Life Insurance Plans

Life Insurance Companies

Advantages of Life Insurance

Life Insurance is an important addition to your financial portfolio. Life Insurance has various advantages that can guarantee your own financial security and that of your family as well. Let us tell you how your Life Insurance can be beneficial to you apart from giving your loved ones death benefits.

Access to Cash 

Give it a few years and once your insurance premiums accumulate, your policy’s cash value can be accessible as a loan withdrawal. This can be useful if you want to fund business opportunities, education or retirement income.

Financial Safety

Life Insurance can provide you with a financial safety net when you or your family faces a financial crisis. Your Life Insurance can ensure your family has a comfortable lifestyle if you are not around to support them.

Return on Investment

Life Insurance gives you guaranteed long-term returns. With Life Insurance, the insured person can benefit from periodic bonuses that are accumulated in the cash value of the policy. The money you invest in Life Insurance will be returned as Sum Assured on maturity of the policy tenure or on the demise of the insured person.

Tax Benefits

You can avail of tax benefits on your Life Insurance policy under Section 80C of the Income Tax Act. You can claim tax deductions up to Rs. 1, 50,000 on Life Insurance under Section 80C.

Life-Stage Planning

With various types of Life Insurance plans available, you can plan your financial goals. You can use Life Insurance plans to plan finances for your different life stages. Save up for your child’s education, marriage, your dream home or your retirement years. All with Life Insurance.

Additional Benefits    

You can add benefits to your Life Insurance policy. Life Insurance riders offer you a more comprehensive policy. Additional benefits on a Life Insurance plan include critical illness cover, personal accident cover and waiver of premium benefit, among others.

Source: http://blogs.rediff.com/lifeinsuranceplans/2016/07/09/ritikashah11998-20/

Life Insurance

The Importance of Life Insurance for Dads

Happy Father’s Day all you dads!  I want you to know you are greatly appreciated and you deserve a huge thank you for all that you do.  No one can replace that love and support that you provide.  My dad was there for me through a lot, but if there was one specific thing I wish he would have done before he passed away, it would have been to buy life insurance.

My dad passed away after battling liver disease at the age of 59.  That’s young, but old enough to know a few things.  I don’t know if he was in denial about dying or just had faith that he would experience a miracle and live much longer.  Either way, he didn’t have life insurance.

It’s one of those things you don’t like to talk about – life insurance.  My family is fun; we don’t discuss serious things like death (even when someone is dying).  My dad chose to be home during his hospice while my stepmom and nurses cared for him.  As a part of a family with six kids, our number one goal was to spend time with our dad and hopefully make him smile.  We were all afraid to ask him about his wishes and his plans for end of life.  We feared that bringing that up would hurt him or remind him that he didn’t have much time left with us.

Guess what?  We should’ve talked about it a long time ago, before health was an issue.  It would’ve saved our family from so much extra stress than we were already enduring.

After my dad passed, besides dealing with grief and trying to piece together his assets, debt, and a mess of paperwork, we also had to figure out how we were going to pay for everything.  Funeral costs, burial expenses and medical bills added up quickly.  There was plenty of outstanding debt that needed to be paid off as well.  On top of it, my siblings and I were all taking time off of work to meet with lawyers and take care of everything.

I don’t wish this experience we went through on anyone.  Imagine six siblings that are very close, losing their dad and having to deal with splitting finances, assets, paying debt all while being civil.  If anything can tear a family apart its death and money.

This life changing experience made me realize the importance of life insurance and that my husband and I needed to purchase our own policies.  Both of us have small policies through our employers, but ideally you should have your very own insurance to ensure you have coverage if and when you need it.

5 Reasons to Purchase Life Insurance:

Income Replacement

When one spouse dies, the family can take a serious financial hit. Replacing that income can help the family maintain the lifestyle they are used to?

Mortgage Protection

The last thing a family wants to think about is losing their home after the death of their loved one. Life insurance can help to take care of that financial burden.

