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Life Insurance is a much straightforward concept – you basically buy a policy that offers your beneficiary or beneficiary's compensation when you are no more. You need to have thorough knowledge about life insurance to be able to take a well-informed decision about the type of life insurance policy that will be best suited for your unique needs, the amount of death benefit that you should opt for, etc. Since human life is very precious, you get financially as well as emotionally disturbed when you lose a family member. In such challenging circumstances, life insurance policies offer the much-needed financial peace to your family in your absence.
It provides them a lump sum or pay outs in installments, as mutually decided between you and your insurance company at the time of signing the policy. This ensures your family a reliable and stable source of income for meeting basic needs like child’s education, daily expenses, unpaid bank loans or debts (if any), etc.
The assurance of critical illness cover and death benefits make life insurance a must-have. What’s more, you can also be certain of your policy serving as a financial guardian for your family when you are not around.
The premiums that you pay for your life insurance plan makes you eligible for tax exemption of up to Rs. 1.5 lakh under Section 80C, 80CC, 80CCE of the Income Tax Act, 1961. It also saves you from tax deduction on benefits receivable from a life insurance plan as per Section 10 (10D) of the Income Tax Act, 1961. You can also avail tax exemptions of up to Rs. 25,000 (up to Rs. 50,000 for senior citizens) under Section 80D of the Income Tax Act, 1961.
The unpredictability of post-retirement years can be unnerving, majorly due to the lack of a stable source of income. A life insurance policy enables you to plan ahead for your post-retirement years and breathe a sigh of relief. Apart from offering a life cover, it helps you build a corpus for your retirement by offering a lump sum amount or monthly payouts and annuities.
Life insurance policies are bought with varied objectives like being financially prepared for child’s education or marriage, retirement planning, etc. However, in case of an unfortunate event of the death of the insurer, the beneficiary receives the sum assured that is otherwise payable after maturity of the policy term. A person gets discouraged from utilizing these funds for meeting other financial goal, thus, adding to his/her corpus.
Life insurance companies offer additional riders to supplement your insurance plan. These offers benefits over and above the life covers included in your policy. Opt for riders only if it suits your unique requirements. It is neither wise to be under-insured, nor to be over-insured. Here are some of the useful riders that you may consider while buying a life insurance policy:
Critical Illness: This add-on rider covers illnesses that are usually not covered in life insurance plans. These offer covers on medical expenditures related to illnesses such as cancer, heart attack, stroke, paralysis, kidney failure, etc. The treatment for such illnesses not only burns a hole in our pockets, but is a cause of emotional turmoil as well. Therefore, being financially prepared for such exigencies is a wise move. Besides, it saves us from emotional stress to a great extent. The lump sum can be availed on the policyholder being diagnosed of any of these illnesses.
Accidental Death: An Accidental Death rider keeps the policyholder’s family financially covered in case of his/her death. The additional lump sum offered to the beneficiary by such riders enables the family to meet long and short term financial objectives like immediate family expenditures, outstanding debts of the policyholder (if any), child’s education and marriage, etc. Apart from being a stable source of income, it acts as an emotional support and saves the family from an impending debt burden. Income Benefit Rider This rider assures the policyholder’s family of a reliable and steady source of income after his/her unforeseen death. This rider proves to be especially beneficial when the policyholder is the sole breadwinner of the family. This rider relieves the family from financial stress and instability, securing their lives.
Waiver of Premium: In situations when the policyholder is unable to pay premiums due to disability or death of the policyholder where the insured and policyholder are different, this rider prevents the life insurance policy from lapsing and ensures that the policyholder can avail the pre-decided maturity benefits.
Partial and Permanent Disability: There is no guarantee to the kind of surprises that life throws on us, and surprises are not always good. Hence, it is best to be prepared for different eventualities, if it may arise. A partial or permanent disability rider serves as a much-needed financial support for the policyholder and his/her family when there is lack of a steady source of income due to the disability. Insurance companies usually offer 10% of total sum assured on such riders. Since riders offer the aforementioned benefits, 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 implementation of GST (Goods and Services Tax) has had an impact on life insurance plans as the premium payments are not exempted for it.
Services Accounting Code (SAC) is applicable on life insurance premium payments. The SAC for GST classification for services related to life insurance policies, excluding reinsurance services, is GST Code for Life Insurance. For pension services, the applicable SAC GST code is 997131.
Life Insurance Online Payment
Most life insurance companies have embraced digitalization for the convenience of their customers, contributing to customer delight. These payments can be done through the following ways:
The available online payment platforms are net banking, debit/credit card, mobile banking, etc. You can also opt for the auto-debit option by giving your bank the mandate to deduct the pre-determined premium amount from your account on specific dates, as per your policy terms - quarterly, half-yearly, monthly, or annually. The payment deduction can be done through, Electronic Clearing Service (ECS), NEFT, Standing Instructions (SI) mandate, eCMS, auto-debit facility, etc., as per your preference. However, these online payments options may vary among life insurance companies. These online payments can be completed by logging into the official website of your life insurance company or through the internet banking platform of your bank.
