Life Insurance
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Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of an insured person.
How to find the best Life Insurance Plan?
Choose a reliable life insurance company - Reliable life insurance providers often have a Claim Settlement Ratio (CSR) of over 95% over several years.
Assess your life insurance objectives - With the help of a proper life insurance policy, you must make plans for your life insurance goals.
Choose the best level of insurance coverage you require
Select the correct policy term
Choose a comprehensive plan - a product that offers advantages over and above life insurance or a death benefit. You are also safeguarded by a critical illness, terminal illness, accidental death benefit rider, permanent disability rider benefit insurance policy.
Carefully read the final policy document - Before you make the final commitment, be sure you fully understand all the terms and conditions. Learn the lock-in time and the situations in which the claim will not be valid, among other important details.
Never hide information from your life insurance company - You must also disclose any current illnesses or serious diseases in your family history. Your risk profile is influenced by these variables. To avoid future claim rejection, it is essential to provide precise information.
Find the coverage offering the best bargain after calculating the premium you must pay
Reviewing your life insurance requirements frequently - Periodically, you can assess your life insurance requirements and change your coverage as necessary.
Buy life insurance at an early age - If you purchase your life insurance policy as soon as you begin earning money, you can reduce the cost of your premium.
Why do you need Life Insurance Policy?
DEALING WITH DEBT : Any outstanding debt - a home loan, auto loan, personal loan, or a loan on credit cards-will be taken care of if you happen to buy the right life insurance policy.
RETIREMENT GOALS : Putting money in an annuity is like a pension plan- put in some money regularly in a life insurance product and enjoy a steady income every month even after retirement.
SAVE TAX : The premium you pay on an insurance policy is eligible for a maximum tax benefit of Rs 1.5 lakh under Section 80C, and for tax-free proceeds on death/maturity under Section 10 (D) of the Income Tax Act, 1961.
LOOKING AFTER YOUR LOVED ONES EVEN AFTER YOU'RE GONE : life insurance could save the day for your surviving dependents.
Benefits of Life Insurance
Life Risk Cover
Life insurance offers you a high-risk life insurance policy that protects you and your family in the event of an unforeseen circumstance.
Death Benefits
You may ensure the future of your family and yourself by purchasing term life insurance. The insurer pays the mourning family the full sum assured plus the bonus in the event of any unfavourable occurrence to the insured. Additionally, life insurance protects the interests of retirees, persons with accident risk, and those whose wages decline with age.
Tax Benefits
The Income Tax Act's Section 80C is a useful tool for salaried individuals to lower their tax obligations. By deducting the amount from gross taxable income, the amount invested in these instruments is eligible for a rebate.
Loan Options
If you have life insurance, you have the benefit of being able to borrow money against your coverage in an emergency. Depending on the terms of the policy, the maximum loan amount is a percentage of the cash value or sum insured.
Life Stage Planning
Life insurance serves as both a long-term investment and a means of financial support in the case of an untimely death. You can accomplish your objectives, whether they are related to your children's schooling, their marriage, or the construction of your ideal home.
Riders
The additional benefits that can be purchased and added to a fundamental insurance policy are known as riders. The riders may provide coverage for severe sickness, accidents, family income benefits, and premium waivers.
Types of Life Insurance Policies?
Term Insurance Plan
As implied by the name, term insurance plans are those that are bought for a set amount of time, such as 10, 20, or 30 years. Because these insurance don't have any cash value and hence don't have maturity advantages, they are less expensive than other policies. Only when the event really occurs does this policy become advantageous.
Endowment Plan
The endowment policy comes with the additional benefit that the policyholder will receive a lump sum amount in case he survives until the date of maturity, which is the only distinction between the term insurance plan and the endowment policy. The remaining terms of a term policy are the same and likewise apply to endowment policies.
Unit Linked Insurance (ULIP) Plan
In addition to providing life insurance, these plans allow policyholders to accumulate wealth. The premium paid for this policy is divided into two portions, one for life insurance and the other for wealth accumulation. This plan offers you withdraw a portion of the money.
Money Back Policy
This policy is comparable to an endowment policy, with the exception that it offers numerous survival benefits that are distributed proportionately throughout the course of the policy term.
