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.
One of the most important financial decisions a person can make is buying life insurance. However, there are many who consider this as an added expense. You should ideally take some time to think about the future of your family members. If you were not there, how would the finances of the household be impacted? Although these are not the most optimistic thoughts, it is crucial to reflect on this, as then you will understand the importance of financial planning for your family.
Irrespective of what you earn, it is impossible to predict the future. Premature death, accidents, and illnesses that the breadwinner may face can rupture the financial well-being of the entire family. This could lead to devastating consequences for the surviving family members, as they will inevitably struggle to maintain their standard of living. However, if the victim had a life insurance policy, it will cover the outstanding debts or other such financial obligations.
|Types of Life Insurance||Top 10 Life Insurance Companies in India||Life insurance provider statics||FAQ's|
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.
Other than the points mentioned in the table, life insurance and general insurance policies differ in various other ways as well. For example, a life insurance policy’s total duration is the life of the insured, whereas general insurance policies are usually short-term, such as 5 years, 10 years, and so on.
Top 10 Life Insurance Policies in 2018
When you purchase a vehicle or a house, you automatically purchase insurance for it. Why? Because of the value that is attached to the asset. The same way, life insurance is essential when it comes to human life. After all, it is one’s duty to protect their loved ones, is it not? Life insurance can help protect your loved ones financially in the unfortunate event of your untimely demise. In India, there are several insurers offering a wide range of life insurance policies. To know more about the most popular life insurance policies available in India this year, read on.
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 companies assess an individual purchasing a policy based on the risk that he/she poses to the company at the time of the purchase. The ultimate risk for the insurer will be death of the Life Assured in which case the death benefit will be provided in lump sum (sum assured) to the family of the insured.
Life insurance policies solve multiple problems in one go. Primarily, a life insurance policy guarantees the security of the family in case of demise of the life insured. Moreover, life insurance policies also come in handy if the policyholder has a debt or any other financial requirement or any other financial requirement. Typically, an individual must purchase a life insurance policy as early in life as possible which is in his/her 20s or 30s. This is because the individual is at the best of his/her health relatively, as compared to what they will be at the age of 40 or 50 years. Moreover, if you purchase a policy early, you will be required to pay relatively low premiums.
Why Investing in Life Insurance Early is a Good Idea
In conclusion, life insurance not only guarantees a lump sum amount but also builds a steady corpus that urges a policy buyer to purchase a policy early on in life.
Life insurance policies are known for insuring the life of an insured and also for providing a lump sum amount to the insured’s family after the former (the insured) passes away. The insurance market is flooded with with numerous insurance policies offered by various insurance providers in today’s date. Hence, choosing a life insurance policy that best suits one’s needs has become a convenient process.
However, before investing in a life insurance policy, it is important to analyse the cost and one’s needs, and invest accordingly. Mentioned below are a few life insurance plans in India offering the best benefits.
|Life Insurance Policy||Minimum and Maximum Entry Age||Minimum and Maximum Term of the Policy||Minimum and Maximum Sum Assured Amount|
|Aegon Life iTerm Plan||18 years as on the last birthday and 65 years as on the last birthday||Individuals can opt to invest in any policy that has a term ranging from 5 years to 62 years. A coverage for 100 years can also be opted for||Minimum sum assured is Rs.25 lakh and there is no maximum limit|
|Bajaj Allianz iSecure Plan||18 years as on the last birthday and 60 years as on the last birthday||The policy terms range from 10, 15, 20, 25, to 30 years||Minimum sum assured is Rs.2.5 lakh (general category) and there is no maximum limit|
|HDFC Life Sanchay||30 days as on the last birthday and 50 years if the term of the policy is 10 years and 45 years if the term of the policy is 15 to 25 years||The minimum policy term is 15 years and maximum ranges between 15 years and 25 years||Minimum sum assured is Rs.1.18 lakh and there is no maximum limit|
|SBI e-Shield Plan||18 years as on the last birthday and 60 years is the maximum entry age||If the policy is a level cover then the minimum term is 5 years and for increasing cover the term is 10 years. Maximum policy term is 30 years||Minimum sum assured is Rs.35 lakh and there is no maximum limit|
Factors Affecting Life Insurance Policy Premiums
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 2016-17 on Total Business Premium”
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. 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.
