Term Life Insurance
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Life Insurance  

Life Insurance Infographic

Life Insurance plan is the safest and the most secure way to protect your family or dependents against financial contingencies that may arise post the unfortunate event of your untimely demise. Under a Life Insurance Contract in India, the insurer assures to pay a definite sum to the policyholder’s family on his demise during the policy term.

What is Life Insurance?

Life Insurance is an agreement between an insurance company and a policyholder, under which the insurer guarantees to pay an assured some of the money to the nominated beneficiary in the unfortunate event of the policyholder’s demise during the term of the policy. In exchange, the policyholder agrees to pay a predefined sum of money in form of premiums either on a regular basis or as a lump sum. If included in the contract, some other contingencies, such as a critical illness or a terminal illness can also trigger the payment of benefit. If defined in the contract, some other things, such as funeral expenses might also be a part of the benefits.

Best Life Insurance Plans in India 2018 

Life Insurance Plans

Entry Age (Min/Max)

Policy Term (Min/Max)

Sum Assured (Min/Max)

Premiums for 1 Cr Coverage

Aegon Life iTerm Plan

18/65 years

5/40 years

10 Lacs/NA

For 18 years-Rs. 4,986/Year, Rs. 434 per Month, Rs 15/Day

For 65 year-Rs. 61,163 Per Year,Rs. 5,321 Per Month

Aviva I-Life Plan

18/65 years

10/35 years

25 Lacs/NA

For 18 years- Rs. 6,152 Per Year,Rs. 536 Per Month, Rs.18/Day

For 65 years- Rs. 61,935 Per Year,Rs. 5,395 Per Month

Bajaj AllianziSecure

18/70 years

10/30 years

20 Lacs/NA

For 18 years- Rs. 7,256 Per year, Rs. 653 Per Month, Rs 22/Day

For 70 years- Rs. 60,802 Per Year,Rs. 5, 472 Per Month

Bharti AXA eProtect Term Plan

18/75 years

10/30 years

25 Lacs/NA

For 18 years- Rs. 5,546 Per Year,Rs. 481 Per Month, Rs 16/Day

For 75 years- Rs 65,844 Per Year,Rs. 5,709 Per Month

HDFC Click2Protect Plus

18 /65 years

10/30 years

10 Lacs/10 Crores

For 18 years- Rs. 8,618 Per Year, Rs. 743 Per Month, Rs 25/Day

For 65 years- Rs. 1,22,107 Rs. 10,558 Per Month

Bharti Axa Flexi Term

18/65 years

10/85 years

10,00,000/NA

For 18 years- Rs.6,372 Per Year, Rs. 552 Per Month, Rs 18/Day

For 65 years-Rs. 65,844,Rs. 4,337 Per Month

ICICI Pru iProtect

20/75 years

10/30 years

3 Lacs/NA

For 20 years- Rs. 7,615 Per Year, Rs. 635 Monthly, Rs 21/Day

For 75 years- 30,956 Per Year, Rs 2,580 Per Month

Kotak Life Preferred e-Term

18/75 years

10/40 years

25 Lacs/NA

For 18 years- Rs. 6,849 Per Year, Rs. 589 Per Month, Rs 20/Day

For 75 years- Rs 70,682 Per Year,Rs6,220 Per month

TATA Sampoorn Rakshak

18/70 years

10/35 years

50 Lacs/NA

For 18 years-Rs. 7,788 Per Year,Rs. 688 Per Month, Rs 23/Day

For 70 years- Rs.47,554 Per Year,Rs 4,198 Per Month

LIC e-Term Plan

18/60 years

10/35 years

25 Lacs/NA

For 18 years- Rs, 9,460 Per Year, Rs 788/month, Rs 26/Day

For 60 years- Rs 3,31,100 Per Year, Rs 27591 per Month

Max Life Online Term Plan

18/60 years

10/35 years

25 Lacs/NA

For 18 years-Rs. 5,900 Per year, Rs.519 Per Month

For 60 years- Rs. 36,344 Per Year, Rs. 3,198 per Month

SBI eShield Plan

18/70 years

5/30 years

20 Lacs/NA

For 18 years- Rs. 6,301 Per Year, Rs 525 Per Month, Rs 17/Day

For 70 years- Rs. 72, 263 Per Year,Rs. 6021 Per Month

types of life insurance policy

Life Insurance Policy Types

1.   Term Insurance 

2.   Endowment Policy

3.   ULIP - Unit Linked Insurance Plan

4.   Money Back Life Insurance 

5.   Whole Life Insurance 

Types of Life Insurance Policy in Details

Term Insurance:

It is the simplest and cheapest form of insurance that is designed to offer financial protection for a specified tenure, say 15 or 20 years. Term insurance ensures that your family gets a large lump sum amount, i.e. sum assured after your death to lead a financially stable life. However, if you survive the term, the insurer pays nothing. The best thing about a term insurance policy is that the premium is quite low for the insurance cover it provides.

Endowment Policy

It offers the dual benefit of insurance and investment. A specific part of the premium is assigned towards the sum assured, while the remaining part of the premium gets invested in asset markets— equities and debt. It pays a lump sum amount for the specified duration or on the death of the policyholder, whichever is earlier. An endowment policy may declare bonus periodically, which is paid, either on maturity or on the death of the insured.

Unit Linked Insurance Plans (ULIPs)

In ULIP, a portion of the premium goes towards providing the life cover, while the residual portion is invested in equities and debts. The investment portion in ULIP is subject to market volatility. Investing in ULIP inculcates regular saving habit in a person, which is imperative for the creation of wealth.

Money Back Life Insurance

It offers periodical payment of partial survival benefits during the tenure of the policy as long as the policyholder is alive. In the event of the death of the insured, the insurance company pays the full sum assured along with survival benefits.

Whole Life Insurance

Offering the dual benefit of insurance and investment, whole life insurance plans offer insurance cover for the whole life of the person or up to 100 years whichever is earlier. Also, the life insurance company calculates bonus on the sum assured, which is paid to the nominee after the death of the policyholder. 

Child Insurance

The increasing education cost is causing uneasiness among parents. Therefore, it is best to invest in a good child insurance plan to give secured life to your child even in your absence. A child life insurance plan offers a lump-sum amount to the beneficiary (i.e. child) on the death of the policyholder. Here, the policy doesn’t end. In this case, Life Insurance Company exempts all future premiums and pays the money to the child at specified intervals as planned out by the policyholder.

Pension Plans

Also called pension plans, these are offered by life insurance companies to help an individual build a retirement corpus. This money helps a person to lead a financially secured life even after retirement. In case of an unfortunate death of the policyholder, the nominee can either take a lump sum or receive a regular pension for the rest of the policy tenure. These life insurance plans are great to build up a retirement corpus; most life insurance companies in India provide a wide array of plans for people to save for their retirement.

