What's a critical illness rider? Expert answers all your insurance queries

Can we buy a life insurance cover for an uncle, who is 75 years old? He has no children of his own to help him financially. His only source of income is from a house property he has rented out. The rental income is around Rs 30,000 per month. His spouse is financially dependent on him.

Life insurance is a means of securing the future of your loved ones. However, the purchase of insurance depends on various factors such as age, income, liabilities, etc. While term insurance is a financial safety net that protects the family in the absence of the policyholder and is one of the most affordable products, one should ideally purchase term insurance up to the age of retirement. A very useful product for those who have crossed retirement age is an annuity. Investing a lump sum amount in it fetches the buyer a good income for the rest of his life. I would recommend purchasing a joint-life annuity to ensure a regular stream of income for your uncle and his dependent wife in their retirement years.

 
I heard there's a critical illness rider that can be purchased along with some life insurance policies. What's the advantage of such a rider? In case I avail of one, how do I make a claim for it? Is there a time-frame within which the payment will be made to me?
 

Life insurance riders are additional benefits over a primary policy, which come into play in case of a specific eventuality. A critical illness rider can provide a lump sum benefit or accelerate the benefits payable on the base policy when the policyholder is diagnosed with one of the critical illnesses (say, a heart attack, loss of limbs, loss of sight, etc.) listed in the rider. Please read the terms and conditions of the policy to understand its specific eligibility conditions. The claim process is very similar to the standard claim process: One can reach out to insurance companies as one would do for maturity or a death claim.

 
I am 60 and have a life insurance cover of Rs 50 lakh. It is a term plan. I have a monthly income of Rs 1 lakh. My wife is also employed and has a life insurance policy of Rs 10 lakhs. We do not have any children or other financial dependents. Do I have adequate life cover?
 
Usually, it is advisable that one reduces the amount of life cover as one gets closer to retirement. By retirement age, it is expected that an individual would have created wealth or saved enough from his income during working years. A few things you can consider are purchasing an annuity with any lump sum amount that you have. This will ensure continued income for you and your wife, for the rest of your lives. In case something were to happen, the plan will continue to provide financial support to your wife. Since you don't need to leave a legacy, you can opt for a plan without return of purchase price, thereby enjoying a higher annuity rate.

 
I have a 10-year-old moneyback policy. Can I change the due date for premium payment?
 
A change in the premium due date for a moneyback policy is not available. However, you can alter the premium-payment frequency (annual/half-yearly/quarterly/monthly), depending on your policy terms and conditions.
 
Timely payment of premiums ensures that your policy continues uninterrupted and enables you to enjoy the benefits it offers. You will typically receive a premium payment reminder well before the due date. If for any reason, you have missed a premium due date, you can make the payment within the grace period, which is usually 15 days for monthly premium payments (regular) and 30 days for more extended payment options such as a yearly and half-yearly.

 
The writer is MD & CEO, HDFC Life. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in