What is Life Insurance? What Are the Benefits of Life Insurance Plans? [Full Details]

Life insurance is good for you and your family. If someone is the sole breadwinner of the family, then upon their death, life insurance can provide some financial relief to the people who depend on them. Life insurance is not just one type. Some policies give you coverage as well as the option to get returns on investments.

Apart from the family financial security, a life insurance policy also helps in saving taxes under Section 80C and Section 10 (10D) of the Income Tax Act 1961. Apart from tax benefits and financial protection, a life insurance plan also provides many additional benefits that We will know in detail later. Let us first get the information about some good life insurance plans in India.

What is insurance? How Does Insurance Work? [Full Details]

life-insurance-policy-details

Life Insurance Policy Details

Life insurance is a contract between an insurance company and an insured. Accordingly, in the event of any kind of accident to the insured and he died in it, the insurance company pays a guaranteed amount to his candidate (a family member). The secured life must make regular payments in a small amount as a premium for a limited time period. This insurance policy acts as a financial shield for the family or loved ones.

लाइफ इंश्योरेंस क्या है इन हिंदी – एक जीवन बीमा पॉलिसी एक व्यक्ति और एक बीमा प्रदाता के बीच एक अनुबंध है, जिसमें बीमा कंपनी मासिक शुल्क (प्रीमियम के रूप में जाना जाता है) के बदले पॉलिसी धारक को वित्तीय सुरक्षा प्रदान करती है।

व्यवस्था के आधार पर, पॉलिसी धारक की मृत्यु की स्थिति में, या यदि पॉलिसी देय हो जाती है, तो बीमा कंपनी को एक निश्चित अवधि के बाद व्यक्ति या उसके परिवार को एकमुश्त भुगतान करना होगा। पॉलिसी खरीदार की व्यक्तिगत जरूरतों और आवश्यकताओं के अनुरूप विभिन्न प्रकार की जीवन बीमा पॉलिसियां ​​हैं।

जीवन बीमा प्रीमियम क्या है – सीधे शब्दों में कहें तो, “जीवन बीमा प्रीमियम” वह राशि है जो आप अपने जीवन बीमा कंपनी को अपने कवरेज के बदले में देते हैं। जीवन बीमा प्रीमियम या तो नियमित मासिक/वार्षिक भुगतान या एकमुश्त भुगतान जैसा भी मामला हो, हो सकता है। भुगतान (मृत्यु लाभ कहा जाता है) वह राशि है जो जीवन बीमा कंपनी आपके लाभार्थियों को भुगतान करेगी यदि आपकी अवधि के दौरान अप्रत्याशित रूप से मृत्यु हो जाती है।

Types of Life Insurance Policy in India

You can choose from the best types of life insurance policies according to your need…

Term Insurance Plan

This plan can be purchased for a fixed period, such as 10, 20, or 30 years. Under this plan, you get coverage for any duration as you choose. There is no accrual interest in such a life insurance policy. They provide a cover on life without the savings/profit component. Hence, it is cheaper compared to other policies. In term insurance, upon the death of the policyholder during the term of the policy, the sum insured under the policy is paid to the beneficiary.

Lifelong Life Insurance

In Lifelong life insurance i.e. whole life insurance plan, you get protection for life. This means that policy has no term. Upon the death of the policyholder, the candidate receives an insurance claim. Other life insurance policies have a maximum age limit, which is usually 65-70 years. After that, the candidate cannot accept the death claim in the event of death. But under life insurance, a candidate can claim even if the policyholder dies at the age of 95. The premium for this policy is very high. Under this policy, the policyholder has the right to withdraw the partially guaranteed amount. Apart from this, he can also earn money in the form of loans against the policy.

Endowment Policy

This type of life insurance policy has both insurance and investment. This policy contains a risk cover for a specified period and at the end of that period, the guaranteed amount along with the bonus is returned to the policyholder. The face value of the policy amount under the endowment policy is paid upon the death of the policyholder or after the specified number of years. Some policies also pay in case of serious illness.

Money-Back Insurance Policy

This policy is a type of endowment-only policy. This policy also contains a combination of investment and insurance. The difference is that in this life insurance policy, the guaranteed amount is returned with the bonus in installments during the term of the policy itself. The last installment is available at the end of the policy. If the policyholder dies during the term of the policy, the entire insured amount will reach the beneficiary. However, the premium for this policy is the highest.

Unit-Linked Insurance Plans (ULIPs)

Protection and investment remain in this plan as well. The returns you get in traditional endowment insurance policies and refund policies are guaranteed to an extent, while returns are not guaranteed in ULIPs. This is because the part invested in ULIPs is invested in bonds and stocks and you get units like mutual funds. In this case, returns are based on market volatility. However, you can decide how much of your money should be invested in stocks and how much money should be invested in bonds.

