Life insurance plans are one of the most efficient ways of ensuring the future of a family in the event of an untimely death of the policyholder as well as providing maturity benefits upon survival. It is possible to obtain life insurance benefits either through term plans that provide financial protection to beneficiaries or through investment options like ULIPS, endowments, etc that are used for wealth creation.
Different Types of Life Insurance Plan
|Type of life insurance||Overview|
|Term Insurance||Life cover is provided for a specific tenure at a fixed premium|
|Unit linked insurance||Offers dual benefit of investment and insurance protection|
|Endowment plan||Offers the benefit of savings along with protection|
|Whole life insurance||Protection is offered for lifetime or till the age of 100|
|Money back insurance||Periodic payouts are made to the policyholder at specific intervals|
|Pension plans||Provides fixed amount at regular intervals to help you take care of post retirement expenses|
Why choose InsuranceDekho
Intra plan comparison
To compare for the best pricing
Expert Claim support
Support during claim request
To provide extra benefits as Add ons
Life Insurance Premium Calculator
Date of Birth
Do you smoke or chew tobacco?
Choose required coverage to secure your family’s future
What is Life Insurance?
Life insurance is a contract between the policyholder and the insurance company according to which the latter agrees to provide a sum assured called the death benefit in the event of an unfortunate demise of the life assured. In case of survival of the life assured throughout the policy tenure, a maturity benefit is paid to the life assured. One can also choose to get a compensation in case of a critical illness by opting for the same via a critical illness rider. There are various types of life insurance plans namely term plans, child plans, retirment plans, money-back plans, and Unit-Linked Insurance Plans (ULIPs). Besides the term plans which are pure protection plans, all other types of life insurance plans offer an investment element to help meet the policyholder’s wealth creation requirements.
How Does Life Insurance Work?
Life insurance is a common option considered by many people for financial planning to secure their future. Life insurance policy can help you ensure financial protection of your family in case of your unforeseen demise. At the time of purchasing a life insurance policy it is essential for you to understand how a life insurance policy works and how your nominees/beneficiary can receive the proceeds of your life insurance policy.
A life insurance policy is a contract between the policyholder and the insurance provider wherein the insurance provider promises to provide life cover to the life assured in exchange of regular premium payments. The life assured is the person who is insured under the life insurance policy and the policyholder may or may not be the life assured but can be the person who purchases the life insurance policy. The policyholder/life assured can choose to pay premiums on an annual, semi-annual, quarterly or monthly basis.
In case of an unforeseen demise of the life assured during the policy tenure, given that the life insurance policy is active, a death benefit shall be provided to the nominee/beneficiary which can help them fulfill their financial requirements and goals in the absence of life assured. If the life assured survives the entire policy tenure, surviving benefits known as maturity benefit shall be provided to the life assured at the end of the policy tenure.
Life insurance is not very complicated to understand, in exchange of regular premiums the insurance companies provide life cover to an individual. The policyholder can choose to add a rider to the life insurance policy to increase the power of coverage of the base policy. Riders are additional coverage that comes in exchange for additional premium. One can also use life insurance to avail tax exemptions.
Key Features of Life Insurance Policy
|Death Benefits||Under a life insurance policy a sum assured known as death benefit shall be provided to the nominee in case of an untimely death of the life assured during the policy tenure. The death benefit amount can help your financial independents to fulfil their daily financial requirements and goals in your absence. A life insurance policy helps you create financial security for your loved ones even in your absence.|
|Investment Component||Life insurance can act as an investment component if one chooses to invest in ULIPs, Money Back and Endowment plans as these plans provide dual benefits of life cover and investments, such plans provide returns on investments. Money Back and Endowment plans provide additional bonuses based on the performance of the life insurance provider.|
|Tax Exemptions||The benefits under a life insurance policy help the family of the life assured build a safe and secured future even in the absence of the life assured. Moreover, under Section 80C and 10(10D) of the Income Tax Act, 1961 one can avail income tax benefits by investing in a life insurance policy. Premiums paid towards a life insurance policy qualify for tax exemptions.|
|Maturity Benefits||Some life insurance policies provide a maturity benefit at the end of the policy term in case the life assured has survived the entire policy tenure. The maturity benefit under a life insurance policy helps an individual to fulfill his/her financial goals over a period of time.|
|Additional Coverage||Under life insurance you choose to increase the scope of coverage of the base policy by opting for a life insurance rider which are additional coverages that come in exchange for an additional premium. These additional coverages increase the coverage of the life insurance policy. Some common life insurance riders opted with a life insurance policy are Accidental Total and Permanent Disability, Accidental Death Benefit, Critical Illness Rider, Accelerated Terminal Illness Rider etc.|
|Collateral for Loan||Some life insurance policies offer loans against the policy feature which can help an individual to fulfill urgent financial requirements such as treatment for medical emergencies or help an individual to fulfil financial obligations which cannot be avoided.|
|Flexible Premium Payments||Under life insurance policy premium can be paid on a monthly, quarterly, half-yearly or yearly basis. Life assured is given the flexibility to choose the premium payment mode and frequency.|
Benefits of Life Insurance
There are several benefits of having a life insurance policy. Life insurance is a financial tool which can help an individual create a financial net for their loved ones in case anything unforeseen happens to the life assured. It not only helps an individual to financially secure the future for their loved ones but also helps them save their earnings for a better future. Life insurance is one essential part of one’s financial plan. Most people use life insurance policies to ensure that the beneficiaries who may suffer financial hardships in the absence of the life assured have financial resources to fulfil their daily financial requirements and pursue their dreams.
