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  • Life Insurance

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    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.

    What is Life Insurance?

    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:

    • Premium – An individual is accorded cover only if he/she pays a certain sum of money towards the policy. This is termed the premium. One can consider it to be the initial investment which offers returns in the future.
    • Death Benefit/Sum Assured – This is the money which the insurer assures to pay to the nominee/beneficiary of the policyholder after his/her demise. This varies based on a number of parameters.
    • Term – An insurance policy provides protection for a certain period of time. This is called the term, and it could vary based on the type of policy chosen.
    Insurance Provider
    Features
    Highlights
    Aegon Life Insurance Aegon Life Insurance
    Online premium calculation
    98.39% Grievances Solved 95.31% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 80 years Maximum Maturity Age*
    Edelweiss Tokio Life Insurance Edelweiss Tokio Life Insurance

    Online tracking of applications

    99.09% Grievances Solved 85.11% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 80 years Maximum Maturity Age*
    Future Generali Life Insurance Future Generali Life Insurance
    Presence in over 75 locations in India
    99.31% Grievances Solved 90.26% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    HDFC Life Insurance HDFC Life Insurance
    Exclusive plans for women and children
    99.38% Grievances Solved 95.02% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    ICICI Prudential Life Insurance ICICI Prudential Life Insurance
    Claims can be registered online
    99.87% Grievances Solved 96.20% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    Max Life Insurance Max Life Insurance
    Hassle-free claims settlement
    100% Grievances Solved 96.95% Claim Settlement Ratio*
    100 crores Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*

    Types of Life Insurance Policies Available in India

    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:

    Term Insurance Plans:

    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.

    Life Insurance Plans
    Life Insurance Plans

    Unit Linked Insurance Policies (ULIPs):

    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.

    Endowment Policies:

    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.

    Whole Life Policies:

    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.

    Pension Plans:

    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 Plans:

    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.

     

    • Life Insurance for NRIs – What you should Know

      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 per the laws set by the FEMA (Foreign Exchange Management Act), Non-Resident Indians (NRIs) can purchase life insurance policies, irrespective of whether they are currently residing within the geographic bounds of the country or not.
      • The premium payable will remain the same whether you are in Indian national residing in the country or an NRI, provided that the risk remains the same. Thus, if you are residing in a country that is categorised as high-risk, you will have to be prepared to pay a higher premium.
      • As an NRI, you can make your premium payments online via remittance from the country you are residing in, from a Non-Resident Ordinary (NRO) Account, or a Foreign Currency Non-Resident (FCNR) Account.
      • Certain insurers have limitation on the sum assured that can be offered to an NRI if they take-up the pre-policy medical screening in a foreign country. The same limit would be higher if you went through your medical screening in an insurer-approved diagnostic centre in India.
      • A life insurance policy will cover the policy buyer’s death regardless of the country in which it occurs. However, the benefits payable by the plan will completely be repatriable only if the premium was paid in foreign currency. If the premiums were paid in Indian currency, the payout will not be completely repatriable.

       

      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.

    • Things Policyholders should Know About when Purchasing Life Insurance

      Matters to be Stated in a Life Insurance Policy

      As per the IRDAI regulations, a life insurance plan should clearly state the following:

      • The name and the Unique Identification Number (UIN) that is allotted by the Authority to the product that is governing the policy, the code number, the terms and conditions, name, and contact number of the sales person involved in selling the policy.
      • Whether the policy is linked or non-linked, and whether it is participating in profits or not.
      • The manner/method of vesting and the payment of profits, such as the deferred bonus, simple and compound reversionary bonus, and the cash bonus.
      • The benefits that are payable by way of the policy, the conditions based on which these benefits are payable, and any other terms and conditions of the contract.
      • The name and age of the nominee and their relationship to the life assured, and also the name of the guardian in case the nominee is a minor.
      • All details pertaining to the riders that will be attached to the base policy.
      • All relevant dates, including the date of maturity, the date of commencement of the risk cover, and the dates as on which the survival benefits are payable.
      • The premium amount payable, periodicity of the premium payment, grace periods that are allowed for payment of due premiums, the date of the last instalment of the premium payable, the implications of missing a premium payment or discontinuing premium payments, provisions of the surrender value payable.
      • Any detail pertaining to revival schemes that are provided for reviving lapsed insurance policies and the requirements that are to be submitted for the revival of the policy.
      • The name, date of birth, address, and age of the life assured, as on the date of the commencement of the risk cover.
      • Policy conditions for surrender of the policy, conversion of the policy into a paid-up policy, non-forfeiture, foreclosure, provisions for discontinuance in case of unit-linked policies.
      • Contingencies that are excluded from the scope of the insurance policy’s coverage. This will be applicable to both the base policy and riders.
      • Provisions for assignment, nomination, loan against the policy, and a statement regarding the interest rate which will be payable for any loan that the policyholder might avail.
      • Special clauses, conditions, and exclusions that may be imposed on the insurance policy.
      • The email ID and address of the insurance firm, which the policyholder might use to communicate.
      • Notes to the life assured highlighting the importance of notifying the insurer in case of any change in address, in a timely manner.
      • Details pertaining to the insurer’s Internal Grievance Redressal Mechanism in addition to the contact details and address of the Insurance Ombudsman, in whose territory the office of the insurer/residence of the policyholder is located.
      • All documents that are to be submitted by the claimant to the insurance company, at the time of making a claim.

       

      Free-Look Cancellation of a Life Insurance Policy

      • As per the IRDAI regulations, the insurer will have to inform the policyholder that he/she has a 15-day free-look period from the date of receiving the policy document. In case of policies that are sourced through electronic means or through distance marketing, the free-look period may be extended to 30 days. During the free-look period, the policyholder has the right to return the policy for cancellation to the insurer in case he/she disagrees with the policy terms and conditions. The life assured will also have to state the reason for cancelling the policy. Post this, he/she will be entitled to receive a refund of the first premium paid. The insurer is, however, entitled to deduct a proportionate portion of the premium amount for the duration of the policy cover, medical examination charges, and stamp duty charges.
      • In case of unit-linked policies, in addition to the regular deductions applicable when cancelling a policy, the insurer is also entitled to purchase all the units at whatever price the units are available, as on the date of cancellation.
      • If the insurer has received a cancellation request for a policy during the free-look period, the insurer will have to process the request and refund the premium paid within a period of 15 days, post receiving the request.

       

      Claims Procedure in Respect to Life Insurance

      • As per the regulations provided by the IRDAI, a life insurance firm that receives a death claim is expected to process the claim at the earliest, without any delay. If the insurer is in need of additional documents or has any queries, the request will have to be raised at once and not in a piecemeal fashion, within 15 days of receiving the claim.
      • A life insurance company is liable to either pay or reject a death claim by providing the relevant reason for the decision within a period of 30 days, from the date of receipt of the claim form and supporting documents. In case any further investigation needs to be conducted, the investigation should be initiated at the earliest and completed within a period of 90 days. In such a case, the claim will also have to be settled within a period of 30 days thereafter.
      • If the insurer delays in settling the claim, the insurer will have to pay an interest at 2% over the prevailing bank rate, from the date of receiving the last claim document.
      • Except for claims for which an application was made under Section 47 of the Act to the court, if the insurer has not settled the claim despite the claim being ready for settlement, the life insurance firm is liable to pay an interest amounting to the bank rate from the date on which the claim was ready for settlement.
      • With regards to survival benefit claims, annuities, and maturity benefit claims, the insurance firm is required to initiate the process by intimating the policyholder well in-advance, credit the claim amount to the claimant’s bank account, or send a post-dated cheque to the claimant, before the completion of the due date. In case of delay in settling such types of claims, the insurer will have to pay an interest at 2% over the bank rate, from the date of receipt of the last supporting document or the due date of the payment.
      • With regard to policy surrender, free-look period cancellation, withdrawal of the policy, refund of the proposal deposit, or refund of any outstanding proposal deposit, the insurer is liable to process and pay the same within a period of 15 days from the date of receipt of the request or the last supporting document. If the payout is delayed beyond this period, the insurer will have to pay an interest at 2% over the bank rate.
      • All interest payments that have been referred to above will have to be paid by the insurer suo moto, i.e., without the policyholder/claimant having to make a separate request or demand for the same.

       

      Note: The information mentioned above has been taken from the notification provided by the IRDAI.

    Which Type of Life Insurance should you Buy?

    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.

    Differences between Various Types of Life Insurance Policies

    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
    • NOT TO BE MISSED..

      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

      • Premiums paid towards a life insurance policy are eligible for tax rebates under Section 80C of the Income Tax Act and under Section 80CCC of the same act for pension plans and Unit Linked Insurance Plans (ULIPs).
      • Tax benefits can be claimed up to a sum of Rs.1.5 lakh under Section 80C and Section 80CCC of the Income Tax Act. These benefits can be claimed for premiums that you pay towards maintaining your policy and for premiums that you pay towards your spouse’s or child’s insurance policy.
      • The sum of money that you invest into a life insurance policy, the interest earned by the investment, and the final sum of money that you receive are all exempted from tax deductions.
      • If you have a unit linked insurance plan, you can switch between various funds offered by the insurer. These switches will not be taxed.
      • At completion of the policy tenure, if you are eligible to receive a maturity benefit, this benefit too will be eligible for tax benefits under Section 80D of the Income Tax Act, 1961.
      • A third of the amount that you receive at the time of retirement, via your pension plan, is also eligible for tax benefits.
      • Life insurance providers offer various riders and add-ons that can be attached to one’s base plan. These riders also offer you tax benefits.

       

      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.

      • Increasing the Tax Slab: The current tax slab dictates that any individual earning under Rs.2.5 lakh is exempted from paying tax. However, with the increase in cost of living, more and more people are expecting this limit to be increased as well, at least by a modest Rs.2 – Rs.3 lakh over the existing limit.
      • Extending Tax Benefits under Section 80D: You can claim tax benefits for the premiums that you pay towards maintaining your health insurance policy, up to certain predefined limits. The highest tax deduction that can be availed for health insurance premiums is Rs.30,000. However, this benefit is solely available for senior citizens over the age of 80 years. Requests have been made to the government to extend this benefit to people over the age of 60 years, in order to increase their disposable income and help them reap more tax benefits.
      • Separate Tax Limits for Term Insurance: Most people shy away from purchasing term insurance plans, although they provide a high risk cover at an affordable rate, simply because they do not offer any payouts at maturity. Creating a separate exemption just for term insurance would be a smart way to attract people’s interest.
      • Increasing Fixed Deposit Interest Rates: Fixed Deposits are a safe choice for risk-averse individuals. However, in recent times, the interest rates for FDs have reduced greatly. Thus, increasing the interest rate would be great way to improve the returns of people investing in these avenues.
      • Creating a separate Exemption Limit for Home Loans: As of now, you can claim a deduction of Rs.1.5 lakh for home loan repayment, under Section 80C of the Income Tax Act. However, with the increase in land/home rates over the past few years, people are paying higher EMIs these days. Hence, a separate tax exemption for home loan repayments is extremely desirable.

       

      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.

      1. Market-linked life insurance plans – In case the policyholder dies after committing suicide within 12 months of policy commencement/revival, their nominee will be eligible to get 100% of the fund value of the policy.
      2. Non-linked or Traditional life insurance plans – If the policyholder has died after committing suicide within 12 months of the date of policy commencement/revival, their nominee will be entitled to a death claim amount which is 80% of the total amount paid towards policy premiums.

      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

      • If the policyholder has provided any incorrect or deceptive information on their policy application, then at the time of making a death claim following suicide, the policy will be canceled.
      • In case the death claim following a suicide is made during the policy grace period, the outstanding premium will be deducted from the final sum assured that is payable.
      • If policyholder commits suicide within 12 months from the date of issue of a revived policy, the claim will not be honoured.

    Basic Life Insurance Terms You should Know

    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.

    • Annuity – This is a policy wherein an income is provided at regular intervals throughout the lifetime of the individual.
    • Age limit – Every individual is expected to satisfy certain age-based criteria. Insurance providers will not offer a policy to people who do not fall within the minimum and maximum age limit bracket.
    • Assignment – This is the transfer of the ownership of the insurance policy from the original policyholder to another individual.
    • Proposal/Application form – This is a form which has to filled by the individual looking to purchase an insurance policy.
    • Claim – This is a notice sent to the insurer informing them about a situation wherein they are expected to pay the nominee/beneficiary, as the case may be.
    • Beneficiary – This is the individual who is entitled to receive any benefit from the policy after the demise of the policyholder. A policyholder can choose said person.
    • Coverage – This is nothing but the protection provided by the policy. Each policy accords different cover.
    • Grace period – Policyholders who fail to pay the premium amount on the due date are provided an additional period of time within which they can make the payment. This is termed the grace period. This period varies based on the premium payment mode chosen by the policyholder.
    • Premium – Each individual is expected to pay a certain amount to avail cover under a policy. This is termed the premium. One can view it as the investment one makes to buy the policy.
    • Premium payment modes/frequencies – These are the different options available when it comes to paying the premium. In essence, they refer to the frequency of premium payments. The mode options include: monthly, quarterly, half-yearly, or yearly.
    • Exclusions – An insurance policy does not provide cover in all cases. Insurers cannot be held liable for payment if demise occurs due to certain incidents. These are termed the exclusions.
    • Fiduciary – A beneficiary can choose an individual who can act on his/her behalf. This person is termed the fiduciary.
    • Free-look period – Individuals who do not agree with the terms and conditions of a policy can choose to return it within a specified period of time. This period is termed the free-look period.
    • Participating policy – A participating policy is one which participates in the profits of the insurance company. Such policies earn a bonus when the company registers profits. The quantum of bonus is decided by the Board of Directors.
    • Non-participating policy – This is a policy which does not earn any bonus/partake in the profits of the insurance company.
    • Policyholder – This is the individual who owns the policy. He/she might not be actual individual insured under the plan.
    • Life assured – The life assured individual is the person whose life is insured under the policy. He/she might not be the policyholder, for an individual can purchase a policy in the name of a different person.
    • Paid-up insurance – A paid-up policy is one wherein the death benefit is payable even if future premiums are not paid.
    • Lapse – A policy can be terminated if the premium is not paid. Such policies become lapsed.
    • Maturity Benefit – This is the benefit the insurer pays to the policyholder on completion of the policy term. Not all policies offer this benefit.
    • Death Benefit – This is the amount paid by the insurer to the nominee/beneficiary if the policyholder passes away while the plan is in force.
    • Survival Benefit – This is a benefit paid by the insurer to the policyholder after the completion of a specified period of time. The amount is paid while the policy is active.
    • Surrender – An individual who does not wish to continue with the policy can choose to surrender/terminate it. This can be done only when premiums for a specified period are paid. The insurer might pay a certain surrender benefit based on the premium paid until date of surrender.
    • Maturity date – This is the date on which the policy expires. The maturity amount, if payable, will be paid on said date.
    • Moral Hazards – These are certain conditions which the insurance company takes into consideration before providing a policy. These are related to the personal habits/lifestyle of the individual.
    • Nomination – The process of authorising an individual to receive the financial benefits of a policy is termed nomination.
    • Nominee – The individual who has been nominated to receive the benefits is termed the nominee.
    • Reinstatement – A lapsed policy can be reconverted into a regular policy. This process is called reinstatement. This can be done only if certain terms and conditions are met.
    • Renewal – This is the process whereby the policy continues to be in force after the premium is paid.
    • Rider - A rider is an add-on which can enhance the benefits provided by a base policy.
    • Vesting age – This is the age from which the pension is paid to the policyholder in case of a pension plan.
    • Underwriting – Each insurer evaluates applications based on certain established guidelines. This is called underwriting.

     

    • To be noted on Life Insurance

      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.

    What are the Principles Behind Life Insurance?

