Life Insurance | FAQ's
FAQs About Life Insurance Policy;
01: What is Life Insurance ?
Life insurance is an insurance cover which provides a sum assured to the family of the assured in the event of sudden death. The plan also offers a survival benefit to the assured if he/she survives the policy term.
02: What are the factors that affect the calculation of a life insurance plan premium?
Factors that determine the premium of Life Insurance Plans include the policyholder’s age, sum assured, gender, lifestyle, job, medical history, type of policy, tenure of the policy and riders (if any).
03: Why should I purchase life insurance?
Life insurance helps you attain financial security that ensures your family’s life goals are not affected. Life insurance also offers tax benefits on the premiums that a policyholder pays for their life insurance. Moreover, life insurance plans are affordable and the policyholder can purchase additional benefits by purchasing a rider to enhance their life cover.
04: Which is the best life insurance plan?
Different life insurance plans have different features and advantages. Thus, the definition of the best plan varies from individual to individual. The best life insurance plan is the one which best meets your requirements and budget.
However, among all the different types of life insurance plans, the most preferred type of life insurance plan is Term Insurance Plan because it provides high coverage at nominal premium.
05: What are the factors which I should consider before buying a life insurance policy?
Before purchasing a life insurance plan you must check your insurance objectives, your income, your life insurance existing policies (if any), your assets, liabilities, and your expenses.
06: Is it safe to buy a life insurance policy online?
Purchasing life insurance policy is easy, quick and hassle-free and the payment is made through a safe gateway. Buying policies online is less time consuming as well.
07: What are the tax benefits on insurance premiums?
Under Section 80C of the Income Tax Act, premiums paid towards a life insurance policy qualify for a deduction up to Rs. 1.5 Lakh. Also under Section 10(10D), income received from a life insurance plan on maturity is tax-free if the premium is not more than 10% of the sum assured or the sum assured is at least 10 times the premium.
08: Does tobacco and alcohol consumption affect life insurance premiums?
Yes, if an individual declares that he/she consumes tobacco/alcohol then the premium for a life insurance plan increases because of high-risk involved.
09: Can I return my policy immediately after I purchase it?
You can return the policy stating the reasons why you disagree with terms and conditions of the policy within the free-look period as per regulations of IRDA. For Life Insurance policies, the free-look period is generally 15 days (30 days for online policies) from the date of receiving policy documents.
10: Can I purchase a new life insurance policy even when I already have one?
Yes, you can purchase a new life insurance policy despite already having one. It helps a policyholder get an increased life coverage along with all other benefits of a life insurance plan.
11: What is the difference between term insurance and life insurance?
Major difference between life insurance and term insurance is that term insurance is a type of life insurance policy. Term insurance policies are quite affordable as compared to life insurance policies, but life insurance policies provide extensive coverage.
Life insurance policies provide coverage for whole life and term insurance policies provide coverage for a fixed period of time.
12: Why is buying life insurance important?
Life insurance policy can help an individual to ensure financial security of their family. In case of your unforeseen demise during the policy tenure, the financial burden of fulfilling financial requirements will on to to your family members who were fully dependent on your income, under such circumstances a life insurance policy will provide a death benefit to your family members which will allow them to fulfill their financial requirements in your absence.
13: How to choose the right sum assured under life insurance?
Before you choose a sum assured for your life insurance policy, it is important that you consider a sum assured which is 10 - 15 times your annual income and enough to help your family to maintain a decent lifestyle in your absence.
Consider a few factors such as age, current expenses, liabilities, future expenses and number of financial dependents before choosing a sum assured.
14: What is a life insurance premium?
Life insurance premiums are the periodical amount that you pay for the life cover provided under the life insurance policy. Life insurance premium is provided to the insurance provider. Premiums are the amount of payments made for the life cover provided by the insurance provider.
15: Who decides the life insurance premium?
Underwriters are people who play an important role while determining the premium for your life insurance policy, the underwriters assess your application and decide the premium for your life insurance policy.
16: What will happen if the life insurance premium is not paid on time?
In case premium for a life insurance policy is not made on time the policy will lapse and grace period shall be provided for the due premium payment. Usually the grace period of a life insurance policy offered by insurance providers ranges from 15 - 30 days under which one can pay the premium to keep his/her policy active.
