Life Insurance is defined as an agreement or contract between an insurance company and a policyholder. The insurance company promises to pay a lump sum amount of money in exchange for a premium, upon the policyholder’s unfortunate death or after a set period.
*Tax benefit is subject to changes in tax laws. *Standard T&C Apply
** Discount is offered by the insurance company as approved by IRDAI for the product under File & Use guidelines
A life insurance policy is a scheme that offers guaranteed financial protection for a specific term against the death of the policyholder. The financial protection offered as the sum assured on death of the life assured is payable to the assigned beneficiary of the life insurance policy. The insurer pays out the promised benefit amount either on the death of the life assured (as mentioned earlier) or at the end of the policy term on the date of maturity.
Established in 1956, Life Insurance Corporation of India (LIC) is the oldest and largest insurance company and boasts of a very large customer base. With a claim settlement ratio of 98.62% for the financial year 2020-21, LIC offers a wide range of insurance products catering to various needs of its customers. The claim payout of LIC is great and offers a hassle-free and quick claim experience. The high CSR ratio and the annual premium is an indicative of the quick settlement of death claims and its remarkable performance in the market. There are number of benefits offered by LIC such as the variety of products, easy claim procedure, dedicated customer support, and a simplified purchasing process. The company has a large distribution network comprising of 8 zonal offices, 2048 computerized branch offices, and 1381 satellite offices.
SBI Life, one of the most trusted insurers in India, was incorporated in 2000 and is registered with the IRDAI in 2001. It is a collaboration between India’s largest bank, State Bank of India, and BNP Paribas Cardif. Serving millions of customers across the nation, the diverse range of products offered by SBI Life caters to individuals as well as a group of customers by pension, protection, health, and savings solutions. The claim settlement ratio (CSR) for FY 2020-21 is 93.09%, which indicates the fast claim settlements. The company also offers an easy and convenient way to file a claim through offline as well as online mode. Apart from high CSR, SBI Life Insurance offers various benefits including financial protection to family, hassle-free claim settlement process, flexible premium and payout options, and tax savings benefit as per prevailing laws of ITA, 1961. Another distinguishing feature is that the insurer operates across India through its 947 offices, 18,498 employees, and more than 29000 partner branches.
ICICI Prudential Life Insurance Company Ltd. is supported by ICICI Bank Ltd and Prudential Corporation Holdings Ltd. The company commenced its operations in the financial year 2001. With a claim settlement of 97.90% in FY 2020-21, it has constantly been amongst the top insurers in the Indian insurance industry. The company offers one day of death claim settlement option. To provide comprehensive protection, the insurer offers a wide range of insurance products to meet different customer needs including term insurance, unit-linked plans, retirement, savings, and protection plans. ICICI Prudential Life Insurance has implemented several initiatives to offer cost-effective products, consistent performance of a fund, superior quality service, and an easy, hassle-free claim settlement process to their customers.
Max Life Insurance Company Ltd, founded in the year 2000, is a collaboration between Max Financial Services Ltd. and Axis Bank Limited. It is one of the leading life insurance companies that offer a range of term insurance, participating and non-participating, linked, annuity, retirement, savings, protection, child, and growth plans. With a Claim settlement ratio of 99.35% and a claim paid percentage of 99.35% in FY 2020-21, the company is consistently making the claim process quick and hassle-free for your loved ones. Max Life Insurance has established a PAN India presence and its products are available across 1453 locations. The company offers tax-saving benefits, a variety of life insurance plans to suit different customers’ needs, different premium payment options, and large coverage at low premium rates.
HDFC Life Insurance Company Limited is a collaboration between HDFC Limited, the leading housing finance institution of India, and abrdn plc, a global investment company. Founded in 2000, HDFC Life is a popular long-term insurer in India, offering an extensive range of individual as well as group insurance solutions that meet several customer requirements such as pension, protection, savings, annuity, investment, and health. HDFC Life benefits its customers from its overall presence across the nation with 372 branches and various tie-ups and partnerships. The company offers a simple and hassle-free process of claiming insurance benefits and also provides a facility to settle death claims in 1 day. The claim settlement ratio of HDFC Life Insurance is 98.01% in FY 2020-21, which indicates the quick death claim settlements and reliability of the insurer towards its customers.
