What is Life Insurance Policy?

Life insurance is basically an agreement between a life insurance company and a policy buyer where the insurance company agrees to pay compensation as a death benefit to the nominated beneficiaries upon the death of the insured during the term of the life insurance policy. The death benefit promised by the life insurance company is offered on the exchange of premium paid by the policy buyers.

Life Insurance Policy is the safest and the most secure way to safeguard your family or dependents against various financial contingencies that may occur due to an unfortunate event of your ill-timed demise. Under a Life Insurance Plan in India, the insurance company guarantees to pay a specific sum to the policyholder's family on his/her demise. Also, a life insurance policy can compensate against some other contingencies like a terminal illness or a critical illness if added under the contract. Some other things like funeral expenses can also be received as a part of life insurance benefits if defined in the contract.

Apart from the death benefits, a Life Insurance policy in India also offers maturity benefits. These benefits are generally offered in the form of payment if the insured stays alive through the entire term of the life insurance plan. Furthermore, life insurance plans also provide with a number of tax benefits under Section 80C of the Income Tax Act, 1961.

The life insurance company in India generally establishes the specific premium payment that has to be made by the policyholder to the company. However, the applicant is given the alternative to decide the term of the life insurance policy and the sum assured. The life insurance company takes numerous factors into consideration to determine the premium amount for every individual purchasing this policy. The sum assured is among these factors. Higher the sum assured of a life insurance policy, higher the amount of the premium you are likely to pay.

Why It's Important to Buy Life Insurance Policy in India?

A life insurance policy acts as a financial shield for a possible event linked with human life, such as disablement, retirement, death, accident etc. Since life is a crazy ride, you can't really predict the next move. In the event of the sudden demise of the prime wage earner of a family, apart from the emotional ordeal, his/her family is at the risk of a financial setback. In case this individual is the only bread earner of the family, his/her dependents are faced with a loss of income.

Even though there is no such calculator that can estimate the value of a human life, what needs to be done have to be done at any cost to make sure that you and your family is protected. In order to work out the sum assured, the life insurance company takes your finances and lifestyle into consideration.

This sum assured is provided to insured's family following his/her demise in order to provide them with a much-needed monetary support. You must consider buying a suitable life insurance plan to ensure that your family doesn't have to make any compromises due to financial crunches.

Unpredictability: We can't predict life. We can't really sit here and predict our last day on earth. Anything unfortunate can happy anytime without any warning. If you could really control your life then you wouldn't leave anything to ensure the financial security of your family. It's unfortunate that it's not in your hands.

Therefore, the solution is that you must make sure that you buy a life insurance plan. This way you can be a step ahead so. By purchasing life insurance policy you can accomplish the financial goals that you set for your family even when you will no longer be around them.

Financial Protection: Life insurance policy provides with the much-needed financial support to your family by compensating against the loss of income.

Debt-Proof Future: The unexpected demise of a wage earner is nothing less of a tragedy. You have to deal with the emotional crisis initially and it can transform into a financial emergency in no time. With the help of a life insurance policy, any outstanding debt, like a personal loan, motor loan, a home loan, etc. would be taken care of.

The Fulfillment of Retirement Goals: Life insurance plan is an ideal alternative to achieve the long-term goals. It can also help you accomplish the retirement goals too. Some life insurance plans offer miscellaneous investment opportunities while some life insurance plans provide you with performance-based bonus.

Avail Tax Benefits: A life insurance policyholder can enjoy tax-benefits regardless of the type of life insurance policy one chooses to purchase. As per the Income Tax Act of section 80 C, the premium payable for a life insurance plan is entitled for tax benefits of up to Rs. 1 lakh 50 thousand.

Mental Peace: The most precious gift that life insurance policy offers is the ultimate peace of mind by providing financial assurance for the future of your family. Even a basic life insurance plan can help generate funds to take care of the future economic needs of your family.

Savings Tool: You will have to pay an enhanced life insurance premium if you opt for a traditional/unit-linked plan. This additional amount of money is invested in your preferred fund and as a result, it can act as a savings instrument for the future.

