Top 10 Life Insurance Policies in 2018
Top 10 Life Insurance Policies in 2018
What is Life Insurance ?
Life Insurance is a contract between the insurance company and the person who is insured. The contract states that the company has to pay a lump sum amount to the nominee, which is selected by the insured person when any kind of mishap takes place with the insured. The policy is a protection for the family or the loved ones who are dependent on you for financial needs after you are no more. The insured has to pay a small amount for the specified amount of time and then the company pays a lump sum amount to the family of the insured person if the mishap takes place.
It is basically is a pure risk cover that will be there to provide financial cover to your family in case of your demise. The demise of the breadwinner of the family can easily leave his/her family financially and emotionally stuck. In the contract of a life insurance plan, the insurer promises to pay the sum assured to the family of the insured in the form of death benefit that allows them to live their life happily without any financial burden.
There has been a few cases where insurance companies have tried questionable practices and aren't pretty much able to cover the expenses that the family undertakes. And many policies don't allow for the coverage that the family needs after the death. Bad enough, but the coverage tends to climb high to 8-9 times to that of annual salary.
2. Any mishap that includes an accident
Any individual employee faces this mishap of an accident. The cost of recovering himself from the accident is pretty huge and yet an insurance policy does not provide them as much as their expectation demands. But fortunately though, the life insurance online does, it aims to fill in the vacancy that needs to be removed. So as a matter of fact, the policy does turn out to be a lot helpful and useful to enable the employee to make its recovery process speed up.
3. Additional Benefits
Online life insurance also provides benefits for the following losses- Paralysis, Severance, Speech, Hearing, Disability, etc. Which are offered as a benefit that many a times isn't available in another insurance policy? For that, the Life Insurance is a must option.
If any employee has a large financial obligation like loans and mortgages, then surely this is the one policy that offers (as an additional life insurance policy) to cooperate and deliver the required funds to the family who can then utilize for their own purpose. Also, life insurance assists the family to plan and finance for a funeral.
4. No worries to gain
Now everyone worries about their family (or the spouse, as the case maybe) first and their living if the employee isn't around someday, then this policy will help let the family continue their old living standards after the employee's death.
Best Life Insurance Plans in India
Life Insurance Plans Entry Age Policy Term Sum Assured
Aviva I life 18/55 years 10/35 years 25 lacs/NA
Aegon Life 18/75 years 5/40 years 10 lacs/NA
Bajaj Allianz iSecure 18/70 years 10/30 years 20 lacs/NA
HDFC Life Sanchay 30/35 years 15/25 years 105673/NA
ICICI iProtect 20/75 years 10/30 years 3 lacs/NA
LIC Amulya Jeevan 18/60 years 5/35 years 25 lacs/NA
LIC Term Plan 18/75 years 10/35 years 50 lacs/NA
SBI e-shield Plan 18/70 years 5/30 years 20 lacs/NA
SBI Shubhnivesh plan 18/60 years 5/30 years 75000/NA
Kotak life preferred e-term 18/75 years 10/40 years 25 lacs/NA
HDFC click 2protect plus 18/65 years 10/30 years 10 lacs/10 crores/NA
Max Life Online Term Plan 18/70 years 10/35 years 25 lacs/100 crores/NA
Bharti Axa e-protect 18/70 years 10/35 years 25 lacs/NA
Types of Life Insurance
Term Insurance
It falls into the complete protection category. It provides pure protection. Basically, it covers the risk of dying. In this plan, the sum assured amount which the insurer promises to pay would be provided to the nominee or beneficiary as stated in the policy document in case of insured's death. If you survive in the policy term period, then you will get nothing or can get your premium back which basically varies from insurer to insurer. If you are planning to buy pure life risk cover, then term insurance is the best and cheapest form of policies.
There's a choice to add riders to widen up the coverage.
The death benefit is payable as lump sum, monthly payouts, or a combination of both.
When it comes to term insurance, you should keep in mind that there will no payout if the insured survives. However, nowadays there are many companies that provides Term Plans with Return of Premiums (TROPS), under which the insured gets all the premium in case the insured outlives the term period. But, such plans are expensive as compared to the basic term insurance plan.
Features of Term Insurance
Most Affordable : As compare to others, Term insurance is the cheapest form of life insurance plan that provides complete risk cover in the hour of need.
Pure protection plan : It is basically designed to offer the required cover to the insured family to deal with unexpected circumstances and stands strongly with an adequate financial cover.
No investment option : Term insurance cover provide cover to the dependents. The sum assured is not reinvested in any manner
More coverage for low premium : Term insurance policies offers wider coverage at a low premium
Flexible premium payments : Consumers can choose from a wide range of premium payments options
Cover for a specific period : Cover is provided for a specific period only
Risk management : Assist insured's family in clearing all debts and liabilities.
Riders : You can buy numerous additional riders such as critical benefit rider, accidental death benefit and partial permanent disability are available
Variants : Numerous insurers offers term insurance plan with variants that includes level benefit, increasing benefit and decreasing benefit
No maturity benefits : In most of the term insurance plans, there are no maturity benefits in that if a policyholder survives, he or she doesn't get any maturity benefits. However, some insurance introduced new products with maturity benefits as well.
Benefits of Term Insurance
Provides financial security to your family in your absence
Higher sum assured at a lowest premium
Facility to buy term insurance online
Tax Benefits on the premiums and payouts under Section 80C and 10(10D) of the Income Tax Act, 1961.
Why should someone invest in term insurance?
Ideally, very person should invest in term insurance plan. Moreover, if you are the sole breadwinner fo the family and there is no one else who can take care of your family like you do and if your family depends upon you for their each and every requirement then you should invest in a term insurance plan today. It will not only protect your family but will also safeguards them against several unwanted emergencies.
For the security for your family
If you are the sole breadwinner in the family
If you have dependents - parents, spouse, etc.
If you are a single person who is planning to start a family
If you are running a business or a startup
If you have children and wish to secure their future even in case of your absence
Those who do not want their family to suffer for their daily needs after them should definitely give a gift of love to their family and there is nothing better than term insurance plan.
Bank Loans or any Outstanding Liabilities
Apart from the basic protection cover that comes in the form of lump sump benefit of regular income, there must be some loans and liabilities that you are having. Have you ever thought who will pay them after you, in such financial crisis would your family be able to clear all dues. Not sure! Then it is essential for to invest in a term insurance plan that will help your family in clearing all your liabilities and debts as well.
Income Gap
Imagine you are the sole earner of your beloved family and some unforeseen situation arises. How would the income be replaced due to loss of regular income? How would this gap be met? Therefore, compare term insurance quotes online for different insurers to get a better idea of the sum assured. This will help you in maintaining the current lifestyle of your family members in your absence.
Whole Life insurance
Rest of the plans that come under the same are-endowment plan, money back plans, ULIP, etc. provides coverage to the insured for a specific age- majorly 65 to 70 years, whereas a whole life plan provides coverage for the entire life. In this plan, generally the insured is given a choice to pay a premium amount till the specified time which is also known as maturity period. If the insured person reaches maturity, then he/she has the option to continue the same till death without paying any additional premium and encashing the sum assured or bonuses.
As compare to others, this policy completely carry a different concept. Basically you can buy a whole life plan against a payment which can be made as a one-off sum, on a monthly or a yearly basis. If you have bought a unit-linked whole life policy, then your funds will be directed not only towards the purchase of your insurance for payment of the sum assured amount and the remainder of the amount will be invested in an investment fund.
Types of Whole Life Policy:
There are different forms of whole life insurance plan that is available in the market. Each of the same is designed in a way that can easily cater different needs of customers.
Non-Participating:
A non-participating whole life policy has a level premium and face amount during your entire life. The advantages of such policy includes fixed costs and relatively low out-of-pocket premium payments. Since the policy is non-participating it does not pay you any dividends.
Participating :
The participating whole life policy pays dividends. Payment of dividends basically shows that the extra earnings which the company has accumulated via investments, savings from expenses and favorable mortality of the organization. There is no assurance that insured will receive dividends. However, it is possible that dividends will be there in the form of cash that will be utilized to bring down the premium payment amount or will be allowed to accumulate and will attract interest at a specified rate. The dividends can also be used for buying paid-up additional insurance to improve the face amount of coverage provided.
Who Should Opt?
Basically, a whole life insurance policy is the suitable form of offering protection to several individuals. You can invest in a whole life insurance plan if-
You have made investment for your post retirement life and looking for others options for great benefits
You have an estate and wants to leave the estate and all your savings for your beneficiary that is alo refer as transfer of wealth
You are a young professional who has started earning and will be able to pay premium for a considerable time going into the future.
Advantages of Whole Life Policy:
Cover for life
With such plan, the insured will be able to get the required cover for the long term. It is not like other plans where the policy term is fixed for a specific period of time. The other policies will get expire by the time and it will be hard in old age to insure yourself under an effective form of life insurance plan. In case of the insured's demise, the beneficiary will get a lump sum amount that will help them in maintaining their standard of living. Incase insured survive, then you will not get anything in return.
Assurance of coverage, periodic payments and tax benefits
A whole life insurance plan offers the lifetime coverage along with assure level premiums for a limited premium payment term. The premium will remain same throughout the policy's term. Sum assured is guaranteed, however the bonuses will depend upon the performance. There are a few companies which offer the survival benefit at the end of the premium payment term till the policy matures. Tax benefits are also available to the insured under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Source of cash
Expert of the industry says that a person must keep 6-8 month's living expenses in the form of liquid asset. It is difficult to save such a huge cash while meeting retirement and long term saving goals. However, under the same, you will get cash at the end of the premium payment term.
Loan option
The surrender value of the policy rises over time and you can take loan against the policy's surrender value at any time. It is a good option as compared to borrowing against home or retirement accounts.
Your dependents will get benefits
No doubt, the return that your family will get will be a strong regular financial source in the family. This plan is great when it comes to estate planning. Individuals who want to pass on their estate to their legal heir as it helps create wealth.
Eligibility criteria for whole life policy:
The eligibility criteria i.e. minimum/maximum entry age, premium payment term, etc., will vary from insurer to insurer. To get the details about the eligibility criteria for your chosen policy, you are advised to contact your insurance company directly who can guide you better.
Difference Between Term plan and Whole Life Insurance
Premiums: Talking about the premium in the term insurance it is to be paid for specific period whereas for whole life insurance the payment is to be done for whole life.
Maturity age: Most of the term plan covers till the age of 65 to 75 years whereas for whole life insurance the policyholder is covered for the entire life.
Cash value: There are no cash values in term plan whereas for the whole life plans cash value is there. Guaranteed and Non-guaranteed cash value which is called as dividend value is given.
Policy term: The tenure of the term policy varies from five to thirty years whereas for the whole life plan the policy is valid for the lifetime.
Paid up value: If the policyholder wants to surrender the policy there is no paid up value or any other feature offered by the term plan whereas whole life insurance can be paid up after a specified number of years.
Lapse: The term policy lapses after thirty-one days of a missed premium payment. In the case of whole life policy if the policyholder fails to make payment then a cash value is allowed to offset the premiums.
Endowment Plan
Unlike Term Plan, endowment plan pays you out the sum assured along with the profits in both the cases- death and survival. This plan charges a higher premium which is being invested in the asset market- Equity and Debt. An endowment is a policy in which the insurer promises to pay the lump sum amount at the time of maturity. Majorly maturities are ten, fifteen or twenty years up to a definite age limit. Some plans also pay an amount in case of critical illness. Endowments amounts can be cashed early and the insured will receive the surrender value which would be determined basis how long the policy has been running and how much has been invested in it.
Types of Endowment Policies:
There are basically three forms of endowment policies which one can choose from.
