|
The price you pay for life insurance depends on your age, health and your earnings. A basic policy gives you risk protection which is the minimum you need to pay. You can opt for a base policy with no riders that may be affordable to you.
This is a simple procedure. Beneficiary changes are usually in writing, on a form that your insurer will provide. However if you have designated an irrevocable beneficiary, you are not allowed changes without prior consent of the current beneficiary.
Most insurance companies offer Pension plans with the maximum entry age of 55 or 60, hence you are eligible to buy a Pension plan. The basic objective of a Pension policy is to create a corpus of savings over a period of time to ensure your financial security post retirement. It is therefore advisable to start saving for retirement as early in life as possible, as the amount builds into a significant corpus by the time the individual is 60 years old (regarded as the retirement age). To answer your question, you can start saving in a Pension fund even now, though the amount you keep aside for a significant corpus will be high as you may be working for another 10-15 years only.
A life insurance policy is a combination of protection and savings to meet your future needs. Aviva is one of the few companies offering the policyholder the option of two investment funds: a Unit Linked Fund and a With Profits Fund. In a Unit Linked Fund the unit value of the fund is based on the performance of the assets held. To ensure that you get the maximum benefit from your Unit Linked Fund you should select a company which has a proven track record of delivering good investment return and fund management expertise. You should also seek information on the manner the company invests the money across different financial instruments in the fund. One of the key advantages of investing in a Unit Linked Fund is transparency - you can track the NAV and ensure maximum benefit return on your investment.
The premium allocation by the insurance company depends on the kind of surgery the customer has undergone and the impact it has on the future health of the policyholder. Minor surgeries like gall bladder, hernia, reconstructive surgery, dental surgery, etc do not impact the premium. However if an ailment is serious, you could get rated up and the premiums will be higher. The final assessment is therefore based on a medical test which reveals your current medical condition
The decision to purchase either a term or a whole life policy is dependent on your individual needs and requirements. A term policy only meets your protection needs. In case your liabilities are high and you cannot afford to invest a high amount of premium then a term policy which is usually a low cost option suitable for you. A whole life policy on the other hand is a combination of protection and savings. Apart from providing protection, a whole life policy offers you the benefit of withdrawing some part of the amount depending on your requirements during different stages of life
In case of any claim dispute the case can be represented to the insurance Ombudsman. The Ombudsman has judicial powers and can be challenged only in the High Court. The IRDA (Insurance Regulatory and Development Authority) clearly articulates that a claim will have to be paid within 30 days from the date of receipt. In case the claim warrants an investigation then the insurance company has to complete the investigation not later than 6 months from the time of lodging the claim. Moreover, in case a claim is ready for payment but the payment cannot be made due to any reasons then such an amount will earn interest at the rate applicable to a savings bank account
Most of the foreign partners in the Indian market are well-established global insurance players with a proven track record in the business. Some of them like Aviva have been in the business for almost three hundred years. This amply demonstrates their credibility and stability in the business. All insurance companies in India are regulated by the IRDA which has laid down a very clear criteria defining the manner in which insurance companies can invest your funds. In fact every insurance company needs to have a minimum paid up capital of Rs 100 crore, which acts as a safety net. Further the insurance companies are also required to maintain their solvency margins depending on their volume of business. The minimum solvency margin required to be maintained by any insurer is Rs 50 crores.
A unit-linked insurance policy provides you greater transparency than the traditional life insurance policy. In a traditional policy you are not aware of how your money is invested, where it is invested, what is the value of your investment, etc. In a Unit Linked policy the underlying investments made by the policyholder are clearly identifiable and determine its cash values (Net Asset Value). Most of the organisations publish their NAV listings on a regular basis in the mainline publications, which will help you check the performance of your fund. Companies also mail quarterly newsletters to their customers that provide them a detailed analysis of the Fund performance.
It's a good idea to periodically review your insurance portfolio - especially after a major event in life - to ensure it provides the protection you need. Over a period of time, your investment need also to change. At Aviva we advise our customers to take a "Financial Health Check" once in six months. The Financial Health Check is a need based analysis of the customer's long-term savings and insurance needs. It is a free service administered by our expert Financial Planning Advisers. Depending on your life stage and earnings, the Financial Health Check assesses and recommends the right insurance product for you. I would advise you to go through a Financial Health Check before deciding on your investments.
Today life insurance policies are comparable to other savings instruments available in the market. Moreover, they also provide you risk cover for that unforeseen event. A big advantage of insurance products over certain other savings instruments is that there is a tax rebate on premiums paid for certain income groups upto a prescribed amount and the policy proceeds are tax free, thus providing a high net yield.
