Personal Finance

Insurance Uncovered

Rajalakshmi Nirmal | Updated on July 09, 2019 Published on July 09, 2019

I have an ICICI Prudential term insurance plan for ₹50 lakh. It will cover me till the age of 60. I want to increase it to ₹1 crore to cover me till I am 75 and my spouse. Should I take another ₹50-lakh term insurance or take a single ₹1-crore policy for my wife and I, which will cover us till the age 75? Also, please tell me which insurance company will be best for me at this stage (I am 32 years old) for a joint life cover. Should critical illness be included in term cover or a separate health insurance policy?

Nilesh Anand

We will suggest that you keep your old policy. Even if this is a policy that was taken 1-2 years ago, the premium would be lower than what you may have to cough up now at your current age. So, keep your policy and buy another ₹50-lakh sum assured (SA) policy.

If your wife is a home-maker, there are only limited options for a life cover for her. Aegon, PNB MetLife and the recently launched Aditya Birla Sun Life Insurance’s Life Shield Plan offer an option to cover the spouse in the life insurance policy. ICICI Prudential and HDFC Life also cover spouses in the term policy, but they come with certain conditions and a cap on the SA.

Under PNB MetLife Mera Term Plan and Aditya Birla Sun Life Insurance’s Life Shield Plan, on the death of the primary insured before the spouse (secondary life insured), the sum assured will be paid to the spouse, and her life cover will continue with future premiums waived off.

On the death of the second life insured thereafter, the sum assured is paid to the nominee, and the policy is terminated. In case of death of the second insured before the first, the sum assured will be paid to the primary insured and the future premiums will be reduced to what would have been charged at the inception for only the primary insured (base premium). In case of death of both the persons simultaneously, the death sum assured in respect of both the first life and the second life will be paid and the policy terminated.

Both PNB MetLife and Aditya Birla Sun Life offer the joint life cover feature only if the SA of the primary/first life is greater than or equal to ₹50 lakh. The SA for the spouse/second life will be 50 per cent of that of the primary insured.

ABSL’s Life Shield offers a cover of 50 per cent of your SA to your spouse, irrespective of the occupation (even housewife). However, PNB MetLife restricts the cover for spouse to 25 per cent of SA if she is a housewife. Note that if your wife is working, look out for a separate policy for her. It could be cost-effective.

Regarding critical illness cover, we suggest you take a standalone policy rather than taking it as a rider with your base life insurance policy. A standalone CI policy will offer a more comprehensive coverage than a rider.

Published on July 09, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.