Approximately 22,500 people lose their lives each day in India. This essentially means that 940 people die each hour. While Life and Death are a parcel of life, the loss of a loved one can leave a void which might never be filled. A life insurance policy helps fill certain aspects of this void, ensuring that the financial health of the insured’s family is taken care of.
Life Insurance in India has yet to become popular among the masses, with the total insurance penetration in India being just 3.44%, with life insurance accounting for 2.72%. Non-life insurance accounts for 0.72%. Given these numbers it is easy to understand that a majority of our population is not covered, leaving millions of Indians unprotected.
Life Insurance, in simple terms, is a contract which is signed between an individual and an insurance provider, wherein the insurance provider guarantees to pay a certain sum of money (sum assured) in case of the insured individual’s death. In order to avail this protection, the insured pays a certain amount as premium towards maintaining the policy.
It is nothing but a safety net which provides financial security/protection against loss of life. The primary purpose of a life insurance policy is to protect the financial interests of the insured’s family.
While one might think that this is a recent concept, studies have shown that it has been around for centuries, with different variations of insurance dating back to 1750 BC.
There are 3 basic aspects related to life insurance, namely:
Insurance in India is monitored by the Insurance Regulatory and Development Authority of India (IRDAI). As of March 2016, the country had 54 insurers, with 24 of these offering life insurance products. These insurers offer a diverse range of products, which can be categorised into six broad types, namely:
These are plans which provide life cover for a fixed period of time. They can be either long-term or short-term plans, with the term ranging from a minimum of 5 years to a maximum of 60 years (or more) in certain cases. The insured individual is protected during this term, with the insurance company paying his/her nominee the sum assured on his/her death during the policy term. No protection is provided if the insured dies after the term.
These can be considered as the simplest insurance plans available. While they are affordable, they might not be the ideal option, for there is no protection after the said period of time. These plans do not provide a maturity benefit in almost all cases. One should consider these plans if he/she foresees their demise within a specific period (though it would be close to impossible to predict the accuracy). This could be viewed as ‘temporary insurance’, and is also referred to as pure life plans by certain insurers.
Individuals looking for protection plus returns can consider unit linked insurance plans. These policies are ‘linked’ to market products like mutual funds, bonds, stocks, etc. There is a certain amount of risk associated with ULIPs, with this risk falling on the policyholder.
Most insurers invest a certain portion of the premium into market units, keeping the remaining portion aside for the base sum assured. It is important to keep an eye on the performance of the funds, for the returns could be negligible if there is a market crash. As such, the choice of insurance company is critical. ULIPs can be a smart option for the savvy investor who wishes to invest in a life insurance policy. Insurance companies have dedicated fund managers who oversee the investment.
An endowment plan serves a dual purpose, offering not just life cover, but also doubling as a savings instrument to cater to any future needs. Under these plans, the policyholder is rest assured of an amount, even on maturity of the policy.
Individuals who are looking to protect themselves financially during the future can opt for such plans. These are ideal for people who might encounter expenses after a specified period of time. These plans attract a higher premium when compared to regular term plans.The premium is split into two major portions, with one of it going towards the basic sum assured and the other portion utilised as an investment tool to offer returns on maturity.
While it is possible to have unit linked endowment policies, most insurers in India offer non-linked endowment plans.
A whole life policy, as the name implies, offers protection for the entire lifetime of an individual. Certain insurers can have an upper age limit for maturity of policy. These can be in the form of insurance plus investment plans, wherein a death benefit is provided to the nominee on demise of the policyholder. If there is a maturity benefit associated with the plan, a maturity amount will be paid when the policyholder attains the upper age limit associated with the scheme.
While one might consider a whole life plan to be similar to a term plan, there are a few subtle differences. The premium for a whole life plan is typically higher, but these plans also offer a maturity benefit, which is not assured in case of a term plan.
Retiring from work can often be hard, given the fact that money might become a constraint. Retirement plans, also known as annuity/pension plans can be used by individuals looking to financially secure their retired life. These are mostly single premium policies, wherein a lump sum amount is paid to the insurer.
One can choose the frequency of payouts they wish to receive, with the insurer paying them an amount after they retire. This amount is paid throughout their lifetime, guaranteeing financial security even when one doesn’t work. Certain annuity plans are unit linked, offering market based returns to policyholders.
Money back policies are a subset of endowment plans which provide a survival benefit to the policyholder. These take multiple contingencies into account. While a death benefit is payable on the demise on the policyholder, the survival benefit will be paid if he/she survives for a certain period of time.
Insurers pay a certain percentage of the sum assured at regular intervals, with this plan offering an additional source of income to policyholders. These plans are ideal for individuals who want a regular source of income, but are not keen to take risks associated with market instruments. The survival benefit is paid until maturity of the policy. These plans are known for the liquidity they offer, making them a popular option in the country.
With an increasing number of NRIs or Non-Resident Indians looking to buy life insurance policies from India, Indian life insurance companies have started to capitalised on this previously untapped segment. So, if you are an NRI or a PIO (Person of Indian Origin), here are a few things you should know about purchasing a life insurance policy in India.
As an NRI, you will have to make sure to compare various plans that are available in the market before you choose a policy. Ensure that you take factors like the sum assured, policy benefits, premium payments, and the insurer’s terms and conditions into consideration, and opt for a policy that will provide you coverage as per your needs.
Matters to be Stated in a Life Insurance Policy
As per the IRDAI regulations, a life insurance plan should clearly state the following:
Free-Look Cancellation of a Life Insurance Policy
Claims Procedure in Respect to Life Insurance
Note: The information mentioned above has been taken from the notification provided by the IRDAI.
Given the amount of choice in the market, you might find yourself confused when it comes to deciding which type of life insurance policy you should purchase. Most leading life insurance firms offer a range of plans including term life plans, whole life plans, endowment plans, money back plans, ULIPs, etc. to customers. Any one of these policies might be the right choice for you based on your coverage needs, financial goals, and premium paying ability. A few key types of policies with their corresponding purpose is mentioned in the table below.
|Type of Policy||Purpose of Policy|
|Pure Term Insurance Policy||A term life insurance plan is the most basic and cheapest type of insurance policy that you can buy. These policies do not have a cash value attached to them, and thus only provide a death benefit. You should purchase a term life policy if you want to avail a life cover at an affordable cost.|
|Whole Life Policy||Whole life policies provide a life cover for the policyholder’s entire lifetime. They charge a level premium for the entire policy tenure. These policies offer a range of benefits to the policyholder and also accumulate a cash value over a period of time. You should purchase this type of a life insurance policy if you would like to have a life cover for a longer period of time.|
|Endowment Policy||Endowment plans provide a risk cover and a savings option to policy buyers. Thus, in addition to the risk cover, these policies provide a survival benefit which will be payable at the end of the policy tenure. An endowment plan is ideal for policy buyers who are looking for a protection cum savings option.|
|Money-Back Policy||Money-back policies provide regular payouts to the policyholder by way of survival benefits, in addition to the life cover and related benefits provided by the policy. Money-back policies can be purchased by individuals looking for liquidity in order to attain key milestones of their life.|
|Unit Linked Insurance Plan (ULIP)||Unit Linked Insurance Plans or ULIPs provide a risk cover against death to the policyholder and also allow policyholders to invest in certain funds and avail the returns. ULIPs are ideal for policy buyers who would like to invest in funds as per their appetite for risk and receive the corresponding returns.|
|Pension Plans||Pension plans, also known as Annuity plans and Retirement plan, provide financial security to policyholders after their retirement, by way of regular annuity payments. A pension plan is an ideal buy for individuals looking to secure the golden years of their lives.|
|Group Plans||Group life insurance plans provide a life cover to a large number people under one master policy. Such type of a scheme/plan can be purchased by a group of people seeking an insurance plan with similar benefits, such as employees of an organisation or affinity groups.|
A life insurance policy isn’t a one size fit all. These policies should meet individual requirements, and given the various options available it is possible to get confused. The table below showcases the basic differences between the six insurance policy types.
|Insurance type||Premium||Cover duration||Maturity Benefit||Death Benefit||Ideal for|
|Term Insurance||Cheapest||Entire term chosen||Not applicable||Paid if death occurs during policy term||Individuals looking for protection for specified period of time only|
|ULIPs||Amount varies based on sum assured – More expensive than Term Insurance||Equivalent to policy term||Payable (depends on policy chosen)||Paid if death occurs during policy term||Individuals looking to get a return on their investment. Serves as investment plus insurance|
|Endowment||High||Equivalent to policy term||Paid on completion of policy term||Paid if death occurs during policy term||Individuals looking to get a lump sum amount at a future date. Serves as insurance plus savings|
|Whole Life||The premium is higher than other plans||Entire lifetime of individual/specified period||Payable||Paid when death occurs||Individuals looking to protect the well-being of their loved ones|
|Pension||Single premium||Till demise of policyholder||NA||Payable on death||Individuals looking for a regular source of income after retirement|
|Money Back||Varies based on sum assured||Policy period||Regular amount is paid until maturity||Payable on death||Individuals looking for liquidity|
How to Save on Tax with a Life Insurance Policy?
A life insurance policy, in addition to providing the policyholder and his/her dependents financial security, can also help one save on tax payments. The various tax benefits offered by life insurance plans, under the Income Tax Act, 1961
Thus, with a life insurance policy, not only can you achieve your long-term financial goals and safeguard your dependents, but you can also save on tax every fiscal year.
A Taxpayer's Wish List for the Union Budget 2018
The Union Budget 2018, which is the last Budget before the upcoming General Elections next year, is one that is much-awaited by all Indian citizens. After all, every Union Budget does bring hope to all taxpayers. Given that, here’s a list of 5 things we are all wishing/should be wishing for from the Budget 2018.
Here’s hoping that the Union Budget 2018 gives us cause to celebrate!
