Life Insurance | Types of Life Insurance policy, best life insurance companies comparison online, policies, quotes, types, calculator
Losing the loved ones is one of the hardest thing in this world. The emotional disturbance that a person faces after losing someone dear is too difficult to handle. This disturbance cannot be reduced by money for sure, but it can provide financial aid to the family of the demised. This is why there is a need of life insurance.
Though the dead person cannot be brought back by the insurance money but it can ensure that the beneficiary will be able to at least take care of the basic needs of himself/herself.
WHAT ACTUALLY IS A LIFE INSURANCE?
Life insurance can be seen as a contract between the insurer(policy company) and the insured(policy holder) in which the insurer promises to pay a fixed sum of money to the beneficiary(decided by the insured) after the demise of the insured.
It is the most secured way to protect your family from any kind of financial problems after your death. For this you pay a fixed amount of money to the insurer as premium either at regular intervals(smaller amounts) or as lump-sum(a large amounts).
TYPES OF LIFE INSURANCE
There are various types of life insurance. Some are permanent which provide cover for lifetime and some are term life insurance which provide cover only for a fixed period of time.
- Term life insurance: These policies provide protection for a specific period of time that is pre-decided. This type of policy is cheaper than the permanent lifetime policies.
- Whole life insurance: In this type of policies, you are given protection for your lifetime. For this reason, the premiums you have to pay are costlier than the term life insurance but the premiums are fixed.
- Endowment policy: In endowment policies, the policyholder gets protection for a specific period of time and the sum assured along with the bonuses is paid back to him after the tenure completion. Some policies also cover the payment for critical illness.
- Money back policy: In money back policies, the person gets some percentage of the total sum back at regular intervals of time, unlike in endowment policy where you get the total sum assured at the end of the period.
- Unit Linked Insurance plans: This is a combined plan for both investments and insurance. In this, all the money is not spent over the insurance, but some of it is used to invest in different places.
- Child insurance policy: Child insurance policy assists the policyholder to meet the needs of his child. The child gets a lump sum at the time of the death of the policyholder but that does not end the policy. The policy continues and the policy company pays all the premiums and the child gets all the planned benefits.
Though there are various types of life insurance, all types of insurance are usually income tax free.
WHY YOU SHOULD BUY A LIFE INSURANCE?
Here are a few reasons why you should have a life insurance:
- A way of saving: Insurance policies like unit linked insurance plans doesn’t only provides you life cover but also some of the premium money is invested in stocks, equity or debt schemes. This means that along with the insuring yourself, you are also investing your money.
- To pay final expenses: Paying for funerals or burials can be a huge expense for your loved ones, specially when they are already under the emotional pressure because of losing you.
- Looking after your loved ones even when you are gone: When your family is dependent on you and you need to make sure that they get the same financial assurance after you are gone, a life insurance can be a very good idea.
- Dealing with debt: After your demise, the debts which you had taken gets transferred to your children. To avoid this situation, it is better to take a life insurance so that your children don’t have to bear the burden of your debts.
- Treatments of critical illnesses: A life insurance doesn’t provide aid only after your death. Some types of insurance also provide cover against terminal and critical illness.
- Improve your credit score: When you take a life insurance, it also helps you build a good credit score along with providing cover against your death or illness. By making timely payments of all your life insurance premiums you can improve your credit score which may help you later if you want a loan or other insurances.
- Saving tax: The premium paid by you is eligible for tax benefits of Rs. 1.5 lakh under Section 80C, and for tax-free proceeds on death/maturity under Section 10(D) of Income Tax Act, 1961.
- Taking care of business: Life insurance is not just for you or your family, it can also prevent your business from going down because of death of your business partner.
HOW TO MAKE A CLAIM?
In case the policyholder dies, a claim intimation should be sent to the insurance company. Insurance claims can be classified into two categories:
- Death claim: After the death of the policyholder, the beneficiary gets a death claim for which he/she needs to submit a few documents like a fully filled claim form , original policy bond,identity proof of the beneficiary and an original or copy of policyholder’s death certificate.
- Maturity claim: After the maturity of the policy,you can make a claim of maturity benefits. For this you need to submit the original policy bond and maturity claim form.
Before buying a life insurance it is also important that you compare the life insurance plans of as many banks as you can. Here is a comparison of some of the popular life insurance plans.
|Life Insurance Plans||Entry Age||Policy Term||Sum Assured|
|LIC AmulyaJeevan||18 to 60 years||5 to 35 years||25 Lacs/NA|
|LIC New JeevanAnand||18 to 50 years||15 to 50 years||1 Lac/NA|
|LIC Term Plan||18 to 75 years||10 to 35 years||50 Lacs/NA|
|ICICI Pru iProtect||20 to 75 years||10 to 30 years||3 Lacs/NA|
|Aviva I-Life Plan||18 to 55 years||10 to 35 years||25 Lacs/NA|
|HDFC Life Sanchay||30 to 45 years||15 to 25 years||1,05,673/NA|
|HDFC SL Crest||14 to 55 years||10 to 10 years||(7 or 10) x Annual Premium/20 x Annual Premium|
|HDFC Click2Protect Plus||18 to 65 years||10 to 30 years||10 Lacs/10 Crores|
|Aegon Life iTerm Plan||18 to 75 years||5 to 40 years||10 Lacs/NA|
|SBI eShield Plan||18 to 70 years||5 to 30 years||20 Lacs/NA|
|SBI ShubhNivesh Plan||18 to 60 years||5 to 30 years||75000/NA|
|Bajaj AllianziSecure||18 to 70 years||10 to 30 years||20 Lacs/NA|
|Kotak Life Preferred e-Term||18 to 75 years||10 to 40 years||25 Lacs/NA|
|Max Life Online Term Plan||18 to 70 years||10 to 35 years||25 Lacs/100 Crores|
|Bharti AXA eProtect Term Plan||18 to 75 years||10 to 30 years||25 Lacs/NA|
By comparing the plans, you will be able to take a better decision about which plans suits and you and your family the best.