What is Life Insurance?
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company, or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policyholder a sum of money upon the occurrence of a specific event.
Life insurance is protection against financial loss resulting from an insured Individual’s death. In realistic terms, life insurance provides you and your family the financial security and certainty to deal with the aftermath of any unseen unfortunate events.
Here are few common things which insurance policy covers
A complete documentary that provides general information such as policy packages, duration of the policy, information of what’s insured, and most coverage limits.
This section will define the insurer’s responsibilities, it includes activities such as cancellation of policies, premium plans, etc.
In the future, if you feel there is a need to do some changes in the current policy then insurance endorsement policy is the best category for this to meet your needs. You can add later whatever changes you want in your policy contract.
Life Insurance Provide Financial security to your family in case of any mishappening with Bread earner. By taking life Insurance you can save your Family by against your Loans, Future Financial requirements, and any type of Financial Needs.
- Colour Photo
- Last 6 months bank A/C statement
- Age proof of co-applicant
- Passport size photograph of the applicant & co-applicant
- PAN Card Copy
- Residence Address Proof
Life Insurance FAQ
What is Life Insurance?
Life Insurance is a contract between the insurance company (insurer) and the policyholder (insured). In return for a consideration (the premium), the insurance company promises to pay a specified amount to the insured on the happening of a specific event such as death, disability, critical illness.
Life insurance ensures financial protection on accident or death. It enables maintenance of the same lifestyle even after the unfortunate demise of a loved one. The beneficiaries can utilize the monetary benefits to replace the income one would have earned or help pay off debts or other expenses. Life insurance boosts the confidence of the insured and offers the satisfaction of being covered for illness, life or financial loss.
Why is insurance important?
Insurance is a risk mitigation technique where policy owner can ensure that his/her untimely demise will not result in financial hardship for loved ones and lenders.
What are ULIPs?
Unit-linked insurance plans offer the benefits of both life insurance and returns on investment. They give the insured the option to participate in the growth of the capital markets. On the death of the insured the sum insured or the market value of the investment (fund value), whichever is higher, is paid. On maturity of the plan the fund value is payable. Returns are subject to movements in the capital markets or debt market where investments such as equities (shares) or bonds (debt) are transacted. Unit-linked policies carry a higher risk than with-profit policies and contain fewer guarantees. However, they are much more flexible. Unit-linked policies are suited for people prepared to undertake some investment risk to obtain the benefits of flexibility.
What are traditional insurance plans?
Traditional Insurance Plans are Money Back Plans/Endowment Plans/Term Plans. Before the advent of ULIPs, these were the instruments of choice for insurance as well as investment. However, they offered no option to choose between various asset classes and the investments were made solely at the discretion of the insurance company. Traditional plans provided returns in the form of sum insured plus bonus (if and when declared). The amount of bonus depends upon profits made by the insurance company and the declaration of the bonus is at the sole discretion of the life insurance company.
What is a Benefit Illustration?
Benefit Illustration in the context of Life Insurance is a projection of cash flows and benefits pertaining to a Life Insurance Plan.