Life Insurance
The Wrong Reason to Buy Life Insurance!
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In simple terms, life insurance is a formal arrangement between an insurance company and a policyholder, where the insurer promises to pay a pre-decided amount to specified beneficiaries in case the policyholder meets an unfortunate death. The death compensation is guaranteed by the insurer in lieu of premiums that have to be paid by the policyholder. We at Canara HSBC Oriental Bank of Commerce Life Insurance secure the financial future of your loved ones in case of an unforeseen incident by paying the promised amount through a smooth and hassle-free process.
HOW DOES LIFE INSURANCE POLICY WORKS?Pure Protection: A pure protection plan secures your family's future by providing a lump-sum amount in the case of an untoward incident.
Protection and Savings: As the name suggests, a protection and savings plan has a savings component along with insurance. It helps you plan for life goals such as a child's marriage and education.
KNOW MORE ABOUT TYPE OF LIFE INSURANCELife insurance provides a high-risk cover that helps you and your family stay protected and lead a stress-free life.
With life insurance, you can live with the assurance that your family will stay financially secured in case something happens to you
The premiums paid for life insurance are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The death benefit paid to the nominee is also tax-exempt under Section 10 (10D) of the income tax law.
The premiums paid for life insurance are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The death benefit paid to the nominee is also tax-exempt under Section 10 (10D) of the income tax law.
Life insurance plans come in different hues and colours. You should choose a life insurance plan depending on your financial goal.
Term insurance is the simplest of life insurance policies. It provides the death benefit to the nominee only if the life insured dies. If the life insured survives the policy tenure no maturity benefit is paid and the policy terminates. Due to the linear nature of the benefit, term insurance premiums are not very expensive.
Whole life insurance is a long-duration policy that provides coverage for the entire life. These policies come with a surrender (cash) value component that increases with time. You can surrender the policy to take cash value and can also avail loan based on the policy.
It is a type of protection and savings policy. The benefit is payable to the insured if he/she is living on the maturity date. In case of unfortunate demise of life insured during the policy term, the benefit is paid to the nominee.
Some life insurance policies such as unit-linked insurance policies provide market-linked returns on your investment. These plans are ideal for people who want to accumulate funds for family's future goals along with life insurance cover.
A life insurance plan that provides you with a regular income after retirement. It is a type of savings and investment plan and the corpus generated is invested further to generate regular income.
Here are a few important terms everyone should know before buying life insurance.
It is the contractual document between the insurer and the policyholder that contains all the terms and conditions related to the specific life insurance plan. The policy document generally outlines the sum assured, the policy number, the premium amount and the name of beneficiaries.
It is the amount that is promised by the insurer and is paid to the beneficiary in the event of life insured's death. Many people get confused between the sum assured and the maturity amount. The sum assured is paid if the policyholder dies during the policy term, whereas the maturity amount is paid back when the policy term ends and the life insured is alive.
It is the amount that has to be paid to the insurance company to maintain the insurance cover and allied services. It is a fixed amount that has to be paid annually, but can also be paid half-yearly, quarterly or monthly in some cases. Life insurance premiums vary across products. Term life insurance plans have lower premiums while policies with savings component have higher premiums.
A life insurance policy requires the policyholder to pay the premiums for a specified duration. The duration is known as the premium payment term. The premium payment term can be one time (single pay) or limited duration (less than policy term) or for regular duration (equal to policy term).
Nominee is the person who receives the amount promised by the insurance company in the event of the life insured's death. The nominee, also known as the beneficiary, is generally parents, wife or children of the life insured.
Some life insurance policies offer enhanced coverage which has to be opted by the policyholder which are called riders. Riders have to be activated by paying an extra premium.
Buying a life insurance online is a very easy and convenient process. Here’re the following steps that you need to follow while buying a life insurance online
The first and foremost thing you need to do is to log on to the insurance company’s website and choose the plan that best suits your needs.
The next step you need to do is to fill in all the details such as name, gender, date of birth, email, mobile number, policy term, sum assured, etc.
Once you have entered all the details, you will see your premium amount. Now, you can make your payment online. A soft copy of the policy will be sent to you after insurance company’s approval.
Your insurance company will ask for certain documents when you apply for a life insurance policy online. You can upload these documents directly onto the insurance company’s website. This not only reduces the paper work required during the process but also makes the process simple and hassle free. Furthermore, You need to fill in various parameters such as personal details, lifestyle related details, health details, etc. These details are required for the issuance of all types of insurance plans, not just term plan. The insurance company will look for the following documents while buying a life insurance policy online.
