Life is like a beautiful, serene river. It flows on. The entirety of life can collapse with a sudden jerk. We won’t deter the accidents, but we can cover our family from such fatal blows. How? It is none other than life insurance that provides a complete sturdy shield to our family. Here in this article, we will discuss different Life insurance policy plans and companies in India.
Buying life insurance is a necessary financial decision. Lots of people die prematurely out of accidents and illness. If you are the sole earner, then think about your family after your demise. Really, critical.
To make your loved ones financially comfortable even after you, life insurance is a must. Let us see here a brief note about the life insurance policy plans and companies in India.
What does Life Insurance Cover?
Life insurance is a contract between the policyholder and the insurance company. The contract is that the insurance company would pay the nominee of the insured a certain sum in case of death of the insured; this is called insurance benefit. This insurance benefit is also set off in case of long-term illness.
It Covers the Following Points
Except for payment in case of death, there are also maturity benefits which means a certain amount would be paid to the insured in case he survives the term of the contract of insurance.
If you have life insurance, you also get other benefits from the government such as tax rebates under section 80C under the Income Tax Act, 1961. The other terms of the contract are how much premium amount one has to pay, the end of the policy and the period or duration of the agreement.
If you want a high sum at the time of death, then you have to pay a high premium. When any untoward incident happens, the life insurance policy helps in keeping your family financially stable.
For your monthly premium, it ensures that your dependents can cover the costs such as lost income, expenses towards education, it also covers funeral costs in the term of the contract. The insurance company also pays the mortgages and outstanding payment of the agreement
The Key Reasons for Purchasing Life Insurance
Following are the key reasons for choosing proper Life insurance policy plans and companies in India
Aids in Achieving Long-term Goals
- Since it helps in keeping a long term investment, it would aid in achieving long-term goals such as planning retirement or buying a home.
- There are different types of policies which come with diverse investment options.
- There are some policies tied with certain investment products which yield dividends based on their market performance.
- If you are choosing for an investment-linked policy, be sure and aware of the potential risks and returns of your money.
Irrespective of your plan, you could save tax with insurance policies. Your premium is eligible for a maximum tax benefit of Rs. 1.5 lakh under Section 80C, and tax-free proceeds on death or maturity under Section 10 (D) of the Income Tax Act, 1961.
Dealing with Debt
A right life insurance policy plans and companies in India helps in taking care of any outstanding debt such as personal loan, credit card loan, home loan, vehicle loan. It helps you and family to deal with financial liabilities during a crisis.
This protects the business of the insured and lets a business partner to buy the shares of the deceased. This business insurance helps the family members of the dead as their business would keep running even after the death of the earning member who took care of the company.
In simple words, if the deceased had a business partner, that business partner would pay out the family of the dead, and buy the deceased’s share of the business. And in addition to the life insurance money, the family of the deceased also get the business share value.
Life Insurance Advantages
Let us see advantages of Life insurance policy plans and companies in India
Loan against life insurance policies is a well-established form of the financial revolution. Many financial companies check out the surrender values of the insurance policy and pay loans against the amount. This safe and quick way helps most of us in generating immediate cash.
An Investment Form
Most of us buy life insurance as a part of our investment. Most of the insurance policies guarantee a fixed sum of money payable either on the death of the insured person or at the expiry of the predetermined tenure. Therefore, many people keep a part of their earnings as an investment in life insurance.
While buying a policy, the insured person has to choose the recipient of the plan. In this way, the person paves a path to satiate the material needs of his/her loved ones.
Stay with Peace
Death in unexpected and unavoidable. In such a tragedy face, at least securing your family for their financial need is a must. Though it is a small policy, it will help your family in your absence. So, taking a life insurance policy always makes you stay with peace of mind.
Life Insurance Companies in India
There are many top and prominent life insurance companies in India which provides Life insurance policy plans, and some of them are:
This company is a government of India undertaking, and it is the oldest and most trusted life insurance companies in India.
The mission and vision of the Life insurance corporation of India are to provide world-class services at affordable rates. The company helps with the mobilization of people’s savings by meting out insurance-linked savings.
LIC invests the savings of investors keeping in mind the benefit of the investor as well as the whole community. The corporation spends people’s money never forgetting that the money belongs to the investor and not the corporation.
This company Insurance offers transparency in dealings, and hence trustworthy.
Bajaj Allianz life insurance should be your choice of the insurance company because the transactions here are paperless and electronic transactions take place. This insurance company helps you set your monetary goals urging you to start investing and saving early in life.
Something that each investor asks when investing in a company is whether the company has chances to stay solvent in the coming decade or two, and the answer concerning this company is that the company is 582%solvent, so your money is safe.
The investments that all its investors have made with the company are to the tune of 50,000 crores.
ICICI Prudential Life Insurance happens to be the first private player in the life insurance market; hence it becomes trustworthy. It has a comfortable claim settlement ratio of over 96%.
ICICI Prudential Life Insurance specifically lays down terms when it is detected that you have heart ailments or cancer. The company hands over your claim amount at the time of diagnosis itself, and you do not need to pay more installments after the diagnosis.
This is a dependable company. The values of this insurance company are to be accessible easily in times of investor trouble, sensitivity in times of distress, and living up to company values.
Birla Sun Life Insurance is an Aditya Birla Group insurance company. It has around 600 branches, and you are bound to find an office in your vicinity.
Birla Sun Life Insurance is a reliable company and suitable for first-time investors. Just send the company a message, and you would be informed about policy and fund-related information. The company has a public customer service with the company seeking regular investor feedback about its products and services.
HDFC Standard Life Insurance is the third biggest private player in terms of business. The claim settlement ratio and grievance redressal are main areas where the company wins.
HDFC Standard Life Insurance has a presence in 980 cities with 400 branches. The company offers individual plans for women and children.
The company urges the new adults and those who are 18-year-olds to start investing. This scheme is also related to the young star policy to meet education and marriage needs of young adults. Legally, this company is very reliable.
Max Life Insurance is another major player in the insurance domain and has 100% grievance redressal ratio which makes it trustworthy to work
SBI Life Insurance is a life insurance company which is a joint venture of SBI and a France based banking. It happens to be the third most dependable of all insurance companies.
Types of Life Insurance Policies in India
Let us see in detail Life insurance policy plans and companies in India which provides such policies.
Whole Life Insurance
Whole Life Insurance – Life coverage to the life assured for the entire life. This insurance is permanent life insurance is more expensive than other life insurance, and the insured has to pay the premium right up to the date of his death.
It is called pure life insurance, the second kind of permanent life insurance is when the time of payment by the insurance company is either a fixed date or the date of the demise of the insured whichever is earlier, risks for having been covered.
This type of policy is permanent life insurance. It offers a saving component, along with lifelong protection as long as the insured pays the premium. This policy provides a death benefit to the beneficiary after the demise of the insured.
Term Plan – Pure risk coverage. This plan is the cheapest or easy on-pocket life insurance. It caters to the education of your children and the monthly expenses of the family.
It can also pay off your loans, the most fantastic part about this insurance coverage is that if you need money during your lifetime because someone has fallen critically ill, then you get paid by the insurance provider for the same.
This type covers a specific period. During the policy tenure, if the insured dies, the nominee receives the death benefit. If the insured survives until the end of the policy tenure, the payout will not be provided.
Money Back Policy
Money-Back gives you Insurance cover along with periodic returns. It gives the money back at regular intervals. If death takes place, then you’d get the whole policy benefit without deduction of money back corpus which got covered.
There is also an accrued bonus which your beneficiary would get on your death. This bonus is related to the cashback amount.
It is a kind of endowment plan. It gives a periodic payment during the policy term to the beneficiary instead of providing a lump sum amount at the maturity time of the policy.
The insurer pays a part of the sum insured at regular intervals. When the insured dies during the policy term, the beneficiary gets the full amount assured. If the insured survives until the policy term, he/she receives the remaining amount confirmed.
Unit-linked Insurance Plan (ULIP)
Unit-linked insurance plan (ULIP) – Insurance along with Investment opportunity. Here, the premiums go towards investment in bonds, mutual funds, and shares. It is for those investors who have a high-risk capacity and who wish to protect their children’s marriage and save for the education of the kids.
In a single integrated plan, ULIP offers both insurance and investment. You can pay a premium on a monthly or annual basis where a part of the bonus goes towards life insurance, and the rest amount is invested in the stock market like mutual funds.
Endowment Plan – Insurance with Savings. This life insurance policy not only covers the life of the insured but also helps in saving regularly for a specific period so that the insured can get a lump sum amount at the maturity time of the policy in case he/she survives till the policy term.
It helps in fulfilling your child’s life goals such as education, abroad education, and marriage, etc. This plan offers insurance along with investment for securing the future of the policyholder’s children financially and financing at the turning points in their life including education, marriage, etc.
In this case, the nominee is the child. It is beneficial only for the child. It yields financial assistance to the parents when their children reach a certain age in their life span.
Retirement / Annuity Plan
It plans your retirement. This long-term insurance helps to protect the policyholder from peril. In this plan, the paid premiums will be back to the policyholder as periodic payments after his/her retirement, and they will last till life.
Points to Consider While Purchasing Life Insurance
Following points are important from the point of choosing proper Life insurance policy plans and companies in India
Though there are numerous policies available in the market, do research before purchasing or selecting any life insurance policy plans and companies in India that could give you the full safe and wide benefits.
The most important thing to decide is if you want term life or universal life insurance. Next is how much insurance you need at the time of death, and how much premium you are ready to pay. You have to choose a nominee who would receive the payment in case of your death.
Careful with Terms & Conditions
Before buying or selecting life insurance policy plans and companies in India carefully read the Terms & conditions to avoid bizarrely choosing a plan. Talk to a trusted insurance company agent.
Premium Payment Option
Most of the companies provide the facility of paying premiums in yearly, bi-yearly, quarterly modes. Choose an ECS system that helps in auto-debiting the amount periodically so that there will not be any miss-out.
Find the Policy Quotes
Do connect with a licensed Insurance Agent to know the following services before purchasing any policy. Obtaining relevant information about life insurance. Comparing rates with multiple insurance companies mentioned above.
Individual policies would give you great covers at a low premium, some would make your money grow with tax benefits, some pay you cash at regular intervals as you save tax, some are custom child plans, some savings for your retirement, and some give you insurance cover while covering your life insurance. Finding out the best Life insurance policy plans and companies in India to fit your needs and budget.
Life insurance is not an intricate one to buy for most of us. The important part is to ensure that the purchaser should get enough information about the policy.
In such a way you can protect your investment and your valuable life. Despite its vast benefits, only 10 % of the Indian population has life insurance coverage.
Also, you should start investing and saving through life insurance early in life because it is cheaper that way. But, do not buy an insurance cover you do not need. I hope that was informative.
So we wish you good luck to select proper Life insurance policy plans and companies in India. BE SAFE, BE INSURED, AND BE HAPPY!