Life Insurance Offline Payment
For policyholders who prefer making their premium payments offline, it can be done in the form of cash or cheque. Cheques can be deposited by visiting any branch of the insurance company, while cash payments can be done through bank transfers in the name of the relevant life insurance company.
Buying a life insurance policy is not really a big deal. But no one wants to unnecessarily pay a bomb for the type of policy they want to buy or purchase a policy that is actually not as per their requirement. Therefore, you should know what you are investing in to be able to make a conscious decision about the life insurance you should opt for.
Analyze and evaluate your life insurance requirements and review your policy at regular intervals. Certain changes like marriage, an addition of a family member, job change, etc. calls out for a necessity to re-evaluate your insurance needs.
The amount of income you offer to your family members who are dependent on you, your loans and financial expenses would help you analyse the coverage you should opt for on your policy. This will enable you to efficiently secure your family financially in your absence.
Ensure you have capacity to pay the premiums. If the policy lapses due to non-payment, it will not only adversely affect your future financial goals, it will also dent your savings. Therefore, it is essential that you review the amount of premium you will be able to pay and decide on the life insurance policy accordingly.
Before finalizing on a particular insurance policy, ensure that you compare the life insurance plans of different insurers. This would give you the scope to narrow down your search as per your requirement post comparing the quotes, features, benefits etc. of different insurers. It is a known fact that online life insurance policies are cheaper than the offline ones. Therefore, it is highly recommended that you buy online life insurance plans.
Reading your policy document is very important. There are certain exclusions to life insurance policy covers that you should be aware of, so that you can prevent misunderstandings and claim rejections later. Hence, knowing what is not covered is equally important to know along with knowing what is covered!
If you increase the coverage offered under your basic life insurance policy, you may consider buying riders that would fulfil more requirements such as health etc. However, select the riders wisely. Opt for only those that are aligned to your unique objectives. Do not jump for them, if they are not required.
Here are the factors to help you understand how your life insurance premium will be calculated:
Age: Your premiums would be lower if you buy a life insurance plan at a younger age. With your increasing age, your insurer’s level of risk will also increase. Hence, insurance companies will up their premium amount. So, don’t wait till you grey, apply today!
Gender: Research says that women generally live longer than men. This means life insurance companies interpret men as riskier applicants than women. Therefore, their premiums too are slightly lower than that of men. So, your life insurance premium does depend on your gender too!
Smoking habits: Insurance companies usually calculate premiums based on risk factors like your smoking, intake of drugs and drinking habit. These habits enhance the chances of lifestyle diseases, making insurance companies charge a higher premium from you. Insurers usually double the premium amount for smokers as compared to what they do from non-smokers.
Duration of coverage: The longer the duration of your coverage, the greater is the risk undertaken by the insurance company. Short-term life insurance plans have lower premiums than long-term life insurance plans. Though, short term life insurance policies have lower premium than long term life insurance policies, the coverage/ policy term offered is also lower. Plan for a cover that protects you for a longer duration.
Existing health condition: Most insurance companies makes it mandatory for applicants to submit their health records, which is thoroughly checked for signs of chronic illnesses or potential health problems that might make them high-risk customers. Applicants with clean health records are eligible for availing lower premium rates than those with records of health issues or have symptoms indicating at the same.
Medical history: The medical history of an applicant is one of the parameters that decide the premium amounts they will be eligible for. The lack of medical history of life-threatening diseases like cancer improves their chances of having to pay a comparatively lower premium than those with medical records that indicate at a high scope of them contracting the hereditary health conditions.
Obesity: Obesity is the root cause of various medical conditions like blood pressure, coronary heart diseases, stroke, osteoarthritis, cancer, etc. that can lead to further complications. Hence, applicants who are obese are charged higher premium because they are viewed as potentially high-risk customers.
Participation in adventure sports: Participation in activities that cause an adrenaline rush like mountain climbing, trekking, driving fast cars, bungie jumping, scuba diving, etc. involve high risks. Therefore, insurance companies charge a higher premium from adventure sports enthusiasts than those who do not enjoy such activities.
Profession: Applicants working in industries like mining, oil and gas, fisheries, etc., are at a higher risk of fatal medical and health conditions. Covering such applicants through a health insurance policy also involves high risk for insurance companies. This explains the reason why such applicants are offered higher premiums than those who are employed in fields that are perceived to be safer like finance, marketing, etc.
