Life Insurance is the best way to create wealth & secure a family's future in the event of the unfortunate death of the policyholder. The benefits of life insurance can be availed either through "Term plans" that offer life cover for the family's protection or through "Investment Plans" that help in wealth creation with financial security to meet individuals' financial goals.
Most insurance companies say a reasonable amount for life insurance is six to ten times the amount of annual salary.
Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement.
Another method called the standard of living method is applied wherein you take the amount that survivors would need to maintain their lifestyle and multiply it by 20.
DIME (debt, income, mortgage, education). This is meant for a minimal amount of coverage that will cover family expenses in the event of an untimely death.
Key Features of Life Insurance Policy
A life insurance policy is much more than a source of coverage and thus consists of numerous features.
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 which will help your financial dependents to fulfill their daily requirements and life goals.
Investment opportunity- Life insurance can act as an investment opportunity 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.
Tax exemptions- Under Section 80C and 10(10D) of the Income Tax Act, 1961 one can avail of income tax benefits by investing in a life insurance policy.
Maturity Benefits- Various life insurance policies provide maturity benefits at the end of a policy term in case the life assured has survived the entire policy tenure.
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 fulfill financial obligations.
What Are The Benefits of Life Insurance?
There are a plethora of benefits when you invest in a life insurance policy. Life insurance is a financial tool that facilitates an individual to create a safety net for their loved ones in case anything unforeseen happens to their life.
Financial Security: Along with life coverage, a life insurance plan also offers financial security to your loved ones in case of any uncertainty such as death or disability.
Secure Your Child's Future: A Life Insurance coverage will help to finance the educational and various other needs of your child such as their higher education, their marriage etc.
Retirement Planning: Life Insurance proves to be useful when you plan for retirement and acts as a financial cushion aiding financial independence post-retirement.
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.
Insurance With Savings: Life Insurance plans allow 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 every stage of life.
Tax Advantages: 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.
Loan Facility: Life insurance policies allow the policyholder to avail loan against their life insurance plan to meet any unforeseen situation.
How to Choose the Best Life Insurance Policy?
With the availability of several Life Insurance Plans in the market, it's quite confusing to choose the best among them. Considering one factor and ignoring the other can cause several issues at the time of need. Therefore, it is very important to go through each & every aspect before investing in life cover insurance.
We at PolicyX.com have mentioned a few pointers that will help you to choose the Best Life Insurance Policy:
Keep a close eye on the claim ratio: 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 entered the market. Because of this, the industry is lacking quality providers. To be smart, you should check the background of each company. Whatsoever facts match your expectations should be the one for you.
Evaluation of sum assured: 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. Calculate your Life Insurance Premiums. 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 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.
24x7 Customer Service: PolicyX is always with their customers as we offer 24x7 customer care service.
Life Insurance Companies
Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.
A pure life cover that comes out with two death benefit payout options such as Level Sum Assured or Increasing Sum Assured.
HDFC Life Sanchay Plus
With several other benefits, the plan offers guaranteed returns to the insured and their family.
SBI Shubh Nivesh plan
A traditional savings plan that comes out with two investment option - Endowment plan & Whole Life Plan.
ICICI iProtect Smart
Offers 360-degree protection to your family, allowing in case of your unfortunate demise.
Max Life Online Term Plan Plus
An online term insurance plan that looks after your family's needs and offers 3 payout options for the family - lump sum one time, lump-sum along with a monthly income, or lump sum with increasing monthly income.
Life Insurance Plans
Life insurance is a contract between an individual and an insurance company under which the insurance company promises to provide a sum assured (death benefit) to the family of the policyholder in the event of the policyholder's unforeseen death. Many plans also offer a survival benefit to the insured if he/she survives the policy term. Thus, life insurance provides financial protection to an individual and his/her loved ones against the uncertainties of life.
Types of Life Insurance Policies in India
Term Insurance
It is the most basic form of life insurance. Simply put, the beneficiary will avail of the death benefit only if the insured dies during the policy tenure. Once the policy matures, the insurance company is not liable to pay any benefits.
A term insurance plan is beneficial for those who want to secure the financial future of their family at affordable premiums.
