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Life Insurance refers to a contract between a life insurance company and a policyholder. Under this contract, the insurance company promises to pay the beneficiary a certain amount of money as a compensation for the loss of life of the insured or after a specific period, in return for the policy premiums paid.
A Life Insurance policy provides financial support to the family of the deceased life insured by working as a life cover against the uncertain and unpredictable nature of life. Life insurance plans offer a lump sum amount to the beneficiary in case of death of the insured and a maturity benefit to those who survive their policy term.
In financial terms, Life Insurance is a legal agreement between a policyholder and the insurer or the life insurance company. As part of this contract, the beneficiary receives a certain amount of money from the insurer, upon his death or completion of a specific term; this is given to compensate for the loss of life of the insured person in return for the policy premium payments made by the insured during the policy term.
A Life Insurance policy aims to provide a financial backup to the family of the policyholder after his untimely death. The life cover acts as a financial cushion for the insurer and his family against the uncertainties of life. In case of death of the policyholder, Life insurance plans offer a lump sum amount to the nominated person. If the policyholder survives the policy term, he can claim the maturity benefit.
A Life Insurance policy comes along with a host of benefits that can secure your financial future and at the same time, provide you with the much-needed peace of mind in times of need. If you are looking to buy any insurance policy scheme, certain fundamental factors must be considered. Some of these factors are mentioned below:
A life insurance plan goes a long way in providing financial security to the beneficiary of the policyholder in the event of his death or disability. The payout amount can be used by the dependents to take care of their monthly expenditure and other financial commitments.
If the policyholder has any loan payments to take care of, the proceeds of the life insurance plan can be utilized in the repayment loans or any debt. This liability could otherwise become a burden for his beneficiaries. You can plan your finances and allocate resources for your life insurance cover.
Life insurance policies are long term investment products. They mature after a specific term or number of years. The maturity benefit received by the beneficiary can be used to take care of future goals, such as funding college education, or retirement income or buying a car or a house.
It is always necessary to buy life insurance at the right age. The policy premiums are low if the policy is purchased at a young age. This is because your expenses and liabilities are less at a younger age than as you grow and expand your family.
A life Insurance premium is eligible for Income tax rebate under section 80C. It can be deducted from the taxable income. Similarly, any maturity payout received when the policy gets completed, or as a death benefit, are also tax-free u/s 10(10D) of the Income Tax Act, 1961.
Since you need to pay the policy premium at regular intervals of time, it will help you inculcate the savings habit. Instead of spending money on unnecessary expenses, you can allocate it towards your life insurance premiums.
It is recommended to buy the policy when the person is in good health and disease-free. It is because if the person is unwell, he/she might not be eligible to buy a life insurance policy. Once a plan is purchased, the policyholder can secure his future health by buying additional riders.
Any investment in an insurance policy lowers the financial burden on the policyholder in the future. It leads to peace of mind by assuring financial security to his family in case of his loss of life.
While discussing life insurance plans, some frequently used terms must be understood.
It refers to the person whose life is insured or covered by the life insurance policy. It is the policyholder or the person in whose name the insurance policy is taken.
It refers to the person who makes the life insurance premium payment. The proposer and Life Assured can be the same person if an individual buys a policy for himself. If an individual buys an insurance policy for his family member as the life assured then the individual purchasing the plan would be the proposer.
A nominee refers to the person who would receive all policy benefits in case of loss of life of the insured and hand it to the rightful beneficiary. A beneficiary, on the other hand, is the person who receives the insurance payout and is the owner of the insurance proceeds. The beneficiary of a life insurance policy may be siblings, spouses, parents, children or even some trusts.
An insurance agent is the representative of an insurance company who sells life insurance policies to different buyers. An agent puts forward the best policy plans, their features, and benefits and moulds them to suit the buyer's needs. Their job is commission based and is paid a commission for each policy they sell.
They offer a common platform to the buyers where they can check and compare the different life insurance policies and select a plan based on their needs. An aggregator provides a fair representation of data as they do not receive any commission for selling life insurance policies. They help buyers by saving their money, time, and effort.
The insurance company selling life insurance plans is the insurer. Different insurers in the market sell the same type of insurance plan but with variations.
It refers to the amount paid to the beneficiary in case of loss of life of the insured. It is the payout amount or the 'death cover'. It pays a lump sum amount of money when the insured person dies, which goes to the policyholder’s beneficiaries or nominees.
The policy benefit paid to the nominee on the death of the life insured is the death benefit.
The amount paid by the Insurance Company after the policy term is called the Maturity Benefit. A pure term insurance plan does not offer any maturity benefit. It only provides death benefit payout, in case the policyholder dies during the policy term.
The benefit offered to the life assured if he/ she meets with an accident in terms of medical expenses, hospitalization expenses, and other requirements as mentioned in the policy.
It refers to the amount that the insurer agrees to pay to the insured in case of any mishap, i.e., death or disability because of illness or accident.