Founded in 2001, PNB MetLife India Insurance Company Limited, also known as PNB MetLife, has established itself as one of india’s most successful, and reliable life insurance provider. Some of the prominent shareholders in this venture include MetLife International Holdings LLC (MIHL), Jammu & Kashmir Bank Limited (JKB), Punjab National Bank Limited (PNB), M. Pallonji & Co. Private Limited, besides others. Moving forward, PNB got approval from the Competition Commission of India in January 2013 to acquire a 30% stake in MetLife India Insurance, following which, the name of the venture was rebranded to PNB MetLife India Ltd.
PNB MetLife boasts of a country-wide presence with 111 offices located across the country which cater to the insurance requirements of more than 100 million people. This feat has been made possible primarily with the help of PNB’s wide-spread and penetrating distribution network, along with MetLife’s long-standing expertise in the field of insurance.
With the help of multiple bank partners and over 10,000 financial experts, PNB MetLife has makes affordable insurance solutions accessible to millions of people. Currently, PNB MetLife offers a variety of life insurance plans such as online plans, child plans, savings plans, health plans, wealth plans, group insurance plans, retirement plans and rural plans.
Some of the leading insurance plans offered by PNB MetLife include PNB MetLife Guaranteed Income Plan, PNB MetLife guaranteed Savings Plan, PNB MetLife money Back Plan, PNB MetLife Mera Term Plan, PNB MetLife Mera Heart & Cancer Care, PNB MetLife Endowment Savings Plan, PNB MetLife Mera Jeevan Suraksha Plan, MetLife Smart Child Plan, PNB MetLife College Plan, PNB MetLife Family Income Protector Plus, PNB MetLife immediate Annuity Plan, PNB MetLife Retirement Savings Plan, PNB MetLife Monthly Income Plan-10 Pay, among others.
|Life Insurance Provider||Claims Recieved||Claims Paid||Claim Settlement Ratio||Grievances Solved Ratio||Life Insurance Premium Paid (in crores)|
|Reliance Nippon Life||11079||10473||94.53%||100.00%||4026.82|
|Birla Sun Life||6048||5727||94.69%||99.84%||5723.96|
|Star Union Daichi||1473||1238||84.05%||100.00%||1510.88|
Life Insurance Providers statistics for 2016-17 By IRDA
The concept of life insurance was established in India in the year 1818 by the British colonial rule. Since then, it has become a financial instrument that is crucial for every Indian citizen. The British Raj instituted Oriental Life Insurance Company to initially protect their community from medical mishaps. Much later on, the benefits of purchasing a life insurance policy were extended to Indians as well.
The first-ever life insurance company of Indian origin encompassing reasonable premiums was established in the year 1970 and it was known as Bombay Mutual Life Assurance Society.
The following milestones highlight the many achievements of the Life Insurance sector in India along with how far they have come in terms of covering innumerable lives.
Status of Life Insurance in India Today: Currently, there are 24 life insurance organisations operating their businesses in India. Out of the total companies in India, Life Insurance Corporation of India or LIC is completely owned by the Indian Government.
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.
Life, as we know it, is essentially divided into four stages. In a similar fashion, a life insurance policy will also have its phases and each phase will have its own prerequisites and features.
Mentioned below are the essential stages of life insurance policies that in turn coincide with the stage of life an individual is in.
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:
Nowadays, when you want to make your premium payments for your life insurance plan, you can do it online conveniently. The different online premium payment options include net banking, debit card, credit card, mobile banking, etc. You can also go for automatic payment options where your premium amounts will be deducted from your account directly on a quarterly, half-yearly, monthly, or annual basis depending on the premium payment mode that you choose. The payment options include eCMS, NEFT, Electronic Clearing Service (ECS), Standing Instructions (SI) mandate, Auto debit facility offered by RBI, etc. These online payment options will depend on the life insurance provider that you choose. You can make these payments by logging into the official website of the company or by visiting your bank’s internet banking portal.