Comparing the Types of Life Insurance

Life Insurance, in the recent past, has evolved as a necessity. Life insurance cover has now become an integral constituent for your smooth functioning. While penetration of life insurance in India is yet to do justice to the numbers, every day hundreds of new aspirants are seen entering into various life insurance plans. The biggest challenge pertaining to a life insurance scheme is related to picking the right type of insurance policy, and with insurers offering different options; it would not be a task for people who are unfamiliar with these.

The table illustrates the comparison between various types of life insurance policies in India based on the key aspects:

 

Term Insurance Policies

Whole Life Insurance Policies

Endowment Plans

Unit Linked Insurance Plans

Money Back Plans

Pension/Annuity Plans

Overview

Term insurance plans are the simplest form of life insurance policies

These insurance policies are participatory in nature with saving plus protection plans

Investment plus protection plans

These policies are participatory in nature and are unit linked. Such plans are insurance cum investment plans

Participatory in nature with saving plus protection plans

Non-participatory in nature. These are the traditional form of plans

Term*

Usually ranges from 5 to 30 years

This covers the whole life of the insured. Policy term can be 40 years

Generally ranges between 10 to 35 years

Term ranged between 10 to 20 years

Generally ranges from 5 to 25 years

No fixed term

Maturity Benefits

You are not paid any maturity benefit on the survival

You are paid the maturity benefits while you reach a certain age (may be between 80 to 100 years)

You will be paid the maturity benefits on your survival at the end of the policy term

You can avail the maturity benefits on your survival at the end of the policy term

You are given the survival benefits on the maturity of your policy

No maturity benefit is offered. You are entitled a regular pension for the specified policy term

Death Benefits

In case of your demise, while the policy is active, a sum assured is paid to the beneficiary.

Death benefits are paid to the beneficiary in case of your demise while the policy is in place.

The death benefit is paid to the beneficiary on your demise. It also includes the accrued bonuses.

Death benefit is paid to the beneficiary in case of your demise while the policy is in place

Death benefits are paid to the beneficiary in case of your demise while the policy is still active. This benefit is not included in the other pay-outs

A few plans provide a provision to return the amount invested in case of your demise.

Additional Benefits

Term Insurance offer maximum cover at a lower premium. You can choose for variants of the pure term schemes which offer maturity benefits.

Benefits paid on death or maturity comprise of bonus component with the sum assured.

Investments accrue profits that are paid in the form of a bonus.

Investments accrue profits and are paid in the form of a bonus. You can claim tax exemptions also.

You are given the regular monetary benefits while the policy is active, with such amount not having any impact on the death benefit.

A source of regular income after the retirement.

Premium Costs

Term insurance plans offer Cost-effective premiums. This is the lowest among all the classes of policy.

These plans usually have high premiums

These plans have higher premium costs

The premiums of these schemes are higher owing to the investment cost.

Affordable and cost-effective premiums

These schemes have moderately priced premiums, with many plans requiring single premium payment

Ideal for

These schemes are ideal for the individuals who are seeking to safeguard their financial interest of their loved ones without paying excessive premiums.

The whole life insurance plans are ideal for those who wish to safeguard the interest of their loved ones and secure the future of their loved ones regardless of what might happen to them

These schemes are perfect for the individuals who can pay higher premiums and seek to secure themselves and boost their investment

This is a best-suited plan for those with a medium-term investment goal to expand their portfolio. Moreover, it is an ideal scheme for people with high income and an extraordinary investment sense.

People looking for security their life but want to earn money at regular interval of time must choose this scheme. Best-suited for individuals seeking protection plus investment plans.

This scheme is an ideal option for the individuals who worry about their retirement life and the ones who want to produce a source of regular income after retirement.

Benefits of Life Insurance

Benefits of Life Insurance Policy

Having a Life insurance plan is necessary to do the task for every individual? A life insurance policy is the best way to protect and financially safeguard the future of you and your loved ones. As we all know that it provides life protection to the family of the insured in case of any eventuality but apart from this there are a plethora of other benefits, let’s take a look at various benefits below.

Loan against Life Insurance –

These policies provide an opportunity to take a loan in case you desperately need money. According to the policy provision, the loan amount can either be taken in the percentage of sum assured under the policy or as cash value.

Tax Benefit –

One of the most worthwhile benefits offered the life insurance policy is income tax exemption under section 80C of the Income Tax Act 1961. Under the section, the premium paid towards the insurance policy is eligible for tax deduction under section 80C of Income Tax Act. Moreover, the policies that provide maturity benefits are also eligible for a tax deduction on the maturity proceeds under section 10(10D) of income tax act 1961.

Return on Investment –

As compared to the other investment alternatives the life insurance policies yield better return and the money invested in the scheme is safe and covers risk. The money invested will make a good return and will be paid back fully as sum assured either after the completion of the tenure of the policy or after the demise of the insured person.

Death Benefit –

This is the basic and the most prominent benefit offered by the life insurance policy. It provides you and your family a secured future. The death benefit is referred to as the total amount of sum assured together with the bonus (if any) is paid to the beneficiary of the policy in case of any eventuality or uncertain demise of the policyholder. The plan also provides coverage to people with diminishing income, for retired people or people who meet with an accident.

Life Stage-Specific Planning –

Life insurance plan assists in the most effective way in life stage-specific planning where you can plan the financial goals of your life according to your convenience. Apart from providing financial support to the family in the event of the untimely demise of the insured person, it also acts as a great financial instrument for long-term investment. By having a life insurance Policy by your side you can meet all the major milestones of life like your child’s education, marriage, building your own home, planning for retirement, etc.

Term Life Insurance vs. Whole Life Insurance

Criteria

Term Life Insurance

Whole Life Insurance

Premiums

A Term Policy requires you to pay level premiums for a specified period of time. 

A whole life policy requires you to pay level premiums for your whole life.

Maturity age

Most term plans cover till the age of 65 to 75 years.

Whole Life Insurance policies offer life cover for the entire life of the policyholder.

Cash Value

Term plans don’t build a Cash Value.

Whole Life Insurance build cash value. Whole life plans offer guaranteed and non-guaranteed cash value that is referred as its dividend value.

Policy Term

Term Plans have a tenure usually varying from 5 to 30 years.

Whole Life Insurance plans are valid for a lifetime.

Paid-up Value

Term plans do not offer a paid-up value or any other features if the policyholder wants surrender the policy.

Whole Life Insurance can be paid-up after a specified number of years.

Lapse

Term policy lapses after 31 days of a missed premium payment.

Whole Life Insurance plans allow the cash value to be used to offset the premiums for some time in case he fails to make the payment.

 Life Insurance vs. Health Insurance

Feature

Life Insurance

Health Insurance

Purpose

A life insurance plan covers your life

A health insurance plan covers the cost incurred while the policyholder is hospitalised or the expenses towards the treatment of the ailment.

Affordability

Least expensive

Expensive than a life insurance cover

Core Benefits

The beneficiary is paid the Death benefit (sum assured) in case of an unforeseen event of the demise of the policyholder.

