Life Insurance
The most valuable gift in life is having a family who cares about you. You make every effort to be with your loved ones and to meet their emotional and material requirements. You must take actions to preserve your loved ones’ financial future if something unforeseen happens to you in order to ensure that they are protected and happy throughout their life.
It is here that the decision to get a life insurance policy is essential. Life insurance serves as a safeguard for your family against financial damages that may arise as a result of your unexpected demise. Your family members’ life insurance payouts will assist them pay off debts, meet daily living expenditures, and achieve other life goals.
We keep our promises. Our claim settlement ratio has continuously ranked among the industry’s best. When you’re going through a difficult situation, you’ll find us standing by your side as a pillar of support. At JAE Services, we are dedicated to providing you with the best protection at a reasonable cost. We take care of your worries so you can relax and enjoy the pleasures of life.
About Life Insurance Policy
The contract between an insurance provider and an individual is referred to as a life insurance policy. According to the agreement, policyholders pay a particular amount as a policy premium, and the insurer pays a specific amount to the policyholder’s family in the event of the life insured’s unexpected demise Because death is the one certainty in life, purchasing the finest life insurance policy that meets your financial demands is important..
Why Choose Life Insurance Policy?
When you’re not around, a life insurance policy protects your family’s financial interests. Millions of people purchase life insurance for a variety of reasons, many of which are difficult to articulate. Because of the following advantages, it is an important part of a secure economic plan.
1. Financial Security for the Family
A life insurance policy pays a certain amount to your family (the nominee) in the event of your untimely death. They can put the money aside to cover a variety of expenses.
2. Benefit for Critical Illness
With a life insurance policy, you can add a critical illness rider that protects you from serious illnesses like cancer, kidney failure, and cardiovascular problems. As a result, you or your family will not have to be concerned about the financial aspects of medical emergency.
3. Deductions of Tax
Section 80C of the Income Tax Act, 1961 allows you to deduct the premium you paid for a life insurance policy up to Rs 1.5 lakh.
4. Peace of Mind
With the greatest life insurance coverage by your side, you can rest easy knowing that your loved ones will have a financial safety net if you pass away.
5. Wide Coverage at Low Cost
Depending on your age and health condition, insurance firms offer big payouts for life insurance (such as term plans) for a modest price.
6. Possibilities to Wealth Creation
Life insurance plans, such as ULIPs (Unit Linked Insurance Plans), provide life insurance as well as market-linked returns on your investment.
For instance, the Insurance Savings Plan provides life insurance as well as a lump sum payout for your financial goals. You can also choose funds that are appropriate for your investment style.
7. Financial Planning for Life
Life insurance plans, in addition to providing financial support in the event of an unexpected death, can also be used as long-term investments to achieve various life goals.
8. Investing in your child's future education
Being an responsible parent, saving money for your child’s education may be one of your top priorities. You may plan for your child’s future and assist him achieve important scholastic milestones by investing in the greatest life insurance coverage.
9. Guaranteed Retirement Income
Life insurance is a financial tool that can be used to help you plan for your retirement. The consistent payouts it can provide in the form of annuities can be a source of income in retirement.
Who is eligible to purchase a life insurance policy?
Any person, male or female, between the ages of 18 and 65, can purchase life insurance in India, according to the terms and circumstances of the policy.
You should also be aware of the following relevant issues of purchasing life insurance:
- Smokers, like nonsmokers, can purchase life insurance, however the premiums may change. They must also disclose their smoking habits to the insurer when purchasing a life insurance policy.
- Disabled people might also get the finest life insurance policy provided they can show that they take care of their family. They must also submit to medical examinations in order to assess the policy premium based on the level of risk involved.
- Life insurance can be purchased by those with pre-existing medical issues. If they have any pre-existing health conditions, they must inform the insurance carrier. Failure to provide this information while acquiring a policy may result in a claim being denied later.
Individuals with pre-existing conditions can get life insurance with JAE Services.
Important Life Insurance Policy Terminology
- About Policy
The policy is the insurance contract between you and the insurance company as evidenced by this document, the Proposal Form, the Schedule, and any additional information/document(s) provided to the insurance company in respect of the Proposal Form, as well as any written instructions from you subject to the insurance company’s acceptance of the same, and any endorsement issued by the insurance company.
- About Sum Assured
It is the sum payable to a nominee in the event of the insured’s untimely death, as stipulated in the selected life insurance policy. You may estimate the premium payable for a certain sum assured using an online life insurance premium calculator.
- About Annualised Premium
Annualised Premium is the amount indicated in the Policy Schedule that denotes the Premium payable for a Policy Year chosen by you (as policyholder), excluding any additional premium paid for Underwriting, loadings for modal premium, Rider Premiums, and applicable taxes, cess, or levies, if any;
- Life Insurance Coverage Period
It refers to the length of time that the insured is covered under a life insurance policy. It may differ from the premium payment term/period that you must pay for a life insurance policy.
- Maturity Date for the life Insurance Policy
It refers to the date on which the Policy Term expires as provided in the Schedule;
- Premium of Life Insurance
It referred to an amount indicated in the Policy Schedule that You must pay by the due dates in order to secure the benefits under the Policy, excluding any applicable taxes, cess, or levies.
- Premium Payment Mode
The premium for life insurance can be paid in the following ways:
- Throughout the policy’s existence, regular mode (monthly, quarterly, half-yearly, or annually) is used.
- A defined premium payment period, which could be a certain number of years (not till the end of the policy term)
- Life Insurance Riders
Riders are features that are offered in addition to the Policy’s core advantages. The accidental death benefit rider, critical illness rider, and premium waiver rider are among them.