    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:

    • Insurable Interest – This basically pertains to the interest an individual is expected to have in a policy. An individual who is looking to purchase a plan for someone else should have a connection with him/her. This could be a family bond, personal relationship, etc. An insurance company can choose to reject an application if there is no insurable interest involved. This is done in order to protect against the misuse of a policy.

    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.

    • Law of large numbers – It is next to impossible to predict the death of an individual. Insurance companies utilise the law of large numbers to generate a death rate which can be applied to a particular sample size. This probability is used by insurers while offering a policy. This law is used to minimise losses and provide a certain level of stability.
    • Good faith – Purchasing an insurance in bad faith is something which is bound to dilute the value of the plan. Insurance, being a contract, should be entered into in good faith, with all details provided honestly. Hiding information can result in consequences in the future. While the buyer is expected to be honest while providing personal information (ailments, lifestyle, etc.), the insurer should explain all aspects related to the policy, ensuring that there are no hidden clauses and that the applicant is made aware of all terms and conditions.
    • Risk/Minimal loss – Insurance companies are legitimate businesses who aim to make profits. This can be extremely hard to do if there is a high risk factor. The principle of minimal risk states that the insured individual is expected to take necessary measures in order to limit damage to self. This could include following a healthy lifestyle, eating light, exercising, quitting smoking, etc.

    Best Life Insurance Companies in India

    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).”

    Statistics of Life Insurance Companies (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)
    LIC 98.31% 100% 1.58 22,75,276.59
    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.

    Why is Life Insurance Important?

    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.

    • Peace of Mind – Peace is something we all run after, with only a few people succeeding in ever finding it. Purchasing an insurance plan can provide a certain amount of peace, knowing that the welfare of your loved ones is taken care of in case of any unfortunate event. This enables one to continue with life, providing an opportunity to live to the fullest without worrying about what the future holds.
    • Financial security – An insurance plan takes care of any financial requirements the nominee/beneficiary could have. One can customise a policy to meet individual expectations. Additionally, a number of us take loans to meet certain expenses. This loan amount needs to be paid back, even if the borrower passes away. The burden of repayment falls onto the family members in such cases. A life insurance plan can provide sufficient funds to repay any amount, ensuring that there are no additional liabilities to take care of.
    • Additional income – Certain life insurance plans are designed to offer an additional source of income to the insured during his/her lifetime. These keep pace with inflation, providing decent returns on the initial investment. One can plan for the future by investing in a life insurance plan today.

    Understanding How Life Insurance Works

    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.

    • Determining one’s need – Before one decides to buy a life insurance plan it is imperative to understand his/her needs. This includes computing the sum assured amount, the type of policy, the premium payment capacity, the term, etc. Once this is determined one needs to decide on the beneficiary who will receive the amount in case of loss of life.
    • Choose the insurer and policy – The next step involves choosing a policy based on one’s needs.
    • Pay the premium – Once the policy is chosen the individual is expected to pay the premium amount. In case of regular premium payment policies, the premium should be paid at the agreed upon frequency.
    • Avail the cover – The insured individual is covered for the period chosen by him/her, subject to payment of the premium.
    • On death – In case of demise of the policyholder/life insured during the policy period, the insurer will pay the sum assured. This amount is paid to the nominee.
    • On survival/maturity – On survival of the life insured until maturity, a maturity benefit might be payable to him/her. This depends on the policy chosen and whether or not it has a maturity benefit under it.

    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.

    Benefits of Buying a Life Insurance Plan

    Purchasing a life insurance plan comes with a range of benefits, with the primary ones highlighted here.

    • Peace of mind – Most of us live in stressful environments, with our lifestyle and health taking a beating due to this. The added burden of what the future might hold is bound to increase this stress, which could lead to illnesses and/or breakdowns. Purchasing an insurance plan provides peace of mind, enabling us to continue with our lives without having to think about what could happen in the future.
    • Protects interests of family – A number of us work to provide the best for our families. A good life insurance plan ensures that the family of an insured individual is financially taken care of even after his/her death. One can purchase a policy to fund the education of a child, provide money for the wedding of a loved one, etc.
    • Savings – While a life insurance plan might not be intended towards inculcating the habit of saving, it can help one save money for the future. Certain policies offer returns which are linked to the market, while other offer bonuses on maturity.
    • Tax benefits – Investing in a life insurance plan helps one save tax. Individuals can avail tax benefits or tax rebates under various sections of the Income Tax Act. While there is a limit on the deductions permitted on premiums paid, the amount received as a death benefit does not attract any tax.
    • Added income – Insurers offer additional benefits to individuals looking to purchase a life insurance plan. A pension plan helps one get regular income after retirement. Similarly, there are other plans which offer periodic payouts.
    • Loan – One can avail a loan against a life insurance plan. This depends on the policy in force and could vary from insurer to insurer.
    • Planning – A life insurance plan helps one plan for the future. One should take various scenarios into account before buying the policy.
    • Offsets liabilities – Any liability which an insured individual has is likely to be transferred to his/her family after his/her death. A life insurance plan offsets these liabilities, providing funds to repay any outstanding debt, ensuring that the family is not plunged into further darkness.

    Points to Remember Before Buying a Life Insurance Plan

    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.

    • Assess your needs – A life insurance plan is unlike other purchases, for it has the power to change the outcome of our lives in certain scenarios. The first thing one needs to do is assess his/her needs. Questions like ‘How many people depend on my earnings?’, ‘What sum of money might be required to fund the education of my children?’, ‘Can I survive on my current income in the future?’, ‘Have I borrowed money which needs to be repaid?’, etc. should be asked in order to determine the purpose of a life insurance plan. Failing to do this could result in one buying a policy which does not cater to his/her needs.

    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.

    • Check your finances – How many times have we ended up buying things we do not use, paying an amount for them and compromising on other important items? It is imperative that we check our finances before buying a life insurance plan, especially if the policy involves payment of premiums at regular intervals. A policy for which the premium hasn’t been paid could lapse, reducing the benefits. Always ensure to choose a policy which is affordable.
    • Choose the right cover amount – The cover amount we choose should match the monetary requirements of our loved ones. Opting for a limited cover could result in hardships for them. Inflation is one parameter which should always be kept in mind before choosing the sum assured. An amount which seems sufficient now might not be sufficient a few years later. Any changes in our lifestyle should reflect in the sum assured to ensure that the quality one is used to remains the same even after the demise of a loved one.
    • Research and compare – Gone are the days when there were one or two insurers offering a limited number of products. Today, India is home to 24 life insurance companies, with each offering multiple plans. It is imperative that we research these plans, finding one which matches our expectations. Research not only helps narrow down the options, but can also help us land a great deal, for certain insurers could offer a plan at extremely affordable rates.

    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.

    • Select an insurer to match your needs – The performance of an insurance company is not sufficient when it comes to choosing an insurance partner. The services offered by them are also important. Select an insurer who has a ‘human touch’ associated with them. This can be useful at the time of a claim. Insurers nowadays not only pay the claim amount, but also provide counselling to help loved ones handle the loss.
    • Choose and understand the policy – Once a policy has been chosen, it is important to understand it thoroughly. A number of us merely go by the word of our agent, buying a policy without truly understanding it. Make sure to go through all the benefits offered, the premium expectation, etc. A policy could lose its value if it is purchased without understanding.
    • Get a second opinion – Getting a second opinion is always a good idea, especially when the purchase can be a life-changing one. The second opinion should be taken from people who are aware of how insurance works. This could be a family member who has previously invested in a life insurance plan, a friend, a colleague, or even neutral websites which compare various products and provide reviews.
    • Understand all terms and conditions – How many of us actually take the time to read the terms and conditions associated with a product we purchase? Most of us tend to skip this part, ignoring points which could be critical to avail the benefits associated with the item. Doing the same when it comes to buying an insurance plan can come back to haunt us. An insurance company can deny a claim for various reasons, which could result in our investment becoming null and void. Never sign off on a policy without reading these minute details.
    • Continue paying premiums – Once a policy is bought, it is imperative to maintain it. This means that premiums should be paid regularly. Failing to do so will result in the lapse of the policy, with the insurer not offering a cover/providing limited cover in such cases. It is a good idea to constantly check the policy to ensure that it is active at all times.

