Life Insurance

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Life Insurance

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.

Importance of Life Insurance

  • It ensures that your immediate family has some financial support in the event of your demise
  • It provides financial aid to your children’s education and other needs
  • It helps to have a savings plan for the future so that you have a constant source of income after retirement
  • It makes sure that you have extra income when your earnings are reduced due to serious illness or accident
  • It aids in providing other financial contingencies and life style requirements

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.

What Do You Determine Your Life Insurance Coverage?

  • How many dependants you have?
  • What kind of lifestyle you want to provide for your family?
  • How much you need for your children’s education?
  • What your investment needs are?
  • What your affordability is?
Dos: DON’Ts:
Think through why you are buying insurance and what core requirements and expectations
Seek and receive advice and options patiently
Be open-minded but cautious about the advice and information you gather
Ask lots of questions about the policy options to see what fits your needs
Find out policy details like: whether it is a Single Premium or Regular Premium policy, which is the best premium payment frequency that suits you eg: annual, quarterly etc., whether there is an ECS (Electronic Clearing Service) payment option to make your premium payment safe and easy
Fill the proposal form completely and truthfully. Remember you are responsible for its contents so make sure that the information you give cannot be disputed during a claim
Ensure you fill nomination details
If the form is in one language and you are answering the questions in a different language, ensure the questions are explained correctly to you and that you have understood them completely as you have to give a declaration to this effect in the proposal form
Keep a copy of the completed proposal form you sign and any declarations and terms agreed upon mutually for your records
Do not leave any column blank in the proposal form
Do not let anyone else fill it up
Do not conceal or misstate any facts as this could lead to disputes at the time of a claim
Do not miss or delay your premium payment

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