It refers to the amount paid to the insurance company at regular intervals for a selected number of years or once, as decided at the time of buying the policy from the policy options available, to receive the policy benefits.
It refers to the number of years for which the premium is to be paid to the insurer. Most insurance plans have Premium payment terms equal to the policy term. Some insurers even have provisions for Premium payment terms to be less than the policy term.
It refers to the number of years for which the life cover will be valid. It is the lifetime for which the insurance policy holds well.
Free-look period is the period after the policy issuance where the policyholder can cancel the policy, if the policy terms, conditions, or benefits do not seem satisfactory without bearing any cancelling charges or penalty.
These are issued by the insurer to the policyholder, either at maturity or during the policy term, provided all the policy premiums have been made on time.
A policy whose premium payment has not been done on time becomes lapsed once the grace period for making payment also expires.
Once a life insurance policy gets lapsed due to non-payment of policy premiums on time, the policy can be again revived by making the payment of the due policy premiums. This process of restoring a lapsed insurance policy is known as reinstatement.
It works like a regular insurance policy with the difference being in the policy premium, which is done once as a lump-sum amount.
It refers to the age when the policyholders start receiving the policy benefits from the insurer.
These are the people who analyse and evaluate the risk involved when issuing a life insurance policy. The risk evaluation of policy ends when the policy claim is settled starting from the time when the policy is issued.
These are a very critical portion of a life insurance policy and refer to the parameters that are not covered under the plan; an insurer will not pay any benefit against them. An example of exclusion is death by committing suicide.
Life Insurance Plans fulfil several needs by assisting in wealth creation, offering life cover, financial assistance in unforeseen contingencies, and providing a death benefit, among others. Suppose you want to get the best insurance policy that suits your family and their requirements. In that case, it is apt to compare policies with their respective features, benefits, premium cost, charges involve, etc. and selecting the ideal policy scheme.
There are several key players in the insurance market, which offer term insurance or whole life insurance products at attractive premiums.
Here is a presentation of these life insurance plans in a tabular form for your easy comparison and analysis:
|Name of the Plan||Type of Plan||Minimum & Maximum Entry Age||Minimum & Maximum Policy Term||Minimum & Maximum Sum Assured(SA)|
|AEGON Life i-Term Plan||Term Plan||18-75 years||5-40 years||Minimum SA Limit – Rs 10 Lakh; Maximum SA Limit – No Limit|
|Aviva i-Life||Term Plan||18 - 55 years||10- 35 years||Minimum SA limit – Rs 25 Lakh; Maximum SA limit - No limit|
|Bajaj Allianz i-Secure||Term Plan||18-70 years||10-30 years||Minimum SA Limit – Rs 20 Lakh; Maximum SA Limit – No Limit|
|Bharti AXA Life Elite Secure||Term Plan||18 -75 years||10- 25 years||Minimum SA limit – Rs 25 Lakh; Maximum SA – No Limit|
|Birla Sun Life BSLI Protect @ Ease Plan||Term Plan||18 - 65 years||5 – 40 Years||Minimum SA limit – Rs 30 Lakh ; Maximum SA limit – No Limit|
|Edelweiss Tokio Life Zindagi Plus Plan||Term Plan||18-65 years||10-62 years (as per policy option)||Minimum SA Limit – Rs 25 Lakh Maximum SA Limit – NA|
|Exide Life Smart Term Insurance Plan||Term Plan||18-65 years||10-30 years||Minimum SA Limit – Rs 5 Lakh; Maximum SA Limit – No Limit|
|Future Generali –Care Plus Plan||Pure Term Plan||18 - 60 years||5 – 30 Years||Minimum SA limit – Rs 15 Lakh ; Maximum SA limit – Rs 50 Lakh|
|HDFC Life Click 2 Protect Plus||Term Plan||18 -65 years||10- 40 years||Minimum SA limit – Rs 25 Lakh; Maximum SA limit – No limit|
|ICICI Prudential iProtect Smart||Term Plan||18 -65 years||10- 30 years||Minimum SA limit – 2400 Per annum; Maximum SA - No Limit|
|IDBI Termsurance Life Protection Insurance Plan||Term Plan||18-60 years||10-30 years||Minimum SA Limit – Rs 5 Lakh; Maximum SA Limit – No limit|
|IndiaFirst Term Life Insurance||Term Plan||18-60 years||NA||Minimum SA Limit – Rs 1 Lakh; Maximum SA Limit – Rs 5 Crore|
|Kotak eTerm Plan Online||Term Plan||18-65 years||5-75 years||Minimum SA Limit – Rs 25 Lakh; Maximum SA Limit – Subject to underwriting|
|LIC’s Jeevan Pragati Insurance Plan||Endowment Plan||12 - 45 years||12 – 20 Years||Minimum SA - Rs.15 lakh Maximum SA – No Limit|
|Max Life Online Term Plan Plus with Basic Life Cover||Term Plan||18 - 60 years||10 – 40 Years||Minimum SA - Rs.25 Lakh; Maximum SA - 100 Crore|
|PNB MetLife Mera Term Plan||Term Plan||18 years – 65 years||10 – 40 Years||Minimum SA limit – Rs.10 Lakh; Maximum SA – No Limit|
|Postal Life Insurance – Whole Life Assurance (Suraksha)||NA||19-55 years||NA||Minimum SA Limit – Rs 20,000; Maximum SA Limit – Rs 50 Lakh|
|Pramerica Life U-Protect||Term Plan||18-55 years||10-30 years||Minimum SA Limit – Rs 25 Lakh; Maximum SA Limit – No Limit|
|Reliance Nippon Life Protection Plus||Term Life Plan||18-60 years||10-40 years||Minimum SA Limit – Rs 25 Lakh; Maximum SA Limit – No Limit|
|SBI Life eShield||Term Plan||18 - 65 years||5- 30 years||Minimum SA limit - Rs.20 Lakh; Maximum SA Limit - No limit|
|Sahara Shrestha Nivesh Jeevan Bima||Endowment Plan||9-60 years||5-10 years||Minimum SA Limit – Rs 30,000 Maximum SA Limit – Rs 1 Crore|
|Shriram Life Cashback Term Plan||Term Plan||12-50 years||10,15,20 and 25 years||Minimum SA Limit – Rs 2 Lakh; Maximum SA Limit – Rs 20 Lakh|
|Star Union Dai-chi Abhay Plan||Term Plan||18-65 years||15, 20, 40 years||Minimum SA Limit – Rs 50 Lakh; Maximum SA Limit – NA|
|TATA AIA Life Insurance Sampoorna Suraksha Plus||Term Plan||18-65/70 years||10-15/40 years||Minimum SA Limit – Rs 50 Lakh; Maximum SA Limit – No Limit|
Disclaimer: Paisawiki does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
This is an online term insurance plan offered by AEGON Life Insurance Company Limited. AEGON Life i-Term is a purely online insurance policy with single pay and regular pay premium paying options. This plan comes with an inbuilt Terminal Illness Benefit. Moreover, Life i-Term Plan by AEGON Life Insurance offers four additional riders.
This is an online plan for term insurance by Aviva Insurance. Aviva’s i-Life Total offers you affordable additional coverage against 16 critical illnesses and disability. There are four plan options –Protect, Protect Plus, Protect Assured and Protect income. You can choose any one of these options as per your insurance needs. You can also avail of the Return of Premium option under particular circumstances. For large sum assured optio0ns, you can avail of certain rebates online as well.
Bajaj Allianz iSecure is a non-participating, non-linked term life insurance plan. iSecure term insurance plan by Bajaj Allianz is individual, life regular, premium level cover pure risk premium plan, which offers protection to the financial needs of the family of the policyholder.
Bharti AXA has presented this long term plan that provides comprehensive coverage at affordable premiums. This plan is a pure term plan meant solely for protection purposes and provides coverage until 75 years of age. The nominee will get the sum assured amount in case of the unfortunate demise of the policyholder. It gives the option of two riders- Accidental Death & Disability Benefit Rider and Critical Illness Benefit Rider. This plan offers lower premiums to female policyholders.
A joint product of Aditya Birla Group and Sun Life Financial Inc., this insurance product offers extensive insurance along with two applicable riders. This plan provides death benefits along with a joint life cover with your spouse. The policyholder also has the flexibility to increase his sum insured cover in case of his marriage or childbirth in case he has opted for level term Insurance. This plan also has an in-built terminal illness benefit and offers rewards to the policyholder for following a healthy lifestyle, i.e. no claims made in a year.
This plan is offered by Edelweiss Tokio Life Insurance Company. Zindagi Plus Plan is a customizable and innovative life insurance product. It offers an additional life cover for the spouse of the insured with Better-Half option. The policyholder can choose to increase the life cover at different crucial stages of life.
Exide Life Smart Term Plan is a unique term life insurance policy, which provides comprehensive protection options. Moreover, it also returns the overall premium paid by the policyholder on the completion of the term of the policy.
If you are looking to safeguard your family financially against loans and liabilities, this plan from Future Generali offers a high sum insured cover at affordable premiums. You can choose from the two available plans options-Classic and premium. It is a tax-saving term plan which also has two rider options available- Non-Linked Accidental Death Rider and Accidental Benefit Rider. This plan also comes with a provision to appoint a nominee.
HDFC Life Click 2 Protect 3D Plus offers comprehensive security at an affordable price. This term insurance plan is available online and provides a secure cover in case of the 3Ds, i.e., Death, Disability and Disease. There are 9 customized term plan options available from which you can choose any one as per your requirements. You get the future premiums waiver benefit on Accidental Total Permanent Disability, which is available under all options. This facility is also available on the diagnosis of Critical Illness under 3D Life and 3D Life Long Protection plan options.
