What is Life
Insurance?

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.

While there are single premium policies as well, the premium amount is usually paid on an annual basis, and there are options of paying half yearly, quarterly and monthly as well. The individual who buys the insurance is known as the policy holder.

Types of Life Insurance plans

Pure Protection

These plans are called Term plans and provide the predefined amount of money to the policyholder’s family, if the policyholder dies during a specified term. No amount is paid if the insured person survives till the end of the policy period.

This policy essentially remains active for a predefined time and is one of the most affordable policies available in the market, since the entire amount of premium is used to cover the life of the insured only.

Protection and Savings

This kind of policy works like a financial tool that helps you plan for your long-term goals like purchasing a home, funding your children’s education, retirement and more, while offering the benefits of a Life Cover.

In these kind of plans, part of the premium goes towards covering the risk of loss of life of the insured, while the other part of the premium goes towards accumulating a desired sum to meet the defined objectives.

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Whole life insurance

Whole life insurance, as the name suggests provides cover to the insured for entire life till the policy is in force. The coverage period can be taken for as long as 100 years. These policies also offer loan facilities to the policyholder. The overall process of buying is simple and can be done online as well.

Money Back Policy

The main differentiator of money back policy is that it gives the policyholder different survival benefits which are linked to the period of the policy. Unlike other policies, this policy gives the policy holder money during the policy period. Regardless of the number of instalments paid, if the policyholder dies during the policy period, the family gets the entire sum. These policies are expensive as compared to other policies.

Endowment Policy

Endowment policies are different from term insurance policies in a way that in case of these policies, the insured gets a lump sum amount of money if she/he survives till the maturity date. The policy offers insurance with savings at the same time. They also come with riders that may be used to increase the coverage of the policy. In case of death, the endowment policy guarantees that along with the insured sum a participation profit is also paid according to the nature of the policy

Retirement plans

Retirement plans, in simple terms, can be defined as those plans that guarantee fixed income after your retirement. They aid in creating a retirement corpus. This corpus is then invested to generate post-retirement money flow, thus creating a financial cushion and helping in risk mitigation. The money is rolled out in the form of monthly pension.

Factors that Affect Life Insurance Premium

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Health Conditions

This is the most important factor that decides whether insurance cover would at all be available to a person, and if yes, at what premium. This is because the insurance company perceives that the risk of claim arising sooner than later in a person who is not healthy is much more, hence the premium in a case of medically less fit person would be more than in case of an individual who is medically fit

Family Health History

Family health history also plays an important role in deciding the premium amount for a life insurance. If the insured has a family history of medical issues, especially hereditary diseases, then the premium to be paid by such person would be higher than a person with no such family history of medical issues.

Age

The higher the age of the insured at the time of taking the policy, the higher the amount of premium that the policy holder would have to pay for taking the same amount of life insurance cover

Gender

The life expectation of women in India is higher than men, hence the premium for life insurance of a female would be slightly lower than a male life.

Occupation

A person who is into hazardous occupation like mining, or adventure sports like sky diving, scuba diving, motor racing etc, would have to pay higher premiums to take a life insurance cover for oneself.

Amount of coverage

The larger the amount of cover, the higher the premium would be required to be paid for getting a life insurance cover

Benefits of life insurance

Risk mitigation and coverage

Life insurance provides financial coverage to the insured family in form of monetary compensation in lieu of premium paid to mitigate and cover financial risks after the policyholder’s death.

Tax benefits

Enrolling for a life insurance policy can guarantee you tax benefits. The premiums you pay towards the policy make you eligible for tax exemptions of up to ₹1.5 lakhs of your taxable income, under Section 80C of the Income Tax Act. The death benefits are also fully tax exempt, under Section 10(10) D of the Income Tax Act, subject to meeting certain criteria.

Guarantee of fix returns

Life insurance policies guarantee that you get a fixed amount after a fixed timeline. You need to go through the structure of different life insurance products. Whatever you choose, you can be rest assured that the promised death benefits will be disbursed to the beneficiary, if the information provided by you at the time of enrolling for the policy was accurate.

Provision for loan

Certain policies provide the option of loan and allow the insured to borrow a sum of money against the sum assured in a life insurance policy. This means that if you need to take a loan, for instance, to fund the education or marriage of a child, you can use the life insurance policy as collateral.

Health expense coverage

Most of these policies cover the health and treatment expense that may occur if the policy holder falls ill. You can also choose riders to increase the coverage of the insurance policy to protect your finances even while you are alive.

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Role Of Dealplexus In Your Decision To Take A Life Insurance Cover

If you are looking for a Life insurance cover for yourself, you may simply raise a query on Dealplexus.com, providing your name, contact details and type of insurance required. Our team shall connect with you to understand your priorities which could be any of the following:

Assessment of Insurance cover required

We will assess your assets and liabilities position and your current levels of income to understand the actual quantum of insurance that should be taken to give you sufficient cover to safeguard your financial liabilities in case of any eventuality.

Best premium rate

We strive to get you the maximum cover at the lowest premium rates, with all the features that are actually meaningful to be added to your insurance cover.

Multiple partnerships enabling requirement matching

Our partners are specialised in providing prompt and superlative customer experience in any of their dealings. Our partnership with all the major insurers gives us the flexibility to choose the best insurer who meets your requirements.