    How much Insurance should I Buy?

    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.

    • Current income – The premium payments begin immediately after the policy is purchased. This implies that the current income should be sufficient to handle the onus of these payments. Experts state that the insured amount should be anywhere between 10 to 12 times the gross annual income of an individual. So if your gross annual income is around Rs.5 lakh, a good sum insured could range from Rs.50 to Rs.60 lakh.
    • Age – The age of a policyholder/insured plays a key role in determining the sum insured which might be required. An individual in the higher age bracket (50+ years) might have different commitments compared to an individual who is in his/her thirties. The more the responsibilities one has the more the cover should be. Additionally, an individual with a number of years of work experience might be in a position to afford a higher premium, which results in an increased sum assured.
    • Current expenses – The expenses should be taken into consideration before buying the policy. There is no point of purchasing a plan if one finds it hard to pay the premiums on account of existing financial obligations. Deduct the expenses from the annual income in order to determine the actual budget for an insurance plan. One should choose a sum assured which is around 5 to 6 times the total income plus all miscellaneous expenses.

    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.

    • Inflation – Inflation is a reality we cannot ignore. We see the price of basic essentials going up each year, with these likely to increase in the future as well. Make sure that the insured amount factors inflation as well. Choosing a sum assured based on the current costs might result in the amount being inadequate in the future. Ensure that inflation at the rate of 5-6% per year is adjusted while the sum assured is being decided.
    • Family requirements – Securing the future of our family is one of the main reasons why most of us buy an insurance plan. One should always keep the requirements of the family in mind while choosing the sum assured. The number of children one has, their age, their future educational needs, the income of a spouse, needs of parents, etc. should all be taken into account. For example, an individual with children aged 6 and 8 years might think of taking a sum assured which can cater to their educational needs in the future. Similarly, if one has a working spouse/an additional source of income, he/she can choose a relatively lower amount when compared to an individual who is the sole breadwinner of the family.
    • Future obligations – These could include repayment of loans, cost of medical treatments for parents, etc. The insured amount should be sufficient to take care of any expense which might arise in the future.
    • Other savings/investments – An insurance plan, though designed only to provide security, can also offer decent returns in some cases. Individuals who have other modes of investment can choose a policy which offers pure insurance, whereas those without any other investment might be forced to choose an investment cum insurance scheme. This has a bearing on the premium one pays, for a pure insurance plan can be purchased at a lower premium when compared to other plans.

    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.

    Is there a Right Time to Buy Life Insurance?

    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.

    • Health – The healthier an individual is the less likely it is for him/her to fall ill. A healthy lifestyle is known to increase the longevity of people, with insurers looking at this before providing a policy. Individuals with medical issues might be expected to undergo tests, with insurance providers having the right to deny an application based on the outcome of these tests. The healthier an individual is, the better are his/her chances of getting a good deal on the premium amount.
    • Finances – Individuals with an alternate source of income might think that a life insurance plan is not needed for them. One should consider the current financial situation and future obligations to make sure that a life insurance plan is utilised effectively. As one ages, there are chances for debt to increase, which might prevent one from spending on a life insurance plan. On the other hand, buying a policy when there is no debt can help one utilise resources more effectively.

    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.

    Life Cycle of Life Insurance

    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.

    • Early age/No insurance – The first stage corresponds to the early lifetime of an individual. This phase can be considered to be from the time of birth till the time one reaches an age of 18/19 years. Here, there are no responsibilities/liabilities one has to deal with. On the contrary, this is the period when someone else is spending money on the individual. One can typically say that there is no need for life insurance during this period.
    • Youth/limited insurance – This is the age when most individuals begin to venture out. They complete their education, get their first job, stepping into a new phase of life. The liabilities and responsibilities in this phase are limited, meaning that only a limited minority of people in this age bracket opt for life insurance. One could assume this bracket to be in the range of 20 to 25 years.
    • Middle age/High insurance – This is the phase when life truly begins to change. Responsibilities increase for most people during this period. One might get married, have children, buy a home, etc. These mean that there are people dependant on him/her. A life insurance plan becomes essential during this stage of life, with most people purchasing it as and when their responsibilities towards others increase. This period typically lasts for around 20-25 years.
    • Old age/limited insurance – This is a period when responsibilities reduce. Their children are grown up and are capable of handling themselves, most loans are cleared, and the expenses have reduced. The need for insurance comes down, but this does not mean that it can be avoided. There are still a few requirements which need to be met, which can be done by the policy.

    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.

    Which Documents should I Submit in Order to Purchase Life Insurance?

    Insurance providers require a few basic documents in order to process an application. These include:

    • ID proof – Most insurers insist on a government approved photo ID proof as part of their KYC process. This could be a passport, driving license, Aadhar, etc.
    • Address proof – This could be a rental agreement, utility bill, voter ID card, etc. The insurance company will use this address for all communication associated to the policy.
    • Age proof – An individual is expected to provide proof of his/her age. As stated earlier, the age of an applicant has a huge bearing on the premium. Accepted documents include PAN card, Aadhar, driving license, Voter ID, etc.
    • Proof of income – The proof of income is required to check whether an individual can afford the premium for a particular sum assured. One could submit either their payslip, bank account summary, Form 16, or their IT return as proof.
    • Recent photograph – A recent passport size photograph is needed in some cases.
    • Medical certificate – Individuals over a certain age might be asked to undergo medical tests. A medical certificate will be needed in such cases. The certificate should be issued by competent doctors. Each applicant might not be asked to undergo medical tests, with this varying from case to case.

    Note that an insurer could ask for other documents in order to process an application. These could be related to the nominee/beneficiary.

    Is it Important to Compare Life Insurance Plans Online?

    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.

    Popular Life Insurance Riders Offered in India

    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:

    1. 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.

    2. 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.

    3. 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.

    4. 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.

    5. Guaranteed Insurability Rider – There could be instances where an insured individual feels the need to increase the original cover provided by a life insurance plan. This could be on account of changes in his/her personal life. This rider enables one to increase the initial cover amount without having to undergo any medical examinations. Almost all insurers in India offer this rider option.
    6. Spouse Insurance Rider – This rider, as the name suggests, covers the spouse of the insured under the same plan. It enables one to protect his/her partner without buying a new policy, saving time, effort, and money in the process. The rider would enable a policy to continue for the entire period even if the original policyholder passes away.
    7. Major Surgical Assistance Benefit Rider – This is similar to the Critical Illness Benefit Rider, but is limited to providing financial cover in case of a major surgery. This basically caters only to emergency surgical requirements, with no cover provided for any existing illness/injury.
    8. Family Income Benefit Rider – This rider can be taken by individuals who wish to protect the financial well-being of their family in case of any untoward incident. The rider pays a certain sum of money every month for a specified time duration if the policyholder passes away while the plan is active. This income can be used by the family to meet their generic expenses.

      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.

    How Do I Calculate the Premium for My Life Insurance Plan?

    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.

    Can I Cancel My Life Insurance Plan?

    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.

    What are the Do’s and Don’ts When it Comes to Life Insurance?

    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.

    Do’s Don’ts
    While buying the policy
    • Provide accurate information
    • Fill all columns
    • Clear all doubts with the insurer. Take help if needed
    • Select the policy term, policy type, premium payment mode, etc.
    • Provide information pertaining to the nominee
    • Do not hide any information. This includes past medical history, current ailments, etc.
    • Sign blank proposal forms
    • Ignore any doubts
    After buying the policy
    • Follow-up with the insurer
    • In case there is no communication from the insurer it is important to write to them about the same
    • Provide any additional documents, if asked by the insurer
    • Check the policy bond and understand all conditions associated with it
    • Wait beyond two weeks to receive communication from the insurer
    • Ignore to read the terms and conditions
    Policy maintenance
    • Pay all premiums on time
    • Ensure payment reaches the insurer
    • Intimate the insurer if there is a change in communication address
    • Miss payments
    • Wait for the insurer to send a notice for missed premiums
    In case of loss of policy
    • Contact the insurer immediately
    • Apply for a duplicate policy
    • Ensure that the duplicate copy has the same rights/features as the original
    • Ignore the loss
    In case of a claim
    • Inform the insurer
    • Provide all documents to the insurer
    • Assist the insurer in the process
    • Wait for a certain period to inform the insurer
    • Provide fake documents

    Impact of GST on Life Insurance

    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
    Term Insurance 15% 18%
    ULIPs 15% 18%
    NB Premium 3.75% 4.50%
    Renewal Premium 1.85% 2.25%
    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:

    • Pradhan Mantri Jeevan Bima Yojana
    • Pradhan Mantri Jan Dhan Yojana
    • Pradhan Mantri Vaya Vandana Yojana
    • Insurance schemes notified by state governments/central government
    • Aam Aadmi Bima Yojana
    • Janashree Bima Yojana

    How Much Does it Cost to Purchase and Maintain a Life Insurance Plan?