This is a popular term plan by ICICI Prudential with a Critical illness cover. You can easily afford a large term cover at low premiums. This plan gives the payout amount upon the first diagnosis of any of the 34 illnesses covered under the policy, without the need of any hospital bills.
This plan offers four payout options, and you can choose anyone based upon your financial requirements. These are Lump sum, Income, increasing income, and Lump sum plus Income. In case of any terminal illness, this plan will pay you the life cover.
It is an endowment policy of the non -linked type. The sum assured increases every five years for the term of the policy. It offers insurance along with savings. You pay a regular premium for a policy term of 5 to 20 years. The life cover will increase automatically with every block of 5 policy terms.
You get 100% of Sum Assured amount for 0-5 year's tenure, while for a tenure of 6-10 years of policy; you get 125% of Sum Assured. It increases to 150% of the Sum Assured and is 200% of the Sum Assured for 16-20 years of the policy
This is a comprehensive term plan offered by Max Life Insurance at affordable premiums. Here the nominee gets the Sum Assured on the death of the policyholder. This plan follows an entirely online application process. The policyholder can choose from 3 death benefit options- Sum assured, the sum assured plus level monthly income, and sum assured plus increasing monthly income. The premium amounts for the plan variants changes as per the option chosen.
This term plan comes along with the choice of two riders-Max Life Comprehensive Accidental Benefit Rider and Max Life Premium Waiver Plus Rider.
This plan aims to provide financial security to your family in your absence. It provides coverage up to 99 years, with joint life coverage for a spouse also available in the same policy. This plan offers customized protection with four payout options-Lump sums, Lump sum with regular Income, Lump sum with increasing income, and lump sum with steady monthly income till the dependent child turns 21 years. This plan gives benefit to non-smokers in terms of lower premiums. You can also increase your coverage amount in the middle of the tenure as a top-up in case of important life events, like marriage or childbirth.
This plan for life insurance by SBI provides life insurance benefits for you and your family. It gives two benefits structures-level Cover and Increasing Cover. There are also two rider options- Accidental Death Benefit Rider, and Accidental Total & Permanent Disability Benefit Rider. This plan has an in-built terminal illness benefit and has affordable premiums. The insured person also gets the benefit of a second medical opinion in case of any critical illness. You can buy this term protection plan online easily.
You can also increase your cover every year through the available top-up option, and can also choose your policy and premium payment terms. This plan from HDFC offers special premium rates for women, non-tobacco, and non-smoker users.
Buying a life insurance policy involves the consideration of several crucial factors. It is, therefore, prudent to compare the various life insurance plans existing in the market before selecting the insurance policy that is best suited to the needs of the prospective policyholder.
This step is necessary before you attempt to buy any life insurance policy. There are a host of insurance products available in the market, and in the absence of proper knowledge, you may land up choosing a policy that you may not need or that is financially exhaustive for you. Before making any purchase, you should be aware of why you need the plan and for whom.
It is advised to keep a tab on the requirement of the family from time to time. As with significant life events such as marriage, job change, the birth of a child, etc. insurance requirements keep varying.
A complete analysis of the family income, expenses, surplus funds, future financial planning, retirement funds, loans, etc. must be done to know the exact life covered that would best suit the family needs. Do not just choose a policy because it has low premiums; a low coverage amount may also have lesser premiums which may not be your goal.
Individuals must mandatorily check and reconfirm their premium paying capacity before beginning an insurance plan. It ensures a regular and timely payment of policy premiums, beneficiary getting policy benefits and avoidance of any policy lapse situation. Do not just choose a policy because of low premiums.
Before you finalize an insurance plan, you can take some time to compare and analyse similar products from different insurers. Analysing the policy quotes of all policy plans that provide the same benefits and features would help in selecting the most feasible plan with maximum benefits. It proves simpler when an insurance policy is bought online.
Riders are available with life insurance plans having different benefits. However, it is recommended to take an additional rider only in the case it provides a feature that meets the set financial goals and life cover and avoids adding on riders without complete clarity and understanding.
A policy document is the most crucial document that must be read and understood to avoid any misunderstandings and unpleasant situations later. Reading the fine print is a must so that you do not skip out any important policy details, like plan inclusions and exclusions, or what does not lie within the purview of your insurance cover.
It is advised to select policy plans that offer tailor-made programs and can be moulded as per customers' requirements. It is helpful in the long run, when significant life events like marriage, or childbirth, or any unexpected contingencies can put financial pressure on you. Features such as premium paying mode, policy tenure, payout, and sum assured are the significant factors to be considered.
Another significant factor that must be considered while finalizing a policy plan is the claim settlement ratio of the life insurance company. This ratio is the number of insurance claims that the insurer has successfully settled compared to the total number of claims received by them. This ratio is different for each company and varies each year. Choose companies that have consistently maintained a high Claim Settlement Ratio.
