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Complete Guide on Life Insurance

guide on life insurance

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What are Life Insurance Plans?


Life is uncertain. We can never predict what could happen the very next moment. Life keeps surprising us, where fortunate and unfortunate events are bound to take place simultaneously. In such cases, financial security of the family becomes most important.

Life Insurance is a tool or a provision that helps you secure your family’s financial future by getting adequate risk cover for your life. In return, you pay a particular premium amount to the insurance provider and can be rest assured that your family will be financially secured even in your absence.

Benefits of Term Life Insurance Plan


Financial Coverage

In any case of uncertainties, life insurance plans cover you against the unfortunate event of death and provide the entire sum assured to the nominees/beneficiaries of the policyholder. The inner-peace of knowing your loved ones’ financial future is secure, is unrivaled.

Long Term Protection

Savings and Investments

Except for pure term plans, all other life insurance policies provide maturity benefits at the end of the policy tenure. After analyzing future financial needs, you can invest wisely in traditional or market linked investments plans (called ULIPs) and build a sizeable corpus for your need.



Financial Stability

Loan Provisions

Traditional life insurance plans can be mortgaged against loans that you wish to avail, that too, without compromising the policy benefits. Hence, the unforeseen financial needs can be sorted without worrying about the settlement of the debts.

Peace of Mind

Secured Income

Annuity or pension life insurance plans help you maintain an income even after retirement. Importantly annuity plans safeguard against falling interest rates in a developing economy such as ours.



Peace of Mind

Risk Mitigation

If you are a low/moderate risk taker, life insurance plans are the best suitable for you to invest in. Traditional plans such as endowment offer you assured returns on your investments. Market-linked plans like ULIPs are subject to your risk appetite and can be beneficial even as you move on from one life stage to another.

Tax Benefit u/s 80C

Double Tax Benefits

Your life insurance policy offers tax deductions on both premiums as well as the benefits received under the policy. The premiums paid are exempt from tax under Section 80C, and the maturity amount is exempt from tax under Section 10(10D) of the Income Tax Act of India.

Why Should You Buy a Life Insurance Policy?


Financial Security

It is always better to secure your family’s financial future so that they would not face any financial crisis behind you. This makes it a perfect reason why you should buy a life insurance policy.


Backup Provision

Lifestyle and education costs are continually rising. Quality education nowadays needs a bunch of money, and the fees structure keeps going high for premium institutes. Money accrued through life insurance can be utilized for your child’s education, marriage, or purchasing new property etc.


Flexibility

Today, many life insurance policies, which are less complex to understand, are made available online. You need to get a suitable quote, pay the premium online and your policy is purchased. Also, premium payment options, payout options can be chosen as per your convenience.


Affordability

Edelweiss Tokio Life Insurance comes with competitive pricing and offers a lot of benefits within your budget. You can use the premium calculator to determine the premium amount you will be paying towards your policy.


Tax Benefits

Tax exemption on the premiums paid and the receivable benefits under Section 80C and Section 10(10D) help you save your hard-earned money.


Benefit Payouts

In case of claims made on the demise of the life insured, or even at the end of the tenure, the policy benefits are paid to the respective person. In some cases, you can choose monthly payouts which can act as income for long term.


Riders

Some events may not be covered in the life insurance policy that you purchase. Here, Edelweiss Tokio helps you with the additional cover against certain instances through riders. You can choose riders to get protection against critical illness, accidental death, permanent or partial disablement, waiver of premium, and so on.


Steps to Buy Life Insurance Plans Online


Step 1: Determine which plan you wish to buy

Some events may not be covered in the life insurance policy that you purchase. Here, Edelweiss Tokio helps you with the additional cover against certain instances through riders. You can choose riders to get protection against critical illness, accidental death, permanent or partial disablement, waiver of premium, and so on.


Step 2: Choose your life cover

Usually, life insurance premium needs to be at least 10 times your annual income, when it comes to term insurance plans. Else, you can choose the suitable sum assured, bearing in mind the investment returns and bonuses if any.


