Check Your Knowledge with the Ultimate Insurance Quiz

A life insurance company in India promises to look after your family when you are no longer there to take care of them. But not everyone takes on insurance with that in mind. Did you know that singer Rod Stewart has insured his voice for $6 million? That is nothing when you see that Jennifer Lopez has insured her butt for $27 million! And Dolly Parton’s breasts are not just the butt of jokes, they are a very serious topic indeed given that they are insured for a total of $600,000. And if you were looking for more strange insurance, Heidi Klum has insured her right leg for $1.2 million and her left one for $1 million because it has a tiny scar on it. So, do you think you know all there is to know about what a life insurance company is all about?

The Indian Insurance Quiz

Here’s a simple quiz to check your basic knowledge of what a life insurance company in India offers the consumer:

1. How much insurance do you need?

a. Cover equal to your annual expenses, including bills, educational expenses, household expenses, etc
b. Cover that takes care of all expenses related to the death of the policy holder, such as hospital expenses, funeral costs and taxes.
c. Cover equal to the expenses incurred during the adjustment period after the demise of the policyholder to offer time to the family members to put their finances in order or even for one of the members to find a job to ensure regular income
d. All of the above

Ideally, the amount of cover should include all of the above. Your choice of cover should not only take into account the monthly or yearly expenses that your family or dependents are likely to incur after your demise, you also need to factor in inflation.

2. What happens if you terminate your policy before the end of its tenure?

a. You lose your investment
b. You are liable to pay a termination fine
c. You receive a surrender value that is a portion of the amount you would have received at the end of the tenure
d. A surrender value is payable after the completion of a minimum number of years, which would be equal to a percentage of the total premiums paid till date on the policy

According to the latest IRDA guidelines, the life insurance company is liable to pay a surrender value if you terminate your policy after the completion of a minimum of two to three years. This surrender value can be anywhere between 30% and 90% of the total premium amount paid till date.

3. Can you convert a term insurance policy to a whole life policy?

a. No, a term policy cannot be converted to a more permanent one
b. Yes, you can convert but you will liable to pay additional charges.
c. Yes, you can convert without being charged anything extra.

Most life insurance companies in India offer you the option of converting a Term Plan into a whole life or endowment plan. There are usually no additional charges for such conversion. It is always a good idea to read the terms and condition carefully while choosing any plan to ensure that the said options are available.