Life Insurance & Suicide
Dealing with the loss of a loved one is one of the most difficult thing which anyone can go through. It not only wrecks an individual emotionally, and mentally, but often, also physically. One of the many causes of death in India is suicide. 17% of the 8,000,00 suicides which are committed globally, are committed in India. What is alarming, is that the rate of suicides in the country only seems to be rising with passing time. So much so, that India has now come to be included among the top 12 countries with respect to the number of suicides committed yearly.
The loss of an income earning member of the household can not only be emotionally traumatizing but also lead to adverse financial consequences. The life insurance payout, which is often the sole financial security for the future of the grieving family, is not payable as per standard life insurance exclusions if death has been caused following a suicide.
Revision in Suicide Clause By IRDAI
When it comes to life insurance, one must never forget, that it is not charity, but a business. As a result, insurers tend to exclude several life-related preventable risks by categorizing them under exclusions, for which the policy does not make a payout. This can be especially negative, in case of suicide, where the family has not only lost an earning member, but also the hope of being able to secure their future with whatever funds they receive under the policy payout. To remedy this, the insurance regulator, IRDAI (Insurance Regulatory & Development Authority of India) made a revision in the regulations governing the suicide clause in insurance policies, which came into effect starting 1 January 2014.
Policies Issued Before 1 Jan 2014
For life insurance policies that have been issued before 1 January 2014, the suicide clause governs that in case the life assured has committed suicide within a year of policy commencement/policy revival, either in a sane or insane state of mind, there will not be any claim payout, and the policy shall turn void. However, if the policyholder dies following a suicide after a year of policy commencement/revival, the death benefit shall be payable then. Certain insurers do provide cover for death due to suicide, but on the condition of a waiting period, which is usually 2 years or more.
Policies Issues Post 1 Jan 2014
Following a revision in regulations governing the suicide clause, changes have been made to different types of life insurance policies.
How Are Third Parties Affected
In an event where the policyholder, who has taken a loan against their life insurance policy, commits suicide, the loan will be repaid by the insurer, who will be liable to prioritize the interests of the third party, be it a bank or a housing loan company. However, this arrangement is subject to the condition that the insurer must have acknowledged receiving the notice of policy assignment one month before date on which the policyholder has passed away.
Suicide & Group Insurance
Claim payout in the event of death for a group insurance plan will be decided by the employer/organization which has provided life cover to its employees. In this case, the employer is the master policyholder, and employees are the ‘group insured’ or beneficiaries. Unless the employer has chosen otherwise, death due to suicide will not result in a death benefit payout.
Keep in mind
A number of us are overwhelmed by the terms associated with insurance. Failing to understand these terms can dilute the value of a policy, often leading to confusion during crucial moments. While we might not think of them as important, getting acquainted with commonly used terms can help us enjoy all the benefits provided by a policy. Additionally, one can also be rest assured that they will not be taken for a ride by the insurance provider.
Linking your Insurance Policies with Aadhaar and PAN
The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for policyholders to link their insurance policies with their Aadhaar card and PAN. Insurance firms – both life and general – have been asked by the regulator to implement rules for the same without delay. Due to this, many insurance firms have started to ask customers to update their KYC details, including the Aadhaar card and PAN.
Thus, in order to avail any financial service including insurance, it is mandatory for every policyholder, regardless of what policy they have, to link their Aadhaar and PAN at the earliest. In case one doesn’t have a valid PAN (Permanent Account Number), the individual can submit Form 60/61 in its place. Form 60/61 is submitted by people who don’t have a valid PAN when they are making a transaction that requires them to quote the PAN.
This new rule came into effect after the Central Government. vide gazette notification dated 1 June 2017, notified the Prevention of Money-Laundering (Maintenance of Records) Second Amendment Rules, 2017, making the PAN/Form 60 and Aadhaar mandatory in order to avail any financial service. The Insurance Regulatory and Development Authority of India (IRDAI) further clarified that this rule will be applicable to all life insurance and general insurance firms, including standalone health insurance firms.
The IRDAI was formed by an act of Parliament in order to protect the interests of policy buyers and to ensure that all policyholders are treated fairly. The IRDAI’s 10-member committee consists of a chairman, 5 full-time members, and 4 part-time members. Currently, India has 24 life insurance firms and 33 general insurance firms (which includes standalone health insurance companies) that are operating in the country.
Life insurance, in its current avatar is based on a number of principles. These are modified and adapted to the market, ensuring that insurance companies make a profit, while offering security to insured individuals.
One can say that there are four major principles applied in India, with these being:
For example, Mr. Jay decides to purchase an insurance plan for his mother. The life assured in this case is his mother, while the policyholder is Jay. In case Jay decided to purchase a policy for his neighbour’s mother the insurance company would deny it as there is no insurable interest in this case.
India is home to a total of 54 insurance companies (as of March 2016), with 24 of them offering life insurance products. Both public sector and private sector companies have noticed the huge potential for insurance in the country. Among the 24 life insurance companies operating here, only 1 is in the public sector. The presence of international giants who have teamed up with local companies has resulted in improved quality of service and attractive products on offer.
The table below lists the top 10 insurance companies in India based on the premiums collected by them.
|Insurer name||Premium amount|
|Life Insurance Corporation of India||Rs.3,00,487.36 crore|
|ICICI Pru Life||Rs.22,354 crore|
|HDFC Standard Life||Rs.19,445.49 crore|
|SBI Life||Rs.21,015.13 crore|
|Max Life||Rs.10,780.4 crore|
|Bajaj Allianz||Rs.6,183.32 crore|
|Birla Sun Life||Rs.5,723.96 crore|
|Reliance Life||Rs.4,026.82 crore|
|Kotak Mahindra||Rs.5,139.55 crore|
|PNB MetLife||Rs.3,236.08 crore|
“The data listed above is as per the report released by IRDAI (2016-17).”
LIC continues to be the dominant name in the Indian insurance industry, with private players lagging behind in terms of premiums collected and lives covered. This, however, is changing, with a number of individuals opting for private insurers on account of their improved services and cheaper products.
The table below highlights the various aspects related to life insurance companies in India during 2016-17.
|Insurer Name||Claim settlement ratio (%)||Percentage of grievances solved||Solvency Ratio (for the quarter ending on 31/03/2017)||Assets Under Management (in crores) (as on 31/03/2017)|
|Aegon Life Insurance||97.11%||100%||2.08||1,939.99|
|Aviva Life Insurance||90.60%||100%||3.46||9,062.11|
|Bajaj Allianz Life Insurance||91.67%||100%||5.82||48,278.57|
|Bharti AXA Life Insurance||92.37%||99.82%||1.82||3,726.23|
|Birla Sun Life Insurance||94.69%||99.84%||2.00||34,709.34|
|Canara HSBC Oriental Bank of Commerce Life Insurance||94.95%||100%||4.01||11,282.68|
|DHFL Pramerica Life Insurance||90.87%||99.93%||7.68||2,635.56|
|Edelweiss Tokio Life Insurance||93.29%||100%||2.20||1,476.20|
|Exide Life Insurance||96.40%||100%||2.52||10,842.90|
|Future Generali India Life Insurance||89.53%||99.70%||1.61||2,839.94|
|HDFC Standard Life Insurance||97.62%||99.89%||1.92||91,331.56|
|ICICI Prudential Life Insurance||96.68%||99.96%||2.81||1,19,534.68|
|IDBI Federal Life Insurance||90.33%||100%||3.52||5,862.94|
|IndiaFirst Life Insurance||82.65%||99.06%||1.84||10,600.36|
|Kotak Mahindra Life Insurance||91.24%||97.37%||3.00||20,550.20|
|Max Life Insurance||97.81%||100%||3.09||44,054.00|
|PNB Met Life Insurance||87.14%||98.41%||2.03||15,156.26|
|Reliance Nippon Life Insurance||94.53%||100%||2.72||17,089.74|
|Sahara India Life Insurance||90.21%||90.91%||Not Received||1,195.01|
|SBI Life Insurance||96.69%||99.98%||2.04||96,873.87|
|Shriram Life Insurance||63.53%||99.74%||2.03||2,980.46|
|Star Union Dai-ichi Life Insurance||84.05%||100%||2.78||6,200.80|
|Tata AIA Life Insurance||96.01%||100%||3.15||20,693.11|
Claim settlement ratio (CSR) – This is the ratio of the number of claims settled by the insurer to the number of claims it receives in a particular year. It highlights what percentage of claims have been paid. A high claim settlement ratio indicates that the insurer is more likely to settle a legitimate claim.
CSR = No. of claims approved/No. of claims received
It is a smart option to choose an insurer with a high CSR. As per the data released by IRDA for 2015-16, LIC has the best claim settlement ratio in the country, followed by Max Life, Tata AIA, and ICICI Prudential Life respectively.
Choosing an insurer with a low CSR could jeopardise the chances of a claim being honoured, resulting in trauma for the family of the insured.
Grievances solved ratio (GSR) – This is the ratio of the number of grievances solved by an insurer to the number of grievances received by it in a particular year. This reflects the service provided by the company, with it offering a peek into the how efficient the insurer is when it comes to sorting any problems. A number of insurance companies have a 100% GSR, highlighting their attention to customer issues.
Solvency ratio – There have been instances in the past where insurance companies went bankrupt, leaving thousands of customers in a bind. Governments have had to bail out such insurers, resulting in losses to the tune of billions to the exchequer.
In a bid to ensure that this doesn’t repeat, insurance companies are monitored regularly, with the IRDA checking their solvency ratio. This is nothing but the ratio of the assets of an insurance company with respect to its liabilities. It highlights the ability of an insurer to pay long-term debt.
Insurers with a solvency ratio of under 1.50 are closely monitored, with a high solvency ratio preferred. DHFL Pramerica has the highest solvency ratio amongst Indian insurance companies during 2015-16, with LIC having the lowest.
The average life expectancy in India is around 68 years, but we all know people who passed away before they reached this age. The unpredictability of life can cause irreversible damage to our loved ones. A good life insurance plan can help minimise the financial burden associated with the loss of a dear one.
