What is Life Insurance?
A contract between the policyholder and the insurance company is called Life Insurance, where the insurance company pays the Contract value amount to the insured individual’s family upon his/her death. the insurance company is liable to give financial protection to the policyholder person in exchange for monthly/half-yearly/yearly fees. Our beautiful life is uncertain due to many reasons. You don’t know when you will die but it will happen, This is why you do not leave anything in future scenarios, you love your family members and want to do anything for their future needs. A life insurance policy gives you the opportunity to provide financial security to your loved ones.
What Are the Benefits of Life Insurance Plans?
life insurance provides financial security to you and your family even if you die in the future also. there are so many benefits of a life insurance policy, We will discuss it one by one below.
1-Financial Security:- As discussed earlier life insurance fundamental thing is that to provide financial security. this can be in form of repaying financial liabilities like an auto loan, home loan, and personal loan, etc.
2-Health Security:- A term plan covers hospitalization expenses in critical illness treatment.
3. Long-Term Savings:-There are many insurance plans that offer good returns in the future due to the exchange of monthly premiums.
4. Education and Marriage:-A child insurance plan covers all future needs of children like higher education and marriage expenses.
5. Tension-free lifestyle:- life insurance is the answer to many worries about your family just like What will happen if I die?, how my family will meet their expenses, What will happen if I lost my job? , how I will manage the higher education expenses of my children and how I will survive in old without a certain income
6. Investment Options:- Life insurance gives investment opportunity in Unit-Linked Investment Plans (ULIPs), also you can buy traditional investment policy as money back, etc.
8. Tax Benefits:- As per the Indian income tax department, you can avail of tax benefits of tax deduction under section 80C of the income tax act, 1961.
Types of life insurance
There are mainly two basic types of insurance are available, first is Traditional and the second is Market linked life insurance. Following are the types of Life Insurance
1.0 Traditional Life Insurance
in the traditional life insurance risk-free investment and reward possible, where after the certain time period you will get rewards of paid premium as mentioned in the policy.
1.1 Term Insurance Plans
Term insurance is the true insurance where you will not get any benefit of money return if any misshaping not done for a given period but your Nominee will get maximum return. The premium is also very low in comparability to other policies. You should choose the target policy amount at least 15 times your current annual income.
1.2 Endowment Plans or Guaranteed Returns Plan
Endowment Plans give the option of ﬁnancial protection and life cover along with sure returns. The policyholder person will receive a certain amount if he/she does not die before the maturity of the policy. In Endowment Plans or Guaranteed Returns Plan, the life insurance amount is not a big amount but the return is very good.
1.3 Money Back Policy
In a money-back policy, the customer receives a fixed percentage of the sum assured a payment at a fixed time period. This is also a type of endowment plan with liquidity. The insurance company will transfer the amount to the beneficiary account directly.
1.4 Full Life Insurance
Full life insurance plans give assured them insurance for a lifetime (Up to 90 or 100 Years). The nominee will get the benefit if the policyholder dies before mentioned time period (Up to 90 or 100 Years)
1.5 Child Plan
In the child plan, you have to deposit a small premium and your child will get a return at the time he needed most as higher education /business start-up or marriage, etc.
1.6 Retirement Plan
You can also choose any retirement plan from the insurance company. Where you will get a monthly income after the age of 60 Years. Premium will high if you want a big amount every month after 60 years ages.
2.0 Market Linked Plans or ULIPs
Market Linked Plans or ULIPs insurance policy have more risk in the context of return, which means you can get a low return as well as high return after maturity of the policy. because the return of ULIPs depends on Capital Market performance. it is a combo of insurance and investment.