Paying Off Debt

A life insurance policy can help you pay bills. Most families have more than just a mortgage to think about.  Credit cards, medical bills, student loans, car payments, etc… these can quickly add up after the death of an income earner.

Pass Wealth to Family

As a part of your estate, you can leave money to your loved ones with a life insurance policy.

For me, term life insurance is the smartest and most affordable option for my situation.  With Quota’s easy-to-use quoting tool you can find out how much term life insurance would cost you.  There’s no need to give any personal information until you are ready to apply.  It’s a relief to know that I’m financially protected if my husband were to die.  Without it, I would be forced to move, sell personal belongings and completely change the lifestyle that I’m accustomed to.  I don’t want that for me, and I don’t want that for you or your loved ones.

Source: https://www.quotacy.com/the-importance-of-life-insurance-for-dads/

10 Things You Didn't Know Your Life Insurance Policy Can Do

Over the last several years, the term "life hack" has come into vogue. A life hack is an object or process used to make a small part of your life easier, usually by taking a common object and repurposing it for something that it wasn't originally made for. Examples include using old socks as wearable dusting rags during spring cleaning, a contact lens case for pill storage during an overnight trip, or a muffin tin as a condiment holder for an outdoor barbecue.

In a sense, a life insurance policy acts as a financial "life hack." After all, it can be utilized for something other than providing a death benefit upon someone's passing. Here are ten innovative ways that a life insurance policy can be used:

1.     As a safeguard against being uninsurable. People who are very old and/or unhealthy may not be able to obtain a new life insurance policy. But if you already have a term life insurance policy, you can extend the term or convert it to whole life insurance before it expires - so your coverage never lapses.

2.     As collateral. If you ever need to apply for a loan of any sort, you can use the cash value of a whole life policy as a source of collateral in order to receive a higher amount or a lower interest rate.

3.     As an investment tool. The value of a whole life policy will always grow and never decline, which is more than can be said for many other investments on the market. Some policies even pay dividends to the policyholder.

4.     As a way to pay for college. With the costs of tuition rising, you can tap into the cash value of your whole life policy to help pay the costs of higher education for your children or grandchildren.

5.     As a way to pay off your debts. If you ever need to repay loans, you don't have to wait until you die to access your payout. Just draw upon the cash value of your whole life insurance policy to settle those debts.

6.     As an additional source of retirement income. If Social Security and your retirement savings do not provide enough income during your golden years, you can arrange to withdraw a regular stipend from your whole life policy - or even surrender the entire policy in favor of the cash value.

7.     As funding for long-term care. Many older adults require partial or round-the-clock medical care, which can be expensive. Funds from your whole life policy can be allocated toward these long-term care costs while you are still living.

8.     As a way to fund a favorite charity. If you want to support a cause or organization that has become important to you, part or all of the death benefit of your life insurance policy can be earmarked for that charity upon your passing.

9.     As a way to help pay taxes. If you've accumulated significant wealth, your heirs may be left with a hefty estate tax bill upon your death. As a result, many people acquire life insurance policies in order to offset or pay off any post-death tax bills.

10. As financial security for your heirs. If your loved ones know that they will receive a portion of your life insurance death benefit as part of their inheritance, they can enjoy the peace of mind of having a fiscal safety net while they are alive.

 Source: http://blogs.rediff.com/lifeinsuranceplans/2016/06/29/ritikashah11998-18/

Life Insurance

Checklist for buying Life Insurance Policy

It is important for you to know answers to a few crucial questions before buying an insurance policy. This not only helps in understanding the policy better, but also ensures peace of mind during the entire policy term and afterwards. In this article we shall cover what questions to ask one before buying a life-insurance policy, understanding the policy, terms and conditions.

What you would like your life insurance policy to achieve?

Ask yourself what it is you want the insurance to do. For example, do you want to have coverage that will:

Pay the outstanding balance owing on a mortgage and other debts?

Offset the loss of your income? For how long?

