My base insurer has offered to increase my sum assured to ₹20 lakh for an incremental premium of ₹3,000. I am considering whether to enhance the coverage. I have a no-claim bonus of ₹10 lakh in my base plan. We do not have any adverse medical history. Please advise.

- Name withheld on request

You have a well-structured health insurance coverage. Once your base sum assured gets exhausted, your top-up plan would trigger immediately. Since the deductible of the top-up plan matches that of the sum assured of the base plan, you would not have any outage.

Additionally, you have a cushion coverage from the no-claim bonus. Given that it would take a couple of years for the waiting period to lapse in the top-up plan, the no-claim bonus could step-in.

There is limited incremental benefit of getting the extra coverage in the base plan, given your current structure. For the incremental sum assured purchased in the base plan, the waiting period would be reapplied.

Over the past few years, the super top-up plan has been priced very attractively. For instance, a super top-up of ₹1 crore with a ₹10 lakh deductible for your family composition would cost around ₹1,000. Comparatively, it seems you are being charged ₹3,000 for the additional ₹10 lakh cover in the base plan.

The primary advantage of buying cover in the base plan is that you would be able to make a single claim of ₹20 lakh with one insurer. In the alternative structure, you would have to file a claim of ₹10 lakh with the base plan, and then the remaining amount with the top-up up insurer.

I had applied for a term life insurance cover of ₹2 crore with a prominent life insurer. However, it got rejected because I have some anxiety issues. I checked with multiple other insurers, but the proposal gets rejected. Why is this happening? I now have an option to get a life cover through a group retail plan. Should I consider this option? Why is GST applicable for such a plan?

- Name withheld on request

Life insurance contracts are long-term contracts. Premium once assigned for a particular contract remains fixed for the entire duration of the term. Insurers have pre-fixed underwriting norms based on their assessment of risk.

These are not static rules but change over time. For chronic health issues, such as anxiety, insurers may refuse to underwrite the proposal based on these models. You may choose to reapply when your health condition improves.

In the meantime, it would make sense to apply with the group retail option. In a group plan, insurers have more underwriting leeway due to volume. Also, group plans are generally for shorter period. Thus, allowing insurers to revisit pricing after smaller intervals.

As per the recent GST regulations, only individual health and life products are exempt from GST. Group life insurance plans still fall within the ambit of GST.

As your health condition improves, you may discontinue the group plan and switch to an individual plan. This would make sure that you are able to optimize premium, when possible, and have the necessary coverage in the meantime.