A health insurance policy covers treatment costs for medical conditions/illness subject to maximum coverage sum and other conditions.

Additional Benefits

Surrender Benefit, Maturity Benefits, Loyalty Addition etc.

You cannot add claim bonus in some policies. Free health check-ups are offered by some insurers.

Tax Benefits

You can avail tax benefits under Section 80C, Section 10 (10D) of the IT Act 1961. Moreover, the paid premiums against critical illness are also eligible for a deduction under the Section 80D of the Income Tax Act, 1961.

You can avail tax exemption for making payment of premiums under the Section 80D of the Income Tax Act 1961.

Types of Plans

Savings, term plans, retirement, child-related (wealth creation) etc.

Critical illness cover, comprehensive health insurance policy

Types of Cover

Single (individual) as well as Group Coverage

Family floater plan (family), individual or group coverage

Types

·         Endowment Plans

·         Term Insurance

·         Pension Plans

·         Unit-linked Insurance Plans

·         Money-back plans

·         Family Floater Policy

·         Individual Health Plans

·         Pre-existing disease cover

·         Senior Citizen Health Insurance

·         Preventive Healthcare

  

Life Insurance Riders

Without riders, a life insurance plan is often considered incomplete. In India, life insurance plans are the most crowd-pleasing schemes. The life insurance policies are designed in such a way that they cater to maximum protection to your loved ones and family in case of your unforeseen demise. Nevertheless, you can obtain an additional financial cover through a life insurance coverage by including riders into them.

Basically, riders are additional features, which embellish the value of life insurance plans while offering extra benefits, which are uncovered by the original document of the policy. If you avail a rider together with an insurance plan may marginally increase the amount of premium based on the kind of rider purchased by you. If you’re seeking to pick an optional rider to amplify the insurance cover, it is necessary for you to understand each rider covered and the sort of benefits it is offering.

Below is the list of most popular riders that you can avail in addition to the life insurance policy bought by you:

Critical Illness

As the life is unpredictable and you are prone to contract medical conditions at a certain point in time, a critical illness rider is a wonderful option to cut down your unnecessary expenditures. Life insurance schemes do not generally cover hospitalisation and medical expenses; this means that if you have fallen sick, regardless of holding a life insurance, you have to bear all the medical expenses by yourself. In this case, a critical illness rider proves to be beneficial as it makes sure of financial support when it comes to making payments of heavy medical bills. Moreover, these riders also offer access to quality medical treatment, so that the treatment is not delayed or ignored due to lack of finances.

The critical illness rider generally covers all your medical expenditure related to ailments like cancer, paralysis, kidney failure, heart attack and stroke among other diseases. In case you buy these riders, you can take a breath of relief at times of ill health, knowing that your insurance plan will cover all your medical expenses and that your loved ones will nothing to worry about their finances along with dealing with the emotional agony. People who buy these Critical Illness riders will get a fixed lump sum amount as soon as the diagnosis is carried out by any of the prior conditions specified in the terms and conditions column of the document of the policy.

Permanent and Partial Disability

We know that life is uncertain and an accident or an incident has the potential to make you disabled. In case of a disability, you are impaired to an extent that you can’t work and produce the income you require to assist your family and loved ones financially, thereby having an effect on your lifestyle of your dependents along with yourself. In these cases, you will need an alternate income source to make sure your family’s healthy functioning. A permanent and partial disability rider is the best-suited option for you as it offers staggered payments to you if you have met with an accident because of which you are unable to work. Such payments are usually a specific percentage of the total sum assured, and make sure that all your financial requirements are met even in case of your permanent or partial disability.

Accidental Death

An ideal option for you if you're aiming at ensuring that your families and loved ones have enough financial resources in case of your unforeseen accidental demise is the accidental death rider. In addition to significantly higher medical expenses, the number of unfulfilled financial liabilities is also generally higher in the event of your accidental death, making it tough for your family to cope with their financial requirements.

Accidental riders are the best options to choose in such a situation as it will make sure that your family and loved ones will receive an extra payment in case of your demise in an accident. Even though the beneficiaries will receive the basic sum assured in case of your death, the Accidental Rider offers your family extra funds to make sure that you can manage all their expenditure, thereby making it less nerve-racking to deal with the loss of their loved one.

Waiver of Premium

In case of your failure to pay premiums on time, you will get a notification from the insurer to make sure that you have made payments of all the due premiums within a fixed grace period. In case you fail to make payments of the premium within the imposed period of time, often results in consideration of lapse of the policy. As a consequence, the policy will not be active anymore and you’ll not qualify for the maturity benefits. There might be a number of reasons as to why you may not be able to make payments of the premium, but irrespective of this, the policy will be considered useless. In this case, Waiver of Premiums comes into effect.

Income Benefit Rider

Your death, being a sole-earning member of the family, can be a calamitous loss and make it difficult for your dependents to move on with their lives in the same way as before. If you are the only breadwinner of your family and your income meets all the financial needs and requirements of your family, it is necessary for you to make sure that you have a regular income source if you’re not any more to provide for them. In such cases, Income Benefit Rider is the best-suited option for you to ensure that the lifestyle of your family remains the same when you’re not around.

Documents Required for Buying a Life Insurance Policy

You will require the documents mentioned below to buy a life insurance cover:

  • Proof of Identity (PAN Card/ Voter ID/Ration Card/ Driving License)
  • Proof of Age (SSC Certificate/PAN Card/Driving License/Passport)
  • Proof of Residence (Voter ID/Water Bill/Ration Card/Electricity Bill/Telephone Bill/Passport)
  • Proof of Income (Salary Slip/Form 16/Income Tax Returns/Pension Pass Book)
  • Passport-sized photographs

Life Insurance Online Payment

Presently, while you wish to make payments for your premiums for your life insurance policy, you can make the payment online conveniently. There are many modes of online payment available such as internet banking, mobile banking, credit card, debit card etc. You are given an option for automatic payment also where the amount of your premiums gets deducted from your linked bank account directly on monthly, quarterly, semi-annually or annually basis based on the mode of payment for premiums chosen by you. The options for payment include NEFT, eCMS, Standing Instructions (SI) mandate, Electronic Clearing Service (ECS), Auto Debit facility by the Reserve Bank of India (RBI) etc. Such options for online payment will be based on the life insurance provider chosen by you. You can pay simply by logging into the insurer’s official website or by visiting the internet banking portal of your bank.

How to Calculate Life Insurance Premium?

While life insurers calculate the life insurance premiums for every individual, there are a few factors that are considered. As we know life insurance is a type of investment, even low premiums have the ability to generate comparatively higher returns over a certain period of time. Nevertheless, it is not possible for you to avail a life insurance plan with a lower premium as you have to accommodate a few requirements laid down by the insurance company. A few individuals are likely to avail similar life insurance plans as others at essentially lower costs.

