My father-in-law passed away three months back and we found that he had an LIC policy for which he had paid premium for seven or eight years. The nominee was my mother-in-law who is also no more. Can we claim the money? – Ranjit Karnik

As per Section 39 of Insurance Act 1938, the nominee in a life insurance policy gets only the right to receive the policy money in the event of death of the policyholder. Nomination does not pass on the property in the policy. In the case of your father-in-law's policy, the nominee (your mother-in-law) has also expired. However you have not mentioned whether she died before or after your father-in-law's demise. The claim will be treated as per the following scenarios:

If nominee dies when the policyholder is still surviving then the nomination would be ineffective.

If nominee dies after the death of the policyholder but before receiving policy money, then also nomination becomes ineffective and only legal heirs of the policyholder can claim money.

I would advise you to get in touch with higher authority of the Life Insurance Company to get more clarification.

I have an SBI life insurance pension plan and have been paying premium for about 15 years now. My agent is advising me to withdraw plan and invest in some other plan since this will give me monthly pension of only Rs 2000. Since the premium is only Rs 10000 per year I don't mind paying. But if there are plans that offer better returns I can invest in them. What should I do? – Subalakshmi A N

You have made a wise decision to invest in a pension plan to build a retirement corpus that will provide a steady post retirement income. The tenure of a pension plan as a financial instrument should be aligned with the retirement age to ensure that you lead a tension free life during your non-earning years. I would advise you to continue with your plan as you have paid premiums in a disciplined manner for a long period and will gain from the power of compounding towards accumulation of a retirement corpus. This corpus should be large enough to provide not only for the years after retirement, but also create provisions for the increased cost of living and the high medical expenses of old age.

It will be advisable to invest in multiple financial instruments ranging from FDs, PPF to endowment and pension plans offered by life insurance companies. Almost all life insurance companies have retirement plans in their portfolio of offerings. Some of these are market-linked policies, which allow policyholders to invest in equities and debt, while others are traditional plans, which invest only in debt and fixed income securities.

Anuj Mathur, MD and CEO, Canara HSBC Oriental Bank of Commerce Life Insurance

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