Term insurance is a type of life insurance product that provides a large sum assured to the policy buyer at a relatively affordable premium. Term insurance plans can usually be purchased for a policy tenure ranging anywhere between 5 years and 40 years. The catch to this kind of life insurance is that usually it does not carry any survival or maturity benefits, unlike whole life policies or endowment/money-back policies.
Term insurance plans are much cheaper compared to whole life insurance plans because these plans carry no cash value. Term insurance plans provide pure financial protection benefits. This means that if the life insured dies during the policy term, the beneficiary will receive the death benefit, provided all premiums are paid and the policy is in force. If the person survives until the end of the policy term, no benefits are payable to anyone.In most cases, term insurance plans offer a level premium rate, wherein the policyholder is charged the same premium for the duration of the policy tenure. However, in such cases the premium payable will increase during renewal of the policy based on the concerned individual’s age at the time. While the coverage provided by a term insurance policy is more or less fixed, most life insurance providers offer a number of riders that policy buyers can choose to purchase along with a term policy.
For those who have dependents whom they look after, term plans are ideal as they provide a large payout for very cheap premiums. Individuals can choose a high sum assured while paying a low premium. This way, if the breadwinner/policyholder passes on from this life, the people who relied on them will receive a substantial amount that will help them get by financially. These plans have a set duration limit and the cover will be offered only for this period. Once the plan lapses, the holder can choose to renew it or give up all benefits. Listed below are a few reasons to purchase term insurance plans:
If you apply for a term insurance plan, you will be required to pay a premium. If the life insured dies during the coverage period, then the person nominated will receive the death benefits. There are a variety of term plans in the market ranging from 1-year coverage up to 40 years. Term plans are usually renewable once the policy term ends.
There are different types of term insurance plans. Some of the major plans are:
All insurance companies lay down certain requirements that individuals need to meet in order to be approved for a term plan. Some of the general requirements are listed below, however, this may vary between different insurers:
Term Plans are different in nature when compared to standard life insurance policies, wherein they are specifically designed to cater to the financial needs of the family in case of death or uncertainty.The respective family members/dependants are eligible for a lump sum amount in case of death, uncertainity or any critical illness, if applied for, of the life insured during the term of the policy.Such an insurance plan can help your family to have sound financial independence, even if you are not around.
Term plans have a number of benefits. The main benefit is that the premiums are cheap while the financial protection offered is much larger than regular plans.
Term insurance is the purest form of life insurance. These plans usually offer a pure risk cover on the life of the policyholder. If the policyholder succumbs to an untimely death during the policy term, a death benefit will be paid to the nominee. In terms of the death benefit payout, many insurers currently offer a number of payment options to policyholders, thus ensuring that the policy buyer is able to choose a payout option that is well-suited to the needs of his/her family.
Some of the popular term insurance payout options are:
A term insurance policy is a must-have if you want to ensure that your loved ones are always financially secure. Make sure to research various term insurance plans that are being offered, compare features and benefits of these plans, and opt for a policy that offers you coverage as per your needs.Refer to the Term Insurance Plans comparision chart provided below to choose from an extensive array of life term plans to suit your needs:
|Term Plan||Entry Age||Maturity Age||Policy Term||Premium Payment Option||Minimum sum Assured||Payout Type||Claim Settlement Ratio(FY 16-17)|
|ICICI Prudential iProtect Smart Plan||18 years to 65 years||23 years to 75 years||As per policy brochure||Single pay, duration of plan or 5-year limited pay. Payments can be made monthly, half-yearly or yearly||Subject to minimum premium of Rs.2,400 p.a. (excluding taxes)||Lump sum or monthly income for 10 years||96.68%|
|HDFC Life click2Protect Plus||18 years to 65 years||28 years to 75 years||10 years to 40 years||Single pay, duration of plan or 5-year limited pay. Payments can be made monthly, quarterly, half-yearly or yearly||Rs.25 lakh||Lump sum + optional monthly income over a period of either 10 or 15 years||97.62%|
|Max Life Online Term Plan Plus||18 years to 60 years||85 years||10 years to 50 years (applicable to base plan)||Equal to plan term||Rs.25 lakh||Lump sum + optional monthly income/increasing monthly income over a period of 10 years||97.81%|
|Aegon Life iTerm Plan||18 years to 65 years||100 years||5 years to 62 years (or up to the age of 100 years)||Equal to plan term. Payable monthly, half-yearly or yearly||Rs.25 lakh||Lump sum + optional monthly income for 100 months||97.11%|
|PNB MetLife Mera Term Plan||18 years to 65 years||99 years for all options except the Joint Life Cover option.Maximum maturity age is 75 years for the Joint Life Cover option||81 years for all options except the Joint Life Cover option.75 years for the Joint Life Cover option||Equal to plan term||Rs.10 lakh||Lump sum + choose to receive monthly income/increasing monthly income or monthly income till child turns 21 years||87.14%|
|Canara HSBC OBC iSelect Term Plan||18 years to 70 years||80 years||5 years to 40 years||Equal to plan term. Payable monthly or annually||Rs.25 lakhs||Lump sum + optional monthly income||94.95%|
|LIC e-term Plan||18 years to 60 years||75 years||10 years to 35 years||Annual||Rs.25 lakhs / Rs.50 lakhs for non-smoker||Lump sum||98.31%|
|SBI Life eShield Plan||18 years to 60/65 years (based on the type of cover)||75 years for Level Cover Benefit and 70 years for Increasing Cover Benefit||5 years to 30 years||Equal to policy term, payable annually||Rs.35 lakhs||Lump sum||96.69%|
The iProtect Smart Plan from ICICI Prudential is a term insurance policy that offers comprehensive protection to the life assured. This plan offers life cover payable as a lump sum death benefit, or customers can choose to get a monthly income for 10 years after the demise of the policyholder. Anyone between the age of 18 years to 65 years can apply for this plan with a minimum tenure of 5 years. Customers can choose to pay the premiums as monthly, half-yearly or yearly. The minimum premium required for this plan is Rs.2,400 p.a. (excluding taxes).
The minimum sum assured under this plan is subject to the minimum premium, with no limit on the maximum sum assured. This policy comes with four plan options, i.e., the Life option, Life Plus option, Life and Health option, and the All in One option. The policy provides varying benefits under different plan options, thus helping you opt for a plan option that is perfectly suited to your needs. This policy comes with the provision of providing life cover to policyholders up to the age of 75 years. Further, the policy also comes with the option of providing coverage for up to 34 critical illnesses.
The Click2Protect Plus Plan from HDFC Life is a non-participating, non-linked, term insurance policy that provides a comprehensive life cover to the policy buyer at an affordable cost. This policy comes with a choice of coverage options. In order to purchase this policy, policy buyers will need to be between the age of 18 years and 65 years. The maximum maturity age for this policy is 75 years.
This plan provides optimum coverage with options of either a lump sum benefit, or a lump sum benefit plus monthly income for the beneficiary after the demise of the policyholder. Customers can opt to pay premiums for the duration of the plan, for 5 years or in one single premium. The minimum sum assured under this plan is Rs.25 lakh.
The Max Life Online Term Plan Plus comes in three plan variants – the Basic Life Cover option, the Life Cover + Monthly Income option, and the Life Cover + Increasing Monthly Income option. This term plan is ideal for anyone between the age of 18 years and 60 years. With premium payments equal to the term of the plan, customers can opt for a minimum coverage of Rs.25 lakhs, and a maximum coverage of Rs.100 crore.
If the policyholder dies during the term, then the nominee will be entitled to a lump sum benefit and/or monthly income and/or monthly increasing income for 10 years. For the base plan, the policy buyer can opt for a policy term between 10 years and 50 years. The maximum maturity age for all three plan variants is 85 years. Policyholders can also choose to purchase riders offered by Max Life Insurance along with this policy.
Aegon Life offers its iTerm Plan to individuals who are between the age of 18 years and 65 years. This policy can be purchased online, and the minimum sum assured that one can opt for is Rs.25 lakh. The payout upon the demise of the policyholder can either be a lump sum benefit or a lump sum plus monthly income for a period of 100 years. The maximum maturity age for this plan is 100 years.
Premiums towards this policy can be paid as a one-time lump sum amount, or on an annual, bi-annual, or monthly basis. This plan also comes with an Inbuilt Terminal Illness Benefit, thus providing the policyholder a guaranteed benefit in case he/she is diagnosed with a terminal illness. The insurer also offers preferential premium rates to women and non-smokers. A policy buyer can also opt for additional riders along with this plan to enhance the coverage of the base policy.
The Mera Term Plan from PNB MetLife is a term insurance policy that provides the policyholder customisable protection. With PNB Metlife, customers have an array of payout options that include: Lump sum / Lump sum + monthly income / Lump sum + monthly increasing income / Lump sum + monthly income till the child attains the age of 21 years. This policy also comes with an optional Joint Life Benefit. Policyholders are also provided the choice to increase their coverage amount during certain key milestones in their lives.
In order to purchase this policy, the policy buyer needs to be between the age of 18 years and 65 years. The maximum maturity age for all options, except the Joint Life Cover option, is 99 years. If you choose the Joint Life Cover option, the maximum maturity age is 75 years. Customers can secure financial protection for their loved ones for a minimum sum assured of Rs.10 lakh.
The iSelect Term Plan from Canara HSBC OBC Life Insurance is a non-participating, non-linked, term insurance policy that is available to those between the ages of 18 years and 70 years. The maximum maturity age under this plan is 80 years. Customers can opt for terms of 5 years to 40 years with a premium payment term that is equal to policy term. Customers will benefit from a minimum sum assured of Rs.25 lakhs.
This plan offers the policyholder a cover against death and also against terminal illnesses. Further, a policy buyer can choose to enhance this policy by purchasing the Accidental Death and Accidental Total and Permanent Disability rider, which will provide an additional benefit in case the life assured meets with an accident. Lower premium rates are offered to women and non-tobacco users.
LIC offers its e-Term Plan to individuals between the age of 18 years and 60 years. Customers are required to pay the premium annually and in return will receive a minimum death benefit of Rs.25 lakhs if the policyholder dies during the policy term. Individuals who belong to the non-smoker category can opt for a minimum sum assured of Rs.50 lakh.
When purchasing this policy, the policy buyer can opt for a policy term between 10 and 35 years. The maximum maturity age for this plan is restricted to 75 years. The policyholder will have to pay the due premiums on a yearly basis, for the duration of the policy tenure. This policy is solely available through online channels. The insurer will only consider insurance applications/proposals made by policy buyers on their own lives. Further, preferential premium rates are offered to non-smokers.
SBI Life’s term plan, eShield, is an individual, non-participating, non-linked, pure term insurance plan that is available online on the insurer’s official website. This plan offers a minimum sum assured of Rs.35 lakhs as a lump sum benefit payable to the nominee upon the demise of the policyholder. In order to purchase this policy, the policy buyer will need to be over the age of 18 years.The maximum entry age is 65 years for the Level Cover and 60 years for the Increasing Cover.
Premiums can be paid on an annual, bi-annual, or monthly basis. The minimum policy tenure that should be opted for at the time of purchasing the policy is 5 years for the Level Cover and 10 years for the Increasing Cover. The maximum policy tenure that can be chosen is 30 years. The premium payment term will be the same as the policy term.
Term insurance is one of the purest forms of insurance that one may purchase. The aim of having term insurance is to ensure that the future of your loved ones is safe and secure even if you are not around in the future. The nominee gets paid a lump-sum amount called the death benefit in case of your sudden demise and the term insurance policy ceases to exist.
However, due to the lack of information regarding term insurance policy, there are various misconceptions people have harboured over a period of time. This prevents people from buying a term insurance policy for themselves and ultimately missing out on the benefit of having one.
Some of the myths about term insurance are given below:
Hence, term insurance is a brilliant instrument that you can avail. You may not know much about term insurance since people prefer more popular options such as ULIPs, endowment policies, money back plans etc. Also, one of the major problems is that people often buy term insurance only to save on tax and thus in the process end up with wrong plans which come back to affect them. Term insurance is the purest form of insurance you can come across and you can purchase it just like any other plan. It is important to understand that you must buy term insurance only as per your needs and requirement and only after comparing and researching should you buy term insurance for yourself.
In India, life insurance penetration continues to be quite low despite insurance firms offering a host of innovative products, services, and initiatives. In an effort to make insurance products more accessible and attractive to the general public and to increase the overall efficiency of the company, insurance firms in India are increasingly making use of data analytics. It is expected that data analytics will shape the Indian insurance industry in a significant manner in the near future. Listed below are a few ways in which data analytics can help the insurance industry:
The number of ways through which data analytics can help the insurance industry is endless. Data analytics can provide valuable insights to insurance companies, thereby helping them make informed decisions, increase profits, and mitigate risks.
The Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for policyholders to link their insurance policy with their Aadhaar and PAN by 31 March 2018. The regulator has also said that since these directions have statutory force, all life, general, and standalone health insurance firms will have to implement these rules without any further instruction.
Thus, insurance companies have been sending reminders and notifications to policyholders to link their PAN and Aadhaar numbers with their policies. As a policyholder, you can choose to link your Aadhaar and PAN with your insurance policy through both online and offline channels.
Online Linking: If you are a registered user, you can log into the ‘Customer Portal’ on the insurer’s website and update your Aadhaar number and PAN. Certain insurance firms also make a provision for you to link your particulars without logging in by simply navigating to the website and keying-in certain details, such as your policy ID, Aadhaar number, PAN, date of birth, contact information, etc. After you have furnished your PAN and Aadhaar number to the insurer on the website, an OTP (one-time password) will be sent to your registered mobile number. You will have to enter this number on the insurer’s website to complete the linking process.
Offline Linking: You can also choose to link your Aadhaar and PAN with your insurance policy through offline channels. Thus, you will have to contact your insurance agent or visit the nearest office of your insurer with all relevant documents, including a self-attested copy of your Aadhaar. You can submit these documents to an insurance representative and get your policy linked.
Things to Note
Currently, all new policy buyers are required to submit their Aadhaar number at the time of purchasing the policy.
In case a policyholder does not have a PAN, he/she can furnish a copy of Form 60 to meet this requirement.
In order to successfully link your policy with your Aadhaar number, your mobile number will have to be registered in the Aadhaar database.
Linking your Aadhaar and PAN to your insurance policy will prevent malpractices. Further, it also makes the administration process simpler.
Term Insurance is very simple to understand. You purchase a term insurance plan which promises to provide you cover for a certain period of time. You pay premiums in order to keep the policy in force, and in case if something happens to you, the insurer will pay the nominee a lump-sum amount called the death benefit and the policy ceases to exist.
There are two modes of payment one can come across from a premium payment point of view. They are:
Premium payment term is nothing but the period of time for which you will be required to pay your premiums.
Premium payment frequency is the number of times you will have to pay your premiums in a policy year. For a single term policy, the number of times you will pay your premiums will only be one, which will be at the inception of the policy. If you are availing a regular term policy then you can choose to pay your premiums on a monthly, half-yearly, quarterly, or on a yearly basis.
Premiums form an important part of your policy. The premium you pay will depend on various factors such as your age, policy term, premium payment term, etc. However, one of the questions which is often raised is why is term insurance premium cheaper as compared to a whole life insurance premium?
The reason a term insurance premium is cheaper as compared to the premium of a whole life insurance policy is that term insurance covers you for a limited period of time and is likely to end before you die as compared to whole life insurance which provides you coverage for your whole life as the name suggests. Thus, the premium paid in case of term insurance is utilised to pay you a lump-sum amount called the death benefit in case of your death. Whereas, the premium paid by you in case you have purchased a whole life insurance is utilised not only to pay you the death benefit in the event of your death but also pay you a lump-sum amount called the maturity benefit in case you survive the policy term.
