Contents
- What is Life Insurance Policy?
- Benefits of Life Insurance Policies and Plans
- Let’s take a look at the benefits offered by life insurance plans:-
- Importance of Buying Life Insurance
- These are the following benefits of the Life Insurance Policies and Plans
- Unpredictability–
- Financial Cushion–
- Debt-Proof Future –
- The Accomplishment of Retirement Goals –
- Tax Benefits –
- Mental Piece –
- Savings Tools –
- Children Future’s Expense –
- Business Security –
- Documents Required: Life Insurance Policy
- Address Proof
- Identity Proof
- Age Proof
- Best Life Insurance Plans In India 2019
- Type of Life Insurance Policies and Plans
- Types of Life Insurance Policies
- Coverage
- Meaning
- Term Plans
- ULIPs
- Money-Back Plans
- Whole Life Insurance
- Guideline to Purchase Best Life Insurance Policies and Plans
- Time Period
- Premium
- Dependents
- Evaluate the Sum Assured of Insurance
- Compare Life Insurance Quotation
- Purchase Policy Online
- Keep It Safe
- Type of Life Insurance Riders And it’s Importance
- Exclusion For Life Insurance Policies and Plans
- How Does Age Affect Life Insurance premium Rates?
- How to File Claim For Life Insurance Policies and Plans
- Things To Be Remembered:-
- Document to be Required
- Impact of GST on Life Insurance Policies and Plans
- Impact on Population
- Life Insurance Online Payment
Life insurance policies and plans are the safest and the securest way to protect your family or guardians against the financial contingencies that may arise up post the unfortunate event. Also, as per an Insurance agent in India, the insurer gives assurance to pay a definite sum to the policyholder’s family on his demise during the policy term. Also, read about Insurance agent secrets.
What is Life Insurance Policy?
- It is an agreement between an insurance company and a policyholder,
- In addition, according to which the insurer guarantees to pay an assured some of the money to the nominated beneficiary in the unfortunate event of the policyholder’s demise during the term of the life insurance plans.
- Moreover, in exchange, the policyholder agrees to pay a prescribed sum of money in the form of premiums either on a regular basis or as a lump sum.
- If it’s mention in the contract, some other changes, like critical illness or the terminal illness can also trigger the payment of benefit.
- And so, if its mention in the contract, a policy can also cover some other costs like funeral expenses as a part of benefits.
The life insurance agents also provide maturity benefits except for the death benefits. Also, these types of benefits are available in the form of a payout if the insured survives the entire term of the life insurance policy India. Moreover, online life insurance plans may also offer some tax benefits as per Section 80C of the Income Tax Act, 1961. Must read about how to become an insurance agent
- The insurance company will determine the premium payment which the policyholder has to pay to the company.
- Moreover, the claimant is given the option to choose the term of the policy and the sum assured. There are a number of factors that are taken into consideration while determining the premium amount for every individual. The sum assured is amongst those factors.
- Higher the sum assured, the higher the amount of the premium.
Benefits of Life Insurance Policies and Plans
- The benefits of buying Life Insurance Policies and Plans go beyond protecting one’s family in tough times. Moreover, it is important to safeguard one’s dependents but there is a long list of other benefits, too, that creates the life insurance plan a profitable choice among individuals.
- Sadly, most people are not aware of the many benefits associated with it – all they care about are the death and disability benefits. Moreover, there is a long list of benefits attached to the life insurance policy such as maturity benefits, tax benefits, etc. Let’s take a look at the benefits offered by Life Insurance Policies and Plans
- Most people are not aware of the benefits of life insurance and life insurance agent saving account. They just care about the death and disability benefits.
Let’s take a look at the benefits offered by life insurance plans:-
- Loan Against a Life Insurance Policies and Plans: Many of the people don’t know a special feature of insurance that it secures a loan at a more competitive rate. A person can get a loan from any company. The amount of loan a person gets will depend on the surrender value of his insurance policy. The loan amount is the percentage of the surrender value of the indemnity policy and it can go till 80% to 90%. Only some companies that allow loans amounting to 50 percent to calculate the maximum loan amount they can be eligible for.
- Online Payment Rebate: The payment mode is chosen by a person also affects the premium of the policy. Companies servicing cost goes down when a person pays his premiums online as paperwork is not involved in this. And so amount saved is used as a commission for agents.
- Refund on the Sum Assured: Higher the sum assured, Higher the rebates. Servicing the cost of policies belonging to the same category is similar. It means a lower cost of servicing per unit of sum assured. This explains the rebate on the sum assured.
- Rebate as per the Periodic Payment Chosen: It can be an annual, half-yearly or monthly mode. Higher the payment, Higher the servicing cost. Moreover, if a policyholder wants to pay a premium once for the complete year, the company can use the available funds for investment purposes. Higher the profits, Higher the benefits of the company.
- Taking Care of One’s Business: If the policyholder dies, owns a business then their partners can buy the share of the policyholder without any problem. Moreover, the partner will enter into an agreement and the payout received will be given to his belongings.
Must Read: Insurance Broker or Agent
Importance of Buying Life Insurance
It works as a financial net in case of eventuality linked with human lifelike
- Retirement,
- Disability,
- Accident,
- Death, etc.
1. Life is unpredictable; Noone can guess what happens next. Also, in case of any uncertainty of the primary breadwinner of a family, apart from the emotional trauma, his/her family will come at the risk of a financial crunch.
2. Also, in case this person is the sole breadwinner of the family, his/her dependents can face a huge loss of income.
3. Though there is no premium calculator that can calculate the exact worth of human life, what needs to be done must be done. Moreover, to calculate the sum assured of a life insurance policy, the insurer takes your lifestyle and finances into his calculation process. This sum assured is provided to the insured’s family after his/her demise in order to give them maximum needed financial support. In addition, to make sure that one’s family doesn’t have to make any compromises due to financial crunches, one should buy a suitable life insurance plan.
These are the following benefits of the Life Insurance Policies and Plans
Unpredictability–
Life is unpredictable. No one can tell that when his/her life will come to an end. If it was up to people, no person will want to leave this world without ensuring the financial security of his/her family. Sadly, it’s not up to us. The solution to this problem is, everyone must buy a life insurance plan and be a step ahead so that the financial goals set for his/her family can be complete even when he/she isn’t around.
Financial Cushion–
It provides maximum-needed financial support to the insured’s family by compensating for the loss of income
Debt-Proof Future –
The sudden death of a breadwinner is nothing short of a disaster. While it is an emotional crisis initially, it can get change into a financial one in no time. Also, with life insurance, any outstanding debt, such as a motor loan, personal loan, a home loan, etc. can be taken care of after the demise also.
The Accomplishment of Retirement Goals –
While a life insurance plan is the best option to accomplish long-term goals; it provides us to accomplish retirement goals as well. Some life insurance agent offers diverse investment chances and some insurance plans offer performance-based dividends.
Tax Benefits –
The policyholder can avail tax-benefits regardless of the type of life insurance policy he/she buys. Under the 80 C of the income tax act, the premium paid towards the life insurance plan can get tax benefits up to Rs. 1 lakh 50 thousand.
Mental Piece –
The life insurance plan provides maximum-needed peace of mind to the policyholder by assuring the financial future of his/her family. Also, even a basic life insurance plan provides us to generate a corpus to take care of the future financial needs of the insured’s family.
Savings Tools –
In case a person chooses for a traditional/unit-linked plan, he/she pays an enhanced insurance premium. As well as, this extra amount of money is invested in the insured’s choice fund and continuously acts as a savings tool.
Children Future’s Expense –
A life insurance plan takes care of all the future expenses of a policyholder’s children, such as education, medical and wedding expenses. Also, these days, the cost of raising a child is too high. Not just that, even for taking the admission in a reputed college costs a bomb. And so this policy ensures that the policyholder’s children never have to make any compromises as far as their education and personal needs are concerned.
Business Security –
While some of the life insurance plans cater to the needs of the insured and his/her family, there are some insurance plans there in the market that provides support to the insured’s business. In addition, it also enables a business partner to purchase a share of his/her deceased business partner.
In addition, once the insurance buyers know what they want to buy, the next step is to examine around and compare life insurance plans that can fulfill his/her requirements. The best insurance policy is the plan that fulfills to insurance buyer’s needs. And so this life insurance plan will provide his/her family to sail through the tough times of life with grace.
Documents Required: Life Insurance Policy
Insurance companies also need proofs while issuing a life insurance policy like other companies. Also, the policy seeker needs to submit all the relevant documents in order to avail the policy. And so this process is done always before the policy is issued. Moreover, they can be either upload it directly by visiting the official website of the insurer or e-mail it to the insurer’s customer service id. Also, he/she can courier it to the official address. These documents need to be self-attested by the insured.
- Last3-6 month salary slips
- ITR of 2-3 years
- Last 6 months bank statement with continuous 3 months credited salary
- IF the person s self-employed then CA certificate
- Latest Form16
Address Proof
- Voter ID card
- Adhaar CArd
- PAN Card
- Saving bank statement
- Passbook with Latest 6 month entries
- Latest 3-month credit card statement
- Driving license
- Utility Bills
- Passport
- Ration Card
Identity Proof
- Passport
- PAN card
- Aadhar card
- Voter ID card
Age Proof
- Passport
- PAN card
- Aadhar card
- Voter ID card
- Driving license
- Ration Card
- Marriage certificate
- Birth certificate
- School/College leaving certificate.
Best Life Insurance Plans In India 2019
Life Insurance Policies And Plans | Insurance Entry Age(Min/Max) | Policy Term(Min/Max) | Sum Assured(Min/Max) |
---|---|---|---|
Aegon Life iTerm Plan | 18/75 years | 5/40 years | 10Lacs/NA |
Aviva I-Life Plan | 18/55 years | 10/35 years | 25Lacs/NA |
Bajaj Alliance | 18/70 years | 10/30 years | 20Lacs/NA |
Bharti AXA e-Protect Term Plan | 18/75 years | 10/30 years | 25Lacs/NA |
HDFC Click 2 Protect Plus | 18/65 years | 10/30years | 10Lacs/10Crores |
HDFC Life Sanchay | 30/45 years | 15/25years | 1,05,673/NA |
HDFC SL Crest | 14/55 years | 10/10years | (7 or 10)* Annual Premium/220*Annual Premium |
ICICI Pru iProtect | 20/75years | 10/30years | 3Lacs/NA |
Kotak Life Preferred e-Term | 18/75years | 10/40years | 25Lacs/NA |
LIC Amulya Jeevan 18/60years | 18/60years | 5/35years | 25Lacs/NA |
LIC New Jeevan Anand | 18/50years | 15/50yars | 1Lac/NA |
LIC Term Plan | 18/75years | 10/35years | 50Lacs/NA |
MAX Life Online Term Plan | 18/70years | 10/35years | 25Lacs/100Cr |
SBI eShield Plan | 18/70years | 5/30years | 20Lacs/NA |
SBI Shubh Nivesh Plan | 18/60years | 5/30years | 75000/NA |
Read About- Life Insurance Vs Mutual Fund Agents : Who Earns More?
Type of Life Insurance Policies and Plans
In order to offer the best coverage, Life Insurance Policies and Plans come in two categories. Also, in order to know what life insurance plan is suitable for an individual.
And so it’s important to know what types of life insurance policies are offered in the Indian insurance market.