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 a policyholder’s beneficiary or nominee is claiming life insurance, he or she will be required to follow certain simple rules. The nominee will have to file a death claim in order to procure the death benefit. If you have a physical insurance policy, you can take a claim intimation or a notification form from your life insurance provider. If you have an online policy, you can apply for a form online.
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:
Life insurance involves the payment of an amount of funds when the insured individual dies or once a certain period is completed. It also helps in minimising the risk by migrating it from the policyholder to the insurance provider.
Life insurance mainly focuses on risk management and risk pooling. It helps people in attaining financial security instead of being stuck when certain unforeseen and unfortunate incidents occur.
Some of the most important and common principles of life insurance include both parties (insurer and policyholder) having good faith, policyholder having insurable interest in the insurance offered by the company, the insurance company’s readiness to offer compensation when a damage or loss occurs, the principle of subrogation where the policyholder has the right to claim the amount from the insurer, etc.
Life insurance products function according to 3 aspects and they include interest earnings, mortality, and expenditures of developing and maintaining the insurance plans, etc.
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:
Many employees in India can get life insurance with the help of their employer. This is known as the employer-employee structure. The employer will purchase insurance from the insurance company and then the employee will be insured. This brilliant facility is being offered by many employers in order to retain and motivate employees efficiently. When life insurance policies are offered by the company, employees get attracted and stimulated to work at an organisation. The attrition rate will also minimise with the provision of life insurance.
You can check with your employer if you will receive life insurance. Under the employer-employee structure, the employee will receive the benefits of the policy and also tax benefits. You will not have to pay any tax for such an insurance policy. You can buy any type of life insurance under this particular structure.
Your company will most likely offer a life insurance policy to employees if it is a sole proprietorship firm or a legal or corporate firm with at least 5 employees who can purchase the life insurance policy. Your employer will need to draw a single cheque to offer coverage to its employees.
When an employer offers life insurance policies to its employees, certain eligibility criteria need to be met:
With the insurance sector maturing vastly over the last few years, people are becoming more and more aware about the importance and absolute vitality of insurance policies (both health and life). Indian citizens have rendered themselves proactive and with the constant help of financial advisors, planning in advance has become ever more easy.
Surge of NRIs in India: With an increase in the number of Non-Resident Indians wanting to invest in Insurance policies in India, the platform has become extremely expansive. A Person of Indian Origin or PIO and a Non-Resident Indian has the full liberty to buy a life insurance policy in India to assure their lives. Multiple insurance firms and companies have now begun to re-strategise their policies to suit the needs of PIOs and NRIs.
As most of you must be aware, a term insurance plan is essentially a pure protection policy, and hence makes the most sense to be purchased for the security of an entire family. Multiple insurance companies in India have various term plans that are completely suitable to the needs of an NRI or a PIO. With the help of a questionnaire, this kind of an insurance policy can be bought in a jiffy. They are not entirely different in their structure, however individuals may customise their policies as per their needs.
However, in India, currently a handful of insurance companies have a streamlined system in place to help the NRIs with their policies. Whatever requirements are there, whether it be a medical test or simple documentation, the employees of these companies will always be at your service. Given below are few of the firms who have a systemised structure in place:
NRIs may also choose from certain insurance policies that depend wholly on the country where the person is residing currently, their age, and other valid information.
Location: If you are an NRI seeking life insurance policies in India, then you should bear in mind the fact that your geographical location will not be taken into account for doing so. However, for the medical test, you might need to visit the place of origin.
No Extra Premiums Whatsoever: If the risks involved are more or less the same, then there will be no difference in the premium rate of resident and non-resident Indians. The premium cost will be impacted if the involved risk is increased for some reason.
