Life Insurance

Frequently asked questions

What is the importance of Life Insurance?

It is important as

  • It allows systematic long term savings which are low in nature but grow compoundingly
  • Can be used for transferring wealth though estate planning
  • To give adequate cover to key executives of the business, for its continuity
  • Short term death benefit
  • To substitute loss of income source in case of death
  • Help supplement retirement income in case there is no other retirement coverage

Are there any advantages in buying insurance at an early age?

Yes. The premium that you pay on your insurance policy is mainly dependant upon two things - your age and the tenure of the policy. The younger you are, the lower is your insurance premium amount. At younger age, you would be physically sound and may not be suffering from illnesses / medical. This would entitle you to a lower premium on the policy. Therefore it is advisable to buy insurance at an early age to reduce the cost of insurance.

I know I need life insurance, but cannot afford the coverage I need. Can I do anything to lower the cost?

The cost of life insurance depends on three factors: your age, health and your income. We suggest that you not compromise on the level of protection you require. You could purchase a basic protection policy that gives you the opportunity to pay only the minimum premium. You can choose this affordable policy, without any riders.

How is annuity different from insurance?

Annuities differ from all other forms of life insurance in one fundamental way - They do not provide any insurance cover but offer a guaranteed income for a certain period or for life. Typically annuities are bought to generate income during one's retired life, which is why they are also called Pension Plans.

Annuities are an investment that offers you an income that you cannot outlive and provides a solution to the biggest financial insecurity of old age that you will outlive your income.

If I decide to take out life cover will I need to go for a medical?

Once your application has been submitted to the insurer it will be assessed by a medical underwriter. The life insurance provider will either accept your application immediately, or they could request a medical report from your general practitioner. You may also be asked to attend a medical examination,which will be paid for by the insurer.

What is face amount?

The amount to be paid to the beneficiary when the insured dies. It will be reduced by any unpaid policy loans and interest on those loans, and may be increased by any dividends.

What is cash surrender value?

This term refers to the amount payable to the permanent life policy owner upon surrender of the policy. It is equal to the current cash value, less any surrender charges that may apply, any monthly contract charges, and any outstanding loans and accrued interest.

What is surrender charge?

During the surrender charge period of a permanent life policy, an amount of money that is deducted from a policy's total accumulation value if you:

  • Surrender your policy
  • Decrease the face amount of your policy

What is partial withdrawal?

Partial withdrawal of a policy implies withdrawal of only a part of the funds of your policy. The applicable norms for partial withdrawal may differ for every product.

Can I take a policy loan?

If the policy has a surrender value you can avail of a policy loan up to 90% of the surrender value subject to minimum availability of Rs. 3,000. The policy loan can be taken for regular as well as single premium policies, any time after completion of two policy years. However, please note that no policy loan is available in case of term policies, Flexi Retirement Pension Plan, Flexi Single Premium Bond and ClassicLife Plan.

Is change in mode of premium payment allowed?

Change in premium payment mode is permitted only after completion of one policy year.

What is a rider?

A provision added to a policy that provides additional benefits, usually accompanied by a corresponding premium increase or change.