A life insurance policy provides a sum assured as the death benefit in the event of an untimely demise of the policyholder, thereby providing financial security to the life assured’s family. A life insurance thus acts as a financial shield and ensures that the aspirations of the life assured’s family do not get compromised.
Peace of Mind
Life Insurance helps create a sense of peace of mind for an individual because it ensures a financially secured future for the loved ones of the life assured in his/her absence. Life insurance also provides financial aid at the time of medical emergencies thereby decreasing the family’s stress to arrange funds during difficult times.
Purchasing a life insurance policy can help one ensure the financial stability of their loved ones in the future. In case of a death of life assured, a life insurance plan pays out a death benefit to the nominee which can help the family to clear out debts or any other liabilities and maintain their standard of living.
Life insurance premiums qualify for a tax deduction of up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act. Also, the life insurance proceeds qualify for a tax exemption under Section 10(10D), if the premium is up to 10% of the sum assured or the sum assured is at least 10 times of the premium amount of the life insurance plan.
Assured Income Benefit
Some life insurance plans offer an option to receive the death or maturity sum assured by way of regular income on periodic intervals as monthly, quarterly, half-yearly, or yearly instalments. This helps the life assured enjoy the benefits of the plan as an assured flow of regular income.
Most of the life insurance plans provide an option to avail a loan at a nominal interest rate to meet urgent financial requirements. This helps the life assured to enjoy a substantial amount of liquidity with the help of the life insurance plan. The loan facility is generally available with ULIPs, Endowment Plans and Child Plans.
Why Buy Life Insurance Online?
Purchasing life insurance online can be a very easy task but some people have doubts while purchasing a life insurance policy online. Below mentioned are some reasons why you should purchase a life insurance policy online:
Convenient: One can purchase a life insurance policy online as per their convenience i.e. one can purchase a life insurance policy anytime, anywhere. You can purchase a life insurance policy from the comfort of your home without having to visit the branch office of the insurance company. Purchasing a life insurance policy is very convenient as it is hassle-free, completely digital, time saving and payment can be made through different payment gateways.
Freedom of Choice: Many times agents can influence your purchasing decision, when you choose to purchase a life insurance policy online you have the freedom to choose the life insurance plan according to your budget, requirements and preferences without anybody else influencing your decision.
Quick Comparisons: You can use an online life insurance premium calculator to calculate the premium for life insurance policy and compare several life insurance plans according to your needs and budget. You can make quick comparisons as the premium calculator tool displays life insurance plans according to the information you enter. You can easily compare several life insurance plans at once.
Secure Payments: Many times people think that providing your bank details or card details online on a website may lead to misuse of the information but payment gateways are always encrypted to ensure full security for customers. The payment for life insurance policies are safe and completely encrypted.
How To Buy Life Insurance With InsuranceDekho?
- Fill Your Details
Enter your name, mobile number, date of birth and select your gender. Click on ‘View Instant Quotes’.
- Compare Life Insurance Quotes
All the life Insurance plans matching your requirements and details will get displayed on your screen. Compare the available plans and select the plan that best fulfills your requirements.
- Make Payment Online
After selecting the life insurance plan adjust your sum assured and policy term and then proceed with the payment. You can make the payment using netbanking and/or debit/credit card.
- Submit a photo id proof (voter’s id, aadhaar card, pan card and passport).
- Address proof (electricity bill, telephone bill, ration card or any other utility bill)
- An age proof such as birth certificate
- A passport size photograph along relevant medical records and your recent salary slips to get your policy document.
Partner Life Insurance Companies
Top Life Insurance Companies in India 2022
Here’s the list of the best life insurance companies as per the claim settlement ratio (CSR) registered by them in the financial year 2020-2021.