For the given sum assured premium will increase with the age. Initially up to age 40 the pace of increase will be quite steady but after age 40 it increases steeply. For the sum assured of Rs.5 lacs for a term of 20 years, the annual premiums under Aviva's LifeShield policy is Rs. 1,810 for age 30, Rs. 2,310 for age 35, Rs. 3,170 for age 40 and Rs. 4,560 for age 45.
Actuaries are involved in all areas of financial management of insurance companies. These include: designing of products, pricing of products, setting policy terms and conditions, valuation of policyholder liabilities, experience investigations with regard to mortality, sickness, expenses, lapses, surrenders etc. They also have to ensure solvency of the company at all times.
Most children's policies are a combination of savings and protection where the parent is insured and the child is the immediate beneficiary. Child policies are becoming increasingly popular, especially when viewed within the context of the rising cost of education. Moreover the breakdown of the joint family system means that children have no financial security in case of the death of their parents. The policy not only provides regular savings for the child's future needs but also financially secures him in the eventuality of the death of his parent (policyholder).
You may add a dependent to your health, dental, and life insurance within 60 days of the date of birth or adoption. Benefit coverage changes are effective the latest day of the date the request for change was signed, or the date the event occurred. Coverage for newborns and adopted newborns may be retroactive to the date of birth if the coverage request was made within 60 days of birth.
Illustrations provide indicative figures of the maturity value of your fund. The rates used reflect the range of returns that the company believes may be possible over the period of the policy. In fact IRDA has mandated all Insurers to provide standard policy illustrations with effect from January 2004. Before issuing the premium cheque you must also carefully check all the details provided in the policy document. Insurance companies like Aviva also offer a Freelook Period (15 days) where you have the right to review the policy terms and conditions and even cancel your policy within the stipulated period from the date of the receipt of the policy document.
Most of the life insurance companies offer riders like Hospital Cash Benefit i.e. cash payment benefit in case of hospitalisation for more than 48 hours. Riders like Critical Illness and Permanent Total Disability (coverage from contracting a critical illness or becoming totally and permanently disabled) are also offered by some companies including Aviva.
One of the key advantages of buying units within an insurance policy rather than buying units directly from a mutual fund (sometimes also called unit trusts) is that insurance provides a life cover in the unfortunate event of death. Moreover it is also more tax efficient as life insurance gets the tax benefit under Section 88 and 10(10D). Most mutual funds require lump sum investments while insurance permits access through more manageable regular premium payments. Investors wanting to minimise their risk can invest in a Unitised with Profit Fund. The Unitised With Profit Fund is designed to provide you a capital guarantee on the investment portion of your premiums at the selected date of maturity. The money is invested in a range of assets, predominantly in highly secure fixed income securities that provide solid returns without exposing investors to undue risk.
Indexation is the escalation of policy size by increasing the Sum Insured and the premium amount so that the fund value is a meaningful amount at maturity. This is a unique feature offered only by Aviva Life Insurance where we advise the policyholders, before each policy anniversary to take an indexation increase, based upon the current inflation rate. Most importantly, this increase gives the policyholder an option to increase his Sum Assured without undergoing any medical tests. This is a major benefit for the policyholder as it enables him to increase his life cover within one policy rather than making additional investments in other policies. It also saves him the trouble of undergoing any additional medical tests. The policyholder however has the option to take up or to refuse such an increase.
This entirely depends on the policy terms and conditions. In most cases, if you miss a premium payment, you have a 30 or 31-day grace period during which you can pay the premium with no interest charged. However if you are unable to pay, you can declare the policy paid-up for that year, provided that at least two year's premium has been paid. The company with your authorization will then withdraw the charges from your permanent policy's cash value to keep that policy in force. In some flexible-premium policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values and a shortened coverage period.
Some insurance contracts offer a preferred rate to the customers. In order to receive preferred rates, you must have had a good health record. Each company determines limits on cholesterol levels, blood pressure, etc. Family health history is also a factor used in qualifying for a low preferred rate. Further you should be a non-smoker and must not have had a history of alcohol or drug use.
The term is usually for periods such as 10, 15 or 20 years, but cover can be arranged for shorter periods where necessary. The term you choose will depend on your own personal circumstances, and the reasons for you to go for protection. For example some people may link the term to a mortgage or other types of debt. Parents often link the term to the period of time they feel their children will be financially dependent.
Life Insurance policies are often used to protect the future of businesses as well as families. For instance, a life insurance policy can be structured to fund a Buy-Sell Agreement, which would ensure that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. In short, the owners get the business, the family gets the money. To protect the business in case of the death of a key employee, Key Man Insurance policy, payable to the company, provides the owners with the financial flexibility needed either to hire a replacement or work out an alternative arrangement.
