WHAT IS LIFE INSURANCE?
A contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period. Here, at ICICI Prudential Life Insurance, you pay premiums for a specific term and in return, we provide you with a Life Cover. This Life Cover secures your loved ones’ future by paying a lump sum amount in case of an unfortunate event. In some policies, you are paid an amount called Maturity Benefit at the end of the policy term.
IMPORTANCE OF LIFE INSURANCE
It is a great tool that will help your family in meeting their critical needs and lead a comfortable life even when you are not around. This is because the Insurer will pay the Beneficiary of your Policy a predetermined sum of money after your death. It could also be given if you are bedridden with a critical illness. Life insurance is therefore the most essential insurance Policy that you can have in your savings and investment portfolio.
Family’s Financial Requirements
If you are the only person in your family who is earning, then the family’s income will cease when you are no more. The standard of living will fall and they may not be able to meet even basic needs like education. Life insurance Policy will come to your family’s aid during such phases of life.
Loans and Expenses Repayment
You may have taken a loan along with your spouse. Or you may have borrowed money from a friend for starting a business. Also, you may have just started your family and your child is still very young. In all these cases it is your spouse who will have to bear the heavy burden of paying off the loan and managing your child’s education. Major expenses can help your spouse by buying a life insurance Policy early in life.
Diverse Investment Options
Life insurance Policy can be used as a good investment option. There are various kinds of insurance policies and you can use them for different purposes. For example, retirement plans, child insurance plans, whole life insurance plans, Term life insurance plans etc. are all good life insurance policies. Term plans are exceptional case which don’t have an investment component, all others are good investment options too.
Illnesses and Accidents
Insurances like these always act as a good protection tool against the financial pressure that you will face during a serious illness or accident. Best treatment will be taken from the best hospitals without worrying about the financial burden and all the insurance policies should be purchased when you are young and free of illnesses.
Life insurance policies are a good way of saving tax too. Under Section 80C of the IT Act, many of the insurance schemes in India including the life insurance schemes offer tax deductions on Premium payments.
WHAT ARE THE DIFFERENT TYPES OF LIFE INSURANCE POLICIES IN INDIA?
1. Term Insurance Plans-Term insurance, a type of life insurance, provides coverage for a certain period of time or years. If the insured dies over the policy tenure a death benefit (or sum assured) is paid out. No payout is made if the insured survives the tenure.
2. Endowment Policy-An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its ‘maturity’) or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness.
3. Unit Linked Insurance Plans(ULIP)-A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan.
4. Money Back Policy-In a money back plan, the insured person gets a percentage of sum assured at regular intervals, instead of getting the lump sum amount at the end of the term. It is an endowment plan with the benefit of liquidity.
5. Whole Life Policy- Whole life insurance, or whole of life assurance (in the Commonwealth of Nations), sometimes called “straight life” or “ordinary life,” is a life insurance policy. It is guaranteed to remain in force for the insured’s entire lifetime, provided required premiums are paid, or to the maturity date.
6. Annuity/Pension Plans-A pension plan is the retirement amount, which an individual gets from their insurance companies on a regular basis or in the form of a lump sum. There are various types of such plans available in the country offered by various companies…The sum you gain is can be termed as either the annuity or pension.
APPLY IN QUICK AND EASY WAY
DOCUMENTS REQUIRED FOR LIFE INSURANCE
-Birth Certificate, 10th or 12th mark sheet, Driving License, Passport, Voter ID, etc.(Anyone)
-Driving License, Passport, Voter ID, PAN Card, Aadhar Card, which proves one’s citizenship
-Electricity Bill, Telephone Bill, Ration Card, Driving License, Passport, should clearly mention the permanent address
-Income Proof specifying the income of the person buying the policy
Passport Size Photo
-To have a record of the insured person’s identity for future references
-Some plans may also require medical tests
TOP 10 LIFE INSURANCE COMPANIES IN INDIA:
1. LIC (Life Insurance Corporation of India)
LIC, or Life Insurance Corporation of India, as it is known in its extended form, is India’s sole life insurance provider from the public sector. Having commenced operations in 1956, LIC is the oldest life insurance company in the country, and it was formed thanks to the amalgamation of over 245 provident societies and insurance companies. The company’s headquarters is located in Mumbai, and it currently boasts more than 110 divisional offices in addition to 8 zonal offices, more than 14 lakh insurance agents, and more than 2000 branches.
LIC offers stretching from term life insurance plans to investments to savings products. It is one of the few companies that is currently thriving in both rural as well as urban areas in the country.
2. SBI Life Insurance
SBI Life Insurance was registered in 2001 and commenced operations as a joint venture between BNP Paribas Cardiff and State Bank of India – two among the biggest service providers so far as the finance sector is concerned. BNP Paribas Cardiff holds 26% stock in the company while SBI holds the other 74%.
SBI has one of the largest product portfolios in the industry, offering solutions for a variety of situations. The unit-linked insurance plans made available by the company include SBI Life – eWealth Insurance, SBI Life – Smart Wealth Assure, SBI Life – Smart Scholar, SBI Life – Smart Power Insurance, SBI Life – Smart Wealth Builder, SBI Life – Saral Maha Anand and SBI Life – Smart Elite. The two child insurance plans that can be purchased from the company include SBI Life – Smart Champ Insurance and SBI Life – Smart Scholar.
3. ICICI Prudential Life Insurance
ICICI Prudential Life Insurance Company was formed as a joint venture between Prudential Plc., which is one of the largest global financial services group from the UK, and ICICI Bank, which is among the biggest and most successful private banking institutions in India. ICICI Bank holds 74% of the stake in ICICI Prudential Life Insurance Company, while Prudential Plc. Holds 26%.
The company remains India’s primary private life insurer to have been accredited from Fitch Ratings with a National Insurer Financial Strength rating of AAA. ICICI Prudential has was also voted as the country’s Most Trusted Private Life Insurer for three years in succession thanks to its delivery of quality products and services.
4. HDFC Standard Life Insurance
HDFC Standard Life Insurance Company is among the best Life Insurance providers in India. It is a private institution that offers long-term insurance solutions to customers in almost 1000 cities across the country. The company was registered in 2000 and has its headquartered in Mumbai and currently boasts around 14,000 employees in addition to over 400 branches to ensure that all the insurance requirements of their customers are catered to. The main products offered by the company include investment, savings, pension and health in addition to other specially-designed solutions for women and children.
Among all its achievements, HDFC Standard Life Insurance Company stands out for becoming the pioneer in the finance sector to provide pension plans to customers under the new IRDA regulations. The company offers protection plans, health plans, retirement plans, young star plans, savings and investment plans, and women’s plans.
5. Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance Company was formed as a joint venture between Germany’s Allianz SE and India’s Bajaj Finserv. The company was registered in 2001 under the name of Bajaj Allianz Life Insurance Company and has turned out to be one of the best and most trusted life insurers in the country. The company also offer several general insurance products as well as other financial services in 70 countries across the globe. The company’s performance in recent years has been truly exceptional and its receipt of the “Best Life Insurance Company in the Private Sector” at the BFSI Awards ceremony in 2015 confirmed just that.
Among the child plans offered by Bajaj Allianz Life Insurance Company are Traditional Savings Plan – Bajaj Allianz Young Assure and Bajaj Allianz Lifelong Assure, while the investment plans made available to customers include Savings Plan – Save Assure, Savings Plan – Guarantee Assure and Investment Plan – Invest Assure.
6. Max Life Insurance
Max Life insurance company has developed a reputation for providing comprehensive retirement and life insurance solutions for protection and long-term savings to over 30 lac individuals across the country. Max Life Insurance Company has won several accolades over the years to show for its quality products and services, the most prominent of the lot being the “Best Underwriting Initiative of the Year” at the Asia Banking Financial Services and Insurance Excellence Awards in 2015.
The company boasts a relatively large product portfolio. The term life insurance plans offered by Max Life Insurance Company include Max Life Online Term Plan Basic Life Cover, Max Life Online Term Plan Life Cover + Monthly Income, Max Life Online Term Plan Life Cover + Increasing Monthly Income, Max Life Super Term Plan, Max Life Platinum Protect II and Max Life Premium Return Protection Plan. The unit-linked insurance plans offered by the company include Regular Premium plans, Ma Life Fast Track Super Plan and Max Life Maxis Super Plan
7. Birla Sun Life Insurance
The term life policies offered by Birla Sun Life Insurance Company Limited include Birla Sun Life Insurance Protector Plan Plus, Birla Sun Life Insurance Future Guard Plan, Birla Sun Life Insurance Easy Protect Plan and Birla Sun Life Insurance Protect @ Ease. The savings with protection plans you can purchase from the company include Birla Sun Life Insurance Vision MoneyBack Plus Plan, Birla Sun Life Insurance Vision Life Income Plan, Birla Sun Life Insurance Vision Endowment Plan, Birla Sun Life Insurance Savings Plan, Birla Sun Life Insurance Vision Life Secure Plan, Birla Sun Life Insurance Income Assured Plan, Birla Sun Life Insurance Vision Regular Returns Plan, Birla Sun Life Insurance Vision Endowment Plus Plan and Birla Sun Life Insurance Guaranteed Future Plan.
The only solution for children’s future offered by Birla Sun Life Insurance Company Limited is the Birla Sun Life Insurance Vision Star Plan. However, there are options to choose from when it comes to purchasing retirement solutions, including Birla Sun Life Insurance Empower Pension Plans, Birla Sun Life Insurance Immediate Annuity Plan and Birla Sun Life Insurance Empower Pension.
8. Kotak Life Insurance
One of the largest life insurance providers in India, Kotak Mahindra Life Insurance Company is a joint venture between Old Mutual Fund and Kotak Mahindra Bank Ltd. Old Mutual Fund holds 26% of the stake in the company while Kotak Mahindra Bank Ltd. holds the remaining 74%. The headquarters of the company is located in Mumbai and the company has grown exceptionally ever since it commenced operations in 2001. You know India is the fastest growing insurance provider and currently boasts more than 4 million customers. The clam settlement ratio of the company is among the highest in the industry, highlighting the company’s quality business practice.
Kotak Mahindra Life Insurance Company has an impressive insurance product portfolio. The term life insurance plans that can be purchased from the company include Kotak Preferred e-Term Plan, Kotak Preferred Term Plan, Kotak Saral Suraksha and Kotak Term Plan. The unit-linked insurance plans offered by the company include Kotak Assured Income Plan, Kotak Single Invest Advantage, Kotak Platinum, Kotak Wealth Insurance, Kotak Ace Investment Plan and Kotak Invest Maxima.
9. Reliance Life Insurance
Now, it is among the most important subsidiaries of Reliance Capital, which is among the best financial service companies in the country. The company has a diversified business portfolio, and customers can find products across a variety of categories, including insurances of all types, mutual funds and asset management.
The company also employs more than 1 lac advisors, and has gained a reputation as the biggest non-bank supported private life insurance company. Reliance Life Insurance Company Limited has a relatively huge insurance portfolio too. Whether you are looking for protection plans, health plans, child plans, retirement plans, savings and investment plans, group plans or unit-linked life insurance policies, the company has it all.
10. IndiaFirst Life Insurance
If we talk about India country’s youngest life insurance companies then it is IndiaFirst life Insurance. With its headquarters in Mumbai, IndiaFirst Life has spread across 1,000 cities in India. It is a joint venture between Bank of Baroda with 44% stake, Andhra Bank with 30% stake, and Legal & General group with 26% stake. Legal & General group is UK’s pioneering risk, wealth and investment brand. The company boasts of immense experience in banking, wealth and financial management.
IndiaFirst Life has developed a range of products catering to needs such as savings, health, retirement, protection, and employee liability plans. Integrated technology across purchase, pre-purchase, and post-purchase cycle turning out a seamless experience for its stakeholders. IndiaFirst Life works on the ‘Customer First’ principle, making it a customer friendly insurance company. Products offered by this company are according to individual’s need & life goals of its customers. While in the individual product category, you can plan your protection, retirement, or even legacy, in the group product category, organisations can plan their protection and savings for their members.
USEFUL TIPS TO BUY LIFE INSURANCE
Still confused about comparing life insurance online, then here are a few tips that will help you a lot in choosing the best and affordable one.
Lower Premium for beginners-
There is no doubt in saying that the premiums of life insurance are calculated on several factors. The younger you are, the lower will be the premium. At an young age you can purchase a life insurance as it will help you in availing a long-term, low-cost cover through which you can easily secure the future needs of your loved ones and several other things.
Calculate Your Requirements-
It is the very crucial step, before buying life insurance you must first understand your needs of having it. Consider all your needs of present and future along with the financial obligations, don’t forget to add requirements of your family. Choose a plan that can easily go well with your needs.
Whenever you are buying a term plan don’t?forget to think about the inflation. It is obvious that a cover of Rs 50 lakh does look enough today, but would it be able to meet the needs of future or after 20 years. When deciding the amount of a life insurance plan, make sure to consider inflation like how prices will change and can affect future requirements.