Contribute to the future education of your children?

A combination of all or part of the above?

Knowing what you would like to accomplish with your life insurance policy will help you determine how much life insurance you need to buy. If you have insurance before then what is the purpose of the new policy? What value will it add to existing policy? Why are you buying the policy?

Who would you like to insure?

Most life insurance companies offer a variety of products to suit your lifestyle and family. You can get a life insurance policy

On your own life, or

You can get one policy for both you and your spouse (called a joint life insurance policy) or

For your child.

Remember that the purpose of insurance is not to soothe us emotionally, but rather to mitigate the financial losses we might suffer if some unfortunate event happens. Identify the potential events that would be catastrophic in a household. This means events that would cause a family to suffer serious financial losses and that would cause its members to substantially change their lifestyle and goals. These are risks crying out for cover, such as the death, serious illness, or disablement of the bread-earner(s). Although the death of the breadwinner(s) is catastrophic from a financial point of view, the death of a child, though awful, is not likely to be.

Biggest advantage of child insurance plan is the benefit of premium waiver. In case of child plans, if the proposer, usually the parent, dies then the future premiums of life insurance policy are waived off for the child’s benefit. These types of plans are double benefit plans. At the time of death of the life insured, the sum assured would be paid to the family to meet the immediate expenses but the policy continues. The future premiums are waived off from the policyholder, but the insurer continues to pay the premiums on behalf of the life insured, so that the maturity benefit is secured for the child’s future.

Joint life insurance policies

Joint Life insurance policies are designed to enable two people, typically spouses or business partner, to share in one life insurance plan. It covers two individuals (spouse, business partners) under same policy i.e. jointly. Since the probability of claim is twice than of individual life insurance plan, the premium is bit higher than single individual life insurance plan. Also if claim is made, the policy gets terminated after the payout. However joint insurance policy is cheaper than buying two individual term insurance policies.  Joint Life Insurance could be endowment or term plan; If the policy is a joint endowment policy, the cover amount (sum assured) is payable on the first death and again on the death of the survivor during the period of the policy. If one or both partners owning the joint policy survive to the maturity date, the cover amount and the vested bonuses are payable on the maturity date.

Source: http://blogs.rediff.com/lifeinsuranceplans/2016/06/22/ritikashah11998-17/

Life Insurance Companies

A Guide to Who Needs Life Insurance

Life insurance can fill a wide variety of needs; including covering the finite years of a mortgage and protecting the interests of a special-needs child who will need financial support after you’re gone.

In fact, 63% of Americans consider life insurance a necessity, according to the nonprofit industry group Life Happens. But 30% say they don’t have enough coverage, 19% have only group life insurance (the coverage that’s available through work and often doesn’t provide enough money to meet a family’s needs), and 43% have none at all.

Life insurance can provide “income replacement” so that your family can continue to pay everyday expenses.

Life insurance would cover the cost of paying for services the parent does for “free,” such as child care.

A policy could cover the support payments that a divorced parent makes.

Life insurance can make sure the child will have financial support no matter when a parent dies.

A policy can cover mortgage payments, so your family doesn’t have to move if you die.

Life insurance could cover the cost of the debt. Life insurance can provide funds for heirs to pay estate or inheritance taxes.

If you don't have a lot of wealth, life insurance can provide a small inheritance to heirs.

Life insurance can pay off business debts if you die, help heirs to the business pay off estate taxes, or fund a buy-sell agreement that allows a business partner to buy out your share.

Life insurance with a cash value component can provide a supplemental source of retirement savings.

Small life insurance policies can pay for your funeral and final expenses. People who are interested in permanent life insurance should consult a financial advisor to find the right policy type.

Source: http://blogs.rediff.com/lifeinsuranceplans/2016/06/16/ritikashah11998-16/

Choose suitable Life Insurance plan not the cheapest..

