can also avail of a loan from a bank by pledging the policy as a collateral. In this case, the policy is assigned to the bank and the insurer registers such assignments in its records. However, it should be noted that this assignment to the bank overrides any existing nomination made under the plan. This means the bank will have the first right on the sum assured to the extent of the unpaid loan and other charges in case of the death of the policyholder before the expiry of the loan.

The writer is the country manager of Allianz and MD & CEO, Bajaj Allianz Life Insurance. Send your queries at yourmoney@bsmail.in