Life is full of unexpected surprises. We have no idea what might come next but we keep going and face that is ahead of us. One thing that is certain throughout is the surety of death. No one has ever escaped this ultimate truth and can never will. Also, life is too precious to put a price on it. But we still do it with Life insurance policy. We try to cover the monetary void that might arise due to the sudden departure of the key breadwinner in the family. Thus, having a good life cover is essential for you and your family.
In technical terms, Life Insurance is the contract between the company and the client where the former agrees to reimburse the latter's death or other events like an accident or terminal illness. A Life Insurance can be a Whole Life Insurance, Term Insurance or Endowment Plan. In return of this cover, the insured agrees to pay a certain amount to the company called as premium. Life Insurance thus becomes the most important form of Insurance Offering protection against life.
Different insurer give out different life insurance quotes for their insurance policies. Thus, it is important to compare Life Insurance plans and make a correct choice.
Do you need a Life Insurance policy? Why not? No one can escape from the certainty of death and thus needs to prepared. You need to think about your loved ones and what will happen to them in your sudden absence. Life Insurance will not be able to fill the void left by the departure of your loved one but it can certainly help to fill the financial gap that might arise. The cash provided by the insurance company can make sure dependents are not burdened with large debts. You need to have a good life cover so as to be prepared for the worse and keep yourself and your family safe.
Death is not the only reason to get covered by Life Insurance. You have a healthy life and will live long, but you cannot work all your life. There will be a stage - retirement - where you will take a break and look back on the work you have done. But as you will look back, the regularity of the Income over the years will surely start declining. There might be some unexpected health issues as well. A good life cover will take care of the above-mentioned problems. You can find uses of life insurance in many other ways like child's education and marriage, buying a house, pension or post-retirement income.
In term Insurance, you get covered for a specified period of time. It provides cover with no profits or savings component. Term life protection is the most affordable as the premiums charged are cheaper compared to other types of Life Insurance plans.
As the name suggests, the insurance cover is for the whole life as long as you live. The main highlight of the policy is that the validity of the insurance is undefined. Thus, the policyholder enjoys the cover all through their life.
There is one big difference between endowment plans and term insurance that the endowment plans have a maturity benefit. Unlike term insurance, the endowment plans pay out the sum assured for both death and survival.
It is a variant of endowment Insurance. Money back policy gives out payments at regular time intervals over the term of the policy. A part of sum assured is paid during these regular intervals. If the person survives the term, they get the balance sum assured by the policy.
ULIPs are another variant of the traditional endowment plans. ULIPs are mostly invested in stock Market and are thus more suitable for people with a high-risk appetite. The sum assured is paid at the time of death or maturity.
As mentioned above, it is nearly impossible to put a price tag on a human life, but nevertheless, it is very crucial to estimate the value of your life. You need to calculate how much money your family might need in your absence to be stable financially. In Insurance Terms, the financial quote of your life is called Human Life Value or HLV. And it is also the sum assured for the given Life Insurance policy.
The basic method of calculating HLV involves two steps:
Once you add these points, you get the sum assured for your Insurance policy.
So, after calculating the HLV, your Life Insurance quote or premium is calculated. While calculating, it considers the above HLV and other physical factors such as your age, health, financial power etc.
|Plan Names||Plan Type||Entry Age (Min/Max)||Policy Term (Min/Max)||Bonus Yes/No||Sum Assured (Min/Max)|
|HDFC Life Click 2 Protect Life||Term||18 to 65 years||10 years to 40 years||No||Minimum Rs. 25 Lakh, no maximum limit|
|PNB MetLife Mera Term||Term||18 to 65 years||10 years to 40 years||No||Minimum Rs. 10 Lakh, no maximum limit|
|HDFC Life Click2Invest||ULIP||0 yrs to max 65 yrs||5 to 20 years||No||125 % of Single Premium 10 times the annual premium|
|Aegon Life iTerm Insurance Plan||Term||18 to 65 years||5 years to 40 years or upto 75 years||No||Minimum Rs. 10 Lakh, no maximum limit|
|LIC New Jeevan Anand||Endowment||18 years to 50 years||15 years to 35 years||No||Minimum Rs. 10 Lakh, no maximum limit|
|SBI Life – Shubh Nivesh||Endowment||18 to 60 years||7 years to 30 years||No||Minimum Rs. 75 Lakh, no maximum limit|
|SBI Life – Saral Pension||Pension||18 years to 65 years||5 years to 40 years||Yes||Minimum Rs. 1 Lakh, no maximum limit|
|LIC New Jeevan Nidhi||Pension||20 years to 60 years||5 years to 35 years||No||Minimum Rs. 1 Lakh, no maximum limit|
|ICICI Prudential Wealth Builder II||ULIP||0 years to 69 years||18 years to 79 years||No||Multiples depending on age|
|Bajaj Allianz Cash Secure||Endowment||0 to 54 years||16, 20, 24 and 28 years||No||Minimum Rs. 1 Lakh, maximum is subject to underwriting|
Claims under this section can be classified as under:
In the case of a death claim of the policyholder, the beneficiary needs to produce following documents:
To enjoy the benefits on the maturity of the Life Insurance policy the policyholder needs to produce these documents:
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There are 24 Life Insurance Companies in India: