Life insurance in India was first introduced over 100 years back. However, in our country, which is among the most important in the world insurance companies, the significance of this isn’t as widely acknowledged as it ought to be. This article aims to make readers aware of the basics of life insurance, and specifically about LIC.
But, it must be noted that the information below is not an exhaustive description of the terms and conditions of a LIC policy, nor its advantages or disadvantages.
For more details, please contact our divisional or branch office. Any LIC Agent will help you select the best life insurance policy to meet your needs and provide assistance in connection with your insurance policy.
What Is Life Insurance?
A life insurance plan is a form of contract that promises to pay the amount promised by the personal insurance company (or the designated beneficiary) in the event it is protected.
It is valid for settlement of the insured amount during the time of:
The date of maturity, or
Dates with specific dates that are periodic,
Unfortunate death if it occurs earlier.
Additionally, it permits the payment of premiums through installments to be paid to the Corporation by the individual the insurance covers. Life insurance is regarded as a financial institution that removes the possibility of risk while ensuring that there is no uncertainty and offering aid to families during the tragic loss of the family’s breadwinner.
In most cases, life insurance is generally the sole solution to problems that arise from the loss of a loved one. In essence, life insurance focuses on two risk factors that exist throughout the daily lives of every individual:
There is the risk of dying too soon or leaving a family by itself.
Possibility of living until in the dark with no apparent means for assistance.
Life Insurance vs. Other Savings
The Contract Of Insurance:
Insurance contracts are insurance contracts with the best standard and trust. Technically, they are referred to by the term Berrima fides. The principle of transparency of all the facts is outlined in this essential principle, which applies to all types of insurance.
In negotiating a contract, the insurance company should ensure that all the questions of the proposed form have been addressed. False representations or disclosure or fraud information that could lead to risk could cause the insurance contract to be invalid and void.
Savings plans and life insurance give total security from the dangers of death for the person who has been saved. Furthermore, suppose the person insured passes away in the course of their life. In that case, the insurance policy assures full payment of the amount covered (with bonuses, if appropriate) and, unlike different savings programs, it is only the amount saved (with interest rates) will be paid.
Aid To Thrift:
Life insurance is a way to encourage “thrift.” In addition, it is a great way to build savings for the future as it is simple to pay due to the “accessible” installment option provided by the policy. (Premium insurance premiums can be paid quarterly, monthly, or half-yearly).
For instance: Salary Savings Scheme, commonly called SSS, provides a straightforward way to pay for the cost each month by deducting your wages.
In this case, the employer is the one who pays the amount deducted from LIC. Therefore, this Salary Savings Plan is an excellent alternative for any business or institution subject to specific rules and guidelines.
In the case of insurance, it’s easy to get loans based solely on the security offered by an insurance policy that has value. Furthermore, the fact that the life insurance policy is usually considered security even in commercial loans.
It’s also the best method of obtaining tax-deductible income tax deductions and wealth tax. Furthermore, tax deductions are offered for the amount you pay by the life insurance cost subject to current tax rates applicable to income.
Assessees also have the benefit of legislation that provides relief from tax. In these situations, the insured will have to pay less for insurance than if they did not.
Cash When You Need It
A policy supported by a suitable insurance plan or a combination of strategies can be used to meet specific financial needs that may occur from time to time.
Beginning-in-life, education for children and wedding plans, or regular demands for money over an extended timeframe can be made simpler by following these tips.
Additionally, the funds from the policy could be made available upon retirement and used for any purpose, for example, buying an investment property or buying a house. Additionally, policyholders may provide loans to fund the construction of homes or purchase flats (subject to certain conditions).
Who can buy an insurance policy?
Anyone in adulthood and who can sign a legally valid insurance contract can cover themselves and other people with an insurable interest.
Additionally, it is possible to carry out insurance policies with particular conditions that cover the needs of spouses and children. When underwriting proposals, certain factors like the health status of the individual who is applying for the policy, their income, the one proposing the proposal, and other relevant factors are considered within the Corporation.
