Life Insurance: A Detailed Overview

Life Insurance

What Is Life Insurance?

Life Is Full Of Unexpected Surprises. We Don’t Know What’s Next But We Keep Going And What’s Ahead Is Ahead of us. One Thing That Is Guaranteed Everywhere Is The Certainty Of Death. No One Has Ever Escaped This Stark Truth And Never Will. Also, Life Is Too Precious To Put A Price on it. But we Still Do It With Life Insurance Policies We Try To Cover The Financial Void That May Arise Due To The Sudden Departure Of The Main Breadwinner In The Family. So, Having A Good Life Cover Is Essential For You And Your Family.

Life Insurance: A Detailed Overview

In Technical Terms, Life Insurance Is A Contract Between The Company And the Client Where The Former Agrees to Indemnify Him In The Event Of his Death Or Accident Or Other Eventualities Such As Terminal Illness. A Life Insurance Can Be A Whole Life Insurance , Term Insurance Or Endowment plan . In Exchange For This Cover, The Insured Agrees To Pay The Company A Certain Amount Of Money Called Premium . Life Insurance Thus Becomes The Most Important Form Of Insurance Offering protection Against Life.

Different Insurers Offer Different Life Insurance Quotes For Their Insurance Policies. So, It Is Important To Compare Life Insurance Plans And Make A Right Choice.

Who Needs Life Insurance?

Do You Need A Life Insurance Policy? Why Not? No One Can Escape The Certainty Of Death And Thus Preparation Is Necessary. You Have To Think About Your Loved Ones And What Will Happen To Them in Your Sudden Absence. Life Insurance May Not Be Able To Fill The Void Created By The Passing Of Your Loved One But It Can Certainly Help Fill The Financial Gap That May Arise. Cash Provided By Insurance Companies Can Ensure That Dependents Are Not Burdened with large debts. You Need To Have A Good Life Cover To Prepare For The Worst And Protect Yourself And Your Family.

Death is Not The Only Reason To Be Covered By Life Insurance. You Have A Healthy Life And You Will Live Long, but You Cannot Work All Your Life. There Will Be A Stage – Retirement – Where You Take A Break And Look Back On The Work You Have Done. But The Longer You Look Back, The More Regular The Income Will Begin To Decline Over The Years. There May also Be Some Unexpected Health Problems. A Good Life Cover Will Take Care Of The Problems Mentioned Above. You Can Find Use Of Life Insurance In many Other Ways Like Child Education And Marriage, Home Purchase, Pension Or Post-retirement Income.

Life Insurance Policy: Types

There Are Five Types Of Life Insurance Plans Offered To Consumers By Insurance Companies :

1. Term Insurance

In Term Insurance, You Get Cover For a Fixed Period Of Time. It Provides Cover With No Profit Or Savings Element. Term Life Protection Is The Most Affordable As The Premium Charged Is Cheaper Than Other Types Of Life Insurance Plans.

2. Whole life insurance

As The Name Suggests, The Insurance Cover is For Whole Life As Long As You live. The Main Feature Of The Policy Is That The Validity Of The Insurance Is Indefinite. Thus, The Policy Holder Enjoys The Cover Throughout His Life.

3. Endowment Plan

A Major Difference Between Endowment Plans And Term Insurance Is That Endowment Plans Have A Maturity Benefit. Unlike Term Insurance, Endowment Plans Pay a Sum Assured Both On Death And Survival.

4. Money Back Policy

It Is A Form Of Endowment Insurance. A Money Back Policy Pays Out At Regular Intervals During The Policy Term. A Portion Of The Sum Assured Is Paid At These Regular Intervals. If The Person Survives The Term, They Get The Balance Amount Assured By The Policy.

5. Unit Linked Insurance Plan (ULIP)

ULIP Is Another Form Of Traditional Endowment Plan. Ulips Are Mostly Invested In The Stock Market And thus Are More Suitable For Individuals with High Risk Appetite . Sum Assured is Paid On Death Or Maturity.

How Are Life Insurance Quotes Calculated?

As Mentioned Above, It Is Almost Impossible To Put A Value Tag On A Human Life, But Still, Estimating The Value Of Your Life Is Very Important. You Need To Calculate How Much Money Your Family Might Need In Your Absence To Be Financially Stable. In Insurance Terms , The Financial Quote For Your Life Is Called Human Life Value or HLV. And It Is Also The Sum Assured For The Life Insurance Policy Paid.

The Basic Method Of Calculating HLV Involves Two Steps:

  1. Add Up All Expenses Like Household, Living, Etc.
  2. Calculate Future Liabilities Like Loans, Debts etc. That Your Family May Have To Pay In Case Of Your Sudden Absence.

Once You Add Up These Points, You Will Get The Sum Assured For Your Insurance Policy.

