Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Thank you for your vote
Thanks, you've already rated this review
Life insurance policies play a vital role in financially securing the future of a family. Picking up a life insurance policy is a good choice to make, especially if you’re the sole breadwinner of the family. There used to be a time when people didn’t have many options when it came to choosing the right insurance plan for their families. Now, people are spoilt for choice. The life insurance market has developed significantly over the years and this has begun to garner a lot of positive attention. Depending on your family’s needs, you can chose among a range of different life insurance products that insurance companies are now offering.
Here is a list of some of the different insurance plans that you can choose from:
• Money-Back Policies
•Term Insurance Plans
•Unit Linked Insurance Plans
•Joint Life Insurance
•Child Insurance Plans
Apart from providing your family with a safety net in case of an untimely death and tax benefits, there are a number of advantages of taking up a life insurance policy for your family.
After you have made the decision to pick up a life insurance policy, do not blindly pick up the first policy that looks lucrative. Instead, compare the policy that fits your needs with the same type of policy that’s being offered by other insurance companies.
Family is the pivot point of most of us and securing their future is our number one priority. With uncertain events like terrorist attacks and natural disasters happening all over the world, it is a good idea to pick up a life insurance policy for the entire family. Like they say, “It is better to be safe, than sorry”.
Life insurance can be defined as a contract, in the form of a policy, wherein an insurance provider undertakes to provide financial coverage to an individual in exchange for a payment over regular periods of time called a premium. The insurance provider will offer a lump-sum amount to the beneficiaries or nominees of a policyholder in case of his / her untimely death. This payment will include the sum assured, which is the amount you have purchased the policy for, and the minimum amount of money that the company will pay you before adding bonuses. Apart from the death benefit, a life insurance policy also offers maturity benefits in the form of payouts in case the policyholder survives the entire policy term. In addition, life insurance policies are also known for delivering tax benefits under Section 80C of the Income Tax Act, 1961.
The premium payment that a customer will have to make to an insurance company will be determined by the insurance provider, but the applicant has the option to choose the sum assured as well as the policy term. The insurance company usually determines the premium amount for each individual by considering a number of factors. The sum assured is one such factor, and the higher the sum assured, the higher the premium amount.
Since the insurance industry has been experiencing a strong surge over the past few years, life insurance as a product has also begun attracting an increasing number of buyers. Many individuals opt for term insurance plans as they are designed in a manner such that financial protection can be availed for a predetermined period of time, usually 10 or 15 or 20 years. In case of term insurance plans, your premium payment amount will remain unchanged for the entirety of the coverage term you have chosen. Once the coverage period has passed, continued coverage can be availed for a slightly higher premium. The main reason why term life insurance plans perform so well is due to the fact that they are comparatively cheap in comparison with permanent life insurance policies. Moreover, term life insurance policies are ideal for individuals who cannot earn income during their employment years, as they offer a safety net for the dependents of such individuals and help in ensuring that the financial objectives of the family, such as payment of mortgages, meeting weeding or education expenses of children, etc., can be safely met.
Universal life insurance products have also been experiencing a resurgence in recent years as they offer coverage for the entire lifetime of a policyholder. These policies are also very flexible and allow customers to increase or decrease their coverage amounts or premium payments depending upon the preferences of the policyholder. However, since the policy offers lifetime coverage, the premium payments associated with these policies are relatively high. Universal life insurance policies are ideal for individuals who seek to preserve wealth with a view to transfer the same to their beneficiaries, and also for individuals who want a long-term income replacement in case their financial needs are significantly greater than their working years.
Whole life insurance policies are also great options for individuals who wish to avail lifetime coverage, but they come at higher premium payments in comparison with term life insurance policies. While the premium payments in such policies will remain constant for the entirety of the policy term, whole life insurance policies come with a cash value that can be used as a savings component as it has the ability to accrue tax-deferred over a period of time. In the following section, we will discuss the different types of life insurance policies in detail.
Term life insurance policies are those that can be purchased for a fixed period of time. These policies do not have a cash value, and are thus relatively cheap in comparison with other kinds of life insurance policies. However, the policy will only turn out beneficial in case the policyholder dies during the policy term. Most of the prominent life insurance companies in India offer term life insurance policies for terms such as 10 or 20 or 30 years, and the most attractive feature about these policies is that they come with a built-in option that allows the policyholder to convert them into permanent life insurance policies.
Term life insurance policies are among the most traditional kinds of insurance plans. In order to purchase term life insurance policies, individuals need not set aside large amounts of money as most insurance companies provide policies wherein the sum assured may exceed Rs.1 crore, but the premium payment applicable to the policyholder may be a low as Rs.10,000 per year. It is one of the most inexpensive policies out there, making it the best option for anyone who wishes to avail life cover and ensure the financial protection of his / her family.
The premium amount as well as the premium payment frequency can be chosen by the policyholder, and the options for premium payments may vary from annual, semi-annual, quarterly to monthly. Individuals can also choose to make a lump-sum premium payment if they do not want to make payments at regular intervals of time. The only downside to a term life insurance policy is that it does not offer any maturity benefits as they are designed in a manner such that they offer only life insurance cover. However, in case of the death of the policyholder, the beneficiary or nominee will be eligible to claim the sum assured.
In case you wish to purchase a term life insurance plan, you must first confirm what your sum assured will be before deciding whether or not you want a policy that will provide return of premium. Then, select an insurance company that will be willing to provide you a policy with the sum assured amount of your choice, after which you will have to check if the premium you have been charged for the sum assured amount you selected. The claims settlement ratio of the company from which you are purchasing the term life insurance policy must also be checked as it will ensure that there are no hassles in case you wish to make claims.
Endowment policies are somewhat similar to traditional term life insurance policies in the sense that they pay out a lump sum amount to the beneficiary or nominee in case of the death of the policyholder. However, endowment plans also have an extra clause that mentions that the policyholder will receive a lump sum amount in case he / she survives until the date of maturity. The specified maturity period is also called the survival term of the endowment policy term, and endowment policies may be regular insurance policies with profits or unit linked insurance policies.
An endowment policy offer insurance cover to the policyholder for the whole policy term and pays out a lump sum amount upon maturity. Not only does an endowment plan offer significant returns when used as a long-term investment, but it also provides tax benefits under Section 80C of the Income Tax Act, 1961. Moreover, endowment policies also enable long-term savings and the level of risk associated with them in comparison with other investment options that provide similar returns, such as mutual funds, is relatively low. The presence of additional riders for an extra cost can ensure that maximum cover is availed for disabilities, critical illnesses, etc. However, the only downside to an endowment plan is that the returns on investment are somewhat low in comparison with the returns availed from debt and equity-related instruments or mutual funds, making it instrumental for applicants to be sure of what they expect from the policy before purchasing one.
Unit Linked Insurance Plans are basically insurance policies that provide you with a chance to create wealth in addition to offering the security of life cover. The premium payments made towards an unit linked insurance plan are split and a part of it is sent toward the life cover of the policyholder while the remainder is dedicated to a large pool of money known as fund, and this money is then invested in debt, equity, or both, and the returns of investment will be determined by how well the fund that you have chosen performs.
Unit Linked Insurance Plans allow the policyholder to select the amount of life cover they prefer, and the life cover offered by most unit linked insurance plans is usually 10 times the yearly premium amount. However, customers are free to choose their life cover to the extent of 100 times their yearly salary, but the approval of the same will be determined by the insurance company and the particular policy you have purchased.
The main kinds of funds under a unit linked insurance plan include Debt Funds, Equity Funds, and a combination of both, known as Balanced Funds. While the money transferred to debt funds is invested in company or government bonds, the money transferred to equity finds is usually invested in instruments such as company shares. Balanced funds, on the other hand, are those wherein money is invested in equal proportions of debt and equity funds. Individuals who invest in unit linked insurance plans have the freedom to choose the fund in which they would like to invest their money depending upon their risk appetite and their investment objectives. For instance, in case you wish to see your wealth grow and are open taking a few risks with your investments, debt funds are the right option for you. Likewise, in case you are looking for steady returns on your investment, debt funds will work out best. Moreover, investing in unit linked insurance plans will also give you the option to shift your money between debt and equity funds.
Unit linked insurance plans are the ideal solutions for individuals who may want to withdraw part of the money from their investment at any given point in time. The option of partial withdrawal in unit linked insurance plans allows customers to withdraw a certain amount of money that they have invested in the policy, thereby helping them meet immediate and emergency expenses. The manner in which unit linked insurance plans are structured helps customers secure their main objectives, such as saving for the education or marriage of their children, retirement planning, wealth creation, etc. In addition to the aforementioned benefits, individuals who invest in unit linked insurance plans can also make the most of tax benefits under Sections 80C, 80CCC and 80D of the Income Tax Act, 1961.
