Life Insurance
A Comprehensive Perspective
Benefits Of Life Insurance
Financial Security
Peace of Mind
Wealth Creation
Tax Savings
Retirement Planning
Preventing Loan Burden
Securing Children's Future
Term Life Insurance: A Financial Safety Net for a Specified Duration
Term life insurance serves as a financial protection mechanism, providing coverage for a predetermined period. In the unfortunate event of the insured's passing during the policy term, the insurance company disburses the death benefit to the designated beneficiary.
Participating Products - (Traditional Plans)
A participating policy allows the policyholder to share in the insurance company's profits. These profits are distributed in the form of bonuses or dividends.
Non-Participating Products - (Traditional Plans)
A non-participating policy does not share in the surplus earnings and, therefore, does not receive a dividend payment.
ULIP -The full form of ULIP is Unit Linked Insurance Plan.
A ULIP is a life insurance policy that offers the dual benefits of investment to achieve long-term financial objectives and a life cover to financially secure your family in the event of an unforeseen circumstance. The premium paid towards a ULIP plan is divided into two components.
Pension Plan -A pension plan, also known as a retirement plan, is a type of insurance product that aims to provide a regular income to individuals upon their retirement. These plans are designed to assist individuals in maintaining a comfortable standard of living even after their regular income ceases upon retirement.
Annuity Plan : ( Pension Plans ) -An annuity is a financial product offered by insurance companies. It involves a contract between the insurance provider and an individual, where the insurer agrees to make regular payments to the individual, either immediately or at a specified future date. In return, the individual makes a lump sum payment or a series of installment payments to the insurance company. The key feature of an annuity is that it provides a fixed stream of income for the rest of the individual's life, ensuring financial stability and security.
Terminology
The policy term refers to the maximum duration of coverage provided by the life insurance policy. It is crucial to determine the policy term at the time of policy purchase, as it typically cannot be altered afterward.
The premium payment term signifies the period during which the policyholder is obligated to pay premiums for the policy. In the case of a term plan, the premium paying term may be equal to or shorter than the policy term.
A non-participating policy does not partake in surplus earnings and consequently does not receive dividend payments.
Maturity benefits encompass the sum assured along with bonuses that the life insurance provider disburses to the policyholder upon surviving the policy tenure. While regular life insurance products transform into saving instruments through maturity benefits, term insurance solely offers protection without such benefits.
The income plan is a guaranteed/non-guaranteed return insurance plan that provides guaranteed returns in the form of regular monthly income coupled with life coverage.
The life assured refers to the individual who is covered under the insurance policy.
The proposer is the individual who assumes the responsibility of paying the policy premiums.
- For saving plans, a 4.5% VAT is applicable on first-year premiums, while a reduced rate of 2.25% applies in subsequent years.- For single-premium annuity policies, a VAT of 1.8% is levied. - Term life insurance premiums are subject to an 18% VAT.
