Premium is the amount of money you have to pay to continue your insurance coverage.

The premium amount depends upon
• Your age
• Policy selected
• Mode of premium payment
• Term of premium payment
• Term of the policy

Term is the number of years you choose to insure yourself.
The longer the term the lower the premium. Policy terms vary from a single year to a maximum of 55 years.

The amount of insurance cover you have or the minimum amount your family will receive in the event of your demise.
Your family could get more than this amount based on the type of policy or riders that you select.

Survival Benefit is the amount of money received at pre-fixed, regular intervals by the insured person, upon survival of the term of the policy.

Often, money received upon maturity or at the end of the term of the policy is also referred to as Survival benefit.

It is the amount of money received by the insured, upon survival of the term of the policy.

Insurance Cover or death benefit is the amount of money the nominee receives from the insurance company upon the insured’s death. In addition to the sum assured, this would include the bonus, if any.

Surrender Value is the amount the insured receives, if he / she surrender’s the policy before the maturity

Waiver of premium is an additional clause in an insurance policy which waves the premium of policyholder for the time he is seriously ill or disabled. This feature is however optional and available at an extra cost.

In a single premium policy, payment is made at the beginning of the term.

Period between the subscription date of an insurance-cum-pension policy and the time at which the first installment of pension is received is called as deferment period.

An annuity is similar to receiving pension. In annuity you will get regular payment for life after investing a lump sum investment.

An Insurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form.

Death benefit in whole life policy is the annuity or pension which is paid to a beneficiary after the passing away of the life insured, either as a lump sum or through regular payments.

There is no limit on the number of term insurance plans that you can take. However, insurer typically do not offer a term cover for more than 20 times a person’s annual income.

No

Endowment plan is a life insurance policy, which has different options like money back, child policy etc.

The amount of Life Insurance coverage you need will depend on many factors such as:
• How many dependants you have
• What kind of lifestyle you want to provide for your family
• How much you need for your children’s education
• What your investment needs are
• What your affordability is

It is beneficial to have the term policy active until retirement or financial goals are achieved.

It is always sensible to buy an individual life insurance policy because
a. The amount of insurance covered by your company may not be very large.
b. If your employer decides to cut cost then you may no longer be covered.
c. If you quit the company then you may no longer be insured.
d. Age also plays a role. The premium increases as you start getting older

Yes, nominee can be changed and there is no consent required  from the existing nominee.

Yes, it is mandatory to keep them updated about the insured’s health condition or issues developed post-policy purchase.

Yes, it is mandatory to keep the insurance provider updated about the insured health condition to ensure that your personal information always remains updated with the insurance company

To update your insurer’s records with the new address, you should write to your insurance company and update them about the change in your address along with the new address proof.

Loan against insurance policies are cheaper and easily available than personal loans. These are offered as a percentage of the surrender value accrued for the policy after a period of 3 years from the start of the policy.

One must take a loan against insurance policies only in case of an emergency.

In case of loss of original life insurance document:

• Inform the insurance company and submit an application for issue of duplicate policy along with FIR copy, advertisement and indemnity bond
• Lodge a police complaint and get a copy of FIR
• An advertisement to be placed in local daily local newspaper in English and local language
  • Ad should report the loss of policy and
  • Appeal to inform the advertiser if the policy is found by anyone
• Indemnity bond on stamp paper to be signed by applicant

Insurance companies come under the regulatory authority of IRDA

• IRDA protects policyholders if insurer fails
• Insurer must provide for adequate reserve of fund vis-à-vis its liability
• Regulator keeps tab of solvency ratio
• Solvency levels determines the insurer ability to pay claim and is an indicator of insurer’s health
• Insurance Act provides merger of the failed insurance company with an on-going strong company

In most cases, spouse would be the beneficiary in a life insurance policy. In case of a divorce, one may want to update their child or parents as the beneficiary instead.

In case the policy was bought under Married Women’s Property Act (MWPA), then beneficiary can not be changed.

In case of a joint, investment linked insurance policy, surrender the policy and split the maturity amount (surrender value) received.

If the premium is not paid in time, the policyholder can pay the premium within the grace period which is 30 days from the due date. If the premium is not paid in the grace period, the insurance will lapse.

Assignment of a life insurance policy is the transfer of the property’s ownership, rights and benefits from the original policyholder to another party. The original owner is called the assignor and the new owner is called the assignee.

Yes, NRIs are eligible to purchase term insurance in India. They can buy term insurance plans from the Indian insurance providers. The process of purchasing is similar to that of Resident Indians.