Children's Future Expenses: A life insurance plan can take care of all the future expenses of your children. Various expenses like wedding and education expenses can be take care of by like insurance policies.

In the modern age, the cost of reading a child is through the ceiling. Apart from that, getting an admission in a reputed college costs a high amount of money. Life insurance policy makes sure that the policyholder's your children don't have to make any concession as long as their educational and personal requirements are concerned.

Business Security: Some life insurance plans certainly cater to the requirements of yours as well as your family's. However, there is availability of some life insurance plans in the market that provide support to your business as well. Life insurance policy also facilitates a business partner to buy the share of his/her departed business partner.

Once you know what you want, the next step is to shop around and compare various life insurance plans that fulfill your requirement. The best life insurance policy is the one that provides the best for the insurance buyer's requirements. Such a life insurance plan will help your family to sail through the hard-hitting times with elegance.

Life Insurance Policy Benefits

The plus side of purchasing a life insurance policy goes ahead of securing your family in rough times. Unquestionably, it is an inevitability to protect your dependents in the event of one's ill-fated and premature death, accidents or physical disabilities that could bring about a loss of income etc. However, there is an extensive list of other benefits, too, that make it a profitable choice for all to buy a life insurance policy in India.

Sorrowfully, the majority of people are still not conscious of the numerous advantages linked with the life insurance policy. All they care about reasonably, are the disability and death benefits. However, there is a lengthy list of benefits associated with the life insurance policy like the maturity benefits, tax benefits etc and much more.

Online Payment Rebate

Most people have never heard of the online life insurance policy payment rebate benefit. However, it's very important to note that your chosen policy premium payment mode has a significant impact on the premium of a life insurance plan. If truth be told, the servicing cost of an insurance company noticeably goes down when you opt for online premium payment mode.

This is due to the reason that there is no charge associated with paperwork in this case. Thus, the life insurance companies are able to save a major amount on the commission, which is normally paid to the agents.

Differing one company another, this rebate might have already been given to an individual policyholder before the online life insurance premium rates are quoted to him/her.

Loan against a Life Insurance Plan

Till today, a lot of people still don't recognize that life insurance policies can also be used to get a loan at a considerably lower rate when compared to other modes. One can get this loan from the same life insurance company or a bank or Non-Banking Financial Company (NBFC).

The maximum amount of loan against a life insurance plan you may be able to get will depend on the type and surrender value of your policy.

In general, the loan amount is a percentage of the surrender value of the life insurance policy and it can soar as high as 80% to 90%. There are a small number of life insurance companies that only permit loans amounting to 50% of the total premium amount paid by the policyholders to work out the highest loan amount they can be entitled to receive.

Repayment on the Sum Assured

This benefit could surprise you, but there are several life insurance companies in India that offer refund against a higher sum assured. This is due to the fact that the servicing charge of all the policies belonging to the same category is more or less the same. Therefore, for the life insurance company a higher sum assured stands for a lower cost of servicing per unit of sum assured. Consequently, this converts into higher returns or profits per unit of the sum assured/premium paid, which clarifies the refund on the sum assured.

Rebate on Chosen Periodic Payment Mode

More or less all the life insurance companies offer the periodic payment option to their customers. This periodic payment mode can be in the monthly, quarterly, half yearly or annually.

In this case, the higher the frequency of payment you choose, the higher the servicing cost will be (including of processing, administrative and collection costs) for the insurance provider.

In addition, if you decide to pay your premium at one time for the whole year, the life insurance company can utilize the available funds for investment purpose. This automatically means more benefits and profits for the company.

This rebate is frequently included already into the premium rate offered by the life insurance company once you choose the periodicity for the payment.

Takes Care of Business

There are some life insurance companies that offer an option to their customers, in which if the policyholder runs a business, his business partners can buy his share without any hassles following the death of the policyholder. In this situation, the business partner(s) will only have to go into into an agreement with the life insurance company and the pay-out received after selling and the policyholder's shares will be given to his/her dependents.

However, it's important to note here that the dependents or the nominee of the policyholders do not get any stake in the company.

Tax Benefits

Under Section 80C of the Income Tax Act, 1961, any amount paid under life insurance premium is eligible for a tax rebate, regardless of the fact whether it's for oneself, their children or their spouse (the premium paid for parents and in-laws is exempted).

You can avail the tax rebate benefit for all the premiums you're paying. This benefit can be availed with all the life insurance companies whether it's public sector or a private sector. This benefit has been explained further below. Most importantly, the life insurance policies offering maturity benefits, also meet the criteria for tax deductions on the maturity proceeds of the life insurance policy under Section 10 (10D) of the Income Tax Act, 1961.

Different Types of Life Insurance Plans in India

Life insurance plans are generally offered in two different categories. The first one is pure life insurance policy and the second one is a perfect combination of insurance and various investment components.

So, if you want to know what type of insurance plan is appropriate for you or your family, it's important to know about various types of life insurance plans that are being offered in the Indian insurance market.

Term Life Insurance Plans

Term insurance is the most basic type of life insurance plan. Term life insurance is a reasonably priced policy that you can easily purchase without any hassle.

A term life insurance policy generally provides a death cover for a specific time period. God forbid, in the event of the sudden demise of an insured during his/her policy period, the life insurance company offers a pre-decided death benefit as a lump sum, or as an annual or monthly payment, or as combined benefits to the nominee. The best term life insurance plan offers comprehensive life cover at considerably lower premium. Keep in mind that the life insurance company will offer no payout is case the insured outlives the policy period

Benefits of Term Life Insurance Plans

Death Benefit: Term life insurance plan offers payment as death benefit. It is paid as a lump sum, monthly payouts or both.

Additional Riders: Depending on your expectation, you can always go with different additional riders to increase the basic term life insurance coverage.

Unit Linked Plans

A unit-linked insurance plan, also known as ULIP is a perfect mix of insurance and various investment components. Unit link insurance plans are offered with a long-term investment prospect along with flexibility on valuable investments. ULIP generally provides a combined coverage.

The premium that you will be paying for a ULIP is partially used as a risk-cover for life insurance plan and the rest part is invested in various market funds like debts, bonds, equities, hybrid funds, market funds etc. The collection of market funds depends solely on the risk factors of the policy buyer. The life insurance company invests the amount in the capital market on the basis of insured's fondness.

Benefits of Unit Linked Insurance Plans

Some of the unique benefits of ULIPs include the followings.

Two in One: ULIPs lets you enjoy the benefits of insurance plus investment, altogether.

Effortless Investment: On the basis of the risk factors, Unit Linked Plans offer a range of investment alternatives for insurance buyers.

Total Independence: It provides you a complete freedom of choosing the favored investment option.

Money Back Life Insurance Plans

Money back plans are a one of a kind life insurance policy since it offers an exclusive type of life insurance coverage. A predetermined percentage of the sum assured is paid back to the policyholder at predefined intervals under a money back life insurance plan. This reimbursement advantage is known as a survival benefit.

Money back life insurance plan is the best insurance policy specifically for those who want their investments to be escorted by an ingredient of liquidity. Additionally, money back life insurance plans are qualified for bonuses as declared by the insurance provider (if any).

Benefits of Money Back Plans

Find out some of the unique benefits of money back life insurance plans below.

Temporary Financial Goals: You can efficiently plan your short-term financial goals with money back life insurance plans

Short-Term Financial Planning: Money back like insurance policy acts as a device to implement short-term financial plans. And at the time of maturity, it offers a golden opportunity to earn a return on investment.

Endowment Plans

An endowment policy is basically an amalgamation of both insurance as well as savings. Endowment plan invests a specific amount in a life cover and the rest amount is invested by the insurance provider.

The insurance company will offer a maturity benefit If you buy endowment plan and outlive the policy term. Moreover, some endowment plans may offer attractive bonuses on pre-specified periods. If applicable, these bonuses are paid either to the policyholder at the time its maturity or to the nominee when death claim is filed.

Endowment policies are also well-known as traditional life insurance policy. Endowment plans come with an investment component. The returns on endowment plans are lower since the risk involved is lower when compared to the risk factors of other investment plans or products.

Benefits of Endowment Plans

The benefits of endowment plans include the following.

Get Return on Investment: An endowment policy acts as a long-standing financial planning instrument that provides returns on investment at the time of the policy maturity.

Whole Life Insurance Plans

A whole life insurance policy has been designed to provide coverage for as long as the insured breaths. However, there are numbered insurers in the market who offer coverage for up to 100 years of age. Differing from the coverage offered by term life insurance plans, whole life insurance plan offer a widespread insurance cover.

The sum assured is calculated at the time of policy purchase and is payable to the nominee following the death of the insured along with bonuses (if any). This can be considered the best life insurance plan since the policy can be availed at such a low premium.

An alternative of whole life insurance plan is available in the market that clubs the benefits with ULIPs. A whole life unit linked investment plan offers wide-ranging coverage along with the advantages of far above the ground returns

Note: The insurance company pays the benefit of matured endowment coverage to the policyholder in case the person outlives the 100-year cover.

Benefits of Whole Life Insurance Plans

Some of the best benefits of whole life insurance plans are below-mentioned.

Lifelong Coverage: Whole life insurance plans basically offer a lifelong insurance coverage to the policy buyers.

Partial Withdrawals: This life insurance plan offers the facility of partial withdrawals upon the completion of the premium payment period.

Age No Bar: The policy can be purchased by anyone. It doesn't impose any age limit with respect to the eligibility criteria.

Retirement Plans

A retirement plan is also known as a pension plan or an annuity plan. It helps the insured amass funds for his/her retirement. In general, retirement plans provide installments on an annual basis or a onetime payment once the insured reaches the age of 60 years.

Retirement plan offers a death benefit in case of the insured's demise and a vesting benefit in case the insured outlives the policy period.

Note: Insurance companies pay a predefined amount to insured's nominee in case of the insured's demise while his/her policy is active.

Retirement Plan Benefits

Here are the benefits of retirement plans.

Long-Term Savings: Retirement plans act as an enormous tool for long-standing savings.

Retirement Goals: The policy helps to achieve retirement goals with total independence.

Vesting Benefit: It offers fund value as payment. This fund has to be used for purchasing.

Corpus Generation: It helps the insured build a corpus for his/her retirement.

Financial Independence: The policy provides the much-needed economic independence to the insured.

Death Benefit: Retirement plan offers death benefit which is either the fund value or 105% of paid premiums.

Child Plans

A child plan basically acts an important instrument to generate finances for the insured's child. A child plan can help you amass funds particularly for a child's education and wedding. In general, child plans either provide installments on an annual basis or a onetime payment once the insured child reaches the age of 18 years.

In the event of an ill-fated and premature demise of the insured's parent during the policy period, instant premium payment is payable by the insurance company. In such scenarios, some insurers waive off future premiums but the plan goes on till maturity.

Benefits or Child Plan

Here are some of the benefits of child plans.

Protected Future: Child plan helps parents mount up funds for major events in a child's life like education, wedding etc.

Monetary Support: Even if a child's parents have passed away, the plan makes sure that the future of the insured child is totally secure and safe.

A Number of Things to Consider Before Buying a Life Insurance Policy

Frankly speaking, buying a life insurance policy is no longer a big deal. But no one wants to unreasonably pay a big amount for a specific life insurance plan that they really need or to purchase a policy that is not up to their preferences. For that reason, you should know what you are investing in order to be able to make mindful decision about the life insurance policy you should go for.

Read the Policy Document Carefully

The document regarding your life insurance policy is very important. There are a number of exclusions imposed on life insurance plan that you should know about, so that you can avoid confusions and claim rejections later. Therefore, knowing what is not covered under your policy has equal significance to knowing what is covered!

