A. Policy holders can choose the form in which they want their policies issued – paper or electronic. A policy can be bought or maintained in one form only – either in electronic form or paper but not in both. However, a policy holder can choose to keep some policies in electronic form and others in paper form – only the electronic policies will be reflected in his e IA account and he can use repository services only for the e policies (and not the paper policies)
A. No, only entities approved by Insurance Regulatory and Development Authority (IRDA) can become an Insurance Repository.
Insurance Companies cannot set up an Insurance Repository on their own nor can they hold more than 10% stake in any Insurance Repository.
A. Yes, you can take health insurance plan for your parents who are senior citizen. Now a day’s so many insurance company has designed product especially for senior citizens. You are also eligible to claim tax deduction u/s 80D upto Rs 20000/- P.A. if you pay premium for them.
A. No. IRDA stipulates that an individual can have only ONE e Insurance Account across Repositories, irrespective of the number of policies owned by a policy holder – thus, if a person has an e IA with say Repository A, with any other Insurance Repository. All Repositories will have systems in place to check this before opening an e IA – any application for a second or multiple e IA will be rejected by the Insurance Repository. All the electronic policies owned by a policy holder can be credited or held under this single e IA.
/n Source: CAMS
A. Yes, the e IA can be operated by the account holder only during his life time, unless, of course, he has been unfortunately rendered incapable to operate it (incapacity due to mentally unsound means or terminally ill as certified by a medical practitioner). In such circumstances, the e IA may be operated by the Authorized Representative (AR) appointed by the account holder (pl see below for details).
The account holder is strongly advised to keep the log In ID and password for online access of his e IA confidential and not share it with anyone else.
A. The Insurance Repositories will be paid directly by the Insurance Companies whose policies are held in electronic form in the respective Insurance Repository so that no charges are levied on policy holders. Insurance Companies will be able to pay these fees out of the savings that will accrue to them by the migration to issuance and maintenance of policies in electronic form.
A. Insurance companies send information in advance to the policyholder regarding the maturity of the policy. The policyholder will be required to fill-up the forms along with the documents attached as per requirement. If the paper work is done properly and verified then the payment is either sent by post or directly credited in your bank account.
A. On opening an e IA, you just need to write out a request, addressed to the Insurer, for converting your existing paper policy to electronic mode. Request Forms for policy conversion are available in all offices of the respective Insurance Repositories. They can also be downloaded from respective websites. You need to fill out a separate request for each paper policy that you wish to convert to electronic form. These requests, duly signed, can be submitted at the respective Insurance Company or at any Insurance Repository office.
If you do not have an e IA, you can submit an e IA opening form with the necessary supporting documents along with the request for converting paper policy to electronic mode.
A. To open an e IA, you need the fill out an account opening application form of the Insurance Repository along with the necessary supporting documents. Application Forms would be available in all offices of the Insurance Repository, once they are operational. They can also be downloaded from the respective website or you can fill out an application online at the website). You can also contact your Insurance Advisor (Agent) for an application form. You can submit the signed e IA application form at any Insurance Repository office. If you are applying to open an e IA at the time of buying a new Insurance Policy, it may be best to hand over the e IA form, along with the insurance proposal form, to the Insurance Company.
To open an e IA, you need to necessarily have either a PAN or Aadhar number. When submitting your e IA application, please ensure that you provide copies of your PAN or Aadhar, Address Proof and proof of date of birth, along with a passport size photograph. You also need to show the original of address proof for verification (the list of acceptable address proof documents is given elsewhere).
A. The cost of a policy could be lowered if one starts buying insurance at an early age (while the risk is lower). A longer duration policy along with large sum assured would also reduce the cost. Also you will avail discounts if you offer to pay premium annually. Select a low cost policy such as a Term product. Do not buy riders or additional benefits that may not be of additional benefit to you.
A. It is necessary to know the following terms in order to understand a life insurance policy:
Premium - 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
You could choose to pay premium monthly (as a deduction from your salary), quarterly, half yearly or annually. However, there are Single premium policies where you pay premium once only (hence you do not have the facility to make the effort of paying premium regularly).
