Q: I am 31 years old and working in a MNC. My company is providing me health insurance cover of ₹6 lakh per year. Since there is no free cover for my parents, I have opted for voluntary contribution and pay ₹39,000 per year for both of them from my pocket. My mother has diabetes. However, as this is corporate policy, pre-existing diseases are covered.

After a few years, if my employment is over or if I plan to quit the job for some reason, there won’t be any active health insurance. If I purchase one then, there won’t be coverage for pre-existing diseases from day one and we need to be on waiting period.

Adding to it, the premium amount will also be too high. I would like to hear your suggestion on the following: Should I stop the corporate health insurance and purchase one in the outside market now and continue with that (this is my third company, I may switch jobs again after a few years). Also please advise a preferred website to buy long-term health and term insurance policies, without visiting the insurance company’s branch office.

Also, I am looking to purchase a term insurance for myself, please let me know your views on the riders one can select. Will it be fine if I opt for “With Return of Premium” in term insurance? Till what age can one take term insurance?

Manickababu S.

A: When you have employer-provided health insurance, you should opt for it and use it as the anchor for your coverage. Since you plan to change jobs in the future, your idea of taking separate health insurance is wise, but if you cancel the corporate policy now, the new policy will cover you for pre-existing conditions only after the waiting period. This is clear in the case of your mother who will lose the diabetes cover she has now for four years or so.

Health insurance premium rates go by age slabs. Whether a new policy or old, at a particular age, a specified premium will apply. There could be loading, of course. In life insurance, on the other hand, it is age at inception of the policy that is a factor in the premium rate, so the higher emphasis on buying a policy earlier. There are multiple platforms for buying insurance online with efficient and interesting features to compare across policies and insurance companies and buy with a click of a button from the comfort of your home.

You can check out the leading portals and see what they offer and don’t forget to check what the insurance companies’ own websites offer before finalising your buy. While you are at it, take an e-insurance account so you have your policy details on the cloud and at your fingertips, with renewals, changes, and all administration and even claims and renewals made that much easier. Any feature in an insurance policy comes with a cost attached. Your question is whether to take a term policy with a return of premium option and the reply to that is please check the extra premium for that option, see if the logic appeals to you and then make your choice.

The age up to which you should take term insurance depends on your financial obligations and when your dependents will be financially independent.

If your children are going to be well established financially when you are 70 years-old, then choose 70 with a few added years for buffer if you want. You can opt for an older age as well, just remember that you will be paying premium throughout the term you choose.

(The author is a business journalist specialising in insurance and corporate history)

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