There are many life insurance companies in India. And each life insurance company offers wide range of life insurance plans designed for varied needs of their customers. Therefore, you should know the factors you need to consider while buying a life insurance policy that is best suited for you.
Always buy a life insurance with an objective in mind. If you don’t have any reason to buy, it’s better not to buy simply because you may end up buying an unwanted product. For instance, if you have no dependents, you may simply opt for a mediclaim instead of a life insurance policy.
If you are the only sole earner of the family, you should buy a life insurance plan. A life insurance policy will enable you to ensure that they receive the necessary covers in case of a sudden loss of income after your sudden death.
It is advisable to opt for insurance plans to provide your family with financial assistance during uncertainties like your unforeseen death or critical illness, etc. Term insurance serves as an effective option for overcoming financial instability arising from such incidents.
Once you know the need and type of policy you wish to opt for, determining the coverage amount becomes easy. This will ensure that you are not under or over-insured. It is advisable to opt for a minimum sum assured that is atleast 8 to 10 times of your gross annual income.
Always check the claim settlement ratio of the insurance company you wish to buy a life insurance plan from. This is because you must know the worth of the insurance company that would help your beloved family to settle the claims in your absence.
One of the primary reasons behind claim rejections is suppression or misrepresentation of personal details in the insurance application form. Sometimes, insurance terms, like pre-existing diseases, might be unclear to applicants, leading to applicants filling the form with inaccurate information. Also, don’t suppress facts like smoking and excessive drinking habits, etc., as they will lead to claims rejection when the information provided is proved to be incorrect during claim settlement.
It is good to start early for a life insurance plan. The higher the age, the higher would be the premium. Also, the chances of death and critical illnesses are less when you are young. You are more likely to develop health issues with increasing age, thus, leading to an increase in your sum assured and, hence, your premium amount.
Before opting for a life insurance, watch out for your outstanding liabilities like car loan, home loan, etc. This is because you would know what coverage to opt for depending upon the outstanding debts.
There are many benefits of buying life insurance. However, the main objective of a life insurance plan is to provide life cover to the assured. The sum assured is the financial compensation in case of the untimely demise of the insured during the policy tenure. Hence, it is important to decide the right life insurance cover while buying a life insurance policy.
For children’s education, you can plan separately with the help of a child plan. And for your retirement planning, you can invest in a retirement plan.
If you are planning to buy a pure life insurance cover – a term plan is highly recommended. Opt for a life insurance cover that is 8 to 10 times of your annual income.
For example, if annual income is Rs.5 lakh, the life insurance cover (sum assured) should be approximately Rs.40 lakh.
Regardless of the life insurance plan you purchase, you must check the claim settlement ratio of each life insurance company to assess the reliability and efficiency of their services.
It is important to compare life insurance plans online because all life insurance companies offer different life insurance plans. Moreover, each life insurance company offers a number of variants of each type of life insurance. And analyzing the right plan for oneself is quite a daunting task.
But don't worry.
Coverfox’s tool has transformed such a daunting task into a cake walk.
Online life insurance comparison tool removes all the guess work. Coverfox’s comparison tool helps you find the best life insurance plan, and that too at an affordable premium!
Let's have a look at the factors you should consider while comparing life insurance plans:
Life Coverage Premium: First and foremost, ensure you are buying an adequate life cover and are neither over-insured nor under-insured. After you have enlisted some policies, based on their features and benefits, you need to compare the premiums for the same coverage amount offered by each one of them.
Features of the Life Insurance Plan: Compare features of different life insurance features offered by various life insurance companies. Always make sure you opt for a comprehensive life insurance policy with customizable policy tenure, sum assured, premium paying mode and frequency, payouts, etc., so that you can design it further to your unique needs..
Life Insurance Riders: Riders are add-ons that enhance your basic life insurance coverage. The life insurance riders are optional paid features. However, before buying a life insurance plan online, you should watch out for the riders you want to buy, if they are offered by a different insurer as an in-built feature. Some of the important riders you may wish to add to your policy may be available as a feature of the plan offered by a different life insurance company. However, make sure that you opt for riders only if you genuinely need them as opposed to opting for one and over-insuring your life insurance policy.
Claim Settlement Ratio: Claim settlement ratio of the company symbolizes the proportion of the total claims settled against the total number of claims filed. Higher the claim settlement ratio, the better. A higher ratio implies that the chances of your claim getting settled are also greater. For each life insurance company, the claim settlement ratio changes every year. Therefore, it is an important factor while comparing life insurance plans.
In the event of your unfortunate death during the policy term (the policy is yet to mature), your beneficiary/beneficiaries can claim for your life insurance policy. This claim can either be a ‘death claim’ or a ‘life insurance claim’. During a death claim, your beneficiary or a family member should intimate the claim by calling Coverfox.com.
