What is Life Insurance Policy

What is Life Insurance Policy?

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A life insurance policy is one of the most popular insurance policy. life insurance is an agreement between the policyholder and the insurance company provider that anything happens to the policyholder then the fixed amount should be given to the nominated beneficiary. Life insurance will ensure the life of someone by paying the amount of money to his nominated beneficiary and which can another person life to use the money and make your life and that’s why it called life insurance.

Life insurance in simple terms is the insurance that pays money if something worse happens to the policyholder. life insurance does not only gives the money if someone dies it also gives money for medical treatment. life insurance should be taken by the person who is the only earning member of his family so in that condition if he dies then his family gets some money and they do not depend on others for living their life.

Important Life Insurance Terms You Should Know

If you are not familiar with the insurances then you will not understand some of the things in insurance or some of the terms in the insurance which is used frequently in the insurance field. the important terms you should know in life insurance are:

1) Policyholder

The policyholder is the person who buys life insurance or any other insurance for themselves. the owner of the insurance policy. the policyholder is term is frequently and highly used in the field of insurance.

2) Life Assured

The life assured in life insurance is the person who Buys the life insurance policy for his family member then the family member is the life assured in simple word the one who is ensured.

Example: Ramesh dad buy one life insurance for Ramesh then in that case Ramesh dad is the policyholder and Ramesh is the Life Assured.

3) Nominee

In life, an insurance nominee is used for the person who is the nominated beneficiary of the policyholder. the nominee is a very common word in life insurance you need to know because if you take any life insurance then you have to give the name for the nominee.

If anything happens to the policyholder then the nominee will receive the money from the life insurance company. a nominee is declared when the policyholder buys the life insurance it can not declare after you buy the life insurance. generally, a nominee is the family member of the policyholder.

4) Policy Tenure

The policy tenure is the duration of your life insurance. the life insurance duration is different and it depends on you how many years of life insurance policy you want to buy. the policy tenure differs from insurance company to company.

5) Premium

Premium is the instalment that you have to pay to your insurance company. in simple terms the money you pay to your insurance provider month by month or year by year is called the premium. the premium is very commonly used in the field of insurance you have to have knowledge of the premium in order to want to buy on an insurance policy for yourself.

6) Sum Assured

it is the guaranteed money that your nominee will get when the policyholder dies. the sum assured it the money that the policyholder and the insurance provider decides after buying life insurance.

7) Death benefits

The death benefit is the money given to the nominee when the life assured has passed away. the death benefits can be different depending on your insurance company provider. the sum assured and death benefit are two different things.

8) Maturity Benefit

The money is paid to the policyholder when the policy tenure is completed. take one example if your life insurance policy is about 20 years then the policyholder every after 5 years will get some sort amount of money is called the maturity benefit.

9) Grace Period

it is the extension given to the policyholder by the insurance company for paying the premium within the due date. when the policyholder pays the premium then the insurance company will continue its insurance policy and you will be getting all the benefits from that.

10) Revival Period

if the premium is not paid in the grace period then your insurance policy gets deactivated in order to re-activate your insurance policy yo have to pay the premium within that time so this time is called the revival period.

11) Rider

The rider is the additional benefits that you can get from your insurance company by paying a little high amount of premium to the insurance company provider. the rider benefits are optional and can enhance your cover under the coverage of your life insurance.

12) Exclusion

Life insurance does not cover all the things under his insurance plan and if you raised any claims for that thing that are not covered under the coverage of your insurance policy then it is called the exclusion of the insurance policy that means it is not covered under the insurance policy.

13) Claim Process

When the life assured has passed away then you have to go to your insurance company and raise a claim for getting the money which is decided between the policyholder and the insurance company and this process is called the claim process.

What is the Need for Life Insurance policy?

Life insurance is very important if you are the only earning member of your family and you can help your family in the case if you have died so it is a very important insurance policy for you. the life insurance gives money when the life assures died and using that money the nominee a live his life in a good manner he does not have to beg for food. life insurance also provides you with money in between your insurance policy periods and you can use this money.

Listed below points are the key reason why you should buy the life insurance policy:

  • If you are the only earning member of your family then you should buy a life insurance policy in order to protect your family after you died.
  • The money will help with the education of the child and various other need for the children.
  • In case of your accident, the bill is paid by your insurance policy company.
  • the money that the nominee gets he can use this money to enhance his future.
  • Life insurance also provides money in the interval of your insurance policy period which can help you.

Benefits of Life Insurance Plans

Everything you buy that will give you the benefits in some ways suppose you buy the washing machine then it will help you to wash your cloth so all the things you buy it should give the benefits just like that the insurance you are buying that should give you the benefits if it does not give any benefits then there is no use of buying insurance policy so below are the benefits of Life Insurance.

1) Online Payment Discount

Nowadays everyone switches to the online mode whatever they want to buy the product they buy the product by the online shopping portal like Amazon and Flipkart. many people don’t know about the online payment discount of the life insurance policy. the life insurance policy will give you a discount if you are paying the premiums online or you buy any life insurance policy online.

2) Taking Care of Business

In case of any policyholder who has a business then after his demise the share of the policyholder will be share among his friends by life insurance policy and the business will take care of by his friends.

3) Tax Benefits

By buying the life insurance policy and paying the premium to the insurance company you can reduce your taxes and the money go to the tax you can save that money by paying that money to the insurance company.

Types of Life Insurance policy in India

The life insurance policy is has come with a range of covers that’s why to distribute the cover for the insurance policy the life insurance policy has the following types

1) Term Insurance plan

A term insurance plan is a very basic type of life insurance policy. term life insurance plan can be bought by everyone. it is the most basic type of life insurance policy which covers simply your death and injury between your life insurance policy and after your death, the money goes to the nominee.

2) Unit Liked Insurance plan

A unit like an insurance plan is a combination of insurance and investment. this insurance policy will be used by those who want to buy coverage for their life also and on who want to invest their amount of money in the funds so it is perfect for them. unit liked insurance plan will cover your life and at the same time the amount of money goes to the funds and it is a risky insurance policy.

3) Endowment Plan

the endowment plan is a very traditional life insurance plan these in this type of life insurance policy the policyholder pay money to the insurance company and he gets his life coverage and the insurance provider invest that money in the funds and it is a less risky life insurance plan.

4) Money Back Plans

As per name suggest the money-back plans is the life insurance policy will pay back the money of the policyholder if hed didn’t die in the given interval of the time the money is also paid due to the survival of his life.

Money-back plans is the best life insurance coverage, in this case, you can get your money back and if something happens to you then the money goes to the nominee.

5) Whole life Insurance plan

The whole life insurance plan is the traditional life insurance coverage in this plan offers like coverage as long as you lived. this plan will continue for 100 years and if the policyholder dies then the money will be granted to the nominee.

6) Child Plans

Child plans I one of the most popular life insurance coverage in these life insurance the child will get money after his age past 18. This insurance basically for the child education and his life if something happens to the policyholder then the child will get the money and if not then also the child will get the money once he turned to 18.

7) Retirement Plans

I think you definitely heard the name of the retirement plans in tv ads. this plan will help people who have an age of more than 60 years after the 60 years they can get the retirement plan and help to get money to the nominee.

Document Required for Buying Life Insurance Policy

The documents required to get the life insurance policy has mentioned below:

1) Address Proof

The insurance company will ask you for the address proof in that case the following document is required to approve your address proof:

  • Aadhar ID Card
  • Voter ID Card
  • Saving Account Bank Statement
  • Passbook with at Atleast 6 months entries.
  • Passport
  • Ration Card
  • 3 Months Utility Bills
  • Driving License

2) Identity Proof

Following are the documents require for identity proof:

  • Aadhar Card
  • Pan Card
  • Voter ID card
  • Passport

3) Income Certificate

Following are the documents require for Income Certificate:

  • Salary Slips from last 3 months to 6 months
  • Income Tax Returns
  • Latest Form 16
  • Last 6 months bank Statements

4) Age Proof

Following are the documents require for Age Proof:

  • Pan Card
  • Aadhar Card
  • voter Id card
  • Passport
  • Ration Card marriage Certificate
  • Birth Certificate

Which is the Best Life Insurance Plan?

Life insurance comes with various life insurance plan in order to choose the best life insurance policy you have to consider the factors such as the premiums and the coverage of the life insurance. before buying the life insurance you should consider some pints and after that go for the buying life insurance policy buy a life insurance policy which you have to give low premiums with high coverage.

Comprehensive Plans: This insurance policy not only provides you with the financial need but also provides you with the money to invest in your funds.

Insurance with Savings: the life insurance policy with the insurance with saving will save you money by paying premiums periodically.

Tax Benefits: The life insurance policy offers you tax benefits if you buy the life insurance policy then you can save money from paying money to the taxes.

Frequently Asked Questions

1) What is Monthly premium paid in the Life Insurance?

it depends on your life insurance plan if you buy expensive life insurance then you have to pay a high premium else you have to pay a low premium.

2) What is the maximum age you can buy the life insurance policy?

The maximum age is somewhere between the 75 and 80 years.

3) Who Can Claim Life Insurance after death of Policyholder?

The nominee can claim the life insurance policy.

4) What is the Most popular Life Insurance policy?

Term Insurance Policy.

5) What is the Maximum Coverage can i get after the death of the Policyholder?

it is depend on your insurance policy.

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