Mutual Fund
Rakesh Diwedi: I have invested in a small-cap fund and got good returns. But the past year has not been too great. Should I book profits and exit and start looking at large-cap funds?
Vidya Bala, Head of MF Research at FundsIndia.com, replies:
The small cap as a category has seen corrections this year. Hence, it is only natural that your fund is not doing as well as before. If you are a long-term (five-plus years) investor and your exposure to small caps is less than 20 per cent of your overall portfolio, you should not worry. Otherwise, increase your allocations to large-cap and midcap or multicap funds as it will be a prudent portfolio allocation strategy.
Life Insurance
Sreerangan Prabhu: My cousin died in an accident three months ago. He had an LIC policy, but his wife is not able to locate the documents. Is there a way she can claim the insurance money? Also, what are the documents required?
Rushabh Gandhi, Deputy CEO at India First Life Insurance, replies:
First of all, it is never too late to file a claim. The wife can claim insurance proceeds, but she will have to obtain a duplicate policy document. The process requires inserting an advertisement in an English daily with a wide circulation in the state where the loss is reported to have occurred (the policyholder or his/her family has to pay for it). Next, a copy of the newspaper in which the advertisement appeared should be sent to the insurer's office a month after the ad's publication. If no objection is raised with the LIC regarding the policy in question, a duplicate policy will be issued after the people concerned comply with certain requirements, namely, submitting an indemnity bond and payment of charges for the duplicate policy. Based on that, she can file the claim along with supporting documents, including the claim form, KYC documents of the beneficiary, bank statement of the beneficiary and his death certificate.
Auto Insurance
Devender Rawat: I have a four-year-old car and need to renew the vehicle's insurance. The quotation I have got from the existing insurer is Rs 13,000, but online insurance aggregators are putting it at Rs 7,000. Why do we see such big gaps? Will I miss out on benefits if I buy insurance online?
Mahavir Chopra, Director, Health, Life and Strategic Initiatives, at Coverfox.com, replies:
In the insurance space, different distribution channels work on different cost and commission models. Offline channels include dealers and agents who may incur bigger costs and get bigger commissions, which, in turn, get added to your premium. Also, insurers may give differential discounts to certain agents based on the nature of claims over the years. Online space is fiercely competitive and it is the place for discerning buyers. So, we see fewer fraudulent claims arising from online transactions, and hence, premiums are significantly low.