Retirement Plan

Life insurance coverage is not available in this plan. It’s a retirement solution plan. Under this, you can build a retirement fund by assessing your own risk. After a specified period, a certain amount will then be paid to you or the beneficiary as a pension. This payment can be on a monthly, semi-annual, or annual basis.

Child Insurance Policy

These plans are designed with children’s education expenses and other needs in mind. In a child plan, a lump sum is paid after the policyholder dies but the policy does not lapse. All future premiums are waived and the insurance company continues to invest on behalf of the policyholder. The child gets the money for a certain period.

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Best Life Insurance Plans of 2020 21 in India

Here are the best insurance plans in India.

Insurance PlanEntry Age (Min and Max)Policy Term (Min and Max)Insurance Money 
Aditya Birla Sun Life Shield Plan18-65 years 10,20/30 Years 25 lakhs – there is no upper limit 
Aegon Life iTerm Plan18-75 years 5/40 years 10 lakh – there is no upper limit
Aviva Life Shield Advantage Plan18-55 years 10/30 years Option A -35 Lakh – There is no upper limit Option B – 50 lakhs – there is no upper limit
Bajaj Allianz Eye Secure 18-70 years 10/30 years 20 lakh – there is no upper limit 
Bharti AXA Life Premium Protect Plan18-65 years 10,15/35 Years 25 lakhs – there is no upper limit 
Canara HSBC iSelect Plus Term Plan18-65 years 10/30 years 25 lakhs – there is no upper limit 
Edelweiss Tokyo Life Simply Protect Plan 18-65 years 10/40 years 25 lakhs – there is no upper limit 
Exide Life Smart Term Plan 18-65,60 Years 10,12/30 Years 5 lakh, 10 lakh / not applicable
Future General Flexi Online Term Plan18-55 years 10/75 years 50 lakh – there is no upper limit
HDFC Life Click 2 Protect Plus18-65 years 10/30- Years 10 lakh -10 crore 
HDFC Life Sanchay  30-45 years 15/25 years105673 – there is no upper limit 
ICICI Pru iProtect 20-75 years 10/30 years 3 lakh – there is no upper limit 
IDBI Federal Income Protect Plan 25-60 years 10/30 years Not Applicable
India First Life Plan 18-60 years 5/40 years 1 lakh -5 crore 
Kotak Life Preferred ITerm Plan 18-75 years 10/40 years 25 lakhs – there is no upper limit 
LIC Jeevan Amar 18-65 years 10/40 years 25 lakhs – there is no upper limit 
LIC Tech Term  18-65 years 10/50 years 50 lakhs – there is no upper limit 
Max Life Smart Term Plan 18-60 years 10/50 years  25 lakh -100 crore 
PNB MetLife Mera Term Plan 18-65 years 10/40 years 10 lakh – there is no upper limit  
Pramerica Life- You Protect  18-55 years 10/30 years 25 lakh – there is no upper limit 
Reliance Nippon Life Protect Plus 18-60 years 10/40 years 25 lakh – there is no upper limit 
SBI Eshield Plan 18-70 years 5/30 years 20 lakh – there is no upper limit 
SBI Shubh Invest  18-60 years 5/30 years 75000- there is no upper limit 
Sahara best investment life insurance 9-60 years 5/10 years 30000-1 lakh 
Shriram Life Cashback Term Plan12-50 years 10,15,20,25 Years  2 lakh -20 lakh 
Sud Life Abbey 18-65 years 15,20/40 Years  5000000/-
Tata AIA Life Insurance Sampoorn Raksha Plus 18-70,65 years 10,15/40 years 50 lakh – there is no upper limit 

Disclaimer: ” QnAHub does not endorse, recommend and evaluate any insurance company, any plan .”

What is a Life Insurance Premium?

A life insurance premium is an amount that must be paid to take advantage of life insurance benefits. The life insurance premium is paid annually although it can be paid semi-annually and monthly as well. Paying a premium also increases the cost of insurance. The insurance company decides the premium that the policyholder must pay. With this, the life insurance buyer also gets a chance to choose the policy and the amount insured. The insurance company takes into account your lifestyle, your work, your dependents, your money, and your life money while choosing the sum insured.

Note – There is no premium calculator that can calculate a person’s life value.

Documents Required to Buy a Life Insurance Policy

  • income certificate
  • Address proof
  • Identification card
  • age certificate
  • And more…

Why Buy a Life Insurance Policy and What Are its Benefits?

Nobody can say what will happen in the future. The death of someone at any point in their life can cause problems for their family. Hence, purchasing a life insurance policy will ensure that your family will be able to live comfortably after you. They can maintain their standard of living in case of any emergency. There are many benefits that life insurance policies offer to policyholders. Let’s take a look at the most important benefits.

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Financial Assistance or Death Allowance

An individual needs insurance to cover his expenses, pay off debts, and maintain the income and education of children. Everyone knows that death is real, but what happens when a person dies. So in his absence, his family has to face a lot of difficulties. In times like these, life insurance acts as an aid and contributes to their needs.