|Rank||Life Insurance Company||Claim Settlement Ratio 2020-21|
|1||Max Life Insurance||99.35%|
|2||Aegon Life Insurance||99.25%|
|3||Bharti Axa Life Insurance||99.05%|
|4||Life Insurance Corporation of India (LIC)||98.62%|
|5||Dhfl Pramerica Life Insurance||98.61%|
|6||Exide Life Insurance||98.54%|
|7||Kotak Life Insurance||98.50%|
|8||Reliance Life Insurance||98.49%|
|9||Bajaj Allianz Life Insurance||98.48%|
|10||PNB MetLife Insurance||98.17%|
|11||Tata AIA Life Insurance||98.02%|
|12||HDFC Life Insurance||98.01%|
|13||Aviva India Life Insurance||98.01%|
|14||ICICI Prudential Life Insurance||97.90%|
|15||Aditya Birla Sun Life Insurance||98.04%|
|16||Sahara India Life Insurance||97.18%|
|17||Canara HSBC Life Insurance||97.10%|
|18||Edelweiss Tokio Life Insurance||97.01%|
|19||IndiaFirst Life Insurance||96.81%|
|20||Daiichi Life Insurance||95.96%|
|21||Shriram Life Insurance||95.12%|
|22||Ageas Federal Life Insurance||95.07%|
|23||Future Generali Life Insurance||94.86%|
|24||SBI Life Insurance||93.09%|
(Source: IRDAI Annual Report - Claim Settlement Ratio for the year 2019-20)
Types of Life Insurance Plans
- Term Insurance plans are the most basic type of life insurance plans. They are also called ‘Pure Protection Plans’. Under these plans,a death benefit is provided to the family members in the event of a sudden demise of the life assured during the policy term. This plan thus helps you keep your family financially secured in your absence.
- A Unit-Linked Insurance Plan (ULIP) is an investment cum life insurance plan. In addition to the life cover, this plan invests your money in market-linked funds. These plans generally come with 2 types of investment strategies namely automatic or systematic fund allocation strategy and self-managed strategy for the management of your funds.
- Child plans serve the dual purpose of providing a life insurance cover and an investment corpus for your child’s future. This plan provides a lump sum amount at the end of policy tenure that can be utilised for financing your child’s educational expenses or marriage expenses. These plans are generally available as savings plans and ULIPs.
- Money-Back plans are investment plans which provide guaranteed sum assured on plan maturity/death of the life assured. The guaranteed benefit under these plans can be availed as either a lump sum or in the form of regular instalments as steady income. The regular instalments is generally equivalent to a certain percentage of the sum assured.
- Retirement plans are investment cum life insurance plans which provide you with a life cover, along with helping you accumulate your savings for the life after retirement. This plan helps you enjoy a regular and steady flow of income after retirement, so that you can remain financially independent to enjoy the golden years of your life on your terms and conditions.
- Endowment plans are traditional savings plans which not only provide a life cover but also provide the policyholder an opportunity to invest their money for a specific period of time and earn guaranteed returns. The value of both, the death benefit and maturity benefit, is appreciated under the plan by way of regular and guaranteed additions at regular intervals.
Compare Different Types of Life Insurance Policy
Type of Life Insurance Policy
Who Should Purchase?
Term Life Insurance plans are known as risk protection plan because this insurance policy provides coverage against the uncertainties of life
Policy term of a term insurance plan typically range from 5-60 years.
Not all term insurance policies provide a maturity benefit. Depending on the insurance provider some term insurance plans provide a maturity benefit in case the life assured survives the entire policy tenure.
Term insurance plans are ideal for a person who wishes to ensure financial security of their family in an affordable manner as term insurance policies have affordable premiums.
Whole Life Insurance
Whole Life insurance provides protection till the age of 99/100 years. This type of life insurance policy does not provide investment opportunities.
Whole life cover provides life cover or the whole life of the life assured i.e. upto to the ages of 99/100 years.
Under whole life insurance policies a maturity benefit is provided to the life assured once they reach the age limit set by the insurance provider.
Whole life insurance plans are also ideal for someone who wants to ensure financial security of their loved ones and also ensure that his/her loved ones have adequate funds to pursue their dreams.
Unit Linked Insurance Plans
As the name suggests these plans invest part of the premiums paid towards market linked fund options and the remaining is used for life cover.
ULIPs usually have a policy term of 10 to 20 years.
Under ULIPs a maturity benefit is provided in case the life assure survives the entire policy tenure.
Unit linked insurance plans are ideal for people who have a good income and high risk appetite as part of the premiums paid are investing in market linked fund options. ULIPs are also essential for someone who wants to build a corpus for the future.
Endowment plans provide life cover and guaranteed additions. This type of life insurance plan offers wealth appreciation.
Policy term of an endowment policy ranges between 10 to 35 years.
Under endowment plans a maturity benefit along with additional bonuses (if any) shall be provided at the end of the policy tenure in case the life assured survives the entire policy tenure.
Endowment plans are ideal for people who want financial protection from the uncertainties of life and also want to avail guaranteed returns on investment.
Money Back Plans
Money back plans offer life cover along with investment components. Under this type of life insurance policy payouts are made at regular intervals known as survival benefits.
Money Back plans usually have a policy tenure of 20 to 25 years.
Money back plan also provides a maturity benefit after deducting the payouts made at regular intervals during the policy tenure.
Money back plans are essential for a person who wants to fulfil their financial goals at different stages of life along with life cover.
Retirement plans are a type of life insurance policy which helps an individual build a retirement corpus while providing life cover.
Retirement plans generally don’t have a fixed policy tenure.
Usually retirement plans don’t provide a maturity benefit but a regular flow of income post your retirement. Depending on the insurance provider, some retirement plans provide a maturity benefit in case the life assured survives the entire policy tenure.
