Simplifying Life Insurance in India
Buy Life Insurance Policy Online in India
‘Life’ is undoubtedly nature's most beautiful gift and can never be defined in monetary terms.
Can you ever put a price tag on it?
A family member’s demise certainly causes emotional turmoil, but if the member happens to be the primary breadwinner, it’s a huge financial shock for the family. Life insurance ensures that such unforeseen circumstances do not affect the family's financial security and future.
Hence, it is of utmost importance that a person realises the value of their life for their dependents and accordingly purchases a Life Insurance Plan.
Table of Contents
What is Life Insurance?
In simple terms, life insurance protects against financial loss from an earning member’s untimely death. In legal terms, it is a contract between a policy owner and an insurance provider, wherein the latter promises to pay a certain amount of money to the beneficiary in case the insured's life is lost.
Thus, Insurance cover is in return for a certain amount of money, called a ‘Premium”, that the insured pays to the insurance provider.
How Does Life Insurance Work?
Life insurance is a contract between you and an insurance company. You pay regular premiums, and in return, the insurance company promises to pay your beneficiary a death benefit if you pass away during the policy term.
Choosing a Policy
Select a life insurance policy based on your needs.
Paying Premiums
Pay regular premiums to keep the policy active.
Enjoy Coverage
Ensure your family’s financial future is secure and protected.
Maturity Benefits
Get maturity and survival benefits based on the T&C and type of life insurance.
Death Benefit Payout
If you pass away while the policy is active, the insurance company pays the death benefit to your beneficiaries.
Benefits of Life Insurance
Life insurance in India can be very helpful in various financial situations and offers several benefits:
Financial Coverage and Risk Mitigation
Life is full of uncertainties. An unforeseen death of the family's primary breadwinner can result in financial turmoil for the dependent family due to the loss of steady income. Life Insurance provides financial coverage to the insured's family in unforeseen circumstances.
Insurance payouts help the family cover educational expenses, marriage expenses, loan payoffs, and other regular expenses.
Tax Benefits
The premiums paid towards the Life Insurance policy are exempt from tax under Section 80(C) of the Income Tax Act. Death or Maturity Benefits, i.e., any proceeds from Life Insurance, are also entirely tax-exempt under Section 10(10)(D) of the Income Tax Act.
Act As Collateral for Loan
Some insurance policies provide the option of taking loans against them. Hence, if, under any circumstances, you require a loan, you can use the Life Insurance Policy as collateral for the same.
Additional Coverages Through Riders
Some insurance plans also offer the option of riders that provide an additional benefit over and above the standard coverage of the Life Insurance Plan. For example, Critical Illness Rider covers the treatment of some specific critical diseases.
There is also a Rider for Accidental Death Benefit that provides an additional Sum Assured in case of accidental death.
Online Payment Discounts
Sometimes, life insurance plans offer discounts if you buy them online. You might also get a discount if you pay through a specific bank.
Payment Frequency Discounts
Life insurance plans let you choose how often you pay the premium—monthly, half-yearly, or yearly. Each option might come with different discounts. Check with the insurance company to see which option saves you the most.
Types of Life Insurance Plans & Policies
Life insurance is an important financial tool that provides protection and peace of mind for you and your loved ones. Here are the main types of life insurance:
Let's understand each type of life insurance policy mentioned in detail, which will help you decide which one might be best for you.
Insights about the Types of Life Insurance Plans
Term Life Insurance
A Term Life Insurance is a basic, pure insurance plan that offers high coverage at a low premium, with no savings component. Here premiums are more affordable when purchased at a younger age, as they are age-dependent.
Term plans also provide multiple death benefit pay-out options, such as staggered, fixed monthly, and lump sum payouts, allowing policyholders to manage their liabilities effectively.
Whole Life Insurance
A whole life insurance plan provides coverage for the insured's entire lifetime, offering financial protection for up to 100 years. It includes a savings component known as “cash value,” which grows over time and offers periodic bonuses.
This plan is ideal for individuals seeking long-term financial security and wealth creation for retirement.
Endowment Life Insurance
Endowment Plans combine insurance coverage with savings, providing financial protection and wealth accumulation for long-term goals. Policyholders save regularly to accumulate a corpus, which is paid out as a maturity benefit.
In case of the policyholder's demise, the sum assured plus any bonuses are paid to the nominee, making it a suitable choice for disciplined, goal-oriented savings.
