What is Life Insurance? List of Companies Offering Life Insurance in India

This article explains what is life insurance, the types of life insurance, advantages and disadvantages of life insurance in India.

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Life insurance can be defined as a contract between an insurance company and a policyholder, where the company promises to pay a certain amount to the insured person's family upon their death under certain circumstances. It is essential for an earner, especially those who are the only ones to earn in their family. If you don't know much about life insurance, this article is for you. It will explain to you what life insurance is, the types of life insurance, advantages and disadvantages of life insurance. 

List Of Companies Offering Life Insurance In India

Company Name

Coverage Capacity

Maximum Issue Age

Policies Offered

AM Best Ranking

State Bank of India

1 crore

65 years

SBI Life- eShield

SBI Life-Smart Money Planner

SBI- Smart Humsafar

SBI Life - CSC Saral Sunday

059911

Aditya Birla Sun Life Insurance Company

10 crore

60 - 70 years

Protection Plan

Child Plan

Health and Retirement Plan

ULIP Plan

090264

Aegon Life Insurance Company

1 crore

65 years

Online Term Plan

Endowment Plan

Group Plan

ULIP Plan

Pension Plan

Protection Plan

Child Plan

Savings Plan

091052

Ageas Federal Life Insurance Company

No Upper Limits

55 years

Capital Management Solution

Protection Plan

Retirement Plan

090648

Aviva Life Insurance Company

No Upper Limits

55 years

Child Plan

Protection Plan

Retirement Plan

Saving Plan

Term Plan

Group Insurance Plan

090257

Bajaj Life Insurance Company

No upper Limits

60 years

ULIP Plan

Child Plan

Protection Plan

NA

Bharti AXA Life Insurance Company

No Upper Limits

65 years

Investment Plan

Child Plan

Life Insurance Plan

090259

HDFC Life Insurance Company

No Upper Limits

65 years

Pension Plan

Saving and Health Plan

Protection Plan

Child Plan

Woman Plan

077629

Kotak Mahindra Life Insurance Company

20 crore

65 years

ULIP Plan

Child Plan

Protection Plan

Insurance Plan

Retirement Plan

Saving Plan

090261

PNB MetLife India Insurance Company 

100 crores

65 years

Child Plan

ULIP  Plan

Saving Plan

Money Back  Plan

090262

What Are The Different Types Of Life Insurance In India?

Currently, there are numerous types of life insurance in India that you can buy for yourself. If you are among those who do not know much about them, then don't worry. Here are some of the essential types of life insurance with their explanation-

Term Life Insurance

Term Life Insurance, also known as term insurance, provides coverage to the policyholder at a fixed pay rate for a limited period. And, if someone dies before the maturity period, the policy nominee would receive some amount from the insurance company.

Permanent Life Insurance

Permanent life insurance is a type of life insurance policy that will be in force throughout the policyholder’s life or till maturity. It would guarantee death benefits to the policyholder’s family in exchange for levels. It also has a saving portion known as cash value alongside the death benefit. 

ULIP- Unit Linked Insurance Plans

A ULIP is a famous insurance plan with dual advantages of investment to fulfil your long-term goals and a life cover to support your family financially in case of death. This insurance premium is divided into two sections, one for your life cover, and the remaining part is invested in any fund of your interest. 

Endowment Insurance plans

Endowment Insurance plans are similar to the term life insurance as it is a contract made to pay a lump sum amount after its maturity or in case of the policyholder’s death to their family. Usually, the maturity period for this plan is around 10, 15, or 20 years along with a specific age limit.

Money Back Insurance Policy

Money back insurance is another popular life insurance plan among Indians. LIC in India currently offers it. This insurance plan provides life coverage during the policy term, whereas the maturity benefits are paid to the policyholder via survival benefits every five years.

Whole Life Insurance Plans

A whole life insurance plan is a term insurance policy that provides you coverage for 99 years. They are different from the other ordinary insurance policies and have a defined term, such as 10 or 20 years, based on your selection. You should prefer to buy this insurance if you have someone who would stay dependent on you for an extended period, maybe their whole life, such as a child with special needs.

Child Insurance Plan

A child insurance plan can be a good option if you are looking forward to sending your child to the best universities for further studies. It is a mix of investment and would also help in the financial planning for your kid's future needs. 

Retirement Insurance Plan

Retirement Insurance Plan is slightly different from other insurance plans on the list. It is specially designed to meet the post-retirement needs of an individual, such as medical and living expenses. It would also support the person to maintain the same lifestyle after retirement and help them fulfil their post-retirement dreams, such as travelling worldwide, starting a new venture, and many others.

How To Apply For Life Insurance?

Nowadays, Life insurance has become a necessity, and everyone prefers to buy one to protect their family. If you are among them but don't know how to apply for it, then don't worry.  Here are the steps you should follow to apply for insurance at an agency's site, such as LIC-

  1. Visit the LIC’s official website and move to their “Apply for Insurance” section through the navigation bar. You will be redirected to a new page.
  2. Answer all the questions on the form, such as your name, email id, phone number, pin code, and other details. Recheck and make sure all the entries are correct.
  3. Click the “I agree” check button after reading the terms and conditions given below, and finally, click on the submit button.