Unit Linked Endowment - Under Unit Linked policies, the insurance premiums are directed into multiple units which are held under a specific investment fund that can be selected by the insured.
Full Endowment - Under the same, the basic amount ensured to be provided will be equal to the death benefit, right from the start of the policy. Based on the speculated market-based appreciation, the final payout will be comparatively higher.
Low Cost Endowment - This endowment plan is there for individuals to accumulate the funds which have to be paid after a specified time period, usually mortgage.
Key Features of Endowment Policies:
You will get the sum assured under an endowment policy either on survival to the term or on death occurring within the policy term.
Endowment policies are available as 'With Profit' and 'Without Profit' plans.
Under Endowment policies, bonus for the full term is payable on the date of maturity or in the event of death, whichever is earlier.
Premiums will be limited to shorter term or can be paid as single premium.
Premiums cease on death or on expiry of the term, whichever is earlier.
Benefits of Endowment Policies:
Endowment policies offers several benefits, a few of which are listed below:
An endowment policy will offer the insurance cover during the policy term.
It will pay a lump sum amount at the end of the policy term i.e. once the policy has matured.
It will serve dual purpose. Not only does it work as an insurance policy but also serves as a long-term investment offering decent returns.
Endowment policies come with tax benefits.
In terms of investing, endowment policies are safer as compared to other investment options and offer returns which are close to those offered by mutual funds.
Endowment policies enable long-term savings.
Under an endowment policy, you will surely receive a significant amount upon maturity.
Most endowment plans will extend the insurance and provide assured benefits even after the maturity date, in some cases up to a time when the life insured attains the age of 100.
Insured have the option of opting for additional riders which provide cover for specific illnesses, critical illnesses, disabilities, etc.
How Do Endowment Policies Work?
They are not very difficult from regular insurance policies. These policies not only offer the required cover, but also help them save regularly over a specific period of time. Under the same, the insured or his/her family will receive a lump sum maturity amount which can be utilized for meeting financial needs like purchasing property, children's education, organizing a wedding or preparing for one's retirement.
Child Insurance Plan
Provides financial coverage to your child's future needs and allows you to plan his/her future in a better way and stabilize way. It is basically a combination of insurance cover and investment that secure multiple stages of your child. Life cover is something that you will get as a lump sum amount at the end of the policy. Apart from this basic cover, the plan also assist you in offering flexible payouts at important stages of your child's life. It is obvious that you don't want to think about your death or any unfortunate incident but have you ever thought that what your child would do after your death, how he/she will manage to secure future. Basically, a child insurance plan makes sure that child's future financial needs are taken care of even in your absence.
Why Buy a Child Plan?
It is a question that normally arise. However you must be aware that normal savings would not be able to deal with the growing education costs. For the bright future of your child, you must be thinking of providing everything best to him and in such scenario education fees should be a constraint. Child insurance plans allow you to invest based on your child's education needs, your current financial status, and other monetary goals. Typically, child insurance plans offers a life cover of around 10 times the annual premium. Additionally, you will also get the withdrawal facility as needed. Along with this, you can also avail tax benefits for the premium paid.
Benefits of Child Insurance Plans:
Life cover for the child.
Investment for child's future needs.
You can add riders to the plan.
Death benefit and maturity benefits are paid.
You can select the premium amount based on the sum assured and the maturity amount than you choose.
Policy term will depend upon the age of your child. The policy term can be planned around the time you think that you require extra cash flow.
Waiver of premium rider can also be opted.
Partial withdrawals are allowed as and when you need to meet your child's educational needs or for meeting other related expenses.
Who can take Child Life Insurance?
Anyone who want to secure his child's future can invest in this plan. You can also take this plan if you wish to secure major event of your child's life such as higher education, marriage etc. In case you died then this pan will not allow your child to suffer financially and will make sure that he/she is receiving the best.
How a child insurance plan will secure your child's future?
Offers financial security during the
Joint Life Rider
With the help of this rider, the policyholder, and the partner can be covered under a single plan. In case of death, the sum insured amount is paid to the surviving member
Definite Insurability Rider
Through this rider, you buy the option of increasing your life insurance coverage at any important stage of life like marriage, the birth of children or any other. This may increase policyholder's financial liability without needing to go through a medical test.
Surgical Help
It is a beneficial rider that assists insured by providing financial coverage to them in case of medical treatment needing surgery for 43 surgical processes.
Critical Illness Rider
It is also known as the dread disease rider. In this form of riders, the sum assured is paid to the life insurance policyholder in the case of an unexpected critical disease such as renal failure, heart attack, cancer, etc. In most of the cases, the sum insured amount is paid to the insured and the plan terminates. The critical illness riders become more expensive with time as age increases. In some cases, insurers would deny the rider coverage to the policyholder because of their health conditions at the time of purchase. That's why it is better to purchase the riders at a younger age.
How to Buy Life Insurance Online?
Life insurance is a helpful tool that assists your family in meeting their basic needs and maintain a lifestyle when you are not around to take care of it. This is because your insurer from whom you have bought a life insurance policy will pay the funds to the beneficiary as per stated by you in the documents after your death. It could also be given if you are hospitalized due to a critical disease. Therefore, life insurance policy is an important insurance plan that you can add in your investment and savings portfolio.
We all are aware of the fact that nothing can provide you the absolute peace of mind which an insurance coverage customized for your future needs. And buying an insurance coverage online is the best way as compared to other traditional ways. It is the easiest and quickest way to get information about the best life insurance plan. Even, in the online market, you will get free quotes which help you in comparison and evaluation of premium cost as per your needs easily.
Guidelines to Choose the Best Life Insurance Policy
Estimate Amount of Insurance: After evaluating the amount for life insurance plan, you should move towards online insurance companies. There are many online insurance companies and it's really tough to choose the desired insurance plan out of them. Hence, it is better for you to choose us. We will assist you in comparing insurance plans of different companies at the same place or in a single page.
Provide Accurate Information: It is important to provide the accurate information in the selected insurance web aggregator proposal form. After getting your information, we will provide free quotes for the same. It will assist you in doing a comparison for getting the best life insurance plan that can meet your needs easily.
Select the Insurance Company: Once you get free quotes of different companies then you have many choices. You would be able to select the desired life insurance policy by comparing the quotes. From this, you will easily select the insurer that can meet your requirements in term of budget and coverage as well.
Buy Online: After selecting the insurer, you can directly buy the life insurance plan from the same page. For it you have to complete some formalities depend on the company norms. It may be possible that you need to clear any medical test. You can receive the relevant documents at home, you may need to sign it and provide the required documents that a company asks or according to the company's rules.
Your insurance plan is like others legal documents that you have. It is better to keep it safe. You should make sure that your recipient knows about it in case of any unexpected situation.
The internet has become a one plays to fulfill various kinds of demands. It is really a very simple process and does not cost any amount. Searching online is one of the best and cost effective way to buy life insurance online. It would be better if you buy a life insurance plan at a young age as it can save a big amount of your savings.
How Does Age Helps In Reducing Premium Rates?
You are here on this page that means you want to buy a new life insurance plan? Wait, before you make any commitment regarding the same, it is essential to understand the premium concept of the desired life insurance plan. Yes, there are different choices available in the market that come under the life insurance plan, such as a term plan. A Term Plan works for a limited time, the whole plan that builds up cash value or the universal policies and much more. In all life insurance plans, the annual premiums are influenced by numerous factors such as health, gender, hobbies, height, weight, occupation and much more. You must be aware that the premium rate varies from plan to plan and company to company. If you are thinking about a whole life policy, then the rate of return on the cash value can also affect the premium rates.
When contacted, experts of insurance industries said that the age plays a vital role in the process of setting premiums in the term and whole life insurance plans.
The Age Aspects
The premium rates of life insurance policies depend upon the age of the person at the time of purchase and duration of the policy. The premium rates will increase by 8 to 10 percent every year because of the growing age. An expert of the insurance industry, said that the premium amount would increase by 5 to 8 percent in the 40s and if the policyholder is over 50 age then his premium will increase by 9 to 12 percent every year.
It is advisable to buy a life insurance plan at an early age as it helps in reducing premium rates and bring steadiness in the same. However, in the whole life insurance, the premium rates do rise with the age.
The rates of premium are determined by the insurer each year, depending on the actuarial tables of the book-keeper. And they increase at each consecutive age because each year there is a superior drain on the cash value, attributable to the increased mortality charges
How Does Age Helps In Getting Life Insurance Plan Easily?
According to the experts of the insurance industry, the age factor is an essential part as it helps in checking that the person is eligible for buying a life insurance plan or not. An older person has limited options of life insurance plans. There are many tests that an older person has to pass for buying a desired life insurance policy like medical tests, etc. The premium rates will be higher for an old age person. So, in short, buying an insurance plan at an early can make things quite easier for you.
The premium rates of any life insurance plan will increase by the year and that can leave a bad impact on your savings. So it is better to buy a helpful life insurance plan before your next birthday, it will surely make things quite easier for you. Buying a life insurance plan at an early age will give you the best coverage at low premium rates.
Life Insurance can serve as Health Insurance (if the death of the person takes place)
Nowadays there is nothing permanent in this roller coaster life. Everything is uncertain in this race of survival. Life can turn tragic any moment and one should be well prepared to face all the consequences. It is good to stay emotionally, socially and mentally secured but being in this practical world financial security is also equally important. No needs can be fulfilled without money and when the bread owner dies the problem becomes grave. With the increasing number of accidents and other health related issue life is at risk.
Even more, the medical expenses are way too much. So it's better to get life insurance as when you may face some event in life which may cause the death of policyholder at least the expenses which are incurred by the family are covered under it. When the policyholder faces an accident or any other kind of illness the expenses at one time are a lot which may affect your family's pocket. What more, it may cost lakhs for the treatment and still, the person is unable to survive. In that case, the bill can be cleared with the life insurance amount. It can be a great support to the family.
Health insurance is also required to face the illness as they can cover the expenses of treatment but life insurance covers everything. Though premium is paid after certain time intervals these can actually help in the longer run.
As we all are aware of the fact that that the life is essentially divided into four stages. Similar to it, a life insurance also carries a few stages and each phase has its won benefits and features
Below are a few essential stages of a life insurance plan that in turn coincide with the stage of an individual
No cover for early life- For a few years of our life, we depends on are elders and known as dependents. The main reason behind making investment in a life insurance policy is to provide the needful cover to the family of the insured person against unwanted emergencies of the future. It is also a fact that at a very young age children do not required a life insurance plan as they are considered to be dependants. However in such situation, their parents has the option to insure them under their life insurance plan that aims in savings money for their education.
Insurance for young Adulthood- This stage of life occurs when the basic education gets complete and the child wants to study more. It is also possible that the child wants to
Investing in a life insurance during 30's-It is obvious that you have family, at the same time as your earnings will increase, so will your want to make sure about your family's security and monetary safety to your belongings. If you are investing in a life insurance during 30's, then the primary and predominant factor of security you should ave for your family's future needs. It is advisable for you to go for a plan with a sum assured of 10x s 10x your yearly earnings to protect your assets and family.
Buying a life insurance during 40's-Investment should be made after considering elements like your retirement plans, your kids's higher training and care of aging parents. a protracted-term is usually recommended at this level because it will make certain that your dependents could be covered for a good and you'll also have enough time to clear your loans and mortgages. A long term insurance is the first option as it provides funds accumulation in addition to financial protection.
Shopping for a life coverage policy to your 50's- People of such age group do not actually require an insurance policy as they'll have possibly cleared maximum of their debts and their youngsters will quite likely have completed their schooling too. However, permanent life coverage plans are a terrific option as they are able to come in accessible in case you plan to transfer your property to youngsters. Remember that life coverage at this point of your life might be tremendously luxurious because of more desirable health risks associated with old age.
