ONLINE PREMIUM PAYMENT

I want the annual premiums of my policy to be automatically debited from my bank account, or get paid online. How can I do this?
First, you need to check with your life insurer if they provide an online payment service. Generally all insurance companies have a list of banks (where you need to have an account) or specific credit cards, through which payments can be made online. Also, you should have opted for net banking facility with that bank and/or credit card.
If you haven’t already done this, you can contact the bank, which will give you a form to fill in which you need to give a mandate for direct debit for the billed amount directly from your bank account. You will also have to give your bank account details and other requisite information to the insurance company. After this, your policy premium bill shall be sent to your bank and the bank will debit the amount from your account and remit the payment to your insurers.

LOAN AGAINST THE INSURANCE POLICY

I want to take a loan against my policy which will mature in another five years. How is the loan amount decided? What will happen if I am not able to repay the loan amount before the policy matures? Will the policy period be extended or put on hold?
The loan amount against a life insurance policy is calculated on the basis of the surrender value (SV) of the policy at the time of taking the loan. The loan amount is generally around 85 per cent of the SV. The interest rate charged varies from company to company and time to time. A policyholder can repay the loan amount either in part or in full, any time during the term of the policy. If the loan amount is not repaid during the term of the policy, or in case of an early claim, the amount of loan plus interest, if any, is deducted from the claim money and the balance is paid to the claimant. The policy period is neither extended, nor put on hold on account of settlement of the loan amount.

COLLATRAL OF LIFE INSURANCE FOR LOAN

I have given my life insurance policy as collateral for my home loan. For this I had to assign my policy in favour of the bank. Can I cancel this assignment at any future date? How will I get my policy back?
Assignment is a means whereby the beneficial interest, rights and title under a policy get transferred from the assignor to the assignee. ‘Assignor’ is the policyholder who transfers the title and ‘assignee’ is the person who derives the title from the assignor. When you assign the life insurance policy in favour of a bank or any financial institution, as a collateral security, the nature of assignment is conditional. This means that as and when the loan is cleared, the rights under the policy are transferred back to the assignor.
You can’t cancel the assignment yourself. Once the loan gets cleared, you will get the policy back.

SIMPLE POLICY

Which policies don't have high charges and are simple?

The simplest form of life insurance is the pure risk cover, also known as term plans. A pure risk cover works like a contract that provides a specified death benefit, but no cash build-up or investment component. The guaranteed sum assured is only for a specified term, usually one year, and the policy is renewable at the end of each term period. The policy term can be longer also, but will be effective only when premium is paid each year. Since the premium for risk cover is low, one can get adequately insured for a relatively low premium cost.
Normally, there are two types of term policies—one returns the premium at the end of the term and the other doesn’t. Since you don’t want returns, you can go for the second kind. In this case, the premium will be the lowest.

ATM Usage Goes Free

From 1 April 2009, you will be able to withdraw cash free of cost from any bank’s ATM. Balance enquiry at all ATMs have been made free already.
The Reserve Bank of India (RBI) had found that ATMs were mostly being used for cash withdrawals and balance enquiry, even though they offer more services. Earlier, charges varied bank to bank and were also based on the ATM network used. The customer was not aware of the charges that could be levied for using another bank’s ATM, and this discouraged him from using the ATMs of the other banks.
The RBI has, however, allowed banks to decide the service charges for cash withdrawn using a credit card and cash withdrawals from ATMs located abroad. In a draft proposal in February, the RBI had proposed that ATM transactions be free of cost, and had sought public comments in this regard. Based on the feedback a framework of service charges will be implemented by all banks

PRE EXISTING DISEASES INSURANCE POLICY

I am suffering from mild haemophilia. Does any insurance policy cover pre-existing diseases?
Pre-existing diseases are not covered by any insurer immediately at the commencement of the first policy because it means that there is a 100 per cent chance of the insured making a claim and is against the basic principle of insurance, which provides covers for uncertain eventualities. You can still take a medical cover, but it will exclude expenses incurred on the treatment of any pre-existing disease. Some insurers, however, cover diseases which exist at the time of taking the first policy provided the policy is continuously renewed for a specified number of years. This period varies from insurer to insurer and is generally between two and five years. Such policies are obviously slightly more expensive than normal medical covers.

PROFESSIONAL IDEMNITY POLICY

Are there professional indemnity policies for doctors?
Yes, there are professional indemnity insurance covers for doctors which primarily cover losses or liability arising out of professional negligence or, more particularly, a genuine error of judgement, for instance, error in diagnosing a patient. The policy covers all sums which the insured professional becomes legally liable to pay as damages to the third party on account of any error or omission on his part while rendering professional service. The legal expenses incurred in defence of the civil cases (criminal cases are excluded), with the prior consent of the insurance company, are also payable, subject to the overall limit of indemnity selected. The policy excludes wilful or deliberate acts of negligence. Financial setbacks due to loss of goodwill as a fallout of such cases and other similar acts specified by the insurer are also excluded from the policy.