Step 3: Calculate your premium

Today, premium calculators have made this task easy. You need to enter a few details as required, and the calculator will show you the exact premium amount you will have to pay towards the best suitable life insurance policy.


Step 4: Fill the proposal form

Fill the proposal form with the basic details that are required to issue a policy. Here your contact details, health-related information, as well as hobbies/habits need to be disclosed.


Step 5: Make payment

You have the flexibility of paying your premiums in different modes, such as- yearly, half-yearly, monthly, or one-time lump sum amount. The premium can be paid using a credit / debit card, net banking, or online wallets.


Step 6: Submit the documents

Proofs of your personal information, address, photo, along with medical documentation and income in some scenarios may be needed to purchase the policy.


How can you save tax with a Term Life Insurance Plan?


Life insurance premiums and the policy benefits are exempted from taxable income under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Premiums paid towards your life insurance policy are eligible for tax deductions up to Rs. 1.5 Lakhs. The maturity benefits are also eligible for tax exemption if the premium amount is 10% or less of the sum assured. In short, the sum assured must be at least 10 times the premium amount or more to avail the tax benefits. If the premium amount is greater than 10% of the sum assured, the deduction will be applicable only on the amount equivalent to 10% of the sum assured.

Death benefits, along with any additional bonuses, are tax-free to provide financial stability to the family of the deceased person.

Inclusions & Exclusions of a Term Insurance Plan


Life insurance plans are meant to provide assured policy benefits either on the demise or at maturity on the survival of the life insured. However, certain events are not covered under any of the Edelweiss Tokio Life Insurance Plans. The following are the inclusions and exclusions of the policy that you need to consider while buying the best suitable life insurance.


Inclusions


If all the documents are provided, and no premiums are due at the end of maturity or the event of the demise of the insured person, the claim is the settlement process is initiated immediately.

The policy benefits are paid as a lump sum amount or as per the payout option is chosen at the time of inception of the policy. Subject to the premiums you pay and the sum assured, tax deductions apply to the benefits offered under the policy.

If any rider is chosen along with the policy and it fulfills the condition caused to the event of death/disablement, the claim is settled.

Loan facilities against the policy, additional benefits that you are entitled to get at higher premiums, are paid out under policy benefits.

Exclusions


  • Accidental death due to the influence of drugs or alcohol
  • Death due to life-threatening activities/hobbies like trekking, racing, paragliding, etc.
  • Death occurring through any pre-existing medical condition, specifically not mentioned in the policy terms
  • Any illegal activity resulting in death

Other exclusions for term insurance plans include:

  • Suicide within the first 12 months of the term policy tenure
  • The death occurred due to sexually transmitted illness, not mentioned in the policy terms
  • Any self-inflicted injury that causes death
  • Death due to the inhaling drugs or illegal narcotics

Reasons Why Buying Life Insurance Online Is a Good Idea

The Internet has changed the world drastically and due to the widespread connectivity it offers, the number of people who buy insurance online is increasing. One of the primary reasons for purchasing insurance online is that communication between the Customer and Company is direct leading to transparency and clarity. The process of buying Life Insurance Online is hassle-free, paperless, and usually cheaper.

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Why Us


Hassle-free claim settlement process

While settling the claim, only three steps are followed viz. initiate the claim, submit all the necessary documents, and at last, the company settles the claim amount.

Proven excellence


Edelweiss Tokio has earned 2018 best product innovation awards from National Awards for Marketing Excellence, as well as, Golden Globe Tigers Awards. Also, the company has been awarded the Golden Peacock Award 2018 for innovative products/services.

Qualified Advisors


Right solution is needed for every query. Expertise from Edelweiss Tokio helps you choose the best suitable life insurance policy for you, and assist you throughout the journey.

Widespread Network of Branches

We have 121 branches across 91 cities, and growing rapidly to expand the presence beyond the boundaries.


Frequently Asked Questions



  • Why do I need a life insurance policy? / How much life insurance do I need?