Money Back Insurance Policy
A Money Back Insurance Policy functions like an Endowment Plan but offers liquidity through regular payouts during the policy term. Survival benefits are paid out as a percentage of the sum assured.
If the policyholder passes away during the term, the entire maturity amount is paid to the nominee, regardless of previous payouts.
ULIP Insurance Plan
Unit Linked Insurance Plans (ULIPs) combine insurance and investment. A portion of the premium covers life insurance, while the remainder is invested in equity and debt instruments.
ULIPs provide market-related returns along with life coverage, making them ideal for those looking to build wealth while securing their loved ones.
Child Insurance Plan
Child Insurance Plans help fund education in the face of rising costs. A key feature is the Waiver of Premium Benefit, ensuring that if the policyholder dies, the sum assured is paid to the beneficiary, and remaining premiums are covered.
These plans often allow for partial withdrawals once the child turns 18, supporting educational expenses and financial planning for the future.
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Who Can Purchase a Life Insurance Policy?
Life insurance in India is a crucial financial tool for people of all ages. It provides financial support to your loved ones and can help you achieve various personal financial goals. Here's how different age groups can benefit from life insurance:
Other Types of People Who Will Benefit from Life Insurance
Apart from the age groups mentioned above, several other types of people can benefit from a life insurance plan. This includes:
Smokers
Smokers are at higher risk of health issues. Life insurance can provide financial protection for their loved ones. It's important to inform the insurer about smoking habits.
Disabled Individuals
They can benefit from life insurance but may need medical tests before purchasing a policy.
People with Pre-existing Medical Conditions
Life insurance can offer financial security, but it is essential to disclose any medical conditions to the insurer.
How Much Life Insurance Do You Need?
1. Expense Replacement
This approach calculates total expenses, including daily costs, education, marriage, and debts. From this total, deduct your current savings and investments (excluding assets like homes and cars, which are considered utilities). The resulting figure indicates your insurance coverage needs.2. Income Replacement
This method provides insurance based on replacing the breadwinner's lost income. The formula is:
Insurance Cover = Current Annual Income x Number of Years left for retirement
While straightforward, this method doesn’t account for inflation or significant future expenses.
3. Human Life Value
The Human Life Value (HLV) approach takes a more comprehensive view, calculating the insurance needed based on future earnings and the economic value of an individual’s life.
To apply this method, you must determine your current income, subtract expenses, insurance premiums, and taxes, identify how many earning years you have left until retirement, and factor in inflation and discounting.
You can use our online Human Life Value Calculator to get an estimation.
4. Underwriter’s Rule
This common thumb rule suggests a minimum cover of 10 times your annual income:
Sum Assured = 10 x Annual Income
For example, if your annual income is 10 lakhs, aim for a life cover of 1 crore. However, it’s important to note that this figure may not meet all your insurance needs.
Who Should Buy Life Insurance?
The most significant benefit of life insurance is its financial stability to the policyholder's dependents in case of the policyholder's unfortunate demise. Hence, any individual who has financial dependents, such as a spouse, parents, retirees with liabilities, or business people with financial liabilities, must definitely invest in a Life Insurance Plan.
Young Professionals: The Younger you are, The Lesser your Premium
Young, freshly employed individuals usually think they don't need life insurance since they don't have any dependents. However, this thought might need to be corrected. At a young age, with a healthy body and no liabilities, your premium would be much less than it becomes in the later stages of life. And it remains the same for the entire term.
Newlyweds: Gift your Partner the Ultimate Security of Insurance
Post-marriage, we start a new life and build a new lifestyle. We don’t have an emotional dependency on each other; there is a financial dependency too. So, while we are still lost in the roses and chocolates, do take time to purchase a gift that will secure your partner’s future life. Buy Life Insurance.
Taxpayers: Who Doesn't Like an Extra Penny Saved from Tax
Life Insurance premiums are exempt from taxation under Section 80C of the Income Tax Act. Insurance payouts are also exempt from taxation, subject to some T&C under Section 10(10D) of the Income Tax Act. Hence, Insurance is a wise investment when it comes to securing life and saving tax.
Retirees: Financial Security is Necessary at Every Stage of Life
While waiting till the retirement age to buy life insurance is not a very recommended decision, buying Insurance at any life stage only adds to building a corpus. If retirees need life insurance or additional Insurance for any reason, they can always buy life insurance.
Home Loan Borrowers: Focus on your Dream Abode
The purchase of a home is a considerable expense; if done through a Home loan, it’s a huge liability. Unfortunately, if the primary earner passes away, it would be difficult for the dependents to repay the home loan. Life Insurance provides this assurance that the burden of a loan would not come on the family members in such unfortunate circumstances.