IndiaFirst life insurance company, headquartered in Mumbai, is a joint scheme between Andhra Bank (now called Union Bank of India), legal & general and Bank of Baroda., IndiaFirst Life Insurance with a paid-up share capital of Rs. 663 Cr., is one of the youngest life insurers in India. The company offers an extensive range of insurance products ranging from term plans to savings plans which can be purchased as per the financial needs. The main benefits of India First life insurance plans are their easy-to-understand insurance products at low premium rates, dedicated customer support, tax-saving benefits, availability of online plans and offline plans. The company offers a simplified claim settlement process that allows the nominee to file and track their claims easily. The CSR achieved in FY 2020-21 is 96.81% for individual death claims.
Kotak Mahindra Life Insurance Company Limited, established in 2001, is one of the leading insurance providers in India, covering over 34 million lives across the nation. It is a 100% owned subsidiary of Kotak Mahindra Bank Ltd., offering a diverse range of insurance solutions, including annuity, group, protection, retirement, and protection cum savings plans. The claim settlement ratio of Kotak Mahindra Life is 98.50% in the financial year 2020-21, representing the fast settlement of death claims. There are number of benefits involved with buying Kotak life insurance plans are quick claim settlement, transparency in their services, and high customer empathy. Apart from this, it also offers a 24X7 service option to provide their customers with all the information about their queries.
Exide Life Insurance Company Ltd., a profitable and established life insurer started its operations in 2001-02. The company is headquartered in Bengaluru and is 100 % owned by HDFC Life. Exide life insurance focuses on providing long-term protection and savings policies. It provides plans in several, verticals such as savings and investment, retirement planning, and life insurance coverage. Additionally, Exide Life settled over 98.54% of the claims filed in the year 2020-21. Along with easy and quick claim settlement, the company also offers online services, mobile applications, online payment options, and tax benefits.
Tata AIA Life Insurance Company Ltd. is a joint endeavor, formed by Tata Sons private limited and AIA Group Ltd. With a claim settlement ratio (CSR) of 98.02% for individual claims, Tata AIA is one of the most popular insurers which offers a comprehensive range of insurance products from wealthy solution plans to savings plans to protection plans. The company offers a simple and hassle-free claim settlement process through online as well as offline mode. Apart from easy claim experience, one can also avail of tax benefits under sections 80C and 10(10D) of the Income Tax Act, 1961. There are other benefits also that you can receive under Tata AIA Life Insurance plans such as 24X7 customer service, bonuses, and loyalty additions to increase savings, flexibility in choosing policy terms, and premium payment frequency.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Life Insurance Plans | Coverage |
Term Plans | Pure risk cover |
ULIPs | Insurance + Investment benefits |
Endowment Plans | Insurance cover + Savings |
Money Back Plans | Insurance cover with periodic returns |
Whole Life Insurance Plans | Coverage for a lifetime |
Child Plans | To create a corpus for child's education, wedding etc. |
Retirement Plans | Financial cushion aiding financial independence post retirement. |
Here are the details of the aforementioned plans:
Term insurance is the most basic form of life coverage. It is affordable life insurance that one can buy easily, without any hassles.
Simply put, a term insurance plan offers death cover for a stipulated time period. God forbid, in the event of the sudden demise of the insured during the policy tenure, the insurance provider offers a pre-decided death benefit as a lump sum, as a monthly/ annual pay-out, or as combined benefits to the nominee. The best term plan offers comprehensive coverage at a competitive premium.
A unit-linked insurance plan or ULIP is a type of life coverage plan that offers a perfect blend of insurance & investment. It comes with a long-term investment opportunity along with valuable investment flexibility.
The premium paid towards a ULIP is partly used as a risk-cover for life coverage plan and the remainder is invested in market funds such as debts, equities, bonds, market funds, hybrid funds etc. The selection of the market funds depends purely on the risk appetite of the insurance buyer. Based on that, the insurer invests the amount in the capital market as per the insured's preference.
Endowment plans are also known as traditional life insurance plans. These plans come with an element of saving. As compared to the risk factor of other investment products, the risk involved is lower (so are the returns).
An endowment policy is a combination of a life coverage plan and savings plan. It invests a particular amount in life coverage and the remaining amount is invested by the provider. In case the policyholder outlives the policy term, the insurance provider offers a maturity benefit to him/her. Furthermore, some insurance endowment policies may offer bonuses on pre-specified periods. If applicable, the bonuses are paid either to the policyholder at the time of policy maturity or to the nominee in case of a death claim.
True to its name, this type of life coverage plan offers a stipulated percentage of the assured sum. It is paid back to the policyholder at pre-decided intervals. This payback benefit is known as a survival benefit.
Money back Policy is the best insurance policy for individuals who want their investments to be accompanied by an element of liquidity. Furthermore, these plans are eligible for bonuses as declared by the provider (if any).
A whole life insurance plan offers life coverage as long as the insured lives. There are a few providers that offer life coverage up to 100 years of age. Contrary to the coverage offered by term plans, this plan offers extensive coverage.
The sum assured is computed when the life coverage plan is purchased and is payable to the nominee after the demise of the insured. Along with the sum assured, bonuses (if any) are also paid to the nominee. It is one of the best policies that offer coverage up to whole life at low premiums.
A variant of whole life is available in the market that clubs the benefits of life insurance plans with ULIPs. A whole life ULIP offers extensive coverage along with high returns.
Please Note- In case the policyholder outlives the 100 years of age, the insurer pays the benefit of matured endowment coverage to the policyholder.
A child plan acts as a tool to generate funds for the policyholder’s child. A child plan helps one build a corpus for their child that can be used for the child’s education and wedding. Generally, child plans either provide benefits as installments on an annual basis or a 1-time payout once the insured child is 18 years of age.
In an unfortunate event of the untimely demise of the policyholder during the policy term, immediate premium payment is payable by the insurer. In such cases, some insurer waive off future premiums but the plan continues till the opted policy term.
A retirement plan, also known as an annuity or pension plan, helps the insured accumulate a corpus for their retirement. Typically, retirement plans provide benefits in the form of installments on an annual basis or a 1-time pay-out once insured is 60 years of age. In case the insured outlives the policy term, the plan offers vesting benefit. In case of the insured's demise, it offers the death benefit to the policy nominee.
Note- In case of the insured's demise while the policy is active, the life insurer pays a pre-decided amount to insured's nominee.
If you plan to purchase a life insurance plan, you may have heard of several types of policies such as permanent life insurance and term life insurance. While both the policies offer benefit to the family in case of the unfortunate demise of the policyholder, these plans vary in different ways:
Term insurance plans offer protection for a fixed tenure, whereas permanent insurance has flexible terms, it generally covers until the life assured reaches 100 years of age.
The premium amount paid for a permanent life insurance policy is invested in other investment tools. If the insurance company makes a profit, then a share of it is paid to the life assured as a bonus or investment return. In a term plan, the life assured does not get any returns.
A term insurance plan is a pure protection plan, while permanent life insurance acts as both a protection cum savings plan.
Maturity payout is generally payable in most life insurance policies while it is excluded from the term insurance plans.
Life insurance plans are flexible and term plans do not provide that much flexibility.
Listed below are the best life insurance plans:
Insurance Plan | Entry Age (Minimum/Maximum) | Policy Term (Minimum/Maximum) | Sum Assured (Minimum/Maximum) | |
Aditya Birla Sun Life Shield Plan | 18/65 years | 10, 20/30 years | Rs.25 lakh/no upper limit | View Plan |
Aegon Life i-Term Plan | 18/75 years | 5/40 years | 10 Lakh/ no upper limit | View Plan |
Aviva Life Shield Advantage Plan | 18/55 years | 10/30 years | Option A - 35 Lakh/ no upper limit Option B- Rs.50 lakh/ no upper limit | View Plan |
Bajaj Allianz i-Secure | 18/70 years | 10/30 years | 20 Lakh/ no upper limit | View Plan |
Bharti AXA Life Premium Protect Plan | 18/65 years | 10, 15/35 years | 25 Lakh/no upper limit | View Plan |
Canara HSBC iSelect + Term Plan | 18/65 years | 10/30 years | Rs.25 lakh/no upper limit | View Plan |
Edelweiss Tokio Life Simply Protect Plan | 18/65 years | 10/40 years | Rs.25 lakh/no upper limit | View Plan |
Exide Life Elite Term | 21/60 years | 10 to 40 years | Min SA: Rs. 50L ; Max SA: Rs. 10 Cr | View Plan |
Future Generali Flexi Online Term Insurance | 18/55 years | 10/75 years | Rs.50 lakh/no upper limit | View Plan |
