FAQs
When can a nomination be done?
Insurance Act, 1938, provides for nomination of a person who would receive the benefits of the claim on the death of the life assured. Nomination establishes a clear title to the policy. This prevents dispute and also prevents delay in settlement of a death claim. The nomination can be done at the start of the policy by providing details of the nominee in the proposal form. However, if the nomination is not given at the beginning, it can be done at a later date. This nomination has to be effected by giving notice in a prescribed form to LIC and getting it endorsed on the Policy Bond.
The policyholder can change the nomination at any time during the term of the policy and for end number of times. For this, the policyholder has to give a notice in a prescribed form to LIC. Further, nomination can be removed any time by the policyholder without giving prior notice to the nominee.
Under nomination, the nominee gets only the right to receive the policy amount in the event of the death of the policyholder; nomination does not pass on the property in the policy. If nominee dies when the policyholder is still surviving then the nomination would be ineffective. If nominee dies after the death of the policyholder but before receiving policy amount, then again the nomination becomes ineffective and only the legal heirs of the policyholder can claim money.
How do I surrender my policy?
After the premium is paid for three consecutive years, the Policy acquires a Surrender Value. The Policy, which has acquired a Surrender Value, can be surrendered for payment in cash. Once the Policy is surrendered the contract is terminated.
How do I revive my policy that has lapsed?
You can re-apply to reinstate it if you:
Can motor policies be issued for a longer term than a year?
No policy can be issued for a period of more than one year ordinarily. However, for motor cycles and scooters only, the Act Policy in Form A, which is the minimum compulsory insurance required by law, may be issued on a long term basis. Such policies once issued remain valid up to the cancellation of the registration of the vehicle by the Regional Transport Authority (R T A).
This insurance is particularly useful for owners of comparatively older vehicles, for whom the Comprehensive Cover becomes a little too expensive considering the age and market value of the vehicle. The premium for such insurance is charged in accordance with the Long Term Act Policy Premium Schedule.
Can motor vehicles be insured against fire and theft risks only?
Private Cars, motor cycles, scooters and commercial vehicles can be insured against Fire & Theft Risks only, provided they are laid up in the garage and not in active use. The insurance company under such cover shall only be liable to indemnify the insured against loss or damage by:
- Fire
- Explosion
- Self-ignition or lightning
- Burglary
- Housebreaking or theft and riot
- Strike
- Malicious and terrorism damage
In case of vehicles that are in use, only fire and theft risks can be covered by the Act Liability Risks.
Does a third party claim affect the bonus/ malus rate under the comprehensive motor insurance policy?
The Bonus/Malus concept is applicable only to the Own Damage Section of the Comprehensive Policy.
The discount or loading is accordingly allowed or charged on the Own Damage portion of the premium. The Act Liability or Third Party premium is absolute. There is no scope for adjustment. As such, an accident giving rise to a Third Party claim, whatever the amount, does not affect the application of Bonus/Malus at the time of renewal of the policy.
Are accessories and extra fittings of the vehicle covered under the comprehensive motor insurance policy?
Accessories include parts which are directly supplied by the manufacturer along with the vehicle. But they are not essential for the running of the vehicle. The engine of a vehicle is essential for its running and obviously not an accessory. A spare tyre, is however an accessory. Loss or damage to accessories are covered only if they are on the vehicle.
In case the accessories are detached from the vehicle and kept in a garage and are destroyed by fire, they are not covered. Radios, tape recorders, air conditioners and other electrical or electronic items are fitted by vehicle-owners. These cannot be considered as accessories. These items qualify as extra fittings and the owner has to specifically describe and mention separate values towards them at the time of insurance.
Only on payment of the requisite additional premium, can they be covered. However, if such items are built-in and supplied by the manufacturer, will be treated as accessories and need not be separately insured.
What is a Growth Stock?
A popular investment style whereby fund managers identify companies showing promise of above-average earnings through capital appreciation. Stocks are held primarily for price appreciation as opposed to dividend income. Thus the fund managers of the growth stocks are willing to pay a premium to acquire a stock if they feel it has the further growth prospects. Growth investing is an alternative to value investing.
What is passive investing?
Passive investing is managed by index fund managers who simply invest by benchmarking their portfolio to a common stock market index like the BSE-30 or the SP CNX-50. The fund manager only invests in stocks in the index stocks in exactly the same weightage. The attempt is to simply replicate the benchmark index, as closely as possible and therefore it is called passive investing.
What are Gilt schemes?
Gilt schemes include bonds, money market securities or some combination of these. They have medium to long-term maturities, typically of over one year and have moderate returns. Since the issuer is the central or state Governments, these funds have reduced risk of default and hence offer better protection of principal.