Smooth process

Taking a life insurance cover can be very tedious and time confusing, since a lot of paperwork is required to be completed, and health test also is required in many cases. Our team ensures that this entire process is smooth for you.

Frequently Asked Questions

What is life insurance?

Life insurance is a financial product designed to protect individuals and their families against the risks associated with premature death of the bread winner of the family. It is an agreement between an insurer and a policyholder in which the policyholder pays premiums in exchange for a guarantee from the insurer to pay a sum of money to the policyholder's beneficiaries upon their death. The purpose of life insurance is to provide financial support to dependents or loved ones who may be unable to support themselves after the policy holder's death.

What is the main purpose of life insurance?

Life insurance serves as a means to provide financial stability for one's family members in the unfortunate circumstance of an abrupt passing away of an income earning family member. The main intention is to secure and protect the wellbeing of loved ones. Life insurance provides a lump sum payment, also known as a death benefit, to the beneficiaries named in the policy.

What are the benefits of life insurance?

Life insurance offers numerous advantages to those who desire to safeguard their family members in the event of an unforeseen demise.

The primary benefit of life insurance lies in its ability to provide a lump-sum payment to beneficiaries upon the death of the policyholder, which can be used to cover funeral expenses, pay off debts, mortgage payments, and other financial obligations.

Additionally, life insurance can provide peace of mind to individuals by ensuring their loved ones are financially secure even after they are no longer able to provide for them.

Life insurance can also act as an investment vehicle by offering cash value accumulation options within certain policies. This feature allows policyholders to earn tax-deferred interest on their premiums, effectively increasing their overall savings and providing a valuable source of funds for future financial goals.

Which Plan is the best life insurance plan?

Determining the best life insurance plan is a complex task that requires a multifaceted analysis of various factors. Factors such as the individual's age, financial situation, health condition, and lifestyle will all contribute to the selection of the most suitable insurance policy

What is the premium for Life insurance plan?

A regular sum of money paid by the insured to the insurance company at specified intervals of time to maintain the policy of a certain sum of money is called the life insurance premium

What is the period for which I can take life insurance policy?

The period for which an individual can take a life insurance policy is dependent on various factors such as age, health, and financial needs. Insurance companies provide life insurance plans with varying durations, which consist of term-life policies for a defined time frame and permanent life policies that give coverage for the entirety of the policy-holder's life. Policy holders can select a term length ranging from one to thirty years, depending on their preferences.

Is life insurance available for 100 years?

In India, life insurance policies are generally available for a maximum term of 80 years. However, some insurance providers do offer policies with terms of up to 100 years, albeit as rare cases and only upon meeting specific criteria.

Can I take life insurance if I am 80 years old?

Yes, it is possible for an 80-year-old individual to obtain life insurance coverage, however, it is important to understand that the options available to them may be limited and the premiums may be significantly higher than those for younger applicants

I forgot to pay my life insurance premium? What should I do?

In situations where a policyholder forgets to pay their life insurance premium, it is crucial to act promptly. The first step would be to contact your life insurance provider and inform them of your missed payment. It is important to do this as soon as possible, as most policies will have a grace period in which the premium can still be paid without the policy lapsing. However, if the grace period has expired, the policy may have lapsed, and the policyholder may have lost their coverage. In such cases, the policyholder may still be able to reinstate their policy by paying any outstanding premiums and meeting any reinstatement requirements.

Will my life insurance policy be cancelled if I do not pay the premium?

Failure to pay premiums in a timely manner can result in an undesirable interruption or even termination of coverage.

Life insurance policies have a grace period which is essentially a timeframe granted to the policyholder to make the required payment without repercussions.

Is it ok to pay insurance premium late?

Late payment of insurance premiums is a matter of concern for both the insured and the insurer. The insured who delay payments could face adverse consequences such as non-renewal of policies, loss of coverage, and even cancellation of policies. On the other hand, it could also result in a revenue shortfall for the insurers leading to a loss of credibility among investors, regulatory issues, and financial impact.

Some insurers may charge late fees or penalties while others may allow a certain grace period for payment. Hence it is always desirable to pay insurance premium timely.

I have a health insurance plan. Will I still need a life insurance?

Life insurance and health insurance serve different purposes. Health insurance covers medical expenses incurred by the insured, while life insurance provides financial protection to the beneficiaries of the insured in case of unexpected death. Therefore, the purchase of life insurance can be a wise decision for those who wish to secure the future of their loved ones in case of unfortunate circumstances.

My office has provided me a good life insurance cover. Why should I pay premium for another insurance policy?

It is commendable that your workplace has extended a life insurance package as part of your employment benefits. However, it is important to evaluate the terms and conditions of the policy to determine whether it truly meets your needs. It is possible that the coverage level provided may not be sufficient to cover all the needs of you and your family. Additionally, it is important to consider the possibility of discontinuation of employment in your current organization, which could lead to loss of the life insurance coverage.

Purchasing an additional insurance policy provides a safety net in case of unexpected events

How can Deal Plexus help me to get a good Life Insurance Plan?

The team of experts at Deal Plexus is well-versed in the nuances of life insurance policies and can provide clients with valuable advice on choosing the right coverage. The process begins with evaluating the client's budget, lifestyle, and current financial goals, basis which we inform the type of plan and coverage amount.

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