There is nothing more important than the safety and security of loved ones. Investing in the right kind of policy can help secure the future. Life insurance policies have been considered to be the most trusted financial investment for the future. The insurance sector has undergone a lot of changes. On 19th January 1956, Life Insurance in India was nationalized via the Life Insurance Corporation Act. We now have many private and government entities offering life insurance policies. These policies are of different types and aim to cater to the different requirements of individuals.
Simply putting it, life insurance is a contractual agreement between the insurance provider and the policyholder. The insurance policy scheme guarantees that the insurance provider will be paying a sum of money to the beneficiaries in case of the policyholder's demise. To avail of this benefit, the policyholder has to pay a certain premium to the insurer. There is a defined term for life insurance. There are different types of insurance policies like health insurance, term life insurance and others.
What is Life Insurance Premium?
As mentioned above, an insurer pays a sum to the beneficiary who is covered under the life insurance policy, and to avail of this, one has to pay a specific amount periodically. This is a payment that the policyholder makes as a part of the cost of the insurance policy. This premium can be monthly, quarterly, annually or semi-annually. The premium will vary based on the total insured amount.
Types of Life Insurance Policies
- Term Insurance Plan- This insurance provides complete life cover. In simple words, it provides death cover for a defined period. This is the easiest way to ensure the safety and security of your loved ones. Moreover, the insurance premium is minimum.
- Endowment Policy- This policy offers a mix of insurance coverage and investment opportunity. It is a long-term saving option with a much lower risk. Besides the insurance cover and lower risk, this policy also has the added benefit of providing the policyholder with a lump sum amount if the policyholder survives until the maturity date.
- Unit Linked Insurance Plan (ULIP) - This insurance plan offers an opportunity to build wealth and life security. The premium that the insurance holder pays is divided into two parts:
- One for life insurance
- The second is for building wealth
- Also, it is a tax saving option.
- Money Back Policy - This one is similar to the endowment policy. In this, the policyholders get survival benefits during the policy. This amount is distributed over a period of policy terms like 5-years, 10-years and 15-years.
- Whole Life Policy - If you are looking for a much safer insurance plan, then a whole life insurance policy is a good option; this policy extends to the whole life of the insurance and gives the policyholder the leverage to withdraw money against the insured sum. The policyholder also gets survival benefits as a part of this policy.
- Child Plan - This plan is good for securing the future of the child. It is used for building capital for important events of a child's life, like higher education, overseas education, marriage, etc. Most of the plans have a one-time payout, which is usually when the child reaches 18. In case of the parent's demise, the payment is made to the child or the family.
Eligibility for Life Insurance
- One who wishes to invest in an insurance plan must be a citizen of India.
- He/she has to undergo a medical check-up. This test is in assistance with the insurance company
- The premium for term insurance of smokers will be higher
How to Apply?
The process of applying for life insurance is pretty simple. Based on the type of policy you want, you must choose the right insurance provider. Then, compare the premiums, and calculate the insurance before making the final call. You can apply online through Policy Player as well.
To make a successful application for life insurance, one has to submit the following documents:
- Address proof like Aadhaar card, driving licence, voter’s ID card, etc.
- Photo ID card
- Passport size photograph
- Age proof like Aadhaar card
- Income proof like payslip or bank statements
The process for claim of insurance policy is simple:
- Fill the insurance claim form
- Add the death certificate
- Policy document
- Legal evidence of the title in case the policy is not nominated
- Form of discharge witnesses
Time-taken for Claim Process
The process of claiming life insurance is simple. In addition to the above documents, the requirement may vary from one insurance provider to another. After completing the form and submitting it, the amount is usually disbursed within 30 days from the day of submission. However, the time taken for disbursal may vary depending on the additional requirements set forth by an insurance provider.
It is advisable that you make sure to invest in a good policy and secure the life of yourself and your loved ones.