You can have six nominees and may also specify the proportion of benefit that you would like each nominee to receive Kapil Mehta, Managing director and principal officer, SecureNow Insurance Broker Pvt. Ltd Published in Mint Dated 23rd May, 2012 I am a 29-year-old married male. I have a term plan of Rs. 50 lakh. We recently had a baby girl. Now I plan to increase the sum assured to Rs. 1 crore. Should I now go for a unit-linked insurance plan (Ulip) or an endowment plan? —Nityanand Sahay

1. Ask Mint Money | Give credible reason if you
want to nominate nephew, niece to plan
You can have six nominees and may also specify the proportion of
benefit that you would like each nominee to receive
Kapil Mehta, Managing director and principal officer, SecureNow
Insurance Broker Pvt. Ltd
Published in Mint Dated 23rd May, 2012
I am a 29-year-old married male. I have a term plan
of Rs. 50 lakh. We recently had a baby girl. Now I plan to
increase the sum assured to Rs. 1 crore. Should I now go
for a unit-linked insurance plan (Ulip) or an endowment
plan?
—NityanandSahay
Your sum assured should be at
least 10 times your annual
income. If you earn up to Rs. 10
lakh a year, then your term cover
is adequate. The
incremental Rs.50 lakh of term
insurance that you buy should
cost less than Rs. 8,000 for a 30-
year term.
The second insurance that you must have is health insurance for
the entire family.
The third insurance for you to buy should be a 10-year growth-
oriented Ulip. Do not invest more than 25% of your savings into
aUlip.

2. I would not recommend a traditional endowment plan since it
typically has high hidden costs and provide limited exposure to
equities. At your age, equity would be one of the best long-term
investments to consider.
I am 32 years old and have a one-year-old child. I have
three Ulips for which I pay an aggregate sum assured
of Rs. 40 lakh and aggregate premium of Rs. 35,000. I plan
to buy a term plan as well. How much should be the cover
amount for me? Should I stop any of the Ulips I already
have?
—VinodKondiyal
Your term cover should be about 10 times your annual income,
less Rs. 40 lakh of insurance that you already have. At your age a
30-year term plan for a cover of Rs. 50 lakh will cost
about Rs. 8,000 per annum.
It is hard to comment on the Ulips you have without some more
details. However, as a general rule, if you purchased these after
September 2010, then keep them active because these are Ulips
with a cap on charges. If these were bought before that then you
will need to compare the continuation costs with surrender
charges to take a decision.
I am 35 years old. I want to take a Rs. 2 crore term cover
and nominate six people to that. Will I be allowed to do
so? Also, my annual income is Rs. 15 lakh. Will I get such a
huge cover? Can I name my nephew and niece as
nominees?
—A. Dhar
Yes. You will get a Rs. 2 crore life insurance cover because
insurance companies routinely allow a sum assured up to 15
times the annual income.

3. You can have six nominees and may also specify the proportion of
benefit that you would like each nominee to receive. If there is
insufficient space in your proposal form, then use a separate
sheet to list out the nominees.
You can name your nephew and niece as nominees, provided you
give a credible reason to the insurer. Some credible reasons could
be that they are financially dependent upon you or that you do
not have children of your own and treat them like your own.
Kapil Mehta is the managing director & principal officer,
SecureNow Insurance Broker Pvt. Ltd