Don't Opt for Riders Unnecessary

If you want to increase the coverage of your basic life insurance policy, you can choose to buy riders that would fulfill additional requirements like health etc. You must make sure that you choose the riders intelligently. You should opt for only those life insurance rider covers that match your unique preferences. Do not jump for a rider cover that you don’t really require.

Review the Life Insurance Policy

Scrutinize and assess your life insurance policy requirements and review your policy at standard intervals. A number of important factors such as an addition of a new family member, marriage, job change, etc. demands for a need of reevaluating your life insurance needs.

Evaluate Your Coverage

The income that you offer your family members who are dependent on you, your financial expenses and loans would help you to evaluate the coverage that you should go with for your life insurance policy. This will allow you to proficiently safeguard your family financially in your nonexistence.

Compare Life Insurance Quotes from Different Insurers

Before zeroing on any particular life insurance plan, do make sure that you have compared the life insurance policies with different other insurers India. In this way you will have the power to sort your search as per your preferences, features, requirement, benefits etc. of different insurers. You should know that the online life insurance policies are cheaper than the offline policies. Hence, it is highly advisable that you buy online life insurance policies.

Ensure Your Premium Payment Ability

Before buying any particular life insurance plan online, you must make sure that you have the capacity to pay the premiums. If the policy lapses because of non-payment, it will not only harmfully impact your future financial goals, it will also attack your savings. This is the reason why it is indispensable that you review the amount of premium that you will be able to pay without any financial problem and only then decide on the life insurance policy accordingly.

Important Life Insurance Policy Riders and Their Significance

Picking the right life insurance rider is as critical as buying life insurance itself. In spite of everything, no one wants to leave a space to regret a wrong decision later. This is the reason why you must take your time and expert's advice before buying a life insurance rider.

Life insurance plans can help enhance the base cover with additional features. However, without having proper knowledge about different types of riders available in the market you should not arbitrarily purchase one just for the sake of increasing the premium. In this context, find out some of the rider options available for life insurance seekers:

Accidental Death Benefit Rider

In case of accidental death of the insured, with accidental death benefit rider, the nominee will receive the policy amount along with the rider benefit. In a lot of cases, death doesn't occur on the spot. So, the majority of the life insurance companies set a period after the happening to expand the offered coverage. Let's consider, if the policyholder dies after 100 days of the accident, the nominee will still receive the sum assured. This is the reason why you must check the policy clause with caution at the time of buying a life insurance rider.

Since unfortunate events don't come with prior notice, anybody can take choose to buy this rider. However, this rider is a must for those who -

Travel and commute by bike, car, commercial or public vehicles, on a regular basis.

Someone who frequently goes for business trips or if the job is associated with physical work in on-site civil work or a factory.

Accidental Total and Permanent Disability Rider

If the insured person is not able to produce a daily income because of an accident which leads to permanent or total temporary disability, Accidental Total and Permanent Disability Rider offers financial support to the family. In such ill-fated circumstances, the life insurance company bears the monthly income of the insured person.

The benefits offered with this rider may differ from one plan to another. The benefit with this rider is paid for a pre-decided time period. Some life insurance companies provide rider benefits for 5 to 10 years from the occurrence of the accident, for instance. In the event of the death of the insured during the policy term because of suffering, the beneficiary would be given the outstanding sum assured amount.

The Accidental Total and Permanent Disability Rider is important to buy for those individuals who -

Travels and commutes by bike, car, train, commercial or public vehicle, etc. on a daily basis.

Someone who often goes for business trips or if someone's job involves physical work in an on-site civil work or factory work.

Critical Illness Rider

This Critical Illness Rider basically covers a number of major critical illnesses such as heart attack, cancer, stroke, coma, kidney failure, paralysis, etc. Given that the coverage may vary from one life insurance company to another, it is very much important that you check the list of illnesses included by the insurer.

