Life Insurance
Life insurance is a mutual contract between the policyholder and the insurance provider where the insurance company promises to pay a sum of money to the nominee in return for a premium, in case something happens to the policy holder.
Apart from financial protection, people are attracted to life insurance as it is eligible to get tax deductions under Section 10(10D) & Section 80C of the Income Tax Act, 1961. That's just a sneak peek in the story of life insurance. In order to dive deeper, let's move on to the best life insurance plans in India.
Top Life Insurance Plans in India
According to PolicyX.com, below are the few best life insurance policies of 2019-2020 in India that you can buy-
| Plans | Min/Max Entry Age | Min/Max Policy Term | Sum Assured Minimum | Sum Assured Maximum |
| HDFC Life Sanchay Plus | 30 days/55 years | 15 years/25 years | Minimum Installment Premium:-
Annual: Rs 30,000
Half-yearly: Rs. 15,000
Quarterly: Rs. 7,500
Monthly: Rs. 2,500 | No limit, subject to board approved underwriting policy |
| ICICI iProtect | 18 years/65 years | 5 years/2 years | Subject to minimum premium (Rs. 2,400 p.a) | No limit, subject to board approved underwriting policy |
| Max Life Online Term Plan | 18 years/60 years | 10 years/40 years | Rs. 25 Lakhs | Rs. 100 Crores |
| LIC Term Plan | 18 years/75 years | 10 years/35 years | Rs. 25 Lakhs | |
| SBI e-shield Plan | 18 years/70 years | min 5/10 years/ max 30 years | Rs. 35 Lakhs | No Limit |
| SBI Shubhnivesh plan | 18 years/60 years | 5 years/30 years | Rs. 75000 | No Limit |
| Kotak life preferred e-term | 18 years/65 years | 10 years/40 years | Rs. 25 Lakhs | No Limit |
| HDFC click 2protect plus | 18 years/65 years | 10 years/40 years | Rs. 25 Lakhs | No Limit |
| LIC Tech Term Plan | 18 years/65 years | 10 years/40 years | Rs. 50 Lakhs | No Limit |
| Aegon iTerm Plan | 18 years/65 years | 5 years/82 years | Rs. 25 Lakhs | No Limit |
| Aviva iTerm Plan | 18 years/65 years | 10 years/25 years | Rs. 75 Lakhs | No Limit |
| Bajaj Allianz iSecure Term Plan | 18 years/60 years | 10 years/30 years | Rs. 2.5 Lakhs | No Limit |
| Bharti AXA Life eProtect Plan | 18 years/39 years | 10 years/30 years | Rs. 25 Lakhs | No Limit |
| Birla Sun DigiShield Term Insurance Plan | 18 years/65 years | 5 years/50 years | Rs. 30 Lakhs | No Limit |
| Birla Sun Ultima Term Insurance Plan | 18 years/65 years | 5 years/50 years | Rs. 1 Crore | No Limit |
Table Data updated on 06-07-2020
Benefits of Life Insurance
We all know that life is unpredictable and such uncertainties can cause problems for individuals and his/her family at any time. So, availing a life insurance policy will make sure that your family and dependents can easily enjoy and can maintain their standard of living in case of any unwanted emergencies. There are several benefits that life insurance offers to the policyholders. Let's have a look at the most significant ones.
Guaranteed Annuity
On the subject of planning for retirement, there are few units as powerful as a life insurance policy. Due to the fact that you will be saving money over a period of time, life coverage policies will help in supplying a steady source of profits after your retirement.
Loan Facility
Folks that avail life insurance could have the choice of availing a mortgage towards their insurance coverage that may help them meet their unplanned life degree requirements without hampering the advantages supplied by means of the policy they've purchased.
Comprehensive Plans
Along with financial support, it also serves as a long term investment option. Many conventional life insurance plans, such as traditional endowment plans offer specific maturity benefits via multiple product options like maturity values, cash values, money-back, etc.