Insurance For Women
Before the nationalization (1956) several private insurance companies offered life insurance for women at an additional cost or on strict conditions. Following the nationalization the life insurance policies were not provided under the same terms. The conditions under which life insurance was offered to females are regularly examined.
Presently women who work and earning income are treated in the same way as men. In some instances, the restriction clause can be applied only if the female’s age isn’t over 30 and does not earn an income that attracts income tax.
Medical And Non-Medical Schemes
Life insurance typically comes with a medical exam of the life to be secured. In some cases, LIC has been extending insurance coverage without a medical examination under specific conditions to enable more extensive distribution of insurance coverage and avoid discomfort.
With Profit or without plans
An insurance policy can include “with” or “without ProfitProfit. In the first instance when they are reported in periodic reviews, the bonuses are assigned to the policy and due with the amount of the contract.
If you opt for the “without” plan, profit is paid in the amount agreed upon is paid in full without extra. Thus, the rate of premium that is charged for a profit “with approach is higher than that for the ‘without’ plan.
Keyman insurance is a type of insurance that a company buys in the case of the death of the key employee(s) to protect the business from financial loss that could result in premature death or even the death that of the Keyman.
Information about long-term health insurance, as well as the benefits it offers
Medical costs are no longer affordable for most people and, with the increasing cost of healthcare, it is could increase the next period. Because of the high price of medical costs and the rising cost of insurance, an insurance policy for health is the primary element of your financial assets. Additionally, it will cover medical expenses that occur in the event that you or a member of your family is hospitalized, giving the patient financial aid. Health insurance policies are offered as annual contracts that must renew every year to keep the coverage. Furthermore to the possibility of lifelong renewal provided by all health insurance plans if you keep your insurance when you are ready you’ll enjoy insurance coverage for the rest the rest of your lives.
Health insurance policies are generally offered in an annual plan. But, there are also longer-term health insurance policies which give you coverage that is continuous for a specified period of duration. Have you been aware of the features the long-term insurance policies cover?
What is a medical insurance plan?
A long-term medical insurance policy is an insurance policy that covers health care coverage that is offered for a period of either two (or three) consecutive years. You are required to pay the full amount for the whole time you purchase the policy. The policy will then provide uninterrupted coverage during the duration of the policy without renewals every year.
The advantages that come with long-term plans of insurance
Long-term health insurance plans contain the following features that are essential to consider:
The insurance policy can be used for up to three years, depending on the policy you choose
The price is usually payable in one payment after purchasing the policy. Some companies offer the option of installment-based premiums that permit you to avail of insurance policies that are long-term by paying the premium in equal installments.
There is a significant savings when you choose the longer-term duration
No-claim bonus offers are available each year, even if you’re covered by an insurance policy that is long-term.
Long-term vs . short-term healthcare insurance policies The advantages and consLong-term insurance plans come with advantages and disadvantages when compared with shorter-term health insurance. Let’s take a look at the benefits they provide –
No problems for annual renewal
Health insurance plans that are designed for short-term usage will require renewal following the end of each year to ensure you have coverage throughout the year. This could result in an eventual loss of coverage if you do not renew prior to the due date. When you purchase a long-term insurance plan it is not a problem about annual renewal. If you buy the plan it will be secured by the insurance for a long duration of two or three years.
A higher probability of alapse
A renewal that is regularly renewed is more likely of being a lapse , due to the regularity of renewal each year. However the rate of renewal is less, which means that the likelihood of reversal decreases.
There is a distinct advantage when you choose to purchase long-term insurance plans as you’ll get discounts on premiums by choosing a multi-year policy. The amount can vary from 5% to 10%, and will reduce the price you pay for an annual plan. However, this discount isn’t available in the short-term health insurance plan which makes the cost of premiums higher.
Tax Benefits lost
If you buy the time insurance plan and pay the price in one payment and you are able to deduct your tax-deductible earnings for the year in which your cost is paid. The next year, if there is no cost to pay for the premium and tax deductions are not claimed. So, although you may be able to lower your tax burden in the first year however, during the years following that you have the plan in place, you will lose the tax savings benefits of buying an insurance plan for health. Short-term plans require annual costs. They also provide tax-free savings every year in the amount you pay for premiums.