Ordinary life, or straight life insurance plans as they are also called, whole life insurance policies are those whose terms and conditions remain unchanged for the entirety of the policy term provided that the policyholder makes the required premium payments. A specific predetermined amount will be paid to the beneficiary or nominee in case of the untimely death of the policyholder while the policy term is in progress. The policyholder, however, has the freedom to borrow money against a whole life insurance policy, or withdraw the policy at any time. Since whole life insurance policies have a maturity age of 100 years, the policyholder will receive the maturity benefits in the form of a matured endowment if he / she is alive on the date of maturity.
Unlike other life insurance policies that can be availed for a fixed period of time, whole life insurance policies offer coverage to policyholders for their entire life. In essence, whole life plans are efficient savings instruments if you consider the fact that you will not have to purchase another life insurance policy because your first plan expired. In case of the untimely death of the policyholder, the nominee or beneficiary will receive a lump sum payout from the insurance company.
The survival benefits in whole life insurance policies continue to increase over a period of time, and policyholders can avail lifetime coverage in addition to guaranteed level premiums in exchange for premium payments over a limited premium payment term. There will be no changes in the premium payment for the entirety of the premium payment term and upon maturity, the sum assured will be paid out along with bonuses that are declared depending upon the performance. Whole life policies also act as a source of cash as they offer a lump sum payment when the premium payment term comes to an end. Moreover, these policies also allow customers to avail loans against its surrender value, making it a beneficial instrument considering you will not have to borrow directly from a bank, or against retirement accounts or even your home for that matter. Individuals who invest in whole life insurance policies can also make the most of tax benefits under Sections 80C and 10 (10D) of the Income Tax Act, 1961, and these policies are prefect if you are looking to derive benefits for your dependents, as they are ideal for building up the cash value within the policy as well as saving money.
Money back insurance policies, as the name might suggest, are those that pay out a lump sum amount to the beneficiary or nominee of a policyholder in case of the untimely death of the policyholder. The maturity benefits offered by money back insurance policies will be in the shape of many different guaranteed “survival benefits” that are allotted proportionately throughout the policy. Simply put, a money back insurance plan is just an endowment policy that comes offers the benefit of regular liquidity.
Money back insurance plans offer insurance cover for the whole policy term and regular benefits can be availed from it throughout the policy term. These plans work as long-term investment instruments that offer healthy returns in addition to fulfilling the role of a conventional insurance policy. Tax benefits can also be availed under the Income Tax Act, 1961, and money back insurance plans are considered less risky investment options in comparison with similar offerings such as mutual funds. In addition to enabling regular income and long-term savings, money back insurance policies also ensure that amounts are regularly disbursed. Some of these policies also allow the customer to increase the insurance coverage guaranteed death benefits regardless of whether or not the maturity date has passed, as long as the policyholder does not attain 100 years of age. Moreover, the presence of extra riders for disabilities, critical illnesses, etc. means that you can derive maximum benefits from a money back insurance plan.
In case you are looking to purchase an insurance policy and find yourself in good health, money back policies are good options as they help in saving on tax as well as provide regular returns in addition to comprehensive life insurance cover.
Annuity Life Insurance Policies are long-term contracts that can be purchased from insurance providers. Annuities are designed in a manner such that they help in accumulating assets with a view to collecting income for retirement. However, they do have their limitations. In case of early withdrawals, customers will have to pay penalties and the earnings under annuities are taxable in the same manner as ordinary income.
Annuities are designed to ensure that customers can avoid the risk of outliving their income. Annuitisation allows your premium payments towards the plan to be converted into periodic payments that you can use for the rest of your life. Annuities are also flexible and enable customers to either invest a lump sum amount or to make smaller payments over a period of time. Customers also have the option to decide whether they would like to receive their pay outs immediately or at a later date. However, whether your requirements are long-term or short-term, you have the freedom to select the kind of annuity that best suits your situation. The options are as follow:
Life insurance has evolved from a luxury to a necessity, with it becoming an integral component for our smooth functioning. While life insurance penetration in the country is yet to do justice to our numbers, each day sees hundreds of new entrants into different life insurance schemes. One of the biggest challenges pertaining to Life Insurance is related to choosing the right type of insurance, and with companies offering multiple options it wouldn’t be hard for people who are not familiar with them to get confused.
The table below will highlight and compare key aspects related to the different types of life insurance policies in India.
|Parameter||Endowment Policies||Unit Linked Insurance Policies||Money Back Policies||Whole Life Policies||Pension/Annuity Policies||Term Insurance Policies|
|Overview||These are protection plus investment policies||These are investment plus insurance policies which are unit-linked and participatory in nature||These are protection plus saving policies which are participatory in nature||These are protection plus saving policies which are participatory in nature||These are traditional policies which are non-participatory in nature||These are the simplest life insurance policies|
|Term*||Term typically ranges between 10 -35 years||Term ranges between 10 – 20 years||Typically ranges between 5 to 25 years||Covers the whole life of a policyholder. Term can be as long as 40 years||Typically there are no fixed terms, with annuity kicking in post-retirement||Typically ranges from 5 years to 30 years|
|Death benefits||Payable to nominee on death of policyholder. Typically includes bonuses accumulated also||Payable to nominee if policyholder dies while policy is in place||Payable to nominee if policyholder dies while policy is in place. Death benefit is exclusive of other pay-outs||Payable to nominee if policyholder dies while policy is in place||Some plans offer a provision to return the invested amount in the case of death of policyholder||Sum assured is payable to the nominee if policyholder dies while the policy is in place|
|Maturity benefits||Maturity benefit will be paid to policyholder on survival at end of term||Maturity benefit will be paid to policyholder on survival at end of term||Survival benefit will be paid on maturity of policy||Maturity benefits are typically paid when the policyholder reaches a certain age (could range between 80 years to 100 years)||No maturity benefits per se. Policyholders are entitled to regular pension for the term specified.||No maturity benefit will be paid on survival|
|Premium costs||High premium costs||Premiums are on the higher side, owing to investment costs||Affordable premiums||Generally have higher premiums associated with them||Premiums are moderately priced, with most policies requiring one-time payment||Affordable premiums, lowest among all policy classes|
|Additional benefits||Investments accumulate profits, which are paid as bonus||Investments accumulate profits, paid as bonus. Tax exemptions can also be claimed||Regular monetary benefits are given to policyholder while the policy is in force, with these amounts not impacting the death benefit||Benefits paid on maturity or death include a bonus component along with the sum assured||Regular income source post retirement||These plans provide maximum cover at low premiums. One can opt for variants of pure term plans which provide maturity benefits|
|Ideal for||People with income to pay high premium and those who are looking to protect themselves and multiply their investment||People who are looking at a medium term investment goal to diversify their portfolios. Also suited to those with high income and keen investment sense||Individuals who are looking to secure their life but wish to earn some money at regular intervals. It is ideal for people looking at an investment plus protection plans||People who want to protect the interest of their family and those looking to secure the financial future of their loved ones irrespective of what happens||People who are worried about their retirement life, and those who wish to have a regular income source post retirement. Not suited for those looking at higher returns on their investment||People who are looking to secure the financial interest of their family members without having to pay exorbitant premiums. Individuals looking for short term protection can opt for these plans|
*Note – The term varies from plan to plan, with the numbers mentioned above reflecting an overall average.
“Based on IRDA Annual Report 2015-16 on Business Revenue of Insurers”
When it comes to life insurance, the standard idea of the product is that if you pass away, an insurance company will pay your family a large sum of money. But that is not the only benefit that a life insurance product has to offer. A life insurance policy can also be used to plan for upcoming expenses through scheme like ULIPs (Unit Linked Insurance Plans) that provide returns through investment in the markets. A life insurance policy can also be used to plan your retirement through pension plan that offer a monthly income once you retire or used to keep money aside for a child’s higher education through special policies that offer returns that can be taken when a child turns 18 years old. Life Insurance for Tax Benefits under section 80C of the Income Tax Act on all investments made in them. With certain policies, tax benefits can also be claimed on returns under section 10 (10D). With all these amazing features offered by a life insurance policy, the next logical question is, “what are the top life insurance providers in India and what do they offer?”
Following are the top 10 life insurance companies in India and the products they offer:
LIC, or Life Insurance Corporation of India, as it is known in its extended form, is India’s sole life insurance provider from the public sector. Having commenced operations in 1956, LIC is the oldest life insurance company in the country, and it was formed thanks to the amalgamation of over 245 provident societies and insurance companies. The company’s headquarters is located in Mumbai, and it currently boasts more than 110 divisional offices in addition to 8 zonal offices, more than 14 lakh insurance agents, and more than 2000 branches.
LIC offers a vast array of life insurance policies, stretching from term life insurance plans to investments to savings products. It is one of the few companies that is currently thriving in both rural as well as urban areas in the country.
The term insurance plans offered by LIC include LIC’s Anmol Jeevan II, LIC’s Amulya Jeevan II, LIC’s e-Term, and LIC’s New Term Assurance Rider. The unit-linked insurance plans offered by LIC include pension plan, child plans and investment plans.