These are some of the important documents that are required to determine the amount of life cover offered to you. The income documents required by most of the insurance companies include
This is yet another important document that you need to submit while buying a life insurance policy. Listed below are the documents that are accepted as ID proof
Insurance companies would also ask for your address details. This includes the following documents
Here’s a comprehensive list of that is required while buying a life insurance policy
In a country like India, insurance plays a very important role in securing the financial future of your family. So once you have decided to buy a policy, the next step you need to take is to find the best insurance policy. Although, before choosing an insurance company, you need to understand your requirements so that you do not make any error in picking your insurer. Here is a list of things that you need to consider when on the hunt to find the perfect life insurance provider –
With so many insurance providers available in the market today, choosing an insurance company may be a daunting task. Thus, follow the above-mentioned pointers as this will help you choose the right insurer that offers quality products and services that helps you meet your insurance needs.
The need to buy a life insurance depends upon a number of factors. It majorly depends upon your goals and what stage of life you are in. The main objective of any life insurance is to secure the family’s future financial needs. It includes secondary benefits too like tax benefits and investment. Mentioned below, is a list of people who may need to buy a life insurance –
Hence, keep these above-mentioned pointers in mind as this will help you decide whether buying a life insurance policy at your current stage is required or not.
How much cover do I need?
The first question to ask before buying a policy is what amount of insurance is needed to financially take care of your family in your absence. As a thumb rule, the insurance cover should at least be 10-12 times of your annual salary. You should also consider the rise in expenses with time before finalising the policy.
How much will I have to pay?
It is mandatory to pay premiums in time for the policy to be functional. Having a premium that is payable without comprising with other commitments is important. Therefore, always calculate the premiums that you will have to pay before buying a life insurance policy. The better way of calculating your premiums is to use the premium calculator available on www.canarahsbclife.com.
What will happen if you are unable to pay the premiums on time?
Even though it is compulsory to pay the premiums on time, sometimes due to unavoidable circumstances, people miss their premiums. You should read the terms and conditions thoroughly or ask your agent what will happen in case you miss premium payments. Generally, insurers provide a grace period of up to 30 days (15 days in case of monthly mode) for the payment of the missed premium, but it is always better to have advance knowledge of the situation.
What are the benefits of the insurance policy?
The needs of every family are different. A uniform policy may not be suitable for everyone. Take into consideration the benefits offered with a policy while buying it. Life insurance plans come with optional critical illness cover, accidental death cover and disability cover.
How much life insurance do I need?
The quantum of death benefit varies from person to person depending on the lifestyle and income. As the generic formula for calculating life insurance cover is to subtract financial obligations like expenses and debt from resources such as liquid assets and income. The life insurance cover should be equal to the difference. Another rule states that people should have a life cover equal to 10-12 times of the annual income. You can also calculate the life insurance amount through the life cover calculator available on www.canarahsbclife.com.
How much money can you get from Life Insurance?
Different life insurance plans have different quantum of payments. The maximum cover largely depends on the policyholder. If you are able to pay the premiums for a large cover, the insurer will issue the policy. For instance, the Canara HSBC Oriental Bank of Commerce iSelect term plan has a minimum sum assured of Rs 25 lakhs, but the maximum sum assured depends on the life insured.
How easy is it to buy Life Insurance?
Life insurance can either be bought through banks and branches of the insurer or directly online. Buying a policy online is very easy and hassle-free. You can simply visit www.canarahsbclife.com and opt for an online policy. The entire process from form submission to payment can be completed online.
How can you pay for a Life Insurance?
The standard life insurance policy requires you pay the premiums on an annual basis but Canara HSBC Oriental Bank of Commerce Life Insurance provides you ample flexibility in the premium payment schedule. The premiums for the Invest 4G ULIP can be paid on an annual, half-yearly, quarterly or monthly basis, while the iSelect term plan has yearly and monthly payment options.
What will happen if you are unable to pay the premiums on time?
Even though it is compulsory to pay the premiums on time, sometimes due to unavoidable circumstances, people miss their premiums. You should read the terms and conditions thoroughly or ask your agent what will happen in case you miss premium payments. Generally, insurers provide a grace period of up to 30 days (15 days in case of monthly mode) for the payment of the missed premium, but it is always better to have advance knowledge of the situation.
What are the benefits of the insurance policy?
The needs of every family are different. A uniform policy may not be suitable for everyone. Take into consideration the benefits offered with a policy while buying it. Life insurance plans come with optional critical illness cover, accidental death cover and disability cover.
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Read ArticleThe premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.
Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.
Insurance companies calculate the premiums based on several factors such as age, gender and occupation.
Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.
Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.
Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.
Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.
Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.
Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.
Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.
In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.
Once the form is received, the claim is registered by the insurer.
After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.
Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.
The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.
Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.
Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.
False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.
Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.
Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums
Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.
Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.
Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.
The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.
An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.
Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.
When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.
A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.
If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.
It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.
It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.
Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.
Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.
Yes, there are different payment options for you to pay premiums. Here’re some of them
1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.
2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.
3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.
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