Life Insurance plans not only to provide protection to you and your family in times of need but also act as a safety cushion when disaster strikes. They also come along with a host of benefits, which are as follows:
The foremost benefit of buying a life Insurance policy is that it offers life cover and sum assured with maturity benefits. The policy cover aims to cover your risk of life, which you take care of in the form of the policy premiums.
In case of any unfortunate incident like the death of a policyholder, a Life Insurance policy assures that the death benefit along with the bonus amount is paid to the nominee/ beneficiary. It helps to take care of your dependents in your unfortunate absence with financial protection.
Life Insurance policies prove to offer high returns on investment with their risk-free, safe returns, bonuses, and many other benefits that are part of the life insurance plans.
All insurance policies are benefitted under section 80C (policy premium), and section 10(10D) of the Indian Income Tax Act. The policyholder can claim tax deductions for life insurance premiums paid for self, children or your spouse under Section 80C. Policyholders can also opt for investment in tax saving life insurance like ULIPs (Unit-Linked Insurance Plan) with a lock-in period of 5 years.
A Life Insurance plan offers you the facility to avail loan as a percentage amount of the sum assured. This feature, however, might vary as per company policies.
A life insurance plan helps in planning for the various stages of life such as child's education, higher studies, marriage, retirement plans, buying a home, or other essential occurrences. You can plan your future expenses and liabilities and accordingly take a life insurance cover.
Some life Insurance Plans offer means to invest the money in the market and simultaneously leading to profitable wealth creation at maturity. Life Insurance policies can assist in your long term wealth creation projects by first allocating your money to your life cover.
These are the additional benefits that can be bought with a life insurance policy for extra coverage. These include riders for critical illness, family income benefit, personal accidents, and some others. These riders add additional benefits to the basic policy at nominal costs and provide you with extra customized coverage in case of accidents, illness or disability.
Several tax benefits apply to a policyholder when buying a life insurance policy. These Tax Benefits are appended under their respective headings.
Under section 80C of the Income Tax Act, Exemption up to Rs 1.5 Lakh can be availed through the Life Insurance policy premium. Some noteworthy points here are:
Some additional points that must be known while availing tax benefit through a life Insurance policy scheme are:
Sum assured, as mentioned above, refers to the minimum amount guaranteed to the survivor under a given policy plan. This amount, however, does not include any policy bonus or premium that is to be returned.
Under section 10(10D) of the Income Tax Act, the maturity amount received for any insurance policy is eligible for tax exemption under section 10(10D). Whether it is a maturity benefit or a death benefit, any kind of maturity amount received by the beneficiary is eligible for exemption under the Income-tax Act.
There are, however, certain factors that must be known regarding tax exemption under section 10(10D).
Any benefit received from a policy premium where the total premium is greater than 10% or 20% of the sum assured is eligible for tax.
It is the purest form of life insurance. This type of insurance provides coverage for a specific term of the policy or a fixed number of years. It ensures financial security to the nominee/ beneficiary in the form of monetary assistance upon the death of the life assured during the policy term. If the policyholder outlives the policy term, there is no coverage amount received.
The main aim of a Child Insurance Plan is to secure a child’s future by assisting in accumulating a corpus that would meet the higher education/ marriage needs of children. The parent’s death does not influence the child plan, and it has an in-built waiver of premium benefit. The child will get the maturity benefit as promised by the plan. The insurance plans for children can be of the following types:
These plan options are a traditional insurance plan that offers savings and insurance benefits to the policyholder. Some main features of a Money Back Plan are as follows.
Endowment Plan is an insurance plan option that offers savings with insurance coverage after a certain period or upon the death of the policyholder. If the insured person survives the policy term, he will get the Endowment benefit or the maturity benefit. Some features of an endowment plan are as follows:
A Unit Linked Insurance plan is a blend of life cover and wealth creation in a single insurance policy scheme. Under a ULIP plan, the policyholder's money grows at a faster rate while simultaneously offering protection with insurance. Some standard features of a ULIP plan are as follows.
A Whole Life Plan is an insurance plan that offers assured death benefits during the lifetime of the policyholder. The life cover under this plan applies to the person assured is alive, and all policy premiums are paid. Whole life plans are Permanent life Insurance plans and have savings as well as an insurance component. The policyholder can use the savings component either as an investment or for securing loans on it.
In case of an annuity, the insured person makes either a lump-sum payment or series of payments to the insurance company. In return, he will receive regular payments either immediately or which begin at some point in the future.
Life insurance pension plans provide a wide range of annuities. They come along with many payment options, like an annuity that provides a regular monthly income or pension during the rest of your life. There are also annuity plans where the insured person and his spouse can continue to receive the income.
The main difference between an annuity and a pension lies like the payment made. In the case of annuities, you buy an annuity after retirement to provide you with a guaranteed regular income. A pension plan allows you to invest your entire life to pay you out a steady income after retirement.
The Life Insurance policies available in the market are categorized as per their policy term, features, costs, and benefits. These categories are represented in a tabular form as given below.
|Plan Type||Overview||Term (years)||Death Benefit||Maturity Benefit||Premium|
|Endowment||Protection Plan||10-35||Payable to the nominee||On survival||High|
|ULIP||Insurance cum Investment||10-20||Payable to the nominee||On survival||High|
|Money Back||Protection + savings||5-25||Payable to the nominee||On survival||Affordable|
|Whole Life||Protection + savings||Whole life or 100 years||Payable to the nominee||Policyholder reaching a certain age||High|
|Pension/Annuity||Non-participatory||Return of invested amount||Policyholders are entitled to regular pension||Moderate|
|Term Plan||Basic life insurance||Payable to the nominee||No||Lowest|
Life insurance seeker can follow the steps below to buy a life insurance policy online:
Steps to Buy Life Insurance Policy Online
A Life Insurance Policy can be bought by visiting any IRDA approved insurance company, contacting a government and IRDA approved insurance advisor or purchasing an online policy. To get a life insurance policy through a convenient, cheaper, and hassle-free way, buy online life insurance plans and avail the same benefits.
Buying an online policy of life insurance has the following benefits:
When planning to buy an insurance policy online, it is imperative to make a thorough comparison of the available life insurance policy plans existing in the market before selecting the plan that matches the requirements of the prospective buyer. Keep in mind to check the riders available with the plans and choose a policy that offers maximum benefits, riders, cover at a minimum premium cost.
Customers have always preferred the traditional channels for buying life insurance policies through insurance agents at the insurance offices. This trend is changing gradually as consumers move towards the internet to purchase insurance policies. Now that we know how to buy any life insurance policy online let us go through the advantages of buying a Life Insurance plan online, rather than buying it offline at the insurance office.
Money is the main deciding factor when it comes to buying any insurance product, whether online or offline. If you purchase an online life insurance plan, it will cost you less as compared to the regular offline one. It is because there is no involvement of any agent which results in cost reduction for online sales. Any intermediary cost or agent commission is thus removed.
On the other hand, if you buy insurance offline from any insurance agent, then the addition of their commission increases the premiums. Nowadays, more and more insurance companies are offering low-premium insurance plans online as compared to offline policies.
The process of buying a life insurance policy online allows you to get all the information about various insurance plans available on the website itself. You can quickly gather detailed information regarding insurance policies, their costs and premiums. You can also get to know the various features and benefits associated with the plans at one place.
This makes it easy for you to buy insurance purchase online, and you can get the desired policies under one roof. In case you buy an insurance policy from an agent, you get limited to the information provided by your agent.
Purchasing an insurance policy online provides you with a great deal of flexibility as you can directly deal with the product on the insurance website of the insurer or the insurance aggregator. You have the facility to access the insurance company’s website and directly explore the full policy terms and conditions.
On the other hand, when you buy a plan offline, there are chances that your insurance agent might try to persuade you into buying something of their choice and not as per your decision. Most agents may pressurize your decision as they have specific sales targets to meet.
The online application process for insurance has paved the way for a quick and easy procedure for the customers. Now you can comfortably sit in the comfort of your home, and start your insurance policy purchase process. You can compare different policies from any online insurance aggregator and select the one that suits your needs without putting any unnecessary financial burden.
Most websites provide a step by step guide to assist you in purchasing a policy online that will further simplify things. You just need to have a computer with an internet connection and a debit card to buy a policy online. Your insurer will send your policy document at home.
Each rider serves a separate purpose. The selection of the rider that would suit a given policyholder's requirement is the crucial factor that must be considered when buying riders.
Riders Available With a Life Insurance Policy
Simply put, an insurance rider is provisions that can be used to adds benefits to an existing life insurance policy or modify the terms of a basic insurance policy. Riders help to customize insurance plans. They provide insured persons with options such as additional coverage or extra benefits like accidental cover or disability cover; they may even restrict or limit coverage. Additional costs are incurred if a rider is included with an insurance policy.
.A vital point worth mentioning is that riders are additional benefits, which should be bought depending on one’s requirement after carefully considering all factors. Also, riders are added to the base insurance policy after payment of an additional fee.
Addition of riders can significantly enhance the basic insurance policy. There are various categories of riders available, and depending upon your needs, you can opt for anyone of them. Care must be taken to go through the rider terms and conditions carefully, to understand what is included and what is excluded from their coverage area.
Some riders available for policyholders are as below:
This is a rider added to the life insurance policy to protect the policyholder against financial loss in case of any terminal illness. In case of a critical illness rider, the payout benefits are payable to the insured for medical expenses before his death. The additional cover is equal to the sum assured on the base policy. It is paid upon diagnosis of the illness. This rider protects the policyholder against critical ailments such as heart attack, cancer, kidney failure, coma, stroke, paralysis, etc. The list of critical illnesses covered by insurance companies may vary and must be checked with the respective insurance companies before taking the rider.
