Moneycontrol

You are Here : Insurance FAQs

Q. Can-policy holder have both paperelectronic policies?

A. Policy holders can chooseform"which they want their policies issued paper or electronic A policy can be bought or maintained"one form only either"electronic form or papernot"both However,-policy holder can choose to keep some policies"electronic formothers"paper form onlyelectronic policies will be reflected"his e IA accounthe can use repository services only fore policies (and notpaper policies)

Q. Can anyone become or set upInsurance Repository?

A. Noonly entities approved by Insurance RegulatoryDevelopment Authority (IRDA) can becomeInsurance Repository

Insurance Companies cannot set upInsurance Repositorytheir own nor can they hold more than 10 stake"any Insurance Repository

Q. Can I take health insurance plan for my parents whosenior citizen Is there any tax benefit available if I pay premium for them?

A. Yesyou can take health insurance plan for your parents whosenior citizen Now-days so many insurance company has designed product especially for senior citizens Youalso eligible to claim tax deduction us 80D upto Rs 20000- PA if you pay premium for them

SourceCAMS

Q. Can policy holders have multiple e Insurance Accounts if they have multiple Insurance policies issued by various Insurance Companies?

A. No IRDA stipulates thatindividual can have only ONE e Insurance Account across Repositoriesirrespectivethe numberpolicies owned by-policy holder thusif-person hase IA"say Repository A,"any other Insurance Repository All Repositories will have systems"place to check this before openinge IA any application for-second or multiple e IA will be rejected byInsurance Repository Allelectronic policies owned by-policy holder can be credited or held under this single e IA
n Source CAMS

Q. CaneIA be operated byPolicy holder only?

A. Yes,e IA can be operated byaccount holder only during his life timeunless,coursehe has been unfortunately rendered incapable to operate it (incapacity due to mentally unsound means or terminally ill as certified by-medical practitioner) In such circumstances,e IA may be operated byAuthorized Representative (AR) appointed byaccount holder (pl see below for details)

The account holder is strongly advised to keeplog In IDpassword for online accesshis e IA confidentialnot share it"anyone else

Q. How can Insurance Repository provide free service to policy holders Where iscatch?

A. The Insurance Repositories will be paid directly byInsurance Companies whose policiesheld"electronic form"the respective Insurance Repository so that no chargesleviedpolicy holders Insurance Companies will be able to payfees outthe savings that will accrue to them bymigration to issuancemaintenancepolicies"electronic form

Q. How do I collectmaturity amount frominsurance company?

A. Insurance companies send information"advance topolicyholder regardingmaturitythe policy The policyholder will be required to fill-upforms along"the documents attached as per requirement Ifpaper work is done properlyverified thenpayment is either sent by post or directly credited"your bank account

Q. How do I convert my existing paper policy into electronic form?

A. On openinge IAyou just need to write out-requestaddressed toInsurerfor converting your existing paper policy to electronic mode Request Forms for policy conversionavailable"all officesthe respective Insurance Repositories They can also be downloadedrespective websites You need to fill out-separate request for each paper policy that you wish to convert to electronic form These requestsduly signedcan be submitted atrespective Insurance Company or at any Insurance Repository office

If you do not havee IAyou can submite IA opening form"the necessary supporting documents along"the request for converting paper policy to electronic mode

Q. How do I opene Insurance Account (eIA)?

A. To opene IAyou needfill outaccount opening application formthe Insurance Repository along"the necessary supporting documents Application Forms would be available"all officesthe Insurance Repositoryonce theyoperational They can also be downloaded fromrespective website or you can fill outapplication online atwebsite) You can also contact your Insurance Advisor (Agent) forapplication form You can submitsigned e IA application form at any Insurance Repository office If youapplying to opene IA attimebuying-new Insurance Policyit may be best to hand overe IA formalong"the insurance proposal formtoInsurance Company

To opene IAyou need to necessarily have either-PAN or Aadhar number When submitting your e IA applicationplease ensure that you provide copiesyour PAN or AadharAddress Proofproofdatebirthalong"a passport size photograph You also need to showoriginaladdress proof for verification (the listacceptable address proof documents is given elsewhere)

Q. How do I reducecostbuying life insurance?

A. The costa policy could be lowered if one starts buying insurance atearly age (whilerisk is lower) A longer duration policy along"large sum assured would also reducecost Also you will avail discounts if you offer to pay premium annually Select-low cost policy such as-Term product Do not buy riders or additional benefits that may not beadditional benefit to you

Q. How do I understand-life insurance Policy?

A. It is necessary to knowfollowing terms"order to understand-life insurance policy

Premium -amountmoney you have to pay to continue your insurance coverage
The premium amount depends upon
Your age
Policy selected
Modepremium payment
Termpremium payment
Termthe policy