The life insurance company provides the rider benefits on the diagnosis of a critical illness. Although any of the above-mentioned critical illnesses may not result in immediate death, the treatment for these diseases could cost a huge amount or could compel the insured to leave the job. In such circumstances, the insured is offered compensation under this rider plan where the given money can be used in the monthly expenses or in the treatment of the illnesses. However, the payout may differ since some life insurance provider offers 100% of the basic sum assured while others don't. Note that the only condition that remains is that the insured will have to survive a specific waiting period as per the insurer.

Since none of us can predict any critical illness, anybody can buy this life insurance rider cover, especially those individuals who are -

High-level officers working under extreme work pressure and stress

Chain-smokers

Someone with unhealthy lifestyle

Waiver of Premium

The life insurance policy generally terminates if the insured is not able to pay the premium due to any disability that separates him/her from earning income. In such unfortunate circumstances, the insured person will not be offered any compensation. The question that arises is, then how will the family manage without a source of income?

Waver of Premium rider is a savior in such a situation. Under this rider cover all the future premiums will be waived off and the policy will be in effect like before.

In case of accidental disability or death of the policyholder, if the premiums are not paid, the premium for the main policy and riders will be exempted and the policy will continue.

Generally, Waiver of Premium rider can be purchased along with Accidental Total and Permanent Disability Rider & Critical Illness Rider. If not purchased, the insured has to buy it separately. Since we can't predict an unforeseen circumstance, one should buy this rider, specifically those individuals who -

Travels and commutes by train, car, bike, commercial or public vehicle, etc. on regular basis.

Someone who repeatedly goes for business trips through flights.

Someone whose job involves on-site civil work or physical work in a factory.

Accelerated Death Benefit (ADB) Rider

This Accelerated Death Benefit or ADB Rider acts as a savior in such unfortunate cases where the policyholder is diagnosed with a critical illness like AIDS, cancer, Ebola, leukemia, etc., which may cut down the lifespan of the insured. In such circumstances, the insurer pays a part of the base sum assured beforehand. This amount can be utilized for paying the monthly expenses or for the treatment. The left amount will be paid to the family on the death of the insured to safeguard their financial future.

It's advisable to go for a thorough analysis of lifestyle or surroundings before taking any decision. On the basis of this the insurance buyers should make a decision whether they really need this rider or not

Term Rider

This rider offers a lump sum or a monthly income to the beneficiary in case of the premature death of the insured. The benefit can be equivalent to the base sum assured which is pre-determined by the life insurance company.

Term Rider can be purchased by anyone who wants to leave a huge death benefit behind.

Hospital Cash Rider

Under the Hospital Cash Rider a fixed amount is offered in the event of an emergency or planned hospitalization. Note that the terms and conditions, benefit amount, and sum assured may differ from one insurance provider to another.

This rider plan is specifically for those who want to cover the expenses related to emergency hospitalization.

Surgical Care Rider

The Surgical Care Rider offers a lump sum amount if the insured undergoes an inevitable surgery in India. However, the benefits offered under this rider may vary from plan to plan or minor to major surgery.

Anyone who wants to cover the expenses for surgery in the event of an eventuality can buy this plan. This rider helps in lessening any out-of-pocket expenses that may create a financial dent.

Exclusions of a Life Insurance Policy

Generally a life insurance policy provides financial compensation against numerous events; but there are certain circumstances in which your life insurance policy doesn't provide compensation and turn down your claim. Declining any claim is called exclusion of life insurance policy. That is why it is recommended to go through all the limitations before purchasing any policy. Following are the lists of common exclusions of a life insurance policy.

Life Style Related Diseases

While purchasing life insurance policy and filling out the application form, you should not hide any health-related information. Lifestyle associated habits, like drinking, smoking and other health risks related with them are some of the vital deciding factors. A piece of information about all these disease comes handy to the insurer as these are harmful habits and can cause death of the policyholder. Generally the chances of smokers making a claim are more likely than non-smokers thus the insurance premium for the smokers is higher than a nonsmoker. If you are a smoker and fail to mention about your habit and passes away, the insurer can deny the claim if they come to know that the demise was due to smoking related disease. The same is the case with drinker, the policyholder needs to inform about the drinking habit so that the insurance company can assess the risk and accordingly decide on the payable premium.

