Hello friends, in today's article we will tell you about life insurance. Article What is Life Insurance? What is the identity of the best life insurance policy and how to buy a good life insurance policy? Top Life Insurance Plans of 2021 in India, Why Buy a Life Insurance Policy and What are its Benefits? What are the types of life insurance policies? What are riders? Which riders can be added to a life insurance policy? How to choose the best life insurance policy? How to buy a life insurance policy online? How to claim a life insurance policy? Documents required for a life insurance policy and answers to frequently asked questions will also be found in this article.
Table Of Contents (TOC)
What is life insurance?
Top Life Insurance Plans of 2021 in India
According to us, the following are the best life insurance policies in India for 2021-2022 that you can buy-
| Schemes | Minimum / Maximum Entry Age | Maximum Maturity Age | Minimum Sum Assured |
| HDFC Life Sanchay Plus | 5 years / 60 years | 80 years | on premium basis |
| ICICI iProtect Smart | 18 Years / 65 Years | 75 years | (Rs. 2,400) subject to minimum premium |
| Max Life Smart Term Plan Plus | 18 Years / 60 Years | 85 years | 25 lakh |
| lic tech term plan | 18 Years / 65 Years | 80 years | 50 lakhs |
| SBI E-Shield Plan | 18 Years / 65 Years | 80 years | 35 lakhs |
| SBI Shubh Nivesh Plan | 18 Years / 60 Years | 65 years | 75,000 (x 1000) |
| Kotak Life E-Term Plan | 18 Years / 65 Years | 75 years | 25 lakh |
| HDFC Click2Protect Plus | 18 Years / 65 Years | 85 years | 25 lakh |
| Aegon iTerm Plan | 18 Years / 65 Years | 100 years | 25 lakh |
| Bajaj Allianz i Secure Term Plan | 18 Years / 60 Years | 70 years | 2.5 lakh |
Note: These values are subject to change as per the different plan options, there are multiple options in the same plan.
Why buy a life insurance policy and what are its benefits?
No one can tell what is going to happen in the future. The loss of someone at any point in life can cause trouble for his family. Hence, buying a life insurance policy will ensure that your family will be able to live comfortably after you. They can maintain their standard of living in case of any emergency. There are many benefits that life insurance policies provide to the policyholders. Let's take a look at the most important benefits.
Financial Aid (Death Benefit)
An individual needs insurance to cover his expenses, repay the loan, maintain the income and education of the children. Everyone knows that death is a fact, but what happens when a person dies. In such a situation, in his absence, his family has to face a lot of difficulties. In such times, life insurance acts as a facilitator and contributes to meet their needs.
Accident Cover
Any person may face an accident in which something inappropriate may happen to him. The cost of self-treatment after an accident is very high and general insurance policies do not provide them with the help they expect. But luckily a life insurance policy can do that, aiming to meet the needs that we want to reduce.
Assured Income
Some schemes prove beneficial in saving money in the case of retirement. You keep saving money within a specified period which you get back as income later. It acts as a fixed income at the time of retirement.
Credit Facility
People availing of life insurance also have the option of availing loan or loan through their insurance policy. Which can help them to meet the necessities of their life without having to work on the assured benefits of the policy purchased.
Tax Benefits
Life insurance offers attractive tax benefits and helps you to build a huge amount of wealth. Almost all life insurance policies offer you the benefit of the tax deduction on payment of premium under section 80C of the Income Tax Act, 1961 and also provide tax-free sum assured under 10(10)D.
What are the types of life insurance policies?
Life insurance providers have created different types of life insurance plans keeping in mind the need and choices of the people. You can get information about all types of insurance policies below. Life insurance providers have created different types of life insurance plans keeping in mind the need and choices of the people. You can get information about all types of insurance policies below.
Term Insurance Policy
This insurance policy comes under the protection category as it only provides financial protection. Basically, it covers the risk of death. In this plan, after the death of the life assured, the sum assured is paid to the nominee or the beneficiary, as mentioned in the policy document. If the Life Assured survives the policy term, he or his family will not receive any amount or can only get the premium back. Which basically varies from insurer to insurer. If you are planning to buy only life risk cover, then term insurance is the best and cheapest form of policy.Whole Life Insurance Plan
Whole life insurance policy provides protection for whole life. In such plans, the insured is generally given an option to pay the premium amount for a specified period. Also known as maturity period. If the life insured reaches maturity, he has the option to keep the life cover till death without paying premiums and receiving the sum assured or bonus.Endowment Policy
Endowment policy pays you the sum assured along with both investment and death benefit. The plan charges a high premium which is being invested in the asset market – debt and equity. Endowment is a policy in which the insurer promises to pay a lump sum amount at the time of maturity. Maturity is limited to a fixed age of 10, 15 or 20 years. Some plans also pay out the amount in case of critical illness. The amount can also be availed early in an endowment plan in which the insured receives the surrender value.Child Insurance Policy
These plans provide financial coverage for the future needs of the child. Along with this, it gives you the opportunity to plan better and stabilize your future. It is basically a combination of insurance cover and investment that secures multiple stages of your child's future. This life insurance policy will provide you the amount as a lump sum amount at the end of the policy. Apart from this basic cover, this policy also helps you in offering payouts at crucial stages of your child's life. Obviously you don't want to think about your death or any unfortunate event, but have you ever thought about what your child will do after your death, how to secure the future. Basically, a child insurance policy ensures that the future financial needs of the child are taken care of even in your absence.Pension Plan (Retirement Plan)
This plan helps you to financially secure your post-retirement life. To plan your retirement, there are many pension plans available in the market. These plans are different from each other. Their benefits, features, exclusions etc. also differ. Pension plan is basically an investment or savings instrument to meet retirement requirements in future.Under this, the insured receives regular income in the form of annuity during the days of your retirement. Annuity plan is a form of insurance plan which pays regular income from the beginning and the rest depends on the features of the plan you choose.Investment Plan
This policy also helps you to save and get insurance cover. Improvement in lifestyle, aspirations for a better and brighter life and growing anxiety make people think of investing money to secure their future. Securing all your financial goals with existing investment resources means planning investments. It's true that everyone's needs are different, so one investment plan certainly doesn't suit everyone's needs. Nowadays, insurance companies are offering a wide range of effective investment plans.Unit-Linked Insurance Plans (ULIPs)
In all the above schemes you have no option to choose where you want to invest your money. Most of these schemes invest in loans to secure your capital, while Unit-Linked Insurance Plans (ULIPs) give you the absolute right to choose the best way to invest your money. Which you can invest in debt and equity also. If you want to change the existing investment method, you can do it easily.ULIP is basically a financial instrument which provides you insurance cover and also helps in wealth creation. Those who have good knowledge of stock market can understand it easily.Money-Back Plan
Money-back plans are like endowment plans, with the only difference being that a portion of the returns can be withdrawn during the payout period. In this, some part is returned to the insured from time to time according to the term of the policy. In case of death the entire sum assured will be paid. This also includes bonuses. With these additional features, the premium of these plans is higher as compared to other online life insurance plans.
What are riders?
Riders act as an additional cover in any insurance plan. Mostly, the rider is bought along with the insurance plan and cannot be added later.
Types of Life Insurance Rider: Riders provide a specific benefit and are added to the life insurance policy for additional benefits. Each rider offers a different benefit. Let's know about some riders.
Permanent Total Disability or Accidental Death Rider: With the help of this rider, in the case of permanent total disability or death, an additional sum assured is given to the policyholder.
Premium Waiver Rider: The benefit of this rider is available when the policyholder becomes financially unproductive due to accident or critical illness and is unable to earn. In this rider the insurer assumes the full responsibility of paying the premium amount till the time of maturity, the sum assured is paid to the insured.
Critical Illness Rider: In this rider, the sum assured is paid to the policyholder in case of critical illnesses like kidney failure, heart attack, cancer, etc. In most cases, the sum assured is paid and the plan terminates. Critical illness riders become more expensive with age. In some cases, the insurer may also deny rider coverage due to the health conditions of the policyholder at the time of purchase. This is the reason why it is better to buy riders at an early age.
Surgical Rider: This is a beneficial rider that assists the insured by providing financial coverage for surgeries requiring 43 types of medical treatments. The cover is different for minor or major surgery treatments.
Hospital Cash Rider: During hospitalization, a fixed amount is payable on a per-day basis towards hospitalization charges. The minimum and maximum sum insured may vary from insurer to insurer with policy clauses.
Term Rider: Term rider pays a fixed or monthly income to the beneficiary in the event of death of the policyholder. This is equal to the predetermined value mentioned in the policy or base plan coverage.
How to choose the best life insurance policy?
Since there are various plans offered by life insurance companies, it can be very confusing to choose the best plan among various options to get the best coverage at an affordable premium. Here are some things to remember before buying a plan:
1. Keep in mind the claim ratio
A person buys a life insurance policy only to get a claim in the time of need. But what if the family does not get the sum insured after the person leaves? Nothing to worry about, there is a way to solve it. Before selecting a provider, you should check its claim ratio. This will give you an idea of how many claims the company has made in a year. The company with the highest ratio may be a good option for you.
2. Company Background Check
There are many companies today that provide insurance policies. Because of this, there is a dearth of quality providers in the industry. To become smart, you should do a background check of every company. Whatever the facts match your expectations, you should go with that.
3. Valuation of Sum Assured
Before you start knocking on the doors of insurance providers, it is highly recommended to calculate your expected sum insured. Along with this, you can also check the premium calculation done by the companies in depth. Combine both the factors to know which company deserves your hard-earned money.
4. Customer Reviews Are Important
Sometimes, a company may look great on the outside but run with bad intentions on the inside. The best way to find such companies is through customer reviews. These reviews are given by people who have experienced how such companies work and whether they live up to their promises. Reading reviews from such people can really influence your buying decision.
How to buy a life insurance policy online?
It takes a long time to get good results in offline shopping. It is best to opt for online shopping to save time and money.
How to claim a life insurance policy?
In case of death of the Life Assured, the nominee/executive of the deceased shall be able to make the claim in the following manner:
- Notify the insurance company about the death at the earliest with important details like time, place, and cause of death.
- Submit the required documents and proofs to the insurance company. This will include the death certificate of the insured along with the claim form provided by the insurance company.
- If the policy was assigned, the assignee has to provide the documents. If any person (other than the nominee or the assignee) is filing the claim, he/she has to produce legal proof of his/her relationship with the insured.
- If necessary, the report of the post-mortem, hospital, and attending physician will also have to be submitted.
- In cases involving police inquiries, an inquiry/survey report has to be submitted.
Once the investigation is over, the insurance company will approve/reject the claim. The details of the same will be shared with the claimant.
Documents required for life insurance policy
If you have decided to buy life insurance, you will need to provide certain documents:
- Age Proof: Driving License, 10th or 12th Marksheet, Birth Certificate, Passport, Voter ID, etc.
- Identity Proof: PAN Card, Passport, Driving License, Voter ID, or Aadhar Card.
- Residence Proof: Electricity Bill, Telephone Bill, Ration Card, Driving License, and Passport.
Some plans require a medical check-up to ensure that the insured is not suffering from any chronic disease. Other documents such as claim forms and death certificates will be asked for by the insurer.
FAQ
1. Why buy a life insurance policy?
A life insurance policy is the best option to fulfill the goal set by you. Any difficult time the policyholder may face, life insurance helps the family. Even the needs of the children are covered as the policy can help in case of the death of the insured. Tax exemption is available on the premium paid. Even retirement can be secured by taking a pension plan. In such a situation, it is beneficial to take an insurance policy.
2. When to buy a life insurance policy?
The moment you feel that your family or loved ones are dependent on you for your needs, without wasting time you should buy the policy. Since there is no age limit, it is better to buy life insurance only when you need a life policy.
3. How much life insurance do I need?
The policy requirements you need depend on the requirements. When you are young, needs are limited but as you age, you have more responsibility and more people join you. Hence, you should choose the best one keeping in mind your future needs.
4. How to know your current expenses to get the best insurance plan?
Before buying an insurance policy, think about the liabilities you are paying. From bank loans to credit card bills, everything is taken into account. If your family is living in a rented house, then think about the rent, grocery, school fees, other family expenses, taxes, etc. Choose the policy keeping all these in mind.
5. How do know the future expenses to get the best insurance plan?
Expenses made for the future basically help you meet your needs in the future. From settling down the kids to staying away from health issues, you need to think about all the expenses to get the best life insurance plan.
6. How to Buy the Best Life Insurance Policy in India?
The simple way to choose a policy is to do so when you are young, thus increasing the amount. Think about your requirements and make a note of them, choose the best policy.
7. Is it a good idea to buy a life insurance policy at a young age?
Certainly true, buying a policy, especially at a young age, allows you to take advantage of a policy with lower premiums.
8. Is it better to buy life insurance from an agent or should I buy from an insurance company?
While insurance companies are the most reliable sources for buying life insurance policies, agents are not at all unreliable. However, before buying a policy from an insurance agent, it is suggested that you request IRDAI for their authorized card, assuming they are a certified seller.
9. When does the life insurance cover start?
It will commence from the date on which the insurer has obtained and approved the insurance policy.
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