Whole Life Policy
This policy lasts for the entirety of the insured's life, unlike other policies that cease after a set amount of time. The insured person is also given the survival benefit under this policy. The policyholder under this sort of coverage has the choice to partially withdraw the sum insured. The opportunity to borrow money against the coverage is also available to policyholders.
Annuity/Pension Plan
According to the terms of this insurance, the money paid in premiums is accumulated as assets and transferred to the policyholder as income via annuity or lump sum, as directed by the insured.
Common exclusions
Life Threatening activities - Participation in high-risk, life-threatening sports like skydiving, bike or car racing, scuba diving, paragliding, etc. is discouraged by life insurance providers. As a result, all of these high-risk activities are listed in the life insurance policy's list of exclusions.
Criminal and illegal activities - The insurance company is not obligated to pay a claim when a policyholder's death results from involvement in any illegal or criminal activity.
Smoking habits - Smoking is harmful for you. Insurance companies typically charge smokers a greater premium because it entails a higher level of health risk. However, a lot of people hide their smoking habits in order to avoid paying the higher premium. If a policyholder dies as a result of smoking or issues related to it but has not disclosed this information, the insurance company may reject the claim.
Pre-existing Health conditions - The health problems that the policyholder already possesses at the time of insurance purchase are known as pre-existing conditions. If the proper details are supplied while purchasing the policy, some insurance companies will cover pre-existing conditions. They do, however, typically demand a large premium.
Pregnancy and Child Birth - Most insurance companies do not provide coverage for deaths that happen during childbirth or as a result of complications related to pregnancy. Therefore, in such situations, the nominee does not receive the money assured.
Murder - Almost all insurance providers offer protection from a murder. However, the insurance provider does not pay the claim if it turns out that the nominee is a murderer. However, the nominee is eligible to receive the claim amount if they prove innocent and all accusations are dropped against them.
Claim Process
One of the most crucial services an insurance provider may offer to its clients is claim settlement. Insurance companies are required to quickly resolve claims. You must submit a claim form and get in touch with the financial advisor who helped you purchase your insurance. To substantiate your claim, give your insurer any necessary documentation, such as an original death certificate and a policy bond. Within 7 days of receiving the supporting documentation, the majority of claims are resolved by issuing reimbursements. You will be informed in writing if your insurer is unable to handle all or a portion of your claim, nevertheless.
Types of Claims
Maturity Claim : To facilitate timely settlement of claims on or before due dates, the life insured is required to provide the maturity claim/discharge form and original policy bond well in advance of the date of maturity. The majority of businesses offer/issue postdated cheques and/or pay via ECS credit on the maturity date.
Death Claims (Including Rider Claims) - The procedure below should be followed in cases of death claims or rider claims :
Claim intimation/notification
Documents required for claim process
Submission of documents required for claim processing
Settlement of claim
Claim Intimation
Get in touch with the relevant life insurance branch office.
Contact your insurance agent.
Call the respective Customer Helpline.
Claim requirements
For death claim :
Death Certificate
Original Policy Bond
Claim forms that the insurer has issued, along with any accompanying documentation
For accidental disability/critical illness claim :
Copies of medical records, test results, discharge summaries, and hospital and laboratory admission records.
Original Policy Bond
Claim Forms along with supporting documents
For maturity claims :
Original policy bond
Maturity claim form
TO CHECK VARIOUS CLAIM PROCESSES, CLICK ON THE RESPECTIVE LINKS.
FAQ's
Q. Why is Life Insurance Important?
A. Life insurance can help the policyholder's family maintain their financial independence so they are not forced to make lifestyle compromises.
Q. How do I determine how much life insurance coverage I require?
A. It is advised that you obtain coverage that is roughly eight to ten times your annual income.
Q. How much does life insurance cost?
A. The cost of insurance is determined by the kind of plan picked. You must read the policy document to gain clear knowledge on life insurance expenses.
Q. Are different options available to pay the premium?
A. You have the choice of paying either monthly, quarterly, semi-annually, or annually. A one-time premium is paid for some insurance.
Q. What happens if I don't pay the premium by the due date?
A. From the date the premium is due, there is an optional grace period of up to 30 days. If you don't make the same payment within this time, the insurance expires, and all benefits are forfeited. When you want to restart the coverage, you must pay the revival premium.
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