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Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during:
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates ‘risk’, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
Life Insurance Vs. Other Savings Contract Of Insurance: At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void. Protection: Aid To Thrift: Liquidity: Money When You Need It: Who Can Buy A Policy? Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest. Policies can also be taken, subject to certain conditions, on the life of one’s spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent’s income and other relevant factors are considered by the Corporation. Medical And Non-Medical Schemes Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending insurance cover without any medical examination, subject to certain conditions. With Profit And Without Profit Plans An insurance policy can be ‘with’ or ‘without’ profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount. In ‘without’ profit plan the contracted amount is paid without any addition. The premium rate charged for a ‘with’ profit policy is therefore higher than for a ‘without’ profit policy. Keyman Insurance Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman. Tax Benefits in Pension Plans : Under Section-80CCC Premiums paid for Pension Plans enjoy a tax benefit of Rs. 1, 000, 00, this limit falls under the same limit of Section-80C. Taxability of Maturity Proceeds : Any sum received from Life insurance policy as maturity proceeds, death benefits is tax-free. In the Pension Plans one-third of the value at vesting date would be tax-free & annuity can be purchased with the rest two-third amount, cash received from this will be considered as part of your income & taxed accordingly. Following are the common riders offered by Life Insurance Players: Accidental Death & Disability Rider : Insurers cover the Insured in the case of accidental death or if they become disabled either partially or permanently owing to the accident. There are certain exclusions to the riders such as suicide etc. which must be checked before buying. Waiver of Premium Rider : This rider has a unique feature wherein you can ceased to pay your premium in case of any unforeseen event like acute illness of the policy holder or accident, however the policy continues to stay alive. Term Rider : This rider adds to your risk cover/life coverage providing for payment of the coverage face amount in event of death of the life insured with lower cost. Insurers have a limit to the maximum sum assured in this rider. LIC has got a Special Money Back Plan for women called Jeevan Bharati offering life cover throughout the term of the plan. After at least two full years’ premiums have been paid; you can enjoy the benefit of full insurance cover even when premiums are not paid for up to three years. It also offers Female Critical Illness Benefit & Congenital Disability Benefit along with Survival/Maturity benefits & bonuses etc. Bajaj-Allianz also offers specific plans for women offering the following Benefits: Life Insurance Coverage Why do you need Life Insurance? Life Insurance Policies at a glance Term Insurance : The Term Insurance policy is a Plain Vanilla Insurance Plan which offers financial help to the family in case of Insured’s demise only during a limited term/tenure of the plan. As & when the policy expires, you don’t receive any benefits at the maturity. One of the most striking features of this plan is its Premium rates which are very low along with the maximum sum assured. Now Insurance Companies have brought in Premium Back Term Plans wherein you get benefits at the maturity of the term even if you don’t make any claims, however this feature tends to increase the overall Premium amount. Following are the Term Insurance Plans by various Life Insurance Companies Endowment plans: The Endowment Plans are basically saving plans which offer Insurance against the Insured’s death during the term of the plan, simultaneously acting as a saving tool. Unlike Term Plans which don’t offer maturity benefits Endowment Plans provide benefits when the policy expires. In the case of the Insured’s death his family receives the sum assured/stipulated coverage along with the accumulated profits/bonus. When the Insured survives the term period he receives the life coverage plus the profits & bonuses. Following are the Endowment Insurance Plans Whole Life Insurance : The Whole Life Insurance Plans are Permanent Insurance Plans which run as long as the Policy Holder is alive. The Insured pays the premium amount throughout his life time. The beneficiary of the policy receives the coverage amount plus the interest & accumulated bonus only at the time of Insured’s death. Following are the Whole-Life Insurance Plans
Retirement Plans : These are basically called savings or annuity plans wherein the Policy holder saves for his retirement by accumulating a corpus which is received at the time of the retirement. The policy holder either pays in lump sums or at regular intervals over a certain period of time. Following are the Retirement Plans
Children Insurance Plans : These plans act as an important saving vehicle for your child’s future helping your child at important milestones of his/her life such as Graduation, higher studies, MBA & at your daughter’s wedding. The Child Plans by Insurance Companies play a monetary shield in such time when you want your child’s dream come into a reality & help them prove their talents & excel in their career. In a nutshell these plans offer financial security to children in the form of savings combined with life insurance by paying at regular intervals so that the money available to your child at pre-determined stages. Following are the Child Insurance Plans Unit Linked Insurance Plans (ULIPs) : ULIP is an investment vehicle combined with the feature of life insurance coverage & tax benefits. Thus offering twin benefit of risk cover & investing in the market-linked instruments, however the policyholder has to borne the risk related with stock markets. You have the option of spending in numerous funds varying from 100% Debt Funds to 100% Equity Funds. The ULIPs should be bought with lot of care as they have upfront charges varying from company to company which range from 10-40%. Following are the ULIPs
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