There can be an early death or death due to aging. It is completely based on the time since the policy was bought. An early death is when you die within three years from the policy commencement date. Your beneficiary/beneficiaries will have to approach Coverfox.com or the insurance company and fill the claim intimation form.
The below documents would be required:
The below documents needs to be presented during a natural death claim:
The beneficiary or a relative of the policyholder should intimate the claim by calling Coverfox.com or the insurance company. The below documents need to be presented for a hassle-free claim settlement process:
The below documentation needs to be presented for processing the claim:
The below documentation needs to be presented for processing the claim:
The below documentation needs to be presented for processing the claim:
The below documentation needs to be presented for processing the claim:
The insurance company would investigate the genuineness of the claim and respond about the settlement accordingly. In case of incomplete documentation, the insurance company would raise a requirement and inform the insured's nominee.
|Life Insurance Company||Claim Settlement Ratio 2017 - 18||Life Insurance Company||Claim Settlement Ratio 2017 - 18|
|LIC||98.19%||Aegon Religare||95.30%||Max Life||96.23%||Canara HSBC||92.99%|
|Tata AIA Life||88.45%||Exide Life||86.10%|
|ICICI Prudential Life||94.47%||Reliance Life||95.01%|
|Aegon Life||94.08%||Future Generali||90.61%|
|HDFC Life||96.20%||Aviva Life||82.00%|
|Reliance Nippon||92.90%||Bharti AXA Life||80.00%|
|SBI Life||91.30%||IDBI Federal Life||84.79%|
|Canara HSBC Life||90.73%||India First Life||72.21%|
|Bajaj Allianz Life||95.02%||Shriram Life||65.66%|
|Sahara Life||95.70%||DHFL Pramerica||57.19%|
|Future Generali Life||89.97%||Edelweiss Tokio||85.10%|
"Source: IRDA Annual Report 2017-18"
When should I buy a life insurance policy?
A life insurance policy can be bought anytime between the ages of 18 years to 90 years, but it varies widely between insurance companies and the type of life insurance plan you want to opt for. However, it is highly recommended that you purchase a policy by the time you reach 35 years of age to be eligible for low premium payments and other favourable terms and conditions.
How much life insurance cover should I buy?
The amount of life insurance that you should opt for depends on various parameters like your age, number of dependents in your family, inflation, existence of outstanding debts against your name, marital status, etc. However, since the life cover amount should be well aligned to your standard of living at the time of your retirement, it is recommended that you choose a cover that is at least 10 to 15 times your current annual income. Alternatively, you can multiply your annual income by the number of years left for your retirement, and arrive at the life insurance cover suitable for you.
How do I pay my life insurance premium?
Well, depending upon the life insurance plan that you opt for, you can pay the life insurance premiums either one time, which is ‘single premium’ for a limited number of years under ‘limited premium’, or a regular premium plan. You can pay premiums either monthly, quarterly, half-yearly or yearly again depending on the life insurance plan that you opt for.
Who should buy a whole life insurance plan?
Whole life insurance plans can be suitable type of a life insurance plan for different individuals. Basically, you should buy a whole life insurance plan in the below scenarios:
Under a whole life insurance policy can I borrow money?
Yes, you can certainly borrow money against your whole life insurance policy. The whole life insurance plan doesn’t only offer a cash value, but it also ensures no date of expiry. This makes it easier for the policy holder to borrow against the whole life insurance plan. You can however, contact your insurer in case of any related queries.
Why should you buy life insurance online?
You can get the best life insurance policy online. Mentioned below are the top reasons why you should buy life insurance online:
Saves time- Buying life insurance online saves your precious time since you skip through all the procedures. You simply browse, compare life insurance plans offered by different insurers and make the payment.
Reduced life insurance premium- Well, it’s a known fact that you pay lower premiums when you buy life insurance online rather than offline. The life insurance quotes offered online can be compared with different insurers before settling on a final one. Reason being, the insurance company saves a lot of money on channel overheads and infrastructure. These savings are further transferred to the consumers in the form of discounted life insurance premium.
Minimum paperwork- When you buy a life insurance plan online, you minimize paperwork and filling of forms. Besides, it is a hassle-free process of buying a life insurance policy since certificates, photo-copies of documents and other courier documents are all eliminated.
Easy access- When you buy life insurance online, the chances of the claims getting rejected are negligible since there are lesser mistakes than filling the life insurance forms manually. You can easily access your life insurance plans online since they get saved along with your details for future reference too. You need to fill in the details again. Your life insurance policies that you have bought so far will get saved in the insurance company’s database and the life insurance policy will be in your inbox in no time! Online life insurance policies are cheaper as compared to the offline life insurance policies. Therefore, if you wish to save your time, money and the hassles, go for online life insurance plans.