Retirement plans are ideal for individuals who want to ensure a regular source of income post their retirement.
Child Life Insurance
Child life insurance plans have dual purposes which are providing life cover and helping you build a corpus for your child’s future expenses.
Policy tenure of a child life insurance plan is also not fixed. In case the life assured i.e. the parent passes away during the policy tenure, the child can avail benefits of the insurance policy till he/she completes 18 years of age.
Under a child life insurance policy a maturity benefit is provided in case the life assured survives the policy tenure.
Child life insurance plans are ideal for a person who wants to secure their child’s future. This plan is ideal for people who want to fund their child’s higher education, marriage expenses and other future expenses of their child.
Life Insurance Riders
- Accidental Death Benefit rider provides sum assured in case of an unfortunate demise of the life assured in an accident. This is one of the most opted for life insurance add-ons.
- Waiver of Premium rider waives off all the future premiums payable under the life insurance policy in the case of life assured’s death, disability, or diagnosis of a critical illness. The events covered vary with insurers.
- A Critical Illness rider provides additional coverage to the life assured in case a terminal illness such as heart attack, heart stroke, cancer, kidney failure, liver failure,etc. is diagnosed. It helps you to meet long-term medical expenses with ease and without worrying for finances.
- Under the Accelerated Terminal Illness rider, the death benefit is paid out in advance on diagnosis of a terminal illness of the life assured. This benefit is payable if the chances of survival of the life assured are low due to the illness.
- Under a HospiCash rider, if the life assured has to be admitted to the hospital for a treatment then a fixed amount of rider benefit will be provided to the life assured depending on the per day expense of the hospitalisation.
- Under the Accidental Total Permanent (ATPD) Disability rider, a benefit is payable to the life assured in case he/she suffers a total permanent disability making him/her unable to earn a living.
- An Income Benefit rider provides a certain number of monthly instalments equivalent to the monthly income of the life assured in case of his/her unfortunate death. This rider helps the life assured’s family maintain their standard of living even in the life assured’s absence.
- A Surgical Care rider provides benefit if life assured undergoes an unavoidable medical surgery due to injury or sickness. The benefit provided under this rider is equivalent to a certain percentage of the base sum assured.
Reasons To Invest in Life Insurance
Nobody has an idea which way their life will go. Life is very uncertain, nobody can predict the event of their life. To stay financially secured from the uncertainties of life one should consider purchasing life insurance. If you are not sure about whether life insurance is a good choice for you, below mentioned are some reasons why investing in a life insurance policy will help you ensure financial security for your loved ones:
Helps In Saving Taxes: One major advantage of purchasing a life insurance policy is that you avail tax deductions on the premiums you pay. Under the Section 80C and 10(10D) of the Income Tax Act, 1961 one can avail tax benefits for the premiums paid towards life insurance policy.
Helps In Planning For Retirement: Not every type of life insurance policy can help you create a corpus for retirement. Some life insurance providers have retirement plans that can help you build a corpus for retirement while providing life cover. The earlier you choose to purchase a retirement plan the more money you will have to fulfil your financial requirements post-retirement.
Will Help You Loved Ones Pay Off Your Debts: In case of your untimely demise of the life assured during the policy, a death benefit amount is provided to the nominee/family of the life assured. In case of your untimely demise your loved ones may have to deal with your debts, the death benefit amount can help your loved ones to pay off your debts.
Provides a Financial Safety Net: In case you are the sole breadwinner of the family your untimely demise will not only emotionally affect your family member but also financially. Under such circumstances a life insurance policy can help you provide a financial safety net for your loved ones even in your absence.
Provides Mental Peace: Biggest advantage of purchasing a life insurance policy is that a life insurance policy provides peace of mind. When you purchase a life insurance policy you ensure financial security of your family and you ensure you’ve done whatever you could to secure the future of your family in case you are not around.
Can Act as an Savings Tool: A life insurance policy encourages disciplined savings habits in an individual. Apart from encouraging disciplined savings habits some life insurance policies offer loans against the policy facility which can help you at times when you require immediate funds.
Can be Customised: Depending on different life insurance providers one can customise their life insurance policy by adding riders which are additional coverage that come in exchange of additional premium. Riders help you customise your life insurance plan according to your requirements.
Who is most likely to buy Life Insurance?
The most important question while purchasing a life insurance policy is whether you have financial dependents or not. Below mentioned are some types of people who are most likely to purchase a life insurance policy:
Young Adults: It is always advised to purchase a life insurance policy as soon as you start making a living. As soon as you start earning a living for yourself and your family you should consider purchasing a life insurance policy because it can not only help you avail tax benefits but also help you attain financial security from the uncertainties of life. It is said that life insurance should be purchased when a person is young because premiums for physically fit people are less and it also helps in early tax savings.
Parents: Many adults start considering purchasing a life insurance policy as soon as they become parents because they want to ensure a financially secured future for their child. As parents would always want to provide the best for their children, a lie insurance plan can help you create a financial plan to secure your child’s future. You will require coverage that can help take care of household expenses and potential expenses that arise from raising a child. A life insurance policy provides a death benefit in case of an unforeseen demise of the life assured during the coverage period, with the help of a life insurance you can ensure financial security of their child in case an unforeseen event takes place.