Yes, deaths caused by acts of God are covered by the term insurance plans unless the policy excludes them. Acts of God include deaths caused by natural causes, accidental deaths and natural calamities.

Term insurance does not cover death caused by:

• Self-attempted injuries
• Participation in risky sporting activities like bungee jumping and river rafting
• Dangerous and chronic diseases like HIV and AIDS.
• Drug overdose
• Criminal activity

The following payout options are available with Life Insurance:

Lumpsum – A single death benefit payment

Annuity – A portion of the death benefit is paid as lumpsum and the rest is converted into an annuity

Installments -The payment is made in installments over a period of time

Delayed payment – the death benefit is paid out at a later date allowing the beneficiary to earn interest on it

Interest income and accumulation – the beneficiary can receive the funds flexibly

Fixed period income – a specific type of income payout

Lifetime income – the beneficiary receives regular payments for their lifetime

• a) All insurance policies must be issued in e-format
• – physical format can be asked for by the policyholder
• b) Key documents with a life insurance policy
• i) Covering letter for the policy document informing the free look period
  ii) Policy document
  iii) A copy of the proposal form submitted by the prospect
• iv) Copy of benefit illustration
  v) Customer Information Sheet (CIS)
  vi) Copy of need analysis document under suitability assessment, if any,
  vii) Any other document as may be required by the specific product.

• Type of insurance
• Sum assured
• Benefits
• Exclusions
• Important details: Information about the free look period, policy renewal date, options like policy revival and loans, and other relevant details.
• Claims procedure
• Policy servicing
• Grievance redressal

– The death claims should be settled within 15 days of initiating the claim.

– Death claims where investigation is required, the settlement should be done within 45 days of intimation of the claim.

– Surrender or partial withdrawal requests should be settled within 7 days of initiating the claims

-Claims not settled within the specified timelines, interest @ bank rate + 2% from the date of receipt of intimation till the date of payment.

Some banks are offer life insurance coverage on debit cards

• Documents Required during Claim:

1. Death Certificate of the Insured
2. Identity proof of the Insured and the Claimant
3. Relationship proof between the Insured and the claimant
4. Other relevant documents

• E-insurance account (eIA) is a repository where an individual can access and manage all their insurance policies
• Includes life, health and other insurance policies.

Features and Benefits of E-Insurance Account

• No risk of policy theft or loss
• No more hassle of maintaining physical policy documents
• View and manage all insurance policies at one place
• One time KYC submission enough for all insurance policies
• Every individual can have only one e-insurance account
• Every e-insurance account has a unique account number that can be used for all communication across policies

If you stop paying premium, the policy lapses and the cover ceases.

Yes, and depends on the type of policy, its terms and varies from one insurance company to another. Here is an example :
The number of premiums paid / total number of premiums) X sum assured.

Typically, if the policy is surrendered before completion of 2 years, you will not receive the principle or return.

You cannot exit before 5 years of lock in period. After 5 years, one can exit without any extra charges and insured will get back the fund value.

Most insurers generally allow 3 to 5 years to revive a lapsed policy.

The policy holder needs to visit the insurance company. Typically, sum of all premiums along with interest due needs to be paid.A revival penalty may be applicable on the amount to be revived.

To keep a track of your total fund value, you need to know the Net Asset Value of your funds. This NAV is determined everyday based on the market changes. Insurance companies publish an update for these values regularly.

No, you can not borrow against a ULIP.

The policy will lapse and the value of the paid up premiums with fund value (after deducting charges) will move into discontinuation fund. This will earn 3.5% return till 5 years.

You will receive deduction under Section 80C of the Income Tax Act, 1956 for the premium paid within overall limit of Rs.1.50 lacs per year. However in case the amount paid towards life insurance premium exceeds 10% of the amount of the sum assured, you will get the deduction only up to 10% of the sum assured.

The amount received at the time of maturity of the policy is exempt from tax in the hands of the policyholder under Section 10 (10D). If the premium paid for a policy on or after 01/04/2012 exceeds 10% of the actual sum assured, the entire amount received under such policy shall become taxable.

From Feb 2021, the maturity proceeds from ULIP policies would be taxable only if the annual aggregate premium exceeds Rs 2.5 lakhs in a financial year.

From April 2023, the maturity proceeds from insurance policies would be taxable if annual aggregate premium exceeds Rs 5 lakhs in a financial year.

The Married Women’s Property Act ensures that if a married man, including a divorcee or a widower, buys life insurance plan with the MWP addendum, the insurance benefits upon maturity or death are the sole property of nominated beneficiaries and no one else, including the policyholder himself, has any right over these benefits.

Yes