So, After Calculating the HLV, your life Insurance Quote Or Premium Is Calculated. While Calculating, It Takes iNto Account The Above HLV And Other Physical Factors Like Your Age, Health, Financial Capacity Etc.

Best Life Insurance Plans 2022.

Name Of The PlanType Of PlanEntry Age (New/Max)Policy Duration (Min/Max)Bonus Yes/NoSum Assured (Maximum)
Click on HDFC Life 2 Protect Lifeduration18 to 65 years10 years to 40 yearsNoMinimum Rs 25 lakhs, no maximum limit
PNB Metlife Mera Termduration18 to 65 years10 years to 40 yearsNoMinimum Rs 10 Lakhs, No Maximum Limit
HDFC Life Click2InvestUlip0 years to a maximum of 65 years5 to 20 yearsNo125% of the single premium is 10 times the annual premium
Aegon Life iTerm Insurance Planduration18 to 65 years5 years to 40 years or 75 years NoMinimum Rs 10 Lakhs, No Maximum Limit
LIC New Life JoyEndowment18 years to 50 years15 years to 35 yearsNoMinimum Rs 10 Lakhs, No Maximum Limit
SBI Life – Happy InvestmentEndowment18 years to 60 years7 years to 30 yearsNoMinimum Rs 75 lakh, no maximum limit
SBI Life – Simple PensionPension5 years to 40 years5 years to 40 yearsYesMinimum Rs 1 lakh, no maximum limit
LIC New Life FundPension20 years to 60 years5 years to 35 yearsNoMinimum Rs 1 lakh, no maximum limit
ICICI Prudential Wealth Builder IIUlip0 years to 69 years18 years to 79 yearsNoMultiple depending on age
Bajaj Allianz Cash SecureEndowment0 to 54 years16, 20, 24 and 28 yearsNoMinimum Rs 1 lakh, subject to maximum underwriting

Life insurance claims

Claims Under This Category Can Be Classified As Follows:

Death Claim.

In Case Of Death Claim Of The Policyholder, The Beneficiary Has To Submit The Following Documents:

  • A Properly Filled Claim Form
  • Original Copy Of Policy Agreement
  • An Original Or Certified Copy Of Death Certificate Of The Insured.
  • Beneficiary Identity Proof.

Maturity demands

To Enjoy The Maturity Benefits Of The Life Insurance Policy The Policyholder Needs To Produce These Documents:

  • Original Copy Of Policy Agreement
  • Maturity CLAIM FORM.

Life Insurance Company.

There Are 24 Life Insurance Companies in India:

  1. Aegon Life Insurance Co. Ltd.
  2. Aviva Life Insurance Co. India Limited
  3. Bajaj Allianz Life Insurance Co. Ltd.
  4. Bharti AXA Life Insurance Co. Ltd
  5. Birla Sun Life Insurance Limited Co.
  7. DHFL Pramerica Life Insurance Co. Ltd.
  8. Edelweiss Tokio Life Insurance Co. Ltd
  9. Exide Life Insurance Limited Co.
  10. Future General India Life Insurance Co. Ltd
  11.  HDFC Standard Life Insurance Co. Ltd
  12. ICICI Prudential Life Insurance Limited Co.
  13. IDBI Federal Life Insurance Limited Co.
  14. India First Life Insurance Limited Co
  15. Kotak Mahindra Old Mutual Life Insurance Ltd
  16. Life Insurance Corporation of India
  17. Max Life Insurance Co. Ltd.
  18. PNB MetLife India Insurance Co. Ltd.
  19. Reliance Life Insurance Co. Ltd
  20. Sahara India Life Insurance Co. Ltd
  21.  SBI Life Insurance Co. Ltd.
  22. Sriram Life Insurance Co. Ltd
  23. Star Union Dai-ichi Life Insurance Co. Ltd.
  24. Tata AIA Life Insurance Co. Ltd.

Important Points To Remember

  • No Life Cover Plan Covers Everything You Need. It Doesn’t Have To Be Similar To Your Friend Or Colleague’s Insurance Plan. You Must Set Proper Financial Goals And Those Goals Must Be Reflected In The Insurance Plan.
  • It’s Better To Start Early Because The Cost Of Insurance Goes Up As You Get Older.
  • Term Plans Are More Affordable Than Other Plans, And You Get Bigger Life Cover At A Lower Premium
  • Life Insurance Riders Add More Value To Your Existing Cover. A Rider Is An Add-on To The Primary Insurance Policy, Which Provides Benefits Over And Above The Promised Cover Under Certain Specified Conditions.
  • Consult An Experienced Insurance Agent/ Financial Advisor To Know Which Plan Suits You Best And Thus Buy The Right Cover For Yourself.

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