There are two categories of life insurance policies
1. Pure life insurance
2.The perfect blend of insurance
These are the following types of insurance:-
Types of Life Insurance Policies | Coverage | Meaning |
---|---|---|
Term Plans | Pure risk cover | It is the most basic and affordable form of insurance. It provides a death cover for a particular time period. God forbid if a person suddenly dies in hid policy tenure, then predecided death benefits will be given to the nominee. The best term plan provides comprehensive life cover at competitive premiums.
|
ULIPs | Pure risk cover | ULIP is a perfect blend of insurance and investment components and offers combined coverage. In addition, it comes with a long-term investment opportunity and valuable investment flexibility. The premium paying towards a ULIP is partly used as a risk-cover for life insurance plan and the remainder invests in market funds such as
|
Endowment Plans | Insurance covers + Savings |
|
Money-Back Plans | Pure risk cover |
|
Whole Life Insurance | Pure risk cover |
|
Child Plans | Pure risk cover |
|
Retirement Plans | Pure risk cover |
|
Guideline to Purchase Best Life Insurance Policies and Plans
Choosing it can be a difficult task but you can do it by following these steps:-
Time Period
- If a person wants a lifelong insurance plan which can see to his/her family’s well-being after his/her demise, then a whole life plan is the right choice. Also, people should look for a plan that offers him/her human life value, and includes a salary cover and loan reimbursements.
- If a person wants a protection plan for a particular time period, he/she can go for term insurance.
- If a person wants to save some funds for his/her children’s education, then he/she can buy a 10-year term life insurance plan with return of premium add-on.
- To pay off his/her debts, a person can buy a plan for that particular period. Also, the person can check out various other types of plans like ULIPS, pension plans, money back plans, endowment plans, etc., based on the time-period and individual needs.
Premium
- If a person wants to buy just for the investment plan or tax-saving purposes, then the premium is a difficult deciding factor. For example, the premium sum for endowment plans, Unit Linked Insurance Policies, and Whole life policies are on a higher side when compared to term insurance, money back plans, and pension plans.
- If a person fails to installment on time then life insurance can lapse.
Dependents
- If one is the only head of the family, buying a Life Insurance Policies and Plans should be his/her first priority.
- Moreover, the reason is one’s family is dependent fully on his/her income, and nobody wants their loved ones to suffer due to loss of income in case of sudden death.
Evaluate the Sum Assured of Insurance
- Each one is recommended to have a fair estimate of the assured amount of his/her life insurance policy, and then search online for different companies.
- It might be confusing at starting, but if one follows the above-mentioned steps, everyone will have a clear picture.
- Each one can check out various life insurance companies on our site and then make the right decision.
Compare Life Insurance Quotation
- Firstly, Shortlist 3 to 4 companies. Then choose the best one out of it.
Purchase Policy Online
- Once a person has selected a plan/company, he/she can buy it from its website.
- There might be certain formalities that a person have to fulfill which vary from one insurer to another
- Some companies require an insurance seeker to undergo pre-medical tests before signing off.
- Also, some companies send the documents at home which one can sign and submit them to the company as per their rules and regulations.
- It is so convenient to purchase a policy online as it is easy to search, compare, and get quotations online.
Keep It Safe
- The life insurance policy documents are no less than any other legal document that one possesses.
- And so, it is suggested to always keep them in a safe place.
- Also, make sure that the beneficiaries and the family members of the insured know about their whereabouts.
Learn about: Offline vs Online Insurance Plan
Type of Life Insurance Riders And it’s Importance
Selecting the right life insurance rider is as difficult as buying itself. In addition, no one wishes to regret a wrong decision. That’s why while selecting one must take time and expert advice before buying a life insurance rider. Riders are add-on benefits offer by the insurance policy which helps in enhancing the base cover. Moreover, without knowing the types of riders present in the market, one shouldn’t randomly purchase one for the sake of increasing the cover amount of theLife Insurance Policies and Plans. Moreover, in this regard, here are some of the rider options available for insurance seekers:
- Accidental Death Benefit Rider
- Accidental Total And Permanent Disability Rider
- Critical Illness Rider
- The waiver of Premium Rider
- Accelerated Death Benefits Rider
- Term Rider
- Hospital Cash Rider
- Surgical Care Rider
Exclusion For Life Insurance Policies and Plans
A life insurance agent policy provides you financial cover in place of multiple scenarios, there are certain situations in which your insurance company can decline your claim. Moreover, it is a suggestion that you all go through all the limitations as mentioned in the fine-print before signing-up.