How To Claim Life Insurance
Life insurance claims are made under two circumstances:
In case of death of the insured
Maturity of policy
Life Insurance claims in case of death
In case of death of the insured's death, the nominee of the deceased will be able to make the claim in the following way-
First of all, inform the insurer about the same as soon as possible with the important detail such as time of death, place of death and cause of death.
Submit needful documents and proofs to the insurance company. This will comprises of
The death certificate of the insured along with the e claim form as provided by the company.
The original policy documents along with the needful papers
Discharge form which has to be signed with witnesses.
If the policy was assigned, the assignee will have to provide the deed.
If someone else, apart from the nominee or assignee is filing claim then he/she have to submit all the legal l proof of his/her title.
If required, post-mortem reports and hospital and attending doctor's reports will also have to be submitted.
In cases involving police inquiries, an inquest report will have to be submitted.
While these outline the standard set of documents required to process a claim, other evidence may be required such as an employer's certificate or any other forms or reports that will help resolve any issues thrown up during an insurer's claim verification or investigative processes.
Rules for Beneficiaries Claiming Life Insurance:
When the nominee is claiming for life insurance, he/she have to follow some rules. He/she have to file a death claim. If you have a physical insurance policy, you can take a claim intimation or a notification form from your life insurance provider. If you have an online policy, you can apply for a form online.
Your claim intimation should have policy number, name of the policyholder, place of death, name of the insured, name of the claimant, etc.
The nominee will first have to fill a few death claim forms along with proofs of death. Once the form is filed with the life insurance company, then it is established that the company has got a death claim.
Next, the nominee will need to make arrangements for all the appropriate documents that serve as proofs.
Then, the nominee will need to furnish these documents to the company for the claim settlement process.
After submitting all documents, the company will verify everything and then make a decision if it should be settled or not.
Life Insurance policy Cancellation
There can be numerous reasons as to why you can want to cancel your life insurance policy. It could be because you not own the cash to make premium payments. It may be because of the fact that you have got a dire want to cash out the policy. It could be for any cause, but regardless of the reason, it's quite easy to cancel your life insurance coverage. Following are a few suggestions to cancel your policy:
Visit the website of the organization from which you got a life coverage: No matter whether or not you've got purchased a coverage from a local or big country wide insurance issuer, go to their website to test their cancellation coverage. The website of the business enterprise can be found on any correspondence piece which you have received from the insurer. You could also run a web search for the website with the aid of typing your insurance issuer's name.
Contact a dealer: Prior to the cancellation of the lifestyles coverage policy, it's recommended that you connect with the insurance company and clarify whether or now not you're making the proper selection. Even if you are satisfied about cancelling the policy, it is pleasant to talk about it to an professional as it will help you better understand whether or not you're cancelling your coverage. People who've no brokers can contact their insurance company and request for one.
Contact an accountant: Cancellation of policies can depart the door open for tax implications. Income and excess premiums help in constructing up the cash value for popular and complete life insurance policy. Whilst a policy is cancelled, a cheque for the particular amount is cut by your coverage business enterprise, and this amount might also or won't qualify for tax deductions. It's far consequently crucial to contact a tax expert as he / she can have solutions to all the questions you can have about the tax implications associated with the cancellation of a life insurance policy.
Consider partial withdrawal policy:Individuals who have bought insurance policies are commonly allowed to withdraw a partial amount from their coverage with out the need to completely cancel their policy. In part taking flight finances from your coverage will unfastened up some price range that can be used at once, and, at the same time, will still depart a few finances in the policy so that your family participants / nominees are covered in case of your premature loss of life. However, partial withdrawal is quite much like taking a loan against your life insurance policy, and it may have effects, making it instrumental which will seek advice from a broker before considering partial withdrawal. As an instance, some rules lower the death advantage whilst you choose partial withdrawal and you may no longer be allowed to repay the amount withdrawn so that it will boost the amount once more. Furthermore, in certain conditions, you should pay a tax on the amount you want to withdraw from your policy.
Life Insurance Premium Calculation
While life insurance companies calculate the premium for every individual, there are certain elements which are taken into consideration. Considering life insurance as a investment, even low rates have the ability to yield notably excessive returns over a period of time. However, availing a life insurance plan with a low premium may not constantly be viable as you may must meet some necessities as laid down by the insurer. With that said, a few individuals tend to avail similar life coverage guidelines as others at significantly low expenses. The purpose for this is that these individuals have made the right life choices which have enabled to avail decrease rates.
Following are the factors which might be considered by life insurance companies for the calculation of premiums:
Age: Age is a crucial element on the subject of determining premium charges. Younger candidates are probably to receive lower rates whilst older individuals can also have to pay a tremendously excessive amount. The reason being, life coverage agencies believe that younger people are less probably to agreement terminal illnesses or die during the coverage term. Older humans, however, are at a more threat of contracting critical illnesses or die at some stage in the policy term.
Gender: Although most life insurance company do not discriminate between genders, they do believe that the life expectancy for exceptional genders is distinctive. Statistical research and findings have shown that women live five years more as compared with men, as a result affecting their premium payments. In essence, maximum insurance corporations offer low price plan for women as so far as premium bills are worried.
Health records: Many life insurance company undertake a radical research of their candidates before imparting them an insurance policy. Individuals who want to buy life insurance policy will ought to provide their health records in order that the organization can confirm that the person has no persistent illnesses or potential fitness problems that would grow their chance. Individuals with clean health record will be liable to get low premium cost plan while people with health problems should pay barely extra.
Medical records: The medical history of an individual has the potential to increase or decrease their premium bills. if you have no scientific records of life-threatening sicknesses which include cancers, then you could count on a decrease premium charge rate. However, individuals whose medical statistics display that they're susceptible to contract these hereditary issues will ought to pay a highly excessive price of premium.
Smoking: Smoking is an addiction that is not simply dangerous, however additionally places you at risk of contracting extreme sicknesses in the future. As a result, life insurance groups are sceptical about undertaking the danger of insuring people who smoke. However, people who smoke can still avail life insurance policy no matter their dependancy, however the premium bills as associated to them are usually at least twice as a non-smokers might pay.
Consuming alcohol: Intake of alcohol isn't simply injurious to health that leads you towards several deadly problems in future. However it could additionally affect your premium quotes to a considerable volume. Alcoholics are sure to pay quite excessive charges whilst non-drinkers can avail life insurance policy for considerably proper terms. For this reason insurance organizations ask you earlier if you smoke or drink.
Type of coverage: The sort of policy you pick also can have an effect on your premium payments. The longer the policy time period, the better the maturity and demise advantages. Consequently, policy with longer tenures might be presented at a higher premium than short-time period policies.
Profession: Folks that work in dangerous professions together with fisheries, oil and gas, mining, and many others., are at a better hazard of demise or contracting probably deadly sicknesses. Therefore, the chance undertaken via an insurance corporation to cover such individuals is comparatively higher than that undertaken to insure an individual who works in a bank. Therefore, those who ply their alternate in risky professions are probable to face higher rates.
Life choices: Folks who stay at the metaphorical part are possibly to pay high rates. Insurance corporations pay attention to individuals who take risk by mountain climbing mountains, using speedy vehicles, and so forth., as those individuals are more likely to be a liability to them than the average purchaser, thereby charging them a high premium.
Obesity: Obesity is related to health conditions consisting of Osteoarthritis, coronary heart disease, cancer, blood stress, stroke, and so forth which could lead to further headaches. As a result, overweight individuals are charged high premium.
As soon as the coverage business enterprise has taken the aforementioned factors into consideration, it'll decide the amount of premium applicable to an individual, making it important which will make certain that you lead a wholesome life and make the right selections with a purpose to avail the great feasible costs.
The premium charged for your life insurance coverage is the quantity of cash levied by insurance companies for insurance. The premium charged by every business enterprise may range, making it important for you to evaluate different policies to find the one that satisfactory fits your requirements. but, there can be instances whilst the quote for a premium might also vary from the premium this is genuinely charged because it will rely upon the manner in which the premium is computed.
Mathematical calculations and statistics performed through the insurance provider's underwriting department will decide the premium charges to a man or woman. In maximum instances, the statistical records regarding the health, age and life history of an person are considered while computing the premium. As an instance, a teen riding a fancy sports bike will probable ought to pay a high insurance premium in consideration with a middle-aged individual who drives a sedan. The underwriting method is relevant to all people who desire to avail life insurance, and it involves investigation of filial illnesses, evaluation of stories together with motor automobile reports and medical data.
Once the underwriting department of your coverage provider has accumulate all of your facts and analyzed it, an actuary will scrutinize it further to decide your chance to the coverage employer. The actuary may also forecast how possibly you are to make a claim on your policy, and the better your chances of creating a claim, the better your premium charge might be. The actuary can even peruse mathematical statistics after which he / she will assemble "mortality and sickness" tables primarily based on which potential losses you'll incur because of illnesses and loss of life may be referred to. There tables are utilized by actuaries to create fashions that confirm how in all likelihood an individual is to settlement ailments or die. The premium charged to you'll be decided by using these results.
Life Insurance Provider Statistics (2016-2017)
In the Indian insurance industry, the life insurance sector enjoys a high market share of around 77.95% whereas the non-life sector has a comparatively smaller market share consisting of 22.05%.
There are currently 62 insurance companies operating in India, out of which 8 belong to the public sector, and the remaining 54 belong to the private sector. Under the 8 public sector insurers, there are 2 specialized insurers - ECGC and AIC, one life insurer - Life Insurance Corporation of India (LIC), 4 general insurance providers and one reinsurance company - GIC. The private sector consists of 23 life insurers, 17 general insurers, 6 standalone health insurers and 8 re-insurance companies which also include branches of foreign re-insurance companies and Lloyd's India.
During 2016-17, the industry registered premium-based income of Rs.418476.62 crore, as opposed to Rs.366943.23 crore which was collected in the previous fiscal (2015-16), thereby recording a growth of 14.04% in the current fiscal (last fiscal saw a growth of 11.84%). Private sector life insurers recorded a growth of 17.40% in 2016-17 (compared to 13.64% in 2015-16) in premium-based income, and LIC registered a 12.78 % growth in their income from premiums for 2016-17 (11.17% in 2015-16).
In terms of total premium income, LIC's market share dropped down from 72.61% (2015-16) to 71.81% (2016-17). Private insurers registered a rise in their market share which went up from 27.39% in 2015-16 to 28.19% in 2016-17.
In terms of first year premium, the market share of private sector insurers went down to 28.89% in 2016-17 from 29.46% in 2015-16. On the other hand, LIC registered a slight rise in their market share in terms of first year premiums which stood at 71.11% in 2016-17, as compared to 70.54% in 2015-16. In terms of renewal premium, LIC again clinched a greater portion share of the market share with 72.31% in 2016-17 (73.87% in 2015-16), as compared to private insurers who stood at 27.69% (26.13% in 2015-16).
Unit-linked insurance products (ULIPs) posted a 12.70% premium growth which went up from Rs.46889.58 crore in 2015-16 to Rs.52845.26 crore in 2016-17.
Traditional insurance products recorded a 14.24% growth in terms of premium, which went up from Rs.320053.65 crore in 2015-16 to Rs.365631.36 crore in 2016-17.
Dos and Don'ts of life insurance
Do your research: Given the number of alternatives at your disposal in terms of choosing the right coverage issuer after which choosing the policy that fits your requirements from the substantial array of options, it's important to do your research before shopping a life coverage policy as it can not simplest assist you save a very good sum of money, however it can also help you get hold of maximum benefits. Make sure that you have additionally checked up at the insurer to ensure that there are not any surprising hassles in the future.