    Need for life insurance is not just getting financial security to your family in the event of your unfortunate demise, but also a peace of mind in terms of the post-retirement life sustenance. The money accrued through a life insurance policy can be used to settle liabilities and take care of the family’s lifestyle. The corpus can also be utilized to finance your children’s education and other needs.

  • What are the different types of life insurance policies?
  • What are the benefits of buying a life insurance policy?

    There are several life insurance benefits that you can avail by purchasing the best suitable policy.

    • Pure life insurance like Term insurance plans come at considerably low cost but significant benefits in terms of death payouts. It is always advised to get a term insurance policy if you are on the threshold of your career and life. Couple term insurance policies are also good to have, especially to newly married youngsters.
    • Death benefits are paid in case of the demise of the life insured within the policy tenure. If the person survives the tenure, maturity benefits along with accrued investment corpus or bonus are paid, if any.
    • Tax benefits of life insurance are also significant as you save on spending your hard-earned money on taxes. Tax benefits are applicable under Section 80C and Section 10(10D) of the Income Tax Act.
    • Basis of your risk appetite, you can purchase an endowment plan or a ULIP to get benefited from steady investment options. Pension plans also help you achieve long term financial goals as well as retirement goals.
  • What is the average life insurance cost per month?

    The average life insurance cost per month is subject to the plan you choose to buy. Term insurance is the most affordable type, and life insurance premium cost for this plan is around Rs. 600 per month for the life cover of Rs. 1 Cr for a 30 year old male. The premium cost also differs basis the life insurance amount you choose, i.e., the sum assured. Since all the policies, except term plans, offer cash-value benefits; the factors influencing the premium amount can be enlisted as-

    • Your age and gender
    • The amount of cover you need
    • Health conditions & medical history
    • Smoking/drinking habits
    • Hobbies, habits of life-threatening activities
    • Tenure of the policy
    • Riders you choose

    Usually, premiums of the life insurance policy include all the processing fees and charges such as premium allocation charges, fund management fees, paperwork, etc.

  • At what age should I buy a life insurance policy?

    There is no specific age to buy a life insurance policy as there is nothing precious than life. However, it is more important to secure your loved ones' financial future if they were to live without you. The early you buy the life insurance policy, the more corpuses you can accrue.

    • Usually, term insurance is the best if you are looking for life insurance for youngsters, as it comes at affordable premiums and offers considerably high sum assured.
    • Life insurance for parents can also be chosen as soon as possible, as old age premiums are higher
    • If you are the sole breadwinner in the family, life insurance for working professionals is necessary to have. This not only secures your spouse’s financial future but also of your child and parents.
    • It is also advised to have more than one policy, especially if you have any liabilities to pay off. Buying term insurance as pure life insurance and any other cash-value policy will surely help you achieve your future financial goals along with adequate coverage.
  • How will your family get claim money?

    The process of claim settlement consists of three necessary steps.

    On the demise of the life insured, in this case, to be specific- you; the family needs to inform us or the insurance company from which the life insurance policy had been purchased.

    The proofs of the demise need to be provided to the insurer in terms of the death certificate or any equivalent document if required.

    The insurance company then analyses the proofs submitted by the family, checks whether the claim made fulfills the policy terms and then insurance claim settlement happens by paying sum assured plus bonuses, along with return on investments.

    Life insurance claim settlement is increasing nowadays, as awareness is being created to disclose all the facts related to health and habits.

  • Why are life insurance riders important?

    There are usually a few cases that are not covered under the base life policy. Here, life insurance riders help you get additional coverage against certain events.

    What are the riders? It is nothing but a provision that helps people meeting specific or additional insurance needs at some extra premium. Usually, critical illnesses, permanent or partial disability etc. are not covered under the base plan. In such cases, riders help you get total coverage including a list of critical illnesses and partial disability occurring due to multiple accidents. The accidental death benefit or waiver of the premium rider also helps a lot in case of the unfortunate demise of the insured person or if he/she meets any severe accident, resulting in disability. In such cases, regular income needs to be processed to sustain the lifestyle of the insured’s family.


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