What type of life insurance plan should I purchase?
The most basic and must buy is a term life insurance plan. It offers highest sum assured at a low premium as compared to any other life insurance types, as it is a pure life insurance plan. With term plan, you can be assured of providing financial security to your family. If you are looking for investment opportunities – Endowment, ULIPs, and Money Back plans are good options to meet your financial goals. If you want to build corpus for your child’s education – Child Plan is the most suitable option. If you are looking for a financial vehicle to help you in your retirement planning – Retirement/Pension plan is a sound solution. As per your needs, you must shortlist the type of insurance plan you need to achieve your financial goal. Once you have shortlisted the type, you can check different variants offered by life insurance companies and compare the various life insurance options to select the best life insurance plan for yourself.
Does smoking affect my life insurance premium?
Yes, it does affect your premium. Smokers have to pay slightly higher premium than non-smokers.
Which are the most popular life insurance riders?
Riders are optional paid features. Riders help you to enhance the policy coverage. The most popular life insurance riders are:
What is Claim Settlement Ratio?
A claim settlement ratio is a percentage that indicates the number of insurance claims settled against the number of claims filed in a financial year. The higher the claim settlement ratio, the better is the life insurance company and its customer care service.
How to take a loan against life insurance?
Many may not know that a life insurance policy can act as a multi-tasker. Yes, apart from offering life cover, it also offers you a loan facility. The rates of interest too are competitive. In case of emergency situations, you can certainly avail a loan against your life insurance policy. As per the IRDAI guidelines, ULIPs and term insurance plans aren’t eligible for a loan facility. Only traditional life insurance plans and non-linked endowment plans can offer you the loan privilege.
Remember that you won’t be able to apply for a loan as soon as you buy a life insurance plan. You need to pay the premiums for a specific duration, post which you can apply for a loan facility. This duration is usually 2-3 years and the life insurance policy attains a surrender value.
Firstly, you need to pledge your traditional life insurance plans to get your loan sanctioned. Apart from offering a life cover, these policies also offer a savings component.
Your life insurance policy should be then assigned in the name of the insurer. This means, all the possible rights on your life insurance policy will be then transferred to the lender. Also, the surrender value should be known if you wish to apply for a loan against your insurance policy. Any insurer will grant you a loan amount based on the surrender value of the policy, which is usually 80% to 90% of the surrender value depending upon one insurer to another.
At times, insurers consider 50% of the total life insurance premiums paid to calculate the maximum loan amount eligibility. The duration to make the repayment of this loan is pretty flexible. The interest rates too are low compared to a personal loan. Banks also charge the processing fee as well as any other charges along with the processing fees.
You need to duly fill a loan application form along with the original life insurance policy. The payment receipt as well as a cancelled cheque copy and the deed of assignment also needs to be enclosed along with the loan application form.
What is maturity benefit in life insurance?
Maturity benefit in life insurance is the amount that your life insurance company pays you if you survive until the end of the policy duration. There is no maturity benefit in term insurance policy. However, there is a maturity benefit in all the other life insurance plans.
How to renew lapsed life insurance policy?
If the policyholder does not pay the premium even during the grace period after the expiry of the renewal date, the policy will lapse. God forbid, if an unfortunate eventuality occurs, which leads to the death of the life assured and the policy has lapsed, the insurance company would not accept the claim. However, there is good news, a lapsed life insurance policy can be revived. The revival procedure differs from insurer to insurer. But, the following is the generic procedure for the revival of the lapsed life insurance policy.
Reinstatement: For reinstatement of a lapsed policy, you may need to submit some documents. The documentation will differ as per the time of your application for revival that is early stage revival or major stage. The documents required for the revival will also be different for each of the life insurance company.
Premium payment: If you want to revive the life insurance policy, you need to pay the due unpaid premiums along with the interest on the delayed premium, if any. The rate of interest differs for each insurance company. One more thing you need to keep in mind is, you also may have to pay a penalty.
Underwriting processing: You may be asked to provide a statement of good health or certificate of insurability or even undergo fresh medical examination. It needs to be filled in, signed and supported by identity and address proof documents of the life assured. Please Note: Revival of a life insurance policy can impose fresh terms and conditions at the time of revival.
Which is the best life insurance policy in India?
Here are some of the best life insurance policies in India that you can select from:
Can I get life insurance at 62?
At the age of 62 years, you can either opt for an annuity plan or a whole life insurance policy.
Which type of life insurance is best?
The type of life insurance that will be best suited for an individual depends on various factors. When you are looking for a life insurance policy, consider these parameters before taking a decision:
How much is cost of life insurance for a 55 year old man?