Under pension plans, there are three options to choose from – Jeevan Akshay – VI, Varishtha Pension Bima Yojana, and LIC’s New Jeevan Nidhi. The only child plan that LIC has made available to its customers at the moment is LIC’s New Children’s Money Back Plan, but there are 12 options so far as investment plans are concerned, including LIC Jeevan Tarun Plan, LIC’s New Jeevan Anand, LIC’s New Endowment Plan, LIC’s Single Premium Endowment Plan, LIC’s Jeevan Rakshak Plan, LIC’s Limited Premium Endowment Plan, LIC’s JEEVAN Lakshya, LIC’s Jeevan Sangam, LIC’s New Bima Bachat, LIC’s New Money Back Plan – 20 Years, LIC’s New Money Back Plan – 25 Years, and LIC’s Jeevan Tarang.
SBI Life Insurance was registered in 2001 and commenced operations as a joint venture between BNP Paribas Cardiff and State Bank of India – two among the biggest service providers so far as the finance sector is concerned. BNP Paribas Cardiff holds 26% stock in the company while SBI holds the other 74%.
SBI Life Insurance Company has one of the largest product portfolios in the industry, offering solutions for a variety of situations. The unit-linked insurance plans made available by the company include SBI Life – eWealth Insurance, SBI Life – Smart Wealth Assure, SBI Life – Smart Scholar, SBI Life – Smart Power Insurance, SBI Life – Smart Wealth Builder, SBI Life – Saral Maha Anand and SBI Life – Smart Elite. The two child insurance plans that can be purchased from the company include SBI Life – Smart Champ Insurance and SBI Life – Smart Scholar.
The pension plans offered by SBI Life Insurance Company include SBI Life – Saral Pension, SBI Life – Retire Smart and SBI Life – Annuity Plus. The protection plans that can be availed from the company include SBI Life – Smart Shield, SBI Life – Saral Shield, SBI Life – eShield and SBI Life – Grameen Bima. If you’re looking for savings plans, the options at your disposal include SBI Life – Smart Swadhan Plus, SBI Life – Smart Humsafar, SBI Life – Smart Money Planner, SBI Life – CSC Saral Sanchay, SBI Life – Smart Income Protect, SBI Life – Smart Guaranteed Savings Plan, SBI Life – Smart Money Back Gold, SBI Life – Shubh Nivesh, SBI Life – Saral Swadhan Plus and SBI Life – Flexi Smart Plus.
In addition to individual policies, SBI Life Insurance Company also offers group insurance policies which include corporate solutions such as SBI Life – Kalyan ULIP Plus, SBI Life – CapAssure Gold, SBI Life – Gaurav Jeevan and SBI Life – Swarna Jeevan. The group protection plans offered by the company include SBI Life – Pradhan Mantri Jeevan Jyoti Bima Yojana, SBI Life – Sampoorn Suraksha and SBI Life – Suraksha Plus. The company also offers a group loan protection plan called SBI Life – RiNn Raksha.
The group micro insurance plans offered by SBI Life Insurance Company include SBI Life – Grameen Shakti and SBI Life- Grameen Super Suraksha. The company also offers online plans such as SBI Life – eShield, SBI Life – eWealth Insurance and SBI Life – Annuity Plus.
ICICI Prudential Life Insurance Company was formed as a joint venture between Prudential Plc., which is one of the largest global financial services group from the UK, and ICICI Bank, which is among the biggest and most successful private banking institutions in India. ICICI Bank holds 74% of the stake in ICICI Prudential Life Insurance Company, while Prudential Plc. Holds 26%.
The company remains India’s primary private life insurer to have been accredited from Fitch Ratings with a National Insurer Financial Strength rating of AAA. ICICI Prudential has was also voted as the country’s Most Trusted Private Life Insurer for three years in succession thanks to its delivery of quality products and services.
ICICI Prudential Life Insurance Company offers a wide variety of plans and schemes. The only term life insurance plan made available by the company is ICICI Pru IProtect Smart, but customers have options to choose from when it comes to selecting unit-linked insurance plans. The ULIPs offered by ICICI Prudential Life Insurance Company include ICICI Pru Guaranteed Wealth Protector, ICICI Pru Wealth Builder II, ICICI Pru Elite Wealth II, and ICICI Pru Elite Life II.
ICICI Prudential Life Insurance Company also offers pension plans to its customers, and the options at your disposal include ICICI Pru Easy Retirement and ICICI Pru Immediate Annuity, whereas the child plans from which you can choose include ICICI Pru Smart Life, ICICI Pru SmartKid Regular Premium, and ICICI Pru SmartKid Premier. The investment plans you can avail from ICICI Life Insurance Company include ICICI Pru Cash Advantage and ICICI Pru Savings Suraksha.
HDFC Standard Life Insurance Company is among the best Life Insurance providers in India. It is a private institution that offers long-term insurance solutions to customers in almost 1000 cities across the country. Registered in 2000, the company is headquartered in Mumbai and currently boasts around 14,000 employees in addition to over 400 branches to ensure that all the insurance requirements of their customers are catered to. The main products offered by the company include investment, savings, pension and health in addition to other specially-designed solutions for women and children.
Among all its achievements, HDFC Standard Life Insurance Company stands out for becoming the pioneer in the finance sector to provide pension plans to customers under the new IRDA regulations. The company offers protection plans, health plans, retirement plans, young star plans, savings and investment plans, and women’s plans.
As of now, the only protection plan offered by the company is HDFC Life Click to Protect Plus, but there are plenty of options to choose from when it comes to retirement plans, including HDFC Life Personal Pension Plans, HDFC Click to Retire ULIP, HDFC Life Pension Super Plans, HDFC Life Single Premium Pension Plans, HDFC Life Guaranteed Pension Plans and HDFC Life New Immediate Annuity Plan.
HDFC Standard Life Insurance Company offers two kinds of health plans, viz. HDFC Life Cancer Care Plan and HDFC Life Health Assure Plan. The savings and investment plans offered by the company include HDFC Life Click2Invest Plans, HDFC Life Sanchay, HDFC Life Super Income Plan, HDFC SL Crest, HDFC Life ClassicAssure Plus, HDFC Life Super Savings Plan, HDFC Life ProGrowth Plus, HDFC SL ProGrowth Super II, HDFC SL ProGrowth Flexi, HDFC Life Sampoorna Samriddhi Plus, HDFC Life Sampoorna Nivesh, HDFC Life Invest Wise Plan and HDFC Life Uday.
The child insurance plans offered by HDFC Life Insurance Company include HDFC SL YoungStar Super Premium and HDFC Life YoungStar Udaan, and the only women’s insurance plans provided by the organisation at the moment is HDFC Life Smart Woman Plan. The company also offers a number of group insurance plans such as HDFC Life Group Pension Plan, HDFC Life Group Variable Employee Benefit Plan, HDFC Life Group Unit Linked Pension Plan, HDFC Life New Group Unit Linked Plans, HDFC Life Group Credit Protect Insurance Plan, HDFC Life Group Term Insurance Plan, HDFC Life Group Credit Protect Plus Insurance Plan and HDFC Life Pradhan Mantri Jeevan Jyoti Bima Yojana Plan.
Bajaj Allianz Life Insurance Company was formed as a joint venture between Germany’s Allianz SE and India’s Bajaj Finserv. The company was registered in 2001 under the name of Bajaj Allianz Life Insurance Company and has turned out to be one of the best and most trusted life insurers in the country. Apart from life insurance products, the company also offer several general insurance products as well as other financial services in 70 countries across the globe. The company’s performance in recent years has been truly exceptional and its receipt of the “Best Life Insurance Company in the Private Sector” at the BFSI Awards ceremony in 2015 confirmed just that.
The term life insurance solutions offered by the company include iSecure Plan, iSecure More Plan and iSecure Loan Plan. The unit-linked insurance policies offered by the company include Investment Plan – Future Gain and Investment Plan – Fortune Gain. The company also offers pension plans such as Bajaj Allianz Lifelong Assure Plan, Bajaj Allianz Pension Guarantee Plan and Bajaj Allianz Retire Rich Plan.
Among the child plans offered by Bajaj Allianz Life Insurance Company are Traditional Savings Plan – Bajaj Allianz Young Assure and Bajaj Allianz Lifelong Assure, while the investment plans made available to customers include Savings Plan – Save Assure, Savings Plan – Guarantee Assure and Investment Plan – Invest Assure.
Having commenced operations in 2001 as a joint venture between Mitsui Sumitomo Insurance Co. Ltd. – a general insurance company that is also a member of the MS & AD Insurance Group, and Max India Ltd. – a multi-business corporate firm from India, Max Life Insurance Company has grown into one of the most efficient and admired private life insurance providers in the country.
The company has developed a reputation for providing comprehensive retirement and life insurance solutions for protection and long-term savings to over 30 lac individuals across the country. Max Life Insurance Company has won several accolades over the years to show for its quality products and services, the most prominent of the lot being the “Best Underwriting Initiative of the Year” at the Asia Banking Financial Services and Insurance Excellence Awards in 2015.
The company boasts a relatively large product portfolio. The term life insurance plans offered by Max Life Insurance Company include Max Life Online Term Plan Basic Life Cover, Max Life Online Term Plan Life Cover + Monthly Income, Max Life Online Term Plan Life Cover + Increasing Monthly Income, Max Life Super Term Plan, Max Life Platinum Protect II and Max Life Premium Return Protection Plan. The unit-linked insurance plans offered by the company include Regular Premium plans, Ma Life Fast Track Super Plan and Max Life Maxis Super Plan.
Among the pension plans you can purchase from Max Life Insurance Company are Max Life Forever Young Pension Plan, Max Life Guaranteed lifetime Income Plan and Max Life Life Perfect Partner Plan. The investment plans on offer include Max Life Guaranteed Income Plan, Max Life Whole Life Super and Max Life Life Gain Premier. The only child plan available with the company at the moment is Max Life Shiksha Plus Super Plan.
Birla Sun Life Insurance Company Limited was formed as a joint venture between Sun Life Financial Inc. and the Aditya Birla Group and is currently one of the best global financial services provider. The company has gained a strong reputation for contributing significantly to the growth of the life insurance sector, making it one of the biggest insurance providers in India. The company currently has more than two million customers as it offers a comprehensive range of policies that include protection plans, solutions for the future of children, health and wellness products, wealth with protection plans, savings with protection plans and retirement packages.
Birla Sun Life Insurance Company Limited has more than 500 branches in addition to over 85,000 empanelled advisors. The company is also accredited with the release of unit-linked life insurance policies among various other pioneering feats.
The term life policies offered by Birla Sun Life Insurance Company Limited include Birla Sun Life Insurance Protector Plan Plus, Birla Sun Life Insurance Future Guard Plan, Birla Sun Life Insurance Easy Protect Plan and Birla Sun Life Insurance Protect @ Ease. The savings with protection plans you can purchase from the company include Birla Sun Life Insurance Vision MoneyBack Plus Plan, Birla Sun Life Insurance Vision Life Income Plan, Birla Sun Life Insurance VisionEndowment Plan, Birla Sun Life Insurance Savings Plan, Birla Sun Life Insurance Vision Life Secure Plan, Birla Sun Life Insurance Income Assured Plan, Birla Sun Life Insurance Vision Regular Returns Plan, Birla Sun Life Insurance Vision Endowment Plus Plan and Birla Sun Life Insurance Guaranteed Future Plan.
The only solution for children’s future offered by Birla Sun Life Insurance Company Limited is the Birla Sun Life Insurance Vision Star Plan. However, there are options to choose from when it comes to purchasing retirement solutions, including Birla Sun Life Insurance Empower Pension Plans, Birla Sun Life Insurance Immediate Annuity Plan and Birla Sun Life Insurance Empower Pension.
Birla Sun Life Insurance Company Limited also offers unit-linked insurance plans, such as Birla Sun Life Insurance Wealth Max Plan, Birla Sun Life Insurance Wealth Secure Plan, Birla Sun Life Insurance Wealth Assure Plan, Birla Sun Life Insurance Fortune Elite Plan and Birla Sun Life Insurance Wealth Aspire Plan. The company also offers solutions to customers in rural regions, with specially-designed plans such as Birla Sun Life Insurance BimaDhanSanchay, Birla Sun Life Insurance Bima Suraksha Super, Birla Sun Life Insurance BimaKavachYojana and Birla Sun Life Insurance Grameen Jeevan Raksha Plan. Even non-residents of India can make the most of the company’s offerings thanks to a special product called the Birla Sun Life Insurance Vision Life Income Plan.
One of the largest life insurance providers in India, Kotak Mahindra Life Insurance Company is a joint venture between Old Mutual Fund and Kotak Mahindra Bank Ltd. Old Mutual Fund holds 26% of the stake in the company while Kotak Mahindra Bank Ltd. holds the remaining 74%. The headquarters of the company is located in Mumbai and the company has grown exceptionally ever since it commenced operations in 2001. In fact, it is India’s fastest growing insurance provider and currently boasts more than 4 million customers. The clam settlement ratio of the company is among the highest in the industry, highlighting the company’s quality business practice.
Kotak Mahindra Life Insurance Company has an impressive insurance product portfolio. The term life insurance plans that can be purchased from the company include Kotak Preferred e-Term Plan, Kotak Preferred Term Plan, Kotak Saral Suraksha and Kotak Term Plan. The unit-linked insurance plans offered by the company include Kotak Assured Income Plan, Kotak Single Invest Advantage, Kotak Platinum, Kotak Wealth Insurance, Kotak Ace Investment Plan and Kotak Invest Maxima.
The pension plans made available by Kotak Mahindra Life Insurance Company include Kotak e-Lifetime Income Plan and Kotak Lifetime Income Plan, but the only option available under child plans is Kotak Headstart Child Assure. However, when it comes to investment plans, you have a variety of options to choose from, including Kotak Sampoorn Bima Micro-Insurance Plan, Kotak Gramin Bima Yojana, Kotak Assured Income Accelerator, Kotak Premier Moneyback Plan, Kotak Assured Savings Plan, Kotak Classic Endowment Plan and Kotak Premier Endowment Plan.
Reliance Life Insurance Company Limited is among the most important subsidiaries of Reliance Capital, which is among the best financial service companies in the country. The company has a diversified business portfolio, and customers can find products across a variety of categories, including insurances of all types, mutual funds and asset management.
Reliance Life Insurance Company Limited has more than 10 million customers and boasts in excess of 800 branches around the country. The company also employs more than 1 lac advisors, and has gained a reputation as the biggest non-bank supported private life insurance company.
Reliance Life Insurance Company Limited has a relatively huge insurance portfolio too. Whether you are looking for protection plans, health plans, child plans, retirement plans, savings and investment plans, group plans or unit-linked life insurance policies, the company has it all.
Under protection plans, the options at your disposal include Reliance Term Plan, Reliance Online Term Plan, and Reliance Online Income Protect. Under health plans, customers can choose from Reliance Easy Care Fixed Benefit Plan, Reliance Care for You Advantage Plan, and Reliance Health Total. The retirement plans offered by Reliance Life Insurance Company Limited are Reliance Immediate Annuity Plan and Reliance Smart Pension Plan.
With regards to savings and investment plans, Reliance Life Insurance Company Limited offers three options, viz. Reliance Super Money Back Plan, Reliance Guaranteed Money Back Plan, Reliance Fixed Savings, Reliance Blue Chip Savings Insurance Plan, Reliance Increasing Income Insurance Plan, Reliance Fixed Money Back Plan, Reliance Lifelong Savings, Reliance Future Income, Reliance Smart Cash Plus Plan, Reliance Money Multiplier Plan, Reliance Endowment Plan, and Reliance Super Endowment Plan.
Among the child insurance plans that you can choose from Reliance Life Insurance Company Limited are Reliance Education Plan and Reliance Child Plan. And under unit-linked life insurance policies, the options include Reliance Pay Five Plan and Reliance Classic Plan II.
IndiaFirst Life is one of country’s youngest life insurance companies. With its headquarters in Mumbai, IndiaFirst Life has spread across 1,000 cities in India. It is a joint venture between Bank of Baroda with 44% stake, Andhra Bank with 30% stake, and Legal & General group with 26% stake. Legal & General group is UK’s pioneering risk, wealth and investment brand. The company boasts of immense experience in banking, wealth and financial management.
IndiaFirst Life has developed a range of products catering to needs such as savings, health, retirement, protection, and employee liability plans. The insurance company integrates technology across purchase, pre-purchase, and post-purchase cycle turning out a seamless experience for its stakeholders. IndiaFirst Life works on the ‘Customer First’ principle, making it a customer friendly insurance company. Products offered by IndiaFirst Life are as per individual needs and life goals of its customers. While in the individual product category, you can plan your protection, retirement, or even legacy, in the group product category, organisations can plan their protection and savings for their members.
The term plans offered by IndiaFirst Life are IndiaFirst Anytime Plan, IndiaFirst Life Plan, and Star First Combi Plan. The investment plans or ULIPs offered by the insurance company are IndiaFirst Money Balance Plan, IndiaFirst Happy India Plan, IndiaFirst Life Wealth Maximise Plan, and IndiaFirst Smart Save Plan. IndiaFirst Life also offers traditional savings plans such as The IndiaFirst Cash Back Plan, IndiaFirst Maha Jeevan Plan, and IndiaFirst Simple Benefit Plan. The Immediate Annuity Plan and the Guaranteed Retirement Plan are the two retirement plan offered by the company. The insurance company also has a microinsurance plan for low income and rural families, IndiaFirst CSC Shubhlabh Plan.