The life insurance firms take several factors into consideration while computing the premiums. These factors are mentioned below:

  • Age
  • Gender
  • Health Records
  • Medical History
  • Smoking
  • Drinking
  • Type of Policy
  • Profession
  • Lifestyle Choices
  • Obesity

Illustration of Calculation of Life Insurance Premium

The calculations of premiums of life insurance are complex and cannot be done by potential consumers on their own because of several underlying factors. You can make use of a premium calculator to compute the life insurance premium. This is explained with an example below:

The life insurance premium calculator consists of various fields on the chosen plan. Below is the example of a New Endowment Plan:

Type of the plan: New Endowment Plan

Age of the policyholder: 38 years

Term of the Plan: 20 years

Sum assured: Rs. 10 lakhs

Accident Rider/Benefit: Yes/Selected*

*The Accident Rider offers an additional cover for a death caused due to an accident above the base insurance plan, by summing up a small amount of the premiums on the base premiums. Other insurance companies may offer or may not offer the accident benefit rider.

The inferences drawn from this calculation are as under:

Annual Premium: Rs. 49, 940

Semi-annual Premium: Rs. 25, 235

Quarterly Premium: Rs. 12, 750

Monthly Premium: Rs. 4, 250

The aforementioned figures of premiums are shown in four different types. Generally, annual premiums cost you lesser in the long-term choice for more frequent monthly, quarterly, and semi-annual options.

How can you Claim a Life Insurance Policy?

You can claim life insurance under the following two circumstances:

  • Death of the insured
  • Maturity of the life insurance plan

Life Insurance Claims in case of the event of Death

In case of your unforeseen demise, the beneficiary or any of your close relatives can make the claim by:

  • Informing the insurance company as soon as possible with the required details like the cause of demise, place of demise and time of demise.
  • Submitting specific documents and proofs to the insurance company including

a). your death certificate together with the claim form provided by the insurer.

b). Original policy as it is a proof and legal document of an agreement of insurance covering your life.

c). Discharge form signed with witnesses.

d). the assignee has to present the deed if the policy was assigned

e). If anyone other than the beneficiary or nominee or assignee makes a claim, then the person making this claim have to present a legal proof of his title.

f). you might have to present reports by attending and hospital doctors along with post-mortem reports.

g). In case of involvement of police inquiry, you will have to submit an inquest report.

The aforementioned list of documents are required at the time of processing a claim, you may require presenting other evidence like certificate by the employer or any other reports or forms, which assist in resolving the issues raised during the claim verification by the insurer or the investigation process.

Rules for Beneficiaries who Claim Life Insurance

While the nominee or the beneficiary claim life insurance, he has to follow some simple rules. The beneficiary has to file a death claim so as to obtain the death benefit. In case you are having a physical insurance policy, you can take claim notification or an intimation form from your insurer. In case you have bought your policy online, then you can apply for a form in an online mode.

  • The claim intimation would contain the necessary details related to your policy like the name of the policyholder, number of the policy, name of the insured, place of the death, the name of the claimant, etc.
  • The beneficiary has to fill in a few deaths claim forms and present some proof of demise. Once you are done with filing the form with the insurer, then it proved that the insurer has got the death claim.
  • Then, the beneficiary will have to arrange all the necessary documents serving as proofs
  • Next, the beneficiary has to furnish the documents to the insurer for the claim settlement procedure.
  • After the submission of all the forms and documents, the insurer will begin with the verification procedure and decide whether it should settle the claim or not.

What is the procedure to cancel a Life Insurance Policy?

There can be a number of reasons to cancel your life insurance plan. The reason could be you are running out of money to make payments of the premiums or you come across a crucial need to liquidate your policy. You can have any reason, but irrespective of any reason, it is comparatively easier to cancel your life insurance plan. You can follow the tips given below on cancelling your life insurance policy:

Visit the official website of the insurance company from where you have bought your life insurance policy

Irrespective of the fact that whether you’ve bought a life insurance from a large national or some regional insurance provider, you can visit its official website in order to check the cancellation procedure. You can find the website on any of the correspondence pieces received from the insurance provider. You can also look for the website on the internet using the name of the insurance provider.

Getting in touch with a Broker

Before you proceed with the life insurance policy cancellation, it is suggested that you get hold of an experienced broker and clear all your doubts and check whether you’re making the right decision. Even getting convinced about the cancellation of your policy, it is good to talk about it to whizz as it will assist you in understanding whether this is will reap you good results.

Getting hold of an Accountant

If you cancel your life insurance policy, it can leave a door open for implications for taxes. Excess premiums and earnings assist you to build a financial corpus for whole life policies. When you cancel a policy, the insurance provider cuts you a cheque with a certain amount, and this sum of money may or may not be eligible for tax exemptions. Hence, it is necessary to consult a seasoned tax guru as he can resolve all your queries about tax implication linked to the cancellation of life insurance scheme.

Take partial withdrawal plans into consideration

If you’ve bought a universal life insurance policy, then you’re generally allowed to withdraw the partial sum from your policy without completely cancelling your policy. With the partial withdrawal your policy will free up a certain sum of money that you can use immediately, and in the meantime, you still leave some money in the policy to cover your loved ones and family in case of your untimely demise. Nevertheless, a partial withdrawal is like taking a loan against your policy and can have certain consequences, making it influential for you to get hold of a broker before taking partial withdrawal into consideration. 

Steps to Cancellation of your Life Insurance Plan

If you have decided of cancelling your life insurance policy, you can follow the steps below to assist you in cancelling the policy:

Following the Procedure

You will have to fill-in the cancellation form given by your insurance provider in order, to begin the cancellation procedure. You need fill-in a few personal details namely, the policy number, the name of the policyholder, etc. You are advised to keep a copy of the filled form with you for future references.

Present Everything in Writing

If you have to pose any questions to your life insurance provider or have to make any declarations, ensure that you do it in writing. For example, if you want to know the penalty charges for the cancellation, you can shoot with an email in spite of getting your query resolved over a call. A written query has a better chance of getting responses than a verbal communication; also the documentation assists in resolving any potential conflict between you and your insurance provider.

Cancel all the Automatic Payments

If you make the payments of the premiums automatically via checking account or credit card, you can cancel these payments simply by calling your bank or the credit card company. You have to get hold of your bank or Credit Card Company around three business days before scheduling the withdrawal. You can request to cancel the payments overcall, but you are required to follow up on your verbal communication in writing in many cases.

Follow-ups

If you keep getting invoices for premiums, you have to get in touch with your insurance provider via a letter. The letter must include copies of the documentation, which was retained while the cancellation of the life insurance policy. You must request for a refund in writing if the premium is deducted from your checking account.

Rules to be kept in mind while you cancel your life insurance policy

You can cancel your life insurance cover within the foreordained cooling off period. You will be given a refund of all the payments of your premiums made by you, but you will not receive any refund of the payments made for premiums if you’ve made claims during the cooling off period.