- Term Insurance Plans – Pure death risk covers
- Unit linked Insurance Plan (ULIP) – Combo of Insurance and Investment with Market Risk
- Endowment Plan – Insurance with Savings without market risk
- Money-Back – Periodic returns with life insurance cover
- Full Life Insurance – 90 /100 Years of the life insured
- Child’s Plan – For child education and marriage etc
- Retirement Plan – fixed income after 60 years age
Important word/Terms in the Insurance Sector
The policyholder is the one who purchases the policy and pays the premium from time to time. The policyholder is buyers of policy and the insurance company is the contract seller
2. Life assured
A life assured person is the who mentioned in policy can be different from policyholder if policyholder buys it for their spouse or relatives. It means if a father buys a policy for his child then the child’s life assured and the father is the policyholder or owner.
3. Sum assured
Sum assured is the amount that a nominee receives if a policyholder dies before policy maturity. We also can say that the insurance company will pay sum assured amount to the nominee if policyholder/life assured die
The nominee is the legal name that can claim the sum assured amount if the policyholder dies. The nominee should be mentioned by the policyholder during buying the policy
5. Policy tenure
The policy Tenure is the time period for which a policyholder can get the benefit of insurance, it can be 1 to 100 years or full life as per policy conditions
6. Maturity age
Maturity age is the difference between the target age for which policy will mature and at the time of buying a policy. It means if Ramesh buy an insurance policy that covers his life up to 65 years age and Ramesh is now 25 years old then maturity age will be 40 years
7. Premium and Payment Term
Premium is the amount that a policyholder has to transfer to an insurance company in the defined time period. So the amount is premium and time-frequency is the payment term like yearly or half-yearly.
8. Grace Period
The Grace period the time provided by the insurance company to the policyholder to deposit the premium after that they can lapse the policy if the premium was not paid during the grace period. The grace period is 15 days for half-yearly payment term and 30 days for the yearly payment term.
If the policyholder does not want to continue the policy then the insurance company returns the sum calculative amount to the policyholder. This amount is called the surrender value.
List of the Life insurance company and their website
|Sl.No||Name of the Company||Website Address|
|1||Life Insurance Corporation of India||https://www.licindia.in/|
|2||HDFC Life Insurance Co. Ltd||https://www.hdfclife.com/|
|3||Max Life Insurance Co. Ltd.||https://www.maxlifeinsurance.com/|
|4||ICICI Prudential Life Insurance Co. Ltd,||https://www.iciciprulife.com/|
|5||Kotak Mahindra Life Insurance Co. Ltd.||https://insurance.kotak.com/|
|6||Aditya Birla SunLife Insurance Co. Ltd.||https://lifeinsurance.adityabirlacapital.com|
|7||TATA AIA Life Insurance Co. Ltd.||http://tataaia.com/|
|8||SBI Life Insurance Co. Ltd.||https://www.sbilife.co.in/|
|9||Exide Life Insurance Co. Ltd.||https://www.exidelife.in/|
|10||Bajaj Allianz Life Insurance Co. Ltd.||https://www.bajajallianzlife.com|
|11||PNB MetLife India Insurance Co. Ltd,||https://www.pnbmetlife.com/|
|12||Reliance Nippon Life Insurance Company Limited,||http://www.reliancenipponlife.com/|
|13||Aviva Life Insurance Company India Ltd.||https://www.avivaindia.com/|
|14||Sahara India Life Insurance Co. Ltd.||https://www.saharalife.com/|
|15||Shriram Life Insurance Co. Ltd.||https://shriramlife.com/|
|16||Bharti AXA Life Insurance Company Ltd,||https://www.bharti-axalife.com/|
|17||Future Generali India Life Insurance Company Limited,||https://life.futuregenerali.in/|
|18||Ageas Federal Life Insurance Company Limited||https://www.idbifederal.com/|
|19||Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited||https://www.canarahsbclife.com/|
|20||Aegon Life Insurance Company Limited||https://www.aegonlife.com/|
|21||Pramerica Life Insurance Co. Ltd.||http://www.dhflpramerica.com/|
|22||Star Union Dai-Ichi Life Insurance Co. Ltd.||https://www.sudlife.in/home|
|23||IndiaFirst Life Insurance Company Ltd.||https://www.indiafirstlife.com/|
|24||Edelweiss Tokio Life Insurance Company Limited||https://www.edelweisstokio.in/|