Term - 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. Not all policies offer you a range of terms.
Premium paying term - the number of years you pay premium on your policy.
The longer the premium paying term, the lower the premium. Usually the premium paying term is the same as the policy term. However, some policies offer you the option of selecting a premium paying term that is lower than the policy term.
Sum Assured / Face amount - the amount of insurance cover you have or the minimum amount your family receives 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.
Bonus / Participating profit - is declared by the insurance company each year as a proportion of the sum assured. This amount could vary; it could be different for different policies and terms.
Although declared each year, the bonus is a lump sum payment made to the insured person upon maturity or to his family upon death, in addition to the sum assured.
Bonus is based on an insurance company’s assumptions about the future performance. Like any other assumption, actual results will be more or less favourable. The longer the time being projected, the greater the likelihood of variance from the predicted values. Not all companies guarantee the amount of bonus on each policy.
Guaranteed Addition - is a declaration made by the insurance company; it states that irrespective of the financial results of the company, the company will pay the guaranteed amount of money, to the insured or his nominee.
Like the bonus amount, this is a lump sum payment made to the insured upon maturity or to his family upon death, in addition to the sum assured.
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.
Maturity Benefit - is the amount of money received by the insured, upon survival of the term of the policy.
In case of policies that offer a bonus, the sum assured plus the bonus for the term of the policy is paid to the insured upon maturity. In addition, some policies offer a loyalty addition, which is paid as a proportion of the sum assured and is based on the term of the policy.
In case of policies that offer no bonus, upon maturity, the sum assured or a refund of the premium or no money is receivable by the insured (depending on the type of policy selected).
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.
If additional riders such as Accident Death Benefit or Additional Sum Assured have been selected, the amount of money receivable by the nominee could be higher.
Returns or Pre-tax yields - Interest earned on the premium, on a compounded basis, is the pre-tax yield.
Post-tax yields - If the premium paid for a life insurance policy is used as a tax deduction under section 80C, then the effective premium paid by the insured is lower. Interest earned on the effective premium, on a compounded basis, is known as the post-tax yield.
Source: SBI Life Insurance
A. The Insurance Repository will open an e Insurance Account within 7 business days from the date of receiving the eIA application form. On opening the e IA, the Insurance Repository will inform the applicant the particulars of the e Insurance Account and usage instructions through email and by post.
A. The cost of buying an insurance policy depends on the following factors:
The insured person’s age, health and his nature of work
Type of policy selected
Term for paying premium and payment frequency
Riders (if any) attached to the policy
A. Looking to the present medical cost we should take min sum assured of 3 lacks. We should also keep in mind that once we will be suffered from and disease then sum assured will not increase so, we should consider higher sum assured to cover inflationary medical cost for future.
A. There are two methods of deciding the sum assured which is human life value and need based analysis. One should use need based analysis method for deciding sum assured. In need based analysis method we should add survivors living expenses, future value of outstanding life goals, outstanding debt, cost of dying (funeral, estate lawyer's fees, etc.) and subtracts saleable investments, and insurance already available. The difference is the sum assured required.
A. Pension plans are also known as retirement plans for your future financial stability during your old age. With ever increasing cost of living it has become important that you make arrangements for your retired life. When you continually invest in this plan it grows with the compounding effect.
A. Insurance cover is always available for uncertain event; once we suffer from any disease it is difficult to take coverage for such disease. Life is full of uncertainties we do not know when we will be suffer from diseases and accident so, it is better to take health insurance when we are healthy. When we are healthy we have number of choices available and we can choose the best and affordable plan for us.
A. It is good to create a fund but once we suffer from diseases then our fund will last. Whereas in health insurance if we availed total sum assured in one policy year then again in next policy year same sum assured is available to us even if we suffer from major diseases. If we see the yearly premium of health insurance it is ranging from 1% to 3% of sum assured which is negligible. We also get the tax benefit on premium paid for health insurance.
A. For a regular premium paying policy, premium has to be paid within 30 days of the due date (15 days if the mode selected is monthly). The insurance company provides a grace period during which you can pay the premium and keep the policy in force. If the premium has not been paid within the grace period, the policy is considered lapsed.
Insurance companies offer various schemes that facilitate the process of reviving lapsed policies. A few are mentioned below -
• Paying all the arrears of premium and the interest for the same period can revive the policy. In certain cases, the company may offer installment revival schemes, where you pay a part of the arrear along with the regular premium, and the balance of the revival amount is paid in instalments spread over a year of two years.
• Under another scheme, a money-back policy can be revived by using the survival benefit under the policy (the money receivable from the insurance company at regular intervals) to pay premium plus interest. (If the survival benefit amount is lower than the revival value, you have to pay the shortfall. If it is higher, you receive the excess amount.)
Source: SBI Life Insurance
A. The policy holder may get a proportion of the premium back based on two conditions. The insurance company gives an option of grace period during which you can pay the premium and keep the policy in force.
If the policy is been less than 3 years old since you purchased your policy and not paid premium, then you may not receive any money back from the insurance company.
If you have paid premium for more than 3 consecutive years, you will receive a proportion of the premium paid; depending upon the assured sum and the accrued bonus if any. However, the surrender value will vary by company and policy.
The surrender value depends on factors like type of policy, amount of premium, policy term, number of years for which the premium has been paid and accumulated bonus.
A. Once you have opened an e Insurance Account, it is quite simple to buy a new policy in electronic form. You just need to quote your unique e IA Number in your new insurance proposal form, with a request to issue policy in electronic form. Since KYC documents had already been submitted and verified when you opened your e IA, the Insurer will not do KYC again, provided there has been no change to your KYC details, making the process simpler and convenient for you.
A. Yes. It is the policy holder’s prerogative to opt for a policy in electronic form. If a policy holder wants his/her policy (either new purchase or existing) in electronic form, then the Insurer is bound to fulfill his / her requirement.
The choice of a Repository for opening an e IA is the prerogative of the policy holder and hence all Insurance Companies will need to work with all the Insurance Repositories.
Initially, repository service will be available for life insurance only; over time, health and general insurance (personal lines only) will also be brought within the ambit of repository services.
A. No, it is not (yet) compulsory to issue insurance policies only in electronic form.
Policy holders can choose the form in which they want their policies issued – paper or electronic.
A. It is always sensible to buy an individual life insurance policy because
a. The amount of insurance covered by your company may not be a very large cover
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 goes high as you start getting older.
A. A person who have dependents (especially if they are the primary provider) or significant debts that outweigh ones assets, then you need insurance to ensure that your dependents are looked after if something happens to you.
However, buying life insurance doesn't make sense for everyone. If you have no dependents and enough assets to cover your debts, survivor living expenses, outstanding life goals and the cost of dying (funeral, estate lawyer's fees, etc.), then insurance is an unnecessary cost for you.
A. The primary objective of taking an insurance policy is to insure you and should be looked as an investment tool only as the secondary objective. You could use some of the insurance policies as means of investment. There are various policies offered by the insurance companies. These policies offer a fixed guaranteed rate of return or a market-linked rate of return.
A. Remember that nothing is free of cost. Even if you take ULIP plans, Money Back Plans, Endowment Plans or Whole Life Plans every plan attracts mortality charges which you have to pay. If you take term plan then in very small amount you can take higher sum assured.
A. The two basic elements of life insurance are Risk coverage (i.e. Term Insurance) and savings for the future (i.e. Pure Endowment)
A. This scheme provides insurance coverage to a group of people under one contract. These schemes are provided for employees, associations, societies, etc. Group insurance are more affordable than other individual insurance plans and also beneficial to those who cannot afford individual life insurance.
A. There are multiple benefits in holding insurance policies in electronic form under a single eInsurance Account (e IA). These benefits include:
a. Safety: There is no risk of loss or damage of a policy as may happen with paper policies; the electronic form ensures that the policies are in safe custody and can be easily accessed when needed.
b. Convenience: All insurance policies, be it life, pension, health or general, can be electronically held under a single e IA. This means all details of all policies are available in a single account (place). The details of any of the policies can be accessed at any time by logging on to the online portal of Insurance Repository. Premium for all the policies can be paid online and many service requests or complaints can be logged at this website.
c. Single Point of Service: All service requests in respect of e IA or any of the electronic policies held under the e IA can be submitted at any of the Insurance Repository service points – there is no need to go to the offices of individual insurance companies for service.
d. Less Paper work: When you want to buy a new electronic insurance policy under an existing e IA, you don’t need to go through KYC verification all over again, if there are no changes to your KYC details already recorded in your e IA. Further, if you want to make any changes to your personal details like address or contact no, it is enough to change the details in your e IA with the Insurance Repository by submitting a single request – the Insurance Repository, in turn, will inform all the insurance companies with whom you hold electronic policies, about the changes.
A. ID Proof:
• AADHAR CARD or
• PAN Card
A copy of any one of the following documents should be submitted as proof of address; the original of the relevant address proof should be produced for verification by the Insurance Repository:
I. Ration Card
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 Lease and License agreement / Agreement for sale.
VIII.Self‐declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts.
IX. Identity card/document with address, issued by
a) Central/State Government and its Departments,
b) Statutory/Regulatory Authorities,
c) Public Sector Undertakings,
d) Scheduled Commercial Banks,
e) Public Financial Institutions,
f) Colleges affiliated to universities; and
g) Professional Bodies such as ICAI, ICWAI, Bar Council etc. to their Members.
A. If you invest in life insurance policy, you will get deduction under Section 80 C of the income tax act, 1956 of the premuim paid within overall limit of Rs. 1.50 lacs per year along with other eligible items like Provident fund, EPF, NSC, ELSS, tuition fee, repayment of home loan etc. 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 upto 10% of the sum assured. Moreover When the maturity proceeds are received the same will be fully exempt if the premium paid on such policy did not exceed 10% of the sum assured in any of the year.
A. The insurance sector is classified into Life and Non-life or General insurance
Under Life insurance, an individual’s life is covered. In simple terms, the insured’s nominee will receive a certain amount of money from the insurance company if the insured individual dies within a specified time.
Under General Insurance, everything is covered. Thus, an individual could insure himself for his health, property, vehicle, travel, office, shop, education and even pets.
A. Hospitalization expenses for treatment of disease and accident for min of 24 hrs, pre and post hospitalization expenses generally upto 30 days are paid max upto sum assured. Hospitalization expense includes Room Rent, Medicine Expenses, Doctor Fees, Diagnostic Expenses and other medical expenses related to treatment.
Expenses which are not paid by insurance company are registration charges, service charges/ nursing care chares, personal expenses such as telephone, fax, refreshment etc., taxes levied by government from time to time and other expenses which are not related to treatment.
A. It is best to submit ALL requests in respect of either your e IA or any of your electronic policies to the Insurance Repository. If the changes are with respect to an account level detail (like address or phone number), the Insurance Repository will execute the change after the necessary KYC verification, if any. The Insurance Repository will then intimate the changes to all the Insurance Companies whose policies are held in that e IA, so that the changes are effected in all the policies, in one go (so there is no need for the policy holder to approach the various insurance companies individually for the changes).
In case of any changes at the policy level, the Insurance Repository is expected to forward the request to the respective insurance company and ensure that the same is executed and reflected in the electronic policy held with the Insurance Repository.
A. The insured person will get satisfaction that his family is completely insured in case something happens to the major earning member of the family. His family will get assured sum after his death. In monetary terms, you can claim tax-deductions under section 88.
Premium paid towards a life insurance policy, up to Rs 1,00,000, can be claimed as a tax-deduction u/s 88.
Survival benefits or Interim benefits, i.e. money received during the term of a money back policy are tax-free.
Maturity benefits or the amount received at the end of the term of a policy is also tax-free.
Proceeds of a life insurance policy, received by the nominee, are tax-free.
