My parents are 45 years old and want to buy a term plan. Should they also buy health insurance?
Even if your parents are covered by group health insurance, they should buy a standalone cover as it will ensure lifelong protection.
Yashish Dahiya, Co-Founder and CEO, Policybazaar.com replies: It is advisable that they buy health insurance. Given the rising cost of hospitalisation, protection against such medical emergencies is a must for one's well-being. Even if your parents are covered by group health insurance, they should buy a standalone cover as it will ensure lifelong protection. If your parents live in a metro, they should opt for a medical cover of at least Rs 10 lakh.
I am a 42-year-old working woman. I bought the Kotak Platinum Plan in October 2017. The sum assured is Rs 15 lakh, policy term is 10 years, and the annual premium is Rs 1.5 lakh and has to be paid for five years. Should I continue investing in this plan?
Ankur Choudhary Co-Founder and CIO, Goalwise replies: Ulips neither provide enough insurance cover nor enough returns and this policy is no exception. The annual charges would be around 4% of the amount invested in the Ulip, which will bring down the returns significantly. In the past two years, while the underlying investment of this policy gave around 10% returns, you would have got just about 6%. It is advisable that you discontinue the policy and take a term insurance and start a monthly SIP of Rs 12,500 in 2-3 diversified mutli-cap equity mutual funds.
When you discontinue the policy, you will have to pay a onetime fee of around Rs 4,000 and your existing investment in the policy will be put in a paid-up account and earn 4% interest per annum. This money, along with the interest, will be paid out after the completion of the compulsory five-year lock-in period. You are better off paying the discontinuation charges and earning 4% interest rather than paying huge charges and continuing it.