Life Insurance

A life insurance is a contract between a policyholder and an insurer, wherein the company pays the benefits after a set period or upon demise of the individual in exchange for a premium. Opting for a life insurance cover can protect the policyholder's family from financial strain in case of an unfortunate event, like when the individual passes away.

Life Insurance is a 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.

Term Plan

Term Life Insurance

The salient features and benefits of term life insurance plans are:

• For term insurance policies, the beneficiary can avail the lump sum only if the policyholder dies during the policy tenure. After the maturation of the policy, the insurance company is not liable to return the premiums paid. It is a pure life cover with no maturity benefits.
• These are offered for a fixed term, as suggested by the name.
• They do not include cash value, which explains why they are more affordable than other life insurance plans.
• One of the most traditional insurance plans, they are very reasonable and, therefore, easily accessible for everyone. A small annual investment towards a term plan makes the policy beneficiary eligible for a high lump sum amount as life cover and financial security on the unexpected death of the policyholder.
• Life insurance companies in India generally offer term life insurance policies for tenures of 10 or 20 or 30 or 40 years. One of the primary benefits of these plans is that they may come with a built-in option that enables the policyholder to convert them into permanent life insurance plans.
• It offers applicants to select the sum assured / premium amount and premium payment frequency - annual, semi-annual, quarterly to monthly, as per his/her convenience. The total premium amount can be paid in the form of a lump-sum as opposed to payments at pre-determined intervals.
• A term policy is suitable for policyholders who do not expect to get a return for the entire premium payment after maturity. Opt for a term life insurance from a company with a high claims settlement ratio, so that you are assured that your beneficiary can claim without hassles, in your absence.

Best Life Term Plan

AEGON Life iTerm Plan: iTerm is a pure life insurance policy. A term can plan that can be purchased online without any hassle. It offers high life coverage at low premiums.

Plan details:

• iTerm plan can be opted up to the maturity age of 75 years
• Offers five different types of optional riders
• The policy term can be between 5 to 75 years
• Instant and hassle-free claim support process

HDFC Life Click2Protect Plus 3D Plus: Click2Protect Plus is an online term insurance plan by HDFC Life . It provides life cover at a reasonable cost.

Plan details:

• It offers comprehensive life coverage
• You can purchase Click2Protect 3D Plus online without any hassle
• It offers four cover variants
• You can choose policy term between 10 to 40 years or Whole Life
• Premium payment can be regular, limited, and single premium

Endowment Plan

The salient features and benefits of endowment life insurance plans are:

• Yet another traditional life insurance plan, it is similar to term policies in terms of it being payable to the beneficiary only on the death of the policyholder.
• The difference from term life insurance policies lies in the fact that the policyholder is eligible to receive a lump sum on his/her survival through the policy tenure.
• The pre-determined maturity period is also referred to as the survival term Endowment policies may be either like any regular life insurance policy with returns or similar to a ULIP (Unit Linked Insurance Policy).
• Serving the dual purpose of investment and savings, it is suitable for individuals looking for a long-term investment at low risks. -- Endowment life insurance plans generally offer healthy returns at lower risks as opposed to other investment instruments like mutual funds.
• Policyholders are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.
• It makes applicants eligible to opt for add-on riders on the payment of additional premium. These riders offer coverage on medical conditions like critical illnesses, disabilities, etc.
• The only drawback of endowment life insurance plans are that the returns are comparatively lower than other market linked investments like mutual funds, and debt and equity-related instruments, it acts as reliable source of income for investors with a low-risk appetite.

Best Life Endowment Plans

LIC of India’s New Jeevan Anand: New Jevan Anand is a comprehensive endowment plan by LIC. It is a traditional endowment plan, which provides insurance and an opportunity for savings.

Plan details:

• Customize New Jeevan Anand plan with two optional riders – Accidental Death Benefit Rider and Accidental Total and Permanent Disability Rider.
• The policy term can be between 15 to 35 years
• Easy to apply and buy

SBI Life Shubh Nivesh: Shubh Nivesh is a comprehensive non-linked endowment plan by SBI Life. It provides death risk cover, which can be opted for throughout the life. It also helps you to build corpus with guaranteed maturity benefit.

