How do I buy insurance for my mobile phone?

How can I buy an insurance for my phone? What would be covered under phone insurance?

—Name withheld on request.

You can buy portable equipment insurance for your mobile phones, laptops or personal portable devices. Such insurance is generally an all-risk policy. It would cover any accidental damage to the device including breakage, short-circuit and theft.

Several insurers offer such insurance. However, most insurers prefer to bundle it with another product, such as home insurance. In such a scenario, phones are insured with other household items owned by the policyholder. Commercial establishments of all sizes, including small businesses, with several devices can buy this cover under an office package policy. This will help cover losses to their other office items due to fire and other accidental damage.

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It is generally difficult to buy an all-risk insurance for a single phone. The best time to buy this would be at the point of purchase of the device itself. Several mobile phone distributors offer phone insurance while selling the device. At the point of sale, the insurer is assured that there is no pre-existing damage. Insurers are most willing to issue a stand-alone mobile phone insurance policy then.

My mother is 73 years old. An agent suggested I buy a life insurance policy for her. He suggested both term plans as well as a few endowment plans. What would be the best way to buy a life insurance plan for her?

—Name withheld on request.

Life insurance plans are meant to serve as a financial cushion for dependents when the key earning guardian passes away. Endowment plans help accumulate a corpus, which can be availed even if the person survives at the end of the policy term.

Term plans provide a lumpsum only if the insured person dies during the policy term. They do not provide any benefit if the person survives the policy duration.

The age of your mother is past the regular retirement age. Generally, by this age, individuals do not have active income. Most income is generated through passive sources such as interest income. In case the person passes away, the dependents would not lose their income coverage. That’s why a life insurance plan is not recommended.

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However, if there is a need to provide a corpus for some dependents, then an efficient way would be to invest in a savings instrument rather than a term plan. Term plans are generally expensive at higher age brackets and are much harder to get.

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