Digital Payment: An NRI can opt to pay digitally through a foreign nation’s remittance, or a bank account with an Non-resident ordinary (NRO) nature, and through a Non-resident (NRE)/Foreign Currency Non-Repatriable (FCNR) account.
Benefits such as death and maturity can also be deposited through the above-mentioned methods. If you are paying the premiums in a foreign currency, your proceeds will be rendered wholly repatriable. However, this will not bear any effect on the policy or the proceeds status whatsoever.
Now, even SMEs can provide life insurance policies to its employees. They only need to fill a proposal firm which mentions that they would like to go for the employer-employee scheme and that it will be paying premiums for its employees. The form will need a signature from a certain authorised party working at the company. The form will need details such as names of employees who want coverage, type of insurance plan, policy period, riders, and sum assured. There should also be a stamp or seal of the organisation.
The organisation will need to fill and sign both the nomination form as well as assignment form and furnish these forms to the insurance company at the proposal stage.
The employer will need to fix the insurance quantum according to the CTC of the different employees, work experience, qualification, and previous work records of the employees.
Life insurance is not exempted from GST (Goods and Services Tax). The introduction of GST will have an impact on the life insurance industry. The insurance premiums will most likely increase from 15% to 18% in the insurance sector. If you are paying premiums for health, car, and life insurance, you will be affected heavily.
Under the GST regime, there is a Services Accounting Code (SAC). This code is applicable only for services that come under GST. The SAC for GST classification for life insurance services (not including reinsurance services) is GST Code for Life Insurance. Similarly, the SAC GST code for pension services is 997131.
The on-going debate surrounding the linking of Aadhaar to insurance policies, and a string of other important services had previously created some confusion among policyholders and citizens availing these services. As per an earlier Supreme Court ruling, it was mandatory to link your Aadhaar details to not only insurance policies, but also your mobile number and a number of other facilities. The deadline given for the same was 31 March 2018. However, in a second ruling which was passed on 13 March 2018, the Supreme Court said that the deadline for linking Aadhaar has been extended indefinitely, till a judgement is announced for the same.
The implications of this decision for insurance policyholders are varied, depending on whether you are an existing policyholder, or are looking to purchase a new insurance policy. Existing policyholders will not be required to link their Aadhaar to their policy, until a decision on the matter is announced by the Court.
However those who are looking to buy a new life insurance policy will be required to provide their Aadhaar and PAN/Form 60 details at the time of registering for the policy. This means that new insurance policies will need to be linked to the policyholder’s Aadhaar number, for which IRDAI has granted policyholders 6 months, starting from the date of registration. If the policyholder does not have an Aadhaar Card, they will be required to provide any other “officially valid document”, from the list of documents mentioned in the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. These documents include your driving licence, passport, PAN card, job card issued as per Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and the voter identity card issued by the Election Commission of India.
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.
Your life insurance cover will start on the date of commencement after the insurer has received and approved of your insurance application. It is also known as Risk Commencement date.
The premiums of life insurance policies usually do not change and remain fixed for the term of the policy which is decided by the policyholder. Some policies have single pay or limited pay options also where the premiums can be paid in one lump sum or over a period of a few years.
Yes, older citizens who are above the age of 60 can also purchase life insurance policies. There are various types of insurance policies like term life policies, whole life policies and guaranteed life insurance policies which are designed to provide cover to older individuals. LIC and Reliance offer life insurance plans specially designed for senior citizens.
Yes, you can get your parents insured under a life insurance policy. Depending on their age and health, you can choose from a range of life insurance policies which are specifically designed for older individuals or senior citizens, as the case may be.
As per the provision of Section 10 (10D) of the Income Tax Act, 1961, any sum assured amount received under the policy, along with any bonus that is paid by the policy at the time of its maturity or on the survival of the life assured, is tax free. However, there are certain conditions following which the policy proceeds may be taxed.
When it comes to life insurance, one person’s requirements will differ from another’s. The amount of life insurance cover that one requires depends on various factors such as their income, their liabilities, and their expenses. After calculating all of these, you can determine how much life insurance cover would be adequate for you.