With increasing number of insurance products in the market, customers enjoy a wide array of choices. Many competitive products are being offered; some at comparatively lesser rates as well. Predictably, many of us also prefer products which are cheaper. However the question we need to ask ourselves is - whether every cheap product is good?

Life Insurance, one of the most crucial of all the products are available in a wide range; each plan with something unique to offer. Insurance companies are in a competition to lure consumers with attractive features. Although most of the features are beneficial to us we do need to evaluate thoroughly before finalizing one.

We tend to go for the cheapest plan possible. The reason being the popular belief and the advices that are offered to us, again and again! There is nothing wrong in choosing a cheap plan. However what we need to consider is whether that is the only deciding factor? Should rates of the product be the only criteria we need to follow?

No. Let us discuss why?

Buying a life insurance, unlike any other product affects our entire life. That is the reason why it becomes even more important to be careful while purchasing. There are a few things which we must keep in mind before buying a life insurance plan

Here are a few ways which can help you in making an informed decision. First review all your insurance needs. Understand what your requirements are; Plan for your future and for your family. Decide whether you want to buy a term insurance or a permanent insurance. Term insurance offers cover for a stipulated period of time while permanent insurance offers cover as long as you pay the premiums.

Evaluate your financial condition - check whether you have any debt or mortgages. Decide on the amount of coverage you would want and for how long. Decide on the amount of premium that you will be able to pay regularly. Whether you have any dependents or not; whether you need to provide financial support to your family. If in case something unfortunate happens, how much of financial support you must provide to ensure a financially stable life for your children, parents and spouse. These are just a few factors that can influence your purchase of life insurance policy.

Rates of plans may vary from one company to other. However, for a suitable product, one must consider above mentioned variables along with looking in to the cost of the plans. A life insurance is to help us at times of need. Hence, we shall buy a product which fulfills our requirements on time and in ways we would prefer.

Source: http://blogs.rediff.com/lifeinsuranceplans/2016/06/08/ritikashah11998-15/

Give extra financial care for family’s safe future

In life, we always wish to protect our loved ones with some form of financial security. We purchase gold, invest in equity stocks or mutual bonds to give them necessary security. But due to the rising inflation costs, better lifestyle, these investments are not sufficient to meet the future scenarios. Therefore, the modern way that provides complete financial security would be life insurance policy. There are lot of insurance companies that cater different customized products with variety of offerings. Right from fuelling investment needs to meeting different financial goals, they come with many objectives for the investor. While you have various types of insurance policies in market, they are also add-ons to supplement life insurance policy with added coverage. These policy add-ons are termed as “Rider”. Riders vary from insurance companies, policy structure, workings and costs. Adding a rider increases your premium to be sure for an extra coverage which is worth the costs. There are many riders available across the industry such as:

Critical Illness Rider

As the name suggests, this rider is your added security towards critical illness scenarios at a minimal cost. It requires the insurance company to pay you a lump sum if you’re diagnosed with one of the major illnesses specified in the insurance policy such as cancer, heart attack, stroke, kidney failure and others.

Term Conversion Rider

It lets you convert your term policy into a permanent one without undergoing a medical exam. This would be beneficial to young couples who may start a family and want to then convert for life-long coverage. It is most often a feature of a term insurance contract that is added to the policy at no costs.

Waiver of Premium Rider

This rider gives waiver so that you don’t have to pay the premiums on your life cover when you are struck with total disability and cannot work. Most companies limit policy till 65. So, just in case you are disabled during the old age for longer than six months, your premiums will be waived and, depending on the policy, the premiums you were paying for the previous six months will be reimbursed.

Disability Income Rider

This rider is a vital one as it sets a regular income for people who are totally disabled and cannot work. The policy will specify the amount of income and how long it will be paid. While some riders only pay if you became disabled from an accident others pay for an accident or illness.

Spousal Rider

It allows you to give extra insurance cover to your spouse instead of buying two separate life insurance policies. It provides term coverage for a specific period of time. So why not just go ahead, and give your spouse the best gift ever?

