Life Insurance Frequently Asked Questions

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.

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.

The benefits of Life Insurance include:

• Financial stability for your loved ones in your absence
• Tax benefits up to INR 1.5 lacs under section 80C
• Availability of loan against Life Insurance Policy with savings component (Endowment/ Money Back plan)

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.

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.

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.

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.

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.

Below mention are the factors that will be considered by the Insurance Companies when calculating Insurance Premium:

• Age: Age is a primary factor on which Insurance Premium depends. There is a lesser chance of younger people getting diagnosed with Critical Diseases & falling sick. Hence, there is a lesser chance of acquiring medical expenses, which reduces the total premium amount.
• Type of Coverage: You have several options when it comes to buying an Insurance Policy. The more comprehensive coverage you select, the premium will be higher.
• Amount of Coverage: The premium amount also depends on the coverage amount i.e. sum assured. The higher the coverage amount, the higher the premium.
• Personal Information: Personal Information is one of the most important factors while calculating Insurance Premiums. Insurance companies take a close look at the personal details of the customer like gender, marital status, smoking status, job, annual income, and where you live.

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.