IndiaFirst Life offers simple and affordable life insurance plans with genuine benefits. The exceptional post-sale services make it a better choice than most other life insurance companies.
|Life Insurance Providers Statics (2015-16)|
|Life Insurance Provider||Claims Recieved||Claims Paid||Claim Settlement Ratio||Grievances Solved Ratio||Life Insurance Premium Paid (in crores)|
|ICICI Prudential Life||11034||10615||96.20%||99.87%||19164.39|
|Bajaj Allianz Life||17967||16404||91.30%||99.90%||5897.31|
|Birla Sun Life||7204||6372||88.45%||99.99%||5579.71|
|PNB Met Life||3094||2641||85.36%||99.55%||2827.83|
|Canara HSBC Oriental Bank of Commerce Life||571||531||92.99%||99.60%||2059.96|
|TATA AIA Life||3311||3205||96.80%||100.00%||2478.96|
|Star Union Dai-ichi||1365||1102||80.73%||95.42%||1307.47|
|Bharti AXA Life||1261||1009||80.02%||100.00%||1208.33|
Life Insurance Providers statistics for 2015-16 By IRDA
With life insurance, you can provide enhanced financial security to your near and dear ones. Life insurance is an integral part of our financial planning, providing financial cover to your family members even when you are no more. Life insurance policies help you prepare for life's uncertainties; they provide complete peace of mind ensuring that the future of your loved ones is secure. Also, you can pay off various expenses incurred in different phases of your life with the help of life insurance policies. The amount received as life insurance policies can be used for paying off loan and other expenses, taking loans and fulfilling various personal needs.
Few tools are as effective for long-term financial planning as life insurance. However, in order to ensure the incorporation of a life insurance policy into your portfolio, it is crucial to understand the manner in which life insurance works and when payouts can be claimed.
Life insurance works in a fairly simple manner. Customers will have to make premium payments to the insurance company at regular intervals of time, and in exchange, the company will guarantee the policyholder with a lump sum pay out to his / her beneficiaries in case of his / her untimely death. The premium payments made to the company will accumulate over a period of time and provide bonuses as well.
Benefits under a life insurance policy are usually paid out to the nominee or beneficiary upon the death of the policyholder. To receive the sum assured, the nominee will have to file a death claim with the insurance company for which he / she will have to furnish a copy of the policyholder’s death certificate in addition to any other documents as required by the insurance company. Most insurance providers take around 30 days to review the claim before deciding to make a payment or denying the claim. It takes between 30 and 60 days for an insurance company to settle the claim with a nominee or beneficiary of a policyholder. While there is no specified time frame, most insurance companies try to settle claims as early as possible because it helps them in avoiding high interest fees for delay in payment of claims.
While most claims are paid out without much concerns, there may be situations that cause the insurance company to delay the payment of your claims. For instance, in case the policyholder dies within the first two years following the purchase of a life insurance policy, the nominee or beneficiary may have to wait for a period of between six and 12 months before receiving the payment because the policy may contain a contestability clause due to which the insurance company will have to investigate the original application and confirm there was no fraud committed. A number of life insurance policies also come with a suicide clause that enables the insurance provider to reject claims in case the policyholder commits suicide within two years of taking out a life insurance policy.
Since all life insurance policies pay out a lump sum amount to the beneficiaries or nominees upon the death of the policyholder, it is essential for the nominee or beneficiary to contact the life insurance policy immediately after the death of the policyholder and commence the claims process as soon as possible. A certified copy of the policyholder’s death certificate must be obtained and submitted to the insurance company along with the original policy document and any other document requested by the insurer.
Over the past 20 years or so, an increasing number of life insurance companies have designed and made available policies that enable their policyholders to withdraw money against the policy’s face value. In case you are critically or terminally ill and need funds to meet emergency expenses, you may avail a loan or withdraw money against your insurance policy by simply submitting the necessary documents to the insurance company along with a letter that states the reason for your withdrawal.
Life Insurance policies offer several different benefits to individuals. Following are the most important:
The benefits offered by a life insurance policy varies depending upon the age and life situation of the policyholder. For instance, in case you have just landed your first job and started earning, life insurance can come in handy with regards to ensuring that your ageing parents have the financial resources to survive whilst enabling long-term wealth creation for yourself. For individuals who have recently married, a life insurance policy can help in securing the future of your spouse, helping in creating long-term savings and also aiding in clearing liabilities like loans.
Individuals who have just become parents can find that a life insurance policy will help them meet expenses related to the education of their children, protecting the interests of the children, and enhancing their wealth for later use. If you are a parent with teenage children, a life insurance policy is ideal when it comes to planning for retirement and dealing with the increasing medical expenses. For retired individuals, a life insurance policy will provide regular income, and help in dealing with medical and health costs in addition to providing security for their spouse.
Regardless of what stage of life you might be in, a life insurance policy is a great investment that can help you avail financial security for you and your family, thus ensuring peace of mind.
Purchasing a life insurance policy is considered essential nowadays because it ensures that your dependents will have the financial resources to cope with their daily expenses in case of your unfortunate and untimely death. While life insurance is not necessary for every individual, it definitely plays a crucial role in ensuring the financial security of the family of an income-earning individual, and it becomes all the more important for individuals who are the sole earners in their families.
Insurance can also come in handy for individuals who wish to repay personal loans or home loans, or those who have children that require funds for marriage or higher education. In essence, life insurance policies serve as contingency plans that ensure that your nominees or family members will remain financially stable in case of your demise as the insurance company will pay them a lump sum amount. Based on the kind of policy you purchase, you can also avail a healthy savings-cum-investment instrument that will qualify you for tax benefits as well.
Thanks to advancements in technology, you can now compare life insurance policies from the comfort of your home. All you need is a computer and an internet connection in addition to a payment account such as a debit or credit card. But before you choose a policy and pay for it, it is essential that you do your homework and ensure that the policy is select has all the features and benefits that will come to good use in the future. Following is a brief description of the various policies at your disposal and the important points that must be considered before selecting a life insurance plan:
A thorough comparison of life insurance policies can not only help you find all the right features and benefits, but can also help in saving a considerable amount of money. Thanks to the internet, you don’t even have to step out of your house to compare life insurance plans. However, there are a few basics you must know before comparing policies if you wish to derive maximum benefits from your investment. These basics are as follow:
Some key factors that should factor into choosing the right plan:
Purchasing life insurance need not necessarily make sense for all individuals. In case you do not have any dependents, and possess adequate assets to cover all costs related to your death, such as lawyer fees, funeral expenses, etc., then you need not take out an insurance policy. Life insurance is also not necessary in case you have dependents but also have adequate assets to cover them in case of your unfortunate and untimely death.
However, in case you are the main provider of your family and also have debts that are significantly larger than your assets, insurance will work out beneficial for you. Taking out life insurance will ensure that your dependents are covered in case of your death. While many individuals consider life insurance as a form of investment, it does not offer too many attractive benefits when compared with other conventional investment instruments. Some kinds of life insurance policies are considered as instruments for investing funds for retirement or savings, and are known as cash-value policies, and they are basically policies that help in building up a pool of money that accrues interest, and a percentage of the money will paid out to you upon the maturity of your policy.
Cash-value policies are the preferred selling instruments for insurance companies and they hire agents who aggressively promote these policies in exchange for commission. In case you wish to surrender a cash-value policy, insurance providers recommend that you avail a loan from your savings to continue making premium payments. While this solution seems easy, you will incur costs due to the loan as interest payments will have to be made to the insurance provider for the money you have borrowed.
Term insurance, on the other hand, allows you to purchase a policy that will pay out a predetermined amount of money in case of your unfortunate demise during the policy term. However, no amount will be paid in case you are alive when the policy term coms to an end. The reason this product was designed in such a manner is to ensure that your assets make you self-insured over a period of time. However, convertible and renewable term insurance policies are the best options regardless of your debts, income, lifestyle, etc. The coverage offered by them is similar to that offered by cash-value policies and they are also comparatively cheaper.
If your term life insurance policy has a renewable clause, it means that you will be allowed to renew your policy at a predetermined rate without the need to undergo a medical examination. In essence, in case you have been diagnosed with a serious illness when the policy has expired, the policy can be renewed at a competitive rate. Convertible insurance policies offer the opportunity to convert the policy’s face value into a cash-value plan provided by your insurance company when you attain 65 years of age and do not have the financial security to do without insurance. A comprehensive research and comparison of policies will help you better understand which plans best suits your personal requirements and how much coverage you will require.
Since life can be uncertain, it is essential to have a proper savings plan in place in order to deal with unforeseen circumstances and emergency expenses. One of the best ways through which you can plan your savings while also ensuring that you and your loved ones are financially secure.
There is no particular time that can be considered as the ‘right time’ to purchase life insurance as it depends on individual requirements and circumstances. The market has a number of options with varying terms and implications, and the key to picking the right policy lies in research and comparison. If you find the right policy at the right age, the benefits you reap when you most require it can be truly helpful. It is also important to consider such factors as future plans, dependents, income, etc. in order to make an informed decision about the policy term, the premium and the cover.