Accident Coverage

A person may have an accident in which something unfair may happen. The cost of self-treatment after an accident is prohibitive and public insurance policies do not provide them with the support they expect. But fortunately, a life insurance policy is able to do just that, with the goal of meeting needs that we think will reduce.

Assured or Guaranteed Income

In the case of retirement, there are some schemes that prove useful in saving money. You keep saving money during a certain period of time that you get back later as income. It works as a fixed income at the time of retirement.

Credit Facilities

People who take advantage of life insurance also have the option of availing of a loan or loan through their insurance policy. Which can help them meet their life needs without working on the benefits guaranteed in the purchased policy.

Tax Benefits or Advantages

Life insurance offers attractive tax benefits and helps you build a tremendous amount of wealth. Almost all life insurance policies offer you the benefit of a tax deduction when you pay the premium under Section 80C of the Income Tax Act 1961, and also offer you a tax-free amount guaranteed under 10(10)d.

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How to Choose the Best Life Insurance Policy?

Since there are so many plans offered by life insurance companies, it is very confusing to choose the best plan among the various options to get the best coverage at the most affordable rates. Here are some points to remember before purchasing a plan:

Keep in mind the claim ratio

A person buys a life insurance policy only to get a claim in a time of need. But what if the family does not get the security deposit after the person leaves? There is nothing to worry about, there is a way to solve it. Before choosing a provider, you should check its claim ratio. This will give you an idea of ​​the number of claims the company made in the year. The company with the highest percentage may be a good option for you.

Company background check

Today there are many companies that offer insurance policies. For this reason, there is a dearth of quality providers in the industry. To be smart, you should do a background check for every company. Whatever facts fit your expectations, they should align with that.

Assessment of the sum insured

Before you start knocking on the doors of insurance companies, it is highly recommended to calculate the expected amount guaranteed. Besides, you can make a deep check from the premium calculation done by the companies. Combine the two factors to see which company is worth your hard-earned money.

Important customer feedback

Sometimes a company may look great on the outside but it operates with bad intentions on the inside. The best way to find such companies is through customer reviews. These reviews are provided by people who have experience with how these companies operate and whether they keep their promises. Reading the reviews of these people can really influence your buying decision.

How to Claim a Life Insurance Policy?

In the event of the death of the insured, the nominee/executive officer of the deceased will be able to file the claim in the following manner:

  • Notify the insurance company of the death as soon as possible with important details such as time, place, and cause of death.
  • Submit the required documents and proofs to the insurance company. This will include the death certificate of the insured along with the claim form provided by the insurance company.
  • If the policy is set, the assignee must provide documents. If any person (other than the nominee or assignee) makes the claim, he/she must provide legal evidence of his/her relationship with the insured.
  • If necessary, the autopsy, hospital, and attending physician report must also be submitted.
  • In cases involving police investigations, an investigation/survey report must be submitted.
  • Once the investigation is over, the insurance company will approve/reject the claim. Details of this will be shared with the plaintiff.

Frequently Asked Questions About Life Insurance

What is life insurance?

A life insurance policy is a contract between an individual and an insurance provider, whereby the insurance company pays the policyholder (the policyholder) a monthly fee/fee (called a premium) that provides financial protection.

What are the benefits of life insurance?

Life insurance offers attractive tax benefits and helps you build a tremendous amount of wealth. Almost all life insurance policies offer you the benefit of a tax deduction when you pay the premium under Section 80C of the Income Tax Act 1961, and also offer you a tax-free amount guaranteed under 10(10)d.

Why buy a life insurance policy?

A life insurance policy is the best option for achieving the goal you have set. In any difficult time a policyholder might face, life insurance helps the family. Even the needs of children are protected because the policy can help in the event of the death of the insured.

When do you buy a life insurance policy?

The moment you feel that your family or loved ones are counting on you to meet your needs, without wasting any time you should buy the policy. Since there is no age limit, it is best to purchase life insurance the moment you need a life insurance policy.

Is it a good idea to buy a life insurance policy at a young age?

Certainly, buying an insurance policy, especially at a young age, allows you to take advantage of a policy at a lower premium.

Can Seniors or older Buy Life Insurance?

Yes, those over the age of 60 can also purchase life insurance. There are several types of insurance policies such as term policies, life insurance policies, and guaranteed life coverage guidelines designed to provide coverage for seniors.

What is the maximum age for obtaining life insurance?

Since the company has set a minimum age for obtaining life insurance, there is no single age. However, the minimum age set by life insurance companies is between 75 and 80 years.

Who can claim life insurance after death?

After the death of the policyholder, his nominee or legal heir can claim life insurance.

How can I revive an expired life insurance policy?

You will need to renew your policy from time to time to continue the benefits of the policy. If you forget to renew your policy, it will expire. In such a case, you will have to provide evidence of late payment of installments and the company will revive your policy by imposing a fine.

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