Return of Premium Rider

With this rider, you pay higher premiums for the opportunity to get all of your money back if you live past the term on your insurance policy.

There are various factors to consider when buying an insurance cover. The amount and type of cover depends on factors like your family members & their future needs, income source, debt, lifestyle, asset in hand, inflation costs etc. Also it determines on your risk taking ability as well. It is advisable that you never set a policy premium beyond your income sources else if you cannot afford to pay premium in time your policy might lapse. Life insurance policy is a very personal decision and should be determined thoughtfully.

Source: http://blogs.rediff.com/lifeinsuranceplans/2016/06/07/ritikashah11998-14/

Life Insurance Policy

Life Insurance Policy

Life Insurance In India

Life Insurance In India

Life Insurance

Think twice before shifting from current life insurance policy

If you decide to replace or cancel your existing policy and buy a new life insurance it may not be the intelligent decision for you as it has some points that make it unwise decision.

In the early years of the policy you have to incur additional expenses such as commission, administrative cost of producing and delivering the policy and set up the new account on the computer this may reduce the cash value of the policy.

The company can deny your claim in the first two years of the policy if they can prove that you withheld some important facts at the time of policy issuance which was necessary to know; this is known as the Contestable period; if you change the policy you have to again go through the contestable period.

If you change your current life insurance policy than you have to pay higher premium as your age is more than you have bought the earlier one; your current age plays an important role in deciding your premium.

If you have decided to drop or cash-in your current policy and buy a new policy than you must take the following steps:

This is your responsibility to provide you the relevant facts related to the shift of the policy; and it is your duty to go through the material carefully which is provided to you by your agent or insurer.

You must go through the benefits and cash value of both policies carefully; you must also make sure if there is any surrender charges or not; you must also keep in mind if there is any tax implications or not.

Compare the features of both the policies; life insurance policies usually have many options such as how dividend will used, how claims will be paid, how loans and withdrawals are handled etc.

If you want to take the loan than compare the interest rates for both the policies otherwise you will find yourself paying up more interest.

See that your existing policy and/or proposed policy are participating if a policy is participating than a policy holder may receive the dividend; though the company cannot guarantee that how much dividend it will give in future.

Compare the present and future costs of both policies as term policies may have higher renewal cost depending on the provisions of the policies.

Do not drop or change your existing policy unless you are able to understand all the aspects of the policies.

Source: http://bloglifeinsurance.tumblr.com/post/143937634958/think-twice-before-shifting-from-current-life

Life Insurance

Life Insurance

Life Insurance

Life Insurance

Life Insurance

Life Insurance

Life Insurance

Life Insurance

Buying Life Insurance as a Senior

We frequently say “the younger you are, the cheaper your life insurance premiums.”  While this is certainly true, we aren’t saying that you can’t get life insurance as a senior.  Oftentimes seniors don’t buy life insurance because their children are grown, the mortgage has been paid off, and any other expenses are covered by social security, retirement savings, and pensions.  The need for life insurance may not be there.  However, everyone’s situation is different.  There are certain cases in which, as a senior, you may have a life insurance need.
Some common reasons seniors may want to purchase life insurance:
• Income Replacement – If you and your spouse are still working, life insurance can protect your spouse’s standard of living by replacing your income if you were to die. If your spouse is relying on your pension or social security, life insurance will help cover those benefits.
• Final Expenses – A funeral is not cheap. A life insurance death benefit can help your loved ones afford to honor your life with a proper funeral and burial service.  If your estate is of high worth, estate taxes, both federal and state, would be an unpleasant surprise for your family.  The death benefit can be used to pay these as well.
• Medical Expenses – Not everyone will have the fortunate circumstance of dying peacefully in their sleep of old age. Sometimes medical conditions develop and expenses (prescriptions, hospital bills, etc.) start to accumulate towards the end of one’s life.  Life insurance can help your surviving loved ones pay those expenses instead of trying to pay out-of-pocket.
• Grandchildren – Maybe your loved ones will end up not needing to cover expenses. Instead the death benefit can be used as an inheritance.  As a separate matter, many grandparents in today’s world are deeply invested (both emotionally and financially) in the raising of their grandchildren.  In 2014, 2.7 million grandparents were actually the primary caregiver of their grandchildren.  Life insurance for these specific grandparents is a must to ensure their grandchildren continue happy and healthy lives.
• Charitable Gift – A life insurance death benefit can also be given to an organization you care about. If there is a charity you are greatly involved with, you can continue to give to them even after your death.

