Prices Increasing soon Prices Increasing Soon

Nature and Scope of Life Insurance

Life insurance is a financial contract that is signed between the insurer and the policyholder. Under these plans, the insurer promises to cover the life assured for the designated period in exchange for regularly paid premiums. If the policyholder suffers an untimely demise during the policy term, the insurer will financially secure the nominees by offering them the sum assured as a death benefit. To help you understand the nature and scope of life insurance, let us take a look at the individual benefits of both.

Read more
Gets ₹1 Cr. Life Cover at just
COVID-19 Covered
The Policybazaar Advantage
Dedicated claim support for family FREE
Upto 10% discount for buying online
Only certified experts will call you on 100% recorded lines
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold

#All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply

By clicking on "View plans" you agree to our Privacy Policy and Terms of use

~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Life is Unpredictable! Protect your family’s future
Get ₹1 Crore Life cover starting from ₹384/month+
+91
Secure
We don’t spam
Check Your Premium Now
Please wait. We Are Processing..
Get Updates on WhatsApp
The Policybazaar Advantage
Policybazaar Advantage Icon
Dedicated claim support for family FREE
Policybazaar team will help and support you at the time of claim. A personal claim handler from our team of experts will get in touch with you when your nominee applies for a claim on our website.
Policybazaar Advantage Icon
100% calls recorded to ensure no mis-selling
We will make sure you get what is promised by the advisors. We conduct regular monitoring of our calls to make sure you get the best experience.
Policybazaar Advantage Icon
Exclusive lifetime discount upto 5% for buying online
The discounts will be valid for the entire policy payment term and is not available if you choose to buy the insurance through offline agents.
Policybazaar Advantage Icon
Advisors available in your city
Our advisors are available in more than 55 cities across India and can help you at your doorstep in understanding the plans and in documentation.
Policybazaar Advantage Icon
Refund at the click of a button
In case you aren’t happy with your purchase, you can cancel your policy hassle-free at the click of a button. We will help you with the cancellation and refund of your policy.

What Is The Nature Of Life Insurance?

To understand the nature of life insurance in a better way, let us first know the different types of life insurance plans available in the insurance industry:

  • Term Insurance Plan
    Term insurance plans offer the base sum assured to the policyholder's family members if in case the policyholder passes away during the policy term. If the policyholder survives till the end of the policy term, no maturity benefit is provided. This plan remains active for a pre-specified period and is one of the most cost-effective plans available.

  • Term Insurance with Return of Premium
    With term return of premium plans, the insurer pays out the life cover amount in case the policyholder suffers an untimely death during the policy period, but in case the policyholder outlives the policy tenure, all the premiums paid throughout the policy are returned at the end of the policy. The returned amount is subject to nominal deductions like

  • 100% Refund of Premium at No-cost Term Plans
    The 100% refund of premium plans provides the policyholders with the option of exiting the plan early and receiving all the premiums paid at the end of the policy. These plans also payout the base sum assured to the nominee if the policyholder passes away during the term. 

  • Whole Life Insurance
    Whole Life Insurance plans provide coverage for the policyholder’s whole life i.e., till 99 or 100 years of age. The nature of life insurance for a whole life is to provide lifelong protection and secure a large sum assured for the future generation as a legacy to leave behind. These plans also provide loan facilities to the life assured, and the overall purchasing procedure is simple online.

  • Child Insurance Plans
    The child insurance plans secure your child's financial future by paying the sum assured to ensure your child’s dreams and aspirations are fulfilled in your absence. These plans also provide a waiver of premium options within the plan, through which the child can stay covered under the plan’s benefit even if the parent is no longer around to pay the premiums. 

  • ULIP Plans
    ULIP or unit-linked insurance plans combine the benefits of insurance and investment by investing a portion of the premium in market-linked funds for wealth creation and securing the other portion for life protection. The scope of these life insurance plans provides a wide range of market fund options through which you can select the fund you want to invest in as per your risk appetite.

  • Money Back Plans
    Apart from the death and maturity benefits, the nature of life insurance money-back plans provides different survival benefits to the policyholder who is associated with the policy term and gives money during the policy term. Irrespective of all the paid instalments, if the policyholder passes away, the family receives the whole sum. These plans are expensive compared to other products.

  • Endowment Plans
    In Endowment Plans, the policyholder receives a lump sum amount of money if he/she survives the policy term till the maturity date. The plan offers insurance along with savings simultaneously. They come along with rider – add-ons that enhance the coverage of the plan. The endowment plan guarantees.

  • Retirement Plans
    Retirement plans are plans that guarantee a fixed income after your retirement and help in building a retirement corpus. The nature of life insurance for retirement is that the amount is invested in producing after-retirement money flow, therefore forming a financial shield and helping in risk mitigation.

*Note: It is recommended that you first know what is term insurance and understand its features, benefits and exclusions before you buy term plan.

one crore term plan
plus

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 16/day+

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day+

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day+

What are the Benefits and Scope of Life Insurance Plan?

While discussing the nature and scope of life insurance, it is important to know the benefits of life insurance as they can help the policyholder secure their loved ones in their absence and secure a large amount to fulfill their lifelong dreams. Here is a list of all the benefits that can help explain the scope of insurance in India:

  • Protect your family’s financial future: In the absence of the main income earner, the death benefit payout of your life insurance plan can help your family stabilise themselves financially and take care of their monthly expenses and other financial obligations like rent, fees, and other bills.

  • Secure your kid’s future: The scope of life insurance for your kids is that they can use the payout amount to fulfill their financial goals like paying for their higher education, funding their business or career, or paying for their marriage.

  • Pay off any remaining liabilities: In case you took out a loan for your studies or house, your family might be burdened with the stress of trying to pay off the loan amount. The payout from life insurance can help your family take care of any existing loans.

  • Fulfill lifelong dreams: If you outlive the policy term, most life insurance plans provide a maturity benefit which can help you fulfill any lifelong goals like securing your post-retirement life or building wealth to beat inflation.

  • Life insurance tax benefits: The nature and scope of life insurance plans in India offer life insurance tax benefits as per the prevailing laws under sections 80C and 10(10D) of the Income Tax Act of 1961.

*Note: You can use term insurance calculator to promptly calculate your term insurance premium amount of your selected term insurance plan.

one crore term plan

Secure Your Family Future Today

₹1 CRORE

Term Plan Starting @ ₹449/month+

Get an online discount of upto 10%+

Compare 40+ plans from 15 Insurers

+Standard T&C Applied

What Are the Factors that Affect Life Insurance Premium Rates?

Now that you know the nature of life insurance as well as the scope of life insurance plans, let’s find out the factors that can affect the premium rates of life insurance:

Factor Affecting Life Insurance Premium Rates Factor Affecting Life Insurance Premium Rates

  • Age: As per the nature of life insurance, the premium rates are lower for younger individuals and progressively increase with age.

  • Gender: Various research has shown that women live longer than men. Thus, the life insurance premium rate is lower for women compared to men.

  • Medical Conditions: In case you have any pre-existing ailments or previously have suffered from an ailment that might affect your current medical condition, you would be charged a higher amount of premium.

  • Family History: If the probability of suffering from an illness is considerably high or any hereditary illnesses run in your family, you may have to pay a higher premium.

  • Coverage Amount: The nature and scope of life insurance is that the higher the sum assured amount would be, the higher the premium amount and vice versa.

  • Lifestyle Habits: Lifestyle practices such as drinking alcohol and smoking can affect your health and result in numerous health problems. Thus, insurers charge a high amount of premium for people who drink alcohol or smoke.

  • Occupation: The scope of life insurance is that if your job profile has a high risk, the premium for your policy would be higher than others. For instance, if you are working on a construction site or if your job is putting you at any kind of risk, like exposure to chemicals regularly, the insurer will charge a higher amount of premium.

*Note: In case you have any questions or doubts regarding your life insurance plan, you can contact the insurance advisor to solve all your queries.

Wrapping It Up!