In case of single cover policies, both individuals are covered under separate and independent policies which have no effect on each other. However, under a joint policy, both individuals are covered under one policy. In case of a mishap where both individuals lose their life, their beneficiary will receive only a single pay out, while in the case of two single policies, there will be two pay outs, one from each policy.
Premiums for various kinds of life insurance policies like whole life policies remain fixed for life, as they do for term insurance policies. However, for term insurance policies, if you wish to renew the policy after the end of the policy term, the premiums may significantly increase in order to cover the risk of a higher age.
The person who files a claim on a life insurance policy is known as the claimant. In case of the life insured suffering injuries not amounting to death, the life insured will become the claimant.
A policy which features a modified death benefit usually has a waiting period before it pays out the full death benefit to the beneficiary.
Graded life insurance is one of the lesser known types of insurance. This whole life policy features initial premium which are lower than other similar policies. However, the premium increases every year for a fixed number of years, after which it stays fixed till the policyholder owns the policy. This type of life insurance is suitable for those individuals wish to get covered but may not be able to afford the premiums of a life insurance policy. With a graded policy, they can take advantage of the lower initial premiums which eventually stabilize after a few years. Graded premium policies are also known as graduated premium life insurance policies.
Your life insurance cover will start on the date of commencement after the insurer has received and approved of your insurance application. It is also known as Risk Commencement date.
The premiums of life insurance policies usually do not change and remain fixed for the term of the policy which is decided by the policyholder. Some policies have single pay or limited pay options also where the premiums can be paid in one lump sum or over a period of a few years.
Life insurance is essentially a way in which an individual can secure his/her family’s future in his/her absence. A life insurance policy’s worth is efficiently comprehended once the breadwinner of the family passes away or his/her income ceases to come in altogether. The payout amount released by the insurance provider is thereafter utilised by the family to clear any debts, or pay off loans, or pay the mortgage amount, and so on.
If you have a dependent or dependents who rely on you financially, then purchasing a comprehensive life insurance policy is a must. The sum assured amount of the life insurance policy will financially assist your dependents at a time when they need it the most.
As the name suggests, a whole life insurance policy essentially provides coverage for an individual’s lifespan. In case the insured passes away before end of the policy term, the corpus built is handed out to the nominee/beneficiary as mutually agreed upon by the insured and the insurer.
Whole life insurance policies may be purchased for the following reasons:
Money back plans essentially combine the elements of insurance and investment to provide policyholders with a policy that is comprehensive in nature. Over the policy term, these plans offer a certain amount of money (periodic returns) at regular intervals as survival benefit. The regular payouts are paid as per the interval decided by the insured, and upon successful survival of the policy term, the insured gets the remainder of the maturity benefit.
Top 10 Factors Affecting Life Insurance Premium Costs
Life insurance is a smart way to not only provide protection to your loved ones but also as a means of investment. For a low premium, you can get a modest amount of coverage and also a chance to invest and get returns in the future. However, when it comes to life insurance premiums, it is important to know, that premiums for life insurance policies vary for different individuals depending on a number of factors.
If applicant A is being charged an X amount of premium, it is not necessary that applicant Y will also be charged the same premium. While some of these factors are in your hands to control, some are not. If you are looking to take a life insurance policy, it would be greatly helpful to know what can and what cannot affect your premium. Read on to find out some of the most crucial factors affecting your life insurance premiums.
How To Claim Your Life Insurance Policy
The most important aspect of any insurance policy is claim settlement. After all, the objective of taking an insurance policy is to ensure that your dependents remain financially secure in case you are not around to provide for them. When it comes to insurance, an insurer’s claim settlement ratio is one of the most important indicator of the insurer’s intention regarding claims. Customers will undoubtedly prefer an insurer who has a proven record of processing claim settlements in the shortest amount of time. However, many policyholders remain in the dark about the claim settlement process of an insurer until the time when they actually have to file for a claim. This can often cause hassles and stress as without much knowledge about the process, it can take longer than needed to register a claim and get it approved as well. Did you know that there are multiple steps involved in filing a claim, or there are different documents that are required for death related claims and maturity related claims? Read on to know all about the claim filing process under life insurance.