HDFC Click2Protect Plus | 18 /65 years | 10/30 years | 10 Lakh/10 Crores | View Plan |
HDFC Life Sanchay | 30/45 years | 15/25 years | 1,05,673/ no upper limit | View Plan |
ICICI Pru iProtect | 20/75 years | 10/30 years | 3 Lakh/ no upper limit | View Plan |
IDBI Federal Income Protect Plan | 25/60 years | 10/30 years | N/A | View Plan |
India First Life Plan | 18/60 years | 5/40 years | 1 lakh/ Rs.5 crore | View Plan |
Kotak Life Preferred e-Term | 18/75 years | 10/40 years | 25 Lakh/ no upper limit | View Plan |
LIC Jeevan Amar | 18/65 years | 10/40 years | 25 Lakh/ no upper limit | View Plan |
LIC Tech Term | 18/65 years | 10/50 years | 50 Lakh / no upper limit | View Plan |
Max Life Smart Term Plan | 18/60 years | 10/50 years | 25 Lakh/100 Crores | View Plan |
PNB Metlife Mera Term Plan | 18/65 years | 10/40 years | Rs.10 lakh/no upper limit | View Plan |
Pramerica Life U-Protect | 18/55 years | 10/30 years | Rs.25 lakh/no upper limit | View Plan |
Reliance Nippon Life Protection Plus | 18/60 years | 10/40 years | Rs.25 lakh/no upper limit | View Plan |
SBI eShield Plan | 18/70 years | 5/30 years | 20 Lakh/ no upper limit | View Plan |
SBI Shubh Nivesh Plan | 18/60 years | 5/30 years | 75000/ no upper limit | View Plan |
Sahara Shrestha Nivesh Jeevan Bima | 9/60 | 5/10 years | Rs.30,000/ Rs.1 crore | View Plan |
Shriram Life Cashback Term Plan | 12/50 years | 10,15,20 &25 years | Rs.2 lakh/Rs.20 lakh | View Plan |
SUD Life Abhay Plan | 18/65 years | 15, 20/40 years | Rs.50 lakh/--- | View Plan |
TATA AIA life Insurance Sampoorna Raksha + | 18/70, 65 years | 10, 15/40 | Rs.50 lakh/no upper limit | View Plan |
Disclaimer: Policybazaar does not rate, endorse or recommend any specific insurance provider or insurance product offered by any insurer.
Key Features | Benefits Offered |
Death Benefits | Available under whole life insurance, term insurance, endowment plans, and ULIPs. |
Investment Component | Available under Term, ULIPs, and endowment plans. |
Maturity Benefits | Available under whole life insurance, ULIPs, and endowment plans. |
Tax Benefits | Available under all types of life insurance plans. |
Riders/ Add-on Covers | A number of rider benefits or add-on covers are available for all the life insurance plans. |
Coverage Against Various Liabilities | Most of the policies provides coverage against various liabilities of the policyholders like mortgage, loans, and other types of debts. |
Buying Process | Online and Offline |
Claim Assistance | Available |
Claim Process | Easy online and offline claim process |
Physical Paperwork | Only in case of offline policy purchase |
Premium Payment Term | Single, Regular, or Limited |
Payout Options | One Time Payout, One Time Lump-Sum Plus Fixed Monthly Payouts, and One Time Lump Sum Payment Plus Increasing Monthly Payouts |
Disclaimer: These are the generic features of life insurance plans and they may vary with insurers.
हिंदी
தமிழ்
తెలుగు
Life insurance is a legally binding contract between the insurance provider and the life assured. The insurance provider charges a premium amount against the life insurance coverage sought by the insurance buyer. Because the insurer is assuming risk in providing the life cover, the premiums are decided based on the age of the buyer, the sum assured amount, their medical history, tobacco usage, etc.
Life insurance coverage is the financial protection offered to the families of the life assured against his/her untimely death. In the event that the policyholder dies within the policy term and provided all due premiums have been paid, the assigned nominee can claim the death benefit. Once the claim request is investigated by the insurer and found genuine, the benefit payout is done directly to the claimant’s bank account. This benefit amount thus acts as income replacement for the family of the deceased policyholder.
Now, if the policyholder survives till the end of the policy term, that is the maturity date, they are entitled to the sum assured on maturity (also called the maturity benefit). Note that term insurance policies are pure risk covers and, therefore, do not offer maturity benefits. The important thing to note here is that life insurance comes in different formats, and one should thoroughly research the options that are most suitable to serve their future needs.
