In Life Insurance contact, the human life is insured against old age illness, accident, death, etc. Life insurance contract is not a contract is not a contract indemnity.Hence the insurer has to reimburse a definite sum on the maturity or completion of policy.Life Insurance is only for those who survive , and not for the person who passes away. It is moral responsibility of every person to protect his family member form uncertain cricumsances or death.Hence Life insurance plays a vital role in the world.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer, common examples are claims relating to suicide, fraud, war, riot and civil commotion.
Types of Life Insurance
A term policy is a simple product that provides insurance coverage for a specified period. If the policyholder dies during this period the beneficiaries receive the death benefits. The premium for the policy is based on the insured person’s age and health.term policy has no investment component .There two basic types of term life policies.
• Level term
The death benefits remain the same throughout the life of the policy.
• Decreasing term
The death benefits decline over the life of the policy.
Permanent policies provide lifetime death benefit coverage with cash value components .The permanent life insurance policies are usually categorized into three types.
• Whole Life Insurance /Life Cover Insurance
Under this policy the insured is covered for the lifetime till his/her death. The maturity age is usually 100 years. Thus you need to keep paying the premium till 100 years of your age .here the beneficiary gets the sum assured along with maturity benefits on the untimely demise of the policyholder. On the other hand the policyholder gets to enjoy the survival benefits in case he/she happens to survive the policy term .A whole life insurance plan offer benefit in both the cases when the policyholder survives the policy or on his/her sudden demise during the term.
• Universal life insurance
Universal life insurance is a relatively new insurance product intended to combine permanent insurance coverage with greater flexibility in premium payments. Along with the potential for greater growth of cash values. There are several types of universal life insurance policies including interest-sensitive ,variable universal life ,guaranteed death benefit and has equity—indexed- universal life insurance.
• Variable life insurance
Life Insurance covers
Along with the standard coverage which varies with plan to plan, you can further enhance the protection with the help of riders, such accidental death benefit rider, total or permanent disability rider and many more. The additional benefits can be availed on payment of some extra amount, following areole comment riders,
Accidental death benefit rider
Accidental total and permanent disability rider
Critical illness rider
Hospital cash rider
Waiver of premium rider
Life Insurance Function
• Before purchasing a life insurance policy, you should understand your need and analyses your financial condition and also decide your beneficiary.
• Choose the insurance company and the policy after a thorough comparison.
• Once you finalize the company and the policy also decide the policy term. The premiums decided on the basic of various factors like age, lifestyle, gender, policy term, etc.
• Policyholder has to pay the fixed premiumto the insurance company for the fixed term. The premium is accumulated to provide the sum assured on the untimely demise of the insured.
• In case of the sudden demise of the insured the claimant should immediately inform the company and provide the required documents along with the claim form
• If the claim is approved the beneficiary gets the sum assured. The claim can also get re1ected because of reason like nonpayment of premium reason of death not covered in the policy, etc.
Documents required for claim process
Following are the standard set of document required to process a claim,
Duly filling in and signed claim from
Original policy certificate
Death certificate issued by local authority
Hospital discharge summary
KYC documents of beneficiary like copy of photo ID and address proof
Copy of cancelled cheque and bank statements
If the claim is made by someone other than the nominee or assignee the person making the claim has to summit a legal proof of his or her title
Advantages of Buying Life Insurance policy
Safeguard children’s future
Loan against policy
Protection against other eventualities