Undergo the phrases and situations:The phrases and conditions report of your coverage plan contains all the information regarding the coverage. The general public do no longer be aware of each element and as a end result, turn out to be handling disastrous outcomes in as an alternative difficult conditions whilst making claims. Ensure that you study the policy document and understand it fully earlier than shopping an insurance policy.
Lock-in duration: There are times when individuals buy insurance policies but understand in some days or perhaps weeks that they're now not absolutely glad with the phrases and conditions of the coverage. In such cases, some insurance businesses provide a free lock-in duration, that's a short span of time in which a policyholder and return the coverage to the insurer for no penalty or price. Lock-in periods are normally 15 days long, so make sure you purchase a coverage with the aforementioned feature because it will make it simpler so that you can go back the policy and buy any other in case you are not happy along with your initial purchase.
Recall premium payment alternatives:Most insurance vendors provide premium fee alternatives on an annual, semi-annual, quarterly or monthly basis. It is instrumental that you pick a term in an effort to let you make premium payments with out different consequences. no matter your premium fee alternative, it's also advised that you pick the digital take a look at machine to make premium payments as it will make sure which you make in no way miss a fee date.
Don’t disguise anything: There are instances wherein people attempt to disguise some facts while filling out the software form and buying an insurance coverage. Your medical records must be accurately provided to the coverage employer, and you must also notify them if you are a smoker as each detail requested by them is an crucial factor in determining the phrases and conditions of your coverage coverage. Missing or deceptive information can purpose primary problems when seeking to make claims, even a total rejection of claims in a few instances.
Life Insurance for NRIs
With the coverage region maturing vastly over the last few years, humans have become increasingly more aware of the importance and absolute vitality of insurance policies(each health and life). Indian citizens have rendered themselves proactive and with the regular assist of economic advisors, planning in advance has come to be ever extra smooth.
Surge of NRIs in India: With an boom inside the wide variety of Non-Resident Indians wanting to put money into insurance policies in India, the platform has become extraordinarily expansive. Some of Indians starting place or PIO and a Non-Resident Indian has the overall liberty to buy a life insurance coverage in India to assure their lives. Multiple coverage companies and agencies have now begun to re-strategise their rules to suit the desires of PIOs and NRIs.
As most of you must be conscious, a term plan is largely a pure safety policy, and therefore makes the most feel to be purchased for the safety of a whole family. A couple of coverage agencies in India have diverse time period plans which can be absolutely suitable to the wishes of an NRI or a PIO. With the help of a questionnaire, this type of an insurance coverage may be bought in a jiffy. They're now not completely one-of-a-kind in their shape, however people can also customise their polcie as in keeping with their wishes.
However, in India, currently a handful of insurance agencies have a streamlined device in area to assist the NRIs with their rules. Some necessities are there, whether or not it's a medical test or easy documentation, the personnel of those agencies will constantly be at your provider. Given under are a few of the firms who've a systemised structure in location:
LIC or Life Insurance Corporation Of India
Max life insurance
ICICI Prudential life insurance
Kotak Life Insurance
NRIs may additionally choose from sure insurance policies that rely entirely where the man or woman is living presently, their age, and other valid statistics.
Area: In case you are an NRI seeking life insurance policy in India, then you definitely need to bear in mind the fact that your geographical place will not be taken into consideration for doing so. However, for the medical take a look at, you might need to visit the place of beginning.
No extra charges in any way: If the dangers involved are more or much less the same, then there might be no distinction within the top rate rate of resident and non-resident Indians. The premium price could be impacted if the threat is multiplied for some cause.
Virtual charge: An NRI can choose to pay digitally through a overseas country's remittance, or a financial institution account with an Non-resident everyday (NRO) nature, and via a Non-resident (NRE)/foreign foreign money Non-Repatriable (FCNR) account.
Advantages inclusive of loss of life and maturity also can be deposited through the above-referred to techniques. In case you are paying the charges in a overseas foreign money, your proceeds can be rendered completely repatriable. But, this may no longer endure any impact on the coverage or the proceeds reputation whatsoever.
Latest Life Insurance News
Insurance Sector Expected To Reach 280 $ USD By FY20
September 10, 2018
The insurance industry has always been considered an underdog for decades. Many people are not even aware of the benefits of some basic policies. Until 2001 only 2.71% of the market was captured by the Insurance sector. Within a span of sixteen years, it has penetrated to 3.7% in 2017. During the period of six years i.e. 2011 to 2017, there’s a 56% increase in this Industry.
In the Financial Year (FY) of 2017-2018, it has recorded the Gross premium of 72 billion USD.
The launch of revolutionary schemes like Ayushman Bharat has further accelerated this sector.
Pioneer float of such plans commits to cover Rs. 5 lakhs for about 10 crore poor families. This move will also generate lots of jobs for different skills that will improvise the economy and the employment rates.
As per the latest statistics by IRDA, almost 25% of people don’t care to renew their policies every year. This is more common with the insurance products that are of a low premium amount. Insurance giant LIC has earned 5,000 crores because of lapse of premium in the fiscal year (FY) of 2016-17. The same year it sold policies worth Rs. 22,178 crores, which is almost 44% of the market share. In the FY of 2017, out of 1.8 crore policies it sold, one third are expected to expire before the end of 2018.
Attribute to this loss goes to the agents who often sell insurance just to meet their targets. In some other policies, there are greater chances of misspelling as well. Agents intent to promote such products to increase their numbers and commission. In the west, such actions by the insurance advisers are managed by the clause of clawback. In countries like India, Insurance Industry is still at a nascent stage.
Policy lapse majorly contributes to increasing the ratio of AUM in the Industry. It’s even faster than the increase in the AUM in mutual fund Industry. Within a span of a decade, the mutual fund has grown ten times. In the case of the insurance sector, the ratio of increase is even higher. It has been growing at a pace of 11-14% every year. Life industries have witnessed exponential growth from Rs. 5.41 lakhs to Rs. 30 lakhs from 2008 to 2018. Reson for such a huge growth is the asset under management. Prime reason for the growth of AUM in insurance niche is the cessation in the policy.
These lapsed policies are a complete loss to the policyholders. If they don’t care to renew the policy within the year of purchase than they bear lose of the entire premium amount. The average rate of renewal every year is approximately 75-76%. All the lapsed policies contributes in increasing the AUM of the Insurance Industries.
Linking Of Aadhaar With Insurance Policy Is Mandatory, Says IRDA
November 13, 2017
On Wednesday, 8th Nov 2017, the Insurance Regulatory And Development Authority Of India (IRDA) said that the linking of Aadhar number with insurance plans is compulsory and asked insurance companies to implement the statutory norms.
“The Authority clarifies that, linkage of Aadhaar number to insurance policies is mandatory under the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017,” the IRDA said.
In the last June, the government of India had informed about the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017, making Aaadhar and PAN/Form 60 compulsory for getting financial services that include insurance also and asked policyholders and companies for linking the existing policies with the same.
In a discussion with all life and general insurance companies, IRDA said the rules have “statutory force” and they have to implement the rule without waiting for the further instructions.
Right now, there are 24 life insurers and 33 general insurance companies operating in the country.
Although, there are no deadlines that have been given by IRDA for the completion of the process, as per the circular, it has to be done as soon as possible. Some insurance companies also said that this can also result in the delay of payout in a few cases. Aadhaar is now also compulsory for financial transactions of Rs 50,000 and above. Likewise, one has to link one’s Aadhaar number with the mobile number latest by February 6, 2018.
Life Insurance - FAQ's
1. Why buy a Life Insurance Policy?
Life Insurance Policy is the best means to fulfil the goal which has been set by you. In the case of any tragedy to the policyholder, life insurance serves as the best way to help the families. Even the needs of the children are secure as the policy can help when the main bread owner dies. These policies protect you from taxes which are a great benefit. Premiums which are paid get a tax deduction. The policy can be taken for a special motive like the wedding of children or their education. Even the retirement life can be secured by taking the policy. Thus taking insurance policy is beneficial.
2. When to buy Life Insurance Policy?
The very moment when you feel that your family or loved ones are dependent on you for their needs without even thinking for a minute you should buy the policy. As there is no age limit so it's better to get it the moment you think the requirement arises.
3. How much life insurance you require?
The policy you require depends on the needs. To the more when you are young needs are limited but as you grow you have more responsibly and more people attached to you. So you should choose the best one keeping in mind your future needs.
4. What are the immediate financial expenses which your family may require immediately after your death?
When a person dies the family is in a state of grief and it takes months to come out from this shock. It is disheartening as you have lost your loved one but there are expenses such as for cremation and then other ceremonies which are to be done. Taking an insurance which covers all aspects will provide you with money to fulfill the immediate expenses which will be there after death.
5. How to know your present expenses to get the best insurance plan?
Before buying an insurance policy think about the liabilities which are there. From the loans of the banks to the credit card bills keep everything in mind. If your family is living in a rented accommodation think about the rent that the policy should be able to give till your children grow up and earn. Groceries, school fees, other expenses of families, taxes etc, keeping in mind all these then only select a policy.
6. How to know future expenses to get the best insurance plan?
Future expenses basically help you to get a vision of your needs in future. From settling the children, health issues to the retirement living, you need to think about all the expenses to get the best life insurance plan.
7. How long will your dependents need support in case of your sudden demise?
This is a critical question as you never know when you are going to leave for your heavenly abode. Before buying a policy think about the support your family may require. Maybe you leave the world early and your children are small. So, till the time they grow up and settle the policy should be such that it supports them. Even till your wife starts working or arranges some other income source policy should be there to help them. Thus this all depends upon what your family plans for their future and then only you can take a policy.
8. How to buy the best life insurance policy in India?
The simple way to choose a policy is to do it when you are young, thus you could increase coverage the amount. Research about your needs and then imply on the tools which insurance company gave you. Taking a note on them, choose the best policy.
9. Is it great to shop for life insurance policies at a young age?
Sure, purchasing a policy at a particularly younger age, permit you to avail the plan for insurance low premium.
10. Is it better to purchase a life insurance from an agent or have to I should buy one from an insurance company?
While insurance companies are the most dependable sources when it comes to purchasing life policies, coverage agents aren't absolutely untrustworthy. However, before you buy a policy from an insurance agent, it's suggested which you request for his or her authorisation card from the IRDA to make sure that they're certified sellers.
11. When does life insurance cover begin?
It will start on the date of commencement after the insurer has acquired and accredited of your insurance policy.
12. Are life insurance premium constant?
The premiums of such policies usually do not change and stay fixed for the term of the policy that's decided with the aid of the policyholder. A few policies have single pay or confined pay options Additionally where the premiums may be paid in a single lump sum or over a period of a few years.
13. Can older people purchase life insurance?
Sure, older residents who're above the age of 60 can also purchase life insurance regulations. There are numerous sorts of insurance policies like term policies, whole life policies and guaranteed life coverage guidelines that are designed to provide cover to older individuals. LIC and Reliance provide life insurance plans specially designed for senior citizens.
14. Is it great to take a single cover policy or a joint life insurance plan?
In case of single cover policy, each people are covered under separate and impartial regulations which don't have any effect. But, below a joint coverage, each individuals are covered below one plan. In case of a mishap where both individuals lose their life, their beneficiary will obtain only a single pay out, at the same time as in the case of two single policies, there might be pay outs, one from plan to another.
15. Do life insurance charges grow with the age?
Premiums for numerous sorts of life insurance policies like whole life insurance, as they do for term insurance plan. However, for term insurance policies, if you want to renew the policy after the stop of the coverage time period, the rates might also appreciably growth so as to cover the risk of a higher age.