Apart from that, there are various types of insurance products such as ULIP which not only utilises a part of your premiums to provide you cover, but also uses the rest for investment purposes i.e. a part of the premiums paid by you is invested by the insurer in various market instruments which helps in the maximisation of your savings.
Key Features of ICICI Pru iCare II Term Insurance Plan:
Key Features of the HDFC Life Click2Protect 3D Plus Plan:
Key Features of the Aviva i-Life Plan:
Key Features of the Max Life Insurance Online Term Plan Plus - Basic Life Cover + Monthly Income:
Key Features of the SBI Life – eShield Plan:
|Plan Name||Sum Assured||Policy Tenure||Age at Entry|
|ICICI Pru iCare II Term Insurance Plan||
||18 – 60 years|
|HDFC Life Click2Protect 3D Plus Plan||
|Aviva i-Life Plan||
||10 – 35 years||18-55 years|
|Max Life Insurance Online Term Plan Plus||
||10-50 years||Minimum entry age is 18 years and above|
|SBI Life - eShield Plan||
The claim settlement ratio refers to the total number of death claims that the insurance provider has paid against the total number of death claims received by them in a given financial year. A high claim settlement ratio is desirable since it indicates the insurer’s willingness to settle claims, and will, thus, ensure that your nominee doesn’t have to face any undue hassles during the claim settlement process.
If you are looking to purchase a life insurance policy, it is highly advisable to check the claim settlement ratio of various companies, since it is a good indicator of the insurance firm’s ability to settle received claims. The Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratios of various life insurance companies in their annual report. We have listed the claim settlement ratios of various term insurance providers in the table below.
|Insurance Provider||Claims Settlement Ratio||Claims Received||Claims Paid|
|Birla Sun Life||94.69%||6048||5727|
|Star Union Dai-ichi||84.05%||1473||1238|
|Aviva Life Insurance||90.60%||1245||1128|
“The data listed above is as per the report released by IRDAI (2016-17).”
Insurance providers offer life insurance plans with a varied range of benefits in order to make these policies seem like an attractive investment option to policy buyers. While the primary purpose of a life insurance policy is to provide financial security to the policyholder’s dependents in case of an unfortunate eventuality, these plans can also sometimes serve as a savings/investment tool and can even provide funds if you are in need of emergency liquidity.
The key benefit of availing a loan against your life insurance policy is that the interest rates are typically not as high as the interest levied on personal loans and credit card loans. However, before you decide to avail a loan against your insurance policy, here a few points that you will have to keep in mind.
Firstly, it is essential to check if you are eligible to avail a loan against your insurance policy. Not all life insurance policies offer this benefit to policyholders. In most cases, if your life insurance plan doesn’t acquire a cash value, you will not be able to avail a loan against it. Thus, you cannot take a loan against a term insurance policy. On the other hand, other insurance policies such as money-back plans, endowment plans, whole life plans, etc. will allow policyholders to take a loan against the policy after the policy has acquired a surrender value. Life insurance policies only acquire a surrender value if the policyholder has paid all due premiums for a period of 2-3 years without missing any premium payments. Thus, before you even consider taking a loan against your policy, make sure to read through the brochure or log into your insurer’s Customer Portal to check if you are eligible to opt for a loan.
Loan Amount and Interest Rate
While insurance providers give you the option of taking a loan against your policy after it has acquired a surrender value, they will seldom provide you the full surrender value as the loan amount. In most cases, the amount that you will be eligible to avail will be a certain percentage of the policy’s surrender value – typically between 60% - 85%. One of the benefits of taking a loan against an insurance policy is that since you are borrowing from the policy’s surrender value, the loan amount you receive will not be considered as a source of income, thus you will not be taxed for this. Once you take a loan against your insurance policy, the rights of your plan will be effectively transferred to whoever the lender is. Since this is a loan, you will also have to pay an interest on the amount borrowed. The rate of interest that you will be charged will vary from lender to lender. However, in most cases, lenders or insurance companies charge an interest between 10% and 15%
Repayment of Loan
Just like a regular loan, you will need to repay your loan amount to the insurance company during the policy tenure. The terms and conditions for repayment of loans will vary slightly based on the insurance provider, and this will be communicated to you at the time of taking the loan. However, in most cases, lenders give policyholders the option to pay back the interest alone or the interest and principal amount as regular installments. If you choose to only pay the interest on your loan, you will have to remember that the principal loan amount will be deducted from the death/maturity benefit payout, whenever it happens. Thus, it is advisable to pay both the principal and interest and repay your loan in order to keep your policy’s cash value intact.
Things to consider before availing a loan against your policy
Most individuals remain unaware of the many benefits of taking a loan against their insurance policy. Since you are essentially borrowing from the payout that you are eligible to receive from the insurer, the interest rate that is levied is usually lesser than the interest that you will have to pay for a personal loan. Also, the documentation process for loans taken against life insurance policies is also simpler and more hassle-free.
That being said, it is vital that you keep in mind the actual purpose of purchasing the life insurance policy. Life insurance policies can safeguard your dependents financially and ensure that they have the financial means to carry on with their lives in case of an unfortunate and untimely eventuality. Thus, since you are borrowing from the policy when taking a loan, you are essentially putting the financial security of your loved ones at risk. If you take a loan and happen to pass away before repayment of the dues, your insurance provider will simply deduct the pending amount from the death benefit and pay only what is left of the death benefit to your nominee.
Thus, before you take a loan against your life insurance, make sure to carefully consider the pros and cons of your decision and talk to an insurance advisor to understand the terms and conditions of your loan.
The Central Government of India sponsors various social security schemes, including pension covers, health schemes, crop insurance schemes, etc., for the benefit of the economically underprivileged sections of society. These schemes were launched in order to provide financial security to the masses at a nominal cost.
The government also offers certain term life insurance schemes, by way of which policy buyers can safeguard their dependents financially. A term insurance plan, which is one of the most basic types of life insurance coverage, offers a significant sum assured to the policy buyer at an affordable price. Listed below are the various term/life insurance schemes offered by the Government of India, along with their key features and benefits.
Key features of the Pradhan Mantri Jeevan Jyoti Bima Yojana:
Key features of the Pradhan Mantri Jan-Dhan Yojana:
Key Features of the Aam Aadmi Bima Yojana:
Government-backed schemes offer a range of benefits at an affordable price to policy buyers. Make sure to walk into the nearest insurance office or research online for more details about the various term insurance schemes offered by the government.
Life insurance plans offer a risk cover against death on the life of the policyholder, and thereby provide financial security to the policyholder’s dependents in case of an unfortunate eventuality. While there is a range of life insurance solutions with varied benefits and features, these policies also provide tax benefits to the policy buyer. Read on to know more about how you can save on tax with a life insurance plan:
Supreme Court provides clarity on use of Aadhaar
Lately, there has been a lot of confusion with regard to the use of Aadhaar – whether it is required for financial services or not. Basically, Aadhaar is a requirement for welfare services as well as government subsidies. Apart from that, since Aadhaar has to be linked to PAN, it will be required in the ITR process too. With the new ruling wherein the Supreme Court said that section 57 of the Aadhaar Act is ‘unconstitutional’, it is understood that Aadhaar is not mandatory for bank accounts, mobile connections, and other financial services.
Earlier, the Insurance Regulatory and Development Authority of India (IRDAI) had asked insurance companies to make Aadhaar mandatory for KYC. However, policyholders faced roadblocks in the KYC process because Aadhaar was made mandatory. Insurers, hence, eased the process and allowed even customers who did not have Aadhaar or could not produce their Aadhaar cards to purchase policies. Such customers were allowed to submit their passport or PAN. This was the practice when Aadhaar was made compulsory and is still in practice. Insurance companies now assume that the recent ruling by the Supreme Court provides an option to individuals to either submit or choose not submit one’s Aadhaar data. The insurance industry, however, awaits clarification of the same.
Not humans but AI will decide your next insurance product
Artificial Intelligence or AI has become an integral part of our lives. From buying a pair of shoes to opening a bank account, AI has played a significant role and has influenced our lives significantly.
For example, Mumbai based designers Falguni and Shane Peacock used AI in order to design their latest collections. Similarly, a startup in Bangalore has taken the help of AI in order to improve the detection of breast cancer and also make it treatment cheaper in nature. A TATA Motors plant in Pune has a robot which is adept at carrying out 30 different tasks.
Today, we can see how AI has helped shape the growth of the insurance sector and can help you choose a suitable insurance product for yourself.
Go back to the time when an insurance agent would carry a large pile of files carrying the mortality tables and calculators for help us know the premiums we will pay. Today, the same agent has a tablet where he/she enters data like your age and income and you have a plethora of insurance product that you can choose for yourself. It is all done by AI.
AI has taken over data mining roles, a job which a human would have to do. Experts believe that despite the concept of AI in the insurance sector being at its nascent stage, a time will come when it will also help in resolving queries and help customers in the future.
AI has taken over data mining roles and is simplifying the process. Some of the jobs which AI has been doing are:
Insurance is considered to be a kind of push product, and there is an immediate requirement to de-jargonize the industry and AI has been looked upon as the possible solution.
For example, HDFC ERGO launched its AI enable chatbot ‘Dia’ on the Amazon’s voice service Alexa. This has helped the customers not only have easy access to the various insurance products but also be in a position to understand them better. The chatbot will also constantly learn from the different queries and doubts thrown at them and will help them answer more complex questions in the future.
According to a report by Deloitte, it is understood that the country’s ‘Internet of Things (IoT) market is expected to touch $9 billion dollars by 2020 from $1.3 billion it made last year.
This means that the insurance sector in India will be using the AI based services more frequently in future. The services will be constantly updated in order to ensure that more instant responses are provided to the customers.
There are various areas in the insurance sector where AI has been in constant use. The most frequent have been the chatbots which have helped the customers not only have it easy during the purchasing of a product but also choose the most suitable insurance product for themselves.
Aditya Birla Sun Life Insurance was one of the first few insurance companies that took the help of AI by launching a chatbot service in March last year. The idea was to help the customers get information related to their insurance products easily and also enable personalised and quick responses to their customers’ queries.
The chatbots are also available 24x7 in order to help out with people’s doubt at any point in time. For example, Bajaj Allianz General Insurance introduced ‘BOING’ a 24x7 available chatbot service which aimed at improving the customer interaction. The insurer also launched the service on Alexa and Google Assistant, a next-generation interface which would change the customers’ experience and transcend it into the next level.
AI constantly analyses the data stored on the telematic devices and are able to provide better responses to motor insurance related queries. For example, based on the data available on its telematic devices, AI can see whether a car is being driven at high speeds and through uneven terrains. Based on this data, it can ask the customer to purchase a zero depreciation policy so that the depreciation value does not get deducted during repairing of the vehicle.
AI’s are also helping in responding not only to all the major and minor queries but also send the response fast. For example, SPOK, a chatbot service launched by the HDFC Life Insurance in May 2017, could read, understand, prioritise, and send out response to a customer’s query in no time.
Apollo Munich launched its AI-based chatbot ‘Travel Ninja’ in order to help suggest their customers the right travel insurance policy, cover amount, as well as create a policy proposal and send the payment link all within few minutes.
MyRa, a chatbot launched by ICICI Lombard interact directly with its customers with the help of a virtual robot and sends out the quotes just within a few minutes.
AI has helped different processes to be completed in less time possible. Though many feel that the human touch will be lost but they all agree that AI has helped in increasing the efficiency, something which the customers will choose over human touch any day.
It is understood that a technology grows, not only will the chatbots interact with the customers in their preferred language but various insurance companies will also deploy tools such as in-home monitors and wearables. AI will also be used in order to bring down any discrepancies related to claims. For example, if the insurance company is unable to track the origins of the bills and whose authenticity cannot be tracked, the AI will come into the picture in order to check whether any claims similar to it has been made in the past.
Wearables will also become an integral part and will help the insurance company price the premiums in the future. Here, AI will be used to collect data regarding the daily activities carried out by the customer and will help in determining their fitness level.
But the biggest question which still looms large is whether AI will replace humans. The answer is a straight no.
Machines evolve as they learn but they lack the acumen to tackle novel situations. Though both humans and AI will continue to function together and simultaneously co-exist together, the former will always be the masters of AI and will decide how the latter will function.
Three reforms desperately needed by the Indian Insurance Industry
Indian Life Insurance industry’s reputation has suffered over the years due to various sharp selling practices which have only resulted in various companies facing losses. According to a report by Harvard Business School, published in 2012, one of the major reasons behind this impending problem is that the agents look to only maximise the number of premiums or in short the number of products sold rather than focusing on helping the customer help with the amount of coverage he/she needs. This means, that the agent is more concerned about his/her commissions, rather than work on helping the customer get the best deal possible which would ultimately result in a long fostering relationship between the insured and the insurer.
It is hence understandable that the new chairman of Insurance Regulatory and Development Authority of India (IRDAI) will have to bring certain changes to the way the industry is functioning and a three-step reform might be the need of the hour.
Rationalisation of commission structure - 2017 saw the regulatory body introducing the concept of ‘rewards’ in order to allow the insurance companies to retain their agent force for a longer period of time. This was an incentive which the insurance companies were to pay to their agent over their basic pay. The commission which is due to overselling of a life insurance product is extremely high and it should be done away with since it plays a role in the mis-selling of these products. It is generally seen that traditional policies have been experiencing terrible returns, poor liquidity and the clauses are generally unclear in nature. ULIPs, on the other hand, offer more liquidity and are more transparent in nature. Yet, one can make out that a common man will be more interested in buying traditional policies. The premiums paid by him/her are not completely utilised as a part of it is kept aside as commission for the agent. Hence, IRDAI needs to completely do away with the ‘reward’ scheme and create more transparency regarding the selling of any type of insurance products.
Reformation of traditional products in order to improve returns - According to a government mandate, 50% of the funds gathered due to the selling of traditional insurance products must be used for buying government securities. This means that a person’s money is being underutilised in the worst way possible. First, a portion of his/her premiums is being paid to an agent which should have been used for the utilisation of the policy. Secondly, a major portion of his/her premiums is being invested in an instrument, which does not boast of high returns. The government is forcing the people to invest their savings so as to fund the fiscal deficit, a problem faced by the government for a very long period of time. Since most of the products have a lock-in period, the IRDAI Chairman will have to re-look the total equity allocation allowed for these products and completely remove the clauses that force the insurance companies to purchase Government security instruments. These products need to provide returns in double-digits to its investors and until it is done, the insurance industry will continue to suffer.
The minimum persistency clause must be brought back - Persistency in simple words here means the number of insurance policies that gets renewed every year. Renewal of insurance policies clearly shows that the customers are happy with the policy they are availing. Thus, in order to ensure that ethical sales methods were practiced, the number of customers who were sold a policy by an agent renewing their policies became an important parameter. IRDAI made it mandatory that an agent in order to get his/her licence renewed must see at least 50% of his/her customers renewing their policies. However, this move did not help as insurance companies started losing agents which forced the regulatory body to do away with this rule. The fact that insurance industries are facing deep-rooted problems and with their reputation suffering, it is time that the Chairman brings back this particular clause and also incorporates major changes to the way the industry as a whole has been functioning.
Term insurance and ULIP looks good to rule the insurance industry
The Indian insurance industry is going through a roller coaster ride. Despite the structural growth experienced by the industry is promising, there are certain risks which can stop the industry from gaining profits. Higher surrender penalty and pricing in credit protect are some of the reasons which will keep the insurance industry on its toes.
It is believed that a majority of new business profits comes from surrender charges. If a high penalty is implied, it means that the policyholder will experience more capital loss even if they surrender at the end of the fifth year. A ULIP does not have such risks associated with it and shows that a person is better off purchasing a ULIP. The fact that policyholders experiencing loss due to high charges is a concern to which the IRDA is looking into.