Whole Life Insurance
These Plans remain in force till the policyholder is alive, provided required premiums are paid. On the policyholder's death, the plan pays a sum assured and a bonus (if any) to the nominee. In simple words, If a policyholder is alive till the policy tenure, the policyholder receives matured endowment coverage as a maturity reward under whole life insurance in India. A Whole Life Term Insurance can help you to leave a legacy for your children.
Endowment Plan
Also known as traditional life insurance plans, the Endowment policy is a combination of a life coverage plan and savings plan. Along with life coverage, a policyholder can also save their funds regularly for a specific period. In case the policyholder outlives the policy term, the insurance provider offers a maturity benefit to him/her.
Such policies can be used to build a risk-free savings corpus, and on the other hand, will provide financial protection to your family in case of an unfortunate event.
Child Insurance Plan
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. With a child insurance plan, you can create a corpus to fulfil all your child's needs and ensure that your child doesn't have to sacrifice their dreams because of any financial crunch.
Pension Plan
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 (maturity benefit) if the policyholder outlives the policy term.
Unit-Linked Insurance Plans offer a combination of investment and insurance. Under the same, a small portion of your money is used for life coverage, whereas, the rest of the money is invested in the market.
Investment Plans
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, and quarterly. Along with savings, you get the benefit of insurance coverage.
Money-Back Plan
In a money-back plan, the policyholder is eligible to get a specified percentage of their sum assured at regular intervals. This type of life insurance is ideal for those who want to invest with the benefit of liquidity.
Riders are the add-ons that provide additional financial coverage to the policyholder. Some plans come with the in-built additional cover, however, generally, the riders need to be purchased separately by paying an additional premium.
Having additional coverage enhances protection for you and your family in case of death, disease, or disability.
Popular life insurance riders are:
1 Critical Illness Rider
Critical Illness Rider benefits the policyholders in case they get diagnosed with any of the critical illnesses listed in the policy document. The rider pays out the critical illness sum assured and allows the policyholders to concentrate on their treatments without worrying about the finances.
2 Accidental Death Benefit Rider
With the help of Accidental Death Benefit Rider, if the policyholder dies in an accident during the policy term, then a percentage of this additional sum along with the sum assured will be paid to the beneficiary by the insurance company.
3 Accidental and Total Permanent Disability Rider
This rider comes in force if the policyholder meets with an accident and is declared partially or permanently disabled. The rider pays the predetermined percentage amount and can be relied upon as the income source.
4 Accelerated Death Benefit Rider
If the policyholder is diagnosed with any life-threatening terminal illness such as leukaemia, cancer, AIDs, etc., this rider will pay a part of the death benefit and can be used for the treatment of the policyholder.
5 Waiver of Premium
Under this rider, if the policyholder is unable to pay his premiums due to the loss of income because of any unfortunate accident or injury, or disability, then all the future premiums will be waived off, and the policy will continue with no restrictions.
6 Term Rider
Term rider pays a fixed or monthly income to the beneficiary in case of the policyholder's demise. This rider offers extra coverage for death in addition to the base sum assured that is predetermined by the insurance company.
7 Surgical Rider
Surgical Rider assists the insured by providing financial coverage in case the policyholder undergoes an unavoidable surgery in India.
Factors That Affect Life Insurance Premium
A life insurance premium is an amount that is paid by the policyholders for a specified period and lets them enjoy the life insurance benefits. One can select their premium payment mode as per their needs.
Below are the few important factors that are considered by life insurance companies and can affect the life insurance premiums:
Age: Age is a significant factor while calculating the life insurance premium. As per the insurer's perspective, a young individual is less likely to suffer from age-related disease and pass away prematurely, and also has a higher chance of continuing their insurance policy for years. This makes younger individuals eligible for low premiums.
Lifestyle: If a person smokes/drinks/leads a stressful lifestyle, (s)he needs to pay higher premiums. This happens because such habits lead to life-threatening illnesses, lowering your life expectancy.
Gender: According to some surveys done in India, it is proven that women tend to live longer than men. Due to this disparity, women generally pay fewer premiums than men.
Medical History: If a person has a medical history of critical illnesses or is prone to health issues, then in such cases the insurance companies charge a higher premium.
Policy Tenure: The longer your policy tenure, the higher is the risk to insurance companies. Therefore, life insurance plans with shorter-term have lower premiums than long-term life insurance policies.
Why Should You Compare and Buy Life Insurance With PolicyX.com?
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How to buy Life Insurance from PolicyX.com
PolicyX.com offers you a reliable platform where you can compare life insurance premiums and then choose the best one as per your preference. Check out the below steps and buy your life insurance now:
Go to the top-right corner of this page to find 'Get Life Insurance Quotes Online'.
Provide the required details and tap on 'Continue'.
Fill out your number and city to proceed ahead.
The page will show you all the plans that suit your preference.
Compare and select the best-suited plan out of available options.
Once selected, make the payment online and you will get the details of your policy on your registered email id.
What Are The Documents Required To Buy Life Insurance?
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.
PAN Card, Passport, Driving License, Voter ID, or Aadhar Card.
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.
How To File A Life Insurance Claim?
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 of the deceased will be able to claim in the following way:
Intimate the insurer about the death as soon as possible with all 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 insured's death certificate along with the claim form provided by the insurance company.
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, (s)he has to submit the legal proof of his/her relation with the insured.
If required, post-mortem, hospital, and attending doctor's reports have to be submitted.
In cases involving police inquiries, an investigation/survey report will have to be submitted.
Once the investigation is over, the insurance company will approve/disapprove the claim. The details of the same will be shared with the claimant.
In Case The Policy Is Matured
If the insured outlives the policy term, then he/she is eligible to avail all the maturity and surviving benefits, provided all the premiums have been duly paid. The procedure for filing a claim is as follows:
When the maturity date of the policy is near, the insurance provider will send an intimation to the policyholder with a discharge voucher (at least 2-3 months prior to the date of maturity).
The policyholder has to sign the voucher and send it back to the provider with the original policy bond.
If the policy is assigned to someone else (individual/entity), the amount will only be paid to the assignee who will give the discharge.
Conclusion
Life insurance is a must-have financial tool that can help you ensure the 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 amidst the COVID-19 outbreak a life insurance policy can be very handy under such circumstances.
What makes zero-cost term insurance so attractive?
The new life insurance category - zero cost term insurance plans is different from your regular term insurance plan. With this category, you can discontinue your policy. That being said, the most important feature of the policy is that the zero-cost term insurance is as affordable as the other counter parts. After you terminate the policy, you will get back the premiums you have paid after the deduction of GST.
21 Sep
How to choose a perfect term plan for yourself?
Term insurance is the most affordable type of life insurance to protect your loved ones. In order to find a perfect term plan for yourself, keep in the mind the factors such as your family's financial requirements at the time of the maturity of the plan, your debts and liablities, claim settlement ratio of the life insurance company, tenure of the plan, the method of purchase and riders.
15 Sep
Canara HSBC introduces iSelec Guaranteed Future Plan
iSelect Guaranteed Future Plan is a savings and protection life insurance plan available on the company's digital platform. The target audience for the plan is the new-age customers who are active digitally. The plan is a comprehensive insurance product that enables savings. It provides 'Guaranteed Maturity Benefits' and additions accrue during the last five policy years to enhance the policy's benefits to the customers.
15 Sep
Max Life revises - Max Life Smart Fixed - return Digital Plan
Max Life Insurance Company Limited has declared a rate revision of up to 7.25% to its guaranteed savings plan, 'Max Life Smart Fixed - Return Digital Plan.' The plan targets digitally - savvy millennials who prefer quick and hassle-free onboarding. It combines guaranteed, tax-free offering and protection cover of life insurance, allowing young consumers to enjoy the dual benefits of savings and protection within a single product proposition.
14 Sep
Life insurance solutions for Defence Forces - Bajaj Allianz
Bajaj Allianz Life Insurance launches VEER - a dedicated initiative for the Defence and Central Armed Police Forces (CAPF), enabling them to financially protect their families. The company will offer Bajaj Allianz Life Assured Wealth Goal - Wealth CReation through VEER for Defence and CAPF. Being a non-linked, non-participating, individual life insurance savings plan, it offers guaranteed income.
Life Insurance Policy: FAQs
1. What is term life insurance?
Term Life Insurance is a simple plan, which takes care of the expenses of your family in your absence in the form of a huge life cover for a very small premium. In case of a policyholder's untimely death, their family or nominee receives the Cover Amount as per the policy. The plan can be customized to one's needs by including add-on benefits.
2. How much life cover do I need to protect my family?
Your cover amount of Term Insurance should be a factor of your family's expenses keeping in mind the inflation as well.
A simple way to calculate is going up to 20x of your annual earnings so as to sufficiently cover your family's financial needs in your absence
3. Do you get your money back at the end of a life insurance policy?
Life Insurance policies offer an option of Return of Premium. In case you choose this option, all the premium paid, excluding GST, is paid back as Survival Benefit, in case the policyholder survives the Policy Term
4. How to file a life insurance claim?
In case of the insured's death, the nominee of the deceased will be able to claim in the following way:
Intimate the insurer about the death as soon as possible with all 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 insured's death certificate along with the claim form provided by the insurance company.
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, (s)he has to submit the legal proof of his/her relation with the insured.
If required, post-mortem, hospital, and attending doctor's reports have to be submitted.
In cases involving police inquiries, an investigation/survey report will have to be submitted.
Once the investigation is over, the insurance company will approve/disapprove the claim. The details of the same will be shared with the claimant.
5. Can premiums be tax deductible?
Yes, the premium paid towards the policy is tax exempted up to a maximum limit of Rs 1.5 lakh in a financial year U/S 80C of the Income Tax Act.
6. Can Insurance be cashed in before death?
Yes. Depending upon the cash value of a particular policy, it can be cashed in. Cash value is a part of a life insurance policy's death benefit which can be liquidated. In case the policyholder takes a loan against the cash value and passes away while the loan is unpaid, the death benefit is reduced by the amount of the outstanding loan.
7. Do I need both- Life Insurance and critical illness cover?
It completely depends on your insurance needs. However, it is beneficial to have enhanced insurance coverage and opt for life insurance and critical illness cover both.
8. Does life insurance cover accidental death?
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.
9. Do Life Insurance Policies offer Grace Period?
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.
10. How Much Life Cover Can I buy?
The amount of cover 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.
11. How to revive a lapsed life insurance policy?
The IRDA has directed all the insurance providers to allow policyholders to revive their lapsed policy within two years from the time it is deactivated. One needs to pay the renewal fee along with the late fee and additional penalties that may vary from insurer to insurer.
12. What will happen to the life insurance benefit if both the policyholder and nominee dies?
In such scenarios, where both the policyholder and nominee died, then the benefit will be payable to their heirs or legal representative.
13. What to do if my nominee dies before me?
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.
14. What is the most cost-effective life insurance type?
A term plan is the cheapest type of life insurance since it does not include any survivor benefits. When the policy period ends, the plan lapses.
15. I have a Life insurance cover of 25 Lakhs. Is it enough?
The thumb rule for choosing the right coverage is getting the cover of 10-15 times your annual income. Therefore, analyze your requirements first, and then decide your ideal life insurance coverage.
What Our Customers Have to Say
Prerna Kumari
Mumbai
July 11, 2022
Good company. Presents nice term insurance plans and flexible plans also. My husband has brought one for the family.
Priya Sangwan
Mumbai
July 11, 2022
IndiaFirst Term Insurance company ensures that your family s needs are looked after. One of the best companies offers a term plan per your needs.
Priyanshi Deewan
Hyderabad
July 6, 2022
I recently received the claim amount of the policy that my husband had brought for us. I am glad that the company understands the needs of its customers and their families. Well done Canara HSB...
Rishabh Kumar
Delhi
July 6, 2022
I bought a term plan with Canara HSBC for the protection of my family and have been satisfied with the benefits received. It is simple and easy to buy their plans.
Samarth Gaur
Chennai
July 6, 2022
I am very happy with the term plans offered by the Canara HSBC Life Insurance company. The plans offer comprehensive coverage and I am sure will support my family after my demise.
Vipul Bhardwaj
Coimbatore
June 9, 2022
Bharti AXA is a good life insurance company, and I am sure if something ha[opens to me, the company will look after my family s needs.
Karan Veer
Mumbai
June 6, 2022
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Urvashi R
Delhi
May 31, 2022
Hey everyone, just wanted to say that Kotak Mahindra Life Insurance is one of the best life insurance companies. You can even you should go for this company if you want to secure your family s ...
Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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