Married People: People who are married who have spouses that fully depend on the income of their partner often purchase life insurance policies to ensure financial security of their spouse in the absence of the life assured. As the sole breadwinner between two married people one should consider purchasing life insurance. The death benefit provided under a life insurance policy can help your wife/husband to fulfill their financial requirement and maintain a healthy standard of living even in your absence.
Sole Breadwinner of the Family: Usually the sole breadwinner of the family is most likely to purchase a life insurance policy to ensure that his/her family members are financially unbothered in case of an unfortunate demise of the life assured during the policy tenure. In case the primary income source of the family passes away, a life insurance policy can help the family member of the life assured to maintain a decent standard of living and fulfill daily financial obligations until they are able to arrange funds or start earning themselves. Life insurance policy can help an individual create a financial cushion for his/her family members in case an unforeseen event takes place.
Retirement Age Adults: People who don’t have a large savings amount such as people who wish to retire or have retired may also wish to purchase a life insurance policy. Some life insurance policies offer whole life coverage which can help an individual who is retiring ensure a financially secure future for their dependents such as child, husband/wife etc. In case of an unforeseen demise of the life assured, the death benefit amount paid under a life insurance policy can help the family of the life assured to fulfil immediate expenses.
Business Owners: If you own a business you must worry about what will happen to your dependents and employees in case of your unforeseen demise during the policy tenure. In case of an unforeseen demise of the life assured, the financial dependents of the life assured can use the death benefit amount to pay to creditors, manage payments, pay off life assured’s dues and maintain a decent standard of living in the absence of the life assured.
How Much Life Insurance Cover Do I Need?
The main objective of purchasing a life insurance policy is to ensure that your family has financial support to maintain a healthy lifestyle if you were to meet an untimely demise during the policy tenure. However a valid question to ask here is, ‘How much life insurance cover do I need?’ A specific sum assured for life insurance coverage may not be suitable for many people. Hence, one needs to look at several factors such as income, expenses, number of financial dependents and liabilities (if any at the time of purchasing a life insurance policy) while deciding your coverage amount.
Although, it is advised that the sum assured of a life insurance policy should be 10-15 times the income of the life assured. A sum assured equivalent to 10-15 times the income of the life assured can help the family of the life assured to fulfil immediate expenses, daily financial requirements and fulfil their goals in case of an untimely demise of the life assured during the policy tenure. It is advised to choose a sum assured amount which can help your family to fulfill financial requirements in the absence of the life assured. Some factors that you can consider before deciding your sum assured are your income, current financial liabilities, estimated working years, estimate of future expenses etc.
Life Insurance Terminologies
Tax Benefits of Life Insurance
Life insurance policy is a financial tool which is essential for an individual who wants to ensure a financially secured future for their loved ones. The benefits that come under a life insurance policy help family of the life assured build a safe and secured future even in the absence of the life assured. Moreover, under Section 80C and 10(10D) of the Income Tax Act, 1961 one can avail income tax benefits by investing in a life insurance policy. Under Section 80C, premiums paid towards the life insurance policy qualify for tax exemptions for upto Rs. 1.5 Lakh and under Section 10(10D) provides tax exemptions on income on maturity if the premium is not more than 10% of the sum assured.
In case the sum assured is less than 10 times of the premium you can avail tax exemptions on the premium up to 10% of the sum assured. In case of untimely demise of the life assured, the sum assured paid to the nominee also qualifies for tax exemptions.
Under Section 80C(5) in case the policyholder voluntarily surrenders his/her life insurance policy or in case the life insurance policy is terminated before 2 since the date the policy was issued then the life assured shall not receive any benefits on the premiums paid.
Under Section 10(10D) of the Income Tax Act, the sum assured amount plus bonus (if any) paid in case of death of the life assured or at the time of maturity will be entirely tax-free for the receiver.
How to Calculate Life Insurance Premium?
While calculating premium for life insurance policy certain factors such as age, gender, lifestyle, profession, way of living, BMI (Body Mass Index), coverage amount, health conditions, medical records etc. are taken into consideration. One can easily calculate life insurance premium online with the help of an online premium calculator tool. Many life insurance providers have premium calculators that help in calculating premiums for the life insurance policy based on the information provided by you.
Using a life insurance premium calculator is very easy - you provide your details such as annual income, birth date, lifestyle, gender, coverage amount. You also select the choice of life insurance plan, premium payment frequency and policy tenure. After mentioning these details, the life insurance premium calculator will determine and display the amount of premium payable for the life insurance policy. You can review the quoted premium for the life insurance policy and use it to compare different policies before selecting a life insurance plan that fulfils your requirements.