Key Things To Know About Life Insurance
The concept of life insurance is not a new one. People have been making use of life insurance for over 4 centuries to protect not only themselves but also their loved ones from the possibility for an unfortunate event. Though life insurance seems to have been around for a fairly long time now, there are many people who are not quite aware of all the aspects involved in a life insurance policy. When it comes to purchasing life insurance, there are many people who take the assistance of life insurance agents for purchasing a policy, while several others who prefer doing their own research and purchasing a policy directly themselves.
For someone who isn’t quite familiar with the workings of it, life insurance can be confusing to understand. Who are the parties involved in a life insurance policy? What is the eligibility age acceptable to apply for an insurance policy? How many types of life insurance policies are there? What factors affect the premiums of a life insurance policy? When is it best to purchase a life insurance policy? Is it wise to get life insurance as a tax saving instrument? These are just some of the many questions which will find answers to in this article.
Best SBI Life Insurance Plans in India
SBI Life Insurance is one of the pioneers in India’s life insurance segment. The insurer offers a variety of life insurance plans, some of which cater to individual (ULIPs, protection plans, retirement plans, child plans) and some to corporate group needs (group micro insurance plans, group loan protection plans). Offering the ease of online purchase, SBI Life insurance plans offer a range of other benefits like online payment of premiums, hassle-free claim process, high claim settlement ratio, and minimal paperwork required for application. Some of the popular life insurance plans offered by SBI Life insurance include SBI Life eShield, SBI Life – Smart Money Planner, SBI Life – Smart Humsafar, SBI Life – Smart Power, SBI Life – CSC Saral Sanchay, and more. If you are looking to purchase an SBI life insurance policy, read on to find out about the best policies which SBI has to offer, right here.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017
Most of the times, most Indians purchase a life insurance policy in order to have a steady investment option in life, however, this is not the right approach to take. According to a report released recently, one-fourth of the deposits that people make towards paying their due premiums towards life insurance policies go to waste. The premiums that are paid towards investment policies are the ones that are wasted on a regular basis, thus incurring huge amounts of losses for the country and the Government.
This frequently occurring phenomenon is known as the persistency ratio in the sector of life insurance, which essentially takes into account the proportion of policyholders who continue to fund their insurance product over and beyond the initial few years. In the field of life insurance, at least 25% of the total policyholders have been reported to have dropped out of their policies because of dissatisfaction with the existing terms and conditions.
If you surrender your life insurance policy within the first year itself, you run a huge risk of loss since the surrender value is not provided in such a short span of time, moreover, your insurer gets to keep all the peripheral costs including commissions, upfront in the first year itself.
17 September 2018
The accumulated loss of Canara HSBC Bank is evidently wiping out all of its losses. The total loss incurred till date is Rs.160 crore which the insurance company is planning to get rid off and earn profits to clear off whatever loss the company had incurred in the past.
“We are in a very strong growth trajectory,” said Mathur. He also added that the insurance company is planning to integrate its trajectory of growth of the preceding years in its business operations for the current year. The company has at a compounded annual growth rate (CAGR) of over 35% in the past three years in individual business. The insurance company’s total business recordings stood at Rs.2,781 crore for financial year 2017-18, while the new profits stood at Rs.818 crore.
Mathur was further reported to have said that the company has a solvency ratio of 370% which evidently makes it reliable to deal with. He also emphasised on the importance of funding through internal accruals for its expansion plans, while also stating that capital infusion is not a requirement anymore. The last time the insurance company received capital infusion was six years ago. The CSR or claim settlement ratio of the insurer is 98% and the persistency ratio is more than 80%, according to the company’s Managing Director.
14 September 2018
Life insurance for Indians is more like an investment product wherein the investor receives a lump sum amount of money after the term of the policy. However, this approach is not reasonable as the purpose of life insurance is defeated entirely if you start looking at it like from an investment perspective and not from an insurance perspective.