For a Health insurance policy, you can claim the premium amount, up to a maximum limit of Rs 10,000 u/s 80D.
Moreover, the money you receive from the insurance company, during the term of the policy and/or upon maturity, is tax-free.
A. The policy holder may not receive any money from the insurance company upon maturity in case he survives the policy term. However, some insurance companies offer a term policy with return of premium amount or the sum assured upon maturity. Some companies also offer policies along with bonus or profits and policy holder upon surviving the term of the policy would receive the sum assured along with the accumulated bonus.
A. All the services provided by Insurance Repositories are absolutely FREE of charge to policy holders. Policy holders need not pay anything extra to buy an electronic policy or to convert an existing paper policy into electronic form. Similarly they need not pay anything to avail of any services from the Insurance Repository, including online premium payment and services at the respective online portal.
A. If death of the policy holder takes place during the term of the insurance policy, then the nominee designated by the policy holder receives the assured sum plus the accrued bonus, if any.
If the policy is along with the bonus policy or participative profits, the bonus is payable to the nominee in addition to the sum assured but only for the number of years the premium has been paid.
If the policy has an accident rider and death takes place due to an accident, then nominee may receive double the sum assured.
However, if death takes place after the policy has matured, then the nominee does not receive anything from the insurance company. There are certain policies which offer to cover the insurer for the sum assured or a part of the sum assured, even after the policy has matured.
A. 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.
A. As a parent, you wish to provide your child with the very best that life offers, the best possible education, marriage and life style. Children's plan helps you save so that you can fulfill your child's dreams and aspirations. These plans go a long way in securing your child's future by financing the key milestones in their lives even if you are no longer around to oversee them.
A. You can surrender the policy for cash only after the premiums have been paid for at least three years. The minimum surrender value allowed is equivalent to an assured percentage of the total amount of premiums paid by the holder excluding the premiums for the first year and all extra premiums for riders.
A. An individual buying insurance for a sum of Rs 600,000 and above has to undergo a medical examination. This is done by the insurance company since it needs to ensure that the prospective client is healthy. Also the company wants to verify that the objective of buying a policy is to insure against a risk and not to deceive the company
A. Money back life insurance plan provides for periodic payments during its tenure, it gives back money to policyholder at different points in time usually 4-5 years. The investments done are similar to endowment plans. Money back policy will give you a fixed percentage of the sum assured after 4 or 5years. For example, if the policy is of 20 years, then company will pay 15% after every 4 years and the remaining 40% on maturity with accumulated bonus. The policy terms and payback schemes will vary from company to company.
A. Whole life insurance risk covers the death of the insured, whenever it may happen. It means that there is no fixed term under whole life insurance. Most policies provide a dividend to the policy holder which helps with retirement.
There are two variations in the whole life insurance products i.e.
Pure Whole Life Insurance: - where premiums are payable continuously throughout the life of the insured till death. Risk coverage is for the entire duration of life and the life insured amount is paid on the happening of the death of the insured at any time.
Limited Payment Whole life Insurance: - where premiums are paid for a limited and shorter period and the option of the insured or till death if earlier. Risk coverage is however throughout the life of the insured.
Source: SBI Life Insurance
A. A policy holder needs to open an e Insurance Account (e IA) with one of the Insurance Repositories to be able to buy and keep policies in electronic mode. An individual can have only one e IA with any one of the Insurance Repositories. Once an e IA is opened, the account holder can buy and keep all his electronic insurance policies – be it life, pension, health or general - issued by various Insurers under this single account.
Each e IA will have an unique e Insurance Account number; the account holder should quote this number in all correspondence with Insurance Repository. Each account holder will also get an unique Login ID and Password to access his account and electronic policy details online on the insurance repository website.
A. An Insurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form, rather than as a paper document. Insurance Repositories, like Share Depositories or Mutual Fund Transfer Agencies, will hold electronic records of insurance policies issued to individuals and such policies are called "electronic policies" or "e Policies".