Documents Required for Purchasing a Life Insurance Policy
Following is the list of documents required at the time of application for a life insurance policy:
- Salary slips of last 6 months
- Bank statements of last 6 months with entries of 3 months of salary credited continuously
- Income Tax Returns (ITR) of last 2 years
- Certificate issued by CA in case the individual is self employed
- Form 16 (Latest)
- Birth Certificate
- Aadhaar Card
- Voter ID Card
- PAN Card
- Driving Licence
- Marriage Certificate
- Ration Card
- Aadhaar Card
- PAN Card
- Voter ID Card
- Address Proof
- Aadhaar Card
- Voter ID Card
- Ration Card
- Driving License
- Passbook with 6 months of latest entries
- Bank statement of savings account
- Latest 3 months of utility bills
- Apart from KYC documents there are few other documents required at the time of application of life insurance policy. Following is the list of other documents required at the time of policy application:
- Application/Proposal Form
- Policy Declaration in case the proposal form had not been filled by the life insured
- Final Declaration stating that the information provided is true and in case anything is found to be incorrect the insurance provider has the right to reject the application
How to Choose the Best Life Insurance Policy?
There are different plans offered by different life insurance companies in India and at times it can get difficult to choose a good plan from several options. Below mentioned are some key points that you can consider while purchasing a life insurance policy:
Identify the Type of Life Insurance Policy you Need: There are several types of life insurance plans which have different purposes. Different types of life insurance plans are Term Insurance, Unit Linked Insurance Plans, Whole Life, Endowment, Money Back, Retirement/Pension and Child Life Insurance plans. Term insurance is the basic life insurance plan as it is pure risk that other life insurance plans provide an investment component. It is very important to identify the type of life insurance according to your requirements.
Sum Assured Amount: Before purchasing a life insurance policy one should determine the sum assured which is the coverage amount of the life insurance policy. One should consider a sum assured which is 10-15 times their income. Before deciding a sum assured for your life insurance policy you consider your current lifestyle, expenses, liabilities, goals and number of financial dependents etc. Ideally the sum assured of a life insurance policy should be enough to let your loved one maintain a decent lifestyle in your absence.
Incurred Claim Settlement Ratio: Claim settlement ratio of the insurance provider is one important factor that one must consider before purchasing a life insurance policy. You should consider a life insurance provider with a high claim settlement ratio because a high claim settlement ratio depicts the number of claims settled by the insurance provider against the number of claims received. One must consider an insurance provider with a high claim settlement ratio so that they are able to fully rely on the insurance provider.
Compare Several Plans: Comparing several life insurance plans based on your requirements and budget. Comparing different life insurance policies offered by different insurance providers will help you analyse which policy best suits your requirements . this way you will be able to make an informed decision.
How to File a Life Insurance Claim?
In case of an unforeseen demise of the life assured during the policy tenure, the nominee can file for a death claim. As a nominee/beneficiary of the life insurance policy you should be aware of how to file a death claim and about the claim settlement procedure. You can easily file a claim online or choose to visit the branch office of your chosen life insurance company. Below mentioned are some steps you can follow to file a claim for the life insurance policy:
Online - You can visit the official website of your chosen life insurance company and log in using your registered email ID/policy number and password. You register a claim online easily on the website and submit supporting documents along with the claim form. Your claim will be assessed and settled as soon as the underwriters have approved the claim. The online process is very convenient. Some life insurance companies also let the nominee to file a claim by sending an email at the official email address.
Visit the branch office - You can also visit the branch office to directly intimate and file a claim at the office of the life insurance company. You can submit the claim form along with supporting documents at the branch office.
SMS/Call - Some life insurance companies provide an option to intimate the claim to your life insurance providers through SMS/Call facility. You can send a SMS to the provided number by the life insurance provider and call the helpline number or customer care number provided by the life insurance provider to intimate the insurance provider about the claim.
Things You Must Know About Life Insurance
Life insurance policy is a well known financial tool which helps an individual to financially safeguard their loved ones in case an unforeseen event takes place such as an unpredictable demise of the life assured during the policy tenure. Before you purchase a life insurance policy you should know some things about life insurance policy:
Life insurance policy does not put a monetary value on an individual: People often think that life insurance policy puts a monetary value on an individual which is however not true. Life insurance policy provides life cover to an individual in exchange for the life assured pay the premium for the life cover. In case of an unforeseen demise of the life assured a sum assured known as death benefit is provided to the nominee. At the time of purchasing a life insurance the applicant/life assured decides the sum assured according to their budget and coverage requirements.
There are several types of life insurance plans to choose from: There are several types of life insurance policies available in India such as Term Life, ULIPs, Endowment, Retirement, Money Back, Child and Whole Life insurance plans. One can choose from the different types of life insurance policies according to their coverage requirements and budget. Different life insurance plans have different features and benefits which serve different purposes. Some life insurance plans provide investment components and some provide basic risk coverage.
Life insurance premium depends on certain factors: The premium payable for the life insurance policy depends on various factors such as one’s age, occupation, medical condition, type of life insurance policy, sum assured, policy tenure, personal habits like consumption of alcohol/tobacco etc. Age plays an important role in determining the premium of a life insurance policy, elder people are prone to life threatening diseases so the premium of life insurance policy increases as elderly people require more coverage. Thus, it is advised to purchase a life insurance policy at a young age.