Types of Life Insurance Plans
Before purchasing any sort of life insurance coverage, the consumer must first understand the many varieties available.
- Term Insurance
It is a low-cost type of life insurance that provides a large sum assured for low premiums. In the event of your untimely death, the insurance company will pay a sum assured to the policy nominee.
- Unit Linked Insurance Plans (ULIPs)
ULIPs are a special sort of life insurance that provides both life insurance and market-linked profits on your investment. A portion of the premium is invested in various fund alternatives, while the remainder is used to provide life insurance.
- Child Plans
A child plan is a type of ULIP that allows you to build wealth to support your child’s higher education goals. This plan also gives you the freedom to invest in a variety of funds according on your financial situation and long-term aspirations.
- Endowment Plans
A combination of life insurance and savings is what these plans are referred to as. You will receive life insurance as well as a savings advantage if you invest in an endowment plan. When you outlive the duration of your plan, you will get a maturity benefit as well as monthly incentives (if any).
- Retirement Plans
These plans, also known as deferred pension schemes, are designed to assist you in building money for your retirement years so that you can experience financial freedom. If you pass away during the policy’s term, your nominee will be paid immediately. If you survive the term, you will receive the vesting benefit.
Ways to Select the Best Life Insurance Policy
With so many different life insurance plans on the market, it’s crucial to pick the proper one. A wide range of financial needs must be considered when choosing a life insurance plan.
Here are some points to consider about when looking for the greatest life insurance policy:
- Understand The Types of Life Insurance
People who do not understand how life insurance works are unable to make informed decisions about which coverage to purchase. As a result, it’s critical to have a good understanding of the many types of life insurance plans before settling on one.
- Understand Your Financial Needs
A life insurance policy that is appropriate for your colleagues might not be appropriate for you. Before you begin evaluating different plans, you must first examine your unique needs, such as pricing, choice of sum assured, and riders.
- Compare Plans as per Benefits
Because there are so many different life insurance plans to choose from, you need to be sure you choose the correct one with the right features. To do so, you’ll need to conduct your study and compare the plans based on numerous factors such as premium, sum assured, and investment component, if applicable.
How Do You Pick the Right Life Insurance Company for Your Family?
The correct life insurance company must be chosen in order for you or your loved ones to receive the benefits desired from the buy plan.
When looking for the best life insurance provider, keep the following factors in mind:
- Claim Settlement Ratio (CSR)
This ratio compares the number of claims resolved by an insurer to the number of claims received in a given fiscal year. The greater your CSR, the more likely your life insurance claim will be paid.
- Solvency Ratio
It refers to an insurance company’s ability to manage sufficient cash flow to pay down its debts. If this ratio shows an insurer’s strength to satisfy the connected liabilities, it can enable hassle-free claim settlement.
- Premium
Every life insurance policy has a different cost. As a result, you must select the one that appears to be the most cost-effective for you. To avoid losing your life insurance, be sure you don’t choose a plan with an excessively high premium that you can’t afford.
- Persistency Ratio
It expresses the proportion of policyholders who pay the premium compared to the total number of active policyholders. It’s a solid indicator of how satisfied the insurer’s customers are.
- Claim Settlement
Your family will not have to go through any hassles in order to collect life insurance payments thanks to a simplified claim settlement method. It’s best to go with an insurance company that handles claims in a streamlined manner.
How Can a Life Insurance Plan Help You Save Money on Taxes?
Life insurance policies are seen to be effective tax planning instruments. The reason for this is that the policyholder is entitled to tax benefits under the Income Tax Act of 1961. The premiums paid for various life insurance schemes are tax deductible under Section 80C, while the payment or maturity benefit is tax-free under Section 10(10D).
What Are Your Options for Paying for a Life Insurance Policy?
You have the option of paying the premium for life insurance products all at once or in instalments over time. Most life insurance policies provide you the option of making a single (one-time) payment, a regular (continuous) payment, or a limited premium payment duration (for a payment tenure less than the policy coverage period).
You can choose from the following payment alternatives when using normal premium payment mode:
Annual
Semi-annual
Quarterly
Monthly
How Will Your Family Receive the Claim Money of Life Insurance?
Your loved ones will get the policy benefits after your (Life insured) untimely death by filing a claim with your insurer.
To claim life insurance benefits, follow these steps:
- Notify the insurance as soon as possible.
- Request a copy of the claim notification form.
- Request a copy of the papers that must be presented with the claim form.
- If the coverage was purchased online, submit a claim request online as well.
To ensure a speedy and uncomplicated claim settlement, the nominee of a policy should not wait too long after the insured’s death.
What Kind of Life Insurance Coverage Do You Need?
After deciding to purchase life insurance, the next important step is to select a specific life cover, or sum assured. Here are some things to consider when estimating the cost of a life insurance policy:
- Think about your working years.
A life insurance policy can be used to replace lost income. As a result, when deciding on the sum assured, take into account the number of active working years it would replace. For example, if you are 25 years old now and aim to retire at the age of 50, you will have 25 years of earning potential to consider.
- Make a list of your regular expenses.
On a year-to-year basis, the sum assured should cover recurring financial outgoings such as household expenses, bills, and existing loan EMIs. You will have a better understanding of the amount to be decided if you map out these expenses for a specified period.
- Consider Important Life Stages in Your Family’s History
Certain life phases or circumstances necessitate substantial lump sum payments. Weddings, retirement, and a child’s further education are just a few examples. To guarantee that your family is not financially burdened after you, the sum assured should cover them all.
