What to consider while buying health insurance for family

— Name withheld on request

The first thing to do while buying a health insurance plan is opt for a sum assured of at least ₹10 lakh. This could be a family floater sum assured, so anyone in the family can use up to the full sum assured. If you have a family history of any major illness, then you can consider increasing it. 

I would recommend plans that have no room rent capping, no disease-wise restriction, no co-payment and a high no-claim bonus. Prefer a plan with low waiting period, and an insurer that has a claim settlement ratio of at least 85%. A plan with all these conditions would cost you around ₹20,000 annually.

I am taking a home loan as a co-applicant and my mother as the owner. She is a housewife.  Is it possible to take life insurance policy for both of us? As a co-borrower, if something untoward were to happen to me or my mother, how will this insurance be applicable or helpful?

—Named withheld on request 

The underwriting for a home loan and life insurance is done independently. In life insurance, the coverage and the premium is dependent on the age and health status of the applicant. If an individual is not earning, then the sum assured usually does not exceed ₹50 lakh. This sum assured approved by the insurer need not be equal to the home loan amount. Notwithstanding this, it is possible for both co-applicants to take a life insurance policy. 

Generally, the bank granting the loan insists that the term insurance of the borrower is assigned to the bank. It ensures that whenever the sum assured is paid, it would be paid to the bank. 

In case of a term insurance, if the policyholder dies, the sum assured equal to the outstanding loan amount is retained by the bank and rest is paid to the nominee.   

Abhishek Bondia is principal officer and managing director, SecureNow.in.