Life insurance can also act as an investment instrument: Some life insurance policies provide an investment component under which part of the premiums paid are used for life cover and the remaining are utilised for the life cover. These life insurance plans let the life assured invest part of the premiums paid in different market linked fund options and the returns are purely based on the performance of the market linked fund.
Premiums paid for life insurance qualify for tax exemption: Life insurance policies can help an individual to save taxes as premium paid towards a life insurance policy qualify for tax exemptions under Section 80C and 10(10D) of the Income Tax Act. One can save upto Rs. 1.5 Lakhs for the premiums paid towards a life insurance policy.
You can customize your life insurance with riders: Life insurance can be customized with the help of life insurance riders. Riders are additional coverage that one can purchase along a life insurance policy in exchange of additional premium. These riders can help in increasing the coverage of the base life insurance policy.
Importance of Life Insurance In India
Life insurance is a good financial tool that can help you ensure financial security of your loved ones while providing you life cover. A life insurance policy provides financial assistance to the life assured and their family members in difficulty. Keeping the current scenario in mind, a life insurance policy is essential for individuals who have financial dependents, if anything were to happen to an individual amid COVID-19 outbreak a life insurance policy can be very handy under such circumstances. Below mentioned are some reasons which justify why life insurance is important:
To Pay Off Debts: Usually most people during their professional life take loans to fulfil some financial requirements such as purchasing a house or vehicle. Some people also take loans to fund their child’s education, marital expenses etc. In case of your untimely demise the burden to pay off your debts will fall onto your family members. To avoid the direct financial impact on your family you must consider a life insurance policy, in case of your untimely demise a death benefit shall be provided to the nominee/your family members which can help them pay off your debts. A life insurance policy can help your family members take care of liabilities without compromising their financial requirements.
To Ensure Financial Security of Your Loved Ones: One primary reason to purchase a life insurance policy is to ensure financial security of your loved ones in case an unforeseen event occurs such as your unfortunate demise during the policy tenure. Your family members such as your parents, your child or your spouse who were dependent on your income will continue to be dependent on somebody or your remaining savings in case of your untimely demise during the policy tenure, a life insurance policy can help take care of your family’s essential needs. In case of your unforeseen demise during the policy tenure, a sum assured known as death shall be provided to the nominee/family members of life assured helping them to maintain a decent lifestyle and pursue their dreams in the absence of the life assured.
To Save Tax: Besides providing financial protection to your family members, the other main reason people often purchase life insurance policies is to avail tax benefits. According to the current provisions of Section 80C of the Income Tax Act, 1961 once can avail tax exemptions of upto Rs. 1.5 Lakh for the premiums paid towards the life insurance policy. According to Section 10(10D) of the Income Tax Act, 1961, the death/maturity benefits received also qualify for tax exemptions.
There are several reasons why one must consider purchasing a life insurance policy, especially someone who is the sole breadwinner of the family. If you are worried about your family's future then you should not delay purchasing life insurance.
Why Choose InsuranceDekho For Buying Life Insurance?
- Quick Policy IssuanceAt InsuranceDekho you can purchase life insurance in just a matter of minutes. You can compare and purchase a life insurance plan by simply entering your details and such as Age, Mobile Number and Date of Birth and instantly compare available plans and purchase the life insurance policy that best meets your requirements.
- Dedicated Customer ServiceOur customer assistance team is available all 7 days to provide information and clarify all queries related to purchasing a life insurance policy or its claim settlement. Our knowledgeable team of experts is always available to solve all your queries and serve you in the best manner.
- Availability of Top PlansWe have partnered with all the top life insurance providers in India to provide our customers the best life insurance plans. This helps our customers to get the best plans conveniently at one place with the ease of comparison.
Happy Customers1298 Reviews
- The best policy for my loved onesThe Max Life Insurance Policy from InsuarnceDekho is a very dependable life insurance policy. Through this plan, I could...Read MoreMax Life InsuranceBy Parin PanditOn:31st May, 2023
- Flexible option at every stepFlexible option at every step - Shankar RaghvanInsuarnceDekho understands and offers plans that are flexible to suit eve...Read MoreHDFC Life InsuranceBy Shankar RaghvanOn:31st May, 2023
- Supportive guidance throughoutFrom the initial inquiry for policy selection and the final purchase of the Tata AIA Life Insurance Policy, the represen...Read MoreTATA AIA Life InsuranceBy Devika SahotaOn:31st May, 2023
- Got the best Premiums and Valuable BenefitsI must say that at InsuarnceDekho, one can easily get competitive premiums without worrying about the benefits. Their po...Read MorePNB Met Life InsuranceBy Aadesh SainiOn:31st May, 2023
- Quick and Easy Application ProcessThe process to buy any policy is quick and easy. I secured the ICICI Prudential Insurance Policy from InsuarnceDekho in ...Read MoreICICI Prudential Life InsuranceBy Adhira SandhuOn:31st May, 2023
FAQs About Life Insurance Policy
- Claim Settlement
What is Life Insurance ?