Some Advice on Dos & Don’ts

  • Do thorough research
  • Read the terms and conditions carefully
  • Considering lock-in period
  • Take premium payment options into consideration
  • Do not hide anything

Do thorough research

Before landing up on to a decision, you must do a thorough research. You must go through the vast array of options available in the market and make use of the web aggregators to compare several policies. It can help you choose a policy with maximum benefits for you. You must ensure that you have checked up with the insurance provider to make sure of the unexpected hassles that you might face in future.

Read the terms and conditions carefully

The document containing the terms and conditions of your life insurance policy includes all the information of the policy. Many people don’t pay any attention to minute details of this document and end up dealing with detrimental results while making claims. You must ensure that you go through each and every detail of the terms and conditions section of your policy before buying one.

Considering Lock-in Period

There are cases where people buy life insurance plans and within some days realise that they are not completely satisfied with the policy’s terms and conditions. In such instances, a few insurance providers provide a lock-in period, where the policyholder can return the policy to the insurance company for no charge or penalty after a short span of time. Lock-in periods generally last for 15 days, to ensure that you buy a life policy with the aforesaid features.

Take premium payment options into Consideration

Many insurance providers provide premium payment options on the monthly, quarterly, half-yearly and yearly basis. It is influential that you choose a period of time that will permit you to make payments of your premiums without other ramifications. Irrespective of the option for payment of your premiums you are advised to choose the Electronic Check System to pay your premiums as it will make sure do not miss your payment dates.

Do not hide anything

There are cases where people try to hide some information while filling the application form and buying an insurance cover. You are required to present accurate medical history to the insurance provider, and you must notify them if you’re a smoker. Every information requested by the provider forms the basis of the terms and conditions of your policy. Misleading or missing information can lead to major problems while making claims. You can even face a total rejection of the claims in some instances.

Life Insurance Companies in India

Presently, 24 companies sell life insurance products in India. Of all these 24 providers, the only insurance provider under public sector is the LIC of India. The rest of the 23 companies are either private insurance providers or JVs between national or international insurance/finance companies and private or public sector banks/financial institutions.

The access to life insurance sector was given to the private life insurers in the year 2000. Also, most of the private insurers have partnered with the international insurance players to bring up their insurance venture.

The average claim settlement ratio of the life insurance industry has come out to97%. The table given below shows the ranking of the top life insurance providers based on their CSR and size of business.

Life Insurance Companies with Average Claim Settlement

Insurance Company

No. of Death Claims Received

No. of Death Claims Paid

Average Value per Claim Paid (Rs. In crores)

Claim Settlement Ratio

LIC

761983

743249

10137.09

98.33

Max Life

9175

8895

281.07

96.95

TATA AIA Life

3311

3205

92.41

96.8

ICICI Prudential Life

11034

10615

460.57

96.2

Aegon Religare

533

508

42.64

95.31

HDFC Standard Life

12430

11811

432.51

95.02

Reliance Life

14618

13714

266.96

93.82

SBI Life

16102

15037

469.1

93.39

Canara HSBC OBC Life

571

531

32.89

92.99

Bajaj Allianz Life

17967

16404

440.67

91.3

Sahara Life

794

717

7.7

90.3

Future Generali

1530

1381

32.22

90.26

Exide Life

3233

2889

80.75

89.36

Kotak Mahindra

2767

2465

112.05

89.09

Birla Sunlife

7204

6372

277.51

88.45

PNB Metlife

3094

2641

170.14

85.36

Edelweiss Tokyo

141

120

16.34

85.11

IDBI Federal

1085

920

53.11

84.79

DHFL Pramerica

550

460

18.87

83.64

Aviva

1531

1255

140.6

81.97

Star Union

1365

1102

48.2

80.73

Bharati AXA Life

1261

1009

71.99

80.02

India First

1891

1359

65.74

71.87

Shriram Life

2510

1512

87.35

60.24

** Claim Settlement Ratios for Financial Year 2015-2016 by IRDA

The growth of Life Insurance Sector in India

In the year 2015-2016, the share of the insurance sector in India was 79%. On the contrary, the share of non-life insurance business was 21%. India was at 2.24% in 2015 in the international life insurance plot.

  • The life insurance sector has witnessed an increase in the country in 2015 which has reached 2.72% from 2.6% in 2014. By end of March 2016, there have been 54 insurance providers in India, out of which 24 companies were life insurance firms.
  • The life insurance sector has generated an income of Rs. 3. 6 crores in the year 2015; however, it generated an income of Rs. 3.28 crore in 2016. The amount of renewal premium increased by 6.20% in the year 2015 to 2016. There has been a growth of 22.53% in the first-year The progress of unit-linked products was approximately 12.61% premiums from Rs. 41 crores.
  • For ULIPs, there was a growth of 12.61% premium to Rs. 46 crores in the year 2015-2016 from Rs. 41 crores in the year 2014-2015.
  • The traditional products grew in premiums of around 11.72% to Rs. 3.2 crores in the year 2015-2016 from Ts. 2.8 crores in 2014-2015.
  • In case of total premium income, LIC’s market shared came down to 72% in the year 2015-2016 from 73% in the year 2014-2015.

Death Benefits Settlement Statistics in the Life Insurance Industry for 2015-2016

  • The Indian Life Insurance providers in India have settled around 8.54 lakhs claims on the individual policies in 2015-2016. Rs. 12.6 crores were the total payout.
  • The Claim Settlement Ratio (CSR) of Life Insurance Corporation (LIC) of India, one of the leading insurers, rose to 98.33% in the year 2015-2016.
  • The settlement ratio of the whole industry was 96.97% in the year 2014-2015, which rose to 97.43% in the year 2015-2016.

List of Life Insurance Providers with Data & Figure

Life Insurance Providers

Claims Received

Claims Paid

Grievances Solved Ratio (%)

Claim Settlement Ratio (%)

Life Insurance Premium Paid (in crores)

LIC

761983

749249

100.00

98.33

266444.21

SBI Life

16102

15037

99.97

93.39

15825.36

ICICI Prudential Life

11034

10615

99.87

96.20

19164.39

HDFC Life

12430

11811

99.38

95.02

16312.98

Bajaj Allianz Life

17967

16404

99.90

91.30

5897.31

Max Life

9175

8895

100.00

96.95

9216.16

Birla Sun Life

7204

6372

99.99

88.45

5579.71

Kotak Life

2767

2465

93.11

89.09

3971.68

Reliance Life

14618

13714

98.84

93.82

4398.12

India First

1891

1359

98.82

71.87

1967.4

PNB MetLife

3094

2641

99.55

85.36

2827.83

Canara HSBC Oriental Bank of Commerce Life

571

531

99.60

92.99

2059.96

TATA AIA Life

3311

3205

100.00

96.80

2478.96

DHFL Pramerica

550

460

99.65

83.64

920.21

Shriram Life

2510

1512

96.70

60.24

1022.11

Star Union Dai-ichi

1365

1102

95.42

80.73

1307.47

Exide Life

3233

2889

99.59

89.36

2046.99

IDBI Federal

1085

920

100.00

84.79

1239.67

Bharti AXA Life

1261

1009

100.00

80.02

1208.33

Aviva

1531

1255

100.00

81.97

1493.15

Future Generali

1530

1381

99.31

90.26

592.5

Edelweiss Tokio

141

120

99.09

85.11

310.07

Aegon Life

533

508

5.00

95.31

501.6

Sahara Life

794

717

97.14

90.30

157.05

Source: Insurance Regulatory and Development Authority

Know the Important Terms of Life Insurance

Insurer: The insurance company selling the life insurance policy to a person is referred to as Insurer.

Insured: The person buying the said policy is referred the insured.

Sum Assured: The total sum of money that is guaranteed to a person at the maturity of the life insurance plan is known as the sum assured. Bonuses are not included in the sum assured.

Death Benefit: The payout received by the beneficiary or the nominee upon the unforeseen demise of the policyholder is called death benefit.

Accident Benefit: If you meet with an accident and you have a life insurance cover, your life insurance policy might have a clause covering all the expenses related to your accident such as hospitalisation expenditure, medical expenses etc.

Rider: Often the insurance providers offer the adjoining features to their policies at an affordable fee. Such additional features enhancing the value of your life insurance policy and delivering additional benefits are referred to as riders.

Free-look Period: If you’re unsatisfied with your life insurance policy’s terms and conditions, and would want to cancel your policy, you can do this while the free-look period if going on without paying any penalties or fees.

Lapsed Policy: If a policyholder fails to pay the premium on or prior to the due date, and doesn’t pay the premium after the grace period too, the insurance provider ceases all the benefits provided by the insurance cover and abolishes it for the reason of non-payment. This kind of policy is known as a lapsed policy.

Cash Value: If the life insurance plan gets terminated voluntarily prior to the maturity date, the life insurance provider will pay the policyholder a specific amount known as the cash value.

Vesting Age: The age of the policyholder at which the insurance provider start giving payouts is known as the vesting age.

Policy Term: The total duration for which the policyholder will be covered by the insurance provider is known as the policy term.

Waiver of Premium: The policyholder has a responsibility to pay the premiums regularly. Waiver of Premium is the rider that the insured can buy if he is seriously ill or disabled, and hence, is not able to pay the premiums. This feature makes sure that the insured continue receiving the benefits from the insurance provider even if he can’t afford to pay the premiums.

Premium Paying Term: The total duration for which the policyholder will be paying premiums to the insurance provider is known as the premium payment term. These terms are generally same as that of the policy term.

Where to Buy Life Insurance Online?

Compare Life Insurance Plans Online here to Get Best Insurance Premium Quotes in India:

If you too are looking for some good life insurance plans, but do not have an idea about which Life insurance company to choose and what type of policy is apt for you, PolicyBazaar can be a great help. We offer details of leading life insurers and various life insurance policies in India, such as endowment life policy and whole life policy. You can even compare different life insurance policies online to see which policy suits you most. You can also enrol for a life policy and pay the premium for the policy online. Furthermore, with PolicyBazaar, getting life insurance policies quotes online from different life insurance companies is no more remain a daunting task.

Over the last few years, the premium of life insurance plans has sloshed drastically. Isn’t that a real motivation to be covered? To buy the best life insurance plan, log on to PolicyBazaar and get quotes from life policies of all the top insurers. Therefore, get your life insured, all it takes is a few clicks of the mouse at our website. 

Life Insurance - Latest News

Know Why Life Insurance is considered as Protection Instrument, Not a Mere Tax Saver

As compared to the previous year, the number of life insurance policies sold in 2017 has declined. Contrary to this, the cover of a life insurance policy has increased by a total of 14% in value. This indicates the maturity of the domestic industry, which has now shifted their priority to protection plans from just being a tax saver.The total number of policies sold in the year 2017 has decreased to 264.56 Lakh from 267.38 lakh, whereas the total life insurance policy cover has increased to Rs.4,18,476.62 crore from Rs.3,66,943.23 crore. This annual report has been issued by the Insurance Regulatory and Development Authority of India. In the year 2017, LIC of India accounted for 201.32 Lakh policies from the total 264.65 lakh new policies distributed throughout the year. The share of the state-run corporation has fallen 2.02% points lower than the 76.1% in the preceding year. In contrast to LIC, the private sector life insurance providers have issued a total 63.24 lakh new policies, which is 23.9% of the policies issued, thus this has resulted in the increase of 2.13% over the preceding year. While 12.78% growth has been reported by LIC in their premium income, the private sector life insurance companies have posted a growth of 17.40%.

Why Should You Buy a Life Insurance Policy?

Ans:

Besides offering financial protection to your family, life insurance policies offer the following benefits:-
Certainty: Once a goal has been set, life insurance policy is the best means to fund that goal. This is because it gives a peace of mind that in case of any unfortunate event such as death and critical illness; the sum assured paid by the life insurer will be sufficient to meet future goals of the policyholder or family. People can worry less about what will happen to their families and loved ones in case something unfortunate or unexpected happens to them with an adequate life insurance cover.

Tax benefits: The maturity benefits offered by life insurance policies are eligible for tax benefits under Section 10(10D) of the Income Tax Act in India. Also, premiums paid on life insurance policy get tax deductions under Section 80C of the Act. Planning your life insurance cover the best way possible may even mean that that your tax slabs will be different and you may be able to plan your income to fall under a lower slab than a higher one.

Encourages contribution: Most often, life insurance policy is taken for a specified goal, such as child’s education and marriage. In this way, it discourages the person from utilizing those funds for any other motive. Slowly and steadily, your life insurance policy helps you to increase your corpus and allows you to realize your best dreams without too much effort. The only effort required from you is to pay the life insurance premium on time.

Plan for retirement: Planning for retirement is the biggest advantage of life insurance plans. Most of the country’s working population are not covered under retirement plans. The EPF, PPF and other pension plans only cover a small portion of the population. The only way out seem to be life insurance as the life insurance policy helps build up a corpus for retirement and also provides life insurance cover against a myriad of life’s problems at the same time. The best life insurance companies offer a range of payout options. These include lump sum payment, annuities, and monthly payments.

Provide life insurance cover for life’s unfortunate problems: A life insurance policy safeguards against various small or big problems that life may throw at you. Whether it’s providing life insurance cover against hospitalisation, day care, post surgical treatment, or simply helping you build up your wealth in a safe secure manner, a life insurance policy does all this and more. Moreover, the Indian life insurance companies offer a range of policies that help the individuals to buy policies for themselves or their families for a variety of end purposes. In addition, a life insurance cover guards against any unfortunate or unforeseen events such as critical illnesses and even death.

When should you buy life insurance?

