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Terminology – Simplifying Life Insurance terms
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Section 6 under the MWPA covers any life insurance policy taken by a man on his own life in favor of his wife and children.
Under MWPA, the policy sum assured will always be the property of your wife and children and cannot be claimed by your lenders or attached by the court for repayment of your debts.
Always buy your life insurance policy under the Married Women's Property Act, 1874.
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Is the additional amount over and above your regular premium that you can invest in your Insurance Plan. Top-ups can be availed anytime during policy term, provided all your regular premiums have been duly paid.
To take advantage of a well-performing ULIP, you can increase its investment component by paying an extra premium.
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Riders are add-ons you can opt for additional cover on your primary life insurance policy. You can get covered against risks like critical illnesses which may not be covered by your base policy.
The most popular ones are critical illness riders and accidental death & permanent disability riders.
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A document that outlines policy benefits, terms and conditions of your life insurance policy. A policy bond is issued to you after the insurance company accepts your proposal for insurance.
Sign up for an e-insurance account today and keep your insurance documents safe and secure online.
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You can secure a loan against your life insurance policy. The maximum value of the loan depends upon the type of policy and its surrender value.
You can only avail loans on traditional money back or endowment policies. This facility is, however, not available against term insurance policies or ULIPs that invest in equity or equity oriented securities.
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Sum payable upon demise of the insured person. The claim amount is paid to the beneficiary or the nominee of the policy.
Whenever a claim is raised, the insurance company conducts a review to ascertain the validity of the claim and ensure that the claim is not false.
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An extension period, usually between 15 to 30 days (depending on the premium payment mode opted by you), given by life insurance companies to pay due premium after you fail to pay within the due date.
If you fail to pay due premium during the grace period, your life insurance policy will lapse.
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A person who receives policy benefits in case of demise of the insured person. You can have your spouse, children or parents as your Nominee(s).
Always update your Nominee to ensure policy benefits are received by the right individual
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Usually a 15 day period from date of receipt of your life insurance policy bond during which you can return your policy and get a refund.
The entire premium paid is not refunded in case of cancellation. The refund amount is paid after deducting expenses incurred on medical tests, stamp duty and proportionate risk premium for the period.
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Beneficiary is the person (usually legal heir) entitled to receive the claim amount and other benefits upon the demise of the life assured or on policy maturity. In certain cases, the nominee and beneficiary can be the same person.
Choose your nominee carefully since they will either themselves be the beneficiary or enable the proceeds to reach the beneficiary.