Life insurance is an insurance cover which provides a sum assured to the family of the assured in the event of sudden death. The plan also offers a survival benefit to the assured if he/she survives the policy term.
Why should I purchase life insurance?
Life insurance helps you attain financial security that ensures your family’s life goals are not affected. Life insurance also offers tax benefits on the premiums that a policyholder pays for their life insurance. Moreover, life insurance plans are affordable and the policyholder can purchase additional benefits by purchasing a rider to enhance their life cover.
Can I return my policy immediately after I purchase it?
You can return the policy stating the reasons why you disagree with terms and conditions of the policy within the free-look period as per regulations of IRDAI. For Life Insurance policies, the free-look period is of generally 15 days (30 days for online policies) from the date of receiving policy documents.
Can I purchase a new life insurance policy even when I already have one?
Yes, you can purchase a new life insurance policy despite already having one. It helps a policyholder get an increased life coverage along with all other benefits of a life insurance plan.
What is the difference between term insurance and life insurance?
Major difference between life insurance and term insurance is that term insurance is a type of life insurance policy. Term insurance policies are quite affordable as compared to life insurance policies, but life insurance policies provide extensive coverage. Life insurance policies provide coverage for whole life and term insurance policies provide coverage for a fixed period of time.
What are the factors that affect the calculation of a life insurance plan premium?
Life insurance premium depends on numerous factors including policyholder's age, sum assured, gender, lifestyle, job, medical history, type of policy, tenure, and riders (if any).
What are the tax benefits on insurance premiums?
Under Section 80C of the Income Tax Act, premiums paid towards a life insurance policy qualify for a deduction up to Rs. 1.5 Lakh. Also under Section 10(10D), income received from a life insurance plan on maturity is tax-free if the premium is not more than 10% of the sum assured or the sum assured is at least 10 times the premium.
Does tobacco and alcohol consumption affect life insurance premiums?
Yes, if an individual declares that he/she consumes tobacco/alcohol then the premium for a life insurance plan increases because of high-risk involved.
What is a life insurance premium?
Life insurance premiums are the periodical amount that you pay for the life cover provided under the life insurance policy. Life insurance premium is provided to the insurance provider. Premiums are the amount of payments made for the life cover provided by the insurance provider.
Who decides the life insurance premium?
Underwriters are people who play an important role while determining the premium for your life insurance policy, the underwriters assess your application and decide the premium for your life insurance policy.
Which is the best life insurance plan?
Different life insurance plans have different features and advantages. Thus, the definition of the best plan varies from individual to individual. The best life insurance plan is the one which best meets your requirements and budget. However, among all the different types of life insurance plans, the most preferred type of life insurance plan is Term Insurance Plan because it provides high coverage at nominal premium.
What are the factors which I should consider before buying a life insurance policy?
There are many factors that you should consider while purchasing a life insurance plan. These includes your financial goals, income, existing liabilities, and daily expenses. After analysing all these factors, you can compare different types of life insurance plans like term plans, whole life insurance, child plans, retirement plans, and others to buy the one that suits your needs.
Is it safe to buy life insurance policy online?
Purchasing life insurance policy is easy, quick and hassle-free and the payment is made through a safe gateway. Buying policies online is less time consuming as well.
What are the different types of life insurance plan?
Different types of life insurance available in India are Whole Life, Term Insurance, ULIPs, Endowment, Money Back, Child Life and Retirement Plans.
Is a cover of Rs. 5,00,000 life insurance policy sufficient?
A cover amount of Rs 5 Lakh should be sufficient or not purely depends on applicants annual income. It is always advised to choose a coverage amount of 15-20 times of your annual income allowing your family members to maintain a decent lifestyle in the absence of the life assured. Keep certain factors such as current lifestyle, current expenses, assets, liabilities and number of financial dependents before choosing a coverage amount for your life insurance policy.
Do I get survival benefits under my life insurance policy?
Under some life insurance policies a survival benefit known as maturity benefit is provided to the life assured at the end of the policy term in case the life assured survives the entire policy tenure. Some life insurance plans that offer a maturity benefit are Endowment, Money Back, Child and retirement plans.
How do I file a life insurance claim?
You can register your claim online on the insurance provider’s official website and you can also give your claim intimation in writing, call the insurance provider or visit the branch office of the insurance provider to file a claim for your life insurance policy.
Life Insurance News
All You Need To Know About SBI Child Plans
Want a financially secure future for your child? Invest in S...19 May 2023
What Will Be the Premium for a 1 Crore LIC Policy?
The premium for a 1 crore LIC policy may vary on the basis o...10 May 2023
What is 5-year Child Education Plan?
A 5-year child education plan is helpful to secure the futur...09 May 2023
List of Best Life Insurance Companies in India
Listed below are the best life insurance companies in India ...04 May 2023
Why is Term Insurance Better Than Whole Life Insur...
Both term and whole life insurance provide life coverage to ...03 May 2023