Ans:

The minute you have people dependent on you, you should buy an insurance cover. The younger the age, lower will be the premium. Anyone who is married and has a family to support should think of purchasing the best life insurance policy. Even single persons can choose the best life insurance plans to get tax benefits. Further, after marriage, they can add their spouse and children as beneficiary in the insurance contract.

There is no age limit to start buying life insurance cover. You should buy the best life insurance policy as soon as the requirement arises. In fact, life insurance cover should start from childhood to insure against illnesses and sudden hospitalisations from fever or stomach aches, and should also be present for the elderly to cover against age-related illnesses, regular check-ups, hospitalisation, etc.

How much life insurance do you require?

Ans:

Your life insurance needs depend on a various factors such as your marital status, age and gender. For instance, when you are young, you may not need a life insurance but as you grow old and your financial responsibilities get increased, you may need the best life insurance policy of high sum assured.

What are the immediate financial expenses that your family may require upon your immediate death?

Ans:

Though this is not a question people like to think about, it is a question that lies at the foundation of life. Death like birth is inevitable and causes havoc wherever it touches people’s lives. The after effects are numbing for the rest of the family members and people take months, if not years, to come out of their grief.

Life insurance companies in India provide some of the best insurance covers for the Indian citizens. These covers not only take a long term view and look after future expenses, they also help the family to meet the immediate expenses like repatriation costs, funeral expenses, etc. This may seem like a minor thing to think about against the backdrop of such a major life changing event, but the performance of the rites and rituals cost money and some funds to take care of these expenses always help.

Buying a life insurance policy that takes care of these immediate expenses ensure that the insured has taken care of his or her family in the best manner possible.

How to find present expenses to get the best life insurance plans?

Ans:

Finding the present cost of living requires breaking up of all the current expenses into their respective categories or expense heads. You can do it the old fashioned way using a notepad and a pen or pencil or the new way of using a financial website or an app. Let’s plan the normal expenses under these categories:

Loans and amounts owed: These are the most important expenses that your life insurance policies must cover. You cannot escape from this liability and will have to repay the bank, no matter what. Your life insurance policy payout must be able to pay off these loans and credit card bills. This is a necessary expense and must be considered first before all expenses.

Rent: If you live in a rented accommodation, then the life insurance policy must cover for the rent until at least your children are all grown up and working. Since your family can park your insurance cover in a bank’s savings account or fixed deposit, plan for the rent of some years, say 10 or so. This will ensure that even if they get the life insurance cover amount in a lump sum, they can use the interest of the amount thus received to pay off the rent and if possible, also take care of other expenses.

Groceries and food expenses: Take into account all your living expenses for food for the month to understand how much you need. Then arrive at the annual figure to get the life insurance annuity amount you need. It’s even better if you opt for a monthly payout as this will ensure better planning for these small expenses on a month-to-month basis. T

Clothes: If you have kids, you will have to factor in a larger amount as they will outgrow their clothes every few months. On the other hand, if you only have a spouse and dependent parents, then the outgo on clothing will be less.

School, college and tuition fees: If you have children, then this is an important item you must account for in your calculations to get the best life insurance policy cover in India. These necessary expenses will help you to get the approximate present cost of your children’s education.

Taxes and Other Fees: As the cliché goes, there is nothing more certain than tax and you should ensure that these are properly taken care of. These may accrue because you own a house, become of some income that your family may earn and which may add to the overall earnings, municipality or revenue taxes or any other charges that need to be paid.

Entertainment expenses: Though these are not necessary expenses, they are also not entirely avoidable. Approximate the expenses you incur for this head and then arrive at a judicious figure to add to the current expenses and also to arrive at the future expenses to get the best life insurance policy cover for yourself.

Holidays: These are somewhat avoidable expenses though you must make allowance for some holidays for you and the family. It may be due to family events, a holiday necessitated by the children’s desire to go somewhere, or just for a change of scenery. Out of town travel opens the mind and you can make some allowance, if you prefer for these expenses to arrive at your present expenses. These will help you to better understand how much life insurance you need.

Fees for Helpers: Take into account the fees and other charges that have to be paid to the domestic help, the gardener, the cook, the dhobi and even the driver to get an estimate of how much you spend. Depending on your lifestyle, you may choose to consider all their expenses or trim your staff number to get to the figure.

Utility bills: The utility bills and those for the internet and the phone in India accrue every month and will have to be paid and thus accounted for in the life insurance policy planning.

Travel expenses: If you are living in any large city in India, you will have to consider the travel related costs for yourself or your family members. Consider your fuel bills, the toll and parking charges to get to an approximate figure for your life insurance. These expenses fall somewhere between necessary and avoidable expenses, and it may seem sensible to discount this amount if you are the only one driving the car in your family while the others use it only for the weekend.

How to find future expenses to get the best life insurance plans?

Ans:

For most of the expenses listed under the current expenses, you can arrive at the yearly and thus the future expense by calculating the annual cost from the monthly costs. One of the best ways to get adequate cover for these expenses is to get a lump sum that you or your family can invest in secure and safe investments like bank fixed deposits or secure debt funds. The payment from these investments, whether as interest or otherwise, will help you get the necessary amount to pay off the monthly bills.

Another thing you can do is to check which of the life insurance plans offer monthly payouts. Since these life insurance companies understand the nature of expenses, the best of them have come out with a host of plans for life insurance policyholders in India. These plans work just like a regular salary as the life insurance company deposits the amount on a specific date every month. These regular payouts make it easier to manage your expenses. Some other expenses you have to keep in mind for the future are:

Children’s expenses: Some expenses like children’s higher studies and wedding can be easily covered with life insurance plans. You can allocate a certain amount depending upon your rough estimate to arrive at the number. You can also buy different plans to cover for these expenses. Since higher studies or a wedding happen only when the children have crossed the age of 18 and 21 respectively, opting for child life insurance plans when your children are 1-5 years old means that a significant corpus builds up by the time they reach these specific ages in addition to providing them with a protective life insurance cover.

Healthcare expenses: Your healthcare expenses or those of your spouse or your parents will increase as you age. Life insurance plans should be able to cover for these exigencies. One way to take care of these is to buy mediclaim policies but life insurance plans also work out well. In addition, some of the best life insurance companies in India offer comprehensive plans that also take into account these expenses or provide optional riders that allow you to add these covers for some additional premium amount.

Retirement expenses: Planning for your retirement and paying the premium for such a life insurance policy would form the bulk of your salary outgo while planning for the future. Retirement planning using life insurance plans are a great way to save for your retirement and build up a retirement corpus. You must ensure that you buy life insurance plans that ensure you are able to maintain your current standard of living and also go easy on your wallet. The best way to do this is to compare the life insurance plans available from the various life insurance companies in India. Thereafter, you can choose the life insurance cover or covers that work for you.

How long would your dependents need support in case of your sudden demise?

