Insurers To Start Offering 'Saral Jeevan Bima' Standard Term Life Policy From 1st January
October 16, 2020
Life insurance is a mutual contract between the policyholder and the insurance company, where the company promises to pay a pre-specified amount to the nominee (if something happens to the policyholder) in return for a premium. Along with financial protection, people get tax deductions under Section 10(10D) & Section 80C of the Income Tax Act, 1961.
Our life is full of risks and there is always an uncertainty of death due to illness and accidental causes. In case such a thing happens, the entire family has to suffer. Though human life can not be measured, a monetary sum can help the dependants to continue with their life without sacrificing their needs and requirements. And life insurance can help with that.
Let's understand the importance of life insurance through an example:
Varun and Sunil are childhood friends. Sunil decided to buy a life insurance policy and even told Varun to invest in the same. However, Varun rejected the idea and said it's a waste of money.
After a month, Varun and Sunil were returning home and met with an accident. Sunil died on the spot and Varun died in the hospital. Thanks to life insurance, the insurer offered complete financial support to Sunil's family. However, Varun's family were on their own and struggled to meet their needs. Had Varun purchased life insurance earlier, his family wouldn't have to go through such trouble.
According to PolicyX.com, below are the best life insurance policies of 2020 in India that you can buy:
|Plans||Plan Type||Min/Max Entry Age||Maximum Maturity Age||Minimum Sum Assured|
|HDFC Life Sanchay Plus||Savings Plan||5 years/60 years||80 years||Based on the premium|
|ICICI iProtect Smart||Protection Plan||18 years/65 years||75 years||Subject to minimum premium|
|Max Life Smart Term Plan||Protection Plan||18 years/60 years||85 Years||Rs. 25 Lakhs|
|LIC Tech Term Plan||Term Insurance Plan||18 years/65 years||80 years||Rs. 50 Lakhs|
|SBI e-shield Plan||Protection Plan||18 years/65 years||80 years||Rs. 35 Lakhs|
|SBI Shubh Nivesh plan||Savings Plan||18 years/60 years||65 years||Rs. 75,000|
|Kotak life preferred e-term||Protection Plan||18 years/65 years||75 years||Rs. 25 Lakhs|
|HDFC click 2protect plus||Protection Plan||18 years/65 years||85 years||Rs. 25 Lakhs|
|Aegon iTerm Plan||Protection Plan||18 years/65 years||100 years||Rs. 25 Lakhs|
|Bajaj Allianz iSecure Term Plan||Protection Plan||18 years/60 years||70 years||Rs. 2.5 Lakhs|
** These values may change as per different plan options if the plan has multiple options.
Table Data updated on 27-11-2020
There are several benefits that life insurance offers to the policyholders. Let's have a look at the most significant ones.
On the subject of planning for retirement, life insurance proves to be useful. Because you will be saving money over a while, life policies help in supplying a steady source of income.
Those who avail of life insurance have the choice of availing a mortgage towards their insurance coverage that may help them meet their unplanned requirements without hampering the advantages supplied through the policy they've purchased.
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.
Life insurance offers appealing tax benefits and helps you save an extensive sum of money. Almost all life insurance policies offer you the benefit of the tax deduction on payment of premiums and provide a tax-free sum assured under Section 80C and 10(10D) of the Income Tax Act, 1961.
Life insurance policies offer 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.
In life insurance, the policyholder is required to make a set periodical payment. It allows the policyholder to get into the habit of financial savings. Saving cash over a lengthy time frame enables building a very good corpus to meet your economic necessities at unique levels of existence.
It is the most basic form of life insurance. Simply put, if the insured dies during the policy tenure, term insurance offers a death benefit (in a lump sum) to the nominee as stated in the policy document. The pay-out can be on a monthly/annual basis.
As long as the policyholder is alive, this plan will offer life coverage in return for a small premium. On the policyholder's death, whole life insurance provides a sum assured and bonus (if any) to the nominee.
Unlike a term plan, the endowment plan pays you the sum assured along with the profits in the case of death and survival. This plan charges a higher premium, which is invested in the asset market (equity & debt).
It is a combination of insurance cover and investment that secure multiple stages of your child. In other words, it provides financial coverage to your child's future needs and allows you to plan his/her future in a better and stabilized way.
This plan assists you in securing your post-retirement life financially. The benefits are given annually or once after reaching 60 years (depending on the insurer/policyholder). The plan offers a vesting benefit if the policyholder outlives the policy term.
In all the above plans, you don't have any option to select where you want to invest your money. The Unit-linked insurance plan (ULIP) gives you the authority to select the best way to invest your money (debt/equity). If you want to switch the current investment method, you can do the same easily.
It's one of the core components of financial planning. An investment plan allows the policyholder to invest small amounts (in a periodic manner) to boost his/her savings. The frequency of investment can vary- weekly, monthly & quarterly. Along with savings, you get the benefit of insurance coverage.
Money-back plans are just like endowment plans with only a single difference- the payout can be staggered with the policy term period. In this, some part will be returned to the insured on a time to time basis (as per the policy tenure). In case of death, the sum assured amount will be paid to the nominee.
Riders are the add-ons that provide additional financial coverage to the policyholder. Mostly, the riders are bought along with the base insurance plan and can't be added later.
Several factors are considered by insurance companies while calculating insurance premiums. Some of them are listed below-
With the availability of several life insurance plans in the market, it's quite confusing to choose the best among them. Thankfully, the below-listed pointers will help you make the decision.
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.
Due to the competition, a lot of life Insurance companies have entered the market. Because of this, the industry is lacking quality providers. To be smart, you should check the background of each company. Whosoever facts match your expectations should be the one for you.
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.
Sometimes, the company may look brilliant from the outside but runs with bad intentions from the inside. The best way to find such companies is via customer reviews. These reviews are posted by 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 influence your buying decision.
Definitely. 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. The other reasons are-
Buying a life insurance policy offline is a long and hectic process. So, it's best to opt for online buying to save time and money. One such platform that you can trust is PolicyX.com. Check out the below steps to buy life insurance from it-
If you have decided to buy life insurance, there are a few documents that you need to provide:
Age Proof: 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.
Address Proof: Electricity Bill, Telephone Bill, Ration Card, Driving License & Passport.
Income Proof: Latest form 16, salary slips of last 3-6 months, ITR (2-3 years), etc.
Some plans require a medical check-up to make sure that the insured does not suffer from any chronic illness. The company may ask for other documents as well.
If a claimant follows all the required steps, then filing a claim and getting a sum assured can become a very convenient and hassle-free task. Read ahead to find how a claimant can file a claim in India under the following scenarios:
In case of the insured's death, the nominee/assignee of the deceased will be able to make the claim in the following way:
If the insured outlives the policy term, the respective insurance provider is liable to pay the maturity benefits, provided all the premiums have been duly paid. The procedure for filing a claim is as follows-
October 16, 2020
IRDAI has instructed all insurance providers to mandatorily come out with 'Saral Jeevan Bima', a standard and individual term life policy from 1st January 2021. With several term plans available in the market, customers struggle to select the right option to satisfy their needs. That's why IRDAI feels that Saral Jeevan Bima equipped with simple features and benefits will solve this problem and offer adequate coverage in the time of need.
Saral Jeevan Bima is designed as an individual pure risk premium life insurance, which will offer a sum assured to the nominee in case of the policyholder's death during a policy term. Individuals between 18-65 years can buy this policy. The policy term will range between 5-40 years. The policy holds a maturity age of 70 years (maximum) and offers coverage between Rs.5-25 lakhs. As far as premium payment options are concerned, regular premium, single premium, and limited premium payment term for 5 and 10 years are a part of the list.
All insurers have to file the product with IRDAI latest by 31st December 2020. However, insurers have the option to speed up the process and offer this product (with approval) before 1st January 2021.
August 04, 2020
We all know that Term insurance is one of the excellent & affordable ways to secure your family's financial needs in your absence. However, in the last few months, the insurance companies have significantly increased the premium rates. Most insurers stated that the reason behind rising premiums is the increase in mortality rate, and hence with the rise in mortality rate due to coronavirus, the premiums have also increased. In April, many insurance companies such as HDFC Life Insurance, Max Life Insurance, Tata AIA Life Insurance and ICICI Prudential Life Insurance hiked the premium by up to 20 percent.
Therefore, if you are considering buying a term insurance plan, you might have to hurry up a bit as the insurance premiums are set to experience another significant increase in the months ahead.
June 09, 2020
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.
The very moment when you feel that your family or loved ones are dependent on you for their needs, without even thinking for a minute, you should buy the policy.
The policy you require depends on the needs. When you are young, needs are limited but as you grow, you have more responsibility and more people attached to you. So, you should choose the best one keeping in mind your future needs.
Before buying an insurance policy, think about the liabilities which are there. From the loans of the banks to the credit card bills, keep everything in mind. If your family is living in rented accommodation, think about the rent that the policy should be able to give till your children grow up and earn.
While insurance companies are the most dependable sources when it comes to purchasing life policies, coverage agents aren't absolutely untrustworthy. However, before you buy a policy from an insurance agent, it's suggested that you request for his or her authorization card from the IRDA to make sure that they're certified sellers.
It will start on the date of commencement after the insurer has acquired and accredited your insurance policy.
Sure, older residents who're above the age of 60 can also purchase life insurance. There are numerous sorts of insurance policies like term policies, whole life policies, and guaranteed life that are designed to provide cover to older individuals.
In such a case, you can add a new nominee. In case you don't, by default, the company will consider your heir your new nominee.
Mentioned below are some of the exclusions:
As per IRDA regulations, every insurance company offers a free look period. If you aren't satisfied with the policy, you can discontinue the same within 15 days of buying it and get a refund.
It depends solely on the plan you choose to buy. Some plans allow riders to be added only at the time of buying the policy whereas, others may allow them to be added at the policy anniversary.
In a Life Insurance Policy, the policyholder will receive the maturity benefit of the policy. The policyholder needs to set tenure for the policy and if in an unfortunate event of his/her demise, the money is given to the nominee.
In a Term Insurance Plan, insurance companies provide financial assistance to the nominee of the policyholders in an unfortunate demise of the policyholder within the policy term. Under a term insurance plan, there is no claim to the money if the person survives till the maturity of the policy tenure.
Yes, life insurance policies do cover accidental death. However, one must check the policy documents if it specifically states that it does not cover death by accident.
Yes. The life insurance policies offer a grace period of 30 days (to pay the premium) in case the policyholder missed his/her premium payment date.
The amount of cover totally depends on your income, your family's requirements, and your liabilities. However, as per the financial experts, your cover should be at least 10-15 times the annual income.
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Last updated on 27-11-2020