Factors That Affect Life Insurance Plans

Numerous factors can affect your life insurance plans and premiums and make them super expensive. Let's discuss some of the most important ones here- 

Age

Age is one of the most crucial factors that severely affects one's life insurance premium. If you are pretty young, your premium will be low compared to the aged ones. As you get old, the company will likely increase your premium.

Gender 

Believe it or not, gender also affects the cost of a life insurance plan. As per the reports, women's life expectancy rates are higher than men's. It allows women generally to pay less for their life insurance.

Health history

You may know that the insurance agent needs access to your health records before providing you with a policy. Your agent will look into certain things such as blood pressure, cholesterol level, etc. This thing would help the person to determine what could be your condition in the future and whether you should be awarded insurance or not.

Smoking

Smoking kills, and that is true because it can lead to potentially fatal diseases such as cancer and many others. So, if you are a smoker, you may have increased premiums compared to nonsmokers. 

Occupation

Several jobs have higher lifetime risks than others, including loggers and pilots. When you apply for life insurance, the insurer will ask about your occupation. Your premium could go higher if your occupation is a bit risky for your life and requires you to perform several dangerous activities.

Who Needs Life Insurance?

It is one of the frequently asked questions nowadays. The perfect answer is that anyone with a family or someone behind them to support or an income earner needs it. And, it is a must if you are the only one in your family to earn because if you die, your family will be in deep financial trouble.

What Are The Key Benefits Of Buying Life Insurance In India?

Buying life insurance in India has several benefits you may not know about. Here are some of the key ones-

Financial security

You won’t agree or not, but life insurance provides a deep peace of mind.  It’s because people know if they are gone, their family and loved ones will have financial safety. Perfect life insurance will ensure that all your debts and loved ones are financially taken care of after you are gone.

Saves tax 

Insurance plans are great for business personalities and job persons regarding taxation. The reason is that insurance plans offer dual tax benefits. The premium you paid for your insurance will offer deductions under section 80C of the Income Tax Act, which means up to 1.5L premium paid annually will be deducted from your gross salary. Besides, the matured amount would be free of tax.

Death Benefit

As you all know, life is uncertain and unfortunate events can occur anytime. So, if you want to secure your family after your death, you should buy life insurance. It would ensure that the policy nominee receives a lump sum amount of money in case of your death. The person can use that money to take up the family expenses.

Create wealth

Specific life insurance plans allow you to create wealth for yourself. Apart from life cover, these policies will enable you to invest in different things based on your interest, delivering suitable returns that can beat inflation and grow the amount. One of the best examples of such policies is the ULIP Insurance Plan.

What Are The Things To Consider Before Buying A Life Insurance Plan?

Buying a perfect life insurance plan for yourself is challenging. Everything you have done to date in your life will matter in your purchase. Different policies now offer different benefits. To buy a perfect approach, you should consider certain things, which are as follow-

Find your needs

It is one of the most important things to consider. You should first determine your contribution to your family, how many of them depend on you, and if there is any extra thing for which they require financial help or whether you have any debts they need to pay after your death. This can help you to determine the perfect amount for your life insurance and which plan will fit you the best.

Compare policies

The two most basic plans are term life and permanent insurance. Both have benefits, such as permanent insurance plans allowing people to get maturity if they survive the maturity period, but that is not the case with term life insurance. Therefore, comparing policies becomes an essential task when buying them.

Choose an affordable cover

After finding life insurance that is perfect for yourself based on your needs, determine how much it will cost you annually. Before purchasing it, you should check if you can pay the premiums easily. It will not make sense if you need to take out a large part of your salary for it.

Qualifying For Life Insurance

Qualifying for Life insurance is not a simple thing. You may think life insurance is for the healthy and wealthy, but that's not the case. It’s for all. You will be easily eligible for life insurance if you are excellent, have a good income, and have no bad habits. 

But, in case you are a person who is addicted to any bad habit or has some pre-existing diseases, you will find difficulties in qualifying for life insurance. You may even be ineligible for it, which could be a problem. However, there are now hundreds of insurance agencies out in the Indian market, so you may be able to find an affordable insurance plan for yourself if you do some deep research.

FAQS

1. How to claim life insurance after death?

To claim life insurance after the policyholder’s death, the nominee must visit the insurance company's home branch from where it was issued and inform them about the policyholder’s death. Then, the nominee will be required to fill out several forms, and after confirmation, the funds will be transferred to the nominee’s account.

2. At what age should you buy life insurance?

The perfect period for people to buy life insurance is in their 20s. Health problems and death seem uncommon at this stage, but life is uncertain, so it's better to be safe by taking it.

3. What is not covered by life insurance?

Certain things are not covered in life insurance, such as death due to pre-existing health issues, death due to sexually transmitted diseases such as AIDS, drug overdose, and several others.

4. What is a free look period in a life insurance policy?

After you buy a life insurance plan, you have a free look period. During this period, you have the opportunity to cancel your policy without any form of penalty. The duration of such a period is usually ten days.

Conclusion

If you want your family to be financially secure after your death, you can buy life insurance for yourself. Currently, numerous life insurance policies are on the market, and if you do not know, allow you through this article.

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