Apart from your age, there are several other factors that are considered while evaluating the premium amount that you will be eligible for. Some of these factors are your lifestyle, current health, family medical history, pre-existing medical history, etc. A healthy lifestyle, and a lack of family medical history and pre-existing illnesses will enable you to avail comparatively lower premiums.
What is the best age for buying life insurance?
The younger you are, the better will be your eligibility for availing low premiums. It is advisable that you opt for a comprehensive life insurance cover by the age of 25 - 35 years.
How much is life insurance coverage needed for a 63, 67 and 70 year old people?
At the above ages, life insurance plan should not be purchased for the purpose of covering one’s life. Life Insurance plans like annuity plans should be considered for a carefree retirement.
Can I get money back if I cancel my life insurance instantly?
On the purchase of any life insurance policy, insurance companies usually offer you a ‘Free off period’, i.e., a period of 15-30 days from the date of issuance of the policy, within which you can return the policy, in case you disagree on policy terms and conditions. However, if you want to cancel your life insurance after having started with your premium payments, there are high chances that you will not be eligible for receiving a refund, unless your policy has cash value that has accumulated over the policy tenure. In that case, you will be entitled to the surrender value of your life insurance policy only after it completes the set number of years.
How is Life Insurance a Tax-Saving Tool?
The premiums on insurance policies make the policyholder eligible for tax deduction of up to Rs. 1.5 lakh under Section 80C, 80CC, 80CCE of the Income Tax Act, 1961. Policyholders can also avail tax benefits payable on maturity and death benefits as per Section 10 (10D) of the Income Tax Act, 1961. Tax exemptions of up to Rs. 25,000 (up to Rs. 50,000 for senior citizens) are also applicable under Section 80D of the Income Tax Act, 1961.
How long does it take to get life insurance?
In today’s digital age, the task of getting life insurance has become extremely easy and instantaneous. However, depending upon the information provided by the applicant the time taken for policy issuance may vary from a few hours to a few weeks.
What are the three main types of life insurance?
The three main types of life insurance are:
When should you get life insurance?
The younger you are, the better will be your eligibility for availing low premiums. It is advisable that you opt for a comprehensive life insurance cover by the age of 35 years.
What is the maximum age for buying life insurance?
The maximum age for buying life insurance usually varies between 55 years and 90 years, depending on the insurance company and the type of life insurance company you are looking for.
Can I have multiple life insurance policies?
Yes, you can be the policyholder of multiple life insurance policies, provided you meet certain terms and conditions.
What is underwriting in life insurance?
During every procedure concerning life insurance policies like assessing life insurance applicants eligibility, claim settlement, revival, etc., the policyholder or beneficiary (in the absence of the policyholder) has to submit support document as proofs of good health or certificate of insurability or even undergo fresh medical examinations, whichever is necessary. The relevant form has to be completed with accurate information, along with proofs of identity and address of the life assured for the underwriter to evaluate the eligibility for purchasing life insurance policies, avail claims, renewal of life insurance policies, etc.
How to cancel life insurance policy?
The insured can initiate the cancellation of a life insurance policy through the following procedure:
Can I get life insurance if I have cancer?
It is a challenge to get a life insurance policy that covers individuals already diagnosed with a deadly disease like cancer.
How much do I pay for life insurance per month?
The premium amount that you will be required to pay depends on various parameters like sum assured, age, gender, number of dependents in your family, existing annual income, current health condition and lifestyle, pre-existing illnesses, family medical history, and several others. Investing a life insurance policy at a young age, and without pre-existing medical conditions and family medical history will make you eligible for a low premium amount.
Is life insurance necessary after 65?
NO, Most life insurance companies may not even cover you after the age of 65 years. This is because you have already reached your age of retirement or is on the verge of retirement. Besides, the greater your age, the higher are the chances of you being diagnosed of illnesses typical of old age. This makes you a high risk applicant for insurance companies.
Can I cancel life insurance at any time?
Yes, On the purchase of any life insurance policy, insurance companies usually offer you a ‘Free Look period’, i.e., a period of 15-30 days from the date of issuance of the policy, within which you can return the policy, in case you disagree with the policy terms and conditions. However, if you want to cancel your life insurance after having started with your premium payments, there are high chances that you will not be eligible for receiving a refund, unless your policy has accumulated the surrender value.
Is it safe to buy a life insurance plan online?
It is completely safe for you to purchase life insurance policies online. Powered by advanced technology, banks and non-banking financial institutions that offer life insurance policies are now equipped to keep your personal data safe, apart from ensuring a host of other benefits. This includes seamless accessibility to their life insurance policies through their official websites in a few clicks. These facilities are available across locations and with minimum paperwork, thus, proving to be a major time-saver. What’s more, you are usually eligible for lower premiums on purchasing a life insurance policy online.