It is also a common misconception that the insurance industry hasn’t penetrated to the level it is capable of. This fact is incorrect as LIC is one brilliant example and has existed for over 60 years. More than 50% of people who can afford getting insured have an insurance plan. The only concern is that the average cover amount is only Rs.3 lakh for each policy. It is also expected that the new business premium will grow at 15%.
It is believed that regular suppression of credit life is bound to happen since higher prices mean that the policyholder does not get their value for money. Credit life has been one of the fastest growing segment and has contributed to the value new business (VNB) growing between 4% to 13% and more private players are expected to throw in their hats into the ring. This has resulted in more competition and the cost of distribution rising significantly.
It is also believed that in the relative future, the private players will be more interested in term insurance and ULIP. The latter easily offers more proposition due to strict cap on surrender charges.
Players with strong banking networks will continue to grow. The popularity of standardised insurance schemes and banks stake in different insurance subsidiary will ensure that bancassurer players continue to flourish better than the overall insurance industry despite the latter being expected to grow at a rate of 15%.
Backdating in Term Life Insurance – Should you consider it?
In life insurance, the premium that is charged for an insurance policy is linked to certain factors such as an individual’s age at entry, policy tenure, sum assured, etc. Thus, the older you are, the more you will have to pay for an insurance policy. That being said, you can also choose to backdate your life insurance policy if you wish to reduce the premium payable.
Essentially, when you backdate a life insurance policy, you are altering the policy’s date of issue. Backdating is a completely legal practice in the life insurance sector and insurance policies can be backdated by a few weeks or months, as per the policyholder’s requirement.
When should you backdate a life insurance policy?
While backdating is an extremely attractive option, you should keep in mind that not all life insurance policies can be backdated. Most insurers, for example, do not offer this option for ULIPs since the returns that you receive from a ULIP are market-linked. Further, backdating is also not free. When you backdate an insurance policy, you will need to pay the due premiums for the backdated period.
Certain insurance companies might also charge the policyholder an interest if the insurance policy is backdated by over a month. Thus, before you choose to backdate your life insurance policy, you will need to assess whether the benefits of doing so outweigh the possible expenses that you might have to incur. Listed below are a few instances when backdating a life insurance policy might prove to be useful:
Things to consider before backdating an insurance policy
It is a fairly common practice to backdate life insurance policies. However, there are certain things you should consider before you backdate your policy.
In conclusion, while backdating can be a useful way to save money on your life insurance policy, make sure to only choose this option if it is in line with your financial objectives and your current stage of life.
7 Mistakes you should avoid when buying a term life insurance policy
A term insurance policy is a type of life insurance product that offers financial protection to the policyholder’s dependents. Thus, in case the policyholder succumbs to an untimely death, the sum assured will be paid out to the nominee. Given how important these policies can be in providing financial security to your loved ones, it is vital that you pick the right policy and avoid making the mistakes mentioned below:
Purchasing an insurance policy is a significant financial decision that requires much thought. Thus, make sure to do your due research before you pick a particular policy. Further, once you receive your policy document, it is imperative that you go through the terms and conditions of your policy to ensure that it meets your needs. If you find that you unsatisfied with the policy, you can return it to the insurance provider during the free-look period and purchase another policy.
The primary objective of a life insurance policy is to provide financial aid to the deceased person’s family members. It is therefore important to ensure that the policyholder chooses a nominee to whom the life insurance amount will be provided to. The individual who purchases the policy has the right to nominate the person who will receive the benefit when a death claim is made.
Policyholders typically nominate their spouses, children, or close relatives as nominees. While unrelated individuals like friends can also be nominated, the insurable interest should be proved in such cases. The insurer may or may not approve the nomination because insurers believe that nominating an unrelated individual may increase the risk of the policy.
The policyholder can also nominate multiple individuals and decide the percentage of the sum assured that each individual would receive on his/her demise. If a nominee is a minor i.e. below the age of 18, an appointee would have to be named to handle the documentation and benefit amount until the nominee becomes a major.
To make a nomination, the policyholder will have to provide complete details of the individual including the name, age, address, and the relationship he/she shares with the policyholder.
The policyholder can change the nominee any number of times during the policy term. All he/she has to do is fill in a form with details of the new nominee and submit it to the insurer along with the form containing details of the previous nominee. The latest nomination will supersede all former nominations. Change of nominee is essential when the nominee dies before the policyholder.
In case the policyholder does not choose a nominee, the insurer will provide the death benefit to the legal heir - spouse, children, or mother.
A beneficial nominee is basically the individual who is authorised to use the benefit provided on death claim. The beneficial nominee mentioned in the policy will receive the benefit as directed by the policyholder. Parents, spouses, or children automatically becoming beneficial nominees of a policy.
On the death of the policyholder, the nominee can claim the death benefit by submitting a few important forms and documents.
Currently, term insurance plans are one of the most sought-after life insurance products, in the country. The popularity of these plans stem from the fact that they offer the policyholder a high sum assured at a comparatively low premium rate, thereby being easy on the pockets while guaranteeing financial security to one’s dependents. Most financial experts recommend purchasing a term insurance policy at a young age, in order for you to make the most out of these plans. Read on to know a few reasons and benefits of purchasing a term insurance policy while you are still young.
Premiums are linked to age: When quoting the premium rate, insurers take several factors into account, such as the sum assured opted for, the policy buyer’s age at entry, policy tenure, etc. A young policy buyer poses less risk to the insurer, since the chances of them being diagnosed with a critical illness or a lifestyle disease is relatively lower. Thus, an insurer is likely to charge you less as premium if you purchase the policy in your 20s or 30s, as opposed to buying it when you are older.
Financial security of dependents: There is nothing that can replace the loss of a loved one. However, an insurance policy, at the very least, ensures that your dependents have the means to carry on with their lives, in the event of an unfortunate eventuality. While a term insurance plan does not acquire a cash value, it does offer a high sum assured to one’s nominee in case of the policyholder’s untimely death. The lump sum amount your family receives, by way of the policy, can help them pay for immediate financial needs, plan for future milestones, and pay off any debts or liabilities that you may have, in a hassle-free manner.
Level premium rate: Under certain types of general insurance policies, the premium payable is likely to increase on an annual basis or whenever the policy is renewed. Since most life insurance firms offer term insurance plans with policy tenures ranging between 5 and 30 years, you can opt for your desired coverage period and pay the same premium amount for the duration of the policy tenure. Thus, you are assured of a level premium, which does not increase with age or inflation, for as long as your policy is active.
Helps in tax savings: Although not directly linked to your age, a key benefit of a term insurance plan is that it also helps you avail tax benefits. Thus, in addition to the policy benefits, you can also save on tax by purchasing a term insurance policy. You can claim tax benefits, up to specified limits, for premiums paid towards a term insurance plan under Section 80C of the Income Tax Act, 1961. Also, if a death benefit is paid out, your nominee can claim tax benefits for this lump sum amount under Section 10(10D) of the Income Tax Act, 1961.
Given the popularity of term insurance plans, all leading life insurance firms offer term insurance policies as part of their product portfolio. However, it is advisable that you compare various plans that are available in the market, request for premium quotes, and opt for one that provides you a suitable level of coverage at an affordable cost, before you purchase an insurance policy.
How Do Insurance Providers put a value of your life?
Purchasing a life insurance policy with a suitable coverage is a must for every individual, especially if one has dependents or liabilities. Unlike in the case of general insurance policies where the insurance provider will ascertain the value of the asset before providing you insurance for the same, it is often difficult to put a price on a human life.
The main purpose of a life insurance policy is to provide the policyholder’s dependents a payout in the event of the life assured’s death. This payout will help the family pay for immediate expenses and also help them meet future financial goals. Further, this benefit payout can act as an income replacement. Thus, it is necessary that you compare various insurance plans that are offered by insurance providers and opt for a plan that offers suitable coverage and adequate benefits.
How much coverage should you opt for?
At the time of purchasing your life insurance policy, you will be asked to select a sum assured. In most cases, this is the amount that will be paid to the nominee in the event of the policyholder’s death. Thus, it is vital that you choose a sum assured that is neither too less nor too much. A sum assured that’s too less will do little to help your family, whereas opting for a sum assured that’s too high will increase the premium payable.
Thus, before you opt for the sum assured, it is advisable to calculate your Human Life Value or HLV. A Human Life Value Calculator will help you calculate the financial or monetary value of your life, after taking your income, liabilities, savings, and investments into account. While most life insurance providers in India offer online Human Life Value Calculators, on their websites, for prospective customers to use before they purchase an insurance plan, there is also a simple formula that you can use to calculate the HLV.
Formula to calculate HLV: 70% of the policy buyer’s annual income/current rate of annuity + liabilities, loans, and debts that the policy buyer may have.
Things to be considered
Regardless of the type of insurance policy you purchase, be it a basic protection-oriented term insurance plan or a savings-oriented endowment plan, it is essential that you calculate your HLV before opting for a policy. Also, when you purchase an insurance plan, make sure to consider your coverage needs and opt for a suitable policy tenure. Further, before selecting a particular plan, make sure to research policies offered by insurers, check the claim settlement and grievance solved ratio of the insurance provider, request for premium quotes, and compare the main features and benefits of various plans.
People may envy an IT professional. People working in the IT sector are known to get a hefty package and have a comfortable lifestyle. However, one also needs to understand that an IT professional also leads an extremely stressful life as he/she has deadlines to worry about which means that the person has to spend long hours in the office. All these can take a toll on his/her health and thus a need for term insurance becomes extremely important.
Some of the reasons how term insurance is beneficial for an IT professional are given below:
One of the newest additions to mutual funds is the complimentary life insurance cover provided alongside a Systematic Investment Plan (SIP). These schemes have been in the market for a while but did not have a great demand compared to other mutual fund products. In the recent days, they have made a comeback mainly to make mutual fund investments competitive over other schemes in the market. Following the Union Budget 2018, the taxes introduced on long-term capital gains obtained through mutual funds may have made investors unhappy. However, this additional feature is likely to provide them with some more incentives for investing in mutual funds.
This type of insurance coverage along with SIP investment is available only with some companies in the market. The success of this model is likely to influence other companies to offer similar products to their customers. The insurance cover provided under this scheme is a term insurance plan that pays for the unexpected death of the insured person. In other words, there is no maturity benefit offered along with this insurance. Some of the notable features of this scheme can be listed as follows:
How it works ?
As mentioned above, the term insurance coverage value is determined by the SIP amount and tenure. In some plans, the maximum sum assured for the complimentary term cover will be 10 times the SIP monthly instalment in the first year, 50 times the SIP monthly instalment in the second year, and 100 times the SIP monthly instalment in the third year. If an investor is investing Rs.10,000 per month in the SIP plan, his/her term insurance coverage will be Rs.1 lakh in the first year, Rs.5 lakh in the second year, and Rs.10 lakh in the third year. The coverage available here will continue till the investor reaches 50 or 55 years (depending upon the age limit mentioned in the policy document) unless the plan has been cancelled by the investor.
Some of the key advantages of SIPs with insurance coverage are listed as follows:
Some of the limitations of this scheme are listed as follows:
The complimentary term insurance plan offered along with a mutual fund investment plan is certainly a welcome addition. However, the main focus here must be on the investment or savings part rather than the insurance coverage. It is always easy to find a comprehensive term insurance plan in the market at an affordable price. Hence, it is not a good idea to choose an SIP just for the sake of insurance coverage. Also, most industry experts suggest people to keep their insurance separate from their investments. However, if the investment plan is up to your expectations and the complimentary term insurance comes as an add-on, there is no reason why you shouldn’t opt for this type of SIP.
At the time of purchasing a life insurance policy, you are required to opt for a sum assured. The sum assured is the minimum amount of money that will be paid to one’s nominee in case of an unfortunate eventuality. While the sum assured is fixed for the duration of the policy for most term insurance plans, certain plans provide policy buyers the option to make enhancements to this sum during certain key milestones in their life. This type of a term insurance policy is called life stage event term insurance plan.
The milestones or events during which you can most commonly increase your sum assured include marriage, birth of the first child, and birth of the second child,legal adoption, etc.. You will have to keep in mind that when you make an enhancement to your sum assured, your insurance provider will also charge you a higher premium.
Thus, in case you purchase a term insurance plan with a certain sum assured and find that the coverage amount is not sufficient for you, you can choose to increase the coverage if you have a life stage event term insurance plan. However, not all term insurance plans come with this option. Thus, if you would like to have the option to increase the sum assured of your insurance plan, make sure to opt for a life stage event term insurance plan.
You may have asked yourself the question that who would take care of your loved ones in case something happened to you? If you are the sole earning member of your family then asking this question to yourself becomes extremely important and hence, you must take adequate steps to ensure that the future of your loved ones is safe and secure even if you are not around with them in the future.
Thus, insurance companies have introduced insurance products called the income protection plan which ensures that your family continues to receive a regular payout even in your absence so that they can continue to live the standard of life provided by you for which you have worked so hard.
If you have availed a regular term insurance plan, then the nominee appointed by you will receive a lump-sum amount called the death benefit in case of your death and the plan will cease to exist. However, one of the problems that the beneficiary may face is that he/she may not be able to stretch the amount for a long period of time and there is a risk that the amount may get exhausted quickly.
Thus, an income replacement plan is the best way forward as you can decide the amount and also how you would like your beneficiary to receive the amount i.e. on a monthly, quarterly, half-yearly, or on a regular basis.
Thus the aim of an income protection plan is to ensure that your loved ones continue to receive payouts on a regular basis so that they do not face any financial problems and continue to fulfill their needs and live a standard life. These plans cover till the age of 60 years.
You must purchase an income protection plan if:
Let us take the help of an example in order to have a better understanding of an income protection plan. For example, you are a 30 years old person with an initial monthly income of Rs.75,000. You purchase an income protection plan with a policy term of 30 years and where you have to pay a premium of Rs.1,970 on a monthly basis.
Suppose, you die during your 5th policy term, the insurance company will immediately pay the nominee a lump-sum amount of Rs.11 lakh as a death benefit. Thereafter, the insurance company will pay the nominee a sum of Rs.92,000 on a monthly basis. The monthly benefit will increase by 5% every year keeping in mind the inflation rate.
Similarly, if you meet with an accident in your 5th policy term which hampers your ability to work, the income protection plan then ensures that your family does not have to face any financial problems. You will be first of all be paid 50% of your monthly income as per the plan post the accident. Thereafter, the insurance company will pay you a monthly income of say Rs.45,000 which will increase by 5% every year up to Rs.50,000 for the rest of your policy term. Your future premiums will also be waived by the insurance company.
Of course, it is important to understand that the sum assured, policy term, and the premium payable will depend on various factors such as your age, annual income, financial needs etc.
You can see that under such plans, the income will rise by 5% for a very simple reason that the cost needed to sustain today’s life requirements may not be enough for tomorrow keeping in mind the inflation and thus the insurance company increases the monthly payout by 5% every year.
You may have various dreams that you want to fulfill for which you may take loans and EMIs. In case something happens to you, your family would be under severe pressure and may not be financially adept to repay back the loans and EMIs. An income protection plan is the best way to ensure that the future of your loved ones is safe and secure even in your absence.
With a variety of term plans available in the market, it’s difficult to make a choice knowing that you made the right decision. When opting for a term plan, you need to ask yourself the following questions:
Ideally, your term insurance cover should be 10 times your annual income. Anything below this might not be sufficient to take care of your nominee in your absence. Any amount above this is a good option, however, it’s not advisable to take a higher sum, as the extra premium paid towards the plan can be diverted to better investment avenues that are profitable. Listed below are certain factors that you need to check before selecting a sum assured amount:
You will be required to provide a valid ID to the insurance company. Some of the accepted ID proofs are:
Proof of Residence
The main purpose of purchasing a term life insurance policy is to ensure that one’s dependents are taken care of in case of an unfortunate eventuality. Thus, to make sure that your dependents don’t face any hassles at the time of making a claim, make sure to keep the points mentioned below in mind:
While traditionally insurance policies were always sold by agents, prospective policy buyers, today, have the option of purchasing term insurance plans through both online and offline channels. Purchasing insurance plans online is a hassle-free and convenient process. The key benefit of purchasing an insurance plan online is that you can view various policies that are offered, compare the key features and premium rates of these policies, and opt for one that is best suited to your needs. Further, you will also find that insurers offer online term insurance plans at a lower premium rate, when compared to offline term insurance policies. Thus, if you are looking to purchase an online term insurance policy, here is how you should go about it.
*Note: This is a general procedure to purchase an online term insurance plan. The actual procedure might vary from insurer to insurer and plan to plan.
Term insurance is one of the most overlooked investment options in India. However, it is one of the most important investment options that you must consider if you have beneficiaries and assets to take care of. Though you may not like to think of your death, eventually this is a reality for which you must prepare yourself and hence you must purchase a term insurance plan so that you can work towards achieving your goals while also having a peace of mind. Also, there is nothing better than having the assurance that the future of your loved ones is safe and secure even if you are not around with them.
It is not everyday that you will be purchasing a term insurance plan for yourself and you need to do it once, and hence you must buy a plan so that you can secure your finances. One of the biggest issues with term insurance is that not all the plans are the same and is designed differently keeping in mind the different needs of the customers. Hence, if you don’t know how term insurance works, choosing a policy for yourself can be a difficult task. Thus, you must make efforts to know how term insurance works so that you can choose an appropriate plan for yourself and secure yourself against death, disability, and disease.
Term insurance works on a very simple mantra i.e. providing a lump-sum amount called the death benefit to the nominee in case of your sudden demise. In case you survive the tenure, you do not receive any benefits whatsoever. Thus many people due to this fail to understand that there is no bigger investment then securing your future and ensuring that the future of your loved ones is safe. Apart from this, purchasing a term insurance policy allows you to enjoy various tax benefits as well. If you are the sole earning member in your family, then it becomes even more important for you to purchase a term insurance policy for yourself. Having a term insurance plan is one of the most reliable ways in which you can protect the future of your family members. There are insurance policies which provide guaranteed payouts after the policy term comes to an end irrespective of whether you are alive or not. These types of policies are called Whole Life Insurance policies, which are expensive as compared to a term insurance plan. Term insurance is cheap and affordable in nature, for example, you can buy a policy with the cover amount of Rs.1 crore where you may have to pay a monthly premium of Rs.650 - Rs.850 depending on the benefits that you may have availed for yourself. If you are looking for a WTP then the premiums you may have to pay may range between Rs.1,200 - Rs. 6,500 per month.
You must not purchase term insurance thinking that it is supposed to provide you cover only in case of your death. A term insurance plan also ensures that the future of your loved ones do not suffer in case you meet with an accident and become disabled which would lead to a considerable loss of income since you will have to take a leave of absence. According to various international reports published, it was revealed that a 20 years old adult has over 26% chances of being temporarily disabled for a minimum period of one year before retiring.
Term insurance plans come with riders or add-on plans which ensures that you are covered and your family does not undergo any financial trauma in case you are disabled due to an accident either on a temporary basis or on a permanent basis. On purchasing a rider, you will receive a monthly income for a fixed period of time, or a lump-sum amount if you are disabled permanently. The amount that your nominee will receive will depend completely on how critical your disability is. In case you suffer from a permanent disability, the insurance company will pay you the cover amount, you will receive the partial sum assured in case you suffer from a disability which is temporary in nature. However, the conditions for pay-out may vary from insurer to insurer.
One of the benefits that you can avail for yourself on purchasing a term insurance plan is a Critical Illness Benefit which provides you cover in case you get diagnosed with a major health condition. There are various term insurance plans in the market which provides cover for various health conditions such as cancer, stroke, multiple organ failure, heart attack, etc. Since the medical inflation is expected to rise in times to come, paying the expenses arising due to the treatment of the condition may punch a deep hole in your pocket, and thus it is important that you purchase a critical illness cover so that even if you are diagnosed with any major health condition, you do not have to worry about the expenses. These types of plans are fixed benefit plans which pay out a lump-sum amount. You can purchase a critical illness plan in two ways. One as a rider along with your term insurance plan, or as a standalone plan which is offered by insurance companies along with standard life and health insurance policies.
Purchasing a life insurance policy is a smart way to ensure that your dependents have the financial means to meet the key milestones in their lives in the event of your untimely demise. However, for a life insurance policy to be of help to your dependents, it is vital that you opt for a sufficient sum assured or life cover when purchasing the policy.
When you buy a policy, you will be required to opt for a sum assured. Insurance providers will usually specify the minimum and maximum sum assured that you can opt for when purchasing a policy. A policy buyer will, thus, have to opt for a suitable sum assured within the limits specified by the insurer.
In case the policyholder succumbs to an untimely death during the policy tenure, a death benefit, usually amounting to the sum assured amount, will be paid to the nominee. Thus, it is necessary to opt for an adequate sum assured to ensure that you are not underinsured and that your dependents won’t have to face any financial troubles in the future.
Factors to consider to determine how much sum assured you need
Ideally, the sum assured that you opt for should be representative of the total value of your liabilities and debts, your family’s annual expenses, and the expenses that will have to be borne by your family members during significant events or milestones in their lives. While the importance of purchasing a life insurance policy cannot be understated, it is important to remember that choosing the right sum assured is just as important.
We all know that it is extremely important to have an insurance especially during the time when you have various responsibilities to fulfill and many financial goals to achieve. Having an insurance in place ensures that your family is safe and secured monetarily even if you are not around. Life post-retirement means that you are not working anymore. You are also free of your responsibilities and you may have achieved all your goals. Your children are probably independent by now and capable of taking care of themselves. So, do you need an insurance post your retirement? In some cases you do. It is generally recommended that you purchase a term insurance for yourself since it covers you for a specific period of time. But why do you have to be covered at all after you have retired? We discuss the reasons.
It is generally difficult to purchase a term insurance policy post-retirement as insurance companies are not willing enough to provide one. The premiums that you might have to pay might be expensive and become difficult for you in terms of affordability. Hence, it is important that you have planned well in advance regarding your life. For example, it is rare to have children still being dependant on you after you have retired, but if you are aware that a case like this can arise in the future, it is recommended that you purchase a term insurance well in advance.
The reasons mentioned above are strong enough for you to contemplate whether you need a term insurance post-retirement. If you still have responsibilities to take care of post your retirement then it is advisable that you act and buy a suitable term insurance plan for yourself.
Key Features of LIC’s e-Term Plan:
Key Features of Max Life Online Term Plan:
Key Features of ICICI Prudential iProtect Smart Plan:
Key Features of the SBI LIfe - eShield Plan:
Key Features of Bajaj Allianz iSecure Plan:
|Plan Name||Age at Entry||Maximum Maturity Age||Policy Tenure||Minimum Sum Assured|
|LIC's e-Term Plan||18-60 years||75 years||10-35 years||
|Max Life Online Term Plan||18-60 years (will vary based on premium payment term chosen)||85 years||
|ICICI Prudential iProtect Smart Plan||18 – 65 years||75 years||Minimum policy term is 5 years||Subject to the minimum premium|
|SBI Life - eShield Plan||
|Bajaj Allianz iSecure Plan||18 – 60 years||70 years||10, 15, 20, 25, or 30 years||Rs.2,50,000 (for general category)|
Key Features of SBI Life - Smart Shield Plan:
Key Features of LIC’s Anmol Jeevan II Plan:
Key Features of Max Life Super Term Plan:
Key Features of LIC’s Amulya Jeevan II Plan:
Key Features of HDFC Life CSC Suraksha Plan:
|Plan Name||Age at Entry||Maximum Maturity Age||Policy Tenure||Minimum Sum Assured|
|SBI Life – Smart Shield Plan||18 – 60 years||65 years||5 – 30 years||Rs.25 lakh|
|LIC’s Anmol Jeevan II Plan||18 – 55 years||65 years||5 – 25 years||Rs.6 lakh|
|Max Life Super Term Plan||18 – 65 years||75 years||10 – 35 years||Rs.25 lakh|
|LIC’s Amulya Jeevan II Plan||18 – 60 years||70 years||5 – 35 years||Rs.25 lakh|
|HDFC Life CSC Suraksha Plan||18 – 55 years||60 years||5 – 15 years||Rs.30,000|
A term insurance policy is a type of life insurance product that provides a risk cover against death to the policy buyer. Thus, in case the policyholder passes away while the policy is still in-force, a death benefit, will be paid to the nominee. Traditionally, the death benefit is paid to the nominee as a lump sum amount.
While the purpose of a lump sum death benefit is to help the policyholder’s dependents pay for immediate financial needs and to save some money for their long-term needs, the fact remains that many people do not know how to best invest this payout for maximum returns, and, as a result, might have to face financial problems a few years down the line.
Keeping this mind, life insurance firms have started to offer income replacement term insurance plans as a part of their product suite. In the case of an income replacement term insurance plan, which is a variant of a regular term life policy, the death benefit or payout will usually be split into two parts – a lump sum payout that is paid to the nominee upon the policyholder’s death and a fixed monthly income which the nominee is eligible to receive for a certain number of years, usually between 10 years and 15 years. Thus, income replacement term insurance plans are ideal if you want to ensure that your dependents are provided a regular and fixed source of income in case of an unfortunate eventuality.
Income replacement term insurance plans usually come with a few payout options, from which a policy buyer can choose an option as per the needs of his/her dependents.
The key benefit of a purchasing an income replacement term insurance policy is that you can ensure that your loved ones have the means to pay for financial expenses that they might incur in your absence. With this mind, you should ideally purchase an income replacement term insurance plan if:
An income replacement term insurance plan is a smart choice for any individual who wishes to provide financial security to his/her loved ones for a significant duration of time. However, the decision of which life insurance product to purchase should be based on your needs, liabilities, and future requirements. For example, if you have a number of debts, opting for an income replacement term insurance plan might not be the best choice since the lump sum benefit provided by a regular term insurance policy can help your dependents clear off all the debts at once.
On the other hand, if you are looking for a financial product that will provide guaranteed monthly returns for a number of years, an income replacement term insurance policy is your best bet. Also, before you purchase an insurance plan, make sure to compare at least a few different policies offered by different insurance companies, check the pricing, and read through the policy benefits and features to make an informed decision.
Buying a Term life insurance cover is a must for everyone since it can provide your dependents financial security in case of an unfortunate eventuality. However, purchasing insurance can sometimes be a tricky business, given the number of choices that are available and the various jargons that are used by insurers to describe their products. Thus, we’ve listed down five moves that you should make, especially if you a first-time insurance buyer.
Term Life insurance plans can provide you something truly priceless – a sense of security and peace of mind. Thus, make sure to follow the tips mentioned above and invest in a plan that will give you sufficient coverage.
Purchasing an insurance policy is a significant financial decision, one that requires both thought and time. While finding the right policy and purchasing it at a competitive rate is a task in itself, there are a few things that you should look at after buying the policy to ensure that you and your nominee are able to get the most out of the policy when the need arises. Thus, we’ve compiled a five-point checklist of things you need to do after purchasing your policy.
A life insurance policy is a must-have at all times, and purchasing it will give you a sense of security and peace of mind. However, to ensure that you can avail the maximum benefits from your policy, make sure to keep the points mentioned above in mind.
Riders or add-ons are offered by life insurance companies to policy buyers at the time of purchasing their base policy. While the coverage offered by the base policy is more or less fixed, riders give policy buyers the option to customise their policy as per their needs. Thus, riders offer the policyholder coverage over and above the life cover offered by the base policy. The key benefit of purchasing an insurance rider is that you can avail an increased protection by paying a nominal premium. Also, since the insurance rider is linked to your main insurance policy, you don’t have to go through the hassles of maintaining two policies.
There are a number of riders available with term insurance plans depending on your choice of the insurance provider. Some of the main riders available with these plans are:
A few popular riders that are offered by life insurance companies include the Waiver of Premium Rider, Accidental Disability Benefit Rider, Accidental Death Benefit Rider, Critical Illness Rider, etc. Each of these riders serve a unique purpose and offer varied benefits and features. In this article, we will look at the benefits and importance of a critical illness rider.
A critical illness rider is attached to a term insurance policy to protect the life assured from financial expenses that he/she might have to incur in the event of being diagnosed with a critical illness. Thus, a critical illness rider covers a number of pre-specified critical illnesses, and if the life assured were to be diagnosed with any one of those illnesses, a lump sum benefit would be paid out to him/her. Thus, given the increasing number of critical illness cases and rising medical/healthcare costs, it is smart to purchase a critical illness rider along with your base insurance policy.
Purchasing a critical illness rider along with your term insurance policy will provide you an extensive and comprehensive coverage. Given just how expensive it can be to treat critical illnesses, purchasing a critical illness rider as a precautionary measure is a smart move. Also, even if the rider ceases to exist after the benefit is paid out, your base policy will still continue to remain in force. Thus, you can continue enjoying the life cover provided by your term insurance policy even after the rider coverage ceases.
Term insurance plans are one of the most popular insurance plans in India. A term insurance plan provides the policyholder a risk cover against death, thereby offering financial security to his/her nominee. If the policyholder meets with an untimely death during the policy tenure, a death benefit will be paid to the nominee. That being said, there are certain limitations with regards to the kinds of death that are covered by a term life insurance plans.
Group term insurance schemes or plans are specially designed to provide a risk cover against death to the members of a group. These plans are usually purchased by affinity groups or by employee-employer groups to provide additional benefits to enrolled members. Group term insurance plans are intended to provide financial security to the dependents of the enrolled members in the event of a member’s death.
Listed below are the general features of group term insurance plans. Please note that the exact features will vary from plan to plan and insurer to insurer.
Term insurance plans offer the most basic type of insurance coverage to policy buyers. These plans are purely protection-oriented and provide a risk cover against death on the life of the policyholder. If the policyholder passes away during the policy tenure, the insurer offers a death benefit payout to the nominee. However, since these plans do not acquire a cash value, they don’t provide survival or maturity benefits.
The growing popularity of term insurance plans can be credited to the fact that they offer the policy buyer a high sum assured for a low premium rate. Traditionally, term insurance plans were purchased on an individual basis. Thus, one policy could only cover one individual. However, with changing times, life insurance providers have started offer joint term life policies. As the name suggests, a joint term insurance plan provides life cover to two individuals under a single insurance policy or contract.
A joint term insurance plan offers policy buyers a number of advantages over regular term insurance plans. Further, several leading insurance companies are now also offering these policies to business partners and parents who want to assign the child as the co-owner of the policy. Thus, if you are looking to purchase a joint term insurance policy, make sure to compare the various plans available and opt for one that provides you adequate benefits, at a competitive price.
The purpose of a term insurance policy is to provide financial security to a policyholder’s dependents in case of an unfortunate eventuality. Term insurance policies are extremely popular among policy buyers due to their affordable premium rates and comprehensive coverage. When purchasing term insurance, you can opt to purchase a traditional individual plan or a joint life cover that will cover both you and your spouse under the same policy.
Joint Life Term Insurance Plan: A joint life term insurance plan is meant to provide coverage to both spouses under a single policy. Thus, in this case, policyholders will need to pay a single premium in order to maintain the policy. The way the benefit is paid out will usually vary based on the policy’s terms and conditions. In certain cases, if one policyholder passes away, the surviving spouse receives the death benefit payout, after which the policy terminates. In other cases, the policy might continue even after one policyholder’s death. Insurers might also offer a number of payout options, wherein the death benefit can be paid as a lump sum or in the form of instalments.