Term life insurance is going to be the most affordable type of life insurance to purchase as a senior.  As people age, the less life insurance they need, so a 10-year term life insurance plan may be enough for you.  You also probably won’t need millions or even up to $500,000 in coverage since your children are likely grown and independent.  A healthy 65-year-old can obtain $200,000 worth of life insurance for a 10-year term for under $100 per month.
If you’re still working, be sure to participate in the group life insurance plan your employer offers as well.  You can always apply for an individual life insurance plan to supplement the group insurance plan (and that’s a good idea!)
It’s important to note that all life insurance companies price age groups differently.  A 10-year, $200,000 term policy at one life insurance carrier may cost you $98 per month while another may cost $150.  Quotacy works with multiple life insurance companies so we have the ability to shop your application all over to get you a great product at an affordable price.
Underwriting is the most important step in the application process.  It is during this time that the insurance company determines how much of a risk an applicant is to insure.  Quotacy has an in-house expert underwriter who has worked in many carrier home offices and knows the ins and outs of the complex underwriting world.
Whether you’re 25 or 65, we can help you get life insurance.  Start the process by running term life insurance quotes on our website.  You can contact our friendly agents for additional help and questions as well.  We won’t push more life insurance on you than you need.  Still not sure?  We think Quotacy is great, but don’t take our word for it.  Check out our customer reviews – we aim for excellent, personalized service and honest advice.          

Life Insurance

Why should you avail life insurance

Why would you pay insurance premiums , when the same money can be used elsewhere?

Here are some simple reasons you should to avail life insurance:

Help your family meet their goals

Important things that your family saved for, like a new home or good education for the children, will not be out of reach in your absence. Your family will still be able to meet its needs and wants, without worrying about whether or not they can afford it.

Income Protection

It would be unfair for your family to have to combat both emotional and financial loss at the same time. Life insurance can reduce the negative impact of loss by contributing towards replacing your financial contributions to your family.

Stick to your lifestyle

Life insurance is a financial support that allows your family to maintain the lifestyle you chose for them. Your family need not undergo drastic alterations after losing you.

No worries about loans

With you gone, your spouse might find it difficult to repay loans and other financial obligations that you made together. However, an adequate life insurance cover (sum assured)might mean that there will be no need to worryabout outstanding loans or debts.

Saves tax

Life Insurance offers tax savings also. Premiums paid towards life insurance plans are currently deductible under section 80C, while contributions made towards your pension plan are currently deductible under section 80CCC. The maturity and claim proceeds are also tax-free. However, there are certain annual limits to these deductions. Further, the benefits can vary as per the provisions of the Income Tax Act. Consult your tax advisor for guidance.

Source : https://www.tomorrowmakers.com/articles/life-insurance/why-should-you-avail-life-insurance

Life Insurance Plans

Life Insurance Plans

https://www.bajajallianz.com/Corp/life-insurance/life-insurance.jspz

The Term Life Insurance Policy

There are many things which you have to consider before buying a life insurance policy. One of these aspects is a persistent doubt about the significance and need of the life insurance policy. Basically a life insurance policy is relevant to all those persons who have any concerns about their finical future of their family in case of their death. The apart from the pure protectinoal needs, some life insurance policies like variable and whole life insurance policies offer the opportunity for reaping dividends and ax free payments and they also have built in cash values. These polices are also utilized as the liquid cash in order to cater to the different needs of the policy holders. There are various types of life insurance policies which can be customized to suit to the different needs of different individuals. A suitable life insurance policy can be chosen after discussion with advisors and financial experts. The selection of a life insurance policy depends on the number of people who depends on it and kind of insurance needs.