On the death of the life insured, the claimant needs to give the following documents to the insurance company: -A death certificate of the deceased -The details of the life insurance policy, as it will be required to be mentioned in the claim -The claim form from the insurance agent or the insurance company's office. -Discharge Form should be returned duly signed by the policyholder over a Re. 1/- revenue stamp and duly witnessed -The Policy Document in original -Age Proof of the life insured In case of Maturity / Survival Benefits Claims the policyholder needs to give the following documents. -Discharge Voucher duly executed by the Life Assured / Assignee / Trustee & Original Policy documents -Age proof in case the policy did not have the age admitted
During the term of a life policy, cost of life cover increases with age as mortality risk increases as we get older. Therefore, if you had a series of policies that lasted for one year, at each anniversary the premium would increase. However, for ease of administration and simplicity, this increasing stream of life cover cost is converted into an equivalent amount payable each year throughout the life of a policy, which remains constant (level) during the term of the policy. This amount is called level premium. Effectively it means you pay a bit more in the early years in return for paying a bit less in the later years. The alternative to this approach is the variable premium approach, which has become quite popular in many markets, wherein the premium amount varies with the age of the policyholder. A person would pay less in the early years of his life and more in the later years as the mortality risk increases with age
Once a life insurance policy is issued, it cannot be cancelled by the insurance company during the policy period for any reason including changes in health, provided the required premium payments are made and the information on the application was not misleading or inaccurate.
Depending on your life stage and insurance needs you can evaluate policies offered by different companies. You need to review your need for the coverage, its duration, your current and future financial situation, especially if your family is growing. If you are interested in the liquidity of investment, you may also compare the surrender values/partial withdrawals under products. Standard illustrations are a good way to compare product charges but make sure that the life insurance companies are projecting on the same reasonable growth rate assumptions. To review your financial status it is advisable to undergo a "Financial Health Check", especially offered by Aviva. A need based analysis of your long-term savings and insurance needs, the "Financial Health Check" is a free service administered by our expert Financial Planning Advisers. Depending on your life stage and earnings, the "Financial Health Check" assesses and recommends the right insurance product for you.
Life insurance companies underwrite risk on the basis of the health status of the person. The amount of evidence of health required by the insurer depends upon the amount of risk involved i.e. the sum insured under the contract. In the case of a low sum insured of the life to be insured or younger age, the company might ask only for the statement of health in the form of a health questionnaire from the customer and not a medical examination. In other cases a full medical examination may be required
If you have a life insurance policy that has a cash value, you may be able to obtain a policy loan from the insurance company provided the insurer offers the loan facility under such policies. If you have any loans outstanding at the time of your death or maturity of the policy, they will be deducted from your death benefit or the maturity benefit. On the other hand there are some life insurance products that offer the facility of partial withdrawal, which will not be repaid back. For example Aviva offers partial withdrawal on its LifeLong, LifeSaver and LifeBond policies.
Typically life insurance products are a combination of long-term savings and protection against the risk of death and disability. The mix of protection and savings however varies between different products. Products which offer only protection with no savings element are called "Term Insurance products". Premium payable for these products is low as there is no savings element attached to it. Aviva has one such product "LifeShield" that guarantees a lump sum amount in the unfortunate event of the death of the life insured during the term of the policy. The LifeShield policy can be purchased for any life between 18 to 55 years for a term of 5 years to 40 years. The policy offers a minimum sum insured of rupees five lakhs, while there is no limit to the maximum sum insured. The policyholders of LifeShield are eligible for tax rebate under Section 88 of the Income Tax Act. In the unfortunate event of the death of the policyholder during the policy term, the sum insured will be given to his nominee.
The withdrawal of the tax exemption was a setback to the industry since it looked at insurance as a key saving product. However the law stipulates that a single premium product, which has a Sum Assured five times the annual premium, is eligible for tax exemption. In fact Aviva has recently launched LifeBond 5. It is a fixed term unitised savings and investment plan. The product gives the customers tax benefits on the premium and the policy proceeds are tax free as per the Income Tax Act. It offers three Unit Linked investment funds: Secure, Growth and Balanced Fund with the flexibility of switching from one fund to the other. The Secure Fund gives a minimum guarantee of return of premium on maturity irrespective of the fund performance, while giving all upside benefits.
In case of any claim dispute the case can be represented to the insurance Ombudsman. The Ombudsman has judicial powers and can be challenged only in the High Court. The IRDA (Insurance Regulatory and Development Authority) clearly articulates that a claim will have to be paid within 30 days from the date of receipt. In case the claim warrants an investigation then the insurance company has to complete the investigation not later than 6 months from the time of lodging the claim. Moreover, in case a claim is ready for payment but the payment cannot be made due to any reasons then such an amount will earn interest at the rate applicable to a savings bank account.
|
About Us