You could choose to pay premium monthly (as-deductionyour salary)quarterlyhalf yearly or annually HoweverthereSingle premium policies"you pay premium once only (hence you do not havefacility to makeeffortpaying premium regularly)

Term -numberyears you choose to insure yourself
The longertermlowerpremium Policy terms vary from-single year to-maximum55 years Not all policies offer you-rangeterms

Premium paying term -numberyears you pay premiumyour policy
The longerpremium paying term,lowerpremium Usuallypremium paying term issame aspolicy term Howeversome policies offer youoptionselecting-premium paying term that is lower thanpolicy term

Sum Assured Face amount -amountinsurance cover you have orminimum amount your family receives"the eventyour demise
Your family could get more than this amount basedthe typepolicy or riders that you select

Bonus Participating profit - is declared byinsurance company each year as-proportionthe sum assured This amount could vary it could be different for different policiesterms
Although declared each year,bonus is-lump sum payment made toinsured person upon maturity or to his family upon death,"addition tosum assured

Bonus is based oninsurance companys assumptions aboutfuture performance Like any other assumptionactual results will be more or less favourable The longertime being projected,greaterlikelihoodvariance frompredicted values Not all companies guaranteeamountbonuseach policy

Guaranteed Addition - is-declaration made byinsurance company it states that irrespectivethe financial resultsthe company,company will payguaranteed amountmoneytoinsured or his nominee
Likebonus amountthis is-lump sum payment made toinsured upon maturity or to his family upon death,"addition tosum assured

Survival Benefit - isamountmoney received at pre-fixedregular intervals byinsured personupon survivalthe termthe policy
Oftenmoney received upon maturity or atendthe termthe policy is also referred to as Survival benefit

Maturity Benefit - isamountmoney received byinsuredupon survivalthe termthe policy
In casepolicies that offer-bonus,sum assured plusbonus fortermthe policy is paid toinsured upon maturity In additionsome policies offer-loyalty addition,is paid as-proportionthe sum assuredis basedthe termthe policy
In casepolicies that offer no bonusupon maturity,sum assured or-refundthe premium or no money is receivable byinsured (dependingthe typepolicy selected)

Cover or Death Benefit - isamountmoneynominee receives frominsurance company uponinsureds death In addition tosum assuredthis would includebonusif any
If additional riders such as Accident Death Benefit or Additional Sum Assured have been selected,amountmoney receivable bynominee could be higher

Returns or Pre-tax yields - Interest earnedthe premiumon-compounded basisispre-tax yield

Post-tax yields - Ifpremium paid for-life insurance policy is used as-tax deduction under section 80Ctheneffective premium paid byinsured is lower Interest earnedthe effective premiumon-compounded basisis known aspost-tax yield

Source SBI Life Insurance

Q. How long will it take forInsurance Repository to open AN e Insurance Account?

A. The Insurance Repository will opene Insurance Account within 7 business days fromdatereceivingeIA application form On openinge IA,Insurance Repository will informapplicantparticularsthe e Insurance Accountusage instructions through emailby post

Q. How much does life insurance cost?

A. The costbuyinginsurance policy dependsthe following factors
The insured persons agehealthhis naturework
Typepolicy selected
Sum assured
Policy terms
Term for paying premiumpayment frequency
Riders (if any) attached topolicy

Q. How much health insurance I should opt?

A. Looking topresent medical cost we should take min sum assured3 lacks We should also keep"mind that once we will be suffered fromdisease then sum assured will not increase sowe should consider higher sum assured to cover inflationary medical cost for future

Q. How much sum assured I should take?

A. Theretwo methodsdecidingsum assuredis human life valueneed based analysis One should use need based analysis method for deciding sum assured In need based analysis method we should add survivors living expensesfuture valueoutstanding life goalsoutstanding debtcostdying (funeralestate lawyers feesetc)subtracts saleable investments,insurance already available The difference issum assured required

Q. How pension plan works?

A. Pension plansalso known as retirement plans for your future financial stability during your old age With ever increasing costliving it has become important that you make arrangements for your retired life When you continually invest"this plan it grows"the compounding effect

Q. I am healthy Why should I take health insurance?

A. Insurance cover is always available for uncertain event once we sufferany disease it is difficult to take coverage for such disease Life is fulluncertainties we do not know when we will be sufferdiseasesaccident soit is better to take health insurance when wehealthy When wehealthy we have numberchoices availablewe can choosebestaffordable plan for us

Q. I do not believe"taking health insurance insteadthat I prefer"creating my own fund?

A. It is good to create-fundonce we sufferdiseases then our fund will last Whereas"health insurance if we availed total sum assured"one policy year then again"next policy year same sum assured is available to us even if we suffermajor diseases If we seeyearly premiumhealth insurance it is ranging1 to 3sum assuredis negligible We also gettax benefitpremium paid for health insurance

Q. I have not paid premium for some time Can I revive my policy?

A. For-regular premium paying policypremium has to be paid within 30 daysthe due date (15 days ifmode selected is monthly) The insurance company provides-grace period duringyou can paypremiumkeeppolicy"force Ifpremium has not been paid withingrace period,policy is considered lapsed

Insurance companies offer various schemes that facilitateprocessreviving lapsed policies A fewmentioned below -

Paying allarrearspremiumthe interest forsame period can revivepolicy In certain cases,company may offer installment revival schemes,"you pay-partthe arrear along"the regular premium,the balancethe revival amount is paid"instalments spread over-yeartwo years

Under another scheme,-money-back policy can be revived by usingsurvival benefit underpolicy (the money receivable frominsurance company at regular intervals) to pay premium plus interest (Ifsurvival benefit amount is lower thanrevival valueyou have to payshortfall If it is higheryou receiveexcess amount)

Source SBI Life Insurance

Q. I have not paid premium for some time I want to discontinue my policy Do I get anything back frominsurance company?

A. The policy holder may get-proportionthe premium back basedtwo conditions The insurance company givesoptiongrace period duringyou can paypremiumkeeppolicy"force
Ifpolicy is been less than 3 years old since you purchased your policynot paid premiumthen you may not receive any money back frominsurance company
If you have paid premium for more than 3 consecutive yearsyou will receive-proportionthe premium paid depending uponassured sumthe accrued bonus if any However,surrender value will vary by companypolicy
The surrender value dependsfactors like typepolicyamountpremiumpolicy termnumberyears for whichpremium has been paidaccumulated bonus

Q. If I already havee IAhow do I buy-new policy"electronic form?

A. Once you have openede Insurance Accountit is quite simple to buy-new policy"electronic form You just need to quote your unique e IA Number"your new insurance proposal form,"a request to issue policy"electronic form Since KYC documents had already been submittedverified when you opened your e IA,Insurer will not do KYC againprovided there has been no change to your KYC detailsmakingprocess simplerconvenient for you

Q. Is it compulsory for all Insurance Companies to offer electronic policies?

A. Yes It ispolicy holders prerogative to opt for-policy"electronic form If-policy holder wants hisher policy (either new purchase or existing)"electronic formthenInsurer is bound to fulfill his her requirement

The choicea Repository for openinge IA isprerogativethe policy holderhence all Insurance Companies will need to work"allInsurance Repositories

Initiallyrepository service will be available for life insurance only over timehealthgeneral insurance (personal lines only) will also be brought withinambitrepository services

Q. Is it compulsory to issue policies"only electronic form (ie is dematerializationinsurance policies compulsoryas"the caseshares)?

A. Noit is not (yet) compulsory to issue insurance policies only"electronic form

Policy holders can chooseform"which they want their policies issued paper or electronic

Q. Should I buy-life insurance policy even if my employer has insured me"a group insurance scheme?

A. It is always sensible to buyindividual life insurance policy because
a The amountinsurance covered by your company may not be-very large cover
b If your employer decides to cut cost then you may no longer be covered
c If you quitcompany then you may no longer be insured
d Age also plays-role The premium goes high as you start getting older

Q. Should I take Life Insurance?

A. A person who have dependents (especially if they areprimary provider) or significant debts that outweigh ones assetsthen you need insurance to ensure that your dependentslooked after if something happens to you

Howeverbuying life insurance doesnt make sense for everyone If you have no dependentsenough assets to cover your debtssurvivor living expensesoutstanding life goalsthe costdying (funeralestate lawyers feesetc)then insurance isunnecessary cost for you

Q. Should I use insurance asinvestment?

A. The primary objectivetakinginsurance policy is to insure youshould be looked asinvestment tool only assecondary objective You could use somethe insurance policies as meansinvestment Therevarious policies offered byinsurance companies These policies offer-fixed guaranteed ratereturn or-market-linked ratereturn

Q. There is no return under Term Plan thenshould I take Term Plan?

A. Remember that nothing is freecost Even if you take ULIP plansMoney Back PlansEndowment Plans or Whole Life Plans every plan attracts mortality chargesyou have to pay If you take term plan then"very small amount you can take higher sum assured

Q. What arebasic elementsLife Insurance?

A. The two basic elementslife insuranceRisk coverage (ie Term Insurance)savings forfuture (ie Pure Endowment)

Q. What arebenefitsgroup life insurance?

A. This scheme provides insurance coverage to-grouppeople under one contract These schemesprovided for employeesassociationssocietiesetc Group insurancemore affordable than other individual insurance plansalso beneficial to those who cannot afford individual life insurance

Q. What arebenefitsholding Insurance Policies"electronic form?

A. Theremultiple benefits"holding insurance policies"electronic form under-single eInsurance Account (e IA) These benefits include

a Safety There is no riskloss or damagea policy as may happen"paper policieselectronic form ensures thatpolicies are"safe custodycan be easily accessed when needed
b Convenience All insurance policiesbe it lifepensionhealth or generalcan be electronically held under-single e IA This means all detailsall policiesavailable"a single account (place) The detailsanythe policies can be accessed at any time by loggingtoonline portalInsurance Repository Premium for allpolicies can be paid onlinemany service requests or complaints can be logged at this website
c Single PointService All service requests"respecte IA or anythe electronic policies held undere IA can be submitted at anythe Insurance Repository service points there is no need to go toofficesindividual insurance companies for service
d Less Paper work When you want to buy-new electronic insurance policy underexisting e IAyou dont need to go through KYC verification all over againif thereno changes to your KYC details already recorded"your e IA Furtherif you want to make any changes to your personal details like address or contact noit is enough to changedetails"your e IA"the Insurance Repository by submitting-single request Insurance Repository,"turnwill inform allinsurance companies"whom you hold electronic policiesaboutchanges

Q. What aredocuments required to openeIA Account?

A. ID Proof

AADHAR CARD or
PAN Card

Address Proof

A copyany onethe following documents should be submitted as proofaddressoriginalthe relevant address proof should be produced for verification byInsurance Repository

I Ration Card
II Passport
III Aadhar letter
IV Voter ID card
V Driving license
VI Bank Passbook (not more than 6 months old)
VII Verified copies of

a) Electricity bills (not more than 6 months old),
b) Residence Telephone bills (not more than 6 months old) and
c) Registered LeaseLicense agreement Agreement for sale

VIIISelf8208declaration by High CourtSupreme Court judgesgivingnew address"respecttheir own accounts

IX Identity carddocument"addressissued by

a) CentralState Governmentits Departments,
b) StatutoryRegulatory Authorities,
c) Public Sector Undertakings,
d) Scheduled Commercial Banks,
e) Public Financial Institutions,
f) Colleges affiliated to universities and
g) Professional Bodies such as ICAIICWAIBar Council etc to their Members

Q. What areTax benefits applicable to me if I invest"a Life Insurance Policy?

A. If you invest"life insurance policyyou will get deduction under Section 80 Cthe income tax act1956the premuim paid within overall limitRs 150 lacs per year along"other eligible items like Provident fundEPFNSCELSStuition feerepaymenthome loan etc However"caseamount paid towards life insurance premium exceeds 10the amountthe sum assuredyou will getdeduction only upto 10the sum assured Moreover Whenmaturity proceedsreceivedsame will be fully exempt if premium paidsuch policy did not exceed 10the sum assured"anythe year

Q. What arevarious typesinsurances?

A. The insurance sector is classified into LifeNon-life or General insurance
Under Life insurance,individuals life is covered In simple terms,insureds nominee will receive-certain amountmoney frominsurance company ifinsured individual dies within-specified time
Under General Insuranceeverything is covered Thus,individual could insure himself for his healthpropertyvehicletravelofficeshopeducationeven pets

Q. What coverage available under health insurance plan?

A. Hospitalization expenses for treatmentdiseaseaccident for min24 hrsprepost hospitalization expenses generally upto 30 dayspaid max upto sum assured Hospitalization expense includes Room RentMedicine ExpensesDoctor FeesDiagnostic Expensesother medical expenses related to treatment

Expensesare not paid by insurance companyregistration chargesservice charges nursing care charespersonal expenses such as telephonefaxrefreshment etctaxes levied by governmenttime to timeother expensesare not related to treatment

Q. What do I do if I need to make any changes to my policy or e IA Do I submit-request toInsurance Company or toInsurance Repository?