A. 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.
A. The insurer will receive a lump sum amount either at death during the term or at maturity of the term.
Source: SBI Life Insurance
A. The value of policy is the fund value. In simple terms, it is the total value of units that you hold in funds.
Fund Value = (Number of equity fund units x NAV of equity fund) + (Number of bond fund units x NAV of bond fund) + (Number of money market fund units x NAV of money market fund)
A. It is a provision given to the policy holders to pay premium in the next 15-30 days since he fails to pay it before due date. This period of 15-30 days is called as grace period.
A. This scheme provides insurance coverage to a group of people under one contract. These schemes are provided for employees, associations, societies, etc. group insurance are more affordable than other individual insurance plans and also beneficial to those who cannot afford individual life insurance.
A. Life insurance policy gives you the protection against financial losses resulting from the insured individual’s death. It provides you and your family the financial security and certainty to deal with the aftermath of any unfortunate events.
A. You can redirect your current contribution allocation percentage into various funds. It will not impact the percentage of the contribution already invested.
A. A policyholder has the option to move their investments from one fund to another within his ULIP plan. It does not impact the investment allocation
A. Term Insurance covers “Risk” and Risk means “Death”. Here a lump sum amount is payable only if death occurs during a selected period. If the insured survives till the end of the selected period, nothing becomes payable.
Source: SBI Life Insurance
A. Nomination is an act by which the policy holder authorizes or gives consent to another person to receive the money from the policy. The person authorized by the policy holder is called Nominee.
Assignment means legal transfer of right from one person to another. It can be transferred for various reasons. The original policy holder is called the assignor and the person to whom it will be transferred is called the assignee. Assignment can be of two types Conditional & Absolute.
A. Health insurance plan of general insurance company works on the principle of reimbursement. In which hospitalization expenses (provided that of min of 24 hrs hospitalization) is paid upto sum assured.
Health insurance plan of life insurance companies works on the principle of compensation. In which hospital daily cash benefit (provided that of min 48 hrs hospitalization) and major surgical benefits are paid as per the fixed amount under plan opted irrespective of actual expenses. In this type of plan premium are allocated in two parts one is investments and another is for providing benefits. Generally, premium and expenses are on higher side in such type of plan.
A. Insurance Account is absolutely FREE to the policy holder – the policy holder does not have to pay anything to open an e Insurance Account.
A. There are some insurance policies that guarantee the amount of money you would receive upon maturity. Typically, this amount is a proportion of the sum assured such as a bonus or a guaranteed addition. Lets say bonus is Rs 50 per Rs 1000 of the sum assured and you have an insurance policy for a sum assured of Rs 100,000 then you earn a bonus of Rs 5,000 each year on the sum assured.
Other policies may offer you a guaranteed bonus as a percentage such as a guaranteed addition of 3.5% per annum on a compounded basis.
A. As per section 80D of Income Tax Act one can claim deduction on premium paid for self, spouse and dependent children upto Rs 15000/- in F.Y. and if tax payer is senior citizen than they can claim deduction upto Rs 20000/- in F.Y.
A. ULIPS provide for benefits of protection and flexibility in investment, it is insurance cum investment plan. The allocated premiums will be applied to purchase units as per the fund type based on the ongoing NAV. NAV is the value per unit of the scheme. They provide multiple benefits like life protection, investment and savings flexibility, options to take additional covers, tax planning, etc. but they are riskier compared to other schemes.
A. The age at which you start receiving pension in an insurance-cum-pension plan is known as vesting age.
A. The term of your insurance policy should be ideally equal to the number of years your family will be dependent on you financially. However, one also needs to ensure that insurance payment period is also equal to the number of years you plan to work.
A. If you misplace your policy then you can ask for a duplicate document from the insurance company. However, you will receive a duplicate policy only after paying the necessary fees coupled with executing an indemnity bond.
The verification process will be conducted by the insurance company and you need to carry a premium receipt and an identity card.
A. To ensure you are safe, you should ensure that you have Health insurance, - Life insurance, Accident Insurance, Automobile insurance, - Home insurance
A. When your family members become dependent on your earning income, you should insure yourself. The advantage of starting insurance at an early age is that the premium will be lower at early stages. Even if you are single, earning and planning to get married, you should think of buying a policy now, as it costs less now than it will when you marry.
Even if you are 45, and not insured, you could still choose insurance plans that provide benefits to your family and provide income during your retirement period.
A. The following types of insurance policies are eligible to be held in electronic form:
(a) All individual life insurance policies including health and pension policies. Policies issued to groups by registered life insurance companies can also be held in electronic form.
(b) All general insurance policies held by individuals including group policies
(c) Any other class of insurance policies that may be notified by IRDA u from time to time
A. If you need pure protection then Term Plan is best for you.
A. The type of policy that suits you best depends on many factors, such as your insurance objectives, your income, assets, liabilities, number of dependent members in your family and family expense. Life insurance policies are broadly classified in to three categories
Whole life policies
Endowment policies cover the insured for a specified period. Thus, the insured may select to insure himself until retirement; e.g. if he is 25 years old, he may choose to insure himself for 35 years, until he reaches the age of 60.
• Upon the death of the insured (during the term of the policy), the nominee receives the sum assured plus the bonus, if any. Bonus is paid for the number of years the policy was in force.
• Upon surviving the term of the policy, i.e. upon maturity, the insured receives the sum assured plus the bonus for the term of the policy, if any. Thereafter, the insured is not covered by the policy.
• Endowment policies are usually more expensive in comparison to whole life policies. Endowment policies are broadly classified into two types - Endowment - Without profit and Endowment - With profit.
• Endowment - Without profit or Term products - offer the nominee the sum assured only, upon death of the insured. Upon surviving the term of the policy or upon maturity, the insured may receive the sum assured or a portion of the sum assured or a refund of the premium only. Typically, such policies are low-cost policies.
• Endowment - With profit policies - offer a bonus (which could be guaranteed) in addition to the sum assured, upon death of the insured or at the end of the term of the policy. These policies cost more than the Endowment - Without profit policies. Currently, four types of Endowment - With profit policies are offered in the market:
Endowment with profit policies
• Upon death of the insured, the nominee receives sum assured plus bonus for the number of years the policy was in force.
• Upon surviving the term of the policy or upon maturity, the insured receives sum assured plus bonus for the term of the 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, the maturity amount is utilized to supplement the pension income (pension income is taxable).
Money back policies
During the term of the policy, the insured receives a fixed portion (percentage) of the sum assured at regular intervals. This money received during the term of the policy is tax-free.
Upon surviving the term of the policy or upon maturity, the insured receives the balance amount of the sum assured plus bonus for the term of the policy.
Upon death of the insured, the nominee receives full sum assured plus bonus for the number of years the policy was in force. (Money received by the insured during the term of the policy is not deducted from the amount paid to the nominee.)
Money back policies cost more than Endowment - With profit policies. Many people prefer to purchase such a policy to utilize the money receivable for going on a holiday, re-furnishing their homes or even re-investing the same amount.
• The child receives sum assured plus bonus (if any) at a pre-determined time. This money is receivable irrespective of the fact that the proposer is dead or alive.
• The proposer for such a policy could be the parent/guardian/grand parent; he pays the premium for the policy.
• In the event of death of proposer, usually no further premiums need to be paid by the family. However, depending upon the policy type, the child may or may not receive the sum assured upon the death of the insured. However, the policy continues and the child receives the sum assured plus bonus, if any, at the pre-determined time of the policy.
• Upon survival of the term of the policy, the child receives money at the pre-determined time.
• Such policies are best suited for planning children’s higher education and marriage expenses.
Unit-linked Insurance Plans
• A portion of the premium is invested in the stock market or in a mutual fund. Thus, the returns earned on such a policy are transparent (unit-linked) since they can be tracked on a daily basis.
• The company utilizes balance part of the premium to cover insurance and administrative costs.
• In the event of death of insured, the nominee receives sum assured plus returns earned in the market by the insurance company.