Here, the accidental death benefit is a payment made to the policyholder who holds an insurance policy for accidental death. This death benefit is paid along with the standard benefit payable to the policyholder as death payout. In this rider, the nominee will get the policy benefit if the policyholder’s demise is due to an accident. In some cases, the policyholder may die after many days of the accident. Even in such cases, the nominee gets the accidental death benefit along with the sum assured.
If the life insured is unable to make policy premium payments due to an unforeseen disability and loss of income source, the life insurance policy gets terminated with no benefit to the insured. In such a scenario, the waiver of premium rider waives off all future premiums and ensures that the life insurance policy remains in force and active. However, to avail of this rider, the policyholder may need to meet specific age and health criteria.
This rider is of great use in case the policyholder becomes disabled in an accident which impairs his earning capacity. Under this rider, if the insured is unable to earn any income owing to total permanent or temporary disability, the riders provide financial aid to the insured delivered in the form of a monthly income.
This rider is useful and comes handy if the insured person needs more insurance coverage in the early policy years. However, this does not hold good for the entire life term. Under this rider, the insured person’s nominee gets an additional death benefit in case of unforeseen and premature death of the insured. This benefit is paid either as a lump-sum payment or in monthly instalments.
Under this rider, a lump-sum payment is made by the insurer if the insured has to undergo any medically necessary surgery performed in India for a hospitalization period of at least 24 hours. The surgeries covered under this rider may vary from company to company. This rider provides a lump sum payout in case of surgery.
This rider assures a guaranteed amount paid to the insured in the event of any unforeseen or unplanned hospitalization during the coverage period of the insurance policy. The customer can be covered for hospitalization expenses for up to 30 days. The rider benefit, in this case, may vary for different companies. This rider has to be bought along with a base insurance plan and cannot be bought as a separate product.
In all, you can customize your life insurance policy by adding an appropriate rider. The addition of riders varies from one insurer to another. Some companies allow riders to be added only at the inception of the policy. Others enable the riders to be added only after completing a specific policy term. A policyholder cannot add all kinds of riders to his life insurance policy. Also, there are some riders whose benefits are only available with online insurance plans of the companies.
To get the life insurance payout amount, you need to file a claim which is essentially a request to the insurer to help you with the payout support. Life insurance claims are of two types: Death claims and Maturity claims. A Death claim is made to the insurer in case of death of the policyholder by his assignee or the nominee. A Maturity Claim is made by the policyholder himself when he survives the policy term, and the plan reaches its maturity value.
This claim will be made by the family members or the nominated person of the policyholder in the event of the death of the policyholder. The person who is making a claim should be the same as the one assigned as your nominee in the life insurance policy document.
This claim is made by the policyholder when he survives the full policy tenure. In such cases, he is eligible to claim the maturity value. Once the policy tenure is over, the policyholder can file a claim to collect the maturity amount from the insurance company.
Whether it is a Death Claim or a Maturity Claim, the first step in making a life insurance claim is informing your insurer about the claim. The insurance company needs to be informed on time about the claim. They will request you to fill a claims form and submit the required documents as part of the Claims Settlement Process.
Below we discuss how you can file a life insurance claim, both in case of death of the policyholder and in case of maturity of the policy.
In case of death of the person who has a life insurance policy, the very first step is to send claim intimation to the insurance company.
The claim intimation should contain complete and accurate information related to the date and place of death and its cause
If the policyholder had any insurance agent, his nominee or assignee could take their help to deal with the insurance company and fulfil the required claim formalities.
Once the insurance company is notified of your claim, they will acknowledge the Claim Intimation and will require these documents to be submitted:
Many policyholders survive their policy terms and would like to recover their payout amount. In such cases, the insurance company automatically sends them intimation about when the life insurance policy is maturing, two to three months in advance. It is accompanied by a discharge voucher that provides details about the maturity date and the amount payable at maturity.
Once the policyholder receives the discharge voucher or receipt, he has to sign it in the presence of a witness and then send it back to the insurance company along with the original policy document.
In some cases, the policyholders assign the policy to some other person or entity (like a housing loan company). Here, the claim amount will be paid only to the assignee.
Once the policyholder submits the claim, the insurer will issue a settlement shortly. In the meanwhile, you can decide about the way the proceeds need to be distributed. There are generally four available options:
Specific Income — The policyholder or his nominees get both the principal and interest on a predetermined schedule by the insurer
Life income — The policyholder receives a guaranteed income for his whole life. This amount of income depends on the payout amount or the death benefit, gender and age at the time of the insured's death
Claim settlements are a lengthy process and need time and patience. It is, therefore, necessary to file a life insurance claim promptly and correctly, with all the required documents submitted to avoid rejection of claims.
Any person opting for a life insurance cover would like to know what Documents Required for Life Insurance Policy.
Life insurance companies will require specific documents from you when you purchase a life insurance plan in any insurance category. If you are planning to buy any Life Insurance policy, you can gather useful information regarding what documents you need to submit to your insurer. It will make the process quick once you have prior knowledge of all the documents required for the plan.