Man-Made Calamities

Any kind of man-made disasters is another exclusion of a life insurance policy. If the claims occur due to the war or other man-made activities then it's come under man-made calamities. As per this clause, if the insured person has died due to a war act or any war associated activity, then the death profit will not be paid out to the dependent of the insured person.

Suicide or Self-inflicted Injuries

If the death happens due to any suicidal activities like deliberate self-harm, self-abuse are not usually covered by a life insurance policy. The dependant of the policy cannot make claim if the death takes place due to such reason. But according to the terms and conditions of the policy, the nominee may get equal to or more than 80% of the total premiums that paid for the policy till death.

Life-threatening Activity

Death takes place due to the involvement in life-threatening activity like paragliding, trekking, scuba diving, water-sports and many more are not covered. Insurance policies mention that dangerous or adventure activities are under exclusions. These activities are considered as high life risk, thus dependant of the insured will not get coverage after his or her demise.

Death Associated to Maternity

Generally, life insurance plans do not provide coverage for death caused due to pregnancy or complications related to pregnancy.

Loss of Life due to HIV

If anyone is suffering from HIV/AIDS or any sexually transmitted and face untimely death, then the claim made by the beneficiaries will be rejected.

Intoxication and Overdose of Drugs

Intoxication and consumption of drugs can force serious health risks and even result in death. If the death of insured person occurs due to overdose, this situation will lead to refusal of the insurance claim of beneficiaries.

Pre-existing Disease

Pre-existing diseases are considered those diseases which the insured person has been suffering from before purchasing the policy. These pre-existing are usually not covered by life insurance policy. Hence you should be informed that the dependent members of your family will not be benefited by the company.

Unlawful/Illegal Activities

Danger arising due to participation in any illegal activity is beyond the range of coverage of life insurance. Any unlawful activity where the insured is getting into a situation that will cause harm will not be eligible for a claim.

Right Age to Consider Buying Life Insurance Policy

To cope up with any kind of financial emergency in the future it is essential to invest in a life insurance plan. Basically life insurance is a simplest form of insurance that helps to secure insured's family financially after his/her death. There is no precise time that can be considered as the right time to purchase life insurance policy, it can be purchased anytime, as it relies upon on man or woman requirements and situations however, it has a changed meaning while purchasing at a specific age. The right age to purchase term insurance is as soon as possible. According to financial experts, the starting month of the financial year, April is the best time to re-evaluate one's financial plans. Alternatively, if one thinks the age factor, then you should follow below pointers.

Buying Life Insurance at the Age of 20

Purchasing a life insurance plan at the age of 20's can be cheap and relatively clean affair as most people start a professional career to begin making decisions on their own during this period and they have the ability to make premium payment for many years after buying the policy. It helps a person ease all these risks. And one big advantage of buying life insurance policy at this age is that one can avail an affordable premium, as the risk to the purchaser's life is comparatively low. In other words, younger the purchaser, lower the premiums will be.

At the Age of 30

At the age of 30, it is quite obvious that you have family and at the same you may think to the security of your family. So, the earnings usually increase with the age and the standard of living also improves. Therefore, this the right time that a person thinks of purchasing life insurance to shield the fiscal future of the family. Hence, if you are investing in a life insurance policy during your 30's, this could be a big financial backing for your family's future.

At the Age of 40

Well, usually at of 40, investment planning should be made after considering the debts like car loan, home loan and the responsibilities like retirement plans, kids' higher studies and care of old parents' ill health etc. That is why; you need a comprehensive coverage that secures the future of your family. Hence, at this age, it is advised to purchase a policy with high sum insured option.

At the Age of 50

During your 50's, most likely you do not really need a life insurance policy as you have already cleared maximum of your debts and your kids quite likely have completed their schooling too. And disadvantage of buying insurance at this age is the premium of life or term insurance comes doubled as compared to what a 30-year old pays. However, it is suggested that you should invest on a plan; especially you are the main source of income of the family or has vast financial liabilities to pay off.

At the Age of 65

Many people wonder that at the age of their 65, they will not be able to avail their life insurance coverage. However, the thing is not like that, people can buy life insurance policy during their 65's, if they compromise on policy term, like they cannot buy a 30 year plan. In addition to that there are senior citizen plans which are mainly designed to cater to the requirements of this age group. According to insurance experts, at the age of your 65, you should go for term or whole life insurance which offers complete monetary protection.


Guiding Principle to Choose the Best Life Insurance Policy

We all know that purchasing a life insurance policy cannot bring your loved one back, but it can help you by providing financial security. Whether it's just you and your partner or your family that consists of kids, the main concern for your peace of mind is having the right life insurance policy. There are so many life insurance companies in India, thus it can be a daunting task to choose the best life insurance policy. The following guidelines can help you choosing the best life insurance policy.

Type of Policies

There are numerous different types of life insurance policies. While choosing yours, you should know which type of policy you need. If you are looking for a lifelong indemnity plan that can help your family's well-being after your termination, then a whole life insurance plan would be the right choice for you. This plan offers the death benefit for as long as you are alive. You can also look for the plan which provides your Human Life Value and includes a salary coverage and loan repayment if you need.

Apart from these if you want a protection plan for a certain time period, you can choose term insurance. To pay off your overdue amount, you can purchase an insurance plan for specific period. That is why it is recommended to check out the various other types of plans like Pension Plans, ULIPS, Money back plans, Endowment plans etc. It is also suggested to buy life insurance policy at your young age.

Coverage That You Require

It is one of the most crucial factors in choosing the right insurance plan. At first, you should know the number of dependents of your family. If you are the only source of income of your family, purchasing a life insurance plan should be a priority for you. The main purpose of having a life insurance policy is to provide financial security after your demise. So evaluate the number of dependents of your family and search for a policy that provides highest coverage. You may also consider the amount your dependents may require to continue their lifestyle when you are no more.

Premium Costs

While purchasing the right life insurance plan, you also should keep in mind the premium factors. Though you certainly need an adequate coverage, don't over buy. If your insurance premiums are too high to manage, you have to be much more cautious. If you want to purchase the policy just for tax-saving or investment purposes, then the premium is one of the most important deciding factors. For instance, the premium costs for endowment plans, Whole life policies and Unit Linked Insurance Policies are on a higher side when compared to others like Money Back Plans, Term Insurance and Pension Plans.

Age Factor

You present age plays a crucial role while purchasing an insurance policy. The premium cost of some life insurance policies depending on your current age - the younger you are, the cheaper your policy premium. Hence, it is always advised to purchase life insurance policy as your early age - when you are young and monetarily self-sufficient.

Retirement Plan

Retirement plans can be a good start if you think it as a source of cash flow after retirement. Hence, if you are looking for retirement plan, selecting the correct retirement policy will help you to live a worry-free life post-retirement.

For that purpose, you have to go through the terms and conditions of the policies and then choose the right one.

Evaluate the Sum Insured

In order to get the best life insurance policy, you should have a calculation of sum insured and then search online for different insurance companies. And you have to do thorough research of their plans, benefits, and limitations. It may be perplexing initially; you will have a clear picture.

Compare Quote

According to insurance experts, at first you have to shortlist at least 3 to 4 companies from any online life insurance distribution marketplace and comparing them. Once you receive different quotations, you will be able to choose the right one as per you needs. You should choose such policy that can cater to most of your requirements and preferences in terms of the policy period, premium, budget and coverage.

Purchase Life Insurance Policy Online

Once you find a company that you are contented with, you should ask questions, because the clearer you are on what kind of life insurance is right for you, the easier it will be to agree on policy that matches your necessities. You can make the purchase online; there might be certain official procedure that you will need to fulfill which may vary from one insurance company to another. Moreover, it is so convenient to buy life insurance policy online. It's easy to search, compare, and get quotations online.