    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:

    • Age – The lower the age of an individual the cheaper the premium. Each additional year can increase the premium amount. Buying a policy at a younger age can help one enjoy the cover without spending more.
    • Sum assured – The premium amount has a direct correlation to the cover chosen by an individual. The higher the sum assured, the higher the premium.
    • Habits – The personal habits of an individual can either increase or decrease the premium. For example, non-smokers are eligible for discounts which is bound to reduce their costs, whereas those who smoke on a regular basis will end up paying more. Similarly, the nature of one’s job can also have an impact on the premium. Individuals in risky fields will be required to pay more compared to those who work regular jobs.
    • Plan type – The premium for different plans can vary. An individual who wishes to buy a whole-life policy would end up paying a lot more than he/she might have to pay for a limited term policy. Similarly, if one is purchasing a ULIP he/she might pay a differential amount compared to a pure protection plan.

    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.

    How Do Insurers Compute the Premium for Life Insurance Plans?

    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:

    • Rider premium – This is the amount a policyholder is expected to pay to avail a rider. This sum varies based on the rider chosen, and is closely linked to the premium for the main policy.
    • Administration fee – Almost all insurers levy an administration fee for providing the policy. This could be a certain percentage of the premium amount a policyholder pays. Alternately, a few insurers have a fixed fee for their services.
    • Premium allocation fee – Associated with ULIPs, this charge is levied before the insurer invests the premium into units. A certain percentage of the premium is deducted for this. The units allotted are adjusted accordingly.
    • Fund management charge – This amount is charged by the insurer for managing the fund of a policyholder. This is computed on the basis of the assets under management and can range between 1 and 1.5% of the investment.
    • Fund switching fee – Policyholders have to option to switch between funds when they choose a ULIP. Insurers accommodate this transfer but charge a fee for the same. This amount differs for different insurers and can range between Rs.100 to Rs.500.
    • Mortality charge – This is an amount charged for offering death benefits to the insured.

    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.

    How Can You Save on Life Insurance Premium?

    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.

    • High sum assured rebate – Almost all insurance companies provide a rebate for high sum assured. The higher the sum assured the higher the rebate. This rebate is offered primarily due to the reason that an increase in the sum assured results in reduced servicing costs associated with each unit of this amount, helping the insurer earn more profit.
    • Online payment rebate – Paying the premium online reduces the physical paperwork, helping a company save money. Certain insurers provide incentives for online payment, saving effort when it comes to physical collection of cash.
    • Rebates on premium payment frequency – Individuals who choose to consolidate their premium payments are likely to receive a rebate on the sum they pay. This is on account of reduced costs associated with processing the premium. For example, the insurance company will have limited processing costs for an individual who pays the policy annually when compared to someone who pays the premium each month. One can also choose to pay a single premium and get a higher rebate.
    • Pay premium on time – Delaying a premium payment can result in the policy getting lapsed. Reinstating/renewing such policies comes at a cost, for insurance companies charge an interest on the premium amount. Paying the premium on time can help one avoid this additional expense.

    Note: The rebate offered can vary and is at the discretion of the insurer.

    Payment of Life Insurance Premium Online

    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.

    1. Log on to the official website of the insurance company from whom the policy was purchased.
    2. Navigate to the online premium payment section and enter the policy number.
    3. Mention personal details like the date of birth, name, or contact number (as applicable) for identification.
    4. Choose the mode of payment. Insurers accept online payment via credit cards, debit cards, net banking, or online wallets.
    5. Confirm amount and complete payment. Once done, a message is sent out confirming the same.

    How to Revive a Lapsed Life Insurance Policy

    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:

    • Time since lapse: Insurance companies usually specify the number of years within which you can revive your lapsed policy. Thus, make sure to check your policy brochure or contact your insurer’s customer service team to find out if your lapsed policy can still be revived. In general, insurers give a two-year period to policyholders to revive their policy. This revival period may vary based on the plan and the insurer.
    • Payment of due premiums with interest: If your policy can be revived, you will have to pay all unpaid premiums, from the date of the first unpaid premium, with the applicable interest to the insurer. Thus, at this stage, you will have to visit the policy-servicing branch or contact the insurer’s customer service team for the revival quote. Certain insurers will also levy a penalty charge, which you will have to pay at the time of reviving your policy.
    • Submitting a certificate of good health: If you have been uninsured for a certain period of time, your insurer might require you to submit a certificate of good health or might even want you to undergo a medical screening. Post this, you can submit this medical report to your insurer.  

    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.

    Are there any Differences between Life Insurance and General Insurance?

    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.

    Who is a Contingent Beneficiary?

    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.

    What is the Procedure to File a Life Insurance Claim?

    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.

    1. On demise of life assured – It is imperative to initiate the claims process in order to avail the benefits provided by a policy. This can be done by following a few simple steps:
      • Intimate the insurance provider immediately after the policyholder’s death. Intimation could be done by either the nominee, a relative, or the agent from whom the policy was purchased.
      • Fill and submit the claim form. This form can be downloaded from the official website of the insurer/could be availed by contacting them for the same.
      • Provide relevant details pertaining to the policyholder and the policy. These include the policy documents, the death certificate, assignment/reassignment deeds (if applicable), details of the nominee, discharge form, etc.
      • Select the mode of payment.

      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.

    2. On maturity – In cases where a policy offers a maturity benefit it is important to submit a claim for the same. This can be done by following a few basic steps:
      • Each insurer informs the policyholder before the policy maturity date. A discharge voucher is provided to the insured.
      • This discharge voucher needs to be signed by the policyholder. Before signing, one should check and confirm the maturity amount which is being offered.
      • The signed discharge voucher needs to be sent to the insurer. In addition to this, the original policy document should also be submitted.

      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.

    Life insurance Frequently Asked Questions (FAQs):

    1. How do I choose the best life insurance plan?

      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.

    2. Why do term insurance plans offer higher life coverage compared to other types of life insurance plans?

      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.

    3. Is it safe to buy a life insurance plan online?

      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.

    4. When does my cover begin?

      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 .

    5. Are there any tax benefits offered on life insurance plans?

      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.

    6. How do I choose the tenure and sum assured for my 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.

    7. What are premiums?

      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.

    8. Can I pay the premium for my policy in instalments or am I expected to pay a single 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.

    9. What is a ‘bonus’ in life insurance?

      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.

    10. How do I know if my insurance plan is eligible for a bonus?

      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.

    11. What are the different kinds of bonuses provided by life insurance companies?

      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.

    12. What is the difference between terminal, interim, and reversionary bonus?

      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.

    13. What are the differences between a participating and nonparticipating policy?

      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.

    14. How do insurance companies compute the bonus amount?

      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.

    15. What are riders and how can I buy them?

      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.

    16. My policy mentions a free-look period. What exactly does this mean?

      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.

    17. What happens if I cancel my policy during the free-look period?

      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.

    18. What happens if the premiums are not paid during the grace period?

      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.

    19. What is the surrender value of a life insurance plan?

      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.

    20. How do insurance companies calculate the surrender value of an insurance plan?

      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

      =Rs.30,000

      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.

    21. My policy states something called assignment. What exactly does this mean?

      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.

    22. What are the important points I should consider before buying a life insurance plan?

      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.

    23. I have been asked to undergo a medical test before I can purchase the policy. What medical reports should I submit to avail a life insurance plan?

      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.

    24. Can I avail a loan through my life insurance plan?

      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.

    25. How can I determine if the agent who is selling the life insurance plan to me is authorised?

      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.

    26. My insurance agent has asked me to pay the premium amount directly to him. Is it safe to do so?

      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.

    27. Is it better to buy a life insurance plan through an agent or should I buy it online?

      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.

    28. How does an insurance company ascertain individual risks before they sell a policy?

      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.

    29. How often will I have to pay the premium amount?

      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.

    30. Can I make changes to my insurance plan?

      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.

    31. What is meant by premium redirection?

      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.

    32. What is a graded premium life insurance plan?

      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.

    33. Do life insurance plans cover only natural death or do they also cover death by accidents/illnesses?

      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.

    34. How important are proposals and all the disclosures that are made in them?

      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.

    35. What are the formalities involved when submitting a maturity claim?

      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.

    36. What are settlement options?

      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.

    37. How do I get the tax policy statement?

      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).

    38. Why does the premium increase with age?

      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.

    39. What are the documents my nominee should furnish in case of my death during the policy term?

      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)

      Discharge form

      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.

    40. Can I find a policy that pays me money during the policy term?

      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.

    41. Is it better to buy a life insurance plan at a young age?

      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.

    42. Can I get a life insurance plan through my company?

      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.

    43. Can I buy an insurance plan for my parents?

      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.

    44. Is it possible for senior citizens to buy life insurance?

      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.

    45. Will my family have to pay tax on any life insurance payout?

      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.

    46. How long does it take for a policy to build cash value?

      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.

    47. Who is the claimant with regards to a life insurance plan?

      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.

    48. What is modified death benefit?

      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.

    49. Will the insurer pay the beneficiaries if the insured dies in an accident which was caused due to him/her being intoxicated/drunk?

      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.

    50. Can life insurance payments be released to beneficiaries without going to probate?

      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).

    51. What is a premium quote? Is it necessary to request for a quote before investing in an insurance plan?

      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.

    52. Are there life insurance plan options available for children?

      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.

    53. Should I invest in a Pension/Retirement Plan or a ULIP at the age of 40 years?

      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.

    54. Are premiums fixed by the IRDAI or do they vary from insurer to insurer?

      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).

    55. Will I receive any discount if I purchase my insurance plan online?

      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.

    56. On what basis is the premium amount calculated?

      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.

    57. What does a life insurance policy not cover?

      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.

    58. Can I increase my sum assured?

      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.

    59. What is the duration of the grace period and can it be extended?

      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.

    60. Will my term insurance plan cover death that occurs abroad?

      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.

    61. What is the claim settlement ratio?

      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.

    62. I am an NRI. Can I purchase a life insurance policy from an Indian insurance provider?

      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.

    63. I have recently lost my original policy document. What should I do?

      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.

    64. In case my nominee passes away before me, who will receive the death benefit?

      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.

    65. Will I get a full premium refund if I cancel my policy before making any claims?

      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.

    66. What is meant by the Grievance Solved Ratio?

      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.

    67. Do term plans have an investment component?

      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.

    68. What is a Term Insurance Rider?

      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.

    69. Which are some of the lesser known riders available with a life insurance policy?

      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.

    70. How can I calculate the premium for my life insurance plan?

      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.

    71. What are some of the components included in the cost of life insurance premiums?

      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.

    72. Are there any ways I can save on my life insurance premiums?

      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.

    73. Why is it necessary to check the solvency ratio of an insurance company?

      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.

    74. How do I decide how much life cover to purchase?

      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:

      • Current income and liabilities
      • Your current age
      • Inflation
      • Needs of your dependents
      • Financial goals for the future
      • Savings, investments, returns from various avenues
    75. I am a 50-year old individual with a good number of liabilities. Should I opt for a term insurance policy?

      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.

    76. Will I receive a discount if I pay my premium online?

      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.

    77. What is meant by ‘traditional life insurance plans’?

      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.

    78. What is the premium payment term (PPT)?

      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.

    79. In case the nominee is a minor at the time of the policyholder’s death, whom will the claim amount be paid to?

      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.

    80. What should one do in case he/she is dissatisfied with the claims decision communicated by the insurer?

      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.

    81. Can an individual with a pre-existing disease purchase a life insurance plan?

      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.

    What's next?

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      • Compare Life Insurance Quotes
      • 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!

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      • 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.

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      • 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.

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      • 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.

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      • 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.

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      • 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.

    Articles About Life Insurance

    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:

    • Death Claim: A death claim will have to be raised by the nominee upon the policyholder’s death. Firstly, as a nominee, you will need to intimate the insurer in writing about the upcoming claim. Post this, you will need to submit the actual claim form with relevant supporting documents to the insurer. The insurer is required to pay the sum assured within a period of 30 days. In case any further investigation is required, the insurer will have to complete this and settle the claim within 6 months.  
    • Maturity Claim: If the policyholder survives until completion of the policy tenure, a maturity claim can be filed. In this case, the insurer will send the policyholder a policy discharge form. The policyholder will have to fill this form and submit it to the insurer with all required documents. The insurer will verify the claim and pay the maturity sum assured.
    • Rider Claim: The settlement for a rider claim will vary as per the terms and conditions of the rider. For example, for a critical illness rider, the benefit will be paid at diagnosis of the disease. Whereas, for certain other types of riders, the payout will be offered along with the death benefit.

    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.

     

    Time to review your life insurance policy? Here’s what you should check

    A life insurance policy can be truly invaluable in providing financial security to your dependents in case of an unfortunate eventuality. While purchasing a life insurance policy is extremely important, it is equally important to review your life insurance policy from time-to-time.

    It is likely that your financial requirements, goals, and premium payment ability are quite different now from what they used to be when you first purchased the policy. Thus, it is essential to revisit your policy frequently to ensure that you and your family still have an adequate level of coverage. One of the best ways to determine whether your insurance policy is still working for you is by asking yourself the following questions:

    • Do I have the right type of life insurance product?

    Life insurance companies offer a number of insurance products to customers such as term insurance plans, whole life plans, ULIPs, endowment plans, child insurance plans, etc. Each life insurance plan offers certain unique benefits that are specially designed to meet certain coverage and financial needs of the policy buyer. Each type of life insurance product has its own benefits. Thus, you will have to make sure that your life insurance policy still meets your needs.

    • Is the sum assured sufficient for my family?

    The sum assured is a certain amount of money that will be paid to the nominee in case of the policyholder’s untimely death. If it’s been a while since you purchased your policy, it is advisable to check if the sum assured is still sufficient to meet the needs of your dependents.

    • Are the payouts offered by the plan still in-line with my financial needs and goals?

    The type of payouts offered to you will vary based on the type of life insurance product you choose. For example, a term plan only provides a death benefit. In comparison, an endowment policy can provide a death benefit or a maturity benefit based on the eventuality. Thus, it is essential that you check if the payouts offered to you are still in-line with your long-term financial goals.

    • Am I being charged a fair premium for the policy?

    The premium payable is linked to several factors including your age at entry, sum assured opted for, riders chosen, policy tenure, etc. Further, the premium charged will vary from insurer to insurer. Thus, it is essential that you check if the premium that you currently pay for your policy is a fair price or if you are being overcharged.

    A life insurance policy is a must-have at all times if you wish to ensure that your loved ones are financially secure, even in case of an unfortunate eventuality. Given how important a life insurance policy can be, it is highly recommended that you review your policy regularly to ensure that it still meets your needs.  

     

    Mutual funds that offer life cover

    Certain asset management companies like ICICI  Prudential, Aditya Birla Sun Life, etc. offer a life insurance cover for free if customers opt for certain specific mutual fund/systematic investment plan (SIP) schemes. Listed below are certain key features of such life insurance covers:

    • These life covers usually come with a waiting period between 60 days and 90 days, during which time claims will be rejected.
    • Death due to pre-existing illnesses is not covered in most cases.
    • The amount of life cover that is offered will usually be a multiple of the SIP amount and will vary based on one’s investment tenure.
    • Asset management companies that provide such schemes are likely to have an eligibility criteria for these life insurance covers.