Term life insurance and whole life insurance are two basic types of life insurance polices. There are different variations produced in these polices with the passage of time due to the changing demands of the people. The term life insurance policy is also known as temporary life insurance policy. The term life insurance policy is a purely protection oriented policy which provides death benefits only if the person dies within the period of life insurance policy.Mostly the term life insurance policy is adopted those persons who needs short term insurance like a car loan, house loan, a young individual with some dependants etc. People choose a term life insurance policy because it is less expensive as compared with the whole life insurance policy. In term life insurance policy the premiums are very low initially but these premiums may increase with the increase in the age of the insured person and at that time the premiums became more than that of whole life insurance policy.

The term life insurance policy is divided into two types i.e., Level term which is also known as decreasing premium policy and renewable term which is also known as increasing premium polices. Both these types of term insurance policies suit different kind of people. People choose the policy which suits their budget and needs. Variable, universal and variable universal are different variations of the whole life insurance policies. The universal life insurance policy provides the flexibility to the insured person to choose the kind of death benefits, premium payment ant the coverage amount. On the other hand the variable life insurance policy allows the policy holder to invest his\her cash value in direct investment in order to get a greater potential return. The universal variable life insurance policy is the blend of both universal and variable life insurance polices. Which means a universal variable life insurance provides the flexibility factor to the persons along with the investment option of the variable life insurance policy.

Source: http://www.artipot.com/articles/1194222/the-term-life-insurance-policy.htm

Infograph - Life Insurance Consumers Just Don't Understand

Do’s and Don’ts While Buying Life Insurance?

Buying life insurance is an important decision and you need to be sure that you take this decision prudently. If you are planning to buy life insurance here are some do’s and don’ts that you should be mindful of.

The Do’s

1) The first thing you need to do is to understand your insurance requirement. Try to assess the sum Assured you need, the tenure of the cover and the various Riders that you would like to include in your policy.

2) Know the various options you have in terms of the types of insurance policies to cover your insurance objectives. You can seek advice from various insurance advisors. Be open in your thought process as this will help you take a better decision.

3) Understand the costs involved in a life cover. Especially, if you are looking to buy a ULIP know the various charges that would be levied on the Policy such as policy administration and Premium allocation charge. Also, try and understand the various fund options available and whether the switching benefits are allowed.

4) Make sure you fill the Proposal form of the policy on your own.

The Don’ts

1) Do not hide any facts while filling up the proposal form. If you are found guilty of hiding information, this could have a bearing on your claims.

2) While seeking advice on life insurance from insurance advisors do not be carried away with their promises, unless it is offered in written as part of the policy brochure.

3) Do not miss or delay the premium payment.

Source: http://www.easypolicy.com/KnowInsurance-A/Do-s-and-Don-ts-While-Buying-Life-Insurance-

Fundamentals of Life Insurance for You

For millions of people in India, the concept of life insurance still remains a mystery. Thanks to the new media channels, more and more people are becoming aware of the significance of life insurance. For those, who wish to develop fundamental understanding of the concept of life insurance, here is a quick snapshot.

What is meant by life insurance?

As the term suggests, life insurance covers the risk of life. Life insurance policy is a contract between the insured person and the life insurance company to provide a pre-determined sum of insurance to the nominee/s in case of death of the policy holder.

Life insurance is expected to provide financial security to the dependents of a policy holder. The insured amount should be sufficient to replace the income of policy holder. However, there is no compulsion to equate one’s income to the sum insured under the policy.

How much amount should be insured?

Most of the times, life insurance policy holders are not able to determine the amount of insurance coverage. As a thumb rule, the amount of insurance should be 8-10 times of the annual income of the policy holder.