Basis | Term Policies | Whole Life Insurance Policies | Endowment Plans | Unit Linked Insurance Plan | Money Back Plans | Pension/ Annuity Plan |
Overview | Simplest Form | Whole Life with or w/o investment | Protection + investment +guaranteed returns | Protection+investment + Uncertain returns | Protection+ Investment + fixed time income | Offers income till person survives. |
Policy Term Range (in years) | 5-50 | Till 100 | 10-35 | 10-20 | Up to 25 | No Fixed Term |
Maturity Benefits | No Benefits on Survival | At certain age (80-100 years) | Yes, If you survive policy term | Yes, at the end of policy term | Survival Benefits on Maturity | Regular Income till survival |
Death Benefits (to beneficiary) | Sum Assured | Sum Assured | Sum Assured | Sum Assured | Sum Assured | Few plans offer this |
Ideal For People who want | Don’t want to pay excessive premiums | To leave a legacy amount | Life coverage & guaranteed returns in future | High income & have good investment sense. | Insurance + earn regular income | To secure retirement by regular income. |
The perks of buying a life insurance policy are beyond protecting the policyholder's family in tough times. Undoubtedly, it is a necessity for a breadwinner to safeguard their dependents in case of their unfortunate and untimely demise, accident or physical disabilities that lead to a loss of income. Having said that, there is a long list of other benefits that make it a must-have.
Sadly, most people are not aware of the many benefits offered by a life plan. All they care about are the death and disability benefits. However, there are plenty of other benefits offered by life policies such as maturity benefits, tax benefits etc.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Let's take a look at the benefits:
Till date, many people don't know that life policies can also be used as loan collateral. Based on the type of the life insurance policy and the surrender value, the policyholder can opt for a loan from a bank or NBFC (Non-Banking Financial Company) as per applicable terms and conditions.
Loan Amount: Generally, the loan amount is a percentage of the surrender value of the life policy and it can go up to 90%. There are few companies that only allow for a loan up to 50 percent of the total premium amount paid by the policyholder.
Most individuals are unaware of the online payment benefit (the payment mode chosen by an individual drastically affects the premium of the policy). As a matter of fact, an company's administrative costs considerably go down when an individual opts to pay his premiums online.
This is because there is no paperwork-related cost involved. Also, the life insurer is able to save a significant amount on the commission, which they pay to the agents for offline life insurance buying and renewing.
Please Note- This discount varies from company to company.
Almost every life insurer offers various payment periodicities to its policyholders- annual, half-yearly, quarterly or monthly mode.
If a policyholder chooses to pay the policy premium on an annual basis, the company can use it for investment purposes that automatically means more profits and benefits for the company.
Once a policyholder chooses the payment periodicity, this discount is often already included in the premium rate charged by the life insurer.
There are some life insurers that provide an option for policyholders who own a business. In the case of a policyholder's demise, their business partners can purchase the policyholder’s share without any hassles. In this scenario, the business partner will simply have to sign an agreement with the life insurer and the pay-out received after selling the policyholder's share will be given to their dependents.
However, it's important to understand that the nominee or the dependents of the policyholder won’t get a stake in the company.
For paying a life policy premium, a policyholder is eligible for a tax rebate under Section 80C of the Income Tax Act 1961. Irrespective for oneself, their spouse or their children, the premium paid for parents and in-laws is exempted.
This benefit is offered by all the life insurers - be it private sector life insurers or public sector life insurers.
Additionally, the maturity benefit of life policies also qualifies for tax deductions under Section 10 (10D) of the Income Tax Act, 1961.
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
The market has many insurance products such as the term plans , endowment plans, money back plans and ULIPS’. The tax saving instruments is also opulent and people take insurance for Rs 25 lakh, Rs 1 crore and so on. However, simply picking a random figure is not the way to buy an insurance policy.
Primarily, it depends upon the age of the person, the number of dependents, liabilities, and so forth. Let us just assume that a person falls between the age bracket of 18-24 years of age and is single and unmarried. This means that he does not have many responsibilities. The financial liability could be a loan or his parents depending upon him. Now under such a situation, a small insurance plan would be bought. In case the person has a good source of income, then he could also opt for large cover as the liabilities will increase once married and there will be additional responsibilities upon the shoulders.
Now if a person falls between the age bracket of 24-33 years of age then ideally the person will be married and he also needs to protect the interest of his life partner. Such a person should buy the life insurance plan immediately and not delay any further. The life insurance cover will differ across various stages of life.
The life insurance cover should be such that it covers all outstanding liabilities provides money to your spouse and covers the expenses of children education, marriage, etc. When you choose the cover do calculate the yearly family expenses and your liabilities as well. Now multiply the sum with the number of years you are looking forward to supporting the family.
