What is Life Insurance in India?

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What is life insurance?
Life insurance is a compensation agreement between the insurance policy holder and the insurer, in which the insurer promises to pay a certain amount of money to the designated beneficiary after the death of the insured person.

Depending on the contract, other problems, such as an incurable disease or a serious illness, may also lead to payment. The policyholder usually pays the premium either periodically or at a time. Benefits may include other expenses, such as funeral expenses.

The main reason for getting a life insurance policy is that your family will be financially safe, even if something happens to you.

The advantage of purchasing a life insurance policy is that you can have more than one life insurance policy. There are no legal restrictions on the number of insurance policies that a person can purchase.

Obtaining a life insurance policy also provides benefits in accordance with the income tax law.

It is profitable to start investing in life insurance policies from an early age.

A group of people can also choose to register a collective life insurance policy that covers the life of a group of people together.

Indian Life Insurance Company
Life Insurance Corporation of India is an Indian legal and investment insurance organization. It was formed under the administration of the Ministry of Finance, Government of India.

The Life Insurance Corporation of India was founded on September 1, 1956, when the Indian Parliament passed the Indian Life Insurance Act, which nationalized the insurance industry in India.

More than 245 insurance companies and insurance companies have joined together to create India’s state-owned life insurance company.

Types of life insurance
1. life insurance for a term – life insurance for a term is a type of life insurance that guarantees the payment of benefits in the event of death if the insured dies within a certain period of time.
You can purchase a life insurance policy for a certain period of time, usually from 10 to 30 years.

Upon expiration, the policy holder may extend the validity of the life insurance policy for another period or convert the policy into life insurance with permanent coverage or allow the termination of the life insurance policy for a period.

To apply for a life insurance policy for a term, the premium is determined depending on the cost of the policy, age, gender and health status.

A medical examination may be required in order for the insured person to fall under this life insurance plan.

It’s cheaper than a permanent life insurance plan.

2. Whole Life Insurance-A whole life insurance policy is a type of life insurance plan that provides you with coverage for your entire life.
This can be done only if the life insurance policyholder pays the life insurance premiums in a timely manner.

It offers a guaranteed payment of the sum insured as a death benefit to the beneficiary under the life insurance contract in the event of the death of the insured person during the entire term of the life insurance contract.

This policy is also called direct life policy or ordinary life policy.

3. Child insurance Plans-A child insurance plan aims to secure your child’s financial future and ensure that your child’s needs are met in the event of an accident.
These plans offer a double advantage in life insurance as well as investment.

This policy has a wide range of advantages as it allows partial withdrawals to meet the requirements of a financial emergency.

The insurance amount must be properly verified before accepting this plan.

4. Retirement Plans-Retirement plans are a type of life insurance plan specifically designed to meet your needs after retirement.
Medical and living expenses can be covered with this type of life insurance plan.

It is a permanent life insurance plan that uses the value of the monetary component to finance retirement.

5. Personnel policy-personnel plans are a type of life insurance that has a dual purpose.
This is a life insurance plan designed to pay a lump sum of money after a certain period of time or after the death of the insured person.

6. Indemnity Policy – A indemnity policy is a type of insurance policy in which the policyholder receives a percentage of the insured amount during a regular period of time.
In the event of the insured person’s death, the beneficiary will receive the entire amount as an insurance sum, and survival benefits are not deductible.

7. Unit–related insurance plans – A unit-related insurance plan is a type of life insurance offered by insurance companies that offers both insurance and placement in a single plan.

Features of life insurance
The life insurance policy will have the following characteristics:

1. issued only on behalf of the policyholder – the policyholder is the person who draws up a life insurance policy and pays the required amounts of premiums. A life insurance policy is issued only in the name of the policyholder.
2. Flexible insurance premiums-you decide to choose the frequency and flexibility of payments for life insurance premiums.
3.La Duration can be customized – The duration of your life insurance policy can be customized and determined according to your needs.
4.La The insurance amount can be determined – you can view the available plans and choose the plan that provides the best return on your investment.
5. payment is made after death or after the expiration of the repayment period – another important feature of the life insurance policy is that payment is made either after the death of the insured person or after the expiration of the repayment period.
6. Appointment of candidates – you can appoint candidates depending on your choice, to whom the insurance amount should be provided.
7.An investment component-investing in a life insurance policy is also one of the types of investments. This gives the advantage that you get a good yield by maturity.
8. Tax benefits-in accordance with the provisions of the Income Tax Act, a deduction is also provided in accordance with Section 80C for the amount of life insurance premiums paid.

Advantages of life insurance
.Death benefit-an insurance company provides a life insurance policy to compensate the insured’s family in the event of death.
.Valuable Return on Investment – you will get a good return on investment by the time of repayment, and this amount can be used for larger investments.
.Financial Planning Assistance-Life insurance policies help with a person’s financial planning, such as savings and future investments.
.Availability of a loan – a life insurance policy can be used by the insured person as a mortgage to obtain a loan for the required amount.
.Income is guaranteed – you will have a guaranteed income when you apply for a life insurance policy. In case of maturity, you will receive the entire insurance amount.
.Tax benefits-Tax benefits can be claimed for life insurance premiums paid during the year.

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