Given the stress associated with our daily life, we often come across cases of people meeting an untimely end, often leaving entire families shattered after their demise. Here are three main reasons why one must consider investing in a life insurance plan.
It isn’t hard to understand how life insurance works, with insurers aiming to simplify the entire process to generate more interest in this product. The steps below elucidate how exactly life insurance works.
The policy will cease to exist when the death benefit is paid. Note that certain policies provide an option of cover to the spouse of the insured, wherein the policy will cease after the death of the spouse.
Purchasing a life insurance plan comes with a range of benefits, with the primary ones highlighted here.
A life insurance plan can be a great asset if chosen wisely. With hundreds of options in the market today, it is possible for one to buy a policy which does not do justice to their needs. Keeping these simple points in mind before purchasing the policy can ensure that one gets the best out of it.
One should remember that a life insurance plan is not a ‘one size fit all’ product. It needs to be customised to meet personal requirements.
Another critical aspect which should be researched is the history of the insurer. Insurers with a bad track record should be avoided, for they could create issues when it comes to claim settlement. The IRDA provides statistics related to all the insurers operating in India, one should check these before making any decision.
This is a question most of us end up asking. The insurance cover one needs depends on a number of factors and the answer to this question might not be universal. However, there are a few basic aspects which should be taken into account while choosing the insured amount.
For example, an individual who earns Rs.10 lakh per year has annual expenses to the tune of Rs.5 lakh. These include the car loan EMI, home loan repayment, school fees, etc. The cover in this case should ideally be around Rs.75 lakh.
In case there are other investments/savings, one can choose a lower sum assured. If there is no other investment, the cover taken should be on the higher side.
Individuals who are unsure of the cover they require can approach agents/use online calculators to determine an amount which might be sufficient for them.
The answer to this question goes beyond a yes or no, for there is no set age bracket which is considered the best period to invest in life insurance. However, there are a few key parameters which can help one determine the right time to buy it.
Age – The younger an individual is, the cheaper an insurance plan will be. Most youngsters refrain from purchasing a policy, thinking that they do not require it immediately. This, however, might not be the smartest move, for the cost of a life insurance plan increases each year. Statistically speaking, there is an 8-10% rise in the premium amount every year. Simply put, delaying the purchase of a life insurance plan can become an expensive proposition.
We can take the example of Jay to understand how this works. Jay, currently aged 30 years checks the cost of an insurance plan for Rs.10 lakh. The premium works up to around Rs.27,000 per year. He chooses to forego this purchase, deciding to wait instead. At age 50, he considers the same policy. The premium at this age is more than double the premium he was expected to pay when he was 30 years old.
Insurers charge a higher amount with increasing age. A smart option is to buy the policy at a young age. This enables one to enjoy the benefits of the policy without having to pay an exorbitant amount.
Given these points, it is safe to say that the best time to buy a life insurance plan is NOW. Delaying a purchase provides no added benefits. Irrespective of the position one is in currently, investing in a good policy can offer security and stability, in addition to savings.
With it close to impossible to predict life, it would be a smart option to consider the option of a life insurance plan immediately.
Understanding the life cycle of life insurance is not complicated, for it is visible around us. One can essentially break this cycle into four different stages, corresponding to different stages in an individual’s life.
We could take the example of Rakesh to understand the life cycle of life insurance. Born into a middle-class family, Rakesh had a good upbringing. At age 21, he completes his formal education and begins work. Until now he had no life insurance plan. Given the fact that he is independent, he chooses not to buy a policy immediately.
At age 25, he decides to get married. At age 27, he takes a home loan to buy a house. His responsibilities have now increased and he chooses to invest in a term insurance plan with a tenure of 25 years. Within the next few years he becomes a father, with added financial obligations. He increases the cover under his plan to meet them.
At age 52, his children are grown up and are on the verge of completing their education. His home loan is cleared and his financial obligations have reduced. The term plan is about to expire but he still feels the need to provide for his wife. He now chooses to invest in a whole life policy, ensuring that he is protected for as long as he lives.
Insurance providers require a few basic documents in order to process an application. These include:
Note that an insurer could ask for other documents in order to process an application. These could be related to the nominee/beneficiary.
Yes, it is extremely important to compare the different life insurance plans offered before one decides to buy them online. Comparison becomes even more important when everything is being done online, for one might not have the help of experts.
Traditionally, insurance agents would explain a plan before the purchase was completed. The virtual world, however, might not always come with assistance.
With hundreds of plans available it is imperative that one searches and compares the different features of each plan, ensuring that the selected plan suits the personal requirements of the individual. There have been instances of people purchasing a policy without comparing them which have resulted in problems during the claims process.
Almost all insurers have a presence online, with it easy to find details about their products. Not only does this help save time and effort (when compared to offline comparison), it can also help one get a better deal on the premium amount.
Reviews of products and services by people who have invested in them can be an added bonus, offering an insight into what one could expect.
While one can go ahead and buy a policy without comparing it, a smarter option would be to check all other alternatives, enabling one to get the best product in the market.
A basic life insurance plan might not be perfectly suited to the requirements of an individual. Some of us might be looking for additions to the policy in order for it to match our needs and expectations. Insurers offer an option to do the same, providing riders which can be added to a base policy to enhance the protection.
The riders available in India can be broadly categorised under 8 subheadings, with these being:
Critical Illness Rider – This rider is a smart option for those looking to protect themselves against critical illnesses. India witnesses a number of deaths due to critical illnesses like cancer, kidney failure, heart attack, brain tumour, paralysis, etc. The number of critical illnesses covered by these riders can vary from 15 to 34. Insurers will pay an amount if the insured is diagnosed with any of the mentioned critical illnesses, ensuring that out-of-pocket expenses to treat them are reduced.
Different insurers offer different versions of this rider, which can be purchased at an additional cost. Some of the popular critical illness riders available in India include the BSLI Critical Illness Rider, Exide Life Critical Illness Rider, HDFC Life Critical Illness Plus Rider, and the LIC New Critical Illness Benefit Rider.
Accidental Death/Permanent Disability Benefit Rider – Thousands of accidents occur across India each day, with hundreds of lives lost due to them. Under this rider, an additional sum assured is paid if the insured passes away/is rendered permanently disabled due to an accident. Some insurers also refer to these riders as Double Indemnity Riders.
Almost all life insurers provide this rider as an add-on, with the popular ones being the BSLI Accidental Death and Disability Rider, the Max Life Accidental Death and Dismemberment Rider, and the ICICI Pru Unit Linked Accidental Death Rider.
Waiver of Premium Rider – While this might not be a very popular rider in India, it can be a smart investment. This rider limits the financial burden of an individual in case of certain hardships. Future premiums are waived off in case of events like accidents which render an insured disabled, loss of job, etc. The policy continues to be in force thanks to this rider.
Popular options include the BSLI Waiver of Premium Rider, LIC Waiver of Premium Rider, Tata AIA Life Insurance Waiver of Premium Plus Rider, etc.
Term Insurance Rider – Insurance plans are often associated with a certain term, with the cover provided only for this period. A term insurance rider can be viewed as a top-up, increasing the period for which the policy is in force. For example, a policy could have a term of 15 years. Purchasing a term insurance rider with a tenure of 5 years essentially increases the overall cover, making it 20 years.
The death benefit will be paid if demise occurs during the extended term. Popular options include the Term Rider by PNB MetLife, the Term Assurance Rider by LIC, the Exide Life Term Rider, etc.
Popular Family Income Riders include the ones offered by Shriram Life, Reliance Life, Star Union Dai-ichi Life, and Bajaj Allianz Life.
Note that different insurers might offer variations of these riders. There could be cases where riders are not offered for certain life insurance plans.
Insurance companies charge a certain amount as premium to provide cover under a policy. This premium is computed after taking a number of factors into consideration. Probability plays a big role in determining the premium amount, with insurers looking at the lifestyle, medical history, and age of the applicant before deciding the premium.
While insurance companies hire expert statisticians to look into the process and come up with the premium, a regular individual can check the premium amount by using different online tools.
Most insurers have a premium calculator which showcases the premium amount for different permutations and combinations. Alternately, one can also use third-party website tools to compute the premium. One will have to enter details like their age, the term of the plan, the sum assured they wish to avail, the premium payment frequency, add-ons, etc. Once they enter these values into the premium calculator they will be provided the premium amount for the chosen variables.
Higher the chances of a claim being made higher is the premium amount.
Yes, it is possible to cancel a life insurance plan, subject to certain restrictions. As per IRDA regulations, an individual who has p a policy can return it within the free-look period if he/she does not agree with the specified terms and conditions of the policy. This period typically ranges between 15-30 days, depending on the mode of purchase.
This can be done by providing reasons for the same. The insurance company is bound to return the premium after deducting the expenses incurred by them while providing the policy. These could include costs associated with the stamp duty, medical check-up, etc.
Once this period has passed, there are other possibilities when it comes to policy cancellation. In certain cases the policy lapses if premiums are not paid. Alternately, a policyholder can choose to surrender the policy or turn it into a paid-up policy. These options are available only if the policy in question has been in force for a specified minimum period of time.
If one opts for conversion of the policy into a paid-up policy, the policy will remain, albeit with a reduced sum assured. Such policies are not entitled to earn any bonuses.
In case of surrender of policy, the insurer will pay a surrender amount to the individual (if the policy has acquired a surrender value). The policy will cease to exist once this amount is paid.
It is important to consider all possibilities before one decides to cancel a policy, for doing so lifts the protection provided by the plan.