The life insurance cover should be enough at any point in time to take care of the family today and tomorrow.
Here are some basic steps you should follow to choose the right kind of policy for yourself:
A life insurance premium is a payment that is to be paid to enjoy the life insurance benefits. The premium is paid annually; however, the mode of premium payment can be selected from monthly or half-yearly also. This premium also helps to grow the cash value of the insurance.
The insurance company determines the premium payable by the policyholder to the insurance company. Having said that, the buyer gets to select the term of the policy and the sum assured.
In order to calculate the sum assured, the insurer takes various factors such as your lifestyle, occupation, number of dependents, finances, sum assured etc. into consideration.
Note- There is no premium calculator that can calculate the worth of human life.
At the time of applying for a policy, the life insurer will ask for the below-mentioned KYC documents:
This is necessary to estimate the sum assured or cover that would be offered to the insured. In most of the cases, the life insurers offer a cover up to 20 times the proposer's annual income. The standard income proofs include:
Insurance companies would ask for address details of the applicant. The following documents can be used as address proof:
One can provide the following documents as ID proof:
Some of the aforementioned documents would be considered as age proof as well. However, below is a comprehensive list of documents that can be used as age proof:
Apart from the KYC documents, here are some other documents that an applicant would have to submit at the time of buying the policy:
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
There are different plans offered by the life insurance companies in India. It sometimes becomes a task to select the best plan from various options and avail the same at best coverage and a pocket-friendly premium.
Listed below are some key pointers that will help you choose the best life insurance policy:
Filing a claim and getting the assured amount can be a cakewalk if all the necessary steps are taken care of. It is important to have the right approach to file a claim. Here's how nominees of the policyholder or policyholder can file a claim in India under the following scenarios:
Inform the Insurance Company: Contact the insurer as soon as possible on their toll-free number or inform them over email. It is always preferable to inform the insurer directly over a call to initiate the process.
Share Important Details: The beneficiary or the claimant while lodging a claim with the life insurer needs to share all the important details like:
If the policy has been purchased offline, then the insurer would have provided a claim intimation form at the time of the policy purchase.
If it is an online policy, it is simple to apply for the claim settlement through claim form online.
Claim Processing: In case of accidental or natural death, the beneficiary or the nominee needs to submit all the supporting documents to the life insurer as a part of the claim process.
The claim support team will verify the insurance documents and claim declaration. In some cases, they might ask the beneficiary to submit a few other documents.
Documents to be submitted
Note- If someone other than the nominee files the claim, the insurance company can ask for the legal title of succession.
Approval and Pay-out
Aforementioned are the basic set of documents that are required to process a claim.
Here are a few other documents that the insurer can ask for (if need be) -
If the insured outlives the policy term, he/she will be eligible to avail policy maturity benefits. However, the insured must make sure the policy is ongoing and that all the premiums have been duly paid.
Here is a simple process to file a maturity claim with minimal paperwork.
When the policy is about to mature, the life insurer generally intimates the policyholder at least 1-2 months in advance. All the details regarding the maturity date, maturity amount, and discharge voucher are provided to the insured.
The discharge voucher (similar to a receipt) has to be signed by the policyholder in the presence of the witnesses. The voucher is then sent back to the insurer along with the original policy bond, on the basis of which the policy maturity benefits are provided.
In case the policyholder has nominated another individual or entity for the policy, then the nominee must sign the discharge voucher to the insurer, in order to receive the claim amount.
Points to Remember
These riders offer add-on benefits offered by the insurers that help to enhance the base coverage. However, without knowing the types of riders available in the market, one shouldn't randomly opt for the same just for the sake of increasing the cover amount of the life plan.
Choosing the right rider is as crucial as buying a life insurance plan. After all, no one wants to regret an insurance decision. That's why one must take time and expert's advice before opting for a rider.
Here are some of the rider options available for policyholders:
This rider benefit covers major critical ailments like cancer, heart attack, kidney failure, stroke, coma, paralysis, etc. As the coverage may differ from insurer to insurer, it is important to check the list of illnesses covered by the company.
The life insurer offers the rider benefits upon the diagnosis of the covered critical illness. Though many of the above listed critical illnesses may not cause immediate death, the treatment could cost a bomb. Under this rider, the insured can use the sum assured to pay for the treatment expenses. The only condition is that the policyholder will have to survive the waiting period.
