LAPTOP INSURANCE

Can I take insurance for a laptop, which I received as a gift? If yes, please suggest some policies and also explain the exclusions under such policies.
Once the asset belongs to you, you can procure the insurance cover for it. The policies available for laptops are generally known as ‘special contingency policies’ or ‘all risk covers’. These policies are designed to cover the risk of fire, theft, accidental breakdown and such other risks as given by the insurer. These policies will provide compensation in event of a loss or damage to the equipment based on cost of repairs or replacement based on market value. The exclusions under the policy are manufacturing faults or defects and loss due to normal wear and tear.

CAR ACCIDENT CLAIMS

My car met with an accident recently. The damages are huge. How should I claim the loss from the insurers?
The first step is to notify your insurance company regarding the accident and not to start the repairs till an insurance surveyor is appointed by the company to assess the loss. The insurers normally depute a surveyor within 24 hours of being intimated by the claimant.
You should remain present during the survey to answer the surveyor’s questions along with the relevant papers. You shall be required to fill a claim form and give a copy of your insurance policy, a copy of registration certificate of vehicle and driving license of the driver at the time of accident, a copy of estimate of repairs given by the garage, an FIR or a police report in case there was an injury or any other person or the property of any third-party was damaged. The surveyor will assess the loss and recommend a claim amount to the insurer. If you do not agree with the assessment made by the surveyor, you can ask your insurer to appoint another surveyor.
If you have signed up for cashless insurance, all you have to do is take your vehicle to a service centre authorised to settle a claim. The service centre will follow up with your insurer to settle your claim amount.

EARTHQUAKE COVER

I have bought a new flat and took a standard fire and special perils policy for it. Will my policy automatically cover the risk of earthquake? If not, should I take a new policy or the risk can be added to the existing policy?
The standard fire and special perils policy does not automatically cover the risk of earthquake. The risk of earthquake, however, is listed in the standard fire special perils policy as an additional peril that can be covered under the same policy by making additional payment on account of premium. You don’t have to consider taking another policy to cover the earthquake risk; you can only advice your present insurers to include the risk of earthquake in your existing insurance policy. They will calculate the additional payment to be deposited by you for securing the cover.

PREMIUM OF CAR INSURANCE IN INSTALLMENTS

Do car insurance companies accept premium in installments? If yes, which are these companies?
The Insurance Act, 1938, governs the payment of premium on car insurance. According to the Section 64VV of the Act, in all general insurance contracts, the insurance premium must be paid in advance. By implication of this section, no insurer can accept the premium on a motor policy in installments. As per the general regulations of the India Motor Tariff also, the insurers must collect the full premium before the commencement of the insurance cover. Further, this India Motor Tariff specifically prohibits the collection of premium in installments. Therefore, since the government prohibits the payment of premium in installments, no insurance provider will agree to receive the car premium in installments.

CRITICAL ILLNESS

I wanted to take a critical illness (CI) rider with a sum assured of Rs 10 lakh along with a term insurance policy of Rs 30 lakh. But my insurance agent says that since the premium of the CI rider can’t be more than 30 per cent of the basic cover premium, the sum assured of my CI rider can’t be more than Rs 5 lakh. Is there such a rule?
Yes, the IRDA (Protection of Policyholders’ Interests) Regulations, 2002, has put a cap on the maximum amount of a critical illness rider benefit. It stipulates that the additional premium that can be charged for a rider (optional extra benefits) cannot exceed 30 per cent of the premium charged on the main product.
The main idea behind this rule is to stop insurance companies from selling policies with very small death benefits and huge rider benefits. The premium for a rider is generally higher than what it would be if an individual opts for a separate policy. The idea of taking an additional rider is to save costs for a customer to include several covers, such as critical illness and hospital cash benefit, within a basic life insurance policy rather than setting them up as standalone products with their own separate administrative charges. However, it restricts the scope of an additional rider benefit.

PENSION PLANS IN INDIA

What are the pension plan options in India?
There are two kinds of pension plans—immediate annuity plans and deferred annuity plans. In case of immediate annuity plans, the annuity/pension commences within one year of having paid the premium (usually a one-time premium). The premium paid for the immediate annuity policy is also known as the purchase price. In India, very few insurers offer immediate annuity plans.
In case of deferred annuity, the annuity/pension does not commence immediately; it is ‘deferred’ up to a time decided by the policyholder. For example, if an individual buys a pension plan with a tenure of 30 years (also known as the ‘deferment period’), then his annuity will begin 30 years hence. For deferred annuity, you can pay either a ‘single premium’, or regular premiums. At present, most pension plans available are deferred annuity plans.

DIFFERENCE BETWEEN PENSION AND LIFE INSURANCE PLAN

In which ways a pension plan is different from a normal life insurance plan?

Normal insurance plans are meant to cover the risk of life, while pension plans are predominantly investment plans. In case of life insurance plans, the individual receives the sum insured on the maturity of the policy, or the nominee receives the sum insured on the death of the policyholder. Pension plans, on the other hand, provide a regular source of income by way of annuity on its maturity.
Pension plans also have the option of withdrawing up to one-third of the commuted value at the time of vesting. In case of an eventuality under life insurance plans, the nominees receive the sum assured plus the bonuses/additions, if any. Not all pension plans offer a life cover. In case of a pension plan, the nominee has the option of receiving the entire amount on maturity in cash and buying an annuity with the same. Premium paid up to Rs 1 lakh per annum is eligible for deduction under Section 80C in case of insurance plans. However, premium payments towards pension plans are eligible for deduction under Section 80CCC up to a maximum of Rs 10,000 only. The maturity amount in case of conventional insurance plans is treated as tax free in the hands of the individual. However, it is slightly different in case of pension plans. Up to one-third of the maturity amount, which can be withdrawn, is treated as tax free in the hands of the individual. The pension, from the remaining two-thirds amount, is subject to tax.