A. It is best to submit ALL requests"respecteither your e IA or anyyour electronic policies toInsurance Repository Ifchanges are"respect toaccount level detail (like address or phone number),Insurance Repository will executechange afternecessary KYC verificationif any The Insurance Repository will then intimatechanges to allInsurance Companies whose policiesheld"that e IAso thatchangeseffected"allpolicies,"one go (so there is no need forpolicy holder to approachvarious insurance companies individually forchanges)

In caseany changes atpolicy level,Insurance Repository is expected to forwardrequest torespective insurance companyensure thatsame is executedreflected"the electronic policy held"the Insurance Repository

Q. What do I get if I insure?

A. The insured person will get satisfaction that his family is completely insured"case something happens tomajor earning memberthe family His family will get assured sum after his death In monetary termsyou can claim tax-deductions under section 88
Premium paid towards-life insurance policy,to Rs 1,00,000can be claimed as-tax-deduction us 88
Survival benefits or Interim benefitsie money received duringterma money back policytax-free
Maturity benefits oramount received atendthe terma policy is also tax-free
Proceedsa life insurance policyreceived bynominee,tax-free
For-Health insurance policyyou can claimpremium amount,to-maximum limitRs 10,000 us 80D
Moreover,money you receive frominsurance companyduringtermthe policy andor upon maturityis tax-free

Q. What do I get if I survivetermthe policy?

A. The policy holder may not receive any money frominsurance company upon maturity"case he survivespolicy term Howeversome insurance companies offer-term policy"returnpremium amount orsum assured upon maturity Some companies also offer policies along"bonus or profitspolicy holder upon survivingtermthe policy would receivesum assured along"the accumulated bonus

Q. What do I need to pay to maintain electronic policies"my e IA Andisfee for converting my existing paper polices into electronic policies?

A. Allservices provided by Insurance Repositoriesabsolutely FREEcharge to policy holders Policy holders need not pay anything extra to buyelectronic policy or to convertexisting paper policy into electronic form Similarly they need not pay anything to availany services fromInsurance Repositoryincluding online premium paymentservices atrespective online portal

Q. What does my family getmy death?

A. If deaththe policy holder takes place duringtermthe insurance policythennominee designated bypolicy holder receivesassured sum plusaccrued bonusif any
Ifpolicy is along"the bonus policy or participative profits,bonus is payable tonominee"addition tosum assuredonly fornumberyearspremium has been paid
Ifpolicy hasaccident riderdeath takes place due toaccidentthen nominee may receive doublesum assured
Howeverif death takes place afterpolicy has maturedthennominee does not receive anything frominsurance company Therecertain policiesoffer to coverinsurer forsum assured or-partthe sum assuredeven afterpolicy has matured

Q. What is "WaiverPremium"?

A. Waiverpremium isadditional clause"an insurance policywavespremiumpolicyholder fortime he is seriously ill or disabled This feature is however optionalavailable atextra cost

Q. What is-child plan?

A. As-parentyou wish to provide your child"the very best that life offers,best possible educationmarriagelife style Childrens plan helps you save so that you can fulfill your childs dreamsaspirations These plans go-long way"securing your childs future by financingkey milestones"their lives even if youno longer around to oversee them

Q. What is-Guaranteed Surrender Value?

A. You can surrenderpolicy for cash only afterpremiums have been paid for at least three years The minimum surrender value allowed is equivalent toassured percentagethe total amountpremiums paid byholder excludingpremiums forfirst yearall extra premiums for riders

Q. What is-medical examination when buying insurance?

A. An individual buying insurance for-sumRs 600,000above has to undergo-medical examination This is done byinsurance company since it needs to ensure thatprospective client is healthy Alsocompany wants to verify thatobjectivebuying-policy is to insure against-risknot to deceivecompany

Q. What is-Money Back plan?

A. Money back life insurance plan provides for periodic payments during its tenureit gives back money to policyholder at different points"time usually 4-5 years The investments donesimilar to endowment plans Money back policy will give you-fixed percentagethe sum assured after 4 or 5years For exampleifpolicy is20 yearsthen company will pay 15 after every 4 yearsthe remaining 40maturity"accumulated bonus The policy termspayback schemes will varycompany to company

Q. What is-Whole Life insurance product?

A. Whole life insurance risk coversdeaththe insuredwhenever it may happen It means that there is no fixed term under whole life insurance Most policies provide-dividend topolicy holderhelps"retirement

Theretwo variations"the whole life insurance products ie

Pure Whole Life Insurance -"premiumspayable continuously throughoutlifethe insured till death Risk coverage is forentire durationlifethe life insured amount is paidthe happeningthe deaththe insured at any time
Limited Payment Whole life Insurance -"premiumspaid for-limitedshorter periodthe optionthe insured or till death if earlier Risk coverage is however throughoutlifethe insured

Source SBI Life Insurance

Q. What ise Insurance Account (e IA)?

A. A policy holder needs to opene Insurance Account (e IA)"onethe Insurance Repositories to be able to buykeep policies"electronic mode An individual can have only one e IA"any onethe Insurance Repositories Oncee IA is opened,account holder can buykeep all his electronic insurance policies be it lifepensionhealth or general - issued by various Insurers under this single account

Each e IA will haveunique e Insurance Account numberaccount holder should quote this number"all correspondence"Insurance Repository Each account holder will also getunique Login IDPassword to access his accountelectronic policy details onlinethe insurance repository website

Q. What isInsurance Repository?

A. An Insurance Repository is-facility to help policy holders buykeep insurance policies"electronic formrather than as-paper document Insurance Repositorieslike Share Depositories or Mutual Fund Transfer Agencieswill hold electronic recordsinsurance policies issued to individualssuch policiescalled "electronic policies" or "e Policies"

Q. What is Deferment Period?

A. Period betweensubscription datean insurance-cum-pension policythe time at whichfirst installmentpension is received is called as deferment period

Q. What is Endowment product?

A. The insurer will receive-lump sum amount either at death duringterm or at maturitythe term

Source SBI Life Insurance

Q. What is Fund Valuehow it is determined?

A. The valuepolicy isfund value In simple termsit istotal valueunits that you hold"funds
Fund Value = (Numberequity fund units x NAVequity fund) + (Numberbond fund units x NAVbond fund) + (Numbermoney market fund units x NAVmoney market fund)

Q. What is Grace Period?

A. It is-provision given topolicy holders to pay premium"the next 15-30 days since he fails to pay it before due date This period15-30 days is called as grace period

Q. What is Group Life Insurance?

A. This scheme provides insurance coverage to-grouppeople under one contract These schemesprovided for employeesassociationssocietiesetc group insurancemore affordable than other individual insurance plansalso beneficial to those who cannot afford individual life insurance

Q. What is Life Insurance?

A. Life insurance policy gives youprotection against financial losses resulting frominsured individuals death It provides youyour familyfinancial securitycertainty to deal"the aftermathany unfortunate events

Q. What is Redirection?

A. You can redirect your current contribution allocation percentage into various funds It will not impactpercentagethe contribution already invested

Q. What is Switching?

A. A policyholder hasoption to move their investmentsone fund to another within his ULIP plan It does not impactinvestment allocation

Q. What is Term Insurance?

A. Term Insurance covers RiskRisk means Death Here-lump sum amount is payable only if death occurs during-selected period Ifinsured survives tillendthe selected periodnothing becomes payable


Source SBI Life Insurance

Q. What isdifference between "Nomination" "Assignment"?

A. Nomination isact by whichpolicy holder authorizes or gives consent to another person to receivemoney frompolicy The person authorized bypolicy holder is called Nominee

Assignment means legal transferrightone person to another It can be transferred for various reasons The original policy holder is calledassignorthe person to whom it will be transferred is calledassignee Assignment can betwo types Conditional Absolute

Q. What isdifference between health insurance planGeneral Insurance CompaniesLife Insurance Companies?

A. Health insurance plangeneral insurance company worksthe principlereimbursement Inhospitalization expenses (provided thatmin24 hrs hospitalization) is paid upto sum assured

Health insurance planlife insurance companies worksthe principlecompensation Inhospital daily cash benefit (provided thatmin 48 hrs hospitalization)major surgical benefitspaid as perfixed amount under plan opted irrespectiveactual expenses In this typeplan premiumallocated"two parts one is investmentsanother is for providing benefits Generallypremiumexpenses arehigher side"such typeplan

Q. What isfee I need to pay for openinge Insurance Account?

A. Insurance Account is absolutely FREE topolicy holder policy holder does not have to pay anything to opene Insurance Account

Q. What isguaranteed Savingsbonus applicable under-Life Insurance Policy?

A. Theresome insurance policies that guaranteeamountmoney you would receive upon maturity Typicallythis amount is-proportionthe sum assured such as-bonus or-guaranteed addition Lets say bonus is Rs 50 per Rs 1000the sum assuredyou haveinsurance policy for-sum assuredRs 100,000 then you earn-bonusRs 5,000 each yearthe sum assured
Other policies may offer you-guaranteed bonus as-percentage such as-guaranteed addition35 per annum on-compounded basis

Q. What istax benefit available under health insurance plan?

A. As per section 80DIncome Tax Act one can claim deductionpremium paid for selfspousedependent children upto Rs 15000-"FYif tax payer is senior citizen than they can claim deduction upto Rs 20000-"FY

Q. What is unit linked insurance plan?

A. ULIPS provide for benefitsprotectionflexibility"investmentit is insurance cum investment plan The allocated premiums will be applied to purchase units as perfund type basedthe ongoing NAV NAV isvalue per unitthe scheme They provide multiple benefits like life protectioninvestmentsavings flexibilityoptions to take additional coverstax planningetctheyriskier compared to other schemes

Q. What is vesting age?

A. The age atyou start receiving pension"an insurance-cum-pension plan is known as vesting age

Q. What should beduration (term )my insurance policy?

A. The termyour insurance policy should be ideally equal tonumberyears your family will be dependentyou financially Howeverone also needs to ensure that insurance payment period is also equal tonumberyears you plan to work

Q. What should I do if I losemisplace my insurance policy?

A. If you misplace your policy then you can ask for-duplicate document frominsurance company Howeveryou will receive-duplicate policy only after payingnecessary fees coupled"executingindemnity bond
The verification process will be conducted byinsurance companyyou need to carry-premium receiptan identity card

Q. What typeinsurances should I have?

A. To ensure yousafeyou should ensure that you have Health insurance- Life insuranceAccident InsuranceAutomobile insurance- Home insurance

Q. When should I insure?

A. When your family members become dependentyour earning incomeyou should insure yourself The advantagestarting insurance atearly age is thatpremium will be lower at early stages Even if yousingleearningplanning to get marriedyou should thinkbuying-policy nowas it costs less now than it will when you marry
Even if you45,not insuredyou could still choose insurance plans that provide benefits to your familyprovide income during your retirement period

Q. Which Insurance Policies can be held"electronic form?

A. The following typesinsurance policieseligible to be held"electronic form

(a) All individual life insurance policies including healthpension policies Policies issued to groups by registered life insurance companies can also be held"electronic form

(b) All general insurance policies held by individuals including group policies

(c) Any other classinsurance policies that may be notified by IRDA utime to time

Q. Which Life Insurance Plan I should opt?

A. If you need pure protection then Term Plan is best for you

Q. Which typepolicy is best suited for me ?

A. The typepolicy that suits you best dependsmany factorssuch as your insurance objectivesyour incomeassetsliabilitiesnumberdependent members"your familyfamily expense Life insurance policiesbroadly classified"to three categories
Endowment policies
Whole life policies
Pension policies

Endowment policies
Endowment policies coverinsured for-specified period Thus,insured may select to insure himself until retirement eg if he is 25 years oldhe may choose to insure himself for 35 yearsuntil he reachesage60
Upondeaththe insured (duringtermthe policy),nominee receivessum assured plusbonusif any Bonus is paid fornumberyearspolicy was"force

Upon survivingtermthe policyie upon maturity,insured receivessum assured plusbonus fortermthe policyif any Thereafter,insured is not covered bypolicy

Endowment policiesusually more expensive"comparison to whole life policies Endowment policiesbroadly classified into two types - Endowment - Without profitEndowment - With profit

Endowment - Without profit or Term products - offernomineesum assured onlyupon deaththe insured Upon survivingtermthe policy or upon maturity,insured may receivesum assured or-portionthe sum assured or-refundthe premium only Typicallysuch policieslow-cost policies

Endowment - With profit policies - offer-bonus (which could be guaranteed)"addition tosum assuredupon deaththe insured or atendthe termthe policy These policies cost more thanEndowment - Without profit policies Currentlyfour typesEndowment - With profit policiesoffered"the market

Endowment"profit policies
Upon deaththe insured,nominee receives sum assured plus bonus fornumberyearspolicy was"force

Upon survivingtermthe policy or upon maturity,insured receives sum assured plus bonus fortermthe policy The amount receivable upon maturity is tax-free

Many people prefer to buy such policies for terms that mature during their retirement period Often,maturity amount is utilized to supplementpension income (pension income is taxable)

Money back policies
Duringtermthe policy,insured receives-fixed portion (percentage)the sum assured at regular intervals This money received duringtermthe policy is tax-free

Upon survivingtermthe policy or upon maturity,insured receivesbalance amountthe sum assured plus bonus fortermthe policy

Upon deaththe insured,nominee receives full sum assured plus bonus fornumberyearspolicy was"force (Money received byinsured duringtermthe policy is not deducted fromamount paid tonominee)

Money back policies cost more than Endowment - With profit policies Many people prefer to purchase such-policy to utilizemoney receivable for going on-holidayre-furnishing their homes or even re-investingsame amount

Child Plans
The child receives sum assured plus bonus (if any) at-pre-determined time This money is receivable irrespectivethe fact thatproposer is dead or alive

The proposer for such-policy could beparentguardiangrand parent he payspremium forpolicy

Ineventdeathproposerusually no further premiums need to be paid byfamily Howeverdepending uponpolicy type,child may or may not receivesum assured upondeaththe insured However,policy continuesthe child receivessum assured plus bonusif anyatpre-determined timethe policy

Upon survivalthe termthe policy,child receives money atpre-determined time

Such policiesbest suited for planning childrens higher educationmarriage expenses