For instance, if one’s income is Rs 5 lakh a year, then the amount of insurance coverage should be in the range of Rs 40-50 lakh, or more. This way, in case of the death of the policy holder, his dependents can invest the insurance amount in government securities or bank fixed deposits, and earn an interest at the rate of 9-12 per cent. The income derived from interest can thus replace the income of the policy holder in case of his demise.

However, keeping in mind the average rate of inflation at 5-6 per cent, the amount of insurance should be higher than 10 times of one’s annual income. The income from investment of insurance amount should support policy holder’s nominees, and may be utilised for education, marriage and other necessary expenditure. The purpose is to ensure financial security for the people who depend on the income of policy holder.

Types of life insurance

In India, life insurance policies are broadly available in five types. Here is an overview of all of them.

Term insurance policy:

Under this type of insurance policy, one is expected to pay premium amount against consideration of a certain sum of insurance coverage. The amount of premium is treated as expenditure as a term insurance plan does not give any returns or money back. Term insurance plans can be taken for a period

ranging from 5 to 30 years. After the reforms in the insurance sector in India, the premium rates for term insurance plans have gone too low.

Endowment policy:

Under an endowment policy, the policy holder receives whole of his money paid as premium amount back after expiry of a pre-determined policy period. In case of death of policy holder, his or her nominee receives the full sum insured under the plan. These kinds of policies are typical and generate returns in the range of 4-7 per cent. They are suitable for people who do not want to take much of risks and look for secured investments in government securities and debt instruments.

Unit Linked Insurance Plan (ULIPs):

As the term suggests, Unit Linked Insurance Plans (ULIPs) are purchased in units. The price per unit is announced by an insurance company as per the Net Asset Value (NAV), which is declared every day. ULIPs provide the dual benefit of life insurance and investment. The amount of premium paid towards a life insurance plan is investment in equity markets, which work on the principle of risk and rewards. These types of policies generate better returns as compared to other types of plans, in the long term.

Group insurance policy:

Such policies are taken for a group of people. Generally, organisations provide group insurance policy benefits to their employees. It depends on a company whether or not it charges employees to contribute towards group insurance scheme. Governments also provide group insurance schemes to citizens. The recently launched ‘Pradhan Mantri Jan DhanYojana’ is an example of massive group insurance scheme.

Types of Life Insurance policies

Are there any additional benefits also?

In India, there are hardly any public social security schemes for masses. Thus, one has to organise financial security from his or her own resources. Recently, the government launched a couple of mass insurance schemes but the amount is limited to a couple of lakh. This amount may be good but not sufficient to secure financial future of one’s family.

Perhaps, the government also knows that it is not doing enough for its citizens. Thus, there are some great incentives at one’s disposal when it comes to buying life insurance.

Income tax benefits are offered to those who buy insurance. An investment of up to Rs 1.50 lakh in life insurance is eligible for claiming tax exemption under section 80C of the Income Tax Act 2000. Until the end of fiscal year 2013-14, this limit of income tax exemption was Rs 1 lakh. This limit was raised by Rs 50,000 during the Union Budget provisions for fiscal year 2014-15.

That means, if your taxable income is Rs 10 lakh, and supposing that you buy life insurance of Rs 1.50 lakh, then your total taxable incomes goes down to Rs 8.50 lakh. This way, you are able to directly save

income tax in the range of 10-30 per cent, depending on your gross taxable income. One can factor in this tax saving as return generated over the premium.

If you are willing to invest a large amount, you can also consider buying more than one plan for yourself. For instance, if you wish to invest Rs 1 lakh in life insurance, then you can buy two plans of Rs 50,000 each from two different companies. This can provide you benefits of diversification. If one plan does not generate much return, then there are chances that the other one performs better.

Overall, one can ensure peace of mind by buying suitable coverage for himself and get the satisfaction of discharging his duties towards his dependent family members. 

Source: (https://bloglifeinsurance.wordpress.com/2016/01/05/fundamentals-of-life-insurance-for-you/)