The main benefit of purchasing a joint life term insurance plan is that it is usually less expensive than purchasing separate individual term insurance policies for yourself and your spouse. Further, you also don’t have to go through the hassle of maintaining two different insurance plans.
Individual Term Insurance Plans: An individual term insurance plan offers coverage to a single policyholder. In the event of the policyholder’s death, a lump sum payout will be offered to the nominee. After the benefit is paid out, the risk cover will cease to exist. In this case, there is no option to extend coverage to your spouse under the same plan. However, you can choose to purchase a separate term insurance policy for your spouse, if the need arises. Purchasing individual term insurance policies might be the better bet if you and your spouse have different coverage needs.
Which should you choose?
Both joint life policies and individual term insurance plans have their own sets of pros and cons. You should decide which type of term insurance policy to purchase only after assessing your coverage needs, the needs of your dependents, your premium payment ability, etc.
Further, before you opt for a particular policy, make sure to visit an online third-party insurance comparison website and compare at least a few different policies. This will give you an idea about the benefits that are typically offered by insurers and the premiums that are charged. In the end, you should always opt for a policy that offers you coverage as per your needs at a premium that is affordable for you.
A convertible term insurance policy is one that allows policyholders to convert their plan into a different life insurance product type during the tenure of the policy. Convertible term insurance policies are ideal for those individuals who are unable to pay a high premium for an endowment or whole life policy at present but wish to increase their coverage in the future. Convertible term insurance policies can be offered as standalone insurance policies or riders by life insurance providers.
There is a key difference between term plans that are labelled “renewable” and the ones that are labelled “convertible”. In the case of renewable term insurance policies, the policyholder can renew or extend the coverage period at maturity of the policy. During renewal, the policyholder might have to pay an increased premium due to his/her age. On the other hand, in the case of convertible term insurance policies, these policies come with an inbuilt option to convert the term insurance plan into another life insurance product, such as a whole life plan or an endowment plan.
The primary purpose of purchasing a life insurance policy is to ensure that your dependents are financially protected in case something unfortunate happens to you. The payout provided by a life insurance policy can act as an income replacement and can go a long way in helping your family maintain their standard of living.
However, purchasing a life insurance policy and nominating a dependent alone does not guarantee the financial security of your loved ones. If you have taken loans or have other liabilities, it is likely that the death benefit payout will be first used to pay off creditors. In this case, your nominee will only receive whatever is left of the benefit amount, if anything. Thus, it is a must to purchase life insurance policies under the Married Women’s Property Act (MWPA), especially if you have dependents.
The Married Women’s Property Act was originally created to protect the financial interests of married women across India. As per Section 6 of the MWPA, if a life insurance policy is purchased under the MWPA by a married man, the sum assured that is payable under the policy upon the policyholder’s death will be the property of his wife/children alone. No creditor or lender will be able to claim any part of this payout.
Further, the MWPA also states that married women can purchase a life insurance policy under the MWPA with her children as the beneficiaries. In this case, the husband will not be able to claim any part of the payout provided by the life insurance firm.
Any individual who is a married man and is a resident of India can purchase a life insurance policy under the Married Women’s Property Act. Further, policies under the MWPA can also be purchased by divorcees and widowers. If the policy is being purchased by an individual who is a widower or a divorcee, his children will have to be named as beneficiaries of the policy.
Married women may also purchase life insurance plans under the MWPA and nominate her children as beneficiaries. However, one thing to keep in mind is that this benefit can only be opted for by the policy buyer at the time of purchasing the policy, and only if you purchase the policy for yourself. Any type of life insurance policy can be purchased under the MWPA, regardless of the premium amount, policy tenure, etc.
If you purchase a life insurance policy under the MWPA, you can either name only your wife as the beneficiary, only your child/children, or you can name both your wife and children as beneficiaries. Further, you also have the option of dividing the sum assured among your beneficiaries, either equally or in varying percentages.
One thing that you should remember when naming your beneficiaries is that once the beneficiary has been assigned and the policy has been issued, you cannot change the beneficiary at any time during the policy tenure.
The process of purchasing a life insurance policy under the MWP Act is extremely simple. As a prospective policy buyer, you will need to fill-up an MWPA addendum form along with your life insurance policy application form at the time of purchasing the policy. This addendum will be available with insurance agents and can also be downloaded through the insurer’s official website. You will need to remember that a policy can only be brought under the coverage of the MWPA at the time of purchasing it.
Purchasing an insurance plan under the MWPA is a great way to ensure that your dependents are financially protected under any eventuality. Availing the benefits of the MWPA is all the more important for individuals who have taken loans or don’t have a steady source of income. Given how beneficial it can be to purchase a life insurance policy under the MWPA, it is a must that you don’t overlook this option at the time of buying your policy.
In conclusion, you will have to keep in mind that the inclusions and exclusions mentioned above are a general list, and may vary from plan to plan. Different life insurance companies may have varied clauses with regard to the exclusion, thus make sure to read through the policy brochure before purchasing a term life insurance policy. Also, make sure to inform your nominee about the coverage offered by your plan in order to avoid any hassles, at the time of filing a claim.
If you have purchased a term life insurance policy, you will be expected to make the due premium payments to your insurance provider, as per the premium payment schedule. Typically, insurance companies provide a 15-day or 30-day grace period to policy buyers, during which time they can pay their premium amount without paying an additional interest charge. However, in case you haven’t paid the due premium amount before the completion of your grace period, your policy will lapse.
You will have to remember that not all insurance plans lapse due to non-payment of premiums. For example, in most cases, term insurance plans lapse if the policyholder doesn’t pay the due premium amount within the grace period. On the other hand, if you have a traditional insurance plan that has already acquired a surrender value, your insurance policy will not lapse if you stop paying the premium. In this case, your insurance policy will simply continue as a paid-up policy with a reduced sum assured.
Reviving a Lapsed Policy
In the case of insurance plans that have lapsed, insurance providers usually offer policyholders the option to revive the insurance plan within a certain number of years - usually ranging between 2 years to 5 years. Post this revival window that is provided to you, insurance firms usually do not entertain policy revival requests.
In order to revive a lapsed policy, you will need to pay all due premiums from the date of the first unpaid premium with the applicable interest rate. In addition, if your policy has been lapsed for a while, you might also have to undergo a medical test to prove your insurability to your insurer.
Throughout our lives, we do everything we can to protect our loved ones. We ensure that our homes are safe and that the schools our children go to are well-protected. Along with such measures, we also need to ensure that our family is protected against our death. This is when we should realise the importance of life insurance policies. A life insurance policy offers financial protection to our family members in case the unfortunate were to pass. Various types of life insurance policies are available in the market - ones that offer savings, ones that offer a channel to make investments, etc.
A term insurance policy is one such life insurance policy type that carries out the basic function of providing life cover. It does not offer savings or returns of any kind. Hence, term plans are one of the most popular life insurance policies. They are simple and affordable. A few insurance companies also provide certain riders to enhance the plans.
As much as it is important to purchase a life insurance policy, it is equally important to renew the policy you hold. If you possess a term plan, you should ensure that you renew the plan so that the life cover is extended.
While purchasing a term insurance policy, it is a good idea to pick one that has the renewability option. Renewability allows you to enjoy life cover after completion of the policy term chosen by you, initially, without having to purchase a new policy or undergo a medical examination.
Here’s why renewing your term life insurance is important:
Points to note about term insurance renewal
A term insurance policy is an assurance to you that your family will manage their expenses even in your absence. Renewing a policy is no rocket science and it can be done online through the websites of the insurance companies. So, don’t think twice to renew your term insurance policy which will secure the future of your loved ones.
|Criteria||Term Plan||Endowment Plan||Unit Linked Insurance Plan (ULIP)|
|Purpose||Pure protection||Protection plus investment||Protection plus more investment opportunities in equity and debt|
|Benefits||Death benefits||Death and maturity benefits||Death, maturity and withdrawal benefits|
|Returns on Premium||No||Yes||Yes|
|Premium costs||High sum assured at low premiums||Premiums are higher for same sum assured||Premiums are higher for same sum assured|
|Loans||Loans are usually not available||Loans against policy is available||Partial withdrawals can be made after 3 years|
Life insurance offers the much needed financial security to the dependents of a person following his/her unexpected demise. There are different types of life insurance policies including term insurance, permanent life insurance, ULIPs, etc. Term life and permanent life are the two most common forms of life insurance available for customers. When it comes to choosing between these two, the decision must be made based on your personal needs, affordability, financial goals, dependents’ needs, etc. Let’s discuss the pros and cons of these two plans in detail to help you narrow down the choices.
Term life insurance is simplest form of life insurance. It is also the cheapest type of life insurance you can buy. Term plans can be bought for a specific period, say 5 years or 10 years or even 30 years, depending upon your requirement. The cost of insurance gets higher with your entry age. For instance, a term plan for a 30-year old person is much cheaper than a term plan for a 50-year old person. Once entered, the premium amount for term insurance remains the same as long as the policy is renewed. Hence, it is better to enter a term insurance plan at a very young age.
There are a few limitations associated with term insurance plans. One of the major limitations of term insurance is that it does not offer any maturity benefits at the end of the policy term. If a policyholders outlives the policy term, the plan will come to an end and no payout of any sort will be paid to the insured person. If you need protection for a longer time, you must take a separate over after one expires or you need to convert your term plan into a whole life plan (a form of permanent life insurance plan). Lack of maturity benefit is one of the reasons why term plans are much cheaper than other varieties of life insurance.
Permanent life insurance is a kind of life insurance cover that remains active throughout a person’s life. This comes with an insurance as well as investment component to provide maximum benefit to policyholders. One of the major advantages here is that the death benefit is guaranteed to the dependents as long as the policy remains active. The cash value associated with the investment part grows steadily and matures at a guaranteed rate. Also, the premium amount remains the same throughout the life of the policyholder.
Among the downsides of permanent life insurance, it has been often stated that these plans are a little more complicated than term life insurance plans. Since there is an assured return, permanent life insurance is way more expensive than term plans. The cash value growth in this type of insurance is extremely slow, and it takes more than 10 to 15 years to accumulate a decent amount.
When it comes to choosing between term or permanent life insurance, various factors such as age, health condition, financial requirements, family needs, retirement plans, debts and liabilities, etc. must be taken into consideration. Also, the cost of insurance determines the choice in many cases. Term plans are ideal for replacing your income and paying for your liabilities. Permanent life plans are most suitable for estate planning. Also, permanent life is ideal if you have to provide for lifelong dependents.Conclusion
Both term life insurance and permanent life insurance policies come with their own set of advantages. Choosing between these policies must be done after understanding of your financial situation and determining the type of protection you need for your dependents. There are various life insurance companies in the market that offer both plans to their customers. Make sure that you do a thorough research on the available policies before choosing a life insurance plan that meets your expectations.
A level term insurance policy is a type of term insurance plan that is most commonly offered by Indian life insurance providers. Under a level term insurance plan, the premium payable will be determined before the risk cover commences, and this premium rate will remain constant for the duration of the policy tenure. Policy tenures for level term insurance plans can range between 5 years and 30 or 40 years, in India.
Under this type of policy, the premium rate does not rise with the policyholder’s increasing age since the premium payable for each policy year is averaged by the insurance provider. Thus, if you choose a longer policy tenure, you premium payable will be higher, and vice versa. Most level term insurance policies can be renewed by policyholders, at the completion of the policy tenure. However, at renewal, the insurer may charge you a high premium rate due to your increased age. Also, if the policyholder’s health has deteriorated significantly or if the policyholder has developed certain life-threatening diseases or ailments, the insurer may not allow the policyholder to renew the policy.
Certain insurers also provide policyholders the option to convert their term insurance plan into a whole life policy or an endowment assurance policy. However, this option varies from insurer to insurer, and customers might not always be offered this benefit. Thus, when purchasing a term insurance policy, it is advisable to start young and opt for a long policy tenure, which can provide you adequate coverage during your employment years.
Term insurance is one of the purest forms of insurance you can purchase for yourself. It provides only a protective cover and in case something happens to you, the nominee appointed by you will receive a lump-sum amount called the death benefit. However, one of the problems that people are not aware of are the types of term insurance policies.
There are various types of term insurance policies which you can avail for yourself based on your needs and other financial requirements. For example, the return of premium term plans, returns your premiums in case you survive the policy term. Similarly, increasing term insurance plans allow you to increase your cover amount as your responsibilities increase over a period of time, especially keeping in mind your other financial requirements, you may have to increase your cover amount. A decreasing term insurance plan is the opposite of an increasing term insurance plan, where you have the option of reducing your cover amount over a period of time.
You purchase a term insurance policy since you may have financial liabilities to take care of, and a term insurance plan provides coverage to you and your family. In case something happens to you, the death benefit provided to the nominee can help in paying back the loan and other financial liabilities that you may have. However, a decreasing term insurance plan works in a different manner. As you pay your loan installments on a yearly basis, the outstanding loan balance reduces and so does the requirement for a higher sum assured as well. The cover amount chosen by you helps in clearing off the loan liabilities in case something happens to you, and as these liabilities decrease, so should the cover amount. For example, if you are a 30-year old person and purchase a decreasing term insurance plan with a cover amount of Rs.20 lakh for a period of 20 years. According to your plan, the cover amount at the end of each policy term will decrease by 5%. Hence, your new sum assured after the end of the first policy term will be Rs.19 lakh, Rs.18 lakh for the second year and so on. In case you meet your demise when the term is still in force, the nominee appointed by you will receive the available cover amount post reduction. For example, if you die in the 10th year of your policy, then the nominee will receive a sum assured of Rs.10 lakh, which will allow the beneficiary to pay off the remaining financial liabilities.
There are certain advantages to having a decreasing term insurance plan. They are as follows:
In the end, a decreasing term insurance can be beneficial to you provided you have loans and other financial liabilities which are expected to decrease over a period of time. If you are sure that your loan and other financial liabilities are expected to decrease with time to come, then it is suggested that you purchase a decreasing term insurance plan for yourself. A decreasing term insurance plan not only provides you with a loan protection cover but also provides your loved ones with a protective cover and ensures that the future of your loved ones is safe and secure even in your absence.
The most unique feature about term insurance plans is that there is no return on premiums in the event that the policyholder survives till the end of the term. Many people do not opt for a term plan because if they survive the term, then the money is gone. There is no return on investment with a term plan. However, there are a few insurance companies in the market that offer returns on premiums with their term plans. There are not too many of these plans available, but with research one can find a term plan that provides this benefit. Under these plans, if the life insured is still alive at the end of the plan term, then they will receive the premiums paid minus any fees, administrative charges, and so on. Some of the top Return of Premium Term Plans in India are:
The Jeevan Mangal Plan from Life Insurance Corporation of India is a micro insurance product that returns all premiums paid during the policy tenure, on the date of maturity.
Key Features of LIC’s Jeevan Mangal Plan:
The Premium Return Protection Plan from Max Life Insurance is a policy that guarantees the return of all premiums paid should the policyholder survive till the completion of the plan tenure.
Key Features of the Max Life Premium Return Protection Plan:
The ICICI Prudential LifeGuard Plan comes with three plan options – Level Term Assurance, Level Term Assurance with Return of Premium, and Single Premium. Policy buyers can opt for any plan option as per their requirements.
Key Features of ICICI Prudential LifeGuard Plan:
The iRaksha TROP from Tata AIA Life Insurance is an online term insurance plan with a ‘Return of Premium’ feature. Thus, this plan provides a death benefit in the event of the policyholder’s untimely demise or a survival benefit if the policyholder survives till the end of the policy tenure.