Incapacity to adapt the policy
If you buy a longer-term policy, if you aren’t satisfied with your policy or insurance company, it’s likely that you won’t be capable of transferring the policy to another insurer for the time period you’ve already selected. That means you’re bound to the policy for the duration you’ve selected. Because short-term health insurance policies are plans that are renewed annually. They are transferable to a different program at renewal if you’re not satisfied with the policy you bought and/or with your insurance provider.
A bigger pocket pinch
Since you are required to pay the premium for the long-term insurance plan at the time you purchase the plan, you’re susceptible to a greater amount of money in your pockets. Even though the annual premium is believed to be lower than the cost of shorter-term plans but the amount of dividends due may not be enough in the end.
Advantages of buying Long-term Insurance plans
The pros and cons that have been described above outline the benefits and drawbacks of these policies. Here’s an overview of the advantages of these policies for health insurance —
You’re not burdened by the pressure of renewing your insurance every year
You’ll be guaranteed the coverage for the long-term without the chance of alapse during the time frame of coverage
You can claim an additional tax deduction when you buy the long-term insurance plan because you have to pay more in advance for the policy
You can receive premium discounts up to 10%, if you are relying on that the long-term health insurance policy is a good investment.
In order to not need to renew your policy every year, you should consider buying longer-term plans. This will make it easier to keep your health insurance in good standing and ensure you will be able to pay for medical costs you incur should you experience an medical emergency.
How can you pick the best long-term insurance?
Many long-term health insurance plans are available. So, when you decide to take out an insurance plan for yourself, it’s crucial to be aware of the policy you choose. The following factors should be taken into consideration when selecting the best long-term insurance plan to
Choose an inclusive set of coverage
The different health insurance policies offer a variety of coverage benefits therefore you need to pick one that provides the most comprehensive coverage benefits and will provide for all medical costs. A plan that has a wide coverage coverage will cover the most expensive medical costs, which will reduce the amount you pay out of pocket.
In certain long-term health insurances, you may be covered by in a room with rent limits that are sub-limits. Sub-limits limit how much coverage you can get. Additionally should you be admitted to a room which has a more costly rent, the amount of reimbursement will be decreased. This is why you should select policies that do not limit sub-limits so that you receive the maximum coverage through the insurance policy.
Find the costs of premiums based upon the coverage.
It is not advisable to make comparisons between apples and oranges. When choosing health insurance policies it is essential to constantly compare the cost associated and the coverage that is provided through the plan. Before you do that, look at rates of plans that offer similar benefits to those you’re considering. Select one with the lowest cost, without sacrificing coverage.
Find the list of hospital networks.
If you’re looking to reap the benefits of cashless treatment, you should visit an institution that is affiliated with an insurance provider. If you’re in an un-networked facility, the insurance company will settle claims by reimbursing and can place the cost on your pocket. Thus, prior to buying the plan, ensure that you review the list of hospitals that are networked. If there are tie-ups with the hospitals in your vicinity, choose them for rapid reimbursement of any claims.
Long-term insurance plans can offer attractive discounts on premiums when selecting the long-term duration of coverage and also bringing family members into the plan, or if they are fit or otherwise. Check out the discounts offered by various plans choose one that has the most quality. The higher the discount you get, the lower the cost you pay.
In order to ensure all these elements are taken into account, make sure you compare and choose the most appropriate long-term insurance plan that meets your needs. Check to see if all your household members are covered through the plan, and pick that amount sufficient to cover expected medical costs.
How do I buy long-term insurance policies?