Let’s check all the documents required. These documents can be submitted to your insurance company in any of the following ways:
You can email the complete set of necessary documents to customer service email id of the insurance company, or,
You can also send the documents by courier to the closest life insurance office branch
You need to collect and submit the following documents when applying for a life insurance plan:
Human life is priceless. A mere life insurance policy cannot cover it entirely, but it can certainly provide enough for sustaining the needs of your family a long time after you are gone. Most people enrol in a term life insurance plan to secure their family's financial future in case they are no more. If the policyholder meets an untimely death, a life insurance policy can provide sufficient cover for their family and dependents.
The extent of life insurance that you need depends on your income, age, liabilities and the number of dependents. Let us see how:
Income is the main determining factor in the case of buying any insurance product. Your premiums will be decided based on your income. Whether you need a large insurance cover or additional riders, or would you go in for top-ups, will be determined by your income.
For young people who are unmarried and earning, and looking for life insurance, their insurance requirement is not that high. Similarly, for people in their fifties, with a decent income and investment, and their liabilities settled, again, the life insurance requirement is not going to be too high.
This factor includes your monthly expenses, loan repayments or other credit payments. You may have a decent income, but if your monthly expenses are high, it may impact your premium amount. Increased liabilities can also limit your capability to opt for a large cover.
This will include all your family members in your care whose future you would like to secure the life insurance policy. Your spouse, children, and parents all come under this. The more dependents you have, the higher the insurance cover that you may need to take care of their needs in the future.
According to financial experts, the life insurance coverage should be at least 10-15 times the annual income. Today, this is generally taken as a popular term life insurance cover of 1 Crore. However, the premiums for this figure cannot fit into every budget. Thus, the question of what can be adequate life coverage arises. You can aim for a life cover of at least 5-10 times your annual income as a minimum amount.
As a basic principle, your life insurance cover should be adequate to generate income that can take care of your family in case of your untimely demise. You can also opt for Income replacement plans with increasing income. Here the insurer will pay the surviving dependents of the policyholders a one-time payout with an increasing monthly income. In some other plans, the payout is spread over 10-15 years, instead of being a lump-sum payment or a monthly amount.
To make things easier for you, you can use the online Life Insurance Calculator tool to determine the right amount of insurance cover that you will need.
would be an appropriate amount for his insurance coverage. This determination is essential, keeping in mind the payout that would be required to meet the financial needs of the insured person's family in his absence. The coverage needs differ from person to person, based on their current financial status, current and future liabilities, age, health and family structure.
A life insurance calculator is an online tool that assists you in determining the amount of life insurance coverage required based on your income, expenses and liabilities. This financial tool comes along with various features that can range from a basic calculator to a tool that provides a graphical summary and even a premium payment schedule. It will assist you in knowing the life insurance cover.
You do not need to speculate your life insurance amount every time. You can make use of a Life Insurance calculator. This is an online tool that will help you to determine your life insurance cover based on practical financial calculations, rather than estimations and speculations.
This life Insurance Calculator tool is based on a logical rationale. The calculation is based on the fact that in case the earning member of a family dies, the payout should be such that it can cover the family debts or liabilities(if any), and should also be able to help the family members in maintaining their basic lifestyle. This income should be applicable for at least ten years till the time the dependent members can arrange for some alternate source of income.
There are various kinds of Life Insurance policies available in the market. They can be categorized into any of the following schemes:
You can easily access the life insurance calculator online on the website of the insurer or the insurance aggregator. You need to fill in some necessary details like your income, age, assets and liabilities and gender. This tool will give you the sum assured and premium results after some calculations.
Here are the steps that you need to follow to use the calculator:
Based on the details that you have provided as input and in-built calculations, the calculator will give you a suggested life insurance coverage amount. Some tools have additional functionality to provide a tentative premium payment schedule and amount as well.
Some of the core benefits of using the Life Insurance Calculator are as follows:
If you go about calculating the life insurance premiums or the coverage amount as such, it may consume a lot of time, and the results may also not be always accurate. Essential factors on which these calculations depend can also be missed out. However, with the use of this calculator tool, you can calculate and re-calculate your insurance coverage amount or premiums any number of times with equal accuracy and in seconds. It saves a lot of time and makes this tool accessible.
Using the calculator properly allows you to determine your life insurance coverage amount under various parameters of age, gender, income, assets, liabilities and health habits. It also takes into account inflation rates. You can calculate various coverage amounts to find out the one that is the most cost-effective for you. Accordingly, you can also get information about your premiums under different tenures, policy covers and other factors.
This is an important feature as well as a benefit of using the life insurance calculator tool. You can use it as many times as you want to determine insurance cover amounts from different plans and insurers. You can alter term periods or amounts to see the impact on the calculated premium amounts. It will help you determine the best option among the various available insurance plans of a similar nature. Comparison and analysis lead to making the right choice.