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A life insurance policy is something that provides a dedicated sum of money on the demise of the policyholder or after a certain period of time.
Life insurance is a contract wherein an individual is offered financial coverage by an insurance company in exchange for a payment over a period. The payment made to the insurer is referred to as the premium. In case the policyholder passes away during the policy tenure, the insurance company will offer a lump sum amount to his/her nominee. This lump sum amount is called the sum assured on death or the death benefit. Upon completion of the policy term, the policyholder receives a sum assured on maturity or the maturity benefit from the insurer along with some bonuses.
A pure protection plan, such as a term insurance policy, offers only the death benefit. However, there are several types of life insurance policies that offer savings in addition to protection. The savings can be in the form of a maturity benefit or bonus. Premiums paid and benefits received under life insurance are liable to tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Life Insurance policies offer several different benefits to individuals and some of them are mentioned below:
New Plans from Life Insurance Corporation of India
Life Insurance Corporation of India or LIC (as is popularly known) is the first-ever state-owned general insurance company in India to have commenced operations. Till date, LIC remains to be one of the most reputed insurance companies providing comprehensive health and life insurance policies to its customers. LIC came into origin in the year 1956 and since then it has managed to carve its own niche in the sector of insurance. LIC offers a wide range of insurance products to its customers from endowment plans, and Unit-Linked Insurance Plans, to moneyback plans and term insurance plans. Whatever insurance needs and requirements you have in life, Life Insurance Corporation of India will fulfill it easily and in a hassle-free manner.
Life insurance has changed from being a luxury to a necessity, and it now plays a crucial role in how smoothly our lives go. Although the country's life insurance penetration has not yet kept pace with its population, hundreds of new people enroll in various life insurance plans every day. Selecting the appropriate sort of insurance is one of the most difficult aspects of life insurance, and with so many alternatives available from different firms, it wouldn't be difficult for those who are unfamiliar with them to become perplexed.
The table below will highlight and compares key aspects related to the different types of life insurance policies in India:
Parameter | Term Plans | Whole Life Insurance | Endowment Policies | Unit Linked Insurance Plans | Term Return of Premium Plans | Pension/Annuity Plans |
---|---|---|---|---|---|---|
Overview | Life Insurance at a Fixed Price for a Specific Period | Protection for Lifetime, or coverage under the policy until you turn 100 years old | Protection plus returns that are assured to reach 6.5% | Investments across a range of asset classes plus protection (Market-linked, debt, money market etc) | At the conclusion of the Policy Term, paid premiums are returned. | monthly pension to cover post-retirement costs |
Policy Term Range(in years) | 5 years to 85 years | Until 100 years old | 5 years to 35 years | 10 years to 20 years | 5 years to 65 years | Entire life |
Maturity Benefits | Only if the Return of Premium option is selected is the Maturity Benefit accessible. | Plan matures when you reach the age of 100. | Yes, when the policy's term expires. | Yes, when the policy's term expires. | Benefits of Survival on Maturity | regular earnings until "survival" |
Death Benefits(to beneficiary) | Life Cover | Life Cover | Sum assured | Sum assured | Life cover | Offered by few plans |
Ideal For People who want | family financial security at a reasonable cost | to leave their family a legacy | Secure and assured return on investment for stress-free planning | a portfolio of investments with strong yields and life insurance | Life Insurance and a Guaranteed Benefit Upon Maturity | to guarantee retirement through a steady income. |
*Note – The term varies from plan to plan, with the numbers mentioned above reflecting an overall average.
When it comes to life insurance, the standard idea of the product is that if you pass away, an insurance company will pay your family a large sum of money. But that is not the only benefit that a life insurance product has to offer. A life insurance policy can also be used to plan for upcoming and unforeseen expenses through schemes like ULIPs (Unit Linked Insurance Plans) that provide returns through investment in the markets.
Below are some of the popular life insurance companies in India:
Following are the documents you will require to purchase a life insurance policy:
Life insurance claims are made under two circumstances:
Here, nominees or close relatives of the deceased make the claim (or assignees if the policy has been assigned) in the following way:
While these outline the standard set of documents required to process a claim, other evidence may be required such as an employers certificate or any other forms or reports that will help resolve any issues thrown up during an insurers claim verification or investigative processes.
