Why Travel Insurance is important..Case study 1


John and his wife had been waiting for this day since four years now. Finally their dream seemed to be coming true. They have won two tickets to that one place they always wanted to go..Falkland Island.

So they started, it was March 15th 2013. ‘It’s gonna be a week on this cruise isn’t it?’ asked Maria, John’s wife. ‘Yes, my dear’ replied John while lighting his cigar. ‘John, doctors have told you not to smoke, why don’t you listen? Now this is going to make you sick.’

‘Nothing is going to happen,’ said John with a smile.

A week went by finally the ship stopped at the Falkland Island. The duo was about to get down when John suddenly fainted. He had a COPD and Atrial Fib. Nervous Maria shouted for help. Help did come, very quickly and John was transferred to Santiago in an air ambulance. From there he was finally brought back to his home hospital at Miami, Florida. Maria was anxious not only for her husband’s health but also the medical expenses. However the entire air ambulance charges which were over $50,000 were paid by the travel insurance company.

‘John is now recovering…the insurance company brought great relief to us’, said Maria with a sigh of relief

Picture courtesy: Dxing

I suggested reverse mortgage this time

IW12_RETIRE01_655412fIt was almost 8, raining outside. I was planning to pull down the shutters of my office, when the door opened and an old man walked in. He was in a white shirt and grey trousers. How old is he…65 may be.

‘Hello sir, what can I do for you?’ I asked. He stared for a second and asked, ‘Are you Mr. Chandra?’ ‘Yes..’. ‘I am Ramesh. I have heard about you from my friend and hence I have come to you for some financial advice today.’

‘See I don’t have much money and I’m just 4 years from my retirement. Once I am out all I will have is a monthly income of 10000/- and a house worth 20 million rupees (2 crores). I really don’t know how I am going to manage after my salary stops.’

Till now I was listening quietly. The 20 million rupees house rang a bell! ‘Why don’t you go for a reverse mortgage? See, you can easily opt for a reverse mortgage loan enabled annuity. The bank will give you a loan of around 60% of your property value. So..that will be what..1,20,00,000 ? The bank will then buy you an annuity with this money. This way you can get a fixed monthly income.’

His eyes were suddenly bright. ‘But what about my son? He will not have a place to live in after I die.’

‘Oh don’t worry Mr. Ramesh you can even buy an annuity with return of purchase price. Of course the monthly payment will be lower, but at least it will be easier for your son to repay the loan and repossess the house after your lifetime.’

Hmm, sounds like a good idea. He pushed the chair back, got up and gave me 300 bucks. ‘Well Mr. Chandra, you don’t know how much relieved I am now. You are really great’, and he walked out. 

If you are in similar situation you can also try the same. Just consult a financial expert regarding your specific needs before you proceed.

Photo Courtesy: The Hindu Business Line

How to get loans in emergency in India


Your father is very sick. Doctors say, he needs immediate medical care. You don’t have the money. What are your options? Read this:

You can take a cash advance from your credit card.

  1. If you are a salaried employee you can take a loan against your provident fund.
  2. You can go for a personal loan.
  3. Personal loans are of two types:

Secured loans: You need collateral here which you may lose if you fail to pay.

  • These loans are cheaper than unsecured loans.
  • You need to pay on time unless you want to shell out big money as interest.
  • You can keep your house, car, gold as mortgage.
  • The loan amount, duration of the loan, interest rate will depend on the collateral deposit, your credit score with CIBIL and your monthly income.
  • You need to have proper paperwork/documents to get your loan issued fast.

Unsecured loan: Go to a bank and ask for a personal loan. These loans will charge you high interest rate. However they need less paperwork and you get the money in your pocket quickly.

There is a even a new option available these days. It’s called peer to peer loan. In this case you borrow from an individual. However you do not approach him in person. There are companies who will help you to connect with your lender and the entire process is done on the company’s platform.

Can you suggest any other type of loan that people can take in case of emergency? 

What happens if your nominee does not know about your insurance policy?

what happens if your nominee does not know about your insurance policyWow that’s a good question isn’t it?

First let me tell you who a nominee is.

If you have a life insurance your nominee is the person who will receive the money if you die during the term of the policy.

So what will you tell him?

  1. Tell him that he is the nominee!
  2. Is there an additional nominee? Tell him that too.
  3. To claim the insurance money usually he/she will need your policy contract, a claim form and a death certificate.
  4. At times additional documents might be presented to the insurance company which includes an FIR, a physician’s report or a post-mortem certificate depending on the circumstances of your death.
  5. If you die within the first 3 years of the policy then he should be prepared to bring medical attendant’s certificate, a burial or cremation certificate, a certificate from the deceased’s workplace, and a police report in case of an accidental death. 

The list mentioned above, is not exhaustive but still useful.

Just to keep you posted these days you get insurance when you go for a credit card. Reserve bank of India has prescribed certain rules regarding this in its master circular issued on July 2, 2012.

Where banks are offering you (credit card holder) insurance coverage in tie up with insurance companies they can take the details of your nominee/s for such insurance coverage in respect of accidental, disablement and death benefits. It is the duty of the bank to ensure that the insurance companies are keeping a record of the insured. They can also issue letters notifying you about the name, address and telephone number of the insurance companies.

I suggest you tell your nominee/s what I just told you and that can help your loved ones when you won’t be around.