As no one can ensure 100 percent guarantee against a critical illness, this rider can be opted by:
If the insured is unable to pay the premium due to any disability that leaves him/her with no income, the life insurance policy will be terminated. In such cases, the insured wouldn't be offered any compensation. In such a situation, how will their family manage their finances without a regular source of income?
In such a situation, waiver of premium rider acts as life savior, as all the future premiums of the policy will be waived off and the policy will remain in force.
In case the premiums are not paid due to the death or accidental disability of the policyholder, the premium for the base policy and riders will be waived off and the policy will continue.
While this rider can be opted along with critical illness and accidental total and permanent disability rider, the insured can opt for it separately. As uncertainties can't be predicted, one should consider buying this rider if they are a daily commuter or work on on-site civil work that involves physical work.
With this rider, in case of the accidental death of the insured, the nominee will receive the basic sum assured amount along with the additional accidental death benefit. In many cases, the policyholder doesn’t pass away on-the-spot, so most of the insurance companies set a time period after the incident to extend the offered coverage.
Let’s say, if the policyholder passes away after 100 days of the accident, the nominee will still receive the sum assured. That's why it is imperative to check the life insurance policy clause carefully at the time of opting for a rider.
As accidents can happen anywhere, anytime, everyone should ensure the financial future of their family. While anybody can opt for this rider, it is a must-buy for those who:
Due to total temporary or permanent disability in case of an accident, if the insured is unable to earn a daily income, this rider provides financial assistance to their family in the form of a monthly income. The rider benefit may vary plan to plan and it is offered for a pre-decided time period.
For instance, some companies offer rider benefits for 5 years to 10 years from the occurrence of the accident. In case of the death of the insured during the policy term, the beneficiary would receive the outstanding sum assured amount.
This rider is important to buy for the individuals who:
The figures in the below table are as per the annual report of IRDAI 2019-2020:
Insurer | Total Number of Claims | Claims Paid | Claims Repudiated | Claims Rejected | Claims Unclaimed | Death Claim Settlement Ratio |
Aditya Birla Sun Life | 5162 | 5035 | 108 | 0 | 0 | 97.54% |
Aegon | 351 | 344 | 7 | 0 | 0 | 98.01% |
Aviva | 810 | 790 | 11 | 4 | 0 | 97.53% |
Bajaj Allianz | 12127 | 11887 | 237 | 0 | 1 | 98.02% |
Bharti AXA | 1320 | 1285 | 33 | 0 | 0 | 97.35% |
Canara HSBC OBC | 1276 | 1252 | 22 | 0 | 0 | 98.12% |
Edelweiss Tokio | 326 | 272 | 54 | 0 | 0 | 83.44% |
Exide Life | 5052 | 4978 | 11 | 0 | - | 98.54% |
Future Generali | 1143 | 1089 | 51 | 0 | 0 | 95.28% |
HDFC | 12626 | 12509 | 54 | 15 | 13 | 99.07% |
ICICI Prudential | 11460 | 11212 | 153 | 0 | 0 | 97.84% |
IDBI Federal | 1416 | 1366 | 45 | 0 | 0 | 96.47% |
India First | 2241 | 2166 | 66 | 0 | 0 | 96.65% |
Kotak Mahindra | 3346 | 3225 | 112 | 0 | 0 | 96.38% |
LIC | 758916 | 733809 | 6124 | 2172 | 10936 | 96.69% |
Max Life | 15643 | 15342 | 120 | 0 | 0 | 99.22% |
PNB MetLife | 4364 | 4241 | 123 | 0 | 0 | 97.18% |
Pramerica Life | 569 | 560 | 7 | 0 | 0 | 98.42% |
Reliance Nippon | 8017 | 7866 | 149 | 0 | 0 | 98.12% |
Sahara | 654 | 585 | 10 | 13 | 0 | 89.45% |
SBI Life | 22490 | 21257 | 1157 | 0 | 40 | 94.52% |
Shriram | 3074 | 2816 | 195 | 58 | 0 | 91.61% |
Star Union | 1248 | 1210 | 35 | 0 | 0 | 96.96% |
TATA AIA | 2982 | 2954 | 28 | 0 | 0 | 99.06% |
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
To understand life insurance completely it is important to know the basic terminologies that are often used within the plan. Sometimes you might not be aware of some terms and refrain from buying the plan.
Let us help you to understand the given below key important life insurance terms with brief explanations of each:
Policyholder
Anyone who buys the life insurance plan and pays the premium is referred to as the policyholder. An individual might own the policy, however, may or may not be the life assured.