Life insurance policies are often considered incomplete without riders. While term life insurance policies are the most popular kind of insurance purchased by Indian individuals, they have been designed in a manner such that they offer maximum protection to the family of the policyholder in case of his / her untimely death. However, additional financial cover can be obtained through a life insurance policy by incorporating riders into them.
Riders are basically additional features that enhance the value of a life insurance policy while providing extra benefits that are not covered by the original policy document. Availing a rider along with an insurance policy may slightly increase the premium amount depending upon the kind of raider you have purchased. If you are looking to choose an optional rider to increase your insurance cover, it is essential to understand each rider and what kind of benefits it offers. Following are the most popular riders that can be availed in addition to your life insurance policy:
Since life is uncertain and we are prone to contracting medical conditions from time to time, a Critical Illness rider is an excellent option to reduce unnecessary expenses. Life insurance policies do not usually cover medical and hospitalisation expenses, which means that if you fall sick despite holding a life insurance policy, you will have to bear all the costs related to your treatment by yourself. A Critical Illness rider can prove very beneficial as it not only ensures that you have financial support when it comes to paying your medical bills, but also provides access to quality medical attention, thereby ensuring that treatments are not ignored or delayed owing to lack of finances.
A Critical Illness rider usually covers medical expenses related to illnesses such as stroke, heart attack, kidney failure, paralysis and cancer among other illnesses. In case you purchase this rider, you can breathe relatively easy in times of ill health, knowing fully well that your insurance policy will cover your medical expenses and that your family will not have to worry about the finances in addition to dealing with the emotional trauma. Individuals who purchase the Critical Illness rider will receive a predetermined lump sum amount the moment they are diagnosed by any of the aforementioned conditions or the conditions mentioned in the terms and conditions section of the policy document.
Given the uncertainty of life, an incident or accident has the potential to render an individual disabled. In case of disability, the individual is impaired to the extent that he / she cannot work and earn the income they require to support their family, thereby affecting the lifestyles of both, the individual as well as his dependents. In such cases, the individual will require an alternate source of income to ensure the healthy functioning of his / her family. A Partial and Permanent Disability rider is the best bet in such cases as it provides staggered payments to the individual in case he / she has met with an accident due to which they are disabled and unable to work. These payments are generally a certain percentage of the total sum assured (10% or more in most cases), and ensure that you can meet your financial requirements even if you are partially or permanently disabled.
The Accidental Death rider is an ideal option for those who intend on ensuring that their families have adequate financial resources in case of their untimely and accidental death. In addition to considerably high medical costs, the number of unfulfilled financial liabilities are also usually high in case of an individual’s accidental death, making it very difficult for his / her family to cope with the financial requirements.
An Accidental Death rider comes in very handy in such situations as it will ensure that the individual’s family will receive an additional payment in case the policyholder dies from an accident. Although the basic sum assured will be paid out to the nominees upon the death of a policyholder, the Accidental Death rider provides the family with extra funds to ensure that they can manage all their expenses, thereby making it less stressful to deal with the loss of a loved one.
In case you fail to make a premium payment on time, you will receive a notification from the company to ensure that all due premiums have been paid within a predetermined grace period. Failure to make premium payments within the stipulated time period often results in a situation wherein the policy is considered lapsed. As a result, the policy will no longer be active and you will not be eligible for the benefits upon maturity of contract. There could be a number of reasons as to why an individual may not be able to make premium payments, but regardless, the policy will be rendered useless. In such a case, the rider called Waiver of Premium can come in handy.
Even if you cannot make premium payments for a certain period of time, be it because of disability or unemployment, purchasing a Waiver of Premium rider will ensure that your policy does not lapse so that you can enjoy all the benefits upon maturity as initially agreed. The rider will allow your premium payments to be waived off but the policy will continue as per the initial agreement.
The demise of a sole-earning member of any family can be a devastating loss and make it hard for the dependents to carry on with their lives in the same manner as before. If you have a family whose financial requirements are met solely by your income, it is essential to ensure that they have a regular source of income in case you are no longer able to provide for them. The Income Benefit rider is perfect for individuals who wish to ensure that their family’s lifestyle remains unaffected in case of their untimely death. As the name suggests, the Income Benefit rider provides regular income to the family of a deceased policyholder, and the amount payable to the nominees through such a rider is usually a percentage of the total sum assured. Purchasing this rider will ensure that your family will be financially secure and have lesser concerns to deal with in case of your untimely death.
Since riders offers such benefits as mentioned above, it is recommended that you purchase them if they meet your requirements. However, it is essential to do your research and make sure that you do not make any unnecessary purchases as you may end up spending money for something that you may never even use. Go through each of the riders and purchase them only if they provide the benefits that you will actually require at some point in time.
The importance of comparing life insurance policies before purchasing one cannot be stressed on enough. Following are a few simple reasons as to why it is absolutely necessary for you to compare life insurance plans online:
Following are the documents you will require to purchase a life insurance policy:
Life insurance claims are made under two circumstances:
Here, nominees or close relatives of the deceased makes the claim (or assignees if the policy has been assigned) in the following way:
While these outline the standard set of documents required to process a claim, other evidence may be required such as an employer’s certificate or any other forms or reports that will help resolve any issues thrown up during an insurer’s claim verification or investigative processes.
When life insurance companies calculate the premium for each individual, there are certain factors that are taken into consideration. Since life insurance is a form of investment, even low premiums have the potential to yield relatively high returns over a period of time. However, availing a life insurance policy with a low premium may not always be possible as you will have to meet some requirements as laid down by the insurer. With that said, some individuals tend to avail similar life insurance policies as others at significantly low costs. The reason for this is that these individuals have made the right life choices that have enabled to avail lower premiums.
Following are the factors that are taken into consideration by life insurance companies for the calculation of premiums:
Once the insurance company has taken the aforementioned factors into consideration, it will determine the amount of premium applicable to an individual, making it essential for you to ensure that you lead a healthy lifestyle and make the right choices in order to avail the best possible rates.
The premium charged on your life insurance policy is the amount of money levied by insurance providers for coverage. The premium charged by each company may vary, making it important for you to compare different policies to find the one that best suits your requirements. However, there may be times when the quote for a premium may differ from the premium that is actually charged as it will depend on the manner in which the premium is computed.
Mathematical calculations and statistics done by the insurance provider’s underwriting department will determine the premium charged to an individual. In most cases, the statistical data regarding the health, age and life history of an individual are taken into consideration when computing the premium. For instance, a youngster driving a fancy sports car will likely have to pay a higher insurance premium in consideration with a middle-aged individual who drives a sedan. The underwriting process is applicable to all individuals who wish to avail life insurance, and it entails investigation of filial illnesses, analysis of reports such as motor vehicle reports and medical information bureau.
Once the underwriting department of your insurance provider has gather all your information and analysed it, an actuary will scrutinise it further to determine your risk to the insurance company. The actuary will also forecast how likely you are to make a claim on your policy, and the higher your chances of making a claim, the higher your premium payment will be. The actuary will also peruse mathematical information after which he / she will compile “mortality and sickness” tables based on which potential losses you will incur due to illnesses and death will be noted. There tables are used by actuaries to create models that ascertain how likely an individual is to contract illnesses or die. The premium charged to you will be determined by these results.
There could be several reasons as to why you may want to cancel your life insurance policy. It could be because you no longer possess the money to make premium payments. It could be because you have a dire need to cash out the policy. It could be for any reason, but regardless of the reason, it is relatively easy to cancel your life insurance policy. Following are a few tips on how to cancel your insurance policy:
If you are absolutely certain that you will be cancelling your life insurance policy, following are the steps that can help you do just that:
Your life cover can be cancelled within the predetermined cooling off period. A refund of all the premium payments you have made will be given to you, but there will be no refund of premium payments in case claims have been made while the cooling off period is in progress. In case your premium payments have been made in advance on an annual basis, a refund of the premiums you have paid will be computed on a pro rata basis after deducting the applicable stamp duties and cancellation fees. The request for cancelling the policy must be provided to the insurance company in writing.
Cancelling your life insurance policy cover can have several implications. They are as follow:
The most important thing to do before taking out a life insurance policy is to evaluate and understand your insurance requirements. Following are the points you will have to consider before purchasing a life insurance policy:
Choosing a life insurance policy depends on your financial protection needs. Ideally, life insurance should be opted for to provide financial protection to your dependents in the unfortunate event of death. Term insurance policies are considered the best form of pure protection as they offer the highest coverage for the lowest premiums. These plans offer only death benefits. To receive maturity or survival benefits as well as death benefits, you will have to opt for TROP policies, endowment policies, pension or annuity policies, money back policies or ULIP policies.
Premiums paid by a term insurance policyholder are fully utilised towards creating a life cover. Under other types of life insurance plans, only a part of the premium paid is allocated towards creating a life cover. The balance is utilised to provide for maturity benefits or as in the case of ULIPs a part of the premium is used to meet administration and sales expenses. This makes term insurance plans more affordable than other plans. This is why they are also called pure protection plans because they only offer a pay-out in the event of death of the life assured. Other plans offer returns as well as life coverage.