It is possible to purchase long-term health insurance plans online after comparing the available plans and selecting the appropriate policy. Policies online are available for purchase at any moment on the company’s site or on the website of an insurance aggregator. Turtlemint is also a platform that permits users to buy a long-term insurance plan on the internet after completing an study. Turtlemint is in partnership with most reputable health insurance providers offering customers the option of the most efficient long-term health insurance policies by the marketplace. After that, you’ll be able to examine the plans offered in terms of benefits as well as the cost of costs before selecting the right policy. Once you’ve chosen the option, you will be able to buy it by contacting Turtlemint by making the payment on the internet. After the policy has been purchased, it will be issued and you will be sent a copy of the policy via email. Turtlemint can also assist customers with their insurance claims health insurance. If you require filing an insurance claim, all you have to do is must contact Turtlemint and its claims department can assist with the resolution of your claim within the shortest time.
Frequently Answered Questions
Have I the possibility of switching insurance companies for a long-term plan of coverage?
The process of switching insurers is known as portability and is allowed when the policy renews after the duration of the policy has expired. When you purchase an insurance policy with a lengthy duration, you can’t change insurers during the duration of the coverage. You must wait until the duration has expire before switching would be permitted.
My no-claims bonus can be in any way affected by an insurance plan that covers long-term medical? Policy?
There will be no effect on the no-claim bonuses you earn when you own an insurance policy that is long-term. However, no-claim bonuses will become available after every year of no claims regardless of whether or not you’ve purchased a long-term health insurance plan or a short-term policy.
Can senior citizens purchase long-term insurance?
Yes, many older health insurance programs have the long-term protection for senior citizens. This is why you should opt for these plans and enjoy the long-term coverage.
Are I able to have the possibility of adding riders on an insurance contract over the long-term?
Yes there is the option of adding riders to your insurance plan. Policies can be purchased either when you purchase the policy or upon renewal is made on the insurance policy.
Can an incoming member be covered under the insurance coverage provided by an insurance plan for long-term?
It is possible that an additional member of the family can be covered at the midpoint of a long-term insurance plan. This can be done by paying an extra fee to the insurance company and filing an application for the person to be added to an insurance plan.
What effect does it have on the waiting time of a long-term health insurance?
The waiting time for pre-existing ailments is not affected if you choose an insurance policy which is a long-term one. The waiting period is shorter after the expiration of that policy’s year no matter if you select an insurance plan with an extended-term policy and an annual policy.
Do you know about the longer timeframe for premium payments on the life insurance policy in India?
The current Coronavirus outbreak has caused a dramatic shift in the world of business. With the lockdown extended to prevent it from spreading the virus , and the emphasis on social distancing and social integration, companies are looking for new methods to manage business. In the meantime, the Insurance Regulatory and Development Authority of India (IRDAI) has issued revised guidelines to the insurance industry to safeguard the policyholders. All the guidelines are designed to provide relief to customers with insurance policies. The guidelines that was issued through the IRDAI was designed to extend grace periods to pay Life insurance rates.
It’s quite a joy, isn’t that? But do you know when the extension is granted and what the grace time is designed for?
It’s a term utilized in the context of insurance policies. It’s also relatively easy to understand. It’s the reason for the Grace time and the changes which IRDAI suggests. IRDAI has made.
What is a grace time?
A grace period refers to a period of time which can be extended in the life insurance policy to pay for premiums after the payment. It is the time where the insurance coverage won’t expire. If the policyholder is able to pay their claim within the grace period, the policy will last without expiration. If the premium isn’t paid in the grace period and the policy is terminated.
Duration of the grace period
For policies where premiums are due each year either quarterly or semi-annually, or every half-year insurance companies offer the option of (30) (or 31) days (one month) as an additional grace period. In this instance, the deadline for the payment of premiums for a life insurance policy will be June 30. In the event that premiums are due annually, the policy owner has until July 30 to pay for the premium due. The period from June 30, to July 30, could be referred to as a grace period where the insurance would be kept. If dividends aren’t received in the thirty days preceding July 30, the insurance would end on the 31st of July.
If, however, premiums are due every month The grace period allowed could be up to 15 days. So, if in the preceding example dividends were due every month and the grace time is 15 calendar days, the grace period would be extended to July 15. On the 16th day, which is July 15, the grace period is over.
IRDAI’s guidelines for extension of grace periods
The Coronavirus pandemic triggered the order to lockdown the government from March 25 in 2020. The lockdown created an obstacle to the freedom of movement of people and businesses as well as the closure of their premises. The lockdown meant that those who held life insurance policies scheduled renewal in the month of March were unable to not pay for premiums due to the lockdown. In the interest of the policyholders IRDAI granted extended grace periods in order to pay dividends. As per the latest guidelines of IRDAI that policyholders who have premiums due by March 20th, 2020, are able to make payments on life insurance until the 31st of May, 2020, and the policy is not cancelled. The grace period policyholders are given is extended to May 31, 2020.
Justifications for prolonging the grace period
The main reason behind IRDAI’s decision to extend this grace period is to allow customers to renew their life insurance quickly. This will cut down the amount of time between renewals, which will allow policyholders to have continuous coverage on the term insurance. In the event that the lockdown has caused an economic recession for the population. In that scenario it is important to think about their financial plan over the duration of the extended grace interval prior to paying the sum to make sure the life insurance policy are in force. Furthermore, the extended grace time is also designed to keep customers from having to visit the offices of the insurance company in order to get their policies renewed in the event of a lockdown. IRDAI has demanded that insurance companies provide payment options online to pay premiums so that customers can pay for their insurance from the comfort of their home.
What will the guidelines do to the owners of insurance policies?
The IRDAI’s advice is an important source of comfort for those concerned about paying the fees for life insurance under the event of a lockdown. If, for instance, you haven’t paid your premiums by March 2020, then you may be eligible to pay your premiums during the grace period that has been extended and still reap the full advantages from your policy. In contrast, when you’re facing financial issues because of the lockdown, you may be able to arrange for money to be used in the extended period to cover the cost of cost of the insurance and keep it indefinitely without having to renew. From the standpoint of the insurance policyholder, it is beneficial as it keeps them free of lapses.
What effect will the guidelines affect the insurance business?
Insurance companies have also been delighted by the prolonged grace period, as it will result in more durable policies for their clients. The amount of policies in force will measure the persistence at end of fiscal year, compared to the total amount of policies issued by the company. Persistently higher is advantageous since it provides insurance companies with a profit from their premiums, which helps them cover expenses and generate income. Furthermore, because customers are able to enjoy a longer grace period, policies will last longer and will result in more efficient collection of premiums for insurance companies.
The latest IRDAI guidelines for extended grace period will benefit both the policyholder as well as the insurance firms. Furthermore, this step was required during the unpredictable period of lockdown in the national economy and it is anticipated that it will aid the insurance business.
Frequently asked questions
Does the grace period extended to medical insurance policies as well?
This particular rule is relevant to coverage of life insurance. Health insurance policies that has a premium payment date that is in the month of March, 2020, and between the 3rd of May, 2020 between March 25, 2020 and May 3, 2020. the grace period lasts until May 15, 2020. (Source: Economic times)
What happens if the insured dies during the grace period but is unable to pay the premium due?
In the grace period, the insurance coverage remains included in a life insurance plan. In the event that the insured dies within the grace period, insurers will offer funeral benefits after paying the premium due.
If I make my payment within the grace time, will I be subject to additional interest?
It’s not true that the amount you pay on the due date doesn’t have to pay interest. It’s just necessary for the payment of the compensation.
What happens if your policy has been scheduled to expire within the grace period of extended duration and the premium hasn’t yet been paid?
If the policy’s maturation the maturity benefit will be paid to the insurance company, after deducting the amount due in premium.
Tests and medical information for temporary insurance protection in India
An insurance term is thought to be the most straightforward type of insurance which covers the possibility of a premature death. It will provide financial protection for families if an insured dies during the duration of insurance. The policy allows the insured to receive an enormous amount of money assured, as the premiums are reasonable. The substantial amount assured lets the insured build an amount enough to cover their family during the event of his death , before it happens. This strategy helps in ensuring that income is replaced should loss of the breadwinner.