• Upon surviving the term of the policy, the insured receives the returns earned in the stock market by the insurance company.
Whole life Plans
Whole life policies provide insurance until the death of the insured person.
• Upon the death of the insured, the nominee receives the sum assured plus the bonus, if any.
• Whole life policies typically offer no survival benefits, since there is no definitive term to the policy. However, the insured could make withdrawals or take loans against the cash value of the policy.
• Typically, the cash value (the interest or bonus earned on the premium) of a Whole Life policy is higher than that of an Endowment with Profit policy.
• Moreover, the premium for a Whole Life policy is paid for a longer duration of time (since the insurance coverage term is longer). However, the insured has the option of selecting the premium paying term.
• Pension policies provide a regular sum of money to the insured or to his nominee for a fixed period.
• The insured has the option of selecting when and for how long (term) she or he would like to receive the pension amount.
• In the event of death of the insured during the term of the policy, the nominee has the option of taking a lump sum amount or receiving a regular pension for the remaining term of the policy.
It is advisable to have a portfolio of policies with varied benefits, as a single policy cannot meet all your insurance objectives.
Source: SBI Life Insurance
A. A policy holder who opens an e IA shall appoint an Authorized Representative (AR) who shall be entitled to access the account in the event of demise of the policy holder or in his incapacity to operate the e Insurance Account. The AR is entitled only to access the e IA so as to know the portfolio of insurance policies and the nominees of the respective policies held under that account. The Policy Holder can change the AR, at his discretion, during the term of the eIA. The AR is different from a nominee and has only access rights to the e IA in the event of demise of the policy holder.
A. Income producer- If you are the major earning member of your family, you need to insure yourself first.
Working spouse - If your spouse is also earning then both of you could take an insurance cover in a joint-life policy. It is a good option for working couple since it could serve as a low-cost policy covering both of them.
Children - If you have children you could buy an insurance policy in their names. This would also help your children to receive a certain amount of money when they opt for higher education.
Partner/Key-person in the organization: If you have a working partner in your firm or a key-person(s) in the organization, your firm/organization could buy life insurance for them.
A. You need insurance for
Family that is financially dependent on you: If you have a family that is financially dependent on you, then you definitely need to insure yourself. The most common reason to buy life insurance is it provide protection to your family incase of any unforeseen events. The life insurance proceeds can be used to support your family members with the expenses.
Loans or liabilities: It is very important to insure yourself if you have taken a loan or mortgaged your assets. It not only provides peace of mind but also a steady source of income for your family
Compulsory saving-cum-investment: A life insurance policy could be used as a compulsory saving-cum-investment avenue. Proceeds from the insurance policy could be used to fund future expenses such as child’s higher education or retirement funds or even a well-deserved holiday.
Partner in a firm or Self-employed: It is highly needed by people who are partners in a firm or have their own proprietor firms. Life insurance can be a critical component for specialized business applications - such as funding a buy-sell agreement. The proceeds of a life insurance policy could be used to provide cash for the purchase of a deceased owner’s interest in the business or to pay off business liabilities.
Other than the RBI Bonds, insurance products are the only other investment products that guarantee yields over a range of time - from 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 a period.
Source: SBI Life Insurance
A. Life Insurance provides you and your family with protection against all the risks involved, moreover providing you an opportunity to grow your investments. It could be viewed as a long-term investment to provide for your child’s future expenses or your expenses, post retirement.
Source: SBI Life Insurance
A. If all the relevant paperwork is done on time then usually the proceeds of the insurance policy are made available to the nominee in a period of 3 months. If you have purchased a policy for your child (if he is minor), then please verify the details of the policy. Some children policies offer no money to the nominee upon the death of the proposer or the parent.
A. Once you buy an insurance policy, a contract is signed between the policy buyer and the insurance company to pay a fixed amount of premium and get the insurance cover. Hence, the premium amount is fixed before the policy is taken and the insurance company cannot increase the same later. However, the Finance Ministry levied a service tax on insurance companies in 2002-03 which could have led to increase in premium.