Key Features of Tata AIA Life Insurance iRaksha TROP:
This plan is a non-participating term insurance plan which is offered at a nominal cost by the insurer. Under this plan, upon maturity of the plan, the policyholder will receive the sum of all premiums paid and the Guaranteed Additions.
Key Features of MetLife Suraksha TROP:
Purchasing a term insurance plan is a brilliant decision that one can make. A term insurance policy provides your family with a protective cover in case something happens to you; your family will be financially covered and does not have to undergo any monetary turmoil in your absence. This allows you the necessary peace of mind while you go about taking care of any financial liabilities that you may have.
However, having two term insurance plans can be even better. You are provided double cover and in case something happens to you, the nominee gets double cover, which ultimately ensures that he/she is able to take care of all the financial requirements in your absence without the fear of the cover amount getting exhausted anytime soon. So, what are the benefits of having two term insurance plans? We discuss below.
The following are the benefits of having two term insurance plans:
Having two term insurance plans will naturally be slightly expensive as compared to having one term insurance plan, but anyone will surely prefer to have that extra layer of protection. Having two term insurance plans means that you will be able to take care of your future goals without having to worry about the financial trauma that your family may undergo in your absence as two term insurance policies mean that the nominee will receive the extra cover amount. It is also perfectly legal to have more than one term insurance policy provided that you have disclosed all the relevant information about your health and lifestyle and the combined sum assured of all policies do not exceed your human life value. Having two term insurance policies also provides you the assurance that in case one of the policies do not work out and the claim amount gets rejected due to whatever reasons concerned, your family has the cushion of having extra insurance and are able to take care of their financial requirements even in your absence. Thus, these are some of the few reasons why you should have two term insurance policies for yourself.
In the event that you need to make a claim from the insurance company for the benefits of a term plan, the steps listed below is the general process to be followed:
Term Insurance Premium Calculators are handy tools that are specially designed to help potential term plan customers to calculate their premiums for the cover they wish to opt for. The calculators are easily available online and are very simple to use. Customers can adjust the sum assured to see different premium rates. To use these calculators, you need to follow the steps given below:
The most important step while taking a term plan is to determine how much coverage would be sufficient. Ensure you choose a sum that will help fulfill the needs of your loved one in your absence.
Insurance companies witnessing a rise in demand for policies on online platforms
In today’s time when everything is available easily online, more people are making use of it by not only shopping for clothes, making payments, or ordering food, but also purchasing insurance policies.
Currently, the number of insurance policies sold online is still at a nascent stage, but the insurance companies are witnessing a large number of people from only urban areas but also from smaller towns interested in purchasing insurance policies online.
Insurance penetration in India is estimated at 3.49 percent for the year 2016-17 which is well below the global average, but one of the biggest positive to come out is that more and more people are becoming aware of purchasing insurance policies online and depend less on agents.
Rakesh Goyal, the director of Probus Insurance said that lot more people are using the online platforms to know more about different insurance policies, exclusions, and are more informed and hence making better choices when it comes to buying insurance policies. According to Goyal, Probus Insurance sells an average of 18,000 policies through its online portal every month which has allowed them to expand their portfolio of products due to high demands.
Though only 7% of the total insurance policies in India are sold through online platforms, the reach, affordability, reach, and convenience are some of the major reasons why people are looking to purchase insurance policies online.
If you go back ten years, you will easily see that there was no online platform for people to purchase insurance policies. However, with the boom in technology, more and more people are going digital. Insuretech has played a huge role in more and more people purchasing policies online and with a large crux of these demands coming from people belonging to tier I and tier II cities.
Travel insurance and motor insurance are common attraction among those who purchase insurance policies online, but people are also purchasing small-ticket policies for home insurance and are also spending a considerable amount of time reading about products such as term insurance. The insurance companies are also making things more user-friendly which includes online documentation for health insurance policies.
For example, Royal Sundaram relies heavily on its online platform as more than 54% of their business happens thanks to the internet. Out of it, 50% of the products that they sell, the customers who buy these policies belong to tier II cities. The insurance companies have realised that in order for them to be successful, they will have to pay attention to innovation and technology as it is easier selling insurance products online since everyone in India has a smartphone and an internet connection.
Customers are using both online and offline platforms in order to purchase insurance policies for themselves. However, people look for trust, simplicity, a simplified underwriting process, and fast issuance of policies when looking to buy insurance policies online.
Stocks investors cannot ignore the opportunities in the insurance sector
One of the sectors which is expected to grow and has a ton of opportunities waiting to be harnessed. The industry overall has grown by leap and bounds with the size of the total premium basis of non-life insurance and life insurance sector grown at Rs.1.28 lakh and Rs.4.2 lakh.
The time period between the fiscal years 2001 to the fiscal year 2017 has seen the total premium grow at 17% CAGR after private players were allowed to enter the industry in 2000. The insurance industry between the period fiscal year 2007 to the fiscal year 2017 saw its new business premium grow at 9% CAGR.
According to CRISIL, the next five years is expected to see the total premium grow at 13% - 15% CAGR from Rs.4.18 lakh crore in FY2017 to Rs.7.90 - Rs.8.10 lakh crore by FY2022. The period between FY2017 to FY2022 is expected to see the Gross direct premium income for non-life insurance grow between 15% - 20%.
The insurance sector overall is undergoing modernisation. Newer techniques have been adopted in order to counter fraud and exploring better methods related to risk management, investment, and operating models.
The insurance industry has managed to penetrate deep into the core of the country thanks to Pradhan Mantri Fasal Bima Yojana (PMFBY). The scheme successfully insured more than 50.9 million farmers in the year 2016-17.
The launch of Ayushman Bharat – National Health Protection Scheme which will provide benefits of up to Rs.5 lakh per family has also played a significant role in more people purchasing insurance for themselves. The government is also providing other benefits such as direct benefit transfers under the Digital India programme which has helped the industry.
The year 2017 also turned out to be an important year for the insurance industry as more and more insurance company went public while few more are in line to be listed on various Indian bourses. This has helped in bringing a certain level of compliance and will continue to improve the service levels of the insurance companies.
The Insurance Regulatory and Development Authority of India (IRDAI) has also played a role in the enhancement of PE investments in the insurance sector in India by allowing the private equity investors to invest in unlisted insurance companies.
The future of the insurance industry looks extremely positive thanks to several changes being incorporated into the regular framework which will allow the stakeholders to explore untapped markets allowing more opportunities for the insurance industry to grow. Technology will only help the sector grow.
The insurance sector has delivered profits due to their approach being more customer centric in nature and having a diversified distribution network. The insurance sector has also changed the ideology of them being merely an investment product to them also providing protection as well which has given them new dimensions.
Various factors such as stakeholders having strong bancassurance channels, increasing life expectancy, growth in financial savings, etc. will play a significant role in the insurance industry to touch $350 - $400 billion in another couple of years.
The Indian insurance sector in order to be more profitable will heavily rely on the automotive industry in the future. This also means that some of the major insurance companies such as ICICI Lombard, GIC, HDFC Standard Life, etc. are expected to grow brilliantly. One may also see investors in order to create wealth for a long period of time also put their money in insurance stocks.
A large number of Indians are uninsured: A report by IRDA shows
According to a handbook by Insurance Regulatory and Development Authority (IRDA) published in 2016-17, only 32.81 crore Indians have life insurance. Even if one assumes that few of the policies were revived, the numbers would not go up more than 33 crore. If we also take into account the number of people who are holding group insurance policies such as PMJJBY, the number of Indians who are insured is more than 40 crore. This is a huge problem.
This is a huge problem because, in developed countries, almost 90% of the people have a life insurance policy and also enjoy other social security benefits. In India, the number of people who have got insurance is grossly underinsured as they have inadequate coverage. According to IRDA, the average cover amount does not go more than Rs.3 lakh, and even if an individual purchases more than a policy, the chances are that he/she may not have more than Rs.4 lakh as the cover amount. Those who come under PMJJBY policy, do not get cover for more than Rs.2 lakh which is extremely inadequate.
However, a large number of people are purchasing ULIPs, which has certainly helped in the growth of these insurance companies as customers are interested in purchasing a tool which not only provides them with insurance but also helps in maximising of their savings. 42% of the profits enjoyed by private companies are due to the selling of ULIP plans, but the real problem starts after that. A majority of Indians who have purchased a ULIP surrender their plan as soon as they start getting good returns on the investment. A very few people are interested in purchasing term insurance for the only situation where the nominee will get money is if the insured dies.
It is clear that people do need other insurance products where apart from being provided with a cover, they also get money in return without any uncertainty looming over them. Till the time a product like this introduced, it is safe to say that the people of India are inadequately insured by miles and are living extremely dangerous lives.
Reasons why Life Insurance is a great sector to invest in
Life Insurance is one of the oldest forms of business to exist in India when Oriental Life Insurance Company was formed in 1818. Earlier it was difficult to purchase a share directly from an insurance company until ICICI Prudential Life Insurance Company got listed followed by SBI Life Insurance. There are various reasons why life insurance is one of the best sectors to invest your money in.
Low penetration is one of the reasons why one should invest their money in a life insurance company. Some of the reasons are that India’s ratio of premium to GDP as compared to the world median is low and stands at 2.7% as compared to countries like Thailand which is 4% and South Africa which is 11%. One of the other ways to look at is the ratio of the number of policies doled out to the population of India which goes as low as 2% compared to 80% in developed countries.
Other reasons why one should invest in a life insurance sector is that people are underinsured. Despite a majority of people in India who have an insurance do not have substantial sum assured to cover them. This means that, since a large number of people are not buying adequate coverage for themselves, there is a large opportunity for the insurance company to grow faster. The fact that India is one of the largest economies in the world and is growing at almost 1.2%, the chances are high that the per capita income will increase at a quicker pace. Apart from that pension funds and foreign institutional investors love investing in life insurance due to the visibility it has to offer. The fact that they have benefitted from the investment they had made, these bodies are likely to hold on to these stocks for a longer period of time. The insurance subsidiaries of companies like SBI and ICICI are getting exposed directly to these investment institutions which plays a huge role in how the face of the industry is changing.
The budget which was held this year exempted the investments made through from Unit Linked Insurance Plan (ULIP) from the Long Term Capital Gains (LTCG) tax which means that more money is expected to flow into this tool which will help the insurance companies to grow. Also, the new business in life insurance premiums has grown at a rate of 24.3% and is expected to surge due to tax breaks. There are chances that the tax slab might be reduced to 12% in future which will also play a role in the growth of this sector.
Due to these many reasons, the life insurance industry is likely to become one of the best sectors to invest one's money in. It is important that one looks at how much he/she is worth and then decide what should be the appropriate amount for him/her to invest his/her money in this sector.
Why do agents not sell you a term insurance plan?
It is extremely necessary to have insurance for you never know what can happen to you in the future and thus you would not want your family to suffer from a financial point of view. Term insurance is one of the most economical insurance plans that you can purchase. However, your agent may not be so keen on selling you a term insurance plan and there are various reasons behind this.
What should you do in such cases?
Purchasing not only a term insurance plan but any type of plan is an important process and hence it is always advisable that you have good knowledge regarding the type of insurance products available in the market.
If you at all take the help of an agent, ask them to tell you about term insurance plans. If your agent avoids your query and tries hard to sell you other insurance plans, it is better that you move away from him/her and look for another person to help you buy an adequate term insurance plan for yourself.
You may not need an agent to help you purchase a term insurance plan either as most of the information is given online. You can purchase them online instantly as it not only helps you but also the insurance company since they do not have to pay anything to the agent, and your premiums are utilised for the managing of your policy only. There are various websites which help you compare the best plans available for you based on your financial needs and thus, it is always advisable that you analyse the plans in which you are interested in before purchasing the most suitable one for you.
How Blockchain Technology will save the Insurance Industry billions of dollars
There are several uses for blockchain technology in the insurance industry, including fraud detection, capturing data in real-time, risk protection, data standardisation, etc. Since the data is distributed in a blockchain, chances of false billing occurring and tampered documents are less likely to happen. Thus, by way of this, insurance companies will be able to reduce their loss-adjustment expenses and also lower identity theft and cyber liability losses.
As of now, most claims teams from various insurance companies share key data on a case-to-case basis via email, making the whole process inefficient and time-consuming. With the implementation of the blockchain, insurance companies will be able to check on the blockchain if another company has already conducted an investigation of a claim. Thus, if a certain individual has been identified as a fraudster by the system, insurance companies will pay special attention to claims raised by such a person.
In order to implement a blockchain, a common ledger or platform will need to be built by an IT service provider. Post this, each insurer can set-up a node at specific locations. After this, each insurance company will be able to upload date of fraudulent records, medical records, and KYC data. By way of doing this, blockchain can eliminate about 15% - 25% of the expenses that companies might incur, thus helping the industry, as a whole, save about $5 - $10 billion.
Currently, insurance firms in India are actively engaged with the insurance regulator for approval of the blockchain project.
Life Insurance Payouts and TDS
A common misconception about life insurance policies is that the policyholder doesn’t have to pay any tax on the payout received, at maturity of the policy. However, the fact remains that maturity payouts are eligible for TDS deductions. Thus, if the policyholder’s PAN is available, TDS will be deducted at the rate of 1% of the total maturity payout. In case the policyholder’s PAN is not updated or unavailable, there will be a 20% tax deduction on the maturity claim amount, under Section 194DA of the Income Tax Act, 1961.
However, you will have to keep in mind that payouts received under certain life insurance plans will be totally exempt from tax deductions, under Section 10 (10D) of the Income Tax Act, 1961. These policies are:
Things to note
Returns from Life Insurance Policies
Life insurance prepares an individual for unforeseen circumstances. Individuals who have dependents should ideally buy a life insurance policy in order to financially support his/her family when they are not around to help them out.
Though this is the primary reason why life insurance policies were created in the first place, most people tend to look for policies that help them get returns. Insurance agents try to lure their clients into buying policies that apparently give high returns. This leads the individual to make the wrong decision while buying a policy. While in actuality, the returns received on life insurance policies are very low. Traditional life insurance policies that promise returns in the form of savings only offer about 3-5% returns. This is regarded extremely low in comparison with other savings instruments.
Hence, purchasing a term plan for life cover and a different savings instrument for long-term returns would be a better idea compared to buying a life insurance policy hoping it would serve both purposes. One can buy a simple and affordable plan for life cover and use the amount he/she wishes to use to enhance the term plan to purchase a good savings product that would provide more profitable returns. Plus, policyholders can always enjoy tax benefits under section 80C of the Income Tax Act.
The Effect of GST on Insurance Premiums
The Goods and Services Tax, more commonly known as the GST, came into effect on 1 July 2017, after being passed by the Lok Sabha in 2016. The GST, which is a value-added tax (VAT), will be levied by the Government of India on the supply of most goods and services. Thus, after its implementation, the GST has replaced a number of indirect taxes that were previously levied by central and state governments.
Impact of GST on Insurance
Before the introduction of the GST, a standard service tax of 15%, which comprised of the Basic Service Tax (14%), Swachh Bharat Cess (5%), and the Krishi Kalyan Cess (50%), was levied on various goods and services. Currently, the tax levied on insurance under the GST regime amounts to 18%, which is a 3% increase on what was charged earlier. Thus, after the GST came into effect, the premium payable for various insurance products have risen. GST has had an effect on both life insurance and general insurance businesses in the country.
|Insurance||Before GST||After GST|
|Life Insurance Plans||15%||18%|
|Health Insurance Plans||15%||18%|
|Riders and Add-Ons||15%||18%|
What should you do as a policy buyer?
Regardless of the type of insurance policy you are planning to purchase, be it a life insurance plan, a health insurance plan, or a motor insurance policy, the premium payable should not be the only thing that you consider. The main purpose of a life insurance plan is to provide your beneficiaries financial security. Similarly, the purpose of general insurance policies is to provide you a cover against expenses that you may incur in case of an untimely eventuality.
That being said, make sure to research various policies that are offered by insurance providers, request for premium quotes, compare the features and benefits of each policy, and purchase a plan that will provide your adequate coverage for a competitive rate.
Term insurance is the purest form of insurance you can avail. In case something happens to you, the insurance company will pay the nominee the lump-sum amount called the death benefit and the plan will cease to exist. However, you can also add rider plans which provide an extra layer of protection and covers your family in case you are hit by a critical illness. In various cases, if you suffer from a critical illness, the insurance company will pay the rider benefit and the plan will cease to exist. There are various health conditions which a rider plan will cover. Some of them are:
There are various reasons why you should purchase a critical illness rider plan for yourself. One of the biggest reasons is that it acts as an income replacement. In case you are hit by an illness and have to take an absence of leave from your job, the rider plan ensures that your family does not suffer financially.
A critical illness rider plan also covers your hospital expenses which otherwise would have taken a toll on your family financially. Also, in most cases, you may not be required to undergo any medical examination in order to purchase a critical illness rider plan.
You may have to pay an extra premium on purchasing a critical illness rider plan. The premium thereafter will remain constant and will not be increased by the insurer unless mentioned by them.
You will also receive tax benefits for the premiums paid towards your critical illness rider plan under Income Tax Act,1961.
Some of the term insurance plans that offer critical illness rider plan are:
Term insurance is considered to be the purest form of insurance as it provides cover to you. In case something happens to you, the nominee receives a lump-sum amount called the death benefit and the policy ceases to exist. The premiums payable for a term insurance plan is also considered to be cheap and affordable and hence it is always advisable that you purchase a term insurance plan for yourself as soon as possible.
However, in order to purchase a policy, you may have to visit an agent. An agent may not be so keen about selling you a term insurance policy since they are extremely cheap and it means that their commission will be less. A part of your premiums is paid to the agent as a commission which means that your premiums are not utilised completely. However, with the advent of technology, it has become to purchase a term insurance plan instantly and in a hassle-free manner.
There are various benefits to purchasing a term insurance online. They are:
Before you purchase a term insurance plan online, you must keep certain things in mind.
You must always purchase a term insurance policy from the official website of the insurance company or from a reliable third-party company. You must research and compare various plans properly. Also make sure that before you sign on the dotted lines, read the documents carefully so that you are familiar with the terms and conditions of the scheme.
A life insurance plan is essentially an agreement between the insurance company and the policyholder. The insurance company offers to provide a certain amount to the policyholder’s dependents on his/her demise. The policyholder, in return, is required to pay a nominal amount known as the premium on a regular basis. Different types of life insurance plans are available in the market and term insurance plans are one of them.
A term insurance plan is the purest form of life insurance which offers coverage for a specific period of time at an affordable price. The policyholder is given the flexibility to choose the term and the sum assured amount he/she wishes to be covered for. He/she can also attach riders such as the accidental death benefit rider, critical illness rider, return of premium rider, etc.
Advantages of term plans
There are a number of reasons why individuals should choose to buy a term insurance plan, here are a few reasons:
Disadvantages of term plans
While there are many advantages, term plans have a few drawbacks as well.
Therefore, a term insurance plan is the best life insurance plan type for individuals who want an inexpensive plan that provides optimum coverage.
Once an individual starts earning, it is a good idea for him/her to focus on financial planning. While saving and making investments are important parts of financial planning, being prepared to face the uncertainties of life is another. The purpose of a life insurance policy is to financially support the family members of the deceased person.
The overall insurance penetration in the country is quite low but in the recent past, many people have started understanding the importance of life insurance and have started purchasing life insurance policies. One of the most common questions when buying a life insurance policy is how much insurance coverage one should opt for. Getting too much or too less coverage is certainly not a good idea.
Consequences of being uninsured, over-insured or under-insured
Not being covered by a life insurance plan could mean leaving one’s family members in a risky financial situation. The family members will be forced to cut down on expenditures and modify their lifestyle if the sole earning member of the family passes away and he/she was not covered by a life insurance plan at the time of death. While this is the downside of not being insured, being over-insured or under-insured can have negative effects too. If a person chooses a sum assured that exceeds the requirement, he/she will have to unreasonably shell out more from his/her regular income to pay for unnecessarily high life insurance coverage. Further, choosing too low a sum assured amount is also not a good idea. A low sum assured may be adequate only during the initial stage after the demise of the individual but leave the dependent members financially helpless shortly after.
How to choose the right sum assured amount
As established earlier, it is best to opt for the right sum assured amount that will help the policyholder’s family sustain their lives after the life assured’s death. Here are a few factors a prospective policyholder should bear in mind before choosing the sum assured:
Life insurance policyholders are required to pay a certain amount on a regular basis towards the policy so that they can enjoy the benefits provided by the insurance company. Since life insurance costs comparatively low for younger individuals, it is ideal to buy policies at a young age. The additional benefit of a life insurance policy is that one qualifies for tax benefits under section 80C of the Income Tax Act, 1961, on paying premiums towards the policy.
Term insurance plans are a popular option for many policy buyers due to their high coverage and low premium rates. In order to purchase a term insurance plan, you, the policy buyer, will need to submit an application form with whatever documents are required by the insurance provider. In certain cases, the insurance provider may also require you to undergo a pre-policy medical screening before purchasing the policy.
The pre-policy medical screening is to help the insurer ascertain that you don’t suffer from any adverse medical conditions. That being said, it is important to know that not all policy buyers are required to undergo medical tests before purchasing an insurance policy. In most cases, individuals who lead a healthy lifestyle and are under a certain age will be given the policy without a medical check-up.
If you want to purchase a term insurance plan without undergoing a medical screening, it is vital that you do your due research and read the terms and conditions of various policies. You can also choose to contact a company representative or an agent if you have any queries about the same.
While not all insurance companies will need you to go through a medical screening, you will still be required to provide a declaration of your health at the time of purchasing your insurance policy. It is important that you don’t conceal any information about your health since the insurer can cancel your policy if any discrepancies are found in the information that you provided.
Purchasing a life insurance policy is a must if you want to ensure that your loved ones are financially protected in case of an unfortunate eventuality. However, many individuals with adverse medical conditions like diabetes don’t purchase life insurance policies fearing that their applications will get rejected by insurance providers.
However, if you are diagnosed with a lifestyle disease like diabetes, it is important to know that most life insurance providers will offer your policies as long as you have made the required changes to your lifestyle and have brought your health condition under control.
You should, however, be prepared for certain questions that the insurance provider might ask you about your health. Thus, if you are a diabetic, the insurance provider might want to know when you were diagnosed with the condition, what type of diabetes you are diagnosed with, what your A1C level is, what treatments you underwent or are undergoing, how often you visit your specialist, whether you suffer from any other related health conditions or ailments, etc.
Also, insurance companies might require you to undergo a pre-policy medical check-up before purchasing the policy. The medical test will help the insurer accurately assess the risks associated with your condition. If you are a diabetic and are looking to purchase a life insurance policy, it is important to research various plans that are available in the market and compare the features and prices of each policy. Doing so will ensure that you receive adequate coverage without having to pay a hefty premium.
For those who wish to financially secure the lives of their family, loved ones, or dependents, by paying a nominal amount, they can choose the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). A yearly renewable plan, for just a premium of Rs.330, a policyholder can insure their loved ones of Rs.2 lakh. Backed by the Government of India, the policy is offered by Life Insurance Corporation (LIC) and various other private insurers and if offered by a number of popular banks across the country as well.
If you feel that your life hangs by a thread and you have not much time left, apart from caring for yourself and attempting to improve your condition, you should think about your family and loved ones as well. A term insurance particularly for heart patience is the solution. By availing a term insurance plan, your family, loved ones, or dependents will be be financially secure once you’re gone. Being a financial turmoil is an added stress, you can choose to jump that hurdle for your family and loved ones.
If you though that a term insurance plan can be purchased by the young and healthy, you’re wrong. In fact, term insurance plans are offered by the biggest life insurance companies for senior citizens as well. Coverage for a term insurance plan can extend till the age of 85 years. Senior citizens availing a term insurance plan can secure their loved ones and dependents financially and can also cover any pending loans - ensuring the burden does not fall on the surviving members of the family. In your mid 50s or 60s? Take a look at these term insurance plans that you can avail.
The number of term covers you buy is entirely up to you. However, there will not be any benefit in buying two term covers due to fear of rejection. The criteria for claim reject remain the same across all companies in the market. For instance, there is a one-year exclusion for suicide with regard to term insurance policies. This exclusion will remain the same for almost all insurance companies in the market.
Claims are typically rejected for various reasons like fraud, death due to pre-existing health condition, death due to exposure to hazardous situations, etc. If any of this applies to the policyholder, all life insurance companies are likely to reject the claim. Hence, it is not a good idea to buy multiple term insurance covers on the possibility of rejection. With that being said, there is no specific rule against buying more than one term insurance policy.
When buying a term insurance policy, you may have to consider the benefits offered by the policy. Another thing you have to consider is the possibility of losing out on discounts of high-value sum assured amount. If you split the sum assured amount into two different policies, most often you might end up paying more for the same value of coverage. If you are looking for term covers, choose the sum assured amount you need and buy it within the same company. This will be both beneficial as well as hassle-free for all your requirements.
Buying term insurance is certainly advisable even though your family is in a good financial position. Term insurance is mainly to avoid the uncertainty associated with the loss of the family’s primary earner. It is better if you opt for individual term plans for you and your wife. Also, term plans are highly beneficial if taken for your productive years. Hence, you can choose a policy term of 15 years or 20 years. Through this way, you can protect your family from financial uncertainty till the time of your retirement.
Since you already have endowment policies, you need to check with the insurance company to determine what value of life insurance coverage is available for you as per the human life value (HLV) calculation. Term covers are essential to make sure that your family members don’t have to compromise on their lifestyle following an unexpected death.
Since term insurance plans do not acquire a cash value, you will not be paid a surrender benefit if you surrender the policy. If you cancel your policy during the free-look period, you will receive a full refund of your premium paid, excluding a nominal deduction. However, no term insurance plan will pay a surrender benefit to policyholders.
Before you select an insurance provider, make sure to consider the following things:
Term insurance plans do cover accidental deaths. In case the policyholder meets with an untimely death due to an accident, the insurance provider will pay the base sum assured to the nominee. However, in case you purchase an Accident Death Benefit Rider along with your term insurance plan, your nominee will be paid an additional rider benefit or rider sum assured. Thus, you can increase the benefit payable to your nominee by purchasing an additional rider.
Yes, you can purchase a term insurance plan for your spouse and pay the due premiums, as well. In this case, you will be the policyholder and your spouse will be the life assured.
Most term insurance plans do not cover suicide, death as a result of self-inflicted injuries, alcohol abuse, drug abuse, participation in illegal activities, HIV/AIDS, etc. The exclusion criteria are likely to vary from plan to plan, and hence it is recommended that you read through your policy brochure and the policy terms and conditions in detail before purchasing any insurance plan.
No, premiums paid during the grace period will not attract a penalty. However, if you pay the due premium amount after completion of the grace period, you will have to pay a revival fee to your insurance provider.
Most term insurance plans do not return premiums paid during the policy tenure, at the completion of the policy term. However, certain insurance provider offers term insurance plans with a ‘return of premium on maturity’ option. In this case, if you survive till the date of maturity, all premiums paid by you will be returned by the insurance provider.
Yes, you can cancel your term insurance plan at any time. If you cancel your policy during the free-look period, you will be provided a refund of your premium amount paid. You will have to notify the insurer within the free-look period of 15 or 30 days.
Most life insurance providers who sell term insurance plans will require you to be between 18 years and 65 years to be eligible to purchase the policy. That being said, make sure to read through your policy brochure or talk to an insurance advisor for policy-specific information.
While the documentation process will usually vary from insurer to insurer, a few basic documents that you will have to submit at the time of purchasing a term insurance plan are:
The ideal cover you should take is determined by the formula below:
Minimum sum assured = Annual income x 10 (+ loans and liabilities, if any)
Yes. You can declare yourself as a non-smoker only if you have not smoked in the last 12 months. Not declaring that you smoke can lead to your claim being rejected later for non-disclosure of important information.
Smoking is the cause of a number of health issues and cancers. The risk borne by insurers for smokers is much higher. Therefore, the premiums are higher for smokers.
Once you submit the request along with all the documentation, the insurer will usually take about 8-15 days. A claim settlement should not exceed 180 days for whatever reason.
Yes, buying a term plan online is cheaper. If you buy a plan through an agent or a branch, the insurer incurs a higher cost to deliver the plan to you. Online, the plan is sold directly to the customer making it cheaper for the insurer. Therefore, premiums are lower on online term plans.
The Insurance Regulatory Development Authority of India (IRDAI) publishes a report annually which details the claims status of every insurance company in the country. The public can view how many claims were made to a company and how many they settled.
Insurance providers offer term insurance plans with varying policy tenures, starting from a period of 5 years. Any policy that you purchase should be sufficient to meet your coverage needs. That being said, it is always advisable to opt for a long-term insurance policy since the premium rates will only keep increasing each time you renew your policy due to your advancing age.
No, insurance providers do not offer the same riders under different policies, thus making it all the more important that you consider this factor when purchasing a policy.
Yes, you can purchase more than one term insurance plan. Provided you have disclosed all facts to the insurer and have made your due premium payments, your nominee should be able to claim the payout from both policies.
Yes, term insurance plans come with a free-look period. For most term life plans, the free-look period is usually either 15 days or 30 days. You can review the terms and conditions of your policy during the free-look period and return it if it doesn’t meet your expectations.
Most life insurance plans come with a suicide clause. Thus, if the policyholder, whether sane or insane, commits suicide within a year of purchasing the policy, the insurer will not be held liable to pay a death benefit. In this case, a percentage of the overall premiums paid will be returned to the nominee. Further reasons for claim repudiation are non-disclosure of key information at the time of purchasing the policy, misrepresentation, fraud, etc.
This will vary based on the insurer’s terms and conditions. Certain insurance providers will offer term insurance plans to NRIs, while other insurers might require you to be a resident of India in order to purchase the policy. Make sure to read through the eligibility criteria of the policy or reach out to an insurance advisor before purchasing a policy if you are an NRI.
Pure term insurance plans do not provide a maturity benefit at the completion of the policy tenure. However, there are a few term insurance plans that have a ‘Return of Premium’ feature, wherein you receive the sum of all premiums paid during the policy tenure at maturity of the policy.
For most term insurance policies, your premium amount will remain constant for the duration of the policy tenure. However, in most cases, you will have to renew the policy for a slightly higher premium rate. This premium will be decided primarily on the basis of your age at the time of renewing the policy and the sum assured.
No, since term insurance plans do not have a cash value attached to them, you will receive no surrender benefit if you surrender this type of a policy. Since it is always good to have an active life insurance plan, ensure that you continue to pay the due premiums during the policy tenure.
The exact claims settlement procedure varies from insurer to insurer. However, most insurers settle claims within a period of 7 – 30 days based on the timely submission of supporting documents and the prevailing conditions of the said claim.
Yes, you can change your nominee any time during the policy tenure. You will, however, have to submit a request to the insurer for the same.
Riders are offered by insurance providers in an effort to help policy buyers customise their policy. However, you only have to purchase a rider if you are in need of it. Purchasing a rider can help you or your nominee receive an additional benefit, and thus increase the level of protection offered by the base plan.
Yes, it is completely safe to purchase a term insurance plan online since policy payments are done via secure, authorised channels. However, when buying insurance, make sure to only purchase a policy from a reputed insurance firm or from a trusted third-party website.
No, since term insurance plans do not have a cash value attached to them, you cannot avail a loan against a term life insurance policy.
Yes, policyholders and nominees are eligible to avail tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961, for premiums paid and the death benefit, post the policyholder’s death.
Purchasing an insurance plan online, as opposed to offline channels, has several benefits. Firstly, since there are no agents involved, the process is likely to be more hassle-free as you can purchase the plan right from the comfort of your house. Also, when you purchase the insurance plan online, you can compare various plans offered by different insurance providers, and opt for a policy that is best suited to your requirements. Insurance providers selling online plans are also likely to have a simpler documentation process.
Insurance providers will mention the eligibility criteria for each plan in the policy brochure. Thus, if your age at entry falls within the insurer’s age limits, you will be eligible to purchase the policy.
Both types of insurance products serve different purposes. A term insurance plan offers only protection. Thus, if the policyholder passes away during the policy tenure, a payout is offered to the nominee. However, if the policyholder does survive the policy term, no benefit is paid. A ULIP or Unit Linked Insurance Plan, on the other hand, offers customers the dual benefit of a savings cum investment option. Thus, in addition to the risk cover, you are also provided the option of investing in funds that match your appetite for risk. Before opting for a certain type of policy, make sure to consider our stage of life, needs of your dependents, financial goals, and liabilities to find the right insurance policy.
A term insurance plan is a pure protection policy. Thus, they offer a risk cover with a large sum assured for a relatively low premium. Considering this, they do not serve as a savings/wealth creation option.
No, life insurance premiums are decided by the insurer. Insurance companies consider various factors to measure the premium. A few factors that could affect premium rates include the policyholder’s age at entry, the gender, previous medical conditions, smoking/tobacco use, nature and type of occupation, the type of policy, etc. Since the premium rates offered various insurers will differ, it is recommended that you compare premium quotes on a third-party website and opt for a policy that will provide you optimum coverage for a competitive premium.
Discounts and offers provided by insurers will vary from company to company and time to time. Thus, you will have to check on the insurance website or consult an agent to know if any discounts are being offered.
The minimum age at entry for most term insurance plans in the market is 18 years. Thus, if your child is under the age of 18 years, you will not be able to purchase a term insurance plan for him/her.
The decision of what insurance plan to buy will vary based on several factors, such as your liabilities, premium payment capacity, needs of your dependents, etc. The advantage of term insurance plans is that the policy buyer can opt for a high sum assured by paying a low premium. However, with increasing age, the cost of term insurance plans also rise slightly. On the other hand, a retirement/annuity/pension policy is best suited for those looking to secure their post-retirement years, by way of a steady source of income. Thus, make sure to consider these factors before purchasing any policy.
Yes, most insurance providers offer services like online premium payment, via the insurer’s official website.
A few reasons why claims get rejected are mentioned below:
Yes, you can nominate a minor at the time of purchasing your insurance policy. However, since the nominee is a minor, you will also have to nominate an appointee. Thus, in case a claim is to be made, it will have to be raised by the appointee. If you do not nominate any appointee, the death benefit will be paid to your legal guardian.
Term insurance plans are offered at a lower rate by insurance providers since they don’t acquire a cash value. Term insurance plans are protection-oriented and thus provide a risk cover against death to the policyholder. If the life assured passes away during the policy tenure, a death benefit will be paid to the nominee. However, no benefit can be claimed at maturity of the policy.
The riders that you can purchase along with your term insurance plan will vary from insurer to insurer and plan to plan. Certain popular riders that are offered with term insurance plans include:
If a policy has lapsed due to non-payment of premiums, you will be able to revive the lapsed policy by paying all due premiums with the applicable interest charge, within a period of 2 to 5 years, in most cases. In certain cases, you might also have to submit a declaration of good health. The revival period will vary from insurer to insurer. Thus, you will have to read through your policy brochure or contact your insurer at the earliest for more information.
No, as a policyholder, you are offered this feature at no additional charge. In most cases, you will simply need to navigate to the insurer’s website, click on the relevant tab, enter your policy details, select your preferred payment mode, and enter your payment details, in order to pay your premium online.
A few ways through which you can reduce your payable premium are listed below:
Most insurance providers will not require policy buyers to undergo medical tests for term insurance plans. However, this might vary based on your insurer’s terms and conditions. Thus, if you have reported being diagnosed with medical conditions in the past or are opting for a high sum assured, you might be required to undergo a pre-policy medical screening.
You can choose to pay your due premiums through online or offline channels. Most insurance providers will allow you to pay the due premium through their official website in a hassle-free manner. If you wish to pay it through offline means, you can directly walk into the nearest office of your insurance provider and pay it at the cash counter. Other premium payment methods will vary from insurer to insurer. Make sure to contact your insurer’s Customer Service Team for more information.
Premium rates for term insurance plans are linked to the policy buyer’s age at entry. Thus, an individual in his/her 20s will be offered a lower premium rate than somebody in their 40s or 50s. The reason why insurance premiums increase with age is that the insurance provider has to undertake a higher degree of risk with an older person than with a young policy buyer.
Most life insurance providers will give you an option of making enhancements to the sum assured at the time of renewing your policy or upon attaining certain key milestones in your life. However, this benefit/feature might vary as per the terms and conditions mentioned in your policy brochure.
In such a case, the death benefit will be paid to one’s legal heir.
As a prospective policy buyer, it is necessary to research various term insurance plans and compare the premium quotes offered by insurance companies. Most insurance providers offer online premium calculator tools on their website, through which policyholders can calculate the premium payable in a hassle-free manner by simply keying-in a few details. You can also visit a trusted third-party insurance website and compare the premiums and features of various insurance plans side-by-side.
For term insurance plans, the premium payable is fixed during the policy tenure, unless otherwise mentioned in the policy brochure. However, you might have to pay a higher premium at the time of renewing your policy.
Most group term insurance policies are annually renewable. However, since this might vary from plan to plan, make sure to read through the policy brochure carefully for more information.
Since term insurance policies are purely protection-oriented, they do not offer maturity benefits or survival benefits.
The riders that can be purchased will vary from plan to plan and insurer to insurer. However, some of the popular riders that are offered include the Accidental Death Benefit Rider, Accidental Disability Benefit Rider, Critical Illness Rider, etc.
Yes, most group term insurance plans come with a free-look period of 15 days.
The minimum age at entry will vary based on the insurer’s terms and conditions. However, for most policies, members will be required to be over the age of 16 – 18 years.
Life insurance is nothing but a signed document where the insurer provides cover to the insured for a specific period of time. The insurance companies provide a protective cover in the event of the person’s death. The insured, in order to continue availing the policy pays a certain sum of money called premiums.
Also called ULIP, this kind of plan not only provides you a protective cover but also invests a part of your savings in different investment tools in order to see your money maximise over a period of time.
This type of plan not only provides you cover but keeps a part of your money aside as a savings amount. If you avail this plan, you can be assured of a lump sum even after your plan attaining maturity.
This type of plan offers you protection for the rest of your life. Though the premium payable is slightly higher as compared to a term insurance plan, you can be eligible for various benefits including the tax benefit. Certain plans also offers a lump sum called the maturity benefit which you get as and when your policy attains maturity.
Pension Plans helps in ensuring that you continue to live a standard life post your retirement. These type of plans are single term in nature where you decide the payout you want to receive including the frequency.
Moneyback plans ensure that you receive a continuous flow of income getting credited to your bank account. Apart from receiving a death benefit incase of your death, you are also eligible to receive a survival benefit in case you survive the policy term. This plan is perfect for those who do not wish to invest their money in various market tools but still want a regular sum of money to secure their family financially.
Unknown fraudsters have defrauded four LIC policyholders of Rs.22 lakh by surrendering policies with the help of fake policy documents. All four victims of the fraud are residents of Ranchi, Jharkhand. Following the incident, the company has registered a case of economic offense at the Chutia Police Station.
The fraud came to light after a policyholder went to deposit her premiums but was shocked to find her policy surrendered and Rs.10 lakh money withdrawn from her account. Once the fraud was detected, the policyholder filed a complaint with the LIC branch regarding the irregularities in the account.
LIC checked the accounts of policyholders and found that three more victims have been defrauded by fraudsters. Police revealed that the fraudsters have opened an account at the Argora branch of the Union Bank of India in the name of the victim. They used this account to withdraw the money from her account. They also noted that policy documents have been forged to withdraw the policy amount.
16 October 2018
According to a study conducted by IndiaFirst Life Insurance along with ASSOCHAM, millennials prefer life insurance over all other investment options. While 70% of the participants of the study prefer life insurance, 69% prefer mutual funds and 64% prefer fixed or recurring deposits. The 1,000 individuals who were part of the study were between ages 18 years and 35 years and were from across the state of Maharashtra. The survey was conducted for a period of two weeks in July-August this year. The study revealed that people are well aware of life insurance and its types. Of the total number of respondents, about 35% of them prefer term insurance plans. However, 80% of the participants said that term plans should have additional features along with the life cover. Of the 80%, 35% of the individuals would prefer a plan with the return-of-premium feature while 21% would prefer an add-on such as a money-back feature to the base plan. Out of the 1,000 respondents, 20% of them make recurring investments and 42% make single investments based on the amount they possess. However, 3% of the individuals make unorganized investments. Hence, suggestions were made to insurance companies to make the purchase process easy and quick to encourage more investments in life insurance.
9 October 2018
Life Insurance Corporation (LIC) made a public announcement making an open offer to shareholders for its 26% equity stake in IDBI. The company offers each share at Rs.61.73 adding up the total payout to Rs.12,602 crore. IDBI had previously provided its approval for LIC to issue preferential shares in order to increase LIC’s stake in IDBI to 51%. The open offer to shareholders has been made in accordance to SEBI guidelines of substantial acquisition and takeover of shares of a certain company. LIC made the open offer after the government transferred 43% of its stake in IDBI to LIC. Therefore, now LIC has a 51% stake, the government has a 43% stake and public shareholders will have a 6% stake in IDBI. As per the details mentioned by LIC in the open offer, the company wishes to acquire over 204 crore shares, each equal to Rs.10 making its total equity stake in IDBI 26%. Therefore, LIC will have to buy an additional 20% stake from the government while the rest will be tendered by the public shareholders. The government has already given its approval for LIC to increase its stake in the debt-ridden IDBI Bank.
8 October 2018
The Congress Party has asked for a Supreme Court led probe into all the matters related to Infrastructure Leasing and Financial Services (IL&FS).
The political party said that why none of the stakeholders which had representatives from State Bank of India (SBI), Central Bank of India (CBI), Life Insurance Corporation (LIC) of India warn the authorities of the huge losses incurred by the company.
LIC, SBI, and CBI among other firms have 40% equity in IL&FS. IL7FS own a debt of Rs.91,000 crore and its collapse may trigger implications similar to the ‘Lehman Brothers collapse’.
27 September 2018
The cricketing legend, Sachin Tendulkar, will flag off all the three races conducted for the IDBI Federal Life Insurance Half Marathon in Mumbai. More than 16,000 runners have registered themselves for the half marathon that is to start from Jio Gardens, Bandra Kurla Complex on September 30. The event, organized by NEB Sports, has three races – 5k Fun Run, 10k Time Run, and 21k Half Marathon. The Half Marathon has been certified by Distance Races and the Association of International Marathons (AIM). The event that is being conducted in association with the Athletic Federation of India (AFI) is the third edition of the Half Marathon by IDBI Life. While the registration fee for the 10k Time Run is Rs.1,950, Rs.2,500 is charged for the Half Marathon. Rs.1,000 paid by each participant will be donated to the charity partner, Apnalaya. The last date to register for the marathon was September 20. Individuals who complete the National Marathon Circuit 2018-19 will receive a certificate, a T-shirt and a medal. The Half Marathon is going to be held next in Bengaluru on October 21, followed by Hyderabad on November 4, Kolkata on February 3, and New Delhi on February 24.
21 September 2018
Initial insurance claims related to the recent Kerala floods may amount to the tune of Rs.500 crore according to an executive from a public sector insurance company. Kerala is currently battling the worst natural calamity it has faced in the last century. It has also suffered damages in life and property to the tune of thousands of crores.
According to an executive from New India Assurance, claim intimations are already coming in from various policyholders across the state. As of now, the company is getting claim intimations related to property damages from people who are in other locations. Once people from the relief camps go back to their homes, it is likely that the claims are going to increase further.
It is expected that most of the claims will be related to life and motor insurance. Initial claims regarding these losses are expected to touch Rs.500 crore. In addition to damages caused to life and property, the state has also witnessed a huge loss in income due to the crippled tourism and service industry.
21 August 2018
Public insurance companies have been asked to settle the Fasal Bima crop insurance and Jan Suraksha insurance claims instantly for those residing in Kerala to help them receive immediate financial relief. Under Jan Suraksha, the schemes available are the personal accident scheme known as Pradhan Mantri Suraksha Bima Yojana and term insurance scheme known as Pradhan Mantri Jeevan Jyoti Bima Yojana. The benefit payable to the nominees under the above-mentioned schemes is Rs.2 lakh. The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to settle the claims on an immediate basis whether the death certificate is available or not. During the Chennai floods, insurance companies, in the absence of a death certificate, referred to the list of deceased individuals from a government hospital or a statement by the municipal body. In addition to the Jan Suraksha claims, the public insurance companies were also asked to settle the Fasal Bima crop insurance claims at the earliest.
20 August 2018
Bharti AXA Life Insurance, a leading private-sector life insurance firm, has partnered with Airtel Payments Bank to offer the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is a government-sponsored term insurance scheme. The scheme offers enrolled members an insurance cover of Rs.2 lakh, with an annual premium charge of Rs.330.
By way of this partnership, new and existing savings bank account holders of Airtel Payments Bank who are between the ages of 18 years and 50 years can purchase the term insurance policy in a paperless, secure, and completely digital manner.
Mr. Anubrata Biswas, the CEO and MD of the Airtel Payments Bank, has said that Airtel Payments Bank’s distribution network will enable around 190 million underinsured Indians to purchase the insurance cover. As per the terms and conditions of the partnership, the PMJJBY scheme will initially be available at around 1,00,000 Airtel Payments Bank – Banking Points across India.
17 August 2018
With reports from insurers across the country that the penetration of life insurance is increasing by the year, and with more people opting for term insurance plans for the protection of their loved ones and their future, insurers over the last few months have been rolling out attractive and pliable term insurance plans for customers across the country. The latest has been Edelweiss Tokio, who have launched the Zindagi + term insurance plan. The company, which was formed following a joint venture between Tokio Life Insurers and Edelweiss Group, rolled out their latest term insurance plan with a host of benefits for subscribers. The sum assured of the policy ranges between Rs.25 lakh to Rs.10 crore and subscribers can choose the pay upto 60 years old option as well. The premiums are higher for this, but the coverage is active even if the policyholder stops paying the premiums once he/she has attained the age of 60 years. This term insurance policy comes with benefits such as the top-up benefit up to Rs.50 lakhs, better half benefit up to Rs.50 lakh, waiver of premium benefit, accident death benefit cover, decreasing sum assured option and the accidental total and permanent disability cover option.
16 August 2018
The State of Telangana has decided to provide life insurance bonds to 27 lakh farmers during the period between August 6 and August 13. The scheme will be effective from August 14. The Agriculture Minister of the state, P. Srinivas Reddy, said that Rs.600 crore has been provided to LIC towards the premium for the life insurance.
During the launch of the life insurance bonds delivery programme in Jukkaldan, Banswada, Reddy also spoke about premium payment of paddy insurance and said that farmers need to pay the premium for their paddy insurance by the end of the month. He stressed the fact that insurance is a continuous process. He also stated that a total of Rs.89 crore would be provided to all farmers who lost crops and had paid premiums towards their paddy insurance policies from 2015 to 2017.
15 August 2018
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