How Much Life Insurance Cover Do You Need at Different Life Stages?
Here is a simplified guide on how much life insurance coverage you might need at different stages of life:
Early Adulthood (20 - 30 Years)
Buying life insurance early means lower premiums and easier approval. Choose a coverage amount at least 10 times your annual salary plus any outstanding loans. This amount helps your family financially in your absence and accounts for inflation.
Suitable Plans: Term plans, endowment plans, and unit-linked investment plans.
Middle Adulthood (30 – 45 Years)
Ensure your coverage meets your growing family's needs. The coverage amount should be at least 15 times your annual salary plus any outstanding loans, covering your spouse's and children's needs, including future education costs and inflation.
Suitable Plans: Term plans, endowment plans, unit-linked investment plans, and child plans. Start retirement planning with pension plans.
Mature Adulthood (35 – 45 Years)
Adjust your coverage as your financial responsibilities increase. Choose a coverage amount at least 15 - 20 times your annual salary plus any outstanding loans, covering children's college, post-graduation, and marriage expenses.
Suitable Plans: Continue with term plans, endowment plans, pension plans, and unit-linked investment plans.
Late Adulthood (45 – 55 years)
Choose a coverage amount at least 10 times your annual salary plus any outstanding loans. Financial responsibilities towards children may decrease, but you still need coverage for any emergency related to your health.
Suitable Plans: Term insurance plans and pension plans like annuity plans. Focus on securing your retirement and ensuring your spouse's financial stability.
Factors Affecting Life Insurance Premium
Here are the most common seven factors that affect a Life Insurance premium:
Age
The topmost factor affecting your Life Insurance premium is your age. A younger age means fewer chances of developing any life-threatening ailments and a long premium payment term. This translates to lower premiums at lower ages that, in turn, increase with age.
Term
The Insurance Premium directly depends on the period and increases with the increasing term, considering the older and the riskier years of life.
Medical History
Insurers usually ask for medical checks before issuing a policy, and they assess the health records, especially any serious ailments or family history. Other body metrics like cholesterol, BP, etc., are also considered since any health risk would mean a higher chance of a Life Insurance claim, which results in a higher premium.
Current Health Condition
While issuing the policy, a health assessment of the prospective policyholder is done to ensure they do not suffer from any serious ailment that might pose a life risk and thus increase the policy's premium.
Occupation
Your premium is also affected by the profession you are in. People in professions where they are directly exposed to life risks, like soldiers, mine workers, etc., are charged higher premiums.
BMI
A skewed BMI index can directly mean you are at a health risk, increasing your premium.
Lifestyle Habits
Smoking, Alcohol consumption, inclination towards adventure sports, all these lifestyle habits increase your premium.
What is a Life Insurance Rider?
A rider can be an extension to your base plan, with an additional premium that provides additional coverage for various situations.
Below are some of the significant Riders in Life Insurance:
1. Accidental Death Benefit Rider
Accidental Death Benefit Rider provides extra coverage to the dependents in case of accidental death of the life assured. This is over and above the basic coverage the insurer already provides in the base plan.
In fatal accidents, the medical interventions that go into saving the victim's life hit the family's finances. In many cases, the victim eventually dies, and the family then deals with the personal loss in addition to this financial loss.
To cover these scenarios, in cases where the life assured does not immediately pass away after an accident, the Accidental Death Benefit rider provides the Sum assured to the nominee within 120-180 days from the date of the accident. Hence, Accidental Death Benefit is one of the most significant Riders that must be added to the basic insurance policy.
2. Critical Illness Rider
A Critical Illness Rider provides financial coverage in case the life assured is diagnosed with any critical illnesses mentioned in the policy document. Some critical illnesses are cancer, heart ailments, and tumours.
The Critical Illness Benefit is provided to the life insured to meet treatment and household expenses in times of need. It acts as an Income Replacement plan and ensures that the policyholder's treatment and family finances are not affected by the illness.
3. Accidental Total and Permanent Disability Benefit Rider
This rider takes care of the finances in case the life assured suffers an accidental partial or permanent disability and becomes unfit to continue working in any occupation.
For example, loss of both eyes, legs, arms or one arm and a leg can be classified as a permanent disability. Such disabilities leave a person incapable of leading a normal life where they can work and earn for their family. In such cases, the policyholder is paid a specific portion of the Sum Assured regularly for a few years, which takes care of the finances for the most challenging years of the family.