- Death as a Result of Lifestyle Diseases
- Self Inflicted Injuries
- Involvement in Extreme Sports Activities
- Man-Made Disaster
- Loss of life due to HIV and STDs
- Overdose of Drugs
- Criminal Intent/Illegitimate Activities
- Also, Read the Fine Print Carefully
- The life insurance premium amount rises by 8-10% each and every year due to the increase in the insured’s age. So, it is always profitable to buy an indemnity policy while one’s young.
- If the insurance buyer is young, the premium rates of the policy will be low when comparing to the premium rates for someone older. Moreover, this is because young individuals tend to be less prone to life-threatening diseases and the possibility of demise.
- Moreover, purchasing Life Insurance Policies and Plans at a young age can help the insured save a lot of money in the long run.
- Also, as a person grows older, the lifetime period of that person decreases, thus, they become riskier to the insurer. Rather than increasing the premium of the life insurance policy on every birthday of the insured. The insurance company spreads the premiums one would pay over 10, 20 or 30 years depending on the age and averages them into one amount.
- And so, the premium amount that insurance holder pays remains the same every year. Moreover, the rate grows every year by 5-8% if an individual is in his/her 40s and 9-12% if an individual is above 50 years of age.
How to File Claim For Life Insurance Policies and Plans
It is important to have the right approach to make a demise claim. Also, here’s how nominees of the deceased insured can make a claim – under these scenarios, life insurance claims are made
- On the demise of the Policyholder
- On Maturity of the Policy
Things To Be Remembered:-
- Informing the insurance agent as soon as possible by any medium.
- Moreover, while lodging a claim all the documents need to be share like policy number, name of the policyholder, place of death, name of the claimant and insured.
- Also, when insurance is purchase offline then the claimant has to provide claim imitation.
Document to be Required
- Original copy insurance policy
- Claim form and death certificate
- deeds of assignment
- DIscharge form signed by the witness
- a supplementary document like hospital certificate, post-mortem certificates, etc,
- Also, the investigation report in case of the police inquiry
Impact of GST on Life Insurance Policies and Plans
- The service sector comprises 60% of the GDP.
- In addition, the GST is likely to have a great impact on the service sector. The life insurance industry also creates a part of the service sector, which, got greatly affected by the GST.
- And so, life insurance is a sector which is having a vast potential in the country due to the fiscal cushion that it offers to the population for taking care of their requirements at various stages of life. Moreover, at present, it seems a very low penetration in the country.
- Also, it could be advantageous to not only create awareness but also boost its coverage and reach.
Impact on Population
Life insurance services were taxed in the range of 1.5% and 15% before the implementation of GST. Moreover, in December 2015, Revenue Neutral Rate (RNR) report was published through the Chief Economic. In addition, according to this report on GST Laws, a standard GST rate of 18% was decided for the insurance services.
- The burden of indirect taxes is now on the end customer; the 18% tax rate under the GST was likely to make life insurance policies more unreachable to a larger chunk of customers.
- Moreover, which in turn, lowered the level of insurance penetration in India.
- Despite this, now insurance penetration has witnessed a growth of 8% (CAGR).
In comparison to countries like Australia, Malaysia, Africa, Singapore, etc. where the government is providing the life insurance benefit as a part of social security. Also, imposing taxes on insurance products and services discourage many people from buying life cover for themselves and their dependents.
Life Insurance Online Payment
There are different modes of online payment like:-
- Internet banking,
- Mobile banking,
- Credit card,
- Debit card, etc.
One is given a choice for automatic payment as well as where the amount of the premiums gets deducted from his linked bank account directly. Also, the choices between payment include
- NEFT,
- eCMS,
- Standing Instructions (SI) mandate,
- Electronic Clearing Service (ECS),
- Auto Debit facility by the Reserve Bank of India (RBI), etc.
And so options for online payment will depend on the provider chosen by the insured. And so a person can pay simply by logging into the insurer’s official website or by visiting the internet banking portal of the bank.
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