Life insurance, undoubtedly is one of the most reliable products to invest in however if you do not intimate your family members or spouse about the said investment, it might go to complete waste.
If you have had a relative in the family who owned a life insurance policy but missed out on letting anybody know about the same, then you may have set yourself up for a daunting task of finding the lost policy. As of now, India does not have a national database of all life insurance policies, purchased or expired. Hence, the process of tracking a lost policy becomes increasingly hassled and tedious as you do not know where to start from.
However, a little sleuthing can go a long way. By looking in the right corners and contacting the right people and executives, you may be able to trace your steps to the policy that has now become past. Given below are a few steps that can be followed while looking for a lost life insurance policy:
Search for documents that are insurance-related: Check and recheck in all the possible places that the policy document might be in. This includes files, folders, safety deposit boxes, store houses, and so on.
Get in touch with the deceased family member’s financial advisors: Any attorneys from the present or past, investment advisors, accountants, business insurance brokers, agents, bankers, may be contacted in order to obtain information about the lost life insurance policy.
Look at any other policy that the deceased may have owned: At the time of purchase of the policy, the application of other policies are attached to the purchased policy’s document. Therefore, if you are able to trace any other policy that your family member used to own, tracking the lost policy may become easy.
12 September 2018
What has come as a huge news for the insurance sector, India’s state-owned insurance company Life Insurance Corporation of India has recently announced their target of gaining an income worth Rs.75 billion from payment of premiums only. During the 2018-19 financial quarter, premiums paid by the eastern region will supposedly come down to Rs.75 billion, which is a commendable achievement on LIC’s front.
According to the Regional Manager of Life Insurance Corporation of India (LIC), the aim to grow has been placed at 20%, i.e., LIC’s premium will evidently witness a 20% growth. During the quarter of April-August, the first premium income of the eastern region was recorded to be Rs.21.65 billion which is flat as compared to the number that was recorded in the previous year.
Till the period of 31 August, 2018, the group premium income that was collected from the eastern region stood at Rs.20.5 billion. It has also been announced that the eastern region ranks at the top in terms of purchasing the maximum number of policies and in case of first premium income.
11 September 2018
At times, it is possible to purchase an insurance policy and then realise that you do not need it or that it does not benefit you in any way. If you have entered your retirement age just now or sometime back, keep in mind that there are some insurance products you need to avoid. A few of them are mentioned below, read on to find more details on why you need to avoid these products.
Unintentionally-purchased policies: It is possible that you were sold a policy without you being aware of it. Since it is not required, you can always return the plan. Check for the free-look period and return the plan before the period ends.
Guaranteed returns policies: If you are not planning to work after retirement, a guaranteed-returns policy is not for you. The premium for such policies are high and the term is over 10 years.
Single-premium policies: Sometimes single-premium plans could be mis-sold as fixed deposits with better returns and tax benefits. The premium for such policies could get quite high due to the age factor.
Unit-linked policies: These policies cost a high premium as they are invested in mutual funds. Usually, there is a lock-in period of 5 years for such plans, so it possible that you cannot surrender the policy if needed during that period.
Insurance policies at banks: Insurance policies sold at banks are due to the tie-ups between bancassurance and insurance companies. It is possible for you to be sold a policy that you really do not need.
If you are looking for steady income after retirement, then you need to avoid these policies. There are other life insurance products that can be quite beneficial for you.
7 September 2018
A life insurance policy can be quite beneficial when you pick the right plan. There are multiple plans available so it is essential to do research to find out which plan is suitable for you. The main factors you need to consider while purchasing a life insurance policy are:
1. The amount of coverage you require
First, you need to determine the coverage you require. This would include sufficient coverage for your family members as well. You also need to consider not just the present but the future needs as well. So, it would be wise to calculate the sufficient amount of coverage based on your income, financial standing and family members.
