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    Exide Life Insurance launches Exide Life Smart Term Plan

    19/07/2016 06:05:36
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Everything you wanted to know – Life Insurance

1. What is Life Insurance?

Life Insurance is a financial cover for a contingency linked with human life, like death, disability, accident, retirement etc. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is loss of income to the household.

Though human life cannot be valued, a monetary sum could be determined based on the loss of income in future years. Hence, in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by way of a 'benefit'. Life Insurance products provide a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident.

2. Why should you buy Life Insurance?

All of us face the two risks of dying too soon or living too long.

  • Life Insurance is needed to ensure that your immediate family has some financial support in the event of your demise and to finance your children’s education and other needs.
  • To have a savings plan for the future so that you have a constant source of income after retirement
  • To ensure that you have extra income when your earnings are reduced due to serious illness or accident.
  • To provide for other financial contingencies and life style requirements

3. Who needs Life Insurance?

Primarily, anyone who has a family to support and is an income earner needs Life Insurance. In view of the economic value of their contribution to the family, housewives too need life insurance cover. Even children can be considered for life insurance in view of their future income potential being at risk.

4. How much Life Insurance is needed?

The amount of Life Insurance coverage you need will depend on many factors such as:

  • Life Insurance is needed to ensure that your immediate family has some financial support in the event of your demise and to finance your children’s education and other needs.
  • Dependents you have
  • Amount of Debts or mortgages
  • Lifestyle you want to provide for your family
  • Provision for children’s educational needs
  • Investment needs

You could use the Human Life Value calculator to calculate the amount of life cover.

5. When does the coverage on the policy begin?

Coverage under a life insurance policy begins once the proposal made to the life insurance company is accepted and communicated and the person making the proposal has paid the first premium. Most companies provide some temporary conditional coverage during the application process assuming certain conditions are met. This temporary coverage is limited in time and amount. The availability, amount and conditions are described in the application and vary from company to company. If you are replacing existing coverage, you should never drop your existing coverage until your new policy has been approved, and your first premium has been paid.

6. When could a person cover the lives of spouse and children?

There is no single guidance or rule for this. Initially, life insurance for appropriate amounts should be effected on the family breadwinner(s). It is of utmost importance that the income earning capacity of the primary breadwinner be fully protected, through the purchase of the required amount of life insurance before contemplating the purchase of life insurance on children or on a non-wage earning spouse. In a dual-earning household, it is important to protect the income earning capacity of both spouses. Life insurance on a non-wage earning spouse is often recommended for the purpose of paying for household services lost at this individual's death.

7. What is a life insurance policy?

A written document issued by a life insurance company to a policyholder, which expresses the insurance contract between the company and the policyholder.

8. What is a ULIP?

ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. In a unit linked policy the investment risk is generally borne by the investor.

Click here to buy our Unit Linked Insurance Policy

9. What is QROPS?

Indians who have worked in UK might have made some regular contribution from their income towards a pension fund. Now if they plan to move out of UK, the UK Government allows transfer of their pension funds tax free to pension schemes in India registered as QROPS.

QROPS stands for Qualifying Recognized Overseas Pension Scheme . It refers to overseas pension schemes which have been approved by Her Majesty's Revenues and Customs (HMRC), UK for transferring a UK pension fund 'tax free' to any other country. HMRC is the government body in UK that collects and administers taxes.

Learn more about QROPS from Exide Life Insurance

10. Who is a proposer?

The person who proposes to enter into a contract of insurance with a life insurance company to insure himself or another life on whom he has insurable interest.

11. Who is a life insured?

The person whose life is covered under the contract of insurance.

12. What is premium?

Premium is the consideration (price) payable periodically to the life insurance company for the risk undertaken by it under the insurance policy.

13. What is underwriting?

Underwriting is the process through which a life insurance company takes a decision whether to accept the risk and if so at what rate of premium, after considering relevant facts disclosed to it.

14. What should I look for before I decide to buy a policy?

You must check and see whether or not there is availability of guarantee of return, what the lock in period is, details of premium to be paid, what would be implications of premium default, what the revival conditions are what the policy terms are, what are the charges that would be deducted, would loan be available etc.

Know more about your Right & Duties.

15. What is the importance of a proposal and the disclosures made therein?

The disclosures made in a proposal are the basis for underwriting a policy and therefore any wrong statements or disclosures can lead to denial of a claim.

16. Who is a policyholder?

A person who has entered into a contract of insurance with the insurance company.

17. What is lapse of policy?

The termination of policy caused by the policy holders failure to pay the premiums within the stipulated period.

18. What is a paid up policy?

Once the premium on a life insurance policy for a specified period is paid in full, the policy may not lapse even if no subsequent premiums are paid. Such policies are known as paid-up policies. In such cases, the sum originally assured is reduced to a sum bearing the same ratio to the sum originally assured as the number of premiums actually paid to total number of premiums originally stipulated as payable under the policy.

By way of example, if 6 out of the originally stipulated 30 premiums are paid, the sum assured under a paid-up policy could still be 20 percent of the original sum assured by the policy.

19. What is maturity date?

The date on which the policy comes to on end and the date on which the survival benefits are payable.

20. What is maturity value?

The amount payable under a life insurance policy on its maturity date.

21. What is a claim?

Demand presented for payment of the benefit due under the terms of an insurance policy.

Read more about out Claim philosophy

22. What is group insurance policy?

An insurance policy that provides coverage for a number of people under one contract, called a master contract. In a Group insurance policy, the policy holder is usually the employer who contributes premium which is a certain percentage of the salary of the employees in the Employers organization. However, the employees are the beneficiary in such Group insurance policies. In general, in a group insurance policy the insurance company ordinarily cannot turn down any applicant that is a member of the defined group.

23.What are "with profit" policies?

With Profit Policies are policies where the policyholders receive bonuses, upon the insurance company generating surplus and declaring them to the policyholder. Only a "with profit" policy is eligible to bonus. The bonus that may be receivable may vary year to year according to the surplus generated by the insurance company. 'With profit' policies are more popular because of the possibility of getting increasing bonus every year even though the premium payable is higher than the premium paid in 'without profit' policies.

24. What is a Unit Fund?

The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund.

25. What is Net Asset Value (NAV)?

NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on the website of the respective insurers.

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*Conditions apply *The mentioned Benefit Illustration is for a male aged 30 years paying Rs. 10,000 p.m. for a premium payment term of 10 years and policy term of 10 years assuming 100% investment in Exide Life Active Asset Allocation Fund (ULIF01527/12/10ACTASSET114). Maturity Value has been shown at IRDAI prescribed fund growth rate. Actual maturity value will depend on the performance of the fund. Exide Life Wealth Maxima UIN: 114L079V01, is a Non-Participating, Unit Linked Life Insurance Product (ULIP). The premiums paid in ULIP policies are subject to investment risks associated with capital markets and the Unit Price of the Units may go up or down based on performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. For more details on risk factors, terms and conditions, please read the sales brochure of product carefully before concluding a sale. Exide Life Insurance Company Limited is only the name of the Insurance Company and Exide Life Wealth Maxima is only the name of the product and does not in any way indicate the quality of the product, its future prospect or returns. Past performance of Unit Linked Fund and other Funds of the Company is not indicative of future performance of any of these funds. ARN: EXL/2016-17/Online/288
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News

    Exide Life Insurance launches Exide Life Smart Term Plan

    19/07/2016 06:05:36
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