4. Waiver of Premium Rider
The Waiver of Premium Riders ensures that the policy stays active even when the policyholder cannot pay premiums due to physical disability.
With this rider, the premiums are waived, and the policy continues until maturity. At maturity, the benefits are paid to the nominee.
This rider can be availed in cases where:
- The life insured has been disabled for six months or more.
- When life insured is diagnosed with any of the critical life-threatening ailments.
5. Terminal Illness Rider
Also known as an Accelerated Death Benefit Rider, this rider ensures that the Sum Assured is paid to the policyholder upon diagnosis of any terminal illness.
Terminal Illnesses are ailments with a high likelihood of death within six months. In these types of illnesses, in addition to the eventual personal loss of the family member, the finances are also hit badly during the treatment.
A Terminal Illness Rider provides much-needed financial freedom when one needs to put finances in order, take care of medical support, or travel. This rider comes into effect only after the diagnosis and confirmation of short life expectancy.
6. Income Benefit Rider
Life is full of uncertainties, but it's up to us to plan well for all those lemons that life might throw at us. When you buy insurance, you have taken an essential step towards securing your family's future. However, there is always scope for better planning.
Under usual circumstances, insurance pays off the death benefit as a lump sum in case of the policyholder's demise. But, with Income Benefit Rider, if the policyholder dies during the policy term, the family receives a certain monthly payout with which they can manage their finances better. It acts as a substitute for monthly income in the absence of the policyholder so that the family doesn't struggle to pay bills.
What Payout Options are Available for Life Insurance Plans?
Life Insurance Plans offer flexible payout options to suit different policyholders' needs. Here are the four payout options available:
Lump-Sum
The agreed life cover is paid as a fixed amount to the nominee in case of the policyholder’s unfortunate death.
Income
Provides claim payout in equal monthly instalments to care for the family's monthly financial needs.
Increasing Income
Your nominee will receive monthly instalments for 10 years. The income amount will increase by 10% per annum simple interest every year, providing a 45% additional life cover.
Lump-Sum Plus Income
As specified during policy inception, life cover is paid in two parts. You can receive half of the amount as a lump sum and the rest in equal monthly instalments.
Steps to Buy a Life Insurance Policy Online
Step 1
Look for a life insurance plan that fits your unique needs, budget, and your family's future requirements.
Step 2
Pick an insurance company with a good reputation, excellent customer service, quick claim settlements, and a straightforward claim process.
Step 3
Carefully choose the policy term, type of cover, sum assured, and any riders. Ensure the premium fits your budget.
Step 4
Provide all necessary details such as identity, age, income, and address proofs. You may also need to submit photographs and undergo a medical test.
Step 5
Pay the premium online using your debit card, credit card, net banking, payment wallets, or UPI.
Documents Required to Buy a Life Insurance Policy
When buying a life insurance policy, you must provide several important documents. Here's a list of the key documents typically required:
Identity Proof
1. Aadhaar card
2. PAN card
3. Passport
4. Voter ID
5. Driving license
Age Proof
1. Birth certificate
2. School/college leaving certificate
3. Passport
4. Aadhaar Card
Address Proof
1. Utility Bills
2. Aadhaar Card
3. Passport
4. Voter ID
5. Rental Agreement
Income Proof
1. Salary slips
2. Income tax returns
3. Bank statements
4. Form 16
Photographs
Recent passport-sized photographs are required.
Medical Reports
Depending on the policy, you may need to undergo a medical examination and submit the reports.
Types of Life Insurance Claims
Insurance claims are broadly classified into the following two types:
Death Claim
In the unfortunate event of the policyholder's demise during the policy tenure, the payout is paid to the nominee, as agreed in the policy terms. This payout is known as Death Benefit. While the documents might differ across insurance providers, the most common documents required to file a death claim are Filled form, Original Policy Bond or Contract, Policyholder's Death Certificate, Proof of Identity as the Nominee.
Maturity Claim
Maturity Benefit is the amount the Life Insured receives if they survive the policy term and the premiums are all paid. Additionally, the policy must have the maturity benefit as a component because the Maturity Benefit is absent in the case of Life Insurance. The Maturity Claim Form and Original Policy Bonds are usually required to avail of the maturity benefit. However, they may differ from one insurer to the other.