Health Expense Cover
Whether it is through stand-on my own insurance policies or via riders, all life insurance companies offer economic coverage against hospitalization costs and crucial illnesses. On that account, health expenses are growing constantly. The requirement for medical insurance rules has improved too, as it ensures that the policyholder will have minimum scientific fees to deal with
Boom Through Dividends
Traditional life insurance policies provide clients with the possibility to participate in the monetary boom of the insurance company while taking no funding threat in any way. At the same time as the policyholder breaks up the funding earnings through yearly announcements of bonus/dividends, the policyholder will earn maturity benefits.
Tax Advantages
Life insurance offers appealing tax benefits and helps you save an extensive sum of money. Almost all the Life Insurance policies offer you the benefit of the tax deduction on payment of premiums and also provide tax-free Sum Assured under Section 80C and 10(10)D of the Income Tax Act, 1961 respectively.
Loan Reimbursement
Life insurance policies function the fine viable device for the coverage of loans and mortgages availed by the policyholder. If there is any unforeseen situation due to which the policyholder isn't able to pay off his/her loan, the bereaved circle of relatives will no longer have the weight of compensation, and the policy can be used to pay off the mortgage.
Insurance with Savings
Since life insurance is long-term agreements wherein the policyholder is required to make a set periodical payment. It enables the policyholder to inculcate the addiction to financial savings. Saving cash over a lengthy time frame enables in building a very good corpus with a view in meeting your economic necessities at unique levels of existence.
Long-Term Investment
The IRDA has carried out numerous policies through which the money of the policyholder is secured with the stakeholders. The money spent on life insurance coverage can be the obligation of the stakeholders of the corporation from where you purchased the policy. It additionally guarantees that the insured makes good returns in place of focusing on risky funding choices that might offer quick-term earnings.
Types of Life Insurance
It provides pure life protection. 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 the insured's death. If you survive in the policy term period, you will get nothing or can get your premium back which basically varies from insurer to insurer.
Whole Life Insurance
In this plan, generally, the insured is given a choice to pay a premium amount till the specified time which is also known as the maturity period. If the insured person reaches maturity, he/she has the option to continue the same till death without paying any additional premium and encashing the sum assured or bonuses.
Endowment Plan
Unlike term plan, the endowment plan pays you out the sum assured along with the profits in both the case of 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 for ten, fifteen or twenty years up to a definite age limit.
It provides financial coverage to your child's future needs and allows you to plan his/her future in a better and stabilized 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.
This plan assists you in securing your post-retirement life financially. It is a saving/investment tool that caters to future retirement. For planning your retirement, there are heaps of pension plans available in the market. These plans are different from each other. Their features, benefits & exclusions are different too.
This plan helps you in enhancing your wealth, savings and get insurance coverage along with it. With the motive of improving lifestyle, better & luxurious living aspirations and the growing concern makes people think about investing an amount to secure the future.
In all the above plans, you don't have any option to select where you want to invest your money. For securing your capital, most of these plans invest in debts, whereas the Unit-linked insurance plan (ULIP) provides complete authority to you in choosing the best way to invest your money which you can invest in debt and equity as well. If you want to switch the current investment method, you can do the same easily. Those who have good knowledge about the stock market can understand this easily.
Money-back plans are just like endowment plans with only a single difference that the payout can be staggered with the policy term period. In this, some part will be returned to the insured on time to time basis as per the policy tenure. In case of death full sum, the assured amount will be paid out. It also includes a bonus. Because of these additional features, the premiums of this plan are higher than the normal life insurance plans online.
Life Insurance Riders
Riders are the add-on features of any insurance plan that provides additional financial coverage to the policyholder. Riders are the innovations of the insurance industry that aims in customizing the insurance plans to the degree which is possible while keeping a standard base plan available. Basically, riders provide extra risk protection; hence the insured has to pay an extra premium for it. Mostly, the riders are bought along with the base insurance plan and cannot be added later. The riders are optional, it provides pure risk coverage and that's why they do not have any saving and investment elements.
Popular life Insurance Riders are:-
Critical Illness Rider :- Major critical illnesses are covered under the policy, such as cancer, failure of kidneys, heart attack, coma, paralysis, etc. Make sure to go through the illnesses covered as different companies offer different illnesses cover.
Accidental Death Benefit Rider :- If the policyholder dies in an accident, this rider benefit along with the sum assured will be paid to the beneficiary by the insurance company.
Accidental and Total Permanent Disability Rider :- If the policyholder suffers from complete or partial permanent disability and is unable to work or dies due to an accident, this rider will provide the benefit to the policyholder.
Accelerated Death Benefit Rider :- If the policyholder is diagnosed with any life-threatening terminal illness such as leukemia, cancer, AIDs, etc. his rider will pay a lump sum amount and can be used for the treatment of the policyholder.
Waiver of Premium :- If the policyholder suffers disability due to which he will not be able to afford to pay the premiums of the life insurance plans, the policy may cease because of such a situation. But in case the policyholder opts for a rider, it will waive off the premiums and the policy continues with no restrictions.
Term Rider :- Term rider pays a fixed or monthly income to the beneficiary in case the policyholder's demise. This is equal to the predetermined value mentioned in the policy or the base plan coverage.
Surgical Rider :- It is a beneficial rider that assists the insured by providing financial coverage for medical treatment needing surgery under 43 surgical conditions. The cover differs for minor or major surgery treatments.
Hospital Cash Rider :- During hospitalization, a fixed sum of money is payable on the per-day basis for expense charges of the hospital. The minimum and maximum sum assured benefit amount along with the clauses of the policy may vary from insurer to insurer.
How To Choose The Best Life Insurance Policy?
Since there are various plans offered by the life insurance companies with multiple benefits, it is very confusing to select the best plan from different options to get the best of the coverage at an affordable premium.
Here are some of the points to remember while planning to purchase a plan:
Keep a close eye on claim ratio
You buy life insurance to get a claim in the time of need. But what if that claim never sees the light of the day? Don't worry, there is a simple way to get around it. Before selecting a provider, you should check its claim ratio. This will give you a vague idea of the number of claims received & settled by a company in a single year. The company which has the highest ratio is your safe bet.
Background check
Due to the competition, a lot of companies have jumped in the market. Because of this, the industry is lacking quality providers. In order to be smart, you should check the background of each company. Whosoever facts match your expectations should be the one for you.
Evaluation of sum assured
Before you start knocking on the doors of insurance providers, it is highly recommended to calculate your expected assured amount. Along with this, you can get an insight into premium calculation which is done by the companies. Combine both the factors to know which company deserves your hard-earned money.
Customer reviews are important
Sometimes, the company may look brilliant from the outside but runs with the mind of bad intentions from the inside. The best way to disclose such companies is via customer reviews. These are those people who have experienced (first hand) how such companies function & whether or not they keep true to their promises. Reading the reviews of such people can really influence your buying decision.
How To Buy Life Insurance Online?
If you are searching offline for different types of life insurance policies, it will be a long and tough procedure to get the desired results. That's why it is advisable to search online for a hassle-free and time-saving process. It will save you time and money.
So, go online and follow the steps mentioned below:
- Visit PolicyX.Com, and choose the 'Life Insurance' plan from the tabs available at the top of the homepage.
- Click on the option of 'Get Quotes' present on the top right side of the page.
- Enter some basic required details asked to find the best results for your policy demand.
- Start comparing plans provided by top insurance companies to choose the best one.
- Choose a plan that suits your requirements.
- Fill the proposal form that requires some basic information.
- Upload your documents online to proceed further for the payment process.
- Make the payment through different available modes of payment and it's done. You are insured now!
In this way, you can easily purchase a life insurance policy online from the comfort of your home, inclusive of all the desired requirements and benefits needed for the best investment policy that is suitable to you and your family for a safe future.
How To File A Life Insurance Claim?
In case of the insured's death, the nominee of the deceased will be able to make the claim in the following way:
- Inform the insurer about the death as soon as possible with the important details such as time, place and cause of death.
- Submit needful documents and proof to the insurance company. This will consist of the death certificate of the insured along with the claim form provided by the insurance company.
- The original policy documents along with the needful papers.
- The discharge form has to be signed by the witnesses.
- If the policy was assigned, the assignee will have to provide the documents.
- If someone else, apart from the nominee or assignee is filing a claim then he/she has to submit all the legal proof of his/her relation with the insured.
- If required, post-mortem, hospital and attending doctor's reports are also needed to be submitted.
- In cases involving police inquiries, an investigation/survey report will have to be submitted.
While the steps need a standard set of documents to process a claim, other evidence may be required such as an employer's certificate or any other form of reports that will help resolve any problems faced during an insurer's claim verification/investigative processes.
Should You Compare Life Insurance With PolicyX.com?
Definitely. There is no doubt about that. It is a certified insurance regulator that has the full support of IRDA (License Number: IRDA/WBA17/14). But this is not the only reason why you should place your faith in PolicyX.com.
- It allows you to get online quotes from different companies without paying a penny.
- If you have any doubts regarding the plans or premium calculation, you can freely get in touch with their experts. They are 24*7 at your service.
Documents Required for Life Insurance Policy
If you have decided to buy life insurance online, there are few documents that you need to provide such as:
Age proof : Any one of the following- Driving License, 10th or 12th mark sheet, Birth Certificate, Passport, Voter ID, etc.
Identity proof : PAN Card, Passport, Driving License, Voter ID or Aadhar Card which proves one's citizenship.
Address proof : Electricity Bill, Telephone Bill, Ration Card, Driving License & Passport should clearly mention the permanent address.
Some plans require a medical check-up usually for elder people above the age of 45 years in order to make sure that the insured does not suffer from any chronic illness.
Life Insurance News
COVID-19: Life Insurers Look To Hedge Against Policy Surrenders
The halt in the Indian economy due to the pandemic that results in job loss and pay cuts is forcing life insurers to have a close watch on their existing policyholders. They are keeping eye on the numbers of surrender and persistence cases. Life insurance companies are aware of the fact that due to job loss, pay cuts, and poor economy, policyholders may not be in a situation to pay premiums or continue their policies.
To deal with the same, life insurance company implemented a new initiative under which they are providing short-term credit called bridge loans to policyholders. These loans are available at affordable rates and the policyholder has the freedom to repay the same whenever they want it. These loans are available against traditional policies, which generally attract high surrender charges.
Such a loan facility enables customers to manage the situation in a better way. It will help customers making payments and continue with their policies, instead of surrendering them.
Higher surrenders hurt the persistency ratio of insurance companies as per a metric that looks after the policy continuity ratio of that entity. As compared to others, India has a low persistency ratio and highly under-penetrated.
While life insurance companies are bracing for the worst, they are also hoping that the policyholders will not surrender long-term assets for short-term financial liabilities.
Moreover, the regulator has provided an option to the policyholder to delay maturity and select a settlement option.
Term Insurance Plans Are Going To Be Costly, Still a Must-buy?
With the growing mortality rates and expected claim cases, reinsures have decided to increase the term insurance charges. The term insurance premium calculation is linked to mortality rate and expected claims. Due to the increased mortality rate, reinsurers have increased the term insurance premium by 30-50 percent. Only a few companies have followed in their footsteps.
Companies like ICICI Prudential Life Insurance Co. Ltd, HDFC Life Insurance Co. Ltd and Tata AIA Life Insurance Co. Ltd has already hiked the premium of term insurance policies in the last month. ICICI Prudential increase it up by 40%. Other insurance companies are expected to follow the suit.
Naval Goel (CEO & Founder of the PolicyX.com), "With the growing numbers of mortality rate and claims, it has become important to increase the premium so that the plans can sufficiently provide the required cover to customers. However, the timing of the hike is a little bit unfair seeing the current liquidity crunch. No matter how much is the increase in premium, people should make sure to invest in one of such plans as soon as possible as it is about the security of your family and their future."
The term insurance plan is a pure protection product that falls under the life insurance category. It is one of the most essential plans for a secure future. It helps the insured to provide security to their family in case of his/her demise.
The present rate of premium charges is not sufficient to offer the required coverage due to the increase in reinsurer rates. Even though the hike in the coming months, people need to understand that such products are really important and become more essential if you have dependents. Seeing the current scenario, insurance companies might increase the premium again as the current hike is less than 40%.
As per the sources, the hike is for new policies, old policies will remain active with the old premium charges.
COVID-19 To Boost Life Insurance's Long Term Gains
The COVID-19 spread following by the nationwide lockdown has imposed an adverse effect on the life insurance business. However, experts in the industry believe that this entire scenario is going to bring a change in customers' behavior. This will lead to a rise in demand for pure protection plans and might bring a positive impact on the life insurance business.
COVID-19 fear is expected to raise awareness about the importance of life insurance as a risk cover rather than a simple investment plan. This will drive the overall insurance penetration in India.
As per my personal experiences and research, such pandemics do always offer tailwinds to pure protection and guaranteed insurance plans. We noticed a shift towards such insurance plans that carries a healthy margin, said Naval Goel (CEO & Founder of PolicyX.com).
In 2003, after the SARS ( Severe Acute Respiratory Syndrome) outbreak, the insurance business has witnessed a sharp uptick in Hong Kong due to the high demand.
"There is no doubt in saying that the last quarter was very important for the life insurance industry. With the nationwide lockdown, there is an impact on the new business. I believe, these are short term impacts and people will likely be more aware of the importance of having an adequate insurance cover and the need will be felt much more intensely by consumers." Naval added.
Avinash Sing, an analyst at SBICAP Securities believe that "life insurance companies would see near term pressure on VNB owing to sluggish new business growth post-COVID-19. However, the overall margin should be broadly stable as high margin protection should continue to outgrow savings." The jury is out on this.
Report: Salaried Women See A Sharp Increase In Life Insurance Ownership
India witnessed a sharp increase in the number of salaried women as life insurance owners. In 1 year of a survey that ended in January this year, the life insurance ownership (women) has increased by 8 percent (up to 67%). Comparatively, ownership by men has increased by 3 percent (up to 71%), during the same tenure. The increase is mainly because of salaried people.
The salaried class has witnessed an increase in life insurance ownership by 4 percent (up to 75%). The affluent witness an increase of 6 percent (up to 79%), as compared to the last year as per India Protection Quotient 2.0 report which is prepared by Max Life Insurance and Kantar.
They get the samples from 7014 respondents of age between 25 and 55 years, who are getting an annual income of around Rs 2 lakh.
Overall, life insurance ownership has increased by 500 bps (up to 70%) from the previous year. Under which, term insurance ownership has increased up to 700 bps (up to 28%). Measuring it on the scale of 0 to 100, the knowledge index stood at 48, and term awareness increased to 57%.
The report has measured mental preparedness, attitudes, future uncertainties, awareness, and ownership of life insurance products. All such topics were the major touchpoint for the calculation.
The life insurance ownership (working women) in Tier-II cities stood at 60%. Under the same, term insurance made merely 16% as women never thought about investing in term insurance, while a few people said that they never have enough money to invest in the same. Moreover, the women of metro cities focus more on better returns than on long-term financial protection.
Further, the report stated the women think more about financial security as compared to men, calculating on several parameters. The report also revealed that in Tier-II cities, the focus is more on savings rather than protection. It also demonstrated that they prefer endowment plans over term insurance.
Policyx is good site, they helped me in claim setllement also for the life insurance policy I brought from them