Q. Suppose I decide to buy an online term insurance plan of a life insurance company, is it possible for me to buy the same through an agent of a life insurance company or should I apply for it on my own through online only?
V. SUBRAMANIAN
A. Agents and websites (of the insurance company itself or of an insurance web aggregator) are two different distribution channels for insurance. You have the option of using either of these by submitting your proposal form and paying your premium through them. So, when it comes to the purchase transaction, they are mutually exclusive.
The insurance company will have independent sales commission arrangements with differing intermediaries (and, usually, a premium discount if you buy from the company website directly).
Some products are designated to be sold only online and, conversely, all products will not be available online.
A classic purchase strategy of customers of other goods and services has been to research online and buy offline.
This combines the benefits of extensive product information material across companies and products. In addition, you can research on third-party websites also. This much information would not be as easily available from an individual sales person.
Going to an agent after you do your research will help you take your purchase forward with better clarity of what you want and what is available where.
Also, once an agent is in the picture, you get to buy only the products offered by the companies he represents. For information, an insurance agent can represent one life insurer, one non-life insurer and one standalone health insurer.
Q. I am 27 years old. My mother and father are 51 and 61, respectively. My company provides a family floater health insurance, that includes parents, covering up to ₹5 lakh.
I want to opt for additional health insurance for them.
What else do I need to consider for health insurance and how will this be useful in my tax savings?
ABINASH PATTJOSHI
A. Additional cover is always wise, and the sooner the better as you will not have too many exclusions in the form of pre-existing conditions and, if so, your waiting period clock can start ticking and you can become eligible for coverage benefits.
Please make an assessment of what likely illnesses they may face and how much treatment for it costs where you live. This will give you an indication of the sum insured you need.
Also check the option of keeping your employment cover as the basic hospitalisation cover and opt for buying a top-up or a super top-up cover as that is a more cost-effective way of increasing cover.
Your tax break on premium for parents will be as per the latest provisions of Section 80D of the Income-Tax Act, 1961, which is currently ₹25,000 (₹50,000 if either of the parents is a senior citizen).
Remember, this is only if they are dependent on you.
(The writer is a business journalist specialising in insurance and corporate history