Documents Required to Get Your Life Insurance Claim Amount
You must provide several important documents to claim your life insurance amount. Here's a list of the key documents typically required:
Claim Form
The insurance company will provide a claim form that needs to be filled out by the nominee or claimant.
Death Certificate
An official death certificate issued by the local municipal authority or relevant government body.
Policy Document
The original life insurance policy document.
Identity Proof of the Nominee
1. Aadhaar card
2. PAN card
3. Passport
4. Voter ID
5. Driving license
Address Proof of the Nominee
1. Utility bills
2. Aadhaar card
3. Passport
4. Voter ID
5. Rental agreement
Medical Reports (if applicable)
Any medical reports or hospital records related to the policyholder's illness or cause of death.
Bank Account Details
Please provide the nominee's bank account details so that the claim amount can be transferred. This may include a cancelled cheque or a copy of the passbook.
Additional Documents (if required)
Depending on the circumstances, the insurance company may request additional documents such as a post-mortem report, FIR, or police report in case of accidental death.
What are the Types of Death Not Covered in Life Insurance?
Life insurance policies generally cover most types of death, but certain exceptions exist. Here are some types of death that are typically not covered:
Suicide (Within the First Two Years)
Most policies have a suicide clause that excludes coverage if the policyholder commits suicide within the first two years of the policy.
Fraud or Misrepresentation
The insurer may deny the claim if the policyholder lies or omits important information on the application, such as health history or risky activities.
Risky Hobbies or Activities
Deaths resulting from high-risk activities like skydiving, scuba diving, or racing may not be covered if these activities are excluded from the policy.
Illegal Activities
Deaths that occur while the policyholder is engaging in illegal activities are typically not covered.
War or Terrorism
Some policies exclude deaths caused by acts of war or terrorism.
Murder by the Beneficiary
If the beneficiary is involved in the policyholder's murder, the insurer will not pay the death benefit to that beneficiary.
Death Without a Beneficiary
The claim may not be paid out if no designated beneficiary exists or the beneficiary predeceases the policyholder.
Do’s of Life Insurance Policy
1. Buy Early
Purchasing life insurance at a younger age can get you more extensive coverage at lower premiums, ensuring early financial protection for your loved ones.2. Read the Policy Document Carefully
Take the time to read and understand the policy document thoroughly. This helps you make informed decisions and know exactly what is covered.3. Consider Adding Riders
Adding riders to your policy can enhance your coverage and provide additional protection in times of need.4. Compare Policies
Compare different policies and insurance companies to find the best coverage, premium, and customer service. Look at factors like claim settlement ratio, assets under management, and the number of lives covered.5. Learn About Different Types of Policies
Educate yourself about the various types of life insurance policies available to choose the one that best suits your needs.Don’ts of Life Insurance Policy
1. Don't Provide False Information
Avoid giving false or inaccurate information during the application process, leading to claim rejections and policy cancellations.2. Don't Miss Premium Payments
Ensure timely premium payments to avoid lapses in your coverage.3. Don't Delay Purchasing Insurance
Don't procrastinate on buying life insurance. Delaying this decision can leave your loved ones financially vulnerable in case of an unfortunate event.Terminologies Related to Life Insurance Policy
Policyholder
The Policyholder is the person who buys the insurance and pays regular premiums.
Coverage
The amount of money the policyholder can get from the insurance.
Life Assured
The person whose life is insured. This may or may not be the same person as the policyholder.
Nominee
The person who receives the death benefit or sum assured in case of an unfortunate demise of the policyholder. The policyholder chooses the nominee when taking the policy; however, they can always be changed during the policy term.
Sum Assured
This is the amount of money a nominee receives in case of the policyholder's demise, and it is one of the major factors determining a policy's premium.
Policy Term
The Policy Term is the period during which a policy is active. An insurance policy's benefits and life cover are valid during this period, which differs across policies.
Insurer
The insurer is the insurance provider who offers life insurance plans and handles claims.
Insured
The person who is covered by the insurance policy.
Insurability
Factors affecting a person’s health or life expectancy make them more or less likely to get injured or sick.
Premium
Premium is the amount of money you pay to the insurance company in return for the insurance. It can be paid in various modes: annual, half-yearly, or even monthly.
Death Benefit
The total amount an insurance provider gives to the nominee in case of demise of the life assured. This mostly equals the Sum Assured; however, it might be more when riders are added.
Add-on Benefits (Riders)
Add-on benefits or Riders are additional coverages on your policy that cover specific conditions like critical illness, accidental death, etc. They come at an additional cost over and above your standard premium.