Online life insurance is affordable and convenient as well. By purchasing online, you are cutting the middlemen that are agents. Online life insurance is easily accessible. It will help you in saving your hard earned money and time as well.
HOW TO MAKE A CLAIM?
An intimation regarding the claim should be sent to the insurer as soon as possible when the policyholder dies. The nominee and beneficiary can do the same. The claim intimation should have the details about the date, place, and cause of death. The claim intimation should contain information like the date, place, and cause of death.
- Claim form
- Death certificate
- Policy document
- Deeds of assignments
- Legal proof of title if the plan is not assigned
- Form of discharge
Apart from this, medical attendant’s certificate, police inquest report, post-mortem report, employer’s certificate, etc are required. You can compare life insurance online to get the best life insurance company which has a good claim ratio.
COMPARE AND DECIDE
LegalRaasta allows you to compare the best deal on insurance and let you choose by yourself which will help you in save more money. To protect yourself and your family from unwanted medical costs-health plans are the best ways. Buying health insurance plan provide risk coverage against expenditures caused by any unforeseen emergencies.
LegalRaasta helps you to compare and choose the best health insurance plan for you. The level of coverage mostly depends upon the type of the Life insurance policy. A lot of companies now offer Life insurance in India and therefore as a consumer, you have multiple choices from leading brands. You should take advantage of our comparison services to choose the best deal. Some of the brands offering life insurance plans are MaxBupa, Bharti-AXA, Tata AIG, Apollo Munich, Star Health etc.
DO’S AND DON’TS OF LIFE INSURANCE:
|Think through why you are buying insurance and what core requirements and expectations||Do not leave any column blank in the proposal form|
|Seek and receive advice and options patiently||Do not let anyone else fill it up|
|Fill the proposal form very carefully and personally||Do not conceal or misstate any facts as this could lead to disputes at the time of a claim|
|Keep a copy of the completed proposal form you sign and any declarations and terms agreed upon mutually for your records||Do not miss or delay your premium payment|
FREQUENTLY ASKED QUESTIONS
Get answers to all your questions
Yes, premiums paid are deductible U/S 80C, U/S 80CCC, U/S 80D, U/S 80DD and death benefits are tax exempt U/S 10(10D). This is subject to prevalent provisions of the Income Tax Act, 1961.
Depending on the type of policy chosen, premiums can be paid either in a lump sum or in regular instalments.
Premiums are the amounts paid by the policyholder to the insurance company in order to keep the policy in force.
Riders are specific to certain situations or events whereby the insurer pays the policyholder a certain amount of money when such event occurs. E.g. critical illness or disability rider. They are an additional benefit to a standard policy for higher premiums.
If a policyholder wishes to cancel his/her policy, once in effect, they can surrender it to the insurer and receive the surrender value as a refund. The surrender value is calculated based on premiums paid and how long the policy was in effect. Surrender is usually allowed after a certain period of time.
If, for example, a policy is used to raise a loan, the policy is ‘assigned’ or transferred to the lender. The policy then bears the lender or the ‘assignee’s’ name. Once the loan is repaid the policy can be reassigned or transferred back.
Proposals are key components on insurance and policies are underwritten based on the disclosures made in them. It is essential that you provide only correct disclosures and statements to the insurance company or you will be at risk of rejection of claims.
In case of your unfortunate and untimely demise during the policy term, your nominees will have to furnish such basic documents as the policy bond, the claim form, and the death certificate of the late policyholder. There may be instances wherein the insurance company may also request you to furnish other documents like a post mortem report, a police inquest report, an employer’s certificate, a hospital certificate, a medical attendant’s certificate, etc. The policy bond usually contains all the information associated with the claims process.
The mortality or risk class of an applicant will be calculated based on an underwriting procedure through which the insurance provider can determine whether or not the applicant is a risk worth taking. The risk of death is calculated based on many different factors like the age of the applicant, the sex, medical and personal history, occupation, habits, etc. The decision of the life insurance company to insure the life of an applicant will depend on the details you have mentioned in the application form. Make sure that all the information you enter therein is accurate as inaccurate information has the potential to cause problems at the time of making claims.
Insurance companies provide something called a grace period to customers who are unable to make premium payments on the due date. The period usually spans for 15 to 30 days, and customers who default on their premium payments are expected to pay during this period. Failure to do so will mean that your life insurance policy has lapsed. As a result, you can either reinstate or revive the policy within a predetermined period of time.
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