     

    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.

    News About Life Insurance

    • Free life cover with SIP investments launched by AMCs

      Fund houses like Birla Sun Life Mutual Fund, ICICI Prudential AMC, and Reliance Mutual Fund have launched a feature which allows investors to be provided with life insurance. The cover provided is available to investors of only some of the selected schemes under these fund bodies and is directly related to the monthly SIP investments made by the policyholder.

      Customers must not be less than the age of 18 years and more than the age of 51 in order to receive the insurance cover. Once the customer crosses the maximum age of entry, the plan ceases to exist.

      The SIP registered by the policyholder must be for the duration of three years and above. The cover provided is 10 times the SIP made by the investor for the first policy year which increases up to 50 times the SIP made from the second year and 100 times the SIP made from the third year.

      If the investor exit the policy before the completion of three policy year, the scheme will expire immediately. However, if he/she exits after completing three policy years, the cover provided will be equivalent to the value of the investment made via SIP for the investors of ICICI Prudential AMC.

      One of the merits of this plan is that an investor receives insurance for practically no cost and in order to increase his/her cover, he/she will have to increase the SIP.

      One of the biggest drawbacks is that that this plan is not available under all plans and hence an investor gets limited choices in the selection of funds.

      18 June 2018

    • Life insurers see 9% increase in new premium collection for May

      Life insurance companies registered a 9% increase in new premium collection for the month of May, as per data released by IRDAI. The new premium collected during the month stood at Rs.12,838.24 crore, as compared to Rs.11,801.01 crore in the same month last year.

      LIC, the largest insurer in the country registered new premiums worth Rs.9,204.88 crore, a 9.49% increase compared to May 2017.

      The other insurance companies collectively registered new premiums worth Rs.3,633.36 crore, a 7.04% increase compared to the same period last year.

      While SBI Life recorded new premiums worth Rs.641.28 crore, Max Life’s new premium collection stood at Rs.235.11 crore during the month. While most insurers registered an increase in this value, ICICI Prudential Life saw a 24.51% dip in its new premium collection, with the amount being Rs.548.56 crore this May.

      Sahara Life saw its new premium collection being impacted the most, with the company registering premiums worth Rs.2 lakh for the month, a 98.17% drop compared to May 2017.

      14 June 2018

    • Credit- enhancement fund worth Rs.500 crore to be launched by the Government

      The Government of India is planning to launch a credit-enhancement fund worth Rs.500 crore in July. The proposal for the fund which was first made in the fiscal year 2016-17 aims to boost infrastructure investments by pension funds and insurance.

      The fund is expected to function as a non-banking financial company (NBFC) and is expected to receive financial support from Life Insurance Corporation (LIC) and India Infrastructure Finance Company Ltd. (IIFCL). China based investment firm Asian Infrastructure Investment Bank (AIIB) will be the owner of 10% stake in the fund. IIFCL will sponsor the fund initially and will hold 22.5% stake in the credit-enhancement fund. State run banks like Bank of Baroda and SBI will also have stakes in the credit-enhancement fund.

      The fund is expected to improve the infrastructure segment as only $110 billion is being poured instead of the $200 billion which has compelled the experts to label India as infrastructure deficit nation.

      13 June 2018

    • Dream Builder Plan launched by IDBI Federal Life Insurance

      IDBI Federal Life Insurance announced the launch of Dream Builder Plan, which is a non-participating, non-linked life insurance policy.

      The person who has purchased this plan can choose the policy term and the cover amount he/she would like to receive as the Maturity Sum Assured (MSA). He/she will have to pay premiums for the first 8 policy year, post which he/she will receive the Guaranteed Annual Payouts which is actually a part of the MSA in the last three policy years. In short, the customer will only need to pay premiums for the first 8 policy years and be covered for the rest of the policy term.

      In case of death of the insured, the nominee will receive the death benefit and he/she will not be required to pay any more premiums and will receive the benefits despite the policy continuing to be in force. The same will be applicable in case the insured suffers from any health condition or critical illness. The policy will continue to be in force and the insured will receive the benefits until the policy expires.

      13 June 2018

    • State Bank of India Life rolls out the Grameen Bima scheme

      For those in the country who wish to offer themselves, loved ones or family members financial protection, they can opt for the recently rolled out Grameen Bima scheme offered by State Bank of India’s Life Insurance sector. Catering to those from underprivileged backgrounds, the SBI Grameen Bima scheme gives policyholders the privilege of availing a whole-life insurance policy via a single premium. In addition, the Grameen Bima scheme comes with tax benefits as well as with the benefit of no requirement for a medical examination when buying the life insurance policy. Available for individuals as well as families, the minimum eligibility for the scheme is 18 years and the maximum is 50 years of age. The policy has a tenure of 5 years - which can be paid in a single premium. The premium amount for the Grameen Bima scheme os a minimum of Rs.300 and a maximum of Rs.2,000 - in multiples of Rs.100. The minimum sum assured for the SBI Grameen Bima scheme is Rs.10,000 and the maximum is Rs.50,000. Coming with a death benefit in case of an eventuality involving the policyholder or those insured, the policy does not have any surrender or maturity benefit at the end of the tenure of the scheme.

      12 June 2018

    • Telangana State Government planning to include farmers under its insurance scheme

      The Telangana State Government is planning to extend its Rs.5 lakh life insurance scheme to cover its farmers as well. Etela Rajender, the finance minister, was reported saying that the farmers in Telangana undergo a lot of hardships, leading to unhappy lives working in their farms. All this is done without being covered under the government’s life insurance initiatives, which has motivated the government to consider including the farmers under their insurance schemes as well. The government is also planning to include toddy tappers and beedi workers under the same plan. In relation to this, the Telangana government has also been requesting the Central government of India to link the Employment Guarantee Scheme (EGS) with agriculture works as well.

      9 June 2018

    • Modi looks to launch welfare plan for 500 million workers in India

      Narendra Modi, the Prime Minister of India, is looking to launch a new welfare plan for about 500 million workers in India, ahead of the 2019 general elections. The Government of India has drafted a bill to extend the benefits of this plan to all workers by merging around 15 federal labour laws into one.

      The government is planning to present the bill in July in the upcoming Parliament session. This plan, once implemented, will be one of the largest mass benefit programs in India. The Government of India is planning to pilot this plan in 6 districts in India.

      6 June 2018

    • Warburg to buy a stake in IndiaFirst Life Insurance

      A private equity company, Warburg Pincus LLC, is shortly going to buy a 26% stake in IndiaFirst Co. Ltd. from Legal and General Plc. IndiaFirst Co. Limited is a union of Bank of Baroda Ltd. (44%), Andhra Bank (30%), and Legal and General (26%). The sources that revealed the expected deal said that it would be finalised in IndiaFirst’s board meeting held on Thursday. Warburg is said to pay Rs.710 crore for the 26% stake. The life insurance company, IndiaFirst, offers a range of life products such as savings plans, retirement plans, education plans, and term plans. Other companies that were interested in the deal are Manulife Financial Corp, Ergo International AG, Fairfax, and General Atlantic LLC.

      2 June 2018

    • Max Life Insurance registers 31% growth in value of new business for FY17-18

      Max Life Insurance, a leading private-sector life insurance firm, has registered an individual adjusted first-year premium collection of Rs.3,215 crore, thereby achieving a growth of 22% in FY18. During the same period, the company’s gross written premium increased by 16% to touch a sum of Rs.12,501 crore. Similarly, the insurer’s renewal premium registered a 15% growth to touch Rs.8,152 crore. The shareholder profit of the insurance company was Rs.528 crore, after tax.

      The insurer’s new business premium collection, for both individual and group businesses, was Rs.4,349 crore, which was a 19% growth. The solvency ratio of the insurer touched 263%, while the conservation ratio was 90%. The insurer’s claims paid ratio increased to 98.26%, against 97.81% that was reported in FY17. Thus, the company reported impressive growth in the previous financial year.

      1 June 2018

    • Non-life insurers increase their gross premium to Rs.13,881 crore in April

      To confirm the fact that the insurance penetration in the country is increasing by the year, according a report, the gross premium for non-life insurers increased in the month of April to Rs,13,880.74 crore to be exact -an increase of 14% over the same month of April last year. Out of those staggering numbers, the gross written premium amounts to Rs.12,980.60 crore. The report that was compiled by the IRDAI of 33 non-life insurance companies, 6 of those companies are private insurers while 2 are public sector insurers while the other 25 are general insurers. The gross written premium for the private sector companies increased by a little more than 29% to Rs.612 plus crore against Rs.474 plus crore in April the previous year. For the 2 public sector insurers, Agricultural Insurance Co of India and Export Credit Guarantee Corporation of India, they collected premiums worth Rs.74.49 crore in April, from Rs.88.26 crore in April the previous year - a drop of 15%.

      28 May 2018

    Get More News on Life Insurance

    Life Insurance Reviews

    • SBI Life Life Insurance
      "Benefits are good"
      0.5 5.0/5 "Blown Away!"
      I have taken a life insurance policy which is beneficial to my nominee after my death. This policy is taken through the government and I need to pay my premium in my account. The amount of 355 is debited and after which sent to SBI life for the same.
      Was this review helpful? 0
      , ludhiana
      Reviewed on Jun 14, 2018
    • LIC Life Insurance
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a mediclaim insurance through the government subsidy. I need to pay a premium of Rs. 12 per year. The sum assured is for two lakhs. I need to renew the policy every where. The government in turn gets my insurance through LIC. Good overall.
      Was this review helpful? 0
      , ludhiana
      Reviewed on Jun 14, 2018
    • Max Life Insurance
      "Benefits are good"
      0.5 5.0/5 "Blown Away!"
      I have a ULIP policy with Max Life. The process to buy this policy is good and there are no hassles in the process. The tenure is for 20 years. The premium is on a yearly basis. It is a simple normal policy. The sum assured and benefits are good. The payment mode is also convenient.
      Was this review helpful? 0
      , sonipat
      Reviewed on Jun 14, 2018
    • HDFC Life Life Insurance
      "Good features overall"
      0.5 5.0/5 "Blown Away!"
      HDFC Life is good in the overall benefits and services. I have taken a life insurance. The tenure is for ten years and there is a lock in period for five years. After the fifth year, I do not have to pay a premium. After the maturity term I would get my sum assured. The premium is normal and I pay it on a yearly basis.
      Was this review helpful? 0
      , rupnagar
      Reviewed on Jun 14, 2018
    • LIC Life Insurance
      "Good. Can be more beneficial"
      0.5 4.0/5 "Great!"
      LIC is also good overall in their policy benefits. I have taken a money back plan. There is a bonus I would get every five years and the tenure is for 20 years. The payment mode is also convenient for me. They could improve on the benefits in their policies.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 13, 2018
    • Max Life Insurance
      "Beneficial policy"
      0.5 5.0/5 "Blown Away!"
      I have taken a term insurance with Max Life. The policy is beneficial and there are good plan benefits and the sum assured as well. The tenure is for 35 to 40 years and the company also has a normal premium. The payment options are also convenient to pay my premiums.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 13, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Services are good"
      0.5 5.0/5 "Blown Away!"
      My overall experience with Bankbazaarinsurance.com was good. The customer support team was on time to connect with me and inform me the details. The website is also good and hassle free and in all there are no issues to buy the term insurance.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 13, 2018
    • Aegon Life Life Insurance
      "Satisfied. Premium can be lower"
      0.5 4.0/5 "Great!"
      I have taken a term insurance from Aegon. It is a iTerm Basic Life Cover plan. The process was convenient and I received the soft and hard copy too. The tenure is for 19 years and the sum assured is for 1,00,00,000. The premium frequency is on a monthly basis. But they are high on the premiums.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "Good features"
      0.5 4.0/5 "Great!"
      I have two other policies with LIC. I am not sure of the name. They are also beneficial in the benefits and the returns. The tenure for the policies are of 21 years. I would get my benefits only after the maturity term. The customer support is good overall.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "More than satisfactory"
      0.5 4.0/5 "Great!"
      The payment options are many at LIC, which is very convenient to pay my premiums. I have taken two Child plan policies. The benefits and the sum assured in these policies are good. The tenure is for 20 years. After the 18th years I would get an amount. Again I would get the balance the after the maturity term.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "Good benefits"
      0.5 4.0/5 "Great!"
      I am comfortable with the services with LIC. The experience is good and there are no hassles in the overall process. The customer support and response is also satisfactory. I have taken a money back policy. Every five years I would get a bonus and I would also be provided with the sum assured after the maturity term.
      Was this review helpful? 0
      , kanchipuram
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "Experience is good"
      0.5 4.0/5 "Great!"
      My other policy with LIC is the endowment policy. I have taken this policy, because it is very beneficial. The sum assured is good and also the benefits. I would get double the sum assured at the time of maturity. The payment options are convenient.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "Process is good"
      0.5 4.0/5 "Great!"
      I have a life insurance policy with LIC. It is a money back plan. The services are good and there are good benefits and the sum assured is also satisfactory. There is a bonus I would get after every five years and after the maturity term of 20 years I would get the sum assured.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 13, 2018
    • LIC Life Insurance
      "Nice experience"
      0.5 4.0/5 "Great!"
      I have taken a lot of policies from LIC. My agent is very prompt and he reminds me much before the due date. I have many options to make a payment. I can either do it online and there are many LIC branches as well. I also had one policy matured and I only had to submit my account details and I got my returns with ease.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 13, 2018
    • HDFC Life Life Insurance
      "GOOD"
      0.5 5.0/5 "Blown Away!"
      I have been using since 3 years. Premium i pay for my insurance is for monthly once that too i do the payment through the on line. Actually i am not aware of the tenuity. Apart from that i have don the documentation which is very easy and it is simple.
      Was this review helpful? 0
      , thane
      Reviewed on Jun 12, 2018
    • Max Life Insurance
      "BETTER"
      0.5 4.0/5 "Great!"
      I have been using the life insurance from the MAX LIFE INSURANCE since 1 year. My family gets benefited with the insurance. Premium i pay for yearly once and i pay through the net banking. Tenuity is for 12 years and it is short term. Due to benefit i took the insurance.
      Was this review helpful? 0
      , bulandshahr
      Reviewed on Jun 12, 2018
    • ICICI Prudential Life Insurance
      "Life insurance from ICICI"
      0.5 4.0/5 "Great!"
      From ICICI PRUDENTIAL i have taken a life insurance with a premium of 75000.The total maturity period is for 10 years, But we have to pay the premium for 5 years. And after completing the 5 more years i could able to claim the amount with the bonus.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 11, 2018
    • Bharti Axa Life Life Insurance
      "AVERAGE"
      0.5 3.0/5 "Satisfactory"
      30 thousand annual payment that i do for my BHARTI-AXA LIFE INSURANCE that i have been taken in 2016 December. Documentation i have done through physically where the agent came to the doorsteps and collected the documents. For 10 years i pay and in the 12th year i would be getting the money. For my family i have taken this insurance .
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jun 10, 2018
    • LIC Life Insurance
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      JEEVAN SURAKSHA is the plan that i have been using from the LIC. I have been using the policy from LIC from last 12 years. My plan is a long term policy that the tenuity period is for 25 years. I have to pay for the complete 25 years. Apart from that documentation i have done it physically.
      Was this review helpful? 0
      ,
      Reviewed on Jun 10, 2018
    • LIC Life Insurance
      "EXCELLENT"
      0.5 5.0/5 "Blown Away!"
      I have been holding my JEEVAN ANAND policy from the LIC. I have been holding since 12 years. I made my documentation completely through physically. I have been paying my premium for monthly once from my salary. I am satisfied with the insurance what i am holding from the LIC.
      Was this review helpful? 0
      ,
      Reviewed on Jun 10, 2018
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