16. Who is the claimant in a insurance coverage?
Life Insurance is a contract between the insurance company and the person who is insured. The contract states that the company has to pay a lump sum amount to the nominee, which is selected by the insured person when any kind of mishap takes place with the insured. The policy is a protection for the family or the loved ones who are dependent on you for financial needs after you are no more. The insured has to pay a small amount for the specified amount of time and then the company pays a lump sum amount to the family of the insured person if the mishap takes place.
It is basically is a pure risk cover that will be there to provide financial cover to your family in case of your demise. The demise of the breadwinner of the family can easily leave his/her family financially and emotionally stuck. In the contract of a life insurance plan, the insurer promises to pay the sum assured to the family of the insured in the form of death benefit that allows them to live their life happily without any financial burden.
There has been a few cases where insurance companies have tried questionable practices and aren't pretty much able to cover the expenses that the family undertakes. And many policies don't allow for the coverage that the family needs after the death. Bad enough, but the coverage tends to climb high to 8-9 times to that of annual salary.
2. Any mishap that includes an accident
Any individual employee faces this mishap of an accident. The cost of recovering himself from the accident is pretty huge and yet an insurance policy does not provide them as much as their expectation demands. But fortunately though, the life insurance online does, it aims to fill in the vacancy that needs to be removed. So as a matter of fact, the policy does turn out to be a lot helpful and useful to enable the employee to make its recovery process speed up.
3. Additional Benefits
Online life insurance also provides benefits for the following losses- Paralysis, Severance, Speech, Hearing, Disability, etc. Which are offered as a benefit that many a times isn't available in another insurance policy? For that, the Life Insurance is a must option.
If any employee has a large financial obligation like loans and mortgages, then surely this is the one policy that offers (as an additional life insurance policy) to cooperate and deliver the required funds to the family who can then utilize for their own purpose. Also, life insurance assists the family to plan and finance for a funeral.
4. No worries to gain
Now everyone worries about their family (or the spouse, as the case maybe) first and their living if the employee isn't around someday, then this policy will help let the family continue their old living standards after the employee's death.
Best Life Insurance Plans in India
Life Insurance Plans Entry Age Policy Term Sum Assured
Aviva I life 18/55 years 10/35 years 25 lacs/NA
Aegon Life 18/75 years 5/40 years 10 lacs/NA
Bajaj Allianz iSecure 18/70 years 10/30 years 20 lacs/NA
HDFC Life Sanchay 30/35 years 15/25 years 105673/NA
ICICI iProtect 20/75 years 10/30 years 3 lacs/NA
LIC Amulya Jeevan 18/60 years 5/35 years 25 lacs/NA
LIC Term Plan 18/75 years 10/35 years 50 lacs/NA
SBI e-shield Plan 18/70 years 5/30 years 20 lacs/NA
SBI Shubhnivesh plan 18/60 years 5/30 years 75000/NA
Kotak life preferred e-term 18/75 years 10/40 years 25 lacs/NA
HDFC click 2protect plus 18/65 years 10/30 years 10 lacs/10 crores/NA
Max Life Online Term Plan 18/70 years 10/35 years 25 lacs/100 crores/NA
Bharti Axa e-protect 18/70 years 10/35 years 25 lacs/NA
Types of Life Insurance
Term Insurance
It falls into the complete protection category. It provides pure protection. Basically, it covers the risk of dying. In this plan, the sum assured amount which the insurer promises to pay would be provided to the nominee or beneficiary as stated in the policy document in case of insured's death. If you survive in the policy term period, then you will get nothing or can get your premium back which basically varies from insurer to insurer. If you are planning to buy pure life risk cover, then term insurance is the best and cheapest form of policies.
There's a choice to add riders to widen up the coverage.
The death benefit is payable as lump sum, monthly payouts, or a combination of both.
When it comes to term insurance, you should keep in mind that there will no payout if the insured survives. However, nowadays there are many companies that provides Term Plans with Return of Premiums (TROPS), under which the insured gets all the premium in case the insured outlives the term period. But, such plans are expensive as compared to the basic term insurance plan.
Features of Term Insurance
Most Affordable : As compare to others, Term insurance is the cheapest form of life insurance plan that provides complete risk cover in the hour of need.
Pure protection plan : It is basically designed to offer the required cover to the insured family to deal with unexpected circumstances and stands strongly with an adequate financial cover.
No investment option : Term insurance cover provide cover to the dependents. The sum assured is not reinvested in any manner
More coverage for low premium : Term insurance policies offers wider coverage at a low premium
Flexible premium payments : Consumers can choose from a wide range of premium payments options
Cover for a specific period : Cover is provided for a specific period only
Risk management : Assist insured's family in clearing all debts and liabilities.
Riders : You can buy numerous additional riders such as critical benefit rider, accidental death benefit and partial permanent disability are available
Variants : Numerous insurers offers term insurance plan with variants that includes level benefit, increasing benefit and decreasing benefit
No maturity benefits : In most of the term insurance plans, there are no maturity benefits in that if a policyholder survives, he or she doesn't get any maturity benefits. However, some insurance introduced new products with maturity benefits as well.
Benefits of Term Insurance
Provides financial security to your family in your absence
Higher sum assured at a lowest premium
Facility to buy term insurance online
Tax Benefits on the premiums and payouts under Section 80C and 10(10D) of the Income Tax Act, 1961.
Why should someone invest in term insurance?
Ideally, very person should invest in term insurance plan. Moreover, if you are the sole breadwinner fo the family and there is no one else who can take care of your family like you do and if your family depends upon you for their each and every requirement then you should invest in a term insurance plan today. It will not only protect your family but will also safeguards them against several unwanted emergencies.
For the security for your family
If you are the sole breadwinner in the family
If you have dependents - parents, spouse, etc.
If you are a single person who is planning to start a family
If you are running a business or a startup
If you have children and wish to secure their future even in case of your absence
Those who do not want their family to suffer for their daily needs after them should definitely give a gift of love to their family and there is nothing better than term insurance plan.
Bank Loans or any Outstanding Liabilities
Apart from the basic protection cover that comes in the form of lump sump benefit of regular income, there must be some loans and liabilities that you are having. Have you ever thought who will pay them after you, in such financial crisis would your family be able to clear all dues. Not sure! Then it is essential for to invest in a term insurance plan that will help your family in clearing all your liabilities and debts as well.
Income Gap
Imagine you are the sole earner of your beloved family and some unforeseen situation arises. How would the income be replaced due to loss of regular income? How would this gap be met? Therefore, compare term insurance quotes online for different insurers to get a better idea of the sum assured. This will help you in maintaining the current lifestyle of your family members in your absence.
Whole Life insurance
Rest of the plans that come under the same are-endowment plan, money back plans, ULIP, etc. provides coverage to the insured for a specific age- majorly 65 to 70 years, whereas a whole life plan provides coverage for the entire life. In this plan, generally the insured is given a choice to pay a premium amount till the specified time which is also known as maturity period. If the insured person reaches maturity, then he/she has the option to continue the same till death without paying any additional premium and encashing the sum assured or bonuses.
As compare to others, this policy completely carry a different concept. Basically you can buy a whole life plan against a payment which can be made as a one-off sum, on a monthly or a yearly basis. If you have bought a unit-linked whole life policy, then your funds will be directed not only towards the purchase of your insurance for payment of the sum assured amount and the remainder of the amount will be invested in an investment fund.
Types of Whole Life Policy:
There are different forms of whole life insurance plan that is available in the market. Each of the same is designed in a way that can easily cater different needs of customers.
Non-Participating:
A non-participating whole life policy has a level premium and face amount during your entire life. The advantages of such policy includes fixed costs and relatively low out-of-pocket premium payments. Since the policy is non-participating it does not pay you any dividends.
Participating :
The participating whole life policy pays dividends. Payment of dividends basically shows that the extra earnings which the company has accumulated via investments, savings from expenses and favorable mortality of the organization. There is no assurance that insured will receive dividends. However, it is possible that dividends will be there in the form of cash that will be utilized to bring down the premium payment amount or will be allowed to accumulate and will attract interest at a specified rate. The dividends can also be used for buying paid-up additional insurance to improve the face amount of coverage provided.
Who Should Opt?
Basically, a whole life insurance policy is the suitable form of offering protection to several individuals. You can invest in a whole life insurance plan if-
You have made investment for your post retirement life and looking for others options for great benefits
You have an estate and wants to leave the estate and all your savings for your beneficiary that is alo refer as transfer of wealth
You are a young professional who has started earning and will be able to pay premium for a considerable time going into the future.
Advantages of Whole Life Policy:
Cover for life
With such plan, the insured will be able to get the required cover for the long term. It is not like other plans where the policy term is fixed for a specific period of time. The other policies will get expire by the time and it will be hard in old age to insure yourself under an effective form of life insurance plan. In case of the insured's demise, the beneficiary will get a lump sum amount that will help them in maintaining their standard of living. Incase insured survive, then you will not get anything in return.
Assurance of coverage, periodic payments and tax benefits
A whole life insurance plan offers the lifetime coverage along with assure level premiums for a limited premium payment term. The premium will remain same throughout the policy's term. Sum assured is guaranteed, however the bonuses will depend upon the performance. There are a few companies which offer the survival benefit at the end of the premium payment term till the policy matures. Tax benefits are also available to the insured under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Source of cash
Expert of the industry says that a person must keep 6-8 month's living expenses in the form of liquid asset. It is difficult to save such a huge cash while meeting retirement and long term saving goals. However, under the same, you will get cash at the end of the premium payment term.
Loan option
The surrender value of the policy rises over time and you can take loan against the policy's surrender value at any time. It is a good option as compared to borrowing against home or retirement accounts.
Your dependents will get benefits
No doubt, the return that your family will get will be a strong regular financial source in the family. This plan is great when it comes to estate planning. Individuals who want to pass on their estate to their legal heir as it helps create wealth.
Eligibility criteria for whole life policy:
The eligibility criteria i.e. minimum/maximum entry age, premium payment term, etc., will vary from insurer to insurer. To get the details about the eligibility criteria for your chosen policy, you are advised to contact your insurance company directly who can guide you better.
Difference Between Term plan and Whole Life Insurance
Premiums: Talking about the premium in the term insurance it is to be paid for specific period whereas for whole life insurance the payment is to be done for whole life.
Maturity age: Most of the term plan covers till the age of 65 to 75 years whereas for whole life insurance the policyholder is covered for the entire life.
Cash value: There are no cash values in term plan whereas for the whole life plans cash value is there. Guaranteed and Non-guaranteed cash value which is called as dividend value is given.
Policy term: The tenure of the term policy varies from five to thirty years whereas for the whole life plan the policy is valid for the lifetime.
Paid up value: If the policyholder wants to surrender the policy there is no paid up value or any other feature offered by the term plan whereas whole life insurance can be paid up after a specified number of years.
Lapse: The term policy lapses after thirty-one days of a missed premium payment. In the case of whole life policy if the policyholder fails to make payment then a cash value is allowed to offset the premiums.
Endowment Plan
Unlike Term Plan, endowment plan pays you out the sum assured along with the profits in both the cases- death and survival. This plan charges a higher premium which is being invested in the asset market- Equity and Debt. An endowment is a policy in which the insurer promises to pay the lump sum amount at the time of maturity. Majorly maturities are ten, fifteen or twenty years up to a definite age limit. Some plans also pay an amount in case of critical illness. Endowments amounts can be cashed early and the insured will receive the surrender value which would be determined basis how long the policy has been running and how much has been invested in it.
Types of Endowment Policies:
There are basically three forms of endowment policies which one can choose from.