Plan details:

• Life assured can be covered against the death risk for the entire life
• Three types of optional riders to choose from
• The policy term can be between 7 years to 30 years
• Premium can be paid either as a single payment or regular payment ###ULIP Plan

The salient features and benefits of unit linked insurance plans are:

• Unit Linked Insurance Plans ULIP are life insurance policies especially designed for wealth creation and life protection, thus, offering the dual benefits of investment-cum-protection.
• The premium payments are divided into two parts – one serves the purpose of life cover for the policyholder, while the other part is diverted towards a pool of funds. These funds are then invested in debt or equity mutual fund investments, or a mix of both.
• Unit Linked Insurance Plans ensures policyholders the flexibility to select the amount of life cover, as per their objectives.
• ULIPs generally provides a life cover that is 10 times the annual premium payment.
• Unit Linked Insurance Plans are classified under Debt Funds, Equity Funds and Balanced Funds, which is a blend of both.
• For debt funds, the investments are made in government bonds, while for equity funds, the investments are made towards company shares. - As a result, for balanced funds, the total fund is equally divided between equity and debt investment instruments.
• As the portfolio investments in a variety of investment instruments, policyholders of life insurance plans can select their investments as per their objectives and risk appetites. Equity funds generate high returns over a short-term and, therefore, are best suited for investors with high risk appetites. On the other hand, the returns on debt funds are not as high as in equity funds, but act as a steady and reliable source of income over the long term. Hence, they meet the investment goals of investors with low-risk appetites. Investors with medium risk-appetites can focus on investments in balanced funds.
• ULIPs offer the benefit of withdrawing a specific part of the money invested in the life insurance plan during unpredicted personal and medical emergencies.
• ULIPs are tailor-made to meet the long-term financial goals of policyholders like child’s higher education and marriage, retirement plans, etc.
• Policyholders are eligible for tax benefits under Sections 80C, 80CCC and 10(10D) of the Income Tax Act, 1961.

Best Life ULIP Plan

HDFC Life Click2Invest: HDFC Click2Invest is an ULIP plan, which can be purchased online. It provides life coverage and also an opportunity to build corpus.

Plan details:

• Click2Invest offers 8 options to choose from
• You can pay the premium as single payment, limited, and regular pay
• The policy period can be of 5 to 20 years

ICICI Prudential Wealth Builder II :ICICI offers a complete ULIP, a unit linked plan. It provides life protection cover and opportunity of savings to build a corpus. --Depending on the risk appetite, one can invest in different options to gain returns on the investment.

Plan details:

• Provides life cover and an opportunity to build corpus
• There is only single premium payment option
• You can avail tax benefits
• There are multiple fund options to choose from

Whole Life Plan

The salient features and benefits of Whole Life Insurance plans are:

• It is also referred to as Straight Life Insurance Plans and Ordinary Life Insurance Plans.
• The premiums, terms and conditions of this policy remain consistent throughout the policy term, provided that timely premium payments are made.
• This life insurance offers the policyholder the flexibility to borrow against the policy, or opt for withdrawal of cash at any time.
• The policy tenure extends to 100 years and the maturity benefits can be enjoyed by the policyholder in the form of a matured endowment, if he/she survives till the date of maturity. This implies that a policyholder would not have to purchase a new life insurance plan after his/her existing policy reaches its maturity.
• These life insurance plans cover policyholders throughout their lives, as opposed to other policies that are for a fixed tenure.
• This life insurance serves the dual purpose of savings and protection.
• Like all other life insurance plans, the beneficiary will be eligible for the lump sum after the death of the policyholder.
• The survival benefits for this policy steadily rise over a period of time, while the premium amount remains constant.
• Policyholders can avail guaranteed level premiums in lieu of premium payments over a limited term.
• The lump sum is paid along with bonuses that are determined by the policy performance. Besides, whole life policies also allow policyholders to withdraw cash as lump sum when the premium payment term reaches its end. Not just that, policyholders can apply for loans against its surrender value, offering you the benefit of not having to approach a bank for the same or against retirement accounts.
• These life insurance plans also offer tax benefits under Sections 80C and 10 (10D) of the Income Tax Act, 1961.

Money Back Plan

The salient features and benefits of money back life insurance plans are:

• Money back life insurance plans, as evident from the name, ensure a lump sum payment to the beneficiary of a policyholder in case his/her unexpected demise.
• The survival benefits are assigned proportionately throughout the policy tenure, i.e., it allows easy liquidity, similar to an endowment life insurance plan.
• Money back insurance plans include insurance cover for the entire policy term, along with benefits.
• They serve as an effective long-term investment instruments that generate healthy returns with low risks, coupled with insurance cover.
• These life insurance plans are best suited for individuals with no health or medical conditions and looking for a stable and dependable source of income.
• Money back life insurance plans include tax benefits under the Income Tax Act, 1961.
• They are customized to offer triple benefits of a steady source of income, long-term savings and regularly disbursements.
• Some life insurance companies also ensure the flexibility to increase the insurance cover in terms of guaranteed death benefits, irrespective of whether the maturity date has passed, provided the policyholder does not reach 100 years of age.
• These life insurance plans are generally accompanied by in-built riders like critical illness, disabilities, etc., offering optimum benefits to policyholders.
• 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.