In general, it is recommended that a person avails a cover that is at least 20 times his/her current income. However, this depends on your personal financial situation and personal profile. If you have to provide for many dependents, you would need a larger cover. If you are young, you should opt for a longer term life cover to take advantage of lower premiums. As you grow older, premiums rise for the same sum assured. Again, if you don’t have other savings avenues, a large sum assured will serve the purpose better. Always, remember to account for inflation as well. Consider loan obligations or debt that will have to be serviced in your absence. Many people ensure the chosen sum assured will cover debts in their absence. Another pertinent factor is affordable. Higher the sum assured, higher the premiums.
Life insurance policies are meant to provide financial sustenance in the event of death, primarily. However, most policies offer additional coverage for disability, accident and various illnesses. These are called riders and usually come at an additional cost although some policies do offer them as part of the primary plan.
Yes, premiums paid are deductible U/S 80C, U/S 80CCC, U/S 80D, U/S 80DD and death benefits are tax exempt U/S 10(10D). This is subject to prevalent provisions of the Income Tax Act, 1961.
Yes, these days almost all insurance providers offer online purchase of life insurance. Additionally, a number of financial services providers offer this option through their websites, where you can compare and choose from a number of providers. The fact that people are increasingly turning to online purchases of life insurance policies signifies how secure the process is. Online purchases offer policyholders of comfort and convenience and in many cases the policies are cheaper since there are no sales agents involved.
Depending on the type of policy chosen, premiums can be paid either in a lump sum or in regular instalments.
Bonuses are offered under participating life policies i.e. policyholders can participate in the profits of the policyholder’s fund. A reversionary bonus is declared as a percentage which applies to the chosen sum assured. Reversionary bonuses can be simple or compounded bonuses. One-off reversionary bonuses are those that are paid out of one-time profits that may not occur again. A terminal bonus is the residual bonus declared on maturity or the policy i.e. if after declaration of all reversionary bonuses, there are still profits accrued to the fund, it may be paid out to the policyholder in the form of a terminal bonus.
Premiums are the amounts paid by the policyholder to the insurance company in order to keep the policy in force.
Under certain plans, insurance companies give policyholders a share in profits. This amount is called a bonus and accrues to the policyholder at no extra cost. It is awarded at certain times during the policy period. Bonus amounts are decided by the company and are paid out in addition to the chosen sum assured. Certain plans guarantee bonus payments.
Riders are specific to certain situations or events whereby the insurer pays the policyholder a certain amount of money when such event occurs. E.g. critical illness or disability rider. They are an additional benefit to a standard policy for higher premiums.
As per IRDA regulations, if a policyholder does not wish to continue his/her policy they can discontinue the same within the first 15 days of buying it and get a refund.
If a policyholder wishes to cancel his/her policy, once in effect, they can surrender it to the insurer and receive the surrender value as a refund. The surrender value is calculated based on premiums paid and how long the policy was in effect. Surrender is usually allowed after a certain period of time.
If, for example, a policy is used to raise a loan, the policy is ‘assigned’ or transferred to the lender. The policy then bears the lender or the ‘assignee’s’ name. Once the loan is repaid the policy can be reassigned or transferred back.
When purchasing a life insurance policy, the most important thing to check is whether or not guaranteed returns will be provided by the plan. You must also keep an eye on the lock-in period, information regarding premium payments, the implications of defaulting on premium payments, the revival conditions, the fees that would be charged for cancelling or surrendering the policy, the availability of a loan facility, etc. Go through the terms and conditions of the policy you wish to purchase and make sure that it meets all your requirements for an affordable cost.
Proposals are key components on insurance and policies are underwritten based on the disclosures made in them. It is essential that you provide only correct disclosures and statements to the insurance company or you will be at risk of rejection of claims.
Insurance companies may request medical reports from applicants depending upon the age at which they purchase the insurance policy, their age when the policy matures, personal and family history, sum assured, and other factors they consider crucial. For instance, if the applicant is obese, special reports such as Glucose Tolerance test or Electro Cardiograms could be requested. Similarly, depending upon your medical condition, the insurance company may ask you for one or more reports.
The surrender value of a policy is usually a percentage of the policy’s paid-up value. Insurance companies calculate the surrender value of an insurance policy based on the surrender value factor, which is the ratio between the premiums paid and the period for which premium payments have not been made.
Some insurance companies provide loans against insurance policies to their customers. The amount of money you can avail through such a loan is usually a percentage of the insurance policy’s surrender value.
Almost all insurance companies send an intimation along with the discharge voucher to you at least two to three months before the date of maturity. The intimation will inform you as to how much money you will be receiving from the insurance provider. The discharge voucher as well as the policy bond must be duly signed by the policyholder and returned to the insurance provider as soon as possible as the sooner you do so, the sooner will they be able to release your payment. In case you have assigned the policy to another individual, only the assignee will be authorised to receive the claim amount at the time of maturity.
At the time of purchasing a life insurance policy, the insurance provider may design and define the manner in which you will receive the payout. Settlement options are offered by most insurance companies and they ensure that you receive your money in a manner that was specified when you were purchasing the insurance policy.
In case of your unfortunate and untimely demise during the policy term, your nominees will have to furnish such basic documents as the policy bond, the claim form, and the death certificate of the late policyholder. There may be instances wherein the insurance company may also request you to furnish other documents like a post mortem report, a police inquest report, an employer’s certificate, a hospital certificate, a medical attendant’s certificate, etc. The policy bond usually contains all the information associated with the claims process.
Insurance agents are usually representatives of specific life insurance companies and have the authority to offer advice on any product that is sold by that particular insurance company. All agents who deal with the sale of life insurance policies are registered with the IRDA. All agents also have a basic requirement to pass an examination before undertaking to sell insurance policies. In case you are purchasing an insurance policy through your agent, make sure that you request for his / her authorisation card attained from IRDA.
A non-participating insurance policy is one that does not allow the insured individual to share in the profits made by the company, while a participating policy ensures that an insured individual has the right to share in the profits of the company. However, the dividends or bonuses declared by the insurance company may increase or decline based on the life funds’ investments returns.
The mortality or risk class of an applicant will be calculated based on an underwriting procedure through which the insurance provider can determine whether or not the applicant is a risk worth taking. The risk of death is calculated based on many different factors like the age of the applicant, the sex, medical and personal history, occupation, habits, etc. The decision of the life insurance company to insure the life of an applicant will depend on the details you have mentioned in the application form. Make sure that all the information you enter therein is accurate as inaccurate information has the potential to cause problems at the time of making claims.
Insurance companies provide something called a grace period to customers who are unable to make premium payments on the due date. The period usually spans for 15 to 30 days, and customers who default on their premium payments are expected to pay during this period. Failure to do so will mean that your life insurance policy has lapsed. As a result, you can either reinstate or revive the policy within a predetermined period of time.
Cancellation of policies during the free-look period can be done free of cost. However, in case you wish to cancel your life insurance policy after the free-look period, you will be charged a small fee for the same.
When a life insurance plan has been active for a specified number of years (usually at least five), the policy acquires a cash value. Every life insurance policy has a savings portion called the cash value. The cash value of a life insurance policy adds up when the worth of premium payments made by the policyholder exceeds the cost of insurance. This excess amount is transferred to a cash value account where it accrues interest. In case you choose to surrender the policy, the company will offer you the cash value or surrender value of the policy. However, please note that surrendering an insurance policy prior to the end of the maturity period will make you incur a significant loss.
The cost of a life insurance policy will be determined by the premium payments you have undertaken to make to the insurance company. The number of premiums and the cost of each premium, in turn, will be determined by your age at the time of purchasing the policy, the kind of life insurance policy you purchase, the sum assured, and the policy term. Premium payments are payable on an annual / semi-annual / monthly basis.
A life insurance policy essentially ensures that your family is financially secure in case of your unfortunate and untimely death. That apart, life insurance policies also offer tax benefits. The premium payments you make towards your life insurance policy can be deducted under Section 80C of the Income Tax Act. However, the total amount of money deducted under Section 80C cannot be more than Rs.1.5 lacs. Moreover, life insurance policies can also be used as a financial planning tool as most insurance policies in the market today come with built-in savings element that enable you to ensure that both savings as well as life cover can be possible. Life insurance companies also cover hospitalisation costs, making them beneficial instruments that ensure that you have access to quality healthcare. In addition, the riders that can be purchased along with a life insurance policy will significantly reduce expenses. For instance, if you purchase a Critical Illness rider, you will receive a lump sum in case you are diagnosed with conditions such as cancer, heart attack, coronary bypass, kidney failure, stroke, paralysis, Alzheimer’s disease, vital organ transplants, etc.
Money Back policies are the best bet in case you want a policy that will pay out during the course of the policy term.