What happens if my life insurance policy is cancelled during the free-look period?
If you cancel your life insurance policy during the free look or cooling period, which varies between 15 days to 30 days depending on the insurance company, you will be eligible for a refund less stamp duty and medical examination charges.
Is it better to buy life insurance policies at a young age?
Yes, it is highly recommended that you purchase a life insurance policy at a young age to be eligible for lower premium payments. The younger you are, the lower will be your eligibility for lower premium payments.
Are life insurance premiums fixed?
Yes, life insurance premiums are fixed for the entire tenure. However, the premium for each and every individual may be different as it depends on sum assured, life insurance companies, type of policy selected, age, gender, number of dependents in your family, existing annual income, current health condition and lifestyle, pre-existing illnesses, family medical history, among others.
Is it better to take a single cover policy or a joint life term insurance policy?
It is best to opt for a joint life insurance policy if your spouse is a home maker, if she is a working women then it is best to get a standalone term insurance plan.
Who should purchase a life insurance policy?
Everyone should purchase a life insurance policy to be financially and emotionally prepared for unforeseen emergencies. The younger you are, the greater will your chances of being able to avail a low premium amount.
How do I choose the best life insurance plan?
‘Best’ is a relative term while selecting a life insurance policy. What may be best for another individual, may not be the best for you. This is because of varied financial objectives owing to various factors like age, gender, existing lifestyle and health condition, family medical history, pre-existing health issues, etc. Select a life insurance plan that best suits your unique requirements.
Are there life insurance plan options available for children?
Yes, there are life insurance policies that are especially customised for the unique needs of children. Such plans enable parents or legal guardians to financially plan and secure their child’s future in their absence for goals like higher education, marriage, etc.
How can I pay my life insurance premium?
You can pay your life insurance premium either online or offline. If you prefer the online option, you can opt for payment through debit/credit card, net banking, mobile, etc. Alternatively, you can select one of these auto-debit facilities like Clearing Service (ECS), Standing Instructions (SI) mandate or eCMS. For offline payments, you can either pay your premiums by cash or cheque. Cheques and cash can be deposited by visiting any branch of your insurance company.
How much time does it take to settle a life insurance claim?
After the policyholder’s death, the beneficiary or a relative of the deceased has to inform the insurance company about the same to initiate the claim settlement procedure. A copy of the death certificate of the policyholder will have to be submitted as proof, along with other essential documents as required by the life insurance company. It generally takes a week or a fortnight or a month for the insurance company to review the claim and then decide on whether to accept or reject it. The end-to-end claim settlement process generally takes one or two months or sometimes even less. There is a fixed term for completing the claim settlement process, and hence life insurance companies make a conscious effort to complete the process as soon as possible to avoid having to pay heavy interest on late payment of the sum assured.
Are life insurance premium constant?
Yes, premiums of life insurance policies are constant for the entire policy duration. However, the premium for each person depends on life insurance companies, type of policy selected, sum assured, age, gender, number of dependents in your family, existing annual income, current health condition and lifestyle, pre-existing illnesses, family medical history, among others.
How do I decide how much life cover to purchase?
The amount of life insurance that you should opt for depends on different factors like your age, number of dependents in your family, inflation, existence of outstanding debts against your name, marital status, etc. However, since the life cover amount should suit your standard of living during your retirement age, it is advisable that you select a cover that is at least 10 to 20 times your existing annual income. Otherwise, you can multiply your annual income by the number of years left for your retirement, and arrive at the life insurance cover that meets your unique financial objectives.
How can I calculate the premium for my life insurance plan?
Sum assured, Age, gender, duration of life insurance coverage, smoking habits (if any), existing heath condition, family medical history, traits of obesity, degree of risks involved in your profession, your interest in adventure activities, etc.
What does a life insurance policy not cover?
Life insurance policies do not cover the following:
How much more expensive is a life insurance policy for smokers?
It is believed that smokers are asked to pay a higher premium amount than what non-smokers are eligible for.
Why life insurance is more expensive for men than for women?
Women are known to live longer than men. This makes life insurance companies interpret women as low risk applicants as opposed to men, making insurers raise the premium amounts for men.
What is a ‘bonus’ in life insurance?
Bonus in life insurance refers to the additional amount that a policyholder is eligible to receive during the policy term or at its maturity on having made the required premium payments within the pre-determined time frame. This amount is a percentage of the sum assured that the insurance company pays from the profit generated by it during a financial year, only a with-profit life insurance policy is eligible for it.
What is joint life insurance?
A joint life policy is one where both the partners are covered under a single plan and they pay combined premiums. The spouses become the owner as well as the beneficiary. The sum assured from such a cover is payable either at the end of the specified term or on earlier death of either of the insured individuals.