Unit Linked Endowment - Under Unit Linked policies, the insurance premiums are directed into multiple units which are held under a specific investment fund that can be selected by the insured.
Full Endowment - Under the same, the basic amount ensured to be provided will be equal to the death benefit, right from the start of the policy. Based on the speculated market-based appreciation, the final payout will be comparatively higher.
Low Cost Endowment - This endowment plan is there for individuals to accumulate the funds which have to be paid after a specified time period, usually mortgage.
Key Features of Endowment Policies:
You will get the sum assured under an endowment policy either on survival to the term or on death occurring within the policy term.
Endowment policies are available as 'With Profit' and 'Without Profit' plans.
Under Endowment policies, bonus for the full term is payable on the date of maturity or in the event of death, whichever is earlier.
Premiums will be limited to shorter term or can be paid as single premium.
Premiums cease on death or on expiry of the term, whichever is earlier.
Benefits of Endowment Policies:
Endowment policies offers several benefits, a few of which are listed below:
An endowment policy will offer the insurance cover during the policy term.
It will pay a lump sum amount at the end of the policy term i.e. once the policy has matured.
It will serve dual purpose. Not only does it work as an insurance policy but also serves as a long-term investment offering decent returns.
Endowment policies come with tax benefits.
In terms of investing, endowment policies are safer as compared to other investment options and offer returns which are close to those offered by mutual funds.
Endowment policies enable long-term savings.
Under an endowment policy, you will surely receive a significant amount upon maturity.
Most endowment plans will extend the insurance and provide assured benefits even after the maturity date, in some cases up to a time when the life insured attains the age of 100.
Insured have the option of opting for additional riders which provide cover for specific illnesses, critical illnesses, disabilities, etc.
How Do Endowment Policies Work?
They are not very difficult from regular insurance policies. These policies not only offer the required cover, but also help them save regularly over a specific period of time. Under the same, the insured or his/her family will receive a lump sum maturity amount which can be utilized for meeting financial needs like purchasing property, children's education, organizing a wedding or preparing for one's retirement.
Child Insurance Plan
Provides financial coverage to your child's future needs and allows you to plan his/her future in a better way and stabilize way. It is basically a combination of insurance cover and investment that secure multiple stages of your child. Life cover is something that you will get as a lump sum amount at the end of the policy. Apart from this basic cover, the plan also assist you in offering flexible payouts at important stages of your child's life. It is obvious that you don't want to think about your death or any unfortunate incident but have you ever thought that what your child would do after your death, how he/she will manage to secure future. Basically, a child insurance plan makes sure that child's future financial needs are taken care of even in your absence.
Why Buy a Child Plan?
It is a question that normally arise. However you must be aware that normal savings would not be able to deal with the growing education costs. For the bright future of your child, you must be thinking of providing everything best to him and in such scenario education fees should be a constraint. Child insurance plans allow you to invest based on your child's education needs, your current financial status, and other monetary goals. Typically, child insurance plans offers a life cover of around 10 times the annual premium. Additionally, you will also get the withdrawal facility as needed. Along with this, you can also avail tax benefits for the premium paid.
Benefits of Child Insurance Plans:
Life cover for the child.
Investment for child's future needs.
You can add riders to the plan.
Death benefit and maturity benefits are paid.
You can select the premium amount based on the sum assured and the maturity amount than you choose.
Policy term will depend upon the age of your child. The policy term can be planned around the time you think that you require extra cash flow.
Waiver of premium rider can also be opted.
Partial withdrawals are allowed as and when you need to meet your child's educational needs or for meeting other related expenses.
Who can take Child Life Insurance?
Anyone who want to secure his child's future can invest in this plan. You can also take this plan if you wish to secure major event of your child's life such as higher education, marriage etc. In case you died then this pan will not allow your child to suffer financially and will make sure that he/she is receiving the best.
How a child insurance plan will secure your child's future?
Offers financial security during the
Joint Life Rider
With the help of this rider, the policyholder, and the partner can be covered under a single plan. In case of death, the sum insured amount is paid to the surviving member
Definite Insurability Rider
Through this rider, you buy the option of increasing your life insurance coverage at any important stage of life like marriage, the birth of children or any other. This may increase policyholder's financial liability without needing to go through a medical test.
Surgical Help
It is a beneficial rider that assists insured by providing financial coverage to them in case of medical treatment needing surgery for 43 surgical processes.
Critical Illness Rider
It is also known as the dread disease rider. In this form of riders, the sum assured is paid to the life insurance policyholder in the case of an unexpected critical disease such as renal failure, heart attack, cancer, etc. In most of the cases, the sum insured amount is paid to the insured and the plan terminates. The critical illness riders become more expensive with time as age increases. In some cases, insurers would deny the rider coverage to the policyholder because of their health conditions at the time of purchase. That's why it is better to purchase the riders at a younger age.
How to Buy Life Insurance Online?
Life insurance is a helpful tool that assists your family in meeting their basic needs and maintain a lifestyle when you are not around to take care of it. This is because your insurer from whom you have bought a life insurance policy will pay the funds to the beneficiary as per stated by you in the documents after your death. It could also be given if you are hospitalized due to a critical disease. Therefore, life insurance policy is an important insurance plan that you can add in your investment and savings portfolio.
We all are aware of the fact that nothing can provide you the absolute peace of mind which an insurance coverage customized for your future needs. And buying an insurance coverage online is the best way as compared to other traditional ways. It is the easiest and quickest way to get information about the best life insurance plan. Even, in the online market, you will get free quotes which help you in comparison and evaluation of premium cost as per your needs easily.
Guidelines to Choose the Best Life Insurance Policy
Estimate Amount of Insurance: After evaluating the amount for life insurance plan, you should move towards online insurance companies. There are many online insurance companies and it's really tough to choose the desired insurance plan out of them. Hence, it is better for you to choose us. We will assist you in comparing insurance plans of different companies at the same place or in a single page.
Provide Accurate Information: It is important to provide the accurate information in the selected insurance web aggregator proposal form. After getting your information, we will provide free quotes for the same. It will assist you in doing a comparison for getting the best life insurance plan that can meet your needs easily.
Select the Insurance Company: Once you get free quotes of different companies then you have many choices. You would be able to select the desired life insurance policy by comparing the quotes. From this, you will easily select the insurer that can meet your requirements in term of budget and coverage as well.
Buy Online: After selecting the insurer, you can directly buy the life insurance plan from the same page. For it you have to complete some formalities depend on the company norms. It may be possible that you need to clear any medical test. You can receive the relevant documents at home, you may need to sign it and provide the required documents that a company asks or according to the company's rules.
Your insurance plan is like others legal documents that you have. It is better to keep it safe. You should make sure that your recipient knows about it in case of any unexpected situation.
The internet has become a one plays to fulfill various kinds of demands. It is really a very simple process and does not cost any amount. Searching online is one of the best and cost effective way to buy life insurance online. It would be better if you buy a life insurance plan at a young age as it can save a big amount of your savings.
How Does Age Helps In Reducing Premium Rates?
You are here on this page that means you want to buy a new life insurance plan? Wait, before you make any commitment regarding the same, it is essential to understand the premium concept of the desired life insurance plan. Yes, there are different choices available in the market that come under the life insurance plan, such as a term plan. A Term Plan works for a limited time, the whole plan that builds up cash value or the universal policies and much more. In all life insurance plans, the annual premiums are influenced by numerous factors such as health, gender, hobbies, height, weight, occupation and much more. You must be aware that the premium rate varies from plan to plan and company to company. If you are thinking about a whole life policy, then the rate of return on the cash value can also affect the premium rates.
When contacted, experts of insurance industries said that the age plays a vital role in the process of setting premiums in the term and whole life insurance plans.
The Age Aspects
The premium rates of life insurance policies depend upon the age of the person at the time of purchase and duration of the policy. The premium rates will increase by 8 to 10 percent every year because of the growing age. An expert of the insurance industry, said that the premium amount would increase by 5 to 8 percent in the 40s and if the policyholder is over 50 age then his premium will increase by 9 to 12 percent every year.
It is advisable to buy a life insurance plan at an early age as it helps in reducing premium rates and bring steadiness in the same. However, in the whole life insurance, the premium rates do rise with the age.
The rates of premium are determined by the insurer each year, depending on the actuarial tables of the book-keeper. And they increase at each consecutive age because each year there is a superior drain on the cash value, attributable to the increased mortality charges
How Does Age Helps In Getting Life Insurance Plan Easily?
According to the experts of the insurance industry, the age factor is an essential part as it helps in checking that the person is eligible for buying a life insurance plan or not. An older person has limited options of life insurance plans. There are many tests that an older person has to pass for buying a desired life insurance policy like medical tests, etc. The premium rates will be higher for an old age person. So, in short, buying an insurance plan at an early can make things quite easier for you.
The premium rates of any life insurance plan will increase by the year and that can leave a bad impact on your savings. So it is better to buy a helpful life insurance plan before your next birthday, it will surely make things quite easier for you. Buying a life insurance plan at an early age will give you the best coverage at low premium rates.
Life Insurance can serve as Health Insurance (if the death of the person takes place)
Nowadays there is nothing permanent in this roller coaster life. Everything is uncertain in this race of survival. Life can turn tragic any moment and one should be well prepared to face all the consequences. It is good to stay emotionally, socially and mentally secured but being in this practical world financial security is also equally important. No needs can be fulfilled without money and when the bread owner dies the problem becomes grave. With the increasing number of accidents and other health related issue life is at risk.
Even more, the medical expenses are way too much. So it's better to get life insurance as when you may face some event in life which may cause the death of policyholder at least the expenses which are incurred by the family are covered under it. When the policyholder faces an accident or any other kind of illness the expenses at one time are a lot which may affect your family's pocket. What more, it may cost lakhs for the treatment and still, the person is unable to survive. In that case, the bill can be cleared with the life insurance amount. It can be a great support to the family.
Health insurance is also required to face the illness as they can cover the expenses of treatment but life insurance covers everything. Though premium is paid after certain time intervals these can actually help in the longer run.
As we all are aware of the fact that that the life is essentially divided into four stages. Similar to it, a life insurance also carries a few stages and each phase has its won benefits and features
Below are a few essential stages of a life insurance plan that in turn coincide with the stage of an individual
No cover for early life- For a few years of our life, we depends on are elders and known as dependents. The main reason behind making investment in a life insurance policy is to provide the needful cover to the family of the insured person against unwanted emergencies of the future. It is also a fact that at a very young age children do not required a life insurance plan as they are considered to be dependants. However in such situation, their parents has the option to insure them under their life insurance plan that aims in savings money for their education.
Insurance for young Adulthood- This stage of life occurs when the basic education gets complete and the child wants to study more. It is also possible that the child wants to
Investing in a life insurance during 30's-It is obvious that you have family, at the same time as your earnings will increase, so will your want to make sure about your family's security and monetary safety to your belongings. If you are investing in a life insurance during 30's, then the primary and predominant factor of security you should ave for your family's future needs. It is advisable for you to go for a plan with a sum assured of 10x s 10x your yearly earnings to protect your assets and family.
Buying a life insurance during 40's-Investment should be made after considering elements like your retirement plans, your kids's higher training and care of aging parents. a protracted-term is usually recommended at this level because it will make certain that your dependents could be covered for a good and you'll also have enough time to clear your loans and mortgages. A long term insurance is the first option as it provides funds accumulation in addition to financial protection.
Shopping for a life coverage policy to your 50's- People of such age group do not actually require an insurance policy as they'll have possibly cleared maximum of their debts and their youngsters will quite likely have completed their schooling too. However, permanent life coverage plans are a terrific option as they are able to come in accessible in case you plan to transfer your property to youngsters. Remember that life coverage at this point of your life might be tremendously luxurious because of more desirable health risks associated with old age.