2. The coverage period which is beneficial for you
Second, when it comes to the coverage period, you need to choose between term insurance and whole life insurance. Term insurance provides coverage for a limited period of time but the premium is less expensive. Whole life insurance covers you for life but the premium is expensive when compared with term insurance. So, you need to decide which type of insurance works better for you.
3. The suitable life insurance plan
Third, you need to choose the right plan that covers all your insurance requirements. The plan must offer coverage amount that you require and offer the coverage period which is suitable for you. Such a plan would be the ideal plan that will meet all your insurance needs.
The key to finding the right life insurance policy is to compare multiple quotes from multiple insurers. With some research and effort, you can understand the options you have and take a right decision.
5 September 2018
The Economic Survey, 2018, showed that the life insurance penetration in India is 2.27%, which is slightly lower in comparison with the worldwide insurance penetration which is recorded at 3.47%. Although the 2.27% is slightly good when compared to previous years, India is still lagging behind other nations. There are five basic kinds of health insurance policies that are growing increasingly popular in India. They are whole life plans, unit linked insurance plans, endowment plans, and pension plans. Each plan has its own features and benefits. Endowment plans are a blend of life insurance and investment opportunities. Pension plans are great investment options for those who are nearing their retirement. Unit linked plans are those that offer tax benefits and also provide insurance coverage, and whole life plans are the most basic kind of insurance plans that offer coverage to individuals until they attain 99 or 100 years of age.
4 September 2018
Even though the penetration rate of life insurance has bettered over the period of time, the sector remains to be one of the most misunderstood ones among its peers. A phenomenon known as ‘buyer’s regret’ has especially been common with life insurance policy buyers. In this phenomenon, you basically pay your premiums diligently up until a certain point, after which you realise that maybe the plan you bought isn’t the most effective.
In order to impart some amount of clarity to the prevailing confusion about life insurance, given below are a few things that you might not know about life insurance:
Sum assured does not always equate to death or maturity benefit: The most common mistake people tend to make with life insurance is placing the concepts of death benefit or maturity benefit and sum assured on the same table. This, however, holds some amount of truth upto a certain degree. In most traditional life insurance policies, the components of maturity benefit and death benefit are elements of the total sum assured and they usually vary between 80% and 125% of the sum assured amount. Be sure to read the policy document carefully before purchasing a life insurance policy.
Traditional life insurance policies can only be surrendered after a timeframe of three years: Traditional life insurance plans such as ULIPs or endowment plans are illiquid in nature, which essentially means that their potential of being surrendered only becomes feasible after the insured has diligently paid his premiums continuously for three years. This means that if you want to surrender your endowment plan you will have to pay the premiums for the same for at least three years.
3 September 2018
While car loans, home loans, etc. do come with flexible tenures and handsome interest rates, the capacity of paying a loan back completely depends on the status of income of the borrower, his dependents, and his existence.
In case you, being the borrower of the loan, pass away without settling the total loan amount, the provider of the loan will have the full right to foreclose your property, and your family in turn might be rendered completely helpless. To deal with a scenario like this, a term or whole life cover will prove to be immensely beneficial. If you have invested in a comprehensive life insurance policy, your family can make use of the death or the maturity benefit (in case you survive) to repay the loan amount.
Apart from paying the loan amount back to the provider, a life insurance policy also makes sure that there is sufficient financial coverage for the entire family after demise of the policyholder. It helps tide over any financial losses that the family may have incurred during that time period.
31 August 2018
Issues with Unit Linked Insurance Plans have always been a deterrent in the past for people buying life insurance, said the MD and CEO of Bajaj Allianz Life Insurance, Tarun Chugh. But he is of the opinion that the new ULIPs are highly beneficial in terms of charges.
An online survey at the insurer’s website has revealed that the life goals of men and women in a specific age group are alike. Most people who participated in the survey did not require just protection, but also the ability to enjoy life.
The improved transparency in ULIPs, reduction in misselling, and the ability to switch without having to pay long-term capital gains tax are positive trends in the industry. Bajaj Allianz has also observed a three-fold increase in the premium of ULIPs off late.
30 August 2018
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