What to keep in mind while choosing an insurance company

, Devanshu Gupta

Apart from the claim settlement ratio, there are other aspects that you should check. This will allow you to get a better shortlist of insurers. First, look at the proportion of claims settled within three months. It serves as a good measure to speed up claim settlement. Second, the number of complaints raised against the insurer serves as an indicator of disputes between policyholders and insurers. Third is the solvency ratio of the insurer. It is a measure of its financial health and ability to meet its financial liabilities towards claims.

What is the concept of whole life in a life insurance policy? What if a person who has taken a whole life policy survives till 110 years? Will the policy continue after this period if premiums are paid regularly?

– Name withheld on request

Whole life insurance policies are meant to provide coverage for an extended period, usually up to the age of 100 years. A Whole Life Term Plan is suitable for those whose nominees will be dependent on them throughout their life. A child with special needs is an example of such a dependent. While the coverage is provided till the age of 100 years, the premium paying term is shorter, say up to 65 years. Insurers also offer low premium payment terms.

If the person survives to 100 years, the maturity value is paid. The maturity value depends on the type of underlying plan. If it is a ULIP plan, the fund value will be payable as on the date of maturity. However, if it is a participating endowment plan, the maturity value includes the sum assured and accrued bonuses declared by the insurer. If the Life Assured dies before attaining the age of 100 years, the Guaranteed Death Benefit plus the higher of the Investment Value will be payable. The investment value is the fund value in case of ULIP, and the sum assured plus accrued bonus in case of a participating endowment plan.

Since the premium paying term is generally less than the coverage period, i.e. 100 years, premium is not payable after 100 years. Thereafter the policyholder gets the maturity value and the policy ceases to exist.

Abhishek Bondia is the Principal Officer and Managing Director of SecureNow.in.