How To Claim Life Insurance
Life insurance claims are made under two circumstances:
In case of death of the insured
Maturity of policy
Life Insurance claims in case of death
In case of death of the insured's death, the nominee of the deceased will be able to make the claim in the following way-
First of all, inform the insurer about the same as soon as possible with the important detail such as time of death, place of death and cause of death.
Submit needful documents and proofs to the insurance company. This will comprises of
The death certificate of the insured along with the e claim form as provided by the company.
The original policy documents along with the needful papers
Discharge form which has to be signed with witnesses.
If the policy was assigned, the assignee will have to provide the deed.
If someone else, apart from the nominee or assignee is filing claim then he/she have to submit all the legal l proof of his/her title.
If required, post-mortem reports and hospital and attending doctor's reports will also have to be submitted.
In cases involving police inquiries, an inquest report will have to be submitted.
While these outline the standard set of documents required to process a claim, other evidence may be required such as an employer's certificate or any other forms or reports that will help resolve any issues thrown up during an insurer's claim verification or investigative processes.
Rules for Beneficiaries Claiming Life Insurance:
When the nominee is claiming for life insurance, he/she have to follow some rules. He/she have to file a death claim. If you have a physical insurance policy, you can take a claim intimation or a notification form from your life insurance provider. If you have an online policy, you can apply for a form online.
Your claim intimation should have policy number, name of the policyholder, place of death, name of the insured, name of the claimant, etc.
The nominee will first have to fill a few death claim forms along with proofs of death. Once the form is filed with the life insurance company, then it is established that the company has got a death claim.
Next, the nominee will need to make arrangements for all the appropriate documents that serve as proofs.
Then, the nominee will need to furnish these documents to the company for the claim settlement process.
After submitting all documents, the company will verify everything and then make a decision if it should be settled or not.
Life Insurance policy Cancellation
There can be numerous reasons as to why you can want to cancel your life insurance policy. It could be because you not own the cash to make premium payments. It may be because of the fact that you have got a dire want to cash out the policy. It could be for any cause, but regardless of the reason, it's quite easy to cancel your life insurance coverage. Following are a few suggestions to cancel your policy:
Visit the website of the organization from which you got a life coverage: No matter whether or not you've got purchased a coverage from a local or big country wide insurance issuer, go to their website to test their cancellation coverage. The website of the business enterprise can be found on any correspondence piece which you have received from the insurer. You could also run a web search for the website with the aid of typing your insurance issuer's name.
Contact a dealer: Prior to the cancellation of the lifestyles coverage policy, it's recommended that you connect with the insurance company and clarify whether or now not you're making the proper selection. Even if you are satisfied about cancelling the policy, it is pleasant to talk about it to an professional as it will help you better understand whether or not you're cancelling your coverage. People who've no brokers can contact their insurance company and request for one.
Contact an accountant: Cancellation of policies can depart the door open for tax implications. Income and excess premiums help in constructing up the cash value for popular and complete life insurance policy. Whilst a policy is cancelled, a cheque for the particular amount is cut by your coverage business enterprise, and this amount might also or won't qualify for tax deductions. It's far consequently crucial to contact a tax expert as he / she can have solutions to all the questions you can have about the tax implications associated with the cancellation of a life insurance policy.
Consider partial withdrawal policy:Individuals who have bought insurance policies are commonly allowed to withdraw a partial amount from their coverage with out the need to completely cancel their policy. In part taking flight finances from your coverage will unfastened up some price range that can be used at once, and, at the same time, will still depart a few finances in the policy so that your family participants / nominees are covered in case of your premature loss of life. However, partial withdrawal is quite much like taking a loan against your life insurance policy, and it may have effects, making it instrumental which will seek advice from a broker before considering partial withdrawal. As an instance, some rules lower the death advantage whilst you choose partial withdrawal and you may no longer be allowed to repay the amount withdrawn so that it will boost the amount once more. Furthermore, in certain conditions, you should pay a tax on the amount you want to withdraw from your policy.
Life Insurance Premium Calculation
While life insurance companies calculate the premium for every individual, there are certain elements which are taken into consideration. Considering life insurance as a investment, even low rates have the ability to yield notably excessive returns over a period of time. However, availing a life insurance plan with a low premium may not constantly be viable as you may must meet some necessities as laid down by the insurer. With that said, a few individuals tend to avail similar life coverage guidelines as others at significantly low expenses. The purpose for this is that these individuals have made the right life choices which have enabled to avail decrease rates.
Following are the factors which might be considered by life insurance companies for the calculation of premiums:
Age: Age is a crucial element on the subject of determining premium charges. Younger candidates are probably to receive lower rates whilst older individuals can also have to pay a tremendously excessive amount. The reason being, life coverage agencies believe that younger people are less probably to agreement terminal illnesses or die during the coverage term. Older humans, however, are at a more threat of contracting critical illnesses or die at some stage in the policy term.
Gender: Although most life insurance company do not discriminate between genders, they do believe that the life expectancy for exceptional genders is distinctive. Statistical research and findings have shown that women live five years more as compared with men, as a result affecting their premium payments. In essence, maximum insurance corporations offer low price plan for women as so far as premium bills are worried.
Health records: Many life insurance company undertake a radical research of their candidates before imparting them an insurance policy. Individuals who want to buy life insurance policy will ought to provide their health records in order that the organization can confirm that the person has no persistent illnesses or potential fitness problems that would grow their chance. Individuals with clean health record will be liable to get low premium cost plan while people with health problems should pay barely extra.
Medical records: The medical history of an individual has the potential to increase or decrease their premium bills. if you have no scientific records of life-threatening sicknesses which include cancers, then you could count on a decrease premium charge rate. However, individuals whose medical statistics display that they're susceptible to contract these hereditary issues will ought to pay a highly excessive price of premium.
Smoking: Smoking is an addiction that is not simply dangerous, however additionally places you at risk of contracting extreme sicknesses in the future. As a result, life insurance groups are sceptical about undertaking the danger of insuring people who smoke. However, people who smoke can still avail life insurance policy no matter their dependancy, however the premium bills as associated to them are usually at least twice as a non-smokers might pay.
Consuming alcohol: Intake of alcohol isn't simply injurious to health that leads you towards several deadly problems in future. However it could additionally affect your premium quotes to a considerable volume. Alcoholics are sure to pay quite excessive charges whilst non-drinkers can avail life insurance policy for considerably proper terms. For this reason insurance organizations ask you earlier if you smoke or drink.
Type of coverage: The sort of policy you pick also can have an effect on your premium payments. The longer the policy time period, the better the maturity and demise advantages. Consequently, policy with longer tenures might be presented at a higher premium than short-time period policies.
Profession: Folks that work in dangerous professions together with fisheries, oil and gas, mining, and many others., are at a better hazard of demise or contracting probably deadly sicknesses. Therefore, the chance undertaken via an insurance corporation to cover such individuals is comparatively higher than that undertaken to insure an individual who works in a bank. Therefore, those who ply their alternate in risky professions are probable to face higher rates.
Life choices: Folks who stay at the metaphorical part are possibly to pay high rates. Insurance corporations pay attention to individuals who take risk by mountain climbing mountains, using speedy vehicles, and so forth., as those individuals are more likely to be a liability to them than the average purchaser, thereby charging them a high premium.
Obesity: Obesity is related to health conditions consisting of Osteoarthritis, coronary heart disease, cancer, blood stress, stroke, and so forth which could lead to further headaches. As a result, overweight individuals are charged high premium.
As soon as the coverage business enterprise has taken the aforementioned factors into consideration, it'll decide the amount of premium applicable to an individual, making it important which will make certain that you lead a wholesome life and make the right selections with a purpose to avail the great feasible costs.
The premium charged for your life insurance coverage is the quantity of cash levied by insurance companies for insurance. The premium charged by every business enterprise may range, making it important for you to evaluate different policies to find the one that satisfactory fits your requirements. but, there can be instances whilst the quote for a premium might also vary from the premium this is genuinely charged because it will rely upon the manner in which the premium is computed.
Mathematical calculations and statistics performed through the insurance provider's underwriting department will decide the premium charges to a man or woman. In maximum instances, the statistical records regarding the health, age and life history of an person are considered while computing the premium. As an instance, a teen riding a fancy sports bike will probable ought to pay a high insurance premium in consideration with a middle-aged individual who drives a sedan. The underwriting method is relevant to all people who desire to avail life insurance, and it involves investigation of filial illnesses, evaluation of stories together with motor automobile reports and medical data.
Once the underwriting department of your coverage provider has accumulate all of your facts and analyzed it, an actuary will scrutinize it further to decide your chance to the coverage employer. The actuary may also forecast how possibly you are to make a claim on your policy, and the better your chances of creating a claim, the better your premium charge might be. The actuary can even peruse mathematical statistics after which he / she will assemble "mortality and sickness" tables primarily based on which potential losses you'll incur because of illnesses and loss of life may be referred to. There tables are utilized by actuaries to create fashions that confirm how in all likelihood an individual is to settlement ailments or die. The premium charged to you'll be decided by using these results.
Life Insurance Provider Statistics (2016-2017)
In the Indian insurance industry, the life insurance sector enjoys a high market share of around 77.95% whereas the non-life sector has a comparatively smaller market share consisting of 22.05%.
There are currently 62 insurance companies operating in India, out of which 8 belong to the public sector, and the remaining 54 belong to the private sector. Under the 8 public sector insurers, there are 2 specialized insurers - ECGC and AIC, one life insurer - Life Insurance Corporation of India (LIC), 4 general insurance providers and one reinsurance company - GIC. The private sector consists of 23 life insurers, 17 general insurers, 6 standalone health insurers and 8 re-insurance companies which also include branches of foreign re-insurance companies and Lloyd's India.
During 2016-17, the industry registered premium-based income of Rs.418476.62 crore, as opposed to Rs.366943.23 crore which was collected in the previous fiscal (2015-16), thereby recording a growth of 14.04% in the current fiscal (last fiscal saw a growth of 11.84%). Private sector life insurers recorded a growth of 17.40% in 2016-17 (compared to 13.64% in 2015-16) in premium-based income, and LIC registered a 12.78 % growth in their income from premiums for 2016-17 (11.17% in 2015-16).
In terms of total premium income, LIC's market share dropped down from 72.61% (2015-16) to 71.81% (2016-17). Private insurers registered a rise in their market share which went up from 27.39% in 2015-16 to 28.19% in 2016-17.
In terms of first year premium, the market share of private sector insurers went down to 28.89% in 2016-17 from 29.46% in 2015-16. On the other hand, LIC registered a slight rise in their market share in terms of first year premiums which stood at 71.11% in 2016-17, as compared to 70.54% in 2015-16. In terms of renewal premium, LIC again clinched a greater portion share of the market share with 72.31% in 2016-17 (73.87% in 2015-16), as compared to private insurers who stood at 27.69% (26.13% in 2015-16).
Unit-linked insurance products (ULIPs) posted a 12.70% premium growth which went up from Rs.46889.58 crore in 2015-16 to Rs.52845.26 crore in 2016-17.
Traditional insurance products recorded a 14.24% growth in terms of premium, which went up from Rs.320053.65 crore in 2015-16 to Rs.365631.36 crore in 2016-17.
Dos and Don'ts of life insurance
Do your research: Given the number of alternatives at your disposal in terms of choosing the right coverage issuer after which choosing the policy that fits your requirements from the substantial array of options, it's important to do your research before shopping a life coverage policy as it can not simplest assist you save a very good sum of money, however it can also help you get hold of maximum benefits. Make sure that you have additionally checked up at the insurer to ensure that there are not any surprising hassles in the future.
