Readers' Corner: Will life insurance be in force even outside India?

It is always prudent to have a life insurance cover irrespective of where one lives

I am moving to Canada with a new job. It will be a permanent posting and I am not aware when I will be back in India. Will my life Insurance be in force even if I am outside India?
 
Yes, it will be. A term plan is valid worldwide and you can continue with the same policy purchased in India. However, for any other life insurance policy the continuity in another country depends on the feature of the product, the type of policy and the new country. You can get in touch with your insurer for further clarity on your policy and do not forget to update your KYC (know your client) details of the policy to be in force. It is always prudent to have a life insurance cover irrespective of where you live.
 

Pankaj Razdan

Is it beneficial to purchase a return of premium (RoP) term plan than buying a regular term plan?
 
A regular term plan or pure term plan provides a death benefit and does not offer any amount in case the policyholder survives the entire term of the policy. A Term Return of Premium (TROP) offers death benefit and the insured gets the premiums back (without GST), in case he or she survives the policy term. Such policies are a tad dearer than pure term plans. Hence, the choice of policy will entirely depend on your needs and goals. In case you want to have some returns on our term plan, you can opt for a return of premium plan.  

I have a five-year-old daughter and have been advised to purchase a child insurance plan for her. However, I have adequate funds only for one policy. Would you suggest buying either a unit-linked insurance plan (Ulip) in my name or a child plan? Which of the two would be beneficial?
 
For your requirement, you can have the best of both - a child plan as well as a Ulip. You can opt for a Ulip child plan, an insurance cum investment product, which will fulfil both your requirements. These are structured to help you save for your child’s future with or without you. While it will have an element of insurance, will offer market-linked returns and if the most unfortunate were to happen, the insurance company will pay all the future premiums on your behalf.
 
I am planning to buy a life insurance cover for myself. Under what circumstances can life insurance companies deny to make payment of insurance proceeds?
 
The exclusions in a life insurance policy differ from product to product. Primarily, claims are refuted if the information provided in the proposal form is incorrect and material facts regarding one’s health are not disclosed at the time of policy purchase. The proceeds will also be denied if the policy is not in force (due premiums not paid), or if there is any forgery or fraud committed by the policyholder which will jeopardise a claim. For better understanding, you should refer the product brochure which will have the exclusions mentioned for the policy of your choice.
 
I am 35-year-old with a monthly income of Rs 72,000. I am undertaking tax planning for the current financial year. What are the exemptions that I can avail in case I opt for life insurance as a tax saving tool?
 
Life insurance is one of the most effective tax saving choices as it not only provides financial protection but also offers a host of tax benefits. For premium paid on life insurance policies, you can avail a deduction up to Rs 150,000 under Section 80C of the Income Tax Act, 1961. It also includes premium paid by you for your spouse or child's life insurance policy. Additionally, any yearly income on life insurance policy in the form of bonus and even the lump sum amount at the end of policy tenure are also tax-free in accordance to section 10(10D) of income tax act.  The writer is MD & CEO, Aditya Birla Sun Life Insurance. The views expressed are the expert’s own.
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