Add co-owner’s name in home insurance policy

You can add co-owner’s name in home insurance policy through endorsement, without paying extra premium

As a part-owner, your insurable interest is limited to your pro-rata share in the policy.
As a part-owner, your insurable interest is limited to your pro-rata share in the policy.

If a house is co-owned, but the home insurance was bought by only one owner (for the full house), will the claim proceeds go to only that owner or both the owners?

—Tania Kumar

This is a grey area and can leave you vulnerable. You should get the name of the other co-owner added in the home insurance policy.

This can be done through an endorsement, without paying any additional premium. As a part-owner, your insurable interest is limited to your pro-rata share in the policy. In some situations, the insurer could decide to settle the full claim with a no-objection declaration from the co-owner.

What is the difference between par and non-par life insurance products? Which one is better? Does it work the same way as par value of stocks?

—Joy Shukla

In life insurance, par is an abbreviation used for participating plans. A traditional endowment plan can be either participating or non-participating. Participating plans share the profits generated by the policyholders’ investment corpus of the company. These are also called with-profit plans. Profits are shared in the form of annual bonuses. The final maturity value for a participating plan is not known at the start of the policy. The maturity value depends on the performance of the insurer’s investment corpus. The product brochures of participating plans give the benefit illustration for customer yield based on different scenarios of fund performance. A non-participating plan does not share the profits of the investment corpus of the insurer. The benefits of the plan are guaranteed and known at policy inception.

Both plans fulfil different requirements. Non-par plans offer assured returns whereas participating returns are not guaranteed but could be better than returns in non-par funds. Keep in mind that the investment returns on both these plans tend to be 3-6% per annum.

Par value of stocks is their face value. This concept is not relevant for a life insurance policy.

To read more queries, go to livemint.com/askmintmoney

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