Investing in a life insurance plan results in a partnership between the insurer and the insured. Doing justice to both can be hard, but keeping these do’s and don’ts in mind can help one enjoy all benefits to the max.
|While buying the policy||
|After buying the policy||
|In case of loss of policy||
|In case of a claim||
The Goods and Services Tax has changed the way India does business. Effective from the first of July 2017, it has had an impact on the price of multiple products and services. The insurance industry also falls under the ambit of GST, with several changes implemented by insurers across the country. Purchasing and maintaining an insurance plan has now become costlier, with the table below highlighting the changes post GST implementation.
|Product/Service||Old service tax rate||New rate post GST implementation|
|Premium for Annuity Plans (single premium)||1.50%||1.80%|
In addition to the aforementioned changes, insurers will also charge GST on the interest which is typically charged when premiums are delayed.
Service tax exemptions which were previously accorded to certain plans/schemes will continue to be effective even after GST, with these provided in the case of the following plans:
A study done by the Environmental Protection Agency in the USA estimated the value of each life to be around $9.1 million, or just around Rs.57 crore. This, however, might not be the actual amount each individual is worth, for there are a number of factors which can change this value.
Similar studies done in the United States have estimated the cost of a life insurance plan for a healthy 30 year old male to be around $150 for a cover of $250,000, with the policy period being 20 years.
This amount, however, is not universal, for an insurance plan is designed to cater to an individual, with personal traits and habits influencing the premium.
In India, insurance companies determine the premium for a particular plan based on four main criteria:
We can understand how these parameters work by using the example of Mr. Jay.
Jay, who is currently aged 35 years invests in a term life insurance plan. He chooses a 30 year term and opts for a sum assured of Rs.50 lakh. As a smoker his premium amount comes up to around Rs.14,000 per year. If he were a non-smoker he would have to pay an annual premium of around Rs.8,600 for the same term and sum assured.
Now, if he had chosen to buy the same policy when he was 25 years old, the annual premium amount would be around Rs.7,500 (if he was a smoker at that age). If he refrained from smoking the premium would be just around Rs.5,000 per year.
From this, we can see how the lifestyle and age can impact the premium amount.
Similarly, if he opted for a sum assured of Rs.1 crore the premium would increase.
The table below highlights how the premium amount varies under different conditions:
|Age||Smoker (Y/N)||Sum Assured||Annual Premium|
|25 years||Yes||Rs.50 lakh||Rs.7,500 for male Rs.6,900 for female|
|25 years||No||Rs.50 lakh||Rs.5,000 for male Rs.4,800 for female|
|40 years||Yes||Rs.50 lakh||Rs.20,500 for male Rs.17,500 for female|
|40 years||No||Rs.50 lakh||Rs.13,000 for male Rs.11,000 for female|
The gender of the individual also has a bearing on the sum assured, with females paying a lower amount compared to males.
Note: The premium amounts mentioned in the example are indicative. Different insurers could charge a different amount.
Insurers compute the premium for a life insurance plan by analysing the probability of a payout on death. The higher the probability of a payout, the higher the premium amount will be. It is for this reason that individuals with an unhealthy lifestyle are charged a higher premium compared to those who look after their health.
In addition to the factors which are used to determine the premium, insurance companies also charge money under the following categories:
Note that the charges mentioned above could vary based on the type of policy chosen by an individual. It is advisable to check these charges before purchasing the policy.
A life insurance plan can be an expensive proposition, especially when one opts for it at a later stage in life. Paying a sum regularly can be draining on one’s finances. While there are no alternatives when it comes to paying the amount, insurers do offer discounts in certain cases.
Note: The rebate offered can vary and is at the discretion of the insurer.
Paying the premium for a life insurance plan is no longer a hassle, for insurers provide an option to pay this amount online. Almost all insurance companies in India are equipped to handle online payments, with a few even providing incentives to pay the sum virtually.
Doing this is advantageous not only to the insurer, but also helps the policyholder save time and effort. Typically, this is a five-step process, which takes no more than a few minutes.
It is crucial that you pay the premiums towards your life insurance policy on a regular basis, as per your premium payment mode, to keep your policy from lapsing. However, if your policy has lapsed due to non-payment of premiums, most insurers will give you the option of reviving the policy. Thus, here are a few things you should keep in mind before reviving a lapsed insurance policy:
It is advisable to revive your lapsed policy at the earliest since reviving it will help you avail the policy benefits as per schedule, as opposed to purchasing a fresh insurance policy and waiting for a longer period of time to receive the due benefits. Further, since the policy was purchased at an earlier date, the premium payable is likely to be lesser than that of a new insurance policy.
Yes, there are a few key differences between life insurance and general insurance. Before we highlight these, it is important to understand what general insurance exactly means. General insurance is typically defined as any contract which does not cover the life of the individual. It is a non-life policy which can be used to protect any material belonging of an individual. Health insurance also falls under general insurance.
The table below highlights the major differences between Life Insurance and General Insurance:
|Parameter||Life Insurance||General Insurance|
|Definition||A contract under which the life of the person is covered/protected||A contract which does not cover the life of the person. Eg: Fire insurance, car insurance, home insurance, etc.|
|Duration||Typically long-term (there is an option for short-term cover as well)||Short-term in almost all cases|
|Premium||Typically paid over the premium payment term –spread over the years||Typically paid as a single amount at the start of the policy|
|Purpose||Serves as an investment cum savings option||Serves as protection against loss/damage|
|Insurable interest criteria||The insured individual should be present (alive) while the contract is being drafted.||The person/object being insured needs to be present when the contract is being drafted as well as when the loss occurs.|
|Savings component||Present||No scope for savings|
|Insured amount||An individual can choose the amount he/she wishes to be insured for||The insured amount is determined based on the actual value of the loss/liability|
While both these products might have differences, it is a smart option to buy a good insurance plan. Staying covered can offset liabilities and help one get the most out of their belongings.
A policyholder can choose a beneficiary who will receive the assured amount in case of his/her death. This individual is termed the primary beneficiary. However, there could be certain cases where the primary beneficiary passes away along with the insured individual. This is where the need for a contingent beneficiary arises.
A contingent beneficiary is an individual who will receive the sum assured if the primary beneficiary passes away. He/she is the second-in-line with respect to the amount. A policyholder can choose a contingent beneficiary at the time of purchasing the policy.
It is possible to choose more than 1 contingent beneficiary, dividing the amount proportionally between all said beneficiaries.
A contingent beneficiary needn’t be a person, for one can choose a trust/charity/organisation as the beneficiary.
Filing a life insurance claim is a simple process. The need for a claim can arise in two circumstances, namely on death of insured or on maturity of the policy.
An insurer can ask for additional details in certain cases. These could include a request for the certificate from the hospital, a medical certificate, a letter from the employer, etc.
The insurer will pay the amount to the policyholder once the policy matures. In cases where the policy is assigned to a third person or an organisation, the amount will be paid directly to said assignee.
Choosing the right insurance plan boils down to a few simple points. The first step involves determining your individual needs. Ask yourself how much cover you need, the duration you wish to be protected for, the returns on an investment, etc. Once these questions are answered you can choose the type of plan which suits your needs. If you are looking for income post retirement choose a pension plan, if you wish to protect yourself against all odds choose a whole life plan.
Once the kind of plan is selected it is important to compare the different options available in the market. Select an insurance company with a good track record. The IRDA provides information pertaining to how all insurers in the country have performed. Check the claim settlement ratio, the assets under management, the grievances solved ratio, the network a particular insurer offers, etc. Select an insurer who you think will be the right partner.
Choosing the best insurance plan takes time and research. In case of doubts it is always a good idea to consult experts who can guide you.
Insurance plans can be customised according to the need of an individual. As such, it is possible to choose a high cover under any plan option. The major difference lies with respect to the premium. While it is possible to opt for a high sum assured under other plans as well, the premium for such sum assured is much higher than the premium for the same sum assured under a term insurance plan.
The main reason for this is the fact that a term insurance plan does not offer additional features which other plans come equipped with. For example, most such policies do not provide a loan option. Similarly, these plans do not meet any financial needs while the insured is alive. Most plans do not even offer a maturity benefit if the policyholder survives until the end of the term.
Given these facts, insurers have to price term insurance plans lower in order to generate interest and increase sales.
Yes, it is absolutely safe to buy an insurance plan online. However, one should always double check the website from where the policy is being purchased. There are no risks involved when the plan is purchased from the official website of the insurer. There are a few websites which have been given permission by the IRDA to sell insurance plans. In case one is using such websites it is mandatory to check the IRDAI web aggregator licence before deciding to pay for it online.
Never buy a policy from websites which are not authorised to sell insurance plans.
The cover under a life insurance plan begins from the Effective Date. This is typically mentioned in the policy document. The effective date can vary from insurer to insurer, with the cover beginning after the premium has been paid in most instances. In certain cases the cover begins only after the policyholder accepts the policy .
Yes, life insurance plans not only provide financial assistance in case of any unfortunate event, they also help one save money on tax. Under Section 80C of the Income Tax Act, one can avail a tax deduction on the premium amount paid by them towards maintaining a life insurance plan. This benefit is also applicable if an individual pays the premium for his/her spouse or child. Both individuals and Hindu Undivided Families are eligible to enjoy tax benefits or tax rebates under this section.
The maximum permitted deduction under Section 80C is Rs.1.5 lakh. This amount is decided by the government and can change yearly.
Similarly Section 10 (10)D of the same act provides a provision for tax benefits on the amount received at death of the policyholder, or maturity/surrender of the policy. The amount received does not attract tax, subject to certain conditions. The Income Tax Department will levy a tax if the premium amount exceeds the limits specified by them.
It is a smart option to consult a tax consultant or a tax advisor to utilise all the tax benefits provided by a life insurance plan.
The tenure and sum assured should be chosen after looking at your current life stage and link this to future expectations. Individuals who might encounter expenses in the future should opt for a high sum assured, ensuring that inflation is accounted for. Similarly, those who have opted for pension plans should ensure that the amount chosen is sufficient to help them continue with their existing lifestyle.
There is no ‘one size fits all’ rule under life insurance. It is imperative to assess future requirements while choosing the sum assured. Similarly, the term should be long enough to cover any eventuality. There is no harm in choosing a longer term. On the other hand, if a short term is chosen, the benefits received might not match the expectations, especially in case of a term plan.