Joint life insurance policies are a preferred option among married couples as it helps save considerable amount when compared with paying two sets of premiums for separate individual covers.
How to assign life insurance benefits to someone else?
An individual can transfer his or her title, rights and interest in a life insurance policy to another by assigning it. This is generally done for providing security against a loan or securing the financial interest of the other individual. Once the life insurance policy is assigned, the assignee will get the benefits from it.
The policyholder has to send the assignment form to the insurer, providing policy details that has to be assigned. Along with this, the policyholder needs to send the original policy and assignee's KYC documents. The assignment can be endorsed on the life insurance policy copy or a notarized assignment, confirming it can be executed.
What types of death are not covered by life insurance?
The types of death that are not covered under life insurance are:
Does life insurance cover accidental death?
Yes, life insurance policies usually cover accidental death. If the policy specifically states that it does not cover death by accident or the individual feels there is a need for additional sum assured in case of accidental death, then accidental death benefit rider can be attached to the base plan. The rider provides an additional payment (usually double the amount of money) if the demise of the individual occurs as the result of an accident.
Does life insurance pay for suicidal death in India?
The suicide clause for policies issued before January 1, 2014, states that if the life assured commits suicide in the first policy year, the policy shall become void and no benefits will be paid. Changes have been implemented to the suicide clause for policies issued after January 1, 2014. Under market-linked plans, the nominee is entitled to receive 100% of the policy fund value even if the life assured has committed suicide in the first policy year. Under non-linked plans, the nominee is entitled to receive 80% of the premium paid even if the life assured has passed away due to the act in the first policy year.
How to cancel your Life Insurance Plan?
If you have purchased a policy and the Free-Look period is still active, you can immediately cancel the policy via phone, email or personally visiting the branch and placing a service request. Any premium amount which has been deducted will be credited back to your account after applicable deductions. All insurance policies come with a Free-Look period of 10-30 days. In case the free look period is expired, a surrender request has to be placed and applicable surrender value is paid back.
What is the free-look period?
Every insurance policy comes with a free-look period. A free-look phase is a time-period which begins immediately post policy receipt and usually lasts 10-30 days. During this time period you are free to return the policy in case you are not comfortable with any terms and conditions mentioned in the policy and wish to cancel the policy.
Can I get Life Insurance if I'm disabled?
Yes, in order to support people with disability or people with physically disabled/challenged dependents, LIC had earlier introduced two plans namely Jeevan Adhar Life Insurance Plan and Jiwan Vishwas Plan. However, these plans are from which are currently withdrawn.
Do I need supplemental Life Insurance?
Yes, if you have a big family with multiple dependents, you must take a supplemental life insurance plan. In case of your absence, if one insurer rejects claim settlement, you can always go to the second insurer and make the claim on the particular policy bought from him.
Can I buy Life Insurance for kids?
Yes, you can purchase life insurance for your children. In fact, there are specific child plans created by the top most insurance companies which provide, life cover, income, maturity, milestone, tax savings benefits, etc. under a single child plan.
Is Life Insurance necessary for the elderly?
No, if an elderly person has fulfilled all his duties and achieved all his financial goals then there is no need for buying a life insurance plan with the objective of getting a life insurance cover. However an elderly person can still buy life insurance with an objective of meeting his retirement and medical expenses. Given the rising cost of medical expenses, good quality treatment is important as senior citizens have special requirements as per their age and finances.
What is guaranteed Life Insurance and who should opt for it?
A guaranteed Life Insurance Plan is a type of a life insurance plan which comes with a Guarantee. These guarantees could be in the form of additions which are made by the insurer during different stages of the policy. Such policies may come with additions of 6-7% per annum of the sum assured or annual premiums or Guaranteed Payouts like 126-138% of the annual premium each year. Anyone can opt for a Guaranteed Life Insurance Plan, there is no such restriction and they are offered by all insurance companies.
How to make a maturity claim on your life insurance?
The insurance company usually sends a policy discharge form, a month prior to the insurance policy's maturity date. The letter will contain instructions concerning the documents that need to accompany the form. The form must be duly filled and signed by the policyholder. Along with the form, the documents that need to be enclosed are original policy document, copy of identity proof, copy of address proof, bank mandate form with bank details and a cancelled cheque leaf. All of the papers need to reach the insurance company within 5-7 working days before the maturity date of the policy. Upon verification, the company will process the maturity claim on life insurance and proceed to make the payment to the policyholder.
How can an e-Insurance account make life easier?
An e-insurance account allows individuals to hold policies in the digital form. Policies issued in electronic form are known as e-insurance policies. The account used to store them is referred to as an e-insurance account. Having an e-insurance account is beneficial in the following ways: