Life Insurance is an agreement between a policyholder and an insurance provider wherein the insurer commits to pay a fixed amount in exchange for a premium if the covered person dies or after a certain length of time.
The nominee of the policy will get the insured amount after your death or you on the maturity of your policy.
Table of Contents
Features of Life Insurance
- Only issued in the name of the policyholder: You can issue a life insurance policy only in your name and you have to pay the premium amount. There are some cases where you can also get a joint life insurance policy.
- Easy premium payments: You can choose the amount of premium you will pay. You can even pay in lumpsum or periodically as per your wish.
- Flexible Tenure: You can choose the duration for which you wanted a life insurance policy.
- Get money on death or maturity: You get your sum insured only on two conditions that are, in the event of your demise or after your maturity period.
- Flexible sum insured: You decide the sum you wanted to ensure there is no fixed amount you are obligated for.
- Nominees: You have to choose the nominee for your policy at the time of purchasing the policy. But, you can also switch nominees or choose at a later time if needed.
- Investment Option: A life insurance policy is not just a life cover some schemes also give a life insurance policyholder an option to invest.
- Enjoy Tax Deductions: Under Income Tax Act,1961 Section 80(C) and in Section 10(10D), subject to the provision stated therein.
Death Benefit vs Maturity Benefit
When the nominee gets the money insured in the event of the demise of the insured person the money received is known as Death Benefit.
When the policyholder gets the money insured on the maturity of the policy it is known as Maturity Benefit.
What is Life Insurance Premium?
Life Insurance Premium is the money you pay periodically or in a lump sum to your life insurance company in exchange for the cover amount you will get as maturity benefit or as a death benefit.
Why do you need a life Insurance Policy?
- A life Insurance policy protects your loved ones from facing financial crises after your demise.
- It covers the expenses that will arise in the future to your family after your death.
- It also makes sure of an Income after your retirement in case of maturity benefit.
- If you ever met with an accident and have not been able to work anymore, a life insurance policy will protect you and your family.
- Take care of your children’s education expenses and other required expenses after your demise.
- You can live with peace of mind knowing your family will be secure.
Top Companies providing Life Insurance Policy
| SL.NO | Companies Name | Claim Settlement Ratio |
|---|---|---|
| 1 | Aditya Birla Sun Life Insurance Company | 97.15% |
| 2 | Aegon Life Insurance Company | 96.45% |
| 3 | Bajaj Allianz Life insurance Company | 95.01% |
| 4 | HDFC Life Insurance | 99.04% |
| 5 | ICICI Prudential Life Insurance Company | 98.58% |
| 6 | Life Insurance Corporation of India | 97.79% |
| 7 | Kotak Mahindra Life Insurance | 97.40% |
| 8 | Tata AIA Life Insurance Company | 99.07% |
| 9 | SBI Life Insurance Company | 95.03% |
| 10 | Sahara India Life Insurance | 90.16% |
FAQs
1] How many nominees I can add to my insurance policy?
There is no limit, you can add as many nominees you want. However, If Policyholder decides whom to get the insured amount, that nominee will get the amount irrespective of how many nominees are mentioned.
2] What is term life insurance?
When the nominee gets the money insured in the event of the demise of the insured person is a Term Life Insurance.
3] What is a Guaranteed plan or return endowment plan in a Life insurance policy?
When the policyholder gets the money insured on the maturity of the policy is a life insurance guaranteed pan.
4] What are Market linked or Unit-linked life insurance plans?
These plans facilitate both protection and saving according to the policyholder’s choice. These plans are linked with the capital market and return is based on the market performance and comes with higher risk which can also provide you higher returns.
5] Did Income Tax Deductions cover life insurance?
Yes, Under Income Tax Act,1961 Section 80(C) and in Section 10(10D), subject to the provision stated therein.