Considering the difficult times we are living in today, it is always a good idea to secure the lives of your family members with a life insurance plan. You should always ensure you understand life insurance's nature before buying a life insurance policy. The scope of life insurance is that it can be bought by anyone regardless of their income. Low-income individuals can opt for a lower sum assured amount that fits within the budget.

FAQs

  • Q: What is Insurance, in simple words?

    Life insurance, in simple words, is a financial arrangement that provides protection and compensation on the policyholder’s death in exchange for regular premium payments. Along with that, the policy also provides wealth creation benefits so you can survive the policy term.
  • Q: What is the purest form of life insurance?

    The purest form of life insurance is term insurance plans that offer pure risk protection in the form of a death benefit payable on the death of the policyholder during the policy term. These plans do not provide any wealth creation benefit and allow customers to gain bonuses and market-linked profits as per the policy’s T&Cs.
  • Q: What are the 2 main types of life insurance?

    The two main types of life insurance are term life insurance plans and investment plans. Term plans only provide death benefits on the death of the policy term and have no investment component. In comparison, the investment plans provide death and maturity benefits along with wealth creation benefits.
  • Q: What is the importance of insurance?

    The importance of insurance lies in its ability to mitigate financial risks and provide security by offering compensation for unexpected events, helping individuals and businesses recover from losses and maintain their financial stability.
  • Q: What is life insurance and types of life insurance?

    Life insurance is a financial contract that provides a payout to beneficiaries upon the insured person's death, offering financial protection and security.
    Types of life insurance:
    1. Protection Plan: This type of life insurance primarily focuses on providing financial security to beneficiaries in the event of the policyholder's death. For example: Term Insurance.
    2. Savings Plan: These policies combine life insurance with a savings or investment component, allowing policyholders to build cash value over time while also offering a death benefit.
  • Q: What is the nature of life insurance?

    Life insurance provides the policyholder with the death, maturity, and survival benefits as per the policy’s T&Cs in exchange for the premiums paid regularly. You can compare and select the most suitable life insurance policy online in just a few minutes.
  • Q: What are the types of insurance?

    To understand the nature of life insurance, you need to understand the various types of insurance plans available in India. They are as follows:
    - Term insurance plans
    - Term return of premium plans
    - 100% refund of premium at no-cost plans
    - Whole life insurance policy
    - Money-back plans
    - Child insurance plans
    - Unit-linked insurance plans
    - Retirement/Pension plans
    - Endowment plans
  • Q: What is the scope of life insurance?

    The scope of life insurance is that the insurer will pay the benefit amount in case the policyholder dies within the policy term or if the policyholder outlives the policy tenure, whichever is earlier.

Premium By Age

Life insurance articles

  • Recent Article
  • Popular Articles
24 Apr 2024

Most Common Life Insurance Frauds in India

Life insurance fraud is a financial crime that can be committed

Read more
09 Aug 2023

What High Net Worth Individuals (HNIs) Do To Secure Their...

High net worth individuals often opt for life insurance plans to

Read more
28 Jun 2023

A Review Of ICICI Prudential Life Insurance

“Policy Bazaar insurance clarified the term policy for me, so

Read more
27 Jun 2023

A Review Of HDFC Life Insurance

“I recently bought an HDFC term plan and it is the best

Read more
20 Jun 2023

Best Life Insurance Policy in India with High Returns

The best life insurance policy in India is a type of life

Read more
15 Dec 2021

Life Insurance for Parents in India

With the increase in the average life expectancy rate, the older population in India is on the rise. Most of the

Read more
08 Jun 2022

Life Insurance for NRI

Going beyond geographical boundaries to study or pursue a career abroad is a common aspiration for many

Read more
14 Apr 2014

Life Insurance Quotes

Life insurance quotes are the approximate premium rates for the specific life insurance policy. It helps you

Read more
26 Dec 2022

Canara Guaranteed Fortune Plan

Canara HSBC life insurance company introduces a guaranteed fortune plan that provides assured benefits to life

Read more
27 Jun 2023

A Review Of HDFC Life Insurance

“I recently bought an HDFC term plan and it is the best decision I have ever made. I feel so good knowing that

Read more
Need Help? Request Callback
top
View Plans
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL