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Life Insurance Life Insurance is concerned with contracts of insurance on human life wherein the life insurance policy provides compensation/sum assured to the insured or dependents in the event of maturity of policy or on occurrence of a peril covered like death, permanent disability of an insured. As per Insurance Act 1938 Life Insurance Business means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death(except death by accident only) or the happening of any contingency dependent on human life, and any contract which is subject to payment of premiums for a term dependent on human life and shall be deemed to include- (a) the granting of disability and double or triple indemnity accident benefits, if so provided in the contract of insurance; (b) the granting of annuities upon human life; and (c) the granting of superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment or of the dependents of such persons. At present as on 20-11-2010 in India life insurance business is transacted by 23 life insurance companies which have been provided licences to do life insurance by IRDA ( Insurance Regulatory & Development Authority).LIC (Life Insurance Corporation of India) is a public sector life insurance company, largest life insurer of India. No other organization can transact life insurance business unless it holds a valid licence given by IRDA. Following is the detailed list of life insurance companies of India along with their websites:
Bajaj Allianz Life Insurance Company Ltdhttp://www.bajajallianzlife.co.in/ Birla Sun Life Insurance Company LtdHDFC Standard Life Insurance Company LtdICICI Prudential Life Insurance Company LtdING Vysya Life Insurance Company LtdMax New York Life Insurance Company LtdMet Life India Insurance Company LtdKotak Mahindra Old Mutual Life Insurance Company LtdSBI Life Insurance Company LtdTata AIG Life Insurance Company LtdReliance Life Insurance Company LtdAviva Life Insurance Company LtdSahara India Life Insurance Company LtdShriram Life Insurance Company LtdBharti Axa Life Insurance Company LtdLife Insurance Corporation Of IndiaFuture Generali India Life Insurance Company Ltd. IDBI Fortis Life Insurance Company Ltd. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. http://www.canarahsbclife.com/ Aegon Religare Life Insurance Company Limited. DLF Pramerica Life Insurance Co. Ltd. Star union Dai-ichi Life Insurance Company LtdIndiaFirst Life Insurance Company LtdAdvantages of life insurance
Important aspects of Life Insurance
Types of Life Insurance Policies
Broadly life insurance plans/policies can be classified in to following categories. Details of company specific products may be seen at website of insurance company before making decision to buy. Names of some products have been given here only as an examples. There are many such products available in different names with insurance companies & before making decision it is advisable to compare the details of products of various companies based on individual’s financial needs, requirements & risk profile. It is advisable to buy one suitable Term Insurance plan( Risk only for large sum assured), one Endowment assurance plan (Plan with returns & bonus) & one Pension/retirement plan & one health insurance plan from life or non-life insurance company for each family.
Term Insurance plansTerm Insurance policies cover only risk of death for the specific term/period of policy. In case of death of insured during the policy period, the sum insured is paid to nominee. In the event of insured surviving after the maturity of term insurance there is no payment. Premium rates are very low of this plan since it covers risk only. Premium can be paid Single or yearly or half yearly. Examples of this plan are Anmol Jeevan-1 of LIC,ICICI Pru iProtect. Whole Life Insurance Plans These plans are called whole life plans since in these plans premium is paid for the whole life of insured or for a limited period and on death, sum insured is paid to the nominee. Only risk of death is covered. Premium can be paid monthly or quarterly or half yearly or yearly or single. Whole life policies are also issued with benefits like endowment assurance. Examples of this plan are Jeevan Anand of LIC. Endowment Assurance plansThese plans provide the coverage of risk of death during the period of policy as well as benefit of survival at the maturity of policy. This is the best plan since benefits on maturity of policy are provided. This plan is available with bonus or without bonus. Premium can be paid monthly or quarterly or half yearly or yearly. Policies may be issued with add-on-covers like accidental death, critical illness. Policies with guaranteed additions are also available. Loans are available on these policies. Examples of this plan are Endowment Assurance policy of LIC, HDFC Premium Guarantee Plan. Money Back plansThese plans are similar to Endowment Assurance plans except that part payments of survival benefits are made periodically at the intervals of 4 or 5 years and final balance payment is made at the maturity of policy with bonus. Entire sum insured with bonus is paid in the event of death any time during the policy period without deducting part payments already made. Examples of this plan are Money Back Policy 20 years & 25 years of LIC. Unit Linked Insurance PlansUnit linked insurance plans are those plans where a units linked fund connected with share market is created and fund value of plan depends upon increase or decrease of value of units. As per guidelines of IRDA minimum lock in period of all ULIP’s is 5 years including top up premiums. During this period, no residuary payments on policies which are lapsed / surrendered / discontinued are made.The residuary payments for policies arising out of policies which stand lapsed/surrendered/discontinued during the lock-in period shall be payable on the expiry of the lock in period.All unit linked products, other than pension and annuity products shall provide a minimum mortality cover or a health cover.All ULIP pension / annuity products shall offer a minimum guaranteed return of 4.5 per cent per annum or as specified by IRDA from time to time, on the maturity date.This guaranteed return is applicable on the maturity date, for policies where all due premiums are paid. Mortality and / or health cover could be offered along with the pension/annuity products as riders, giving enough flexibility for the policyholders to select covers of their