Life Assured
In simple words, the individual who is protected or insured is known as a life assured. In case of demise of the life assured, the beneficiary will receive the insurance sum. For example, when a husband buys the life insurance policy for his wife then he is the policyholder and the wife is the life assured.
Nominee
The person that is nominated by the policyholder is known as a nominee. The nominee will receive the life insurance payouts along with other benefits in case of any eventuality. The nominee is also referred to as the beneficiary. A nominee is declared when the policy is being bought. Generally, the policyholders’ immediate family members such as the spouse, children and parents are declared as a nominee who is directly financially dependent upon you.
Policy Tenure
The duration for, which the life insurance plan provides coverage, is known as the policy tenure sometimes also known as policy term. On the premise of the type of life insurance policy and the terms and conditions of the insurance provider, the life insurance policy tenure differs.
Premium
It is the amount that you will pay to keep the life insurance plan active. In case you are unable to pay the life insurance premium sum either before the due date or under the grace period, then the policy will lapse. The life insurance premium sum depends on factors such as the policy term, the age of the life assured, lifestyle habits, etc.
Sum Assured
It is the guaranteed sum that the beneficiary or the nominee will receive when the life assured has passed away. Most of the times, the choice to arrive at a sum assured is upon the premise of the financial loss that might incur due to the death of the life assured. At the time of buying the life insurance plan, the policyholder chooses this sum, which is then paid to the nominee if the life assured passes away during the policy term.
Death Benefit
The death benefit is the sum that is paid to a nominee when the life assured has passed away during the policy tenure. It is to be noted that sum assured and death benefits are two different terms. This implies that the death benefit could be equivalent or higher than a sum assured as it could involve the rider benefit too.
Maturity Benefit
The sum that is paid to the policyholder when the policy tenure is completed is known as the maturity benefit.
Lapsed Policy
When the policy gets terminated because of non-payment of the premium amount even after the grace period is known as a lapsed policy. There are life insurance companies that offer the facility to revive a lapsed policy only when the outstanding premiums are duly paid by the policyholder.
Grace Period
It is essentially the extension given by the insurance provider to the policyholder after the due date of the premium payment. When the policyholder pays the premium sum then the cover of the plan continues.
Revival Period
When the premiums are not paid during the grace period the policy gets lapsed. In case you wish to continue with the plan then you are provided with an option of re-activating the lapsed plan, however, it should be completed with a certain time frame after the end of the grace period. This is known as the revival period.
Free-look Period
In case you are not comfortable with the terms and conditions of the plan it can be returned within a certain timeframe mentioned in the policy documents. This is known as a free-look period. After deducting stamp duty charges, medical examination, proportionate risk premium, the premium sum will be refunded.
Rider
The riders are additional benefit than enhances the coverage of the plan. These rider benefits are optional and enhance the financial safety to secure the family against any unforeseen event by paying an additional premium sum.
Claim Process
When the life assured passes away during the policy term, the nominee will file a claim to receive the death benefit. This process is known as the claim process.
Exclusions
Certain situations remain uncovered within a life insurance plan. In case the claim is made on such exclusions then no benefit is provided by the insurance company.
To get insured from the comfort of home, an individual can buy life insurance online from Policybazaar. Follow these simple steps to buy life insurance online from Policybazaar.
Step 1- Choose male/female and enter your full name.
Step 2- Enter your correct phone number, and click on view plan and select your age.
Step 3- Answer 4 simple questions to get more accurate quotes.
Yes or No
Step 4- Select the best life insurance plan from the options that are displayed. For suggestions and help, the insurance buyers can choose ‘get free advice.
Step 5- Choose and compare different life insurance plans on Policybazaar. An individual can choose the personalised plan options as well.
Step6- Once you choose the plan, you can pay the premium or speak to the customer care representative. They will help you to make an informed choice.
Step 8- Finally you will need to pay the premium. Once all the steps are completed, the policy documents will be emailed to you on the registered mail ID.
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Published on 23rd September 2021
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Published on 21st September 2021
The second-largest public sector bank, the Punjab National Bank has begun exiting its complete stake in Canara HSBC OBC Life Insurance (CHOICE). PNB has started inviting bids for appointing a legal advisor to carry on the proposed transaction.
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Published on 9th September 2021
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Published on 17th August 2021
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Published on 6th August 2021
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Published on 5th August 2021
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Published on 7th July 2021
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