How it Works, Benefits, Policies in India

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Life Insurance Companies in India, LIC, ICICI Prudential Life Insurance, HDFC life insurance

What is a life insurance policy

A life insurance policy can be called a protection plan that the individual takes for his family for a better future. Life insurance policy is the type of agreement made between the insurance company and the individual. In an insurance policy, the company agrees to provide financial protection to the person in exchange for the insured person paying a monthly fee.

According to the legal contract, the insurance company must pay a fixed sum of money to the insured or his family in the event of death or after a fixed period mentioned in the contract. It is mentioned in the contract that the policyholder must pay a monthly amount to the insurance company in the form of a premium.

The insurance company and the policyholder are the two parties included in the life insurance policy. When the policy matures, the insurance company must pay the promised amount to the policyholder.

life insurance policy

Features of life insurance policy

  • The Insurer – The Insurer is the company that provides the benefit of the insurance policy. The company offers policies to the individual for a better future.
  • The policyholder- The policyholder is the one who buys the policy from the company in the legal agreement.
  • Insured- the person whose life is insured.
  • Nominees– The person who will receive the amount after the death of the insured is known as the nominee. Applicants can be family members or spouses of individuals. The names of the nominees are added by the policyholder when taking out the policy.
  • Prime- This is the amount that the insured regularly pays to the insurance company.
Insurance policy

Benefits of life insurance policy

  • Future Security– The policyholder is aware of the fact that the amount he invests in the insurance company is a kind of investment that will benefit him in the future.
  • Flexibility– The policyholder has the possibility of paying the amount in installments according to his pocket. The Individual is not required to pay all amounts together.
  • Financial benefits– The life insurance policy provides financial benefits to the individual. The policyholder is aware that he and his family will receive a fixed amount as promised by the company.
  • Fiscal advantages– According to the Income Tax Act, if a person continuously pays the installments of an insurance policy, the premium paid may qualify for a tax deduction under Section 80 C of the Income Tax Act. income tax of 1961. The policyholder can also avail a deduction of up to Rs 1.5 lakh.
Insurance policy terms

How the life insurance policy works

It is very important to get a life insurance policy for a better and secure future. But before purchasing the insurance policy, the individual must be aware of the workings of these policies. As it is clear from the above paragraph, it is also a kind of death benefit given by insurance companies. There are two popular types of insurance policies in India.

  • Term life insurance policy– A term life insurance policy is less expensive than a permanent life insurance policy, the coverage of this policy is for a given period. It covers the individual for the period of time decided upon when purchasing the policy such as 10, 20 or 30 years. If the insured person dies during the period covered, the decided amount will be paid to the beneficiaries, but if the person survives, nothing will be paid by the insurance company.
  • Permanent life insurance – Permanent life insurance covers the insured until they survive. It provides coverage for life. It is more expensive than term life insurance. There are also two types of permanent life insurance which are whole life insurance and universal life insurance.
Types of permanent life insurance policies

Permanent life insurance is divided into two categories –

  • Whole life insurance –The best part of this life insurance is that the premium will not change for life and the death benefit is guaranteed. It is considered a simple policy.
  • Universal life insurance – In this life insurance, the holder has the option to pay the amount. The policyholder can pay premiums in small and large amounts.
Important points to remember
  • One of the main points to keep in mind is that the insurance premium is lower for young people and increases slowly with age.
  • According to many studies, we notice that men survive less than women, so the premiums for men are higher.
  • Our daily habits also affect our health, so people who smoke and drink are charged more by insurance companies.
  • Family history of any disease is also considered an important part of the insurance policy.
  • Insurance companies also charge higher premiums for people who have an illness or who may have had an illness in the past.
  • The premium also depends on the profession if the individual works in a hazardous area he will be charged with a higher premium.

BEST LIFE INSURANCE COMPANIES IN INDIA

A life insurance policy is an agreement between the company and the individual. There are many companies in the market that offer insurance. Here is a list of companies that offer policies to individuals:

  • Maximum life insurance
  • HDFC life insurance
  • Tata AIA life insurance
  • Pramerica life insurance
  • Excide life insurance
  • Reliance Life Insurance
  • HSBC Canara Life Insurance
  • Bajaj Allianz Life Insurance
  • Aegon Life Insurance
  • ICICI prudential life insurance
  • Aditya Birla sun life insurance
  • Aviva Life Insurance India
  • Bharti Axa Life Insurance
  • PNB met life insurance
  • life insurance company of india
Buy LIC online

How to Apply/Buy the Life Insurance Policy in India

In the age of the internet, it is very simple to purchase or take out life insurance online.

  • First, visit the official site of the company with which you wish to purchase the policy.
  • The company’s website page will open.
  • Enter all your requested information like names, age, mobile number, gender, income, etc.
  • Click on check bonus.
  • Enter the amount and premium of your life coverage.
  • Click continue.
  • Enter all the requested information and click continue.
  • Enter your payment method and pay.
  • You will receive a confirmation message and email.
Conclusion

The life insurance policy is the financial protection plan in the event of a person’s death. It is very useful for the person as well as for the better future of his family. It is considered a good investment with maximum benefits. Remember that the more time you take to buy it, the more it will cost you.

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