17: Do I get survival benefits under my life insurance policy?
Under some life insurance policies a survival benefit known as maturity benefit is provided to the life assured at the end of the policy term in case the life assured survives the entire policy tenure. Some life insurance plans that offer a maturity benefit are Endowment, Money Back, Child and retirement plans.
18: What are the benefits of buying life insurance?
Life insurance policy is one financial tool that can help an individual ensure financial security of their loved ones during difficult times. Below mentioned are some benefits of buying a life insurance policy:
Provides financial protection to the family of the life assured in case of an untimely demise of the life assured during the policy tenure. One can avail tax exemptions by investing in a life insurance policy Provides mental peace One can add riders to the policy to enhance the coverage of the life insurance policy Can act as an investment component
19: What are the different types of life insurance?
Different types of life insurance available in India are Whole Life, Term Insurance, ULIPs, Endowment, Money Back, Child Life and Retirement Plans.
20: Who needs life insurance the most?
A person who has financial dependents such as wife/husband, parents and children should purchase a life insurance policy. Sole breadwinner of the family, parents, young adults, businessmen etc. should purchase life insurance policy to secure the future of their loved ones.
21: What are reasons to buy life insurance?
The primary objective to purchase a life insurance policy is to provide a financial safety net for family, save taxes, and plan for retirement. Life insurance policy can act as an investment component and provides mental peace.
22: How much life insurance do I need?
It is advised to have a coverage amount 10 - 15 times of the annual income of the life assured which can help the family of the life assured to maintain a lifestyle in the absence of the life that the life assured provided to them. Your life insurance coverage amount should be enough to provide financial security to your family in your absence.
23: How do I file a life insurance claim?
You can register your claim online on the insurance provider’s official website and you can also give your claim intimation in writing, call the insurance provider or visit the branch office of the insurance provider to file a claim for your life insurance policy.
24: How much does life insurance cost per month?
Your monthly premium amount depends on the sum assured chosen for your life insurance policy. There are several other factors that affect the premium of your life insurance policy such as the type of life insurance policy, age, gender, current health condition, occupation, current medical records, policy tenure etc.
25: Is a cover of Rs. 5,00,000 life insurance policy sufficient?
A cover amount of Rs 5 Lakh should be sufficient or not purely depends on applicants annual income. It is always advised to choose a coverage amount of 15-20 times of your annual income allowing your family members to maintain a decent lifestyle in the absence of the life assured.
Keep certain factors such as current lifestyle, current expenses, assets, liabilities and number of financial dependents before choosing a coverage amount for your life insurance policy.
26: At what age should I get life insurance?
It is advised that a person should purchase a life insurance policy at a young age to ensure a long term financial security at nominal premium rate. As the age increases, the premium of a life insurance policy also increases. This is because elderly people require more coverage so the right time to purchase a life insurance policy is when you are young.
27: What is the right amount of life insurance cover for me?
A popular rule followed by many people while determining coverage amount for life insurance is that the coverage amount should be 15-20 times their annual income. The life insurance cover amount that a person chooses without keeping inflation, number of financial dependents, future expenses and financial goals etc. may not be sufficient in future. Considering the above mentioned factors one should consider a high life cover amount.
28: Is Life Insurance worth it?
Yes, life insurance is worth every penny. Life insurance is a financial instrument that not only provides life cover to the life assured but also helps the life assured to ensure financial security for their loved ones.
29: Do I get my money back if I outlive my life insurance?
Yes, in case you outlive your life insurance policy tenure the insurance company provides a maturity benefit as lump sum amount at the end of the policy term.
After the maturity benefit is provided to the life assured, the life insurance policy terminates.
30: Can a person have more than one life insurance policy?
There is no legal limit set by the government as to how many life insurance policies a person can have at a time. Life insurance providers pay less attention to the number of policies a person has but may look closely at the benefits and coverage a person has.
Link: Understand more on Life Insurance in detail.
Terms and Conditions:
*Standard T&C Apply. For more details on risk factors, terms and conditions, please read the sales brochure of respective insurers carefully before concluding a sale. Tax benefits are subject to changes in applicable tax laws. For detailed communication on sales contact below authority.
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Insurance Advisory Club
IRDAI Licensed Agent
- Mr. Dheeraj Bodduna
Financial Advisor
Contact: 85220 66133
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