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Legally adopted son can be your nominee

I am single and have a son who I adopted 25 years ago. He’s 28 years old now. Can I buy an insurance policy and make him and a friend of mine the beneficiaries? She’s a close friend but we don’t plan to get married.

— Pranabh Raza

Your legally adopted son can become your nominee and will be considered as a beneficial nominee. Your friend would, however, be considered a non-beneficial nominee. This means that she will only be a custodian for the proceeds received by her. To make her the ultimate beneficiary, you should assign this amount to her by your Will.

My father is an alcoholic and drinks despite doctors asking him not to. He has also been admitted multiple times due to liver issues. He has a term policy of 1 crore. Will the claim be rejected if death happens due to alcoholism?

—Name withheld on request

For term insurance, the only applicable exclusion is suicide in the first year of the policy. Post the one-year period, there are no named exclusions including for pre-existing diseases and alcohol abuse.

However, you should be mindful that the level of alcohol consumption was rightfully declared at the proposal stage. Your only ground of rejection can be misrepresentation of facts. Though it is difficult to reject the claim, it is still possible if the insurer is able to establish fraud.

I am 64 years old and I am the eldest in the family and the other member is my wife, who is 62 years old. Please suggest a family floater plan for a sum insured of 20 lakh.

—Raghupati Wahi

While selecting a health plan, you should lay maximum emphasis on the waiting period for pre-existing conditions. A lower waiting period would make you eligible to make a claim earlier, if required. The waiting period for a standard health plan ranges between two and four years. Next, you should rule out a co-pay clause. Co-pay is the proportion of claim that the policyholder has to bear. Some insurers apply up to 20% co-pay for insured above 60 years of age. Finally, prefer a plan with no cappings, specifically on named diseases and room rent. Such capping will substantially reduce your claim eligibility amount. You could refer to the Mint SecureNow Mediclaim ratings for names of specific plans. You can also consider family floater options.

Abhishek Bondia is principal officer and managing director, Queries and views at [email protected]

Source: livemint