Pension Plan

The salient features and benefits of annuity/pension life insurance plans are:

• These life insurance plans are tailor-made to enable policyholders plan for their retirement, as apparent from the name.
• There are certain exceptions to retirement planning under these life insurance plans, like early withdrawals.
• Serving as a retirement plan, it acts as a stable source of income during post-retirement years, offering financial security.
• It is a savings plan in which the premium payments that you make now act as your income during post-retirement years.
• These life insurance plans ensure flexibility to either invest a lump sum amount or to pay through easy installments over a period of -time.
• They offer further flexibility in giving policyholders the option to select between enjoying the pay outs now or at a later date.Annuities are classified under 3 categories, based on their investment tenure. Policyholders can opt for any of these, as per their investment objectives:
• Variable annuity: Variable annuity enables the policyholder to choose their investments and enjoy returns according to the investment performances. You can select your investment instruments based on your financial goals and risk appetites.
• Immediate annuity: These are generally bought by paying a lump sum amount. The pre-determined return starts getting paid almost instantly after the purchase of the life insurance policy. Once the pay outs start, the returns on investment is guaranteed because the payments can no longer be revoked.
• Fixed annuity: Fixed annuity plans serve the dual benefit of guaranteed income and principal investments. What’s more, the policyholder is eligible for fixed payments from the life insurance company throughout the policy tenure. ###Best Life Pension Plan

SBI Life Saral Pension: Saral Pension, as the name suggests is pension plan. It is a comprehensive and non-linked traditional retirement plan. Helps you in your retirement planning.

Plan details:

• A comprehensive pension plan
• The policy term can be between 5 to 75 years
• Saral Pension provides guaranteed bonus

Child Plan

Child insurance plans are an insurance cum investment product, aimed at securing the future of a child. The parent who buys this plan becomes the policyholder, while the child shall be the nominee. Child plans typically offer a lump-sum payment on the demise of the policyholder, but the policy will not cease. Instead, all future premiums get waived, with the insurer investing this money on behalf of the policyholder. The child will receive the money at specified intervals, as planned under the policy. Nearly all life insurance providers offer Canara HSBC Child Insurance Plans in their portfolio. Some of them are market-linked policies, allowing policyholders to invest in equities and debt, while others are traditional plans, investing only in debt.

A life insurance policy is an agreement between the insurer and the insured. The insurer would pay the sum assured when the insured pays the premium regularly. This would, however, happen only during the occurrence of an insured event. However, not all situations are covered in a life insurance plan. The life insurance company would investigate in case of an unnatural death of a policyholder. The sum assured is not paid if a death occurs due to any of the below reasons:

• Consumption of drugs, alcohol or any intoxicated stuff
• Participation in any dangerous activity
• Participation in a criminal act
• Due to war
• Due to pre-existing diseases
• Due to pregnancy or childbirth
• Due to self-inflicted injuries or suicide
• Excessive smoking leading to lifestyle diseases

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 insurers in India 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!
• Lifestyle habits: Insurance companies usually calculate premiums based on risk factors like your smoking, intake of drugs and alcohol 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.

Death Claim

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:

• Completely filled claim form
• Death certificate
• Identity proof of beneficiary/beneficiaries
• Age proof of the policyholder
• Life insurance policy details
• Assignment deeds
• Legal evidence of title in case the policy is not nominated
• Medical reports and doctor’s certificate
• Post-mortem report
• Police inquiry report

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.

How much life insurance cover do you need depends on:

• How many family members are financially dependent on you?
• How much is their financial dependency?
• At what age will you retire?
• Is your spouse working? If yes, you can plan the premium amount based on the ratio of contribution to the family’s income.
• How much will your children’s education cost?
• Do you have any loan to be paid-off? You are likely to consider the loan amount as your life insurance cover. Because you do not want your family to suffer or undergo hardships to repay debts against your name, in case of unfortunate eventuality.
• What are your retirement goals? How much money would you require once you retire?

For children’s education, you can plan separately with the help of a child plan. To plan your retirement, 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.

For More Information about Life Insurance Read: FAQs on Life Insurance

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. Analyzing the right plan for oneself could seem like 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.

Individuals can compare and buy life insurance policies through the website of Coverfox in just a few clicks. Here are the steps that one would need to follow to avail a life insurance cover:

• Step 1 - Go to https://www.coverfox.com/
• Step 2 - Select Term Life to view term insurance plans or Investment to view other life insurance plans
• Step 3 - Enter basic details (personal information like age, income, etc.) and financial requirements.
• Step 4 - On submitting the necessary information, the user will be able to view the plans that fit his or her insurance needs. To buy an insurance policy, one needs to simply click the Buy Now or Invest Now option. This will direct the user to the payment page, where he or she can pay premiums and purchase the policy. The individual can also request a call back by submitting his or her telephone number on the Coverfox.com website and scheduling an appointment with an agent.