When a policyholder’s beneficiary or nominee is claiming life insurance, he or she will be required to follow certain rules. The nominee will have to file a death claim in order to procure the death benefit. If you have a physical insurance policy, you can take a claim intimation or a notification form from your life insurance provider. If you have an online policy, you can apply for a form online.
Being insured in today’s date is of utmost importance. Even if your partner has a life insurance policy and a group policy from his/her company, it is important that you purchase a comprehensive life cover for yourself. Covering your life will not reduce the emotional distress that you may be going through, but a life insurance policy will ensure that you have adequate financial backup during times of your need. The insurance market is currently flooded with insurers selling a horde of insurance products and services. While selecting a particular life insurance policy, it is imperative to understand the tax implications of the same.
Women are becoming more and more empowered in all aspects in India. These days they are not only contributing to household chores but are also working shoulder to shoulder alongside men. Gone are the days where the man of the house was the sole breadwinner.
This is probably the reason why women need life insurance just as much as men in India. Women typically have the tendency of taking their financial protection for granted, hence miss out on purchasing life insurance or health insurance policies for themselves. Mentioned below are a few reasons why women should invest in life insurance policies in India:
The following types of life insurance policies are most suitable for the women in India:
LifeLife insurance policies are known for insuring the life of the insured and also for providing a lump sum amount to the insured’s family after the former (the insured) passes away. The insurance market is flooded with numerous insurance policies offered by various insurance providers. Hence, choosing a life insurance policy that best suits one’s needs has become a convenient process.
However, before investing in a life insurance policy, it is important to analyse the cost and one’s needs, and invest accordingly.
Factors Affecting Life Insurance Policy Premiums:
In India, the general tendency is to not purchase an insurance policy unless one really needs it. This is a highly risky behavior as medical emergencies and unfortunate events are unpredictable. The need to purchase a life insurance policy becomes even more integral once an individual reaches his/her retirement age.
Typically, an average young Indian avoids purchasing a life insurance policy for two reasons – firstly they feel like they might not require an insurance coverage due to their current good health, secondly, working professionals often find the insurance coverage provided by their employers to be sufficient. This ultimately results in a situation where they have zero savings during the golden years of their lives. Owing to this, a multitude of insurance companies offer health coverages or plans that are custom-made for the senior citizens of India. The enrollment age for such policies is usually up to 65 years. However, there are multiple insurers in the market that do not have the entry age restriction, thereby making it super easy for senior citizens to access standard healthcare during any point in time.
With almost every insurance company providing quality healthcare to senior citizens, it can be a daunting task to narrow down on one and purchase it. Therefore, the below-mentioned factors must be taken into consideration while purchasing a life insurance policy for senior citizens in India:
Senior citizens are relatively more prone to illnesses and diseases due to their age. This is the time during which they should be worrying about taking care of their health instead of finances.
Life insurance involves the payment of an amount of funds when the insured individual dies or once a certain period is completed. It also helps in minimising the risk by migrating it from the policyholder to the insurance provider. Life insurance mainly focuses on risk management and risk pooling. It helps people in attaining financial security instead of being stuck when certain unforeseen and unfortunate incidents occur. Some of the most important and common principles of life insurance include both parties (insurer and policyholder) having good faith, policyholder having insurable interest in the insurance offered by the company, the insurance company’s readiness to offer compensation when a damage or loss occurs, the principle of subrogation where the policyholder has the right to claim the amount from the insurer, etc. Life insurance products function according to 3 aspects and they include interest earnings, mortality, and expenditures of developing and maintaining the insurance plans, etc.
With life insurance, you can provide enhanced financial security to your near and dear ones. Life insurance is an integral part of our financial planning, providing financial cover to your family members even when you are no more. Life insurance policies help you prepare for life's uncertainties; they provide complete peace of mind ensuring that the future of your loved ones is secure. Also, you can pay off various expenses incurred in different phases of your life with the help of life insurance policies. The amount received as life insurance policies can be used for paying off loans and other expenses, taking loans and fulfilling various personal needs.
Even before the era of online premiums calculators existed, people did feel the need to analyse their life insurance requirements and wanted to know how much is just enough for them and their family members. This was done through the assistance of financial advisors and experts who used to sit down with the policyholders and used to help them calculate their life insurance requirements and needs. This activity basically includes two things:
The remainder that you have at the end of the calculation is essentially the amount of coverage that you need for your family. This is the amount that should ideally be your death benefit. The period of time that your family will need the coverage for is known as policy term. Policyholders are free to choose from a wide array of policy terms made available by insurance providers.
The general thumb rule of life insurance is always selecting a coverage that is ten times more than your current annual salary. However, circumstances and financial requirements vary from one individual to another. What one person needs as a coverage might not suffice for you. Therefore, it is important to carefully calculate your financial expenses in the future before purchasing a comprehensive life insurance policy.
Since life can be uncertain, it is essential to have a proper savings plan in place in order to deal with unforeseen circumstances and emergency expenses. One of the best ways through which you can plan your savings while also ensuring that you and your loved ones are financially secure.
There is no particular time that can be considered as the ‘right time’ to purchase life insurance as it depends on individual requirements and circumstances. The market has a number of options with varying terms and implications, and the key to picking the right policy lies in research and comparison. If you find the right policy at the right age, the benefits you reap when you most require it can be truly helpful. It is also important to consider such factors as future plans, dependents, income, etc. in order to make an informed decision about the policy term, the premium and the cover.
Purchasing a life insurance policy is considered essential nowadays because it ensures that your dependents will have the financial resources to cope with their daily expenses in case of your unfortunate and untimely death. While life insurance is not necessary for every individual, it definitely plays a crucial role in ensuring the financial security of the family of an income-earning individual, and it becomes all the more important for individuals who are the sole earners in their families.
Insurance can also come in handy for individuals who wish to repay personal loans or home loans, or those who have children that require funds for marriage or higher education. In essence, life insurance policies serve as contingency plans that ensure that your nominees or family members will remain financially stable in case of your demise as the insurance company will pay them a lump sum amount. Based on the kind of policy you purchase, you can also avail a healthy savings-cum-investment instrument that will qualify you for tax benefits as well.
Thanks to advancements in technology, you can now compare life insurance policies from the comfort of your home. All you need is a computer and an internet connection in addition to a payment account such as a debit or credit card. But before you choose a policy and pay for it, it is essential that you do your homework and ensure that the policy is select has all the features and benefits that will come to good use in the future. Following is a brief description of the various policies at your disposal and the important points that must be considered before selecting a life insurance plan:
Life insurance policies are often considered incomplete without riders. While term life insurance policies are the most popular kind of insurance purchased by Indian individuals, they have been designed in a manner such that they offer maximum protection to the family of the policyholder in case of his/her untimely death. However, additional financial cover can be obtained through a life insurance policy by incorporating riders into them.
Riders are basically additional features that enhance the value of a life insurance policy while providing extra benefits that are not covered by the original policy document. Availing a rider along with an insurance policy may slightly increase the premium amount depending upon the kind of raider you have purchased. If you are looking to choose an optional rider to increase your insurance cover, it is essential to understand each rider and what kind of benefits it offers.
Following are the most popular riders that can be availed in addition to your life insurance policy:
A Critical Illness rider can prove very beneficial as it not only ensures that you have financial support when it comes to paying your medical bills, but also provides access to quality medical attention, thereby ensuring that treatments are not ignored or delayed owing to lack of finances.
A Critical Illness rider usually covers medical expenses related to illnesses such as stroke, heart attack, kidney failure, paralysis and cancer among other illnesses. In case you purchase this rider, you can breathe relatively easy in times of ill health, knowing fully well that your insurance policy will cover your medical expenses and that your family will not have to worry about the finances in addition to dealing with the emotional trauma. Individuals who purchase the Critical Illness rider will receive a predetermined lump sum amount the moment they are diagnosed by any of the aforementioned conditions or the conditions mentioned in the terms and conditions section of the policy document.
Given the uncertainty of life, an incident or accident has the potential to render an individual disabled. In case of disability, the individual is impaired to the extent that he / she cannot work and earn the income they require to support their family, thereby affecting the lifestyles of both, the individual as well as his dependents. In such cases, the individual will require an alternate source of income to ensure the healthy functioning of his / her family. A Partial and Permanent Disability rider is the best bet in such cases as it provides staggered payments to the individual in case he / she has met with an accident due to which they are disabled and unable to work. These payments are generally a certain percentage of the total sum assured (10% or more in most cases), and ensure that you can meet your financial requirements even if you are partially or permanently disabled.
The Accidental Death rider is an ideal option for those who intend on ensuring that their families have adequate financial resources in case of their untimely and accidental death. In addition to considerably high medical costs, the number of unfulfilled financial liabilities are also usually high in case of an individual’s accidental death, making it very difficult for his / her family to cope with the financial requirements.
An Accidental Death rider comes in very handy in such situations as it will ensure that the individual’s family will receive an additional payment in case the policyholder dies from an accident. Although the basic sum assured will be paid out to the nominees upon the death of a policyholder, the Accidental Death rider provides the family with extra funds to ensure that they can manage all their expenses, thereby making it less stressful to deal with the loss of a loved one.
In case you fail to make a premium payment on time, you will receive a notification from the company to ensure that all due premiums have been paid within a predetermined grace period. Failure to make premium payments within the stipulated time period often results in a situation wherein the policy is considered lapsed. As a result, the policy will no longer be active and you will not be eligible for the benefits upon maturity of contract. There could be a number of reasons as to why an individual may not be able to make premium payments, but regardless, the policy will be rendered useless. In such a case, the rider called Waiver of Premium can come in handy.
Even if you cannot make premium payments for a certain period of time, be it because of disability or unemployment, purchasing a Waiver of Premium rider will ensure that your policy does not lapse so that you can enjoy all the benefits upon maturity as initially agreed. The rider will allow your premium payments to be waived off but the policy will continue as per the initial agreement.
The demise of a sole-earning member of any family can be a devastating loss and make it hard for the dependents to carry on with their lives in the same manner as before. If you have a family whose financial requirements are met solely by your income, it is essential to ensure that they have a regular source of income in case you are no longer able to provide for them. The Income Benefit rider is perfect for individuals who wish to ensure that their family’s lifestyle remains unaffected in case of their untimely death. As the name suggests, the Income Benefit rider provides regular income to the family of a deceased policyholder, and the amount payable to the nominees through such a rider is usually a percentage of the total sum assured. Purchasing this rider will ensure that your family will be financially secure and have lesser concerns to deal with in case of your untimely death.
When life insurance companies calculate the premium for each individual, there are certain factors that are taken into consideration. Since life insurance is a form of investment, even low premiums have the potential to yield relatively high returns over a period of time. However, availing a life insurance policy with a low premium may not always be possible as you will have to meet some requirements as laid down by the insurer. With that said, some individuals tend to avail similar life insurance policies as others at significantly low costs. The reason for this is that these individuals have made the right life choices that have enabled to avail lower premiums.
Following are the factors that are taken into consideration by life insurance companies for the calculation of premiums:
Once the insurance company has taken the aforementioned factors into consideration, it will determine the amount of premium applicable to an individual, making it essential for you to ensure that you lead a healthy lifestyle and make the right choices in order to avail the best possible rates.
The premium charged on your life insurance policy is the amount of money levied by insurance providers for coverage. The premium charged by each company may vary, making it important for you to compare different policies to find the one that best suits your requirements. However, there may be times when the quote for a premium may differ from the premium that is actually charged as it will depend on the manner in which the premium is computed.
Mathematical calculations and statistics done by the insurance providers underwriting department will determine the premium charged to an individual. In most cases, the statistical data regarding the health, age and life history of an individual are taken into consideration when computing the premium. For instance, a youngster driving a fancy sports car will likely have to pay a higher insurance premium in consideration with a middle-aged individual who drives a sedan. The underwriting process is applicable to all individuals who wish to avail life insurance, and it entails investigation of filial illnesses, analysis of reports such as motor vehicle reports and medical information bureau.
Once the underwriting department of your insurance provider has gathered all your information and analysed it, an actuary will scrutinise it further to determine your risk to the insurance company. The actuary will also forecast how likely you are to make a claim on your policy, and the higher your chances of making a claim, the higher your premium payment will be.The actuary will also peruse mathematical information after which he / she will compile ‘mortality and sickness’ tables based on which potential losses you will incur due to illnesses and death will be noted. There tables are used by actuaries to create models that ascertain how likely an individual is to contract illnesses or die. The premium charged to you will be determined by these results.
Many employees in India can get life insurance with the help of their employer. This is known as the employer-employee structure. The employer will purchase insurance from the insurance company and then the employee will be insured. This brilliant facility is being offered by many employers in order to retain and motivate employees efficiently. When life insurance policies are offered by the company, employees get attracted and stimulated to work at an organisation. The attrition rate will also minimise with the provision of life insurance.
You can check with your employer if you will receive life insurance. Under the employer-employee structure, the employee will receive the benefits of the policy and also tax benefits. You will not have to pay any tax for such an insurance policy. You can buy any type of life insurance under this particular structure.
Your company will most likely offer a life insurance policy to employees if it is a sole proprietorship firm or a legal or corporate firm with at least 5 employees who can purchase the life insurance policy. Your employer will need to draw a single cheque to offer coverage to its employees.
When an employer offers life insurance policies to its employees, certain eligibility criteria need to be met:
Life insurance is not exempted from GST (Goods and Services Tax). The introduction of GST will have an impact on the life insurance industry. The insurance premiums will most likely increase from 15% to 18% in the insurance sector. If you are paying premiums for health, car, and life insurance, you will be affected heavily.
Under the GST regime, there is a Services Accounting Code (SAC). This code is applicable only for services that come under GST. The SAC for GST classification for life insurance services (not including reinsurance services) is GST Code for Life Insurance. Similarly, the SAC GST code for pension services is 997131.
The cost of a life insurance policy depends on the type of policy you own. Term plans are generally cheaper in nature as it only offers death benefit with no profits or returns. Traditional plans and unit-linked plans tend to cost more as they offer a wide range of benefits. The cost also depends on the sum assured i.e. a higher sum assured will cost you more and vice versa.
Term life plans are offer a high sum assured at low premium rates. Such plans do not offer any returns and are valid for a limited period of time. Whole life plans, on the other hand, offer death benefits as well as savings benefits. Unlike term plans, these plans are valid for the entirety of the policyholder’s life.
Both types of policies have their own perks. You must assess your needs first to decide which is better. If you seek high coverage at low premium rates, then term plans are a better option. However, if you want life cover as well as savings benefit with a longer tenure, a whole life plan will be a perfect pick.
Life insurance prices are heavily influenced by your age. As you grow older, the premium rates will increase as old age makes us more vulnerable to risks. Ideally, you should invest in a life insurance plan in your late 20s or early 30s. The ideal age varies based on the number of dependents you have. If you have a history of any critical illness in your family, it is advisable to invest in a plan as soon as possible.
Yes, you can buy life insurance at 62 years. Most life insurance policies have a maximum entry age ranging between 55 years and 60 years. However, there are numerous policies that are designed specifically for senior citizens. Such plans are useful for individuals who haven’t invested in a plan earlier in life. Certain plans for senior citizens also offer retirement benefits and pay outs.
Life insurance policies are designed in a way to provide your family/nominee with financial support after your demise. The death benefit can be availed only if the policyholder dies within the policy period. But, in case you survive the policy period, the death benefit won’t be paid out.
For traditional plans and policies with benefits, if you survive the policy term, you will receive the maturity benefit. But in the case of term plans, the policy ceases to exist after you survive the term.
The exclusions under life insurance plans may differ from one policy to another. However, there are certain exclusions that almost all policies agree with. Mentioned below are some important ones:
Death under the following conditions is covered under life insurance plans:
The premium payment term for whole life insurance plans can be any of the following:
Endowment plans include life cover along with savings benefits. By investing in such plans, you will receive a lump sum amount after the policy matures. Endowment plans offer death benefits to the nominee if the policyholder passes away within the policy period.
Premiums paid by a term insurance policyholder are fully utilised towards creating a life cover. Under other types of life insurance plans, only a part of the premium paid is allocated towards creating a life cover. The balance is utilised to provide for maturity benefits or as in the case of ULIPs a part of the premium is used to meet administration and sales expenses. This makes term insurance plans more affordable than other plans. This is why they are also called pure protection plans because they only offer a pay-out in the event of death of the life assured. Other plans offer returns as well as life coverage.
Life insurance policies are meant to provide financial sustenance in the event of death, primarily. However, most policies offer additional coverage for disability, accidents, and various illnesses. These are called riders and usually come at an additional cost although some policies do offer them as part of the primary plan.
Bonuses are offered under participating life policies i.e. policyholders can participate in the profits of the policyholders fund. A reversionary bonus is declared as a percentage which applies to the chosen sum assured. Reversionary bonuses can be simple or compounded bonuses. One-off reversionary bonuses are those that are paid out of one-time profits that may not occur again. A terminal bonus is the residual bonus declared on maturity or the policy i.e., if after declaration of all reversionary bonuses, there are still profits accrued to the fund, it may be paid out to the policyholder in the form of a terminal bonus.
Under certain plans, insurance companies give policyholders a share in profits. This amount is called a bonus and accrues to the policyholder at no extra cost. It is awarded at certain times during the policy period. Bonus amounts are decided by the company and are paid out in addition to the chosen sum assured. Certain plans guarantee bonus payments.
Riders are specific to certain situations or events whereby the insurer pays the policyholder a certain amount of money when such event occurs. E.g. critical illness or disability rider. They are an additional benefit to a standard policy for higher premiums.
As per IRDA regulations, if a policyholder does not wish to continue his/her policy they can discontinue the same within the first 15 days of buying it and get a refund.
If a policyholder wishes to cancel his/her policy, once in effect, they can surrender it to the insurer and receive the surrender value as a refund. The surrender value is calculated based on premiums paid and how long the policy was in effect. Surrender is usually allowed after a certain period of time.
If, for example, a policy is used to raise a loan, the policy is assigned or transferred to the lender. The policy then bears the lender or the assignees name. Once the loan is repaid the policy can be reassigned or transferred back.
Insurance companies may request medical reports from applicants depending upon the age at which they purchase the insurance policy, their age when the policy matures, personal and family history, sum assured, and other factors they consider crucial. For instance, if the applicant is obese, special reports such as Glucose Tolerance test or Electro Cardiograms could be requested. Similarly, depending upon your medical condition, the insurance company may ask you for one or more reports.
Some insurance companies provide loans against insurance policies to their customers. The amount of money you can avail through such a loan is usually a percentage of the insurance policys surrender value.
Almost all insurance companies send an intimation along with the discharge voucher to you at least two to three months before the date of maturity. The intimation will inform you as to how much money you will be receiving from the insurance provider. The discharge voucher as well as the policy bond must be duly signed by the policyholder and returned to the insurance provider as soon as possible as the sooner you do so, the sooner will they be able to release your payment. In case you have assigned the policy to another individual, only the assignee will be authorised to receive the claim amount at the time of maturity.
At the time of purchasing a life insurance policy, the insurance provider may design and define the manner in which you will receive the payout. Settlement options are offered by most insurance companies and they ensure that you receive your money in a manner that was specified when you were purchasing the insurance policy.
In case of your unfortunate and untimely demise during the policy term, your nominees will have to furnish such basic documents as the policy bond, the claim form, and the death certificate of the late policyholder. There may be instances wherein the insurance company may also request you to furnish other documents like a post mortem report, a police inquest report, an employers certificate, a hospital certificate, a medical attendants certificate, etc. The policy bond usually contains all the information associated with the claims process.
Insurance agents are usually representatives of specific life insurance companies and have the authority to offer advice on any product that is sold by that particular insurance company. All agents who deal with the sale of life insurance policies are registered with the IRDA. All agents also have a basic requirement to pass an examination before undertaking to sell insurance policies. In case you are purchasing an insurance policy through your agent, make sure that you request for his/her authorisation card attained from IRDA.
A non-participating insurance policy is one that does not allow the insured individual to share in the profits made by the company, while a participating policy ensures that an insured individual has the right to share in the profits of the company. However, the dividends or bonuses declared by the insurance company may increase or decline based on the life funds investments returns.
The mortality or risk class of an applicant will be calculated based on an underwriting procedure through which the insurance provider can determine whether or not the applicant is a risk worth taking. The risk of death is calculated based on many different factors like the age of the applicant, the sex, medical and personal history, occupation, habits, etc. The decision of the life insurance company to insure the life of an applicant will depend on the details you have mentioned in the application form. Make sure that all the information you enter therein is accurate as inaccurate information has the potential to cause problems at the time of making claims.
Insurance companies provide something called a grace period to customers who are unable to make premium payments on the due date. The period usually spans for 15 to 30 days, and customers who default on their premium payments are expected to pay during this period. Failure to do so will mean that your life insurance policy has lapsed. As a result, you can either reinstate or revive the policy within a predetermined period of time.
Cancellation of policies during the free-look period can be done free of cost. However, in case you wish to cancel your life insurance policy after the free-look period, you will be charged a small fee for the same.
When a life insurance plan has been active for a specified number of years (usually at least five), the policy acquires a cash value. Every life insurance policy has a savings portion called the cash value. The cash value of a life insurance policy adds up when the worth of premium payments made by the policyholder exceeds the cost of insurance. This excess amount is transferred to a cash value account where it accrues interest. In case you choose to surrender the policy, the company will offer you the cash value or surrender value of the policy. However, please note that surrendering an insurance policy prior to the end of the maturity period will make you incur a significant loss.
Money Back policies are the best bet in case you want a policy that will pay out during the course of the policy term.
Premium payments can be paid based on the discretion of the policyholder, but the options available to you will be monthly, quarterly, semi-annual and annual.
While life insurance companies are the most reliable sources when it comes to purchasing life insurance policies, insurance agents are not totally untrustworthy either. However, before you purchase a life insurance policy from an insurance agent, it is advised that you request for their authorisation card from the IRDA to ensure that they are certified sellers.
Your life insurance cover will start on the date of commencement after the insurer has received and approved of your insurance application. It is also known as Risk Commencement date.
The premiums of life insurance policies usually do not change and remain fixed for the term of the policy which is decided by the policyholder. Some policies have single pay or limited pay options also where the premiums can be paid in one lump sum or over a period of a few years.
Yes, you can get your parents insured under a life insurance policy. Depending on their age and health, you can choose from a range of life insurance policies which are specifically designed for older individuals or senior citizens, as the case may be.
As per the provision of Section 10 (10D) of the Income Tax Act, 1961, any sum assured amount received under the policy, along with any bonus that is paid by the policy at the time of its maturity or on the survival of the life assured, is tax free. However, there are certain conditions following which the policy proceeds may be taxed.
When it comes to life insurance, one person’s requirements will differ from another’s. The amount of life insurance cover that one requires depends on various factors such as their income, their liabilities, and their expenses. After calculating all of these, you can determine how much life insurance cover would be adequate for you.
In case of single cover policies, both individuals are covered under separate and independent policies which have no effect on each other. However, under a joint policy, both individuals are covered under one policy. In case of a mishap where both individuals lose their life, their beneficiary will receive only a single pay out, while in the case of two single policies, there will be two pay outs, one from each policy.
Premiums for various kinds of life insurance policies like whole life policies remain fixed for life, as they do for term insurance policies. However, for term insurance policies, if you wish to renew the policy after the end of the policy term, the premiums may significantly increase in order to cover the risk of a higher age.
The person who files a claim on a life insurance policy is known as the claimant. In case of the life insured suffering injuries not amounting to death, the life insured will become the claimant.
YA policy which features a modified death benefit usually has a waiting period before it pays out the full death benefit to the beneficiary.
Graded life insurance is one of the lesser known types of insurance. This whole life policy features initial premium which are lower than other similar policies. However, the premium increases every year for a fixed number of years, after which it stays fixed till the policyholder owns the policy. This type of life insurance is suitable for those individuals who wish to get covered but may not be able to afford the premiums of a life insurance policy. insurance is suitable for those individuals who wish to get covered but may not be able to afford the premiums of a life insurance policy.
Your life insurance cover will start on the date of commencement after the insurer has received and approved of your insurance application. It is also known as Risk Commencement date.
The premiums of life insurance policies usually do not change and remain fixed for the term of the policy which is decided by the policyholder. Some policies have single pay or limited pay options also where the premiums can be paid in one lump sum or over a period of a few years.
Life insurance is essentially a way in which an individual can secure his/her family’s future in his/her absence. A life insurance policy’s worth is efficiently comprehended once the breadwinner of the family passes away or his/her income ceases to come in altogether. The payout amount released by the insurance provider is thereafter utilised by the family to clear any debts, or pay off loans, or pay the mortgage amount, and so on.
If you have a dependent or dependents who rely on you financially, then purchasing a comprehensive life insurance policy is a must. The sum assured amount of the life insurance policy will financially assist your dependents at a time when they need it the most.
As the name suggests, a whole life insurance policy essentially provides coverage for an individual’s lifespan. In case the insured passes away before end of the policy term, the corpus built is handed out to the nominee/beneficiary as mutually agreed upon by the insured and the insurer.
Whole life insurance policies may be purchased for the following reasons:
Money back plans essentially combine the elements of insurance and investment to provide policyholders with a policy that is comprehensive in nature. Over the policy term, these plans offer a certain amount of money (periodic returns) at regular intervals as survival benefit. The regular payouts are paid as per the interval decided by the insured, and upon successful survival of the policy term, the insured gets the remainder of the maturity benefit.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017
The non-life insurance sector reported a growth of 21% y-o-y for the month of June as general insurance companies saw a surge in their premiums.
The general insurance sector saw a surge in premiums as they grew 23% to end at more than Rs.54,000 crores for the quarter ending in June.
ICICI Lombard was the biggest profit maker as they saw their premiums grow 54% in June while HDFC Ergo, Reliance General, and Bajaj Allianz saw their premiums rise by 24.5%, 21%, and 13% respectively. TATA AIG saw their premiums rise by 35% for the month of June.
For state-owned insurers, United India Insurance and Oriental Insurance experienced a profitable month, while New India Assurance did not experience high growth during the period.
11 July 2022
The life insurance market recorded a meagre 4.15% increase in new business premiums in June, owing mostly to a decrease in Life Insurance Corporation (LIC) premiums. However, life insurers' new business premiums (NBP) increased by 40% year on year in the April-June quarter (Q1FY23), owing to a lower base. New business premiums of life insurance increased by 4.1% to Rs.31,254.55 crore in June compared to the same period last year.
While private insurers' NBP increased by 29% to Rs.10,610.89 crore, LIC's NBP decreased by 5.29% to Rs.20,643.67 crore, according to figures from the insurance regulator.
11 July 2022
The Insurance Regulatory and Development Authority of India (IRDAI) is now focusing on the role of market development. The Authority has been acting in a regulatory capacity for all these years.
6 July 2022
The Employees’ Provident Fund Organization (EPFO) asked its members to submit nominations as soon as possible. The organization is offering a life insurance benefit to salaried persons of Rs.7 lakhs which is completely free. If an employee passes away, his or her immediate family members will receive the benefit.
29 June 2022
On Friday, the 'use and file' procedure for most life insurance products was extended by the Insurance Regulatory and Development Authority of India (IRDAI). This allows the insurers to introduce new products without the regulator's prior approval. The extension will also facilitate easier business for insurers thereby expanding the options for policyholders.
13 June 2022
The Insurance Regulatory and Development Authority (IRDAI) committee is expected to recommend that life insurers be allowed to sell health insurance. The committee will seek approval for the distribution and production of health insurance. At present, life insurance providers only sell fixed benefit health plans, not indemnity packages.
25 May 2022
After a quiet showing in December and January, life insurance companies in India showed that they are working towards growing the business as the new business premium (NBP) rose by 2%. Due to the impact of Covid-10 the overall businesses of the life insurance companies had taken a dip.
Life Insurance companies saw their NBP grow 22.47% year-on-year (YoY) to Rs.27,464.76 crore in February while LIC saw its NBP rise by 35.36% to Rs.17,849.34 crore.
14 March 2022
Life Insurance Corporation of India (LIC) led Life insurance industry has reported a 22% growth in the premiums in February. Premiums for LIC increased by 35% a year, while HDFC Life premiums increased by 9% a year. Premiums for ICICI Prudential Life and Max Life, on the other hand, fell by 23% and 5%, respectively.
10 March 2022
On Saturday, the Union Cabinet passed an amendment to allow up to 20% foreign investment in the state-owned Life Insurance Corporation. This comes ahead of the LIC IPO, which is expected to be the biggest in Indian capital markets so far.
1 March 2022
The Life Insurance Corporation of India (LIC) is now offering all policyholders a lot of programs that are financially secured. Investors As an investor, who wants to safeguard your future, you can look into the LIC Jeevan Labh Policy. When you choose the LIC Jeevan Labh Policy for an assured sum of Rs.20 lakh a monthly premium of Rs.7,916 each month, or Rs.262 per day, can be paid for a 16-year investment period.
15 February 2022
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