A term insurance policy, therefore, is a crucial security which shouldn’t be overlooked. Additionally, when you purchase insurance, an amount that is large enough to be selected to ensure the greatest security to your family members in your absence. If you opt to purchase a large sum of money, you have to comply with the requirement to undergo an examination by a physician in order to purchase term insurance prior to the policy is accepted.
The requirement of an examination by a doctor can deter those who are considering purchasing the term plan. However, these tests could benefit both you as well as insurers. Have you been aware of the times when an insurance medical exam is necessary and the reason?
What is the time when an “insurance” medical exam required?
A medical exam to determine the coverage period is required in any of these scenarios. Under the following circumstances.
You’re over the age of 35.
You choose a maximum guaranteed amount amount of 10,000 INR or greater than
The specific plans aren’t required to pass a medical test to get term insurance for those who are you are 40 years or older. The amount of coverage is reduced in the event of medical exam conditions. In general, amounts of coverage that are greater than INR twenty-five or 20 lakhs, can be granted without medical exams if you’re 45 or more years old. older.
Furthermore, what if you have pre-existing medical conditions, a negative medical history, a family background of the disease or hereditary conditions, or any other medical condition. If that is the situation, the insurance provider may require a medical test to decide if you are eligible for term insurance even if you’re young or have a limited amount of the total sum insured.
Medical exams for insurance term differs among plans and are based of the policies for underwriting of the specific insurance company. It is therefore recommended to consult the medical grid offered by your insurance company in order to determine the age of the person and the amount of money covered when a medical exam for term insurance is required.
What’s the purpose behind an examination for medical term insurance is necessary?
If you decide to pay out the largest amount of money insured and your age is in the upper age range and you’re in the higher age group, the insurance company puts itself risks when it covers you. If you are the victim of a lawsuit that is disputed, the claim will need to be paid. This could affect the financial side of the business. As an example, suppose that the likelihood to be sued is extremely high. In that scenario the business could end up in debt since the insurance premium has to be paid in the first period for the coverage. So, the business will be evaluating your health and determine if you are suffering from any health conditions that could increase the likelihood of make claims. Through a medical exam, the company will then assess your health condition. As an example, suppose that you have an illness that increases your chance of dying or disabilities. In this case, the insurance company may increase costs or decrease the amount that is insured, or reject the insurance offer. If, on the other hand, you are healthy, the insurance company will provide the policy with any other conditions or requirements.
How many medical tests are required in order to get term insurance?
The medical exam tests to be taken are built on the medical grid that is used to provide insurance provided by companies. The range of tests needed will increase with age and the amount of money insured. The initial phase of the medical exam the standard medical exam that covers the following categories:
- Blood pressure
- Weight and height
- Routine Urine Analysis
- Complete Blood Count
- Lipid Profile
- Differential blood count
- Hemoglobin levels
- The fasting period and Post Prandial glucose levels
As the amount assured increases as the sum assured increases, the requirement for medical tests will increase as people age and get older. In addition to the greater sums of money guaranteed. There are additional medical tests must be conducted in addition to the ones mentioned earlier. Based on the grid of medical tests utilized by insurance companies, these tests are testing for treadmills, EEG, etc.
The benefits of having medical tests to determine the validity of short-term insurance
Although many are frightened of the medical tests needed prior to buying insurance for a specific term however, they can prove beneficial. Here are a few good reasons you should think about the benefits of them.
If you opt to take the insurance medical exam it is possible to identify your health issues by yourself. It is then possible to take preventive measures to safeguard your health and well-being.
If you opt to pass the medical examination for short-term insurance, you can get a higher level of coverage that can help provide the financial security of the members of your household.
If there is an insurance claim in the event of death due to an illness, the insurance company would not be able to refute the claim if medical tests are performed prior to the claim is made for the person insured. So, the medical tests included in the term insurance policy could increase the chances of a fast resolution of any claims.
If your health is found to be in good shape by the medical examinations, then you do not be required to cover significant costs for an insurance plan for term, which includes a significant amount of money guaranteed.
The medical tests constitute an important component of purchasing a premium term insurance policy. They should be conducted to ensure the best coverage