Premium payments can be paid based on the discretion of the policyholder, but the options available to you will be monthly, quarterly, semi-annual and annual.
Yes, purchasing a life insurance policy at a relatively young age, such as in your twenties, can help you avail the plan for significantly low premium.
While life insurance companies are the most reliable sources when it comes to purchasing life insurance policies, insurance agents are not totally untrustworthy either. However, before you purchase a life insurance policy from an insurance agent, it is advised that you request for their authorisation card from the IRDA to ensure that they are certified sellers.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017
Life insurance premiums are calculated based on an individual’s age. The younger you are, the lower the premiums charged. Buy a policy early to avail a long-term, low-cost cover to protect your immediate and extended family
When estimating how much coverage you need, consider all your present as well as future financial obligations, as well as those of your dependents. Life insurance termplans are the most popular protection plans, offering high coverage at low premiums.
When buying term insurance plans, account for inflation! A cover of Rs.50 lakh may look sufficient today but may not cut it 20 years from now. When estimating how much you should cover yourself for, consider how rising prices will affect future financial requirements.
Online life insurance policies are the most economical and convenient life insurance products you can opt for. By cutting out the middlemen i.e. the agents, these policies are more easily accessible and offer time-saving features like online renewability.
The younger you are, the lower your premiums will be. Premiums increase with age, as does insurer's level of risk. Make use of your youth, apply quick!
The battle of the sexes extends to the life insurance premium battlefield too. Since women on an average live longer than men, their insurance premiums are lower by a tiny margin.
Cigarettes? Chewing tobacco? Snuff? Insurers calculate premiums based on the risk they undertake while insuring your health, which tobacco destroys. We aren't preaching, just telling you what to expect.
Insurers undertake greater risk the longer they cover you. Premiums on short-term policies are more expensive, but long-term life insurance plans have more payments.
The more dependents you have, the higher the life insurance pay-out will have to be, to take care of them after you're gone.
For those you leave behind to maintain a comfortable lifestyle, calculate your expenses and get a life insurance policy with a matching pay-out.
If you're leaving your house, car and business to your dependants, you may also be leaving them your debt through unpaid house and car loans. Arrange to clear your debts, or to have an insurance pay-out large enough to clear it for you.
If you're confident that you have ample savings and investments to carry your dependents through their lives without you to provide for them, choose a policy with a lower pay-out and consequently lower premiums. If not, do the opposite.
The claims-to-premium ratio for the government term life insurance scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), reached 121% in 2016-17. For the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the ratio went up to 170% in 2016-17.
Both these schemes were released in May 2015 in order to offer reliable social security protection at an economical prices. For both the schemes, the premiums have to be paid by the end of May on a yearly basis.
The high-claim ratios of these 2 schemes have resulted in a sense of pressure among other public as well as private insurers.
17th July 2017
The premium income of life insurance companies on new business rose by 6% to stand at Rs.33,156 crore in the first quarter of the current financial year. These figures are in comparison to the statistics last year.
The first year premium on new policies in the private sector rose 12% to Rs.9.872 crore, as per data from the Insurance Regulatory and Development Authority.
Life Insurance Corporation witnessed a growth in new business income by 3% to stand at Rs.23,284 crore.
Other insurers that observed marked growth in new business premium are ICICI Prudential with 57% growth, PNB Metlife with growth of 22%, HDFC Life with 15% growth, and Max Life Insurance with 16% rise in new business premium.
SBI Life observed 3% decline in new business as well.
14th July 2017
HDFC Life Insurance Co. Ltd and Max Life Insurance Co. Ltd have postponed the deadline for discussing the mergers until the 31st of this month. Both the private insurers are planning to have a new merger structure after the insurance regulator rejected the actual 3-step union.
The board of HDFC Life will be meeting soon in order to evaluate this new structure. Under this new structure, HDFC Life and Max Life will collaborate and merge to create a new company known as HDFC Plus. This new company will then have a new subsidiary which will soon have the insurance business. This indicates that HDFC Plus will function as a holding company for the insurance business.
13th July 2017
Shares of the State Bank of India (SBI) gained more than 1% on Tuesday after the directors' board approved the dilution of SBI's stakes in its life insurance wing. Once SBI Life Insurance is listed on exchanges it would be the second insurer in India to go public.
The IRDAI had approved SBI Life's IPO application of Rs.7,000 crore last week. This is the largest share sale by a life insurance company in the country. The company is currently awaiting the final approval from Sebi.
In spite of pending approvals, the board has made a decision to go ahead with the sale of equity shares of up to Rs.8 crore. The price will be fixed at a later date after consultation with parent SBI and BNP Paribas Cardiff, the company's foreign partner.
SBI Life has currently engaged Citi, Axis Capital, BNP Paribas, and Kotak Investment Bank to manage the initial sale of shares.
12th July 2017
SBI Life Insurance will soon become the second insurer to go public after ICICI Prudential Life. SBI has approved the dilution of its stake in the life insurance company through a public offering and has now received a sectoral regulatory approval. The Insurance Regulatory and Development Authority of India (IRDAI) has recently approved a Rs.7,000 crore IPO application filed by SBI Life. SBI Life follows ICICI Prudential as the second largest private life insurer. SBI Life's net profit last year has shown a growth of 10.9% to Rs.954.65 crore from the previous year's Rs.861.03 crore in March this year.
11th July 2017
Canara HSBC Oriental Bank of Commerce Life Insurance, a leading private life insurer, has entered into an agreement with Dhanlaxmi Bank, a bank based in Kerala in order to promote life insurance products.
The bank will be a corporate agent for the insurance company for a period of 3 years. However, both the bank and the insurance company plan to have a healthy relationship for a long period.
The plan to sell bancassurance products is being implemented in order to help both customers as well as the banks. It is a cost-efficient plan and has also proved to increase the sale of life insurance policies.
11th July 2017
A report by reinsurer Swiss Re indicated that the insurance penetration in India has seen a growth from 3.40% to 3.49% in the financial year, 2016-17. Insurance penetration is measured as a percentage of premiums to gross domestic product, i.e., GDP.
General insurance penetration stands at 0.77%, while life insurance penetration is at 2.72%. Insurance density in India is at USD 59.7 for FY17, much lesser than the average for Asia. The global average for insurance density is USD 638.3.
The report said that the initiatives undertaken by the Indian and Chinese governments to develop specific lines will support liability, credit, and agricultural insurance schemes.
The report also mentioned that life premiums saw a hike of 8%, owing to the demand for immediate annuity plans post demonetisation. Further, it states that premiums are likely to increase in the coming years, owing to bancassurance systems, digital distribution avenues, and the promotion of protection schemes.
7th July 2017
Taking a swipe at the right time, ICICI Prudential is looking at a potential buy out of Sahara Life. In a statement confirming the move, ICICI Prudential said that they would like to confirm that we have expressed our interest to evaluate taking over policyholders liabilities and assets of Sahara Life. We are evaluating the way forward on the same. The last reported policyholders liabilities of Sahara Life is about 900 crore which is less than 1% of the company’s balance sheet size.
06th July 2017
The campaign initiated by the Agriculture Department of the Kerala state government to increase the participation of farmers in the revised crop insurance scheme has seen success. The department has revealed that block panchayat level reports from Kozhikode district indicate that the revised scheme has been well-received. The scheme has not seen high popularity in urban areas of the distrcit, owing to lower population of farmers.
Until recently, 10% farmers had only enrolled into the crop insurance scheme in Kozhikode district. Promotional events pertaining to the revised scheme has gained hundreds of fresh enrolments.
The Deputy Director of Agriculture said that 50 individuals from each of the 81 Krishi Bhavans in Kozhikode had enrolled into the scheme during the drive. The revised insurance cover is provided for 25 crops, and will financially assist farmers in case of unprecedented events or loss.
The government expects that the reloaded scheme will improve the participation of farmers in the future. Farmer’s organisations such as We Farm and Indian Farmer’s Movement (Infarm) have applauded the revised crop insurance scheme and its promotion. These bodies state that the increase in insurance coverage would greatly assist the ailing farming community.
5th July 2017
The Goods and Services Tax (GST) regime that was implemented on 1 July 2017 has increased the tax rate on certain insurance products from 15% to 18%. Contrary to popular belief, all products will not see a hike of 3% in tax.
If you are buying a new insurance plan, i.e., motor, term, health, or unit-linked insurance product, the 18% rate of taxation will be applicable. Earlier, the rate of service tax on these products were 14%, and along with cess, the final tax rate would come up to 15%. Now, there is a flat 3% increase in the rate of tax.
If you are buying an endowment plan or a single premium policy, the tax rate is 4.5%. For renewal premiums, the tax charged is 2.25%. For single premium annuity plans, the rate of taxation is 1.8%.
Effectively, there is a differential rate of taxation in insurance, based on the premium paying term and the type of product. It is also understood that micro-insurance policies with maximum sum assured of Rs.50,000 and government-sponsored insurance products will be exempted from tax.
4th July 2017