Life Insurance plays an important part in an individual's life. It provides financial stability to you and your loved ones in case of an unfortunate incident. Many Life Insurance companies in India offer different types of plans.
Here are some FAQs related to Life Insurance to get a better understanding of the same:
1. What is Life Insurance?
Life Insurance is a contract between an Insurance Company and the policyholder. The Insurance Company pays the policy benefits to the policyholder's nominee in case of the sudden death of the policyholder. The policyholder has to pay the premium regularly to avail of this benefit.
2. Why should I buy Life Insurance?
Life Insurance provides financial security to the family members of the policyholder in case of his/ her sudden demise. If you are the sole earning member of your family, you need to ensure that your family continues to live in the best possible manner, even if you're not around. Therefore, you must buy a Life Insurance policy that provides a sustainable future in case of your sudden demise or an unfortunate incident.
3. What are the benefits of Life Insurance?
The benefits of Life Insurance include:
4. Is Life Insurance mandatory?
No, Life Insurance is not mandatory but when you have dependants like children, parents & spouse, then Life Insurance becomes an integral aspect of your life. It provides you and your family financial protection even after your death. In addition to this, it offers various advantages and flexibility like addition of riders.
5. Are different options available to pay the premium amount?
Yes, Insurance companies provide various options for premium payment. The premiums can be paid on a monthly, quarterly, half- yearly & yearly basis. Some policies are also available with the feature of a one- time premium payment.
6. What happens if I do not pay the premium on time?
The company provides a grace period of up to 30 days (15 days for monthly payment mode) from the due date of the premium. If the premium is not paid during the grace period, then the policy becomes defunct and benefits of the policy cannot be claimed. You need to pay all the overdue premiums if you want to restart the coverage.
7. How much Life Cover do I need?
You need to take Life Cover of a minimum of 15% percent of your annual income. You can get a Life Cover based on your annual income at affordable rates.
8. Will I be eligible for Tax Benefits if I buy Life Insurance?
Yes, as per act 1961, Tax Benefits are available in the form of deduction under Section 80C through which every payer can avail of the benefits of annual deduction of INR 150K for taxable income.
9. How to Calculate Life Insurance Premium?
Below mention are the factors that will be considered by the Insurance Companies when calculating Insurance Premium:
To calculate the premium, you need to visit the official website of the company & fill in the required details. The page will then show you the amount of premium that has to be paid.
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.