choice. In the case of unit linked pension / annuity products, no partial withdrawal shall be allowed during the accumulation phase and the insurer shall convert the accumulated fund value into an annuity at the vesting date. However, the insured will have an option to commute up to a maximum of one-third of the accumulated value as lump sum at the time of vesting. In the case of surrender, only a maximum of one-third of the surrender value can be commuted after the lock-in period. The remaining amount must be used to purchase an annuity Some of the pension plans are also ULIP’s. Some plans also provide for guaranteed additions.Examples of this plan are Pension Plus of LIC,Shield Insurance Plan of Bajaj, ING Prospering Life. Women’s PlansThese are the exclusive endowment assurance plans for women & considering the needs of women there are provisions for additional riders/risks/coverages. Examples of this plan are Jeevan Bharti-1 of LIC, Unit Linked Mahila Gain I & II, of Bajaj. Children’s Plans These are the plans which are taken by parents on their life or life of children for the sake of their children in view of the future financial needs of children for the education, marriage etc.Examples of this plan are Jeevan Anurag, Komal Jeevan of LIC,BSLI Classic Child plan of Birla Sun Life, ICICI Pru Smart kid regular premium,ING Aashirvad. Plans for Handicapped dependents These plans are purchased by parents for the benefit of their handicapped dependents. Examples of this plan are Jeevan Aadhar,Jeevan Vishwas of LIC. Pension plans Pension or annuity plans must be taken by all those who do not have as yet any pension scheme to provide them financial security in their old age/retirement when there is no income from any other source. Pension schemes are mainly of two types. First one for immediate pension and another one for pension at a chosen deferred date. For immediate pension lumpsum is deposited depending upon the amount of pension required and for deferred pension,premium is paid in instalments through out the policy term. Pension plans may be unit linked or non-unit linked. Pension plans can be taken with additional riders like term insurance, accident benefit, permanent disability cover, critical illness. In some pension plans guaranteed additions are also available. There are also provisions to take some % of corpus at the time of maturity. Examples of this plan are Jeevan Nidhi, Jeevan Akshya-VI of LIC, Pension Guarantee Plan of Bajaj, HDFC Personal Pension plan, HDFC Immediate Annuity,ICICI Pru Foreverlife,ING Immediate Annuity. Health Insurance plans Health insurance plans cover hospitalization expenses for the diseases covered in the policy. Plans are mainly offered by Non-life insurance companies. Recently some of the life insurance companies have also started their long term health insurance plans with or without death risk. Examples of this plan are Health protection Plus of LIC,BSLI health plan,HDFC Critical Care Plan, HDFC SurgiCare Plan, ICICI Pru MediAssure. Group Insurance plans Group insurance plans are offered to homogenous groups of individuals like employees of an organization, members of a society or association etc.In this policy instead of individual policies; a group policy is issued which is called Master policy.The terms & conditions of master policy are equally applicable to all individuals of group covered in master policy. Premium of members of Group policy is comparatively lower in view of the group discount in premium offered by insurance company. Group policies may be for Term assurance or Endowment assurance. Examples of this plan are Group Saving Linked Insurance Policy,Group Term Insurance Policy of LIC, Group Annuity ,Group Leave Encashment Policy of Bajaj,ING Group Gratuity. Social Insurance plans These plans are applicable to economically weaker sections & people living below poverty line. Aam Admi Bima Yojana, Janashree Bima Yojana, are such social insurance schemes. Details of these schemes can be seen at www.licindia.com. Mortgage Redemption plans These plans are for payment of outstanding dues on account of mortgaged property due to demise of insured. This is a good policy for those who take housing loans. Examples of this plan are Mortgage Redemption policy of LIC, HDFC Home Loan Protection Plan, Home Assure of ICICI. Micro Insurance plansLife Micro Insurance Plan means any term insurance contract with or without return of premium any endowment insurance contract or health insurance contract with or without an accident benefit rider either on individual or group basis as per terms stated in IRDA Micro Insurance Regulations 2005. Under these plans combined policies of Life with sum insured as low as Rs. 5000 can be opted & premium can also be paid weekly, fortnightly besides on other usual intervals. Jeevan Madhur,Jeevan Mangal of LIC,SBI Life Grameen Shakti of SBI Life,ICICI Pru Sarv Jana Suraksha of ICICI Prudential Life Insurance Co. Ltd, Bajaj Allianz Saral Suraksha Yojana of Bajaj Allianz Life Insurance Co. Ltd are some of the Micro Insurance Plans. Life Insurance ClaimsLife insurance claims are mainly of three types: 1.Maturity/Survival benefit claims 2.Death Claims 3.Disability/hospitalization claims Maturity/Survival benefit claims For maturity claims on maturity of policy insured is required to submit maturity claim form & original policy bond to policy issuing office of insurance company who ensure that cheque towards claim is issued immediately. Death Claims For death claims nominee is required to first immediately inform in writing to the policy issuing office of insurance company & later on as early as possible submit claim form, death cerificate & original policy bond to policy issuing office of insurance company. In case of death due to accidental reason FIR & postmortem examination report is also required to be submitted to insurance company. Disability/Hospitalization Claims For disability/hospitalization claims also, insured is required to first immediately inform in writing to the policy issuing office of insurance company & later on as early as possible submit claim form, admission card from hospital, medical disability cerificate from competent medical/surgical specialist, discharge summary, prescriptions, from hospital, laboratory test reports & original policy bond to policy issuing office of insurance company. In case of accident a copy of FIR is also required to be submitted to insurance company.
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