Unit-linked Insurance Plans
A portionthe premium is invested"the stock market or"a mutual fund Thus,returns earnedsuch-policytransparent (unit-linked) since they can be tracked on-daily basis

The company utilizes balance partthe premium to cover insuranceadministrative costs

Ineventdeathinsured,nominee receives sum assured plus returns earned"the market byinsurance company

Upon survivingtermthe policy,insured receivesreturns earned"the stock market byinsurance company

Whole life Plans
Whole life policies provide insurance untildeaththe insured person
Upondeaththe insured,nominee receivessum assured plusbonusif any

Whole life policies typically offer no survival benefitssince there is no definitive term topolicy However,insured could make withdrawals or take loans againstcash valuethe policy

Typically,cash value (the interest or bonus earnedthe premium)a Whole Life policy is higher than thatan Endowment"Profit policy

Moreover,premium for-Whole Life policy is paid for-longer durationtime (sinceinsurance coverage term is longer) However,insured hasoptionselectingpremium paying term

Pension Plans
Pension policies provide-regular summoney toinsured or to his nominee for-fixed period

The insured hasoptionselecting whenfor how long (term) she or he would like to receivepension amount

Ineventdeaththe insured duringtermthe policy,nominee hasoptiontaking-lump sum amount or receiving-regular pension forremaining termthe policy
It is advisable to have-portfoliopolicies"varied benefitsas-single policy cannot meet all your insurance objectives

Source SBI Life Insurance

Q. Who isAuthorized Representative (AR)?

A. A policy holder who opense IA shall appointAuthorized Representative (AR) who shall be entitled to accessaccount"the eventdemisethe policy holder or"his incapacity to operatee Insurance Account The AR is entitled only to accesse IA so as to knowportfolioinsurance policiesthe nomineesthe respective policies held under that account The Policy Holder can changeARat his discretionduringtermthe eIA The AR is different from-nomineehas only access rights toe IA"the eventdemisethe policy holder

Q. Whom should I insure?

A. Income producer- If you aremajor earning memberyour familyyou need to insure yourself first

Working spouse - If your spouse is also earning then bothyou could takeinsurance cover"a joint-life policy It is-good option for working couple since it could serve as-low-cost policy covering boththem

Children - If you have children you could buyinsurance policy"their names This would also help your children to receive-certain amountmoney when they opt for higher education

PartnerKey-person"the organization If you have-working partner"your firm or-key-person(s)"the organizationyour firmorganization could buy life insurance for them

Q. Why do I need Insurance?

A. You need insurance for
Family that is financially dependentyou If you have-family that is financially dependentyouthen you definitely need to insure yourself The most common reason to buy life insurance is it provide protection to your family incaseany unforeseen events The life insurance proceeds can be used to support your family members"the expenses

Loans or liabilities It is very important to insure yourself if you have taken-loan or mortgaged your assets It not only provides peacemindalso-steady sourceincome for your family

Compulsory saving-cum-investment A life insurance policy could be used as-compulsory saving-cum-investment avenue Proceeds frominsurance policy could be used to fund future expenses such as childs higher education or retirement funds or even-well-deserved holiday

Partner"a firm or Self-employed It is highly needed by people whopartners"a firm or have their own proprietor firms Life insurance can be-critical component for specialized business applications - such as funding-buy-sell agreement The proceedsa life insurance policy could be used to provide cash forpurchasea deceased owners interest"the business or to pay off business liabilities

Other thanRBI Bondsinsurance products areonly other investment products that guarantee yields over-rangetime -5 years to 25 years Insurance companies offer single premium investment products as well as regular investment-cum-insurance products that guarantee high yields over-period

Source SBI Life Insurance

Q. Why should I buy life insurance?

A. Life Insurance provides youyour family"protection against allrisks involvedmoreover providing youopportunity to grow your investments It could be viewed as-long-term investment to provide for your childs future expenses or your expensespost retirement

Source SBI Life Insurance

Q. Will my family receiveinsurance amount immediately after my death?

A. If allrelevant paperwork is donetime then usuallyproceedsthe insurance policymade available tonominee"a period3 months If you have purchased-policy for your child (if he is minor)then please verifydetailsthe policy Some children policies offer no money tonominee upondeaththe proposer orparent

Q. Will my premium amount increase after I have bought-policy?

A. Once you buyinsurance policy,-contract is signed betweenpolicy buyerthe insurance company to pay-fixed amountpremiumgetinsurance cover Hence,premium amount is fixed beforepolicy is takenthe insurance company cannot increasesame later However,Finance Ministry levied-service taxinsurance companies"2002-03could have led to increase"premium
Sections
Follow us on
Available On