Life Insurance
At Shaikh Insurance & Investment we provide protection and investment solution to our clients. But protection is the most important solution which is required for every client. Life Insurance covers financial protection against the death of an individual. But to get protected we have to find which best Life insurance provider is there in the market.
Tata AIA is a leading Life Insurance provider and has the highest claim settlement ratio in Life Insurance Industry. Tata AIA is having 99.07% claim settlement ratio for FY 18-19 year. Tata AIA offers three Term plan which are Sampoorna Raksha +, Maha Raksha Supreme, and iRaksha TROP. Term Plan also provide Tax benefit under section 80c and also under section 10 10d.
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Basic Insurance Knowledge
What is life insurance?
A life insurance policy is an agreement with an insurance company & Insurer. In Life insurance policy lum-sum amount is paid to the insurer on Death. The death benefit is passed on to their benefactor.
There are different types of Life insurance for a customer in the market according to requirements. Life Insurance policy returns are tax-free under section 10(10d).
Benefits of Life Insurance
1. Risk Coverage: Insurance provides risk coverage to the insured family in the form of monetary compensation against the premium paid.
2. Difference plans for different uses: Insurance companies offer a different type of plan to the insurer for his different needs. The benefit depends upon what type of insurance is purchase by the insurer. Life Insurance Company also provides different types of insurance for the different age groups with a different benefit.
3. Cover for Health Expenses: These policies also cover hospitalization expenses and critical illness treatment.
4. Promotes Savings/ Helps in Wealth creation: Insurance policies also come with the saving plan i.e. they invest your money in profitable ventures.
5. Guaranteed Income: Insurance policies come with the guaranteed sum assured amount which is payable on happening of the event.
6. Loan Facility: Insurance companies provide the option to the insured that they can borrow a certain sum of amount. This option is available on selected policies only.
7. Tax Benefits: Insurance premium is tax-deductible under section 80C of the income tax Act, 1961.
Types of Life Insurance Policies
1. Term insurance plan:As the name says Term insurance plan are those plan that is purchased for a fixed period of time, say 10, 20 or 30 years. As these policies don’t carry any cash value their policies do not carry any maturity benefits, hence their policies are cheaper as compared to other policies. This policy turns beneficial only on the occurrence of the event.
2. Endowment policy:The only difference between the term insurance plan and the endowment policy is that endowment policy comes with the extra benefit that the policyholder will receive a lump sum amount in case if he survives until the date of maturity. Rest details of term policy are the same and also applicable to an endowment policy.
3. Unit Linked Insurance Plan:These plans offer policyholders to build wealth in addition to life security. Premium paid into this policy is bifurcated into two parts, one for the purpose of Life insurance and another for the purpose of building wealth. This plan offers to partially withdraw the amount.
4. Money Back Policy:This policy is similar to an endowment policy, the only difference is that this policy provides many survival benefits which are allotted proportionately over the period of the policy term.
5. Whole Life Policy:Unlike other policies that expire at the end of a specified period of time, this policy extends up to the whole life of the insured. This policy also provides the survival benefit to the insured. In this type of policy, the policyholder has an option to partially withdraw the sum insured. The policyholder also has the option to borrow sum against the policy.
6. Annuity/ Pension Plan:Under this policy, the amount collected in the form of a premium is accumulated as assets and distributed to the policyholder in form of income by way of the annuity or lump sum depending on the instruction of the insured.
All Insurance Policy can be purchased online. For quotation contact us on Whatapp no : 8689921061
Claim Settlement Process
On the happening of the event, the beneficiary is required to send a claim intimation form to the insurance company as soon as possible. Claim intimation should contain details such as Date, Place, and Cause of Death. On successful submission of claim intimation form, an insurance company can ask for additional information about
1. Certificate of Death
2. Copy of Insurance Policy
3. Legal Evidence of title in case insured has not appointed a beneficiary
4. Deeds of assignment
On successful submission of all the document, the insurance company shall verify the claim and settle the same
Principles of Life Insurance
Life insurance is based on a number of principles that are tailored to meet market conditions and ensure insurance companies make profits while offering security policies to insured individuals.
There are broadly four major insurance principles applied in India, these being:
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Insurable Interest – This principle pertains to the level of interest an individual is expected to have in a particular policy. The interest could be a family bond, a personal relationship and so on. Based on the interest level, an insurance company can choose to accept or reject an application in order to protect the misuse of a policy.
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Law of large numbers – This is a theory that ensures long-term stability and minimizes losses in the long run when experiments are done with large numbers.
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Good faith – Purchasing insurance is entering into a contract between company and individual. This should be done in good faith by providing all relevant details with honesty. Covering any information from the insurance company may result in serious consequences for the individual in the future. This being said, the insurer must explain all aspects of policy and ensure that there are no unexplained or hidden clauses and that the applicant is made aware of all terms and conditions.
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Risk & Minimal loss – Insurance is risky and companies have to do business and make profits keeping in mind the risk factor. The principle of minimal risk states that the insured individual is expected to take necessary action to limit him/her self from any hazards. This includes following a healthy lifestyle, getting a regular health check-up and more.
Points to Consider for Life Insurance
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Research: As an applicant for life insurance, there are numerous policy options at your fingertips to choose from. It is essential that you do your research before making an informed decision on purchasing a life insurance policy, as it can help you save money and receive maximum benefits.
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Read terms and conditions: The terms and conditions of an insurance plan contain all relevant information regarding the particular policy. Make sure that you read the fine print in detail and completely understand it before purchasing an insurance policy of your choice.
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Remember the lock-in period: There are instances when individuals purchase insurance policies without making an informed decision and later realize that they are unhappy with the insurance policy. In such scenarios, some insurance companies offer a lock-in time frame, which is a short time usually 15 days where a policyholder can return the policy to the insurer and purchase another in case they were unsatisfied with the initial purchase.
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Consider premium payment options: Almost all insurance providers offer premium payment options consisting of annual, semi-annual, quarterly or on a monthly basis. It is essential that you opt for Electronic Check System (ECS) payment that will periodically debit your bank account with the required insurance amount. Also, you can choose from a schedule that will allow you to make a premium payment with the convenience of interval payments.
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Don’t Mask Information: There are times where individuals try to hide information when filling out the insurance application form. All personal credentials and medical history must be accurately presented to the insurance company. Misinformation can cause serious issues when trying to make claims later on.