Archive for the ‘Insurance’ Category

Term Insurance – An Overview

September 6, 2013

Term insurance is very common these days. Few years ago, when insurers were not aware with this kind of insurance schemes, they used to prefers other form of insurance in which there was a maturity benefit. But today, people are much aware and they better know value of their lives. So, many insurers are going towards term insurance. It is a life insurance which gives protection to your life for a specific period of time. You can select the policy term while taking a term insurance.

As term insurance is a pure life insurance, it does not provide any maturity benefit. This insurance gives complete risk cover to your life and provides you benefit only if you die during the insurance period. If you survive till your insurance term gets over, you will not get anything on maturity. In case, anything mis-happen occurs to you in which you die, the policy amount (risk cover) is paid to your nominee and the policy is closed.

Your policy get lapsed if you have not paid the policy premium even after the grace period. Once, your policy is lapsed, you will not get any benefit mentioned in the policy document. However, insurance companies provide you a grace period of 30 days even after premium due date. During this period, if you pay the premium, your policy remains inforced. Apart from this grace period, companies also provides you a free look period of 15-20 days after issuing a policy. During this period, if you found that policy is not matching your requirement, you can send a request to cancel the policy. After deducting a nominal charge, remaining amount is credited to your account.

A term insurance can be taken for a term of 10 to 35 years or upto a maximum of 70 years of age at policy maturity. As term insurance is a pure death benefit insurance scheme, it primarily provide financial support to your nominee. Term insurance is preferred over other insurance schemes as it is less expensive as compared to other insurance. Premium frequency can be yearly or half yearly in a term insurance. The term you select while taking a policy, your premium remains same throughout that policy term.

How to Cancel an Insurance Policy

September 5, 2012

No doubt, if you will ask people around, you will found every third person has taken an insurance policy either life or health insurance. You will be shocked when you came to know that more than 60% of these policyholders are not aware with the process to cancel a policy. This is because they rarely read policy document after taking a policy.

We get relaxed after taking an insurance policy and never read the policy document. We read it only when it comes to claim against a policy. When our claim get rejected due to a specific reason, we come to know that we were misguided at the time of taking the policy. Generally, we think to cancel a policy only when it does not fulfill our requirements or its terms and conditions does not matches the terms mentioned by the broker.

As per IRDA (Insurance Regulatory and Development Authority) guidelines, each insurance company provide a grace period of 15-20 days after issuing the policy document to a policyholder. If you are not satisfied with the policy terms or benefits, you can submit an application to cancel your policy during this time. A nominal charge of Rs 50 -100 is charged for bond/stamp paper and processing fees of the application, remaining amount is credited to your bank account or a account payee cheque is issued to you.

Whenever, you have decided to cancel a policy, you need to write an application to the same branch manager where you have submitted the application form to take that policy. In this application, you need to mention why you are willing to cancel the insurance policy. Mention the reason whether, you are not satisfied with the policy benefits or you were misguided by the agent at the time of taking the policy. Then give a request to cancel the policy.

Within a week of submitting the policy cancellation request, your policy get cancelled. Insurance company will dispatch the cheque against your policy after deducting a nominal charge of stamp paper or processing fees. Remember, once you send the cancellation request for your policy, you will not be able to get any benefit that your policy provides.