Queries
Anirudh Bhasin, Noida
I want to know how the
insurers calculate mortality
charges. Do they hike the
charges every year with
increase in age or keep it
fixed at the age at which the
policy was taken?
Mortality charges are a function
of actuary calculation made by
professional and experienced
actuarial managers. It is important
because sufficient experience
and skill goes into calculation of
mortality charges which form the
basis of premiums paid for various
age bands.
Mortality charges calculation is
based on a number of factors:
• Gender costing—mortality
charges differ for both women
and men (women are said to have
a higher mortality than men)
• Inflation rates.
• Future Growth rates .
• Administration and policy
handling charges.
• Further, every premium paid is
divided into cash value, which is
the interest earned on the policy
and pure risk cover charges.
• The discounted rate of future
lapsed policies is covered in the
mortality charges calculation.
For life insurance policies, premium
rates are not hiked every year
because the probability of losing
a life in a pool of insured policy
holders is lower.
For health and general insurance
policies, the premium rates are
reset every year and increase by 10-
15 per cent per annum depending
on profitability of the company and
positive claim ratio the company
has earned over the years.
Dilshad Billimoria, CFP,
Dilzer Consultants
Sanjit Kumar, Delhi
My cousin is a heavy drinker
and is unlikely to survive
any longer. Will his life
insurer pay for the policy
proceeds if his death is due
to alcoholism?
Life insurance claim depends on
declarations. If a person has taken
a policy 10 years back and has
declared all relevant information
correctly but started drinking
Ritesh Pathak, Bhopal
I have zeroed down on two
flats which I wish to buy.
Can I take two separate
home loans at the same
time for these two flats?
Can I borrow from the same
bank for these two loans?
Multiple home loans are allowed for
different properties with the same
bank. Further, bank will evaluate
your applicability which will include
your income, current job, and credit
score. However, banks can reject
your application in case you have
poor repayment capabilities with
existing or past loans. So, before
taking multiple loans, you need to
evaluate all the above mentioned
factors to avoid your credit score
from getting impacted.
Himali Patel, Senior
Correspondent, Outlook Money
How do life insurance
companies deal with the
claim of life assured if the
life assured dies after the
date of maturity of the
policy but before receiving
the maturity proceeds?
What points should
be kept in mind before
deciding in favour of any
particular insurance agent
or a broker?
16
Puneet Oberoi, Founder, Finadwise
Naveen Sarin, Gurugram
Vikas Nagpal, Gurugram
Choose an agent who is
honest and puts the interest
of his clients first. Your agent
should be willing to give you
advice on a financial product
based on your need and not on
the basis of the commission
he earns out of the deal. Make
sure that your agent has
sufficient qualification and
skills to advise you. A timely
response to clients’ queries
is agent’s responsibility. For
efficient client servicing, an
heavily after 4-5 years down the
line, he will be paid his claim
regardless of anything. It comes
under self injury. In case of life
insurance even suicide is covered
after one year of the policy.
agent must ensure that he has
the required infrastructure and
staff with sound general and
technical knowledge to help
you. You can do the reference
check through existing clients
before availing the services.
Pankaj Mathpal, CEO, Optima
Money Managers
Outlook Money December 2017 www.outlookmoney.com
If the policy has matured and
the insured dies just after, the
claim paid is the same as maturity
proceeds, which may include bonus
and other terminal benefits.
In addition to this, the family
of the life assured would have
to submit the original policy
documents in addition to the
beneficiary documents title to
receive the benefits from the
insurance provider.
Dilshad Billimoria, CFP,
Dilzer Consultants