Claim
In the case of the life assured's demise, the nominee should file a claim with the insurance company. It is an intimation to the insurance company about the unfortunate event and the demand for insurance coverage payment.
Maturity Date
When the insurance policy ends and any benefits are paid out.
Maturity Claim
The amount the policyholder receives when the policy ends if it includes a maturity benefit.
Surrender Value
The money the policyholder gets if they end the policy before the maturity date.
Vesting Age
The age at which the policyholder starts receiving regular payouts from an insurance-cum-pension plan.
Beneficiary
The person or entity designated to receive the death benefit from a life insurance policy.
Grace Period
The period after the premium due date, during which the policyholder can still make a payment without losing coverage.
Lapse
The termination of a policy due to non-payment of premiums.
Underwriting
The process by which an insurance company evaluates the risk of insuring a person and determines the premium.
Free Look Period
The policyholder can review the policy terms and cancel the policy without penalty.
Conversion Option
A feature allowing the policyholder to convert a term policy into a permanent one without undergoing a medical exam.
Reinstatement
Restoring a lapsed policy by paying the overdue premiums and meeting other requirements.
FAQs about Life Insurance Policy in India
What is the consequence of not paying my insurance premium on time?
What do I receive on the maturity of my Life Insurance Policy?
What does "Fully Paid Up" mean on a Permanent Life Insurance Policy?
Do I need to pay tax on my maturity benefit?
What are the different options available for me to pay the premium?
Here are the most common methods that you can choose to pay your premium on time:
- Collection agents accept cash or cheques and provide receipts. You can also visit the insurance company’s office to pay in person.
- Online payments through the insurer’s official website are convenient, or you can visit Franchise/premium payment points that also accept premiums.
- Electronic Clearance Service (ECS) allows automatic debits from your account.
- Some insurers offer payment options via IVR and ATM or use Post Dated Cheques (PDCs) to ensure timely payments.
What if I do not want my Life Insurance Policy once I have taken it?
You have several options if you no longer want your life insurance policy. Term Plans generally come with a 15-day Free-Look period, during which you can cancel and receive a refund. Once the Free-Look period is over, you can opt to surrender the policy. Surrendering the policy means you will receive the cash value minus any applicable surrender fees.
You can also stop paying premiums, and the policy will lapse. Alternatively, you can convert your policy to a different type of term or assign it to another person.
On maturity, can a new policy be availed at the rate of the old premium?
Am I still eligible for Life Insurance Coverage if I have a serious health concern?
Can I buy Life Insurance for anyone I wish to?
You can buy Life Insurance for someone other than you, but the main factor here is "Insurable Interest" along with the insured's consent.
Insurable Interest means a person's interest in something like property or another individual wherein any loss or harm to this property or individual would affect the person.
An insurable interest relationship is usually between:
- Spouses and Children
- Business Owner and Key Employees
- A creditor and a Borrower
Why should I buy another Life Insurance Policy when I already have one policy from my employer?
What is Mortgage Insurance?
If I stop smoking today, or maybe 6 months before taking a Life Insurance Policy, will I get a Non-Smoker rate?
What is the best kind of Life Insurance Policy?
What is the Contestability Period in Insurance?
What Is Indexed Universal Life Insurance (IUL)?
What is Cash Value Life Insurance and How does it work?
What are the details of the life insurance policy?
What is the benefit of life insurance?
The primary benefit of life insurance is financial protection for your loved ones in the event of your passing. Life insurance provides a death benefit, which can be used to pay funeral expenses, cover outstanding debts and loans, replace lost income, fund education expenses, supplement retirement income, pay estate taxes, and support business succession planning.
Life insurance can also offer living benefits such as cash value accumulation, tax-free growth, and access to funds through loans or withdrawals. Some policies offer terminal or critical illness benefits, providing financial support during difficult times.
Who needs a life insurance policy?
Which type of life insurance is best?
What age is best to get life insurance?
Is life insurance money refundable?
Life insurance money can be refundable under certain circumstances:
Return of Premium (ROP) Life Insurance is a policy that refunds all your premiums. If you pass away during the term, your beneficiaries receive the death benefit, and if you are still alive when the term ends, the insurer will refund all the premiums you have paid (tax-free).
Cancellation of Term Life Insurance is when the company must refund your payments if you cancel a term life insurance policy within 30 days of purchasing it.
What is the maximum life insurance coverage in India?
What are the two basic types of insurance?
How do I cancel my life insurance policy?
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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