Undergo the phrases and situations:The phrases and conditions report of your coverage plan contains all the information regarding the coverage. The general public do no longer be aware of each element and as a end result, turn out to be handling disastrous outcomes in as an alternative difficult conditions whilst making claims. Ensure that you study the policy document and understand it fully earlier than shopping an insurance policy.
Lock-in duration: There are times when individuals buy insurance policies but understand in some days or perhaps weeks that they're now not absolutely glad with the phrases and conditions of the coverage. In such cases, some insurance businesses provide a free lock-in duration, that's a short span of time in which a policyholder and return the coverage to the insurer for no penalty or price. Lock-in periods are normally 15 days long, so make sure you purchase a coverage with the aforementioned feature because it will make it simpler so that you can go back the policy and buy any other in case you are not happy along with your initial purchase.
Recall premium payment alternatives:Most insurance vendors provide premium fee alternatives on an annual, semi-annual, quarterly or monthly basis. It is instrumental that you pick a term in an effort to let you make premium payments with out different consequences. no matter your premium fee alternative, it's also advised that you pick the digital take a look at machine to make premium payments as it will make sure which you make in no way miss a fee date.
Don’t disguise anything: There are instances wherein people attempt to disguise some facts while filling out the software form and buying an insurance coverage. Your medical records must be accurately provided to the coverage employer, and you must also notify them if you are a smoker as each detail requested by them is an crucial factor in determining the phrases and conditions of your coverage coverage. Missing or deceptive information can purpose primary problems when seeking to make claims, even a total rejection of claims in a few instances.
Life Insurance for NRIs
With the coverage region maturing vastly over the last few years, humans have become increasingly more aware of the importance and absolute vitality of insurance policies(each health and life). Indian citizens have rendered themselves proactive and with the regular assist of economic advisors, planning in advance has come to be ever extra smooth.
Surge of NRIs in India: With an boom inside the wide variety of Non-Resident Indians wanting to put money into insurance policies in India, the platform has become extraordinarily expansive. Some of Indians starting place or PIO and a Non-Resident Indian has the overall liberty to buy a life insurance coverage in India to assure their lives. Multiple coverage companies and agencies have now begun to re-strategise their rules to suit the desires of PIOs and NRIs.
As most of you must be conscious, a term plan is largely a pure safety policy, and therefore makes the most feel to be purchased for the safety of a whole family. A couple of coverage agencies in India have diverse time period plans which can be absolutely suitable to the wishes of an NRI or a PIO. With the help of a questionnaire, this type of an insurance coverage may be bought in a jiffy. They're now not completely one-of-a-kind in their shape, however people can also customise their polcie as in keeping with their wishes.
However, in India, currently a handful of insurance agencies have a streamlined device in area to assist the NRIs with their rules. Some necessities are there, whether or not it's a medical test or easy documentation, the personnel of those agencies will constantly be at your provider. Given under are a few of the firms who've a systemised structure in location:
LIC or Life Insurance Corporation Of India
Max life insurance
ICICI Prudential life insurance
Kotak Life Insurance
NRIs may additionally choose from sure insurance policies that rely entirely where the man or woman is living presently, their age, and other valid statistics.
Area: In case you are an NRI seeking life insurance policy in India, then you definitely need to bear in mind the fact that your geographical place will not be taken into consideration for doing so. However, for the medical take a look at, you might need to visit the place of beginning.
No extra charges in any way: If the dangers involved are more or much less the same, then there might be no distinction within the top rate rate of resident and non-resident Indians. The premium price could be impacted if the threat is multiplied for some cause.
Virtual charge: An NRI can choose to pay digitally through a overseas country's remittance, or a financial institution account with an Non-resident everyday (NRO) nature, and via a Non-resident (NRE)/foreign foreign money Non-Repatriable (FCNR) account.
Advantages inclusive of loss of life and maturity also can be deposited through the above-referred to techniques. In case you are paying the charges in a overseas foreign money, your proceeds can be rendered completely repatriable. But, this may no longer endure any impact on the coverage or the proceeds reputation whatsoever.
Latest Life Insurance News
Insurance Sector Expected To Reach 280 $ USD By FY20
September 10, 2018
The insurance industry has always been considered an underdog for decades. Many people are not even aware of the benefits of some basic policies. Until 2001 only 2.71% of the market was captured by the Insurance sector. Within a span of sixteen years, it has penetrated to 3.7% in 2017. During the period of six years i.e. 2011 to 2017, there’s a 56% increase in this Industry.
In the Financial Year (FY) of 2017-2018, it has recorded the Gross premium of 72 billion USD.
The launch of revolutionary schemes like Ayushman Bharat has further accelerated this sector.
Pioneer float of such plans commits to cover Rs. 5 lakhs for about 10 crore poor families. This move will also generate lots of jobs for different skills that will improvise the economy and the employment rates.
As per the latest statistics by IRDA, almost 25% of people don’t care to renew their policies every year. This is more common with the insurance products that are of a low premium amount. Insurance giant LIC has earned 5,000 crores because of lapse of premium in the fiscal year (FY) of 2016-17. The same year it sold policies worth Rs. 22,178 crores, which is almost 44% of the market share. In the FY of 2017, out of 1.8 crore policies it sold, one third are expected to expire before the end of 2018.
Attribute to this loss goes to the agents who often sell insurance just to meet their targets. In some other policies, there are greater chances of misspelling as well. Agents intent to promote such products to increase their numbers and commission. In the west, such actions by the insurance advisers are managed by the clause of clawback. In countries like India, Insurance Industry is still at a nascent stage.
Policy lapse majorly contributes to increasing the ratio of AUM in the Industry. It’s even faster than the increase in the AUM in mutual fund Industry. Within a span of a decade, the mutual fund has grown ten times. In the case of the insurance sector, the ratio of increase is even higher. It has been growing at a pace of 11-14% every year. Life industries have witnessed exponential growth from Rs. 5.41 lakhs to Rs. 30 lakhs from 2008 to 2018. Reson for such a huge growth is the asset under management. Prime reason for the growth of AUM in insurance niche is the cessation in the policy.
These lapsed policies are a complete loss to the policyholders. If they don’t care to renew the policy within the year of purchase than they bear lose of the entire premium amount. The average rate of renewal every year is approximately 75-76%. All the lapsed policies contributes in increasing the AUM of the Insurance Industries.
Linking Of Aadhaar With Insurance Policy Is Mandatory, Says IRDA
November 13, 2017
On Wednesday, 8th Nov 2017, the Insurance Regulatory And Development Authority Of India (IRDA) said that the linking of Aadhar number with insurance plans is compulsory and asked insurance companies to implement the statutory norms.
“The Authority clarifies that, linkage of Aadhaar number to insurance policies is mandatory under the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017,” the IRDA said.
In the last June, the government of India had informed about the Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017, making Aaadhar and PAN/Form 60 compulsory for getting financial services that include insurance also and asked policyholders and companies for linking the existing policies with the same.
In a discussion with all life and general insurance companies, IRDA said the rules have “statutory force” and they have to implement the rule without waiting for the further instructions.
Right now, there are 24 life insurers and 33 general insurance companies operating in the country.
Although, there are no deadlines that have been given by IRDA for the completion of the process, as per the circular, it has to be done as soon as possible. Some insurance companies also said that this can also result in the delay of payout in a few cases. Aadhaar is now also compulsory for financial transactions of Rs 50,000 and above. Likewise, one has to link one’s Aadhaar number with the mobile number latest by February 6, 2018.
Life Insurance - FAQ's
1. Why buy a Life Insurance Policy?
Life Insurance Policy is the best means to fulfil the goal which has been set by you. In the case of any tragedy to the policyholder, life insurance serves as the best way to help the families. Even the needs of the children are secure as the policy can help when the main bread owner dies. These policies protect you from taxes which are a great benefit. Premiums which are paid get a tax deduction. The policy can be taken for a special motive like the wedding of children or their education. Even the retirement life can be secured by taking the policy. Thus taking insurance policy is beneficial.
2. When to buy Life Insurance Policy?
The very moment when you feel that your family or loved ones are dependent on you for their needs without even thinking for a minute you should buy the policy. As there is no age limit so it's better to get it the moment you think the requirement arises.
3. How much life insurance you require?
The policy you require depends on the needs. To the more when you are young needs are limited but as you grow you have more responsibly and more people attached to you. So you should choose the best one keeping in mind your future needs.
4. What are the immediate financial expenses which your family may require immediately after your death?
When a person dies the family is in a state of grief and it takes months to come out from this shock. It is disheartening as you have lost your loved one but there are expenses such as for cremation and then other ceremonies which are to be done. Taking an insurance which covers all aspects will provide you with money to fulfill the immediate expenses which will be there after death.
5. How to know your present expenses to get the best insurance plan?
Before buying an insurance policy think about the liabilities which are there. From the loans of the banks to the credit card bills keep everything in mind. If your family is living in a rented accommodation think about the rent that the policy should be able to give till your children grow up and earn. Groceries, school fees, other expenses of families, taxes etc, keeping in mind all these then only select a policy.
6. How to know future expenses to get the best insurance plan?
Future expenses basically help you to get a vision of your needs in future. From settling the children, health issues to the retirement living, you need to think about all the expenses to get the best life insurance plan.
7. How long will your dependents need support in case of your sudden demise?
This is a critical question as you never know when you are going to leave for your heavenly abode. Before buying a policy think about the support your family may require. Maybe you leave the world early and your children are small. So, till the time they grow up and settle the policy should be such that it supports them. Even till your wife starts working or arranges some other income source policy should be there to help them. Thus this all depends upon what your family plans for their future and then only you can take a policy.
8. How to buy the best life insurance policy in India?
The simple way to choose a policy is to do it when you are young, thus you could increase coverage the amount. Research about your needs and then imply on the tools which insurance company gave you. Taking a note on them, choose the best policy.
9. Is it great to shop for life insurance policies at a young age?
Sure, purchasing a policy at a particularly younger age, permit you to avail the plan for insurance low premium.
10. Is it better to purchase a life insurance from an agent or have to I should buy one from an insurance company?
While insurance companies are the most dependable sources when it comes to purchasing life policies, coverage agents aren't absolutely untrustworthy. However, before you buy a policy from an insurance agent, it's suggested which you request for his or her authorisation card from the IRDA to make sure that they're certified sellers.
11. When does life insurance cover begin?
It will start on the date of commencement after the insurer has acquired and accredited of your insurance policy.
12. Are life insurance premium constant?
The premiums of such policies usually do not change and stay fixed for the term of the policy that's decided with the aid of the policyholder. A few policies have single pay or confined pay options Additionally where the premiums may be paid in a single lump sum or over a period of a few years.
13. Can older people purchase life insurance?
Sure, older residents who're above the age of 60 can also purchase life insurance regulations. There are numerous sorts of insurance policies like term policies, whole life policies and guaranteed life coverage guidelines that are designed to provide cover to older individuals. LIC and Reliance provide life insurance plans specially designed for senior citizens.
14. Is it great to take a single cover policy or a joint life insurance plan?
In case of single cover policy, each people are covered under separate and impartial regulations which don't have any effect. But, below a joint coverage, each individuals are covered below one plan. In case of a mishap where both individuals lose their life, their beneficiary will obtain only a single pay out, at the same time as in the case of two single policies, there might be pay outs, one from plan to another.
15. Do life insurance charges grow with the age?
Premiums for numerous sorts of life insurance policies like whole life insurance, as they do for term insurance plan. However, for term insurance policies, if you want to renew the policy after the stop of the coverage time period, the rates might also appreciably growth so as to cover the risk of a higher age.
16. Who is the claimant in a insurance coverage?
Post a Comment