Ans:

This is a crucial question in India and determines how much you should save for while you are buying the life insurance plans. With the growth of time, there has been an increased growth of nuclear families in India. This means that your family will have to fend for itself in the event of your demise. The best way to go about it is to understand a few things such as:

The age of your children: Well educated Indians are generally able to find jobs by the time they are 25 years of age on an average. Thereafter they can generally fend for themselves. This means that if your children are in their early teens, they will be able to stand on their own two feet after 15 years at the most. Doing a similar arithmetic, if your children are young and around say 5 years, then they would need 20 years of support at least. So, when you are calculating the amount of life insurance policy you would have to purchase, assume that your policy would be paying for your children’s education for these many years if the unfortunate happens.

The age of your spouse: No matter what, ensure that your homemaker spouse never has to ask monetary help to fend for herself. Looking at how healthcare has developed in India, It makes sense to assume people on an average are going to live well into their 80s in the coming years. Assuming the same for your spouse will ensure she keeps receiving a regular monthly payment for the rest of her life from your life insurance plans.

The age of your parents or other dependent family members: Apply the same logic as the one you have applied for your spouse to get at the amount your parents will need to take care of their needs. You should also factor in the age of your parents while calculating the healthcare expenses they are likely to face. Unlike your spouse who will have time to save enough from your life insurance policy income before she reaches old age, your parents will have less time and will need more funds for the costly medical tests and treatments.

How much money would you like to save for your child’s education and marriage?

Ans:

Most parents in India want their children to have the best education and also get married off in pomp and style. As such, it makes sense to save enough money for these needs. However, how much you need depends on certain factors such as the age of the child and the stream they would want to pursue for their education. For marriage, the primary factor is simply how much you want to spend depending on your social status.

Life insurance plans help you plan for the future quite easily as they provide a regular affordable premium that you can easily pay. The premium amounts are lesser if you are buying a policy for a longer term of say 15-20 years and are higher for the shorter period plans. In addition, the amount you build up is more. Since foreign education is only contemplated for post graduation, that means you have nearly 20 years to build up a corpus if you start the life insurance policy when your child is less than a year old. The same holds true for your child’s marriage. Assuming they will get married when they are 25 years and above, you can easily save a substantial amount by the time your child reaches marriageable age, if you start a child life insurance policy when they are young.

For all these life insurance plans, the motto is, the sooner the better.

How to find the best life insurance policy in India?

Ans:

Following steps to find affordable life insurance plans in India:-

Buy when you are young:- The cost of life insurance policy increases with your age. Therefore, it is always better to buy an appropriate life insurance policy when you are young and when your premium rates are low.

Do your homework:- Every life insurance company deploys its own tools and calculators to choose the right coverage and tenure for your policy. However, it is imperative to carry out some basic research on your part to know what you want and how much premium you can afford. In this way, you can find the best life insurance policy.

Avoid buying too many riders if you don’t understand them:- Though it is a good idea to buy riders, but if you don’t understand them fully, you should avoid them. Remember, riders come at an additional cost and their cost will be added to your life insurance premium. Therefore, it is good to first understand your requirements before shelling out extra money.

Take the help of a trusted life insurance advisor:- While it may look trivial, it is important to take the help of a reliable life insurance advisor to find the right policy. Most individuals are incapacitated to take the right financial decision by themselves and therefore, need to hire a life insurance advisor.

Compare life insurance policies:- Since there are various life insurance companies in India offering a gamut of insurance policies, you need to be sure that you have selected right life insurance plans. Either you can compare it by yourself or take the help of a life insurance advisor who will compare various life insurance policies on your behalf.

What is the Advantages of Online Life Insurance?

Ans:

The number of internet users has increased considerably in India. As a result, more and more people are buying life insurance policies online. However, if you are yet to use the internet to buy the life insurance policy, here we are giving you some of the good reasons why you should buy life insurance policies online now.

Low cost:- Online life insurance policies are cheaper than their offline counterparts. As you purchase life insurance policies directly from the insurer without any intermediary, the insurer saves money and passes on the benefit to the buyer. Thus, online life policies work out to be cheaper.

Easy background check:- With rampant use of social media and other means, it becomes easy to check the reputation of the life insurance company online before buying any policy. While scouting for a life insurance cover online, you can read reviews of policyholders and can take a better decision based on this information.

Hassle-free process:- From start to finish, the entire process is hassle-free. All queries regarding the life insurance cover and insurance plans are quickly resolved by customer service centres. Even mandatory documents such as identity and address proof can be scanned and sent to the life insurance company.

Instant policy quotes:- Online platform allows you to easily compare different life insurance policies in India. You just need to key in the details, get your insurance quotes and compare premium. You can buy the best life insurance policy in a blink of an eye.

What are the Common Life Insurance Terms?

Ans:

It’s easy to get confused with life insurance jargons at the time of comparing insurance plans. Here we explain some of the common life insurance terms that you must be aware of:-

Premium:- An amount paid to the life insurance company to get an insurance cover is called premium. A single premium life policy cover will require you to pay the entire premium amount in one go, while the yearly premium life policy cover will require you to pay premiums every year for the number of years specified in the life insurance policy document. Your life insurance premium will depend on several factors such as your age, amount of cover, the time period of cover, your gender, smoking or alcohol consumption habits and so on.

Insurer and insured:- The person who is covered by an insurance policy is called insured. Further, the insurer is the life insurance company that issues the policy, such as ICICI Prudential Life Insurance Co., Bharti AXA Life Insurance Co., Max Life Insurance, SBI Life Insurance and Birla Sun Life.

Sum assured:- It is the amount that a life insurance company agrees to pay, excluding bonus. In other worlds, it is the guaranteed amount that you or your nominee will receive.

Bonus:-This is an additional amount given by a life insurer along with the sum assured either on maturity or death of the policyholder. However, only participating life insurance plans or plans ‘with profits’ are eligible to get bonus.

Maturity value:-It is the amount that a life insurance company pays on maturity of the life insurance policy. It includes both sum assured and bonus.

Rider:- It is an additional benefit attached to the primary insurance cover. It offers financial protection over and above the basic sum assured against an eventuality. Some of the most popular riders that can be attached with insurance plans are critical illness rider, disability rider and premium waiver rider.

Annuity:- It is the regular payment that an insurance company agrees to pay you after you cross the specified age. So, for instance, you cross the age mark of 55, the life insurer will pay you a monthly or quarterly return. It is called annuity.

Surrender Value:- If halfway the life insurance policy tenure, you decide to discontinue the life insurance policy and take whatever money is due to you, the life insurer pays an amount which is called surrender value.

Paid-up Value:-If you stop paying premiums but do not withdraw the money from your insurance policy, your life insurance policy earns paid-up value. Depending on the number of premium paid, the insurance company will reduce your sum assured considerably and pays the remaining amount at the end of the tenure.

Survival Benefit:- This is a fixed amount paid by a life insurance company at the end of a specified duration.

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