While selecting the term and sum assured it is suggested that you visualise the future and base the decision on this.
The premium is the amount each policyholder is expected to pay in order to enjoy the benefits provided by the policy. One can view it as the investment amount. The sum assured is determined on the basis of the premium, with it possible to increase this sum by increasing the premium amount.
The premium payment depends on the type of policy one purchases. While certain policies like annuity plans require the premium to be paid as a single amount up front, other plans offer flexibility in terms of premium payment.
One can choose to pay the premium either annually, semi-annually, quarterly, or monthly, if the plan provides this option. Certain plans permit only annual payment of premium whereas others provide different alternatives, offering more flexibility to the policyholder.
In cases where one chooses to pay the premium at regular intervals, the entire premium amount is split into the number of terms for which it is expected to be paid. One should check all the premium payment options before deciding to purchase the policy.
Certain life insurance plans mention the term ‘bonus’ in their brochures. A bonus is nothing but an additional amount which the insurer pays over and above the sum assured. This is similar to bonuses in other products.
The bonus is the profit made by the insurer, with this profit shared among policyholders. The bonus amount is determined by the insurance company and might vary from year to year. Insurance companies are not obligated to offer a bonus, with this decision depending on the Board of Directors.
Not all life insurance plans are eligible for a bonus. One can check whether their policy qualifies to partake in the profit by going through the product brochure. Policies which fall under the ‘with-profit/participating’ category are entitled to receive a bonus if the company makes a profit. On the other hand, policies which fall under ‘non-participatory/without-profit’ are not eligible for bonuses.
One should check whether their policy qualifies for a bonus before they buy the policy.
There are three major categories of bonuses offered by insurance companies, with these being Terminal Bonuses, Interim Bonuses, and Reversionary Bonuses. Reversionary bonuses are further classified into simple reversionary bonuses and compound reversionary bonuses.
A terminal bonus is provided only when the policy terminates, i.e., either on maturity of the policy or on the death of the insured. This is a one-time bonus.
A reversionary bonus is a bonus component which is added at regular intervals. This can be yearly or after completion of a few years.
An interim bonus is provided if the policy terminates before the completion of a financial year. Other bonuses are declared keeping the financial year into account, but this one provides a solution in cases where the financial year is not completed.
The primary difference between a participating and nonparticipating policy is that a participating policy partakes in the profits of the insurer whereas a non-participating policy does not partake in any of the profits. In simple words, a participating policy can qualify for bonuses whereas a non-participating policy will not earn any additional bonus.
The sum assured is used to determine the bonus a policy is eligible for. Most insurers offer a bonus per Rs.1,000 sum assured (or any other fixed value). The bonus is a fixed amount per the selected unit.
For example, if the company decides to give a bonus of Rs.30 per Rs.1,000 sum assured, the total bonus for a sum assured equivalent to Rs.10 lakh becomes Rs.30,000. If the period is 10 years, the overall bonus amount becomes Rs.3 lakh, subject to the same bonus being offered each year.
A basic life insurance plan might not be sufficient to meet all the requirements of an individual. Instead of purchasing a new policy, one can buy a rider instead. A rider is nothing but an add-on which offers certain additional features and benefits, thereby enhancing the policy.
You can buy a rider by contacting the insurance provider and paying the amount for the rider. There is also an option to buy a rider at the time of purchasing the policy.
There are numerous instances of individuals purchasing a policy and then realising that it doesn’t meet their requirements. Returning such policies is an option provided by IRDAI. This return is possible only within a specified period of time, termed the free-look period. A policyholder can return the policy to the insurer within this timeframe, subject to certain terms and conditions. The insurer will refund the premium after deducting their administration charges.
If you choose to cancel your policy within the free-look period the insurance company will refund the premium amount paid by you. They will deduct all expenses borne by them to complete the formalities associated with issuing the policy and then cancelling it.
If one fails to pay the premium amount within the grace period the policy either lapses or turns into a paid-up policy. The benefits and protection accorded by the policy automatically change in such circumstances.
The policy will continue to be active during the grace period. It is therefore important to pay all dues before the grace period ends.
There could be instances where a policyholder does not wish to continue with the policy. He/she can choose to surrender it under favourable circumstances. If the policy has been active for a specified period of time it is eligible to receive the surrender value.
This is nothing but the amount paid by the insurer to the policyholder if he/she terminates (surrenders) the policy before its maturity date.
Companies compute the surrender value after taking the original term of the policy, the premium amount, and the period for which the premium was paid into account. Typically, premiums for a minimum of three years should be paid in order for a policy to be eligible for a surrender value.
There are two types of surrender values, the guaranteed surrender value and the special surrender value.
The guaranteed surrender value (GSV) is a certain percentage of the premium amount paid during the term of the policy. The premium for the first year is excluded while computing this sum. A certain percentage of the premium amount is paid to the policyholder as the guaranteed surrender value. For example, an insurer provides GSV of 30% of the premium. An individual who pays Rs.50,000 per year for a period of three years would be entitled to a GSV of:
(1,50,000 – 50,000) x 30/100
The special surrender value (SSV) is computed by taking the surrender value factor into account. This factor is a certain percentage of the paid-up value acquired by the policy. This factor increases with each active policy year.
In essence, the longer the policy was active the higher the surrender value will be.
Assignment refers to the process of transferring the ownership of a life insurance plan to someone else. All rights associated with the policy would move on to the new owner. The assignor is the individual who chooses to transfer all rights, with the assignee being the individual to whom such rights are transferred.
For example, an individual who avails a loan against a policy could be expected to assign the policy to the bank/lender. If the assignor were to pass away during the policy term the sum assured would be paid to the bank/lender.
Purchasing a life insurance plan isn’t like other regular purchases we make. It can be extremely useful in the future, having the power to financially support our loved ones. As such, it is imperative to thoroughly assess one’s needs, research for the right product, determine the cover amount, calculate the effect of the regular premium payment on our budget and then take a step.
Also, one must ensure that they don’t over-insure themselves, for an exorbitant cover essentially boils down to a high premium, which could strain the finances of the person. It is better to choose a sum assured which is affordable rather than choosing a high sum assured and miss payments, for this could result in the policy getting lapsed, thereby making the policy pretty much useless.
A medical report is required only in certain instances. In this case you will be expected to undergo tests specified by the insurer. A full medical test might include a physical exam which checks the height, weight, pulse, and blood pressure of the applicant. In addition to this other tests might be conducted to check the cholesterol, sugar levels, blood count, etc. A urine sample might also be taken.
Insurers do these tests to check the functioning of vital organs, which can help them analyse the individual’s health.
In certain cases one might also be asked to undergo a HIV Test to rule out the possibility of HIV. Additionally, one will have to provide all past medical reports, history of family illnesses, etc.
Yes, it is possible to avail a loan through a life insurance plan. However, not all policy types come with the feature of a loan. For instance, a loan cannot be availed against a term insurance plan.
The policy brochure typically indicates whether the policy comes with a provision for loan.
The IRDAI has made it mandatory for all insurance agents to be registered. Check whether the agent has a licence issued by IRDAI. The licence should state that the said individual is eligible to sell a life insurance plan. There are different licences granted for different insurance products, with a separate licence given to general insurance agents. In certain cases a composite licence is given to an agent, enabling him/her to sell both life insurance and general insurance.
Using references from friends/family members who have purchased a life insurance plan through agents can help alleviate any fear of a fake agent. Always question the agent and check his/her knowledge about the product before committing to a policy.
Not all agents are authorised to collect premiums on behalf of the insurer. Before paying the sum to the agent, first verify his/her credentials. He/she must be authorised by the insurer to collect premiums. Ask for such authorisation. If all checks out you can pay the premium but make sure to collect a signed receipt for the same.
Gone are the days when one depended on an insurance agent to buy the policy. Today, it is possible to buy a policy online, avoiding all middlemen. Choosing to buy a life insurance plan online is quicker and transparent, giving one the flexibility to complete the task at one’s own speed.
Additionally, online purchases are safe even if the policy is purchased through an intermediary. There are no risks of the insurance agent absconding in case of online purchases.
People used to rely on insurance agents to give them an overview of the product, but it is now possible to connect and chat with online representatives who can provide the same information.
Additionally, one can also get a better rate on the premium if the policy is purchased online.
Given these features it is a better option to buy a life insurance plan online.
Insurance companies use an algorithm which predicts the chance of a payout for each policy they sell. The higher this percentage, the higher the premiums are going to be. The risk is computed by taking factors like the applicant’s age, medical history, current lifestyle, work environment, etc. into consideration. They might also take factors like the average lifespan in a particular region, health issues faced by residents of a particular city, chances of infections leading to death, etc. into account.
This depends on the type of policy chosen. Certain policies require only a single premium to be paid at the start. Others give an option to pay the premium at regular intervals. The premium amount should be paid for the complete duration of the premium payment term. This term might or might not be equal to the policy term. Most insurers provide an option to pay the premium at regular frequencies, which can be chosen by the policyholder. The available options include paying either yearly, every six months, every three months, or every month.
Yes, it is possible to make a few changes to your insurance plans. These rights are laid down by the IRDAI. The changes which are permitted include:
Changing the premium payment mode
Changing the policy term
Changing the sum assured (only an increase in this amount is possible)
Switching between funds
Redirecting the premium
Any other change requests can be denied by the insurer. It is important to read the terms and conditions of the policy to comprehend the changes which are permissible under it.
Premium redirection is a concept which is primarily used in ULIPs. This is the process of redirecting/realigning the premium wherein one can tell the insurer to invest future premiums in specific funds. The current funds are not modified in this case.
This can be understood through the example of Mr. Jay who has invested in a ULIP wherein his premium is split between equity and debt funds in a 50:50 ratio. Now, Mr. Jay senses a new investment opportunity wherein he feels that cash funds will offer better returns. As such he asks his insurer to redirect the future premium into cash funds. This ensures that all future premiums are invested into cash funds, with no changes made to the existing investments.
There could be instances where an individual wishes for a higher cover but is not in a position to afford the premiums. A graded life insurance plan can come handy during such situations. A graded policy is one where the premium amount increases at regular intervals, stopping at pre-set limit. This enables an individual to avail the benefit of a high cover without having to exhaust all resources initially.
It is a smart option for those who foresee an increase in their income, enabling them to afford a higher premium after a few years.
The cover provided by a life insurance plan can vary from case to case. Most of them cover death due to natural causes as well as accidents. Individuals can choose to add riders to a base policy in case it doesn’t cover death due to certain reasons.
Proposal forms are extremely important in life insurance plans, with insurance companies using them to gauge the eligibility of an individual. The proposal form is similar to KYC documents which banks and other establishments require. The applicant is expected to fill this form truthfully, providing all the information needed.
Typical information requirements relate to the name of the individual, his/her income, lifestyle habits (smoking, drinking, etc.), history of personal illnesses, history of family illnesses, current medical condition, fitness levels, age, height, weight, etc.
The information submitted here is used by underwriters to determine the premium amount. Any false information submitted in the proposal form could be grounds for rejecting a claim in the future. It is therefore critical to be honest and open while filling it.
Insurers also use the information provided to gauge the premium payment capacity of the applicant. The final decision on whether the applicant qualifies for an insurance plan is determined on the basis of what is mentioned in the proposal.
A maturity claim is easy to file. Most insurers inform the insured/policyholder before the maturity date of the policy. This intimation is typically provided a few weeks before the actual maturity date, with companies also informing them about the maturity amount they are entitled to. In addition to this, the insurer will also send a discharge voucher to the policyholder.
This discharge voucher needs to be signed and submitted to the insurer. Additionally, the original policy bond should also be sent over. On verification of the policy and the signature the insurance company will settle the amount on the date of maturity.
A few insurers also ask policyholders to choose how they wish to receive the maturity amount. One is expected to furnish this information so that the amount is transferred accordingly.
Insurance companies provide options when it comes to payment of the sum assured. These options can vary from policy to policy and insurer to insurer but can be typically categorised into five types:
Lump sum payment – Under this option the entire amount is paid as a single lump sum. No further amount will be paid after this. Nominees/beneficiaries who have immediate financial responsibilities after the demise of the policyholder can choose this settlement option.
Fixed period – Under this amount the sum assured plus any interest accrued is paid at fixed intervals for a specified period of time. The entire amount is paid during this period.
Fixed amount – This option involves the payment of a fixed sum of money at periodic intervals. The sum is paid until the entire amount is paid to the beneficiary.
Lifetime income – Under this option a beneficiary can choose to receive a certain portion of the accumulated amount for the entire duration of his/her life. Insurance companies typically purchase a pension/annuity plan with the death benefit, with this policy in turn paying the amount.
Interest only – Under this option a beneficiary can choose to receive only the interest at intervals chosen by him/her. The principal amount can be withdrawn as per his/her needs.
Insurance companies are expected to file taxes based on their income and expenditure. As such they are also required to be transparent when it comes to their taxes. Most insurers send out a tax policy statement to policyholders after the completion of a financial year. This report contains everything associated with the taxes paid by them. This statement can be used by an individual to compute his/her own tax (in certain cases).
This is primary because the older one is the higher the chances of his/her death. This increases the chance of a payout from the insurer. While it might not be the case in all occasions, it is riskier to insure an older individual compared to a younger one. With insurance companies looking at the probability of a payout in each case, they are prone to charge a higher premium with an increase in this probability.
In case the policyholder passes away during the policy term, the nominee can submit a death claim by submitting the following documents:
Duly filled claim form which is signed by the nominee. The date, cause, and place of death need to be mentioned in this form
Death certificate of the insured
Original policy document
Legal proof showing that he/she is the legal heir (in cases where the nominee hasn’t been mentioned)
Any assignment/re-assignment documents associated with the policy
Certificate from the hospital
Certificate from the employer (in certain cases)
Copy of police report (if applicable)
An insurance company can ask for additional documents if required.
Yes, it is possible to find life insurance plans which pay money during the policy term. The money is paid as survival benefit, with the payment beginning after the premium payment term. A certain percentage of the maturity sum assured is paid at regular intervals until the policy matures.
A number of Money Back policies come with this option. Individuals looking for such benefits should discuss the same with the insurance provider/agent in order to find a policy which pays them money during the policy term.
Yes, it is a better option to buy a life insurance plan at a young age. Premiums are cheaper when the policyholder is young. Insurance companies increase the premium amount with the age of the applicant. Additionally, they can also offer rebates on the premium amount in certain cases.
A young policyholder can enjoy a high cover at affordable rates. Opting for a high cover when one gets older results in premiums which are considerably higher.
Most companies provide insurance to their employees. The insurance is purchased in the form of group plans. Employees who wish to avail an individual policy could get in touch with the group insurance provider and buy a new one.
Most group insurance plans provide limited cover and should not be the only source of insurance for an individual.
Yes, it is possible to buy a life insurance plan for your parents. Choosing to insure your parents can be a good option, ensuring that they needn’t rely on anyone if one of them passes away. Insurance companies provide options wherein an individual can cover two people in a single policy, making these ideal to insure one’s parents.
Yes, it is possible for senior citizens to buy life insurance plans in India. A number of insurance companies offer products designed for senior citizens. While it might be hard to buy a term plan, one can choose to invest in an annuity/whole-life policy.
One major disadvantage of purchasing a policy at an old age is that the premiums are typically higher.
The amount received as payout under a life insurance plan is exempt from tax under Section 10(10D) of the Income Tax Act of 1961. While the death benefit is completely tax-free, there are certain exceptions when it comes to maturity benefit.
In case of policies issued from 01/04/2003 onwards the benefit is exempted only if the premium for such policies is less than 20% of the sum assured. This limit is reduced to 10% for policies issued from 01/14/2012 onwards.
The sum assured which is exempt from tax does not include the premiums which have been returned to the individual. This also does not include any bonus which exceeds the actual sum assured.
It is advisable to consult a tax consultant or tax advisor to utilise all the provisions provided by the government.
The cash value is nothing but the money paid by the insurer if the policyholder cancels the policy. It is typically associated with whole life insurance plans. It normally takes anywhere between 12 to 20 years for the cash value to build up, depending on the premium amount paid and the policy type chosen.
The individual who makes a payment claim to the insurance company is called the claimant. With regards to a maturity claim the claimant is typically the insured/policyholder. In case of a death benefit claim the claimant can be the nominee/legal heir.
A modified death benefit is associated with Modified Benefit Life Insurance plans. These policies are not common in India, with them being more prevalent in western countries. Under the concept of modified death benefit, the sum assured is not payable in all cases. If the policyholder dies within two years of purchasing the policy the insurer will pay only the premiums plus an additional amount.
The complete death benefit will be paid only if the policyholder dies after a specified minimum period. This is typically three years after the policy is purchased.
Yes, insurers will pay the death benefit if the insured dies in an accident which was a result of him/her driving under the influence of alcohol. However, it is possible for insurance companies to contest such claims if the policyholder had not mentioned the fact that he/she used to drink while purchasing the policy.
Most life insurance plans have only one exclusion – suicide. If the policy mentions accidents caused due to drunk driving as an exclusion no benefit will be paid.
Yes, if the insured has specified a beneficiary in his/her policy. Probate is a possibility if no beneficiary was chosen/if the beneficiary passes away before the policyholder’s demise (with no other beneficiary selected by the policyholder).
A premium quote is an estimate of how much you will have to pay as premium for a life insurance plan. Before you purchase a life insurance plan, it is necessary to request for premium quotes from various insurers, either on the insurer’s official website or through third-party websites. This will help you compare between the premium rates offered by various insurers, and can thus help you choose a plan with competitive rates.
Yes, you can purchase a Child Insurance Plan for you children. A child insurance plan can help you financially plan for significant milestones in your child’s future, thereby enabling you to secure his/her future. A child insurance plan is a smart way to build your savings and accumulate wealth for any needs that your child may have in the future.
Investing in a pension/retirement/annuity plan is a smart way to secure your post-retirement years as you will be guaranteed a fixed source of income. A ULIP or a Unit Linked Insurance Plan, on the other hand, offers policyholders the combined benefits of a protection cum investment option. However, with a ULIP, the policyholder will have to bear the risk. It is important to note that some insurers also provide retirement/annuity/pensions plans that are unit linked.
Before you purchase any insurance plan, ensure that you consider your financial goals, needs of your dependents, liabilities/debts, your appetite for risk, etc., and make a decision accordingly.
Insurance premiums usually vary from insurer to insurer. Insurers consider factors like the sum assured, age at entry, policy tenure, risk undertaken, etc. when deciding a premium. Life insurance premiums are not directly fixed by the Insurance Regulatory and Development Authority of India (IRDAI).
Certain insurers may offer you a discount if you purchase an insurance policy online. However, insurers are not bound to provide this discount, and the percentage of discount may also vary from insurer to insurer. Having said that, purchasing an insurance plan online is both hassle-free and time-efficient.
Your premium amount is based on the amount of risk that the insurer undertakes by selling you the policy. Thus, insurance providers calculate the payable premium on the basis of factors, such as your age at the time of purchasing the policy, the sum assured, riders opted for, policy tenure, premium payment term, etc. Make sure to request for a premium quote and compare premiums offered by various insurers before purchasing any insurance plan.
Most life insurance policies come with a suicide clause. Thus, if the insured individual commits suicide within a certain period of purchasing the policy, no death benefit will be paid to the nominee. Instead, the insurer may return a portion of the premiums paid during the policy tenure to the nominee. For a detailed list of exclusions, make sure to read your policy brochure.
Most insurers give policyholders the option of increasing the sum assured amount at the time of renewing their policy. However, this feature might vary based on your insurer’s terms and conditions. Thus, make sure to contact your insurance advisor or read through your policy brochure for more information.
For most life insurance policies, the grace period is fixed between 15 – 30 days. Thus, if you don’t pay your premiums within the end of the grace period, the policy might lapse. There is no option to extend the pre-defined grace period.
Yes, a term insurance plan will cover death that occurs abroad. However, make sure to inform the insurer before you leave the country. In case you are travelling to a country that has been labelled as high-risk, the benefit payout may get affected.
The claim settlement ratio is defined as the overall number of death claims that have been approved by an insurer against the total number of death claims it received. Insurance companies usually report this on an annual basis to the IRDAI (Insurance Regulatory and Development Authority of India) and the same is published on their website and annual report.
Yes, NRIs can purchase insurance policies offered by Indian insurance companies. Purchase of these policies can be done through online modes. However, make sure to compare the features and benefits offered by various plans on a trusted third-party website before you purchase your policy.
If you have your lost your original policy document, make sure to inform your life insurance provider about it at the earliest. The insurer might issue a duplicate policy to you. In some cases, a fee or penalty might also be charged for issuing you a duplicate policy.
In case the nominee has passed away and no change has been made to the nomination, the death benefit will be paid to one’s legal heir.
If you cancel your policy during the free-look period, you will receive most of the premium that you paid, minus a nominal amount. However, if you surrender your policy at any other time during the policy tenure, the insurer will pay you the surrender value of the policy, provided the policy has acquired a cash value.
In insurance terms, the Grievance solved Ratio is an important indicator of the company’s post-sales service. This ratio is basically the number of grievances which an insurer has resolved, as against the total number of grievances that have been registered with the insurer in one year, or a specified period. Therefore, if an insurer has received a total of 100 grievances in a year, and has managed to successfully resolve 75 of those, then the Grievance Solved Ratio will be 75:100. Therefore it is safe to say that this ratio is a very crucial indicator of not just the quality of service provided by the insurer, but also its efficiency in terms of grievance redressal, which is an important part of any transaction.
No, term insurance plans do not have an investment component because they are meant to offer pure risk protection. This is one of the reasons why the premiums for a term insurance plan will always be much cheaper as compared to other types of life insurance plan such as a ULIP which does offer an investment avenue. Because there is no investment component, no part of the premium amount has to be re-directed towards managing your investment. The entire premium is directed only towards providing life cover.
Life insurance policies usually provide cover for a specified term. If you wish to extend the term of your life insurance cover, a term insurance rider can be a helpful option. This rider is basically a top-up which adds to the term of your policy. For instance, if you have a life insurance policy for a term of 20 years, but wish to extend the coverage to 25 years, you can do so by getting a term rider with a term of 5 years. Therefore, if the insured policyholder passes away during the extended term of the plan, the death benefit will be paid.
Besides the usual critical illness rider, accidental death or permanent disability benefit rider, and waiver of premium rider, there are a number of other riders which many policy takers are not aware of. These include the term insurance rider, the Guaranteed Insurability Rider (where initial cover amount can be enhanced without undergoing a medical examination), Spouse Insurance Rider (to cover the spouse of the insured), Major Surgical Assistance Benefit Rider (for financial assistance for a major medical procedure), and the Family Income Benefit Rider.
As a policyholder, or a prospective policy buyer, you can easily calculate the cost of premiums that will be charged under your policy by using a simple online tool called an online premium calculator. This tool can be found on many third party websites, and also some insurer websites. To calculate premiums using this tool, you will typically be asked to provide details like the term of your policy, your age, sum assured you wish to take, premium payment mode, add-on riders 9if any), etc. After these values have been input in the calculator, it will instantly display the result, which will be based on the values which you would have provided.
While a life insurance provider does take into account factors like the applicant’s age, income level, current health state, medial history, etc. to calculate premiums, there are also some other components which are a part of the premiums charged. The premiums include the cost of various other expenses like the rider premium cost, administration fees, premium allocation fee, fund management charge, fund switching fee (for investment-linked plans), and mortality charges.
There are many ways using which you can make significant save on your life insurance premiums. These include (i) Choosing a high sum assured amount for which most insurers will offer you a modest rebate; (ii) making online premium payments or even purchasing the policy online can help you save significantly on the premiums as the middleman cost is eliminated, as is the paperwork, (iii) If you choose to make premiums payments annually, instead of monthly, you can get a higher rebate as the costs associated with processing premium are reduced. The lower the frequency of making payments, the higher rebate you can get, and (iv) remember to pay your policy premiums on time, to avoid the policy from lapsing, following which you will have to pay reinstatement charges.
The solvency ratio is defined as the size of the insurance firm’s capital relative to the risk that the insurer has undertaken. In other words, since the solvency ratio is a measure of the insurer’s assets against how much the company owes to various parties, it measures exactly how financially sound the company is and how capable they are to payout claims. Thus, to ensure that your insurer is able to settle your claim, regardless of what may happen in the future, it is necessary that you consider the solvency ratio of a company before purchasing a life insurance plan from them.
Before you purchase an insurance plan, make sure to consider the points mentioned below in order to get a better understanding of how much life cover you need to purchase:
Term insurance policies offer a high sum assured to policy buyers at a comparatively low premium rate. Thus, it is advisable to purchase a term insurance plan if you have a lot of liabilities and debts. However, the premium rate that is offered to you is linked to your age. Thus, at the age of 50, you can expect to pay a high premium rate for a term insurance plan. Before you purchase any insurance plan, you will need to check the various insurance plans that are available in the market, compare the features and benefits of each plan, request for premium quotes, and opt for a policy that offers you a suitable coverage at a competitive premium.
Insurers usually offer online premium payment options to facilitate or ease the premium payment process for policyholders. For this reason, most insurance providers do not offer a discount to policyholders if they pay their renewal premiums online. However, certain life insurance providers do provide a discount if you purchase the policy and pay the first premium online since it will result in reduced paperwork and eliminate the need for an insurance agent. Make sure to check with your insurance advisor or read through your brochure to know exactly what discounts are offered by your insurer.
Before the introduction of unit-linked insurance plans (ULIPs), insurance providers only offered traditional life insurance plans to policy buyers. Traditional insurance plans include term life plans, whole life plans, and endowment plans. These policies are risk-free, and are, thus, apt for risk-averse policy buyers. Traditional insurance plans provide guaranteed returns in the event of the policyholder’s death or at the completion of the policy tenure.
The premium payment term refers to a particular period during which time the policyholder must pay the due premium. Thus, the actual PPT may be equal to the policy term or lesser than the policy tenure, in the case of limited premium payment plan. To know the premium payment term of your insurance plan, make sure to read through the policy brochure.
If the nominee is a minor at the time of the policyholder’s death, the appointee can make the claim. In case no appointee has been assigned, the death benefit will be paid to the policyholder’s legal heirs.
Most insurance providers have a Claims Review Committee or a Grievance Committee. Thus, if you unhappy with the claims decision, you can inform the insurer’s Claims Committee in writing. Post this, the Committee will review your claim again.
Yes, unless this is listed as an exclusion in the product brochure. In several cases, insurance providers will charge you a higher premium if you have a pre-existing disease at the time of purchasing the policy. Certain insurance providers might exclude the disease or the condition from the policy coverage, even if they do provide you a policy. Thus, make sure to compare various plans available in the market and opt for an insurance policy that provides you coverage despite your pre-existing disease/illness.
Looking to purchase a life insurance policy? When making a decision so important, don’t forget to compare premium quotes from leading life insurance providers in order to get the best coverage at the best rates. Get instant premium quotes, compare premiums and policy features, and do a lot more, only on BankBazaarInsurance.com! We’ve got you covered!
Term Life Insurance plans, a popular choice among policy buyers, provide a comprehensive risk cover with a high sum assured at low premium rates. What’s more, you can also customise the sum assured, select an optimum policy tenure, and avail tax benefits, with a term life plan.
A cancer insurance plan provides the policyholder much-needed financial protection in case he/she gets diagnosed with the deadly disease. Purchase a cancer insurance plan today and ensure that you stay financially prepared no matter what happens in the future.
A health insurance policy can provide a comprehensive cover against expenses that one might have to incur in the event of a hospitalisation/medical emergency. With healthcare costs rising year-on-year, purchasing a health insurance cover can provide you peace of mind and a sense of security. Available in various types with varying features and benefits, opting for the right health insurance cover couldn’t get easier.
It provides you protection against accidents, personal accident, theft, third-party damage, own, damage, natural calamities and man-made calamities. You can buy either third-party liability cover or comprehensive cover. However, a comprehensive two wheeler insurance policy is what one should ideally buy. Owning a two wheeler insurance is no less than having a medical insurance as it takes care of your hospital expenses in case of an accident.
Car insurance is an agreement between the insurer and the insured where the insurer promises to cover the policyholder’s liabilities at the time of a mishap in exchange for a small premium.Car insurance plans are of two kinds, Comprehensive Car Insurance plan that covers the third-party liabilities as well as own damage liabilities and Third-party Liability Car Insurance Plan that covers third-party liabilities at the time of a mishap.
Policy Lapsation – What does it mean?
A life insurance policy is a long term contract between the insurance firm and the individual purchasing the insurance plan. In order to keep this contract running, it is necessary for the policy buyer to make regular premium payments to the insurance company. Usually, even if the due premium payment has not been received by the insurance firm within the premium payment date, the insurer will provide the policyholder a grace period of 15 to 30 days to pay the due premium amount. If you pay the premium within the grace period, the insurer will not levy any additional interest charger.
If the due premium amount remains unpaid even during the grace period, your insurance policy will lapse or terminate. However, even a lapsed policy can be revived within a certain number of pre-specified years by paying the arrears with the applicable interest rate. To keep your insurance policy from lapsing, make sure to pay the due premium amount to your insurance provider without any delay.
Life Insurance Claims Rejection – What you need to know
The main purpose of a life insurance policy is to provide financial security to one’s dependents, in case of an unfortunate eventuality. Thus, to ensure that your nominee does not face any hassles at the time of filing the claim, you need to ensure that you don’t provide the insurer any chances to reject or deny your nominee’s claim.
In most cases insurance providers will only reject claims if you have suppressed key information at the time of purchasing your policy. Certain other reasons for claim rejection include misrepresentation of facts, non-payment of policy premiums, coverage limitations, geographical limitations, etc. Thus, when purchasing an insurance policy, make sure to provide all the required information about yourself without withholding any information and to familiarise yourself and your nominee with the policy terms and conditions, to ensure that your loved ones don’t face any financial hassles.
Unhappy with your life insurance policy? Here’s what you should do
A life insurance policy is a long-term contract between the policyholder and the insurance company. This essentially means that the policyholder will have to pay the due premiums to maintain the policy, throughout the policy tenure. However, in certain cases, the policyholder might want to discontinue the policy.
Currently, within the life insurance industry in India, there is no option to switch from one policy to another. Thus, if you have a money-back policy and you are dissatisfied with it, you cannot switch to a term insurance policy. However, if your policy has acquired a surrender value, you can surrender the policy and then purchase another insurance plan.
On the other hand, if you currently have a life insurance policy that has not acquired a surrender value, you can discontinue the policy by informing the insurer and then choose another policy. However, in this case, it is likely that you will have to forfeit all the premiums you paid till date.
If you have just purchased your insurance plan, ensure to make the most use of the free-look period by carefully reviewing the terms and conditions of your policy. If you don’t agree with the terms and conditions mentioned in the policy, you can return it during the free-look period and receive the full premium paid, excluding a nominal charge.
Why is April a good time to purchase a Term life insurance?
People generally make the mistake of buying term insurance plans towards the end of the financial year since one looks to save on taxes. But, April is generally the best time to buy an insurance plan for oneself due to many reasons.
First of all, April is the time when the new fiscal year starts, new accounts are opened and everything starts from scratch and also when one can reassess their financial needs. For an employee, April is the month when they get their bonuses and appraisals due to which one can purchase an insurance policy for themselves.
It is easier to buy a plan in April since its the lean period for insurers and hence they would be able to give you more attention regarding the queries you may have prior to buying one.
Hence, April is the best time for an individual to reassess their needs, study the products they are interested in properly before deciding to go ahead and buy an insurance plan.
Life Insurance Claims Settlement – What you need to know
The main purpose of a life insurance policy is to provide financial security to your dependents in case of an untimely eventuality. Thus, when purchasing a life insurance policy, it is vital that you familiarise yourself and your nominee with the insurer’s claim settlement process, in order to avoid any hassles at the time of raising a claim. Read on to know more about the claims settlement process for various life insurance claims:
In order to make sure that you or your nominee doesn’t face any hassles, make sure to follow the exact steps mentioned by the insurer. Further, to expedite the claim settlement process, ensure that the necessary documents are submitted at once and that all information is filled out correctly in the claim form.
Insurance Policy Premium Payment – What you need to know
When you purchase a life insurance policy, it is vital that you keep paying your premiums as per the premium payment schedule in order to keep your policy active. If you do not pay your premium within the grace period, your policy can lapse. However, you should make sure to pay your premium amounts only through authorised channels, such as the insurer’s official website, customer portal, or authorised banks, agents, or merchants.
In most cases, you will be able to view a list of authorised premium payment channels on the insurer’s official website and brochure. Thus, when you purchase an insurance policy, make sure to pay close attention to the premium payment channels specified in the insurer’s official website. It is vital that you do not just hand-over your premium to an agent, since not all insurance agents are authorised to collect premiums.
LIC Online Payment
LIC, a company that is well-known for their customer-centric offerings, provides policyholders the option to make premium payments through a range of online and offline channels. To learn how to pay your LIC policy premium through the insurer’s official website, via authorised franchisees and merchants, or through Corporation Bank and Axis Bank branches.
Reliance Capital recently said that Reliance Nippon Life Insurance, a subsidiary of theirs, had reported a total premium collection of Rs.4,042 in FY17-18. The insurer’s renewal premium collection touched a sum of Rs.3,154 crore, which was a year-on-year (YoY) increase of 6%.
As on 31 March 2018, the insurance provider’s assets under management (AUM) rose to Rs.19,096 crore, which was an 11% year-on-year increase. The insurer also reported an Embedded Value of Rs.3,220 crore, a 6% year-on-year increase. At the end of FY18, the insurance provider had about 3 million active insurance policies with an overall sum assured of over Rs.96,000 crore.
25 April 2018
Leading life insurance firm HDFC Standard Life witnessed a 40.4% growth in their standalone net profit to a sum of Rs.346.84 crore, for the quarter ending in March in FY17-18. The company had reported a net profit of Rs.2.47 billion, during the corresponding period in FY16-17.
The company’s robust growth can be accredited to the growth of their new business premium collection and renewal premium collection at 32% and 13%, respectively. The net premiums collected by the company in the last quarter came up to a sum of Rs.89 billion. The company’s consolidated net profit for the full fiscal year increased by 24% to Rs.11.10 billion, as compared to Rs.8.90 billion in FY16-17.
20 April 2018
Officials from ICICI Prudential Life Insurance have recently announced that they are open to acquisition deals, if good opportunities arise. However, the company also said that they are not currently holding any acquisition talks.
Among the 24 life insurance companies in India, ICICI Prudential Life was the first company to list on the stock exchange in the year 2016. Established in the year 2000, ICICI Prudential Life Insurance is a joint venture between ICICI Bank and Prudential Corporation Holdings.
After the company’s listing and issue, ICICI Bank’s stake reduced to 55% from their previous 67.52%. Prudential Corporation Holdings currently holds a 25.83% stake in the company. Further, Hasham Traders and Compassvale Investments hold a 4% and 2% stake in the company, respectively.
18 April 2018
Cognizant, a leading professional services firm, in partnership with a consortium of life insurance providers in India, including Max Life Insurance, SBI Life Insurance, Canara HSBC OBC Life Insurance, IDBI Federal Life Insurance, Edelweiss Tokio Life Insurance, Birla Sun Life, Kotak Life, HDFC Life, Tata AIA Life Insurance, IndiaFirst Life Insurance, PNB MetLife Insurance, Bharti AXA, ICICI Prudential Life Insurance, Star Union Dai-ichi Life Insurance, and Aegon Life Insurance, have recently developed a blockchain solution which will facilitate data sharing across companies.
This will reduce cases of money laundering and fraud and risk of data breaches, in addition to providing a superior customer journey to users through their improved turnaround time, increased process efficiency, and better record-keeping.
17 April 2018
Life insurance companies have requested the GST Council to reduce the GST (Goods and Services Tax) rate from the current 18% to 12%. Before the implementation of the GST regime, a service tax of 15% was levied for most insurance policies. The sudden hike in the tax rate levied has impacted premium costs.
Life insurance providers are hopeful that the GST Council will consider their request. Earlier this year, the GST Council had made reinsurance schemes, such as the Pradhan Mantri Fasal Bima Yojana, exempt from GST. A range of other government-back insurance schemes and certain micro insurance products are also exempt from GST regulations.
14 April 2018
Max Life Insurance, which is one of the most preferred life insurance firms in the country, has recently been recognised as one of the top 15 companies to be employed in, within the BFSI (Banking, Financial Services, and Insurance) sector. Over 600 firms participated in this survey which was conducted by the Great Place to Work Institute. Among these 600 firms, only 55 companies belonged to the BFSI sector. The Great Place to Work Institute has been conducting surveys that access workplace culture for over a decade, across numerous organisations in India.
13 April 2018
Max Life Insurance, a leading life insurance firm in India, is currently leading the race to acquire IDBI Bank’s stake in IDBI Federal Life Insurance. IDBI Federal Life Insurance is expected to divest its stake in the joint venture insurance company by the end of the first quarter of the current fiscal year.
A few of the top companies that have shown interest in picking up IDBI Bank’s stake include Exide Life Insurance, Max Life Insurance, and Kotak Life Insurance. Among these companies, Max Life Insurance is said to be one of the leading contenders.
12 April 2018
ICICI Prudential Life Insurance is trying to simplify the process of buying term insurance cover for its customers.
Sandeep Batra, Executive Director, IPRULIFE said that they are trying to look at a process where medical tests are not needed and based on customer’s profile and using their own artificial intelligence they will decide what type of cover he/she will require.
Batra also said that a simpler process of buying insurance cover would help them sell more products to their customers.
IPRULIFE is also aiming to provide cover to those with significantly higher sum assured and that too without the requirement of a medical test.
9 April 2018
The Insurance Regulatory and Development Authority of India (IRDAI) has stated that Aadhar is not mandatory when purchasing an insurance policy.
Supreme Court of India had extended the deadline to link Aadhar with various services including mutual funds, insurance policies and existing bank accounts.
IRDAI made it clear that Aadhar won’t be necessary for those who wish to buy insurance policies till the Supreme Court of India passes the judgement regarding the linking of Aadhar to different services.
IRDAI also further stated that the customer is allowed 6 months from the date of purchase of the policy to submit their Aadhar and Pan to the insurer. They can meanwhile use any form of “Officially Valid Documents” such as Passport, Driving Licence, Pan Card, and Voter identity card as per the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005.
7 April 2018
Sanjeev Nautiyal has been appointed as the new MD and CEO of SBI Life Insurance Company on 3 April 2018. Nautiyal has replaced Arijit Basu, who has taken over another key role within the SBI Group. Sanjeev Nautiyal started his career with SBI in the year 1985 as a probationary officer. His career has spanned over 32 years, and he has held several important roles in various divisions within the company. In his last assignment, Sanjeev Nautiyal worked as the Chief General Manager of SBI’s Ahmedabad circle.
3 April 2018
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