FAQs on Life Insurance

Your financial plan needs to include life insurance. In the event of an unfortunate event, it gives your loved ones financial security. Different plan types are offered by a number of insurers. This complicates life insurance. This blog post will try and make it easy for you to understand the most common questions regarding life insurance.

Frequently Asked Questions (FAQs) on Life Insurance

What should I consider before making a policy purchase?

Answer: You should examine to see if the guarantee of return is available or not, the lock-in time, the details of the premium to be paid, the ramifications of a premium default, the revival conditions, the terms of the policy, the fees that would be deducted, whether a loan is available.

What special medical records must be presented in order to get life insurance?

Answer: Special medical reports may be required in some cases to consider a risk, based on the age of admission, age at maturity, sum assured, family history, and personal history. For instance, if the proposer is overweight, specialised reports such an electrocardiogram and a glucose tolerance test may be required, whereas an X-ray of the chest and lungs with reports may be necessary for proposers who are underweight.

How is the surrender value of a traditional life insurance policy determined?

Answer: A percentage of this paid up value may be surrendered. The surrender value factor, which considers both the amount of time that has passed and the premiums paid, is used to determine the surrender value.

What documentation must be provided in the event of a Maturity Claim?

Answer: Typically, the insurance company notifies the policyholder of the claim amount due at least two to three months prior to the policy’s maturity date in an announcement that includes a discharge voucher. The insurance company must receive both the policy bond and the discharge voucher as soon as possible so that it can make payment. Both documents must be properly signed and witnessed. The claim amount will only be paid to the assignee who will issue the discharge if the policy is assigned in the favour of another individual

What happens if I don’t pay the premium by the due date?

Answer: From the date the premium is due, there is an available grace period of up to 30 days. If you don’t make the same payment within this time, the insurance expires, and all benefits are forfeited. When you want to restart the coverage, you must pay the revival premium.

So if I cease making premium payments on my life insurance or pension policies, I won’t be able to collect tax benefits, am I right?

Answer: You cannot claim any tax benefits if you cease paying your coverage’s premiums because doing so amounts to discontinuing the policy. The tax will not be subtracted from the premium paid in the year that your policy expires, however, if you stop making premium payments more than two years after the start of your policy. When the policy expires, the amount of tax that was subtracted from the prior year’s premium is taxable.

What happens life insurance policy reaches its Maturity date?

Answer: You will get an accrued sum when your policy matures (in lumpsum or Regular Payments, basis the option chosen). This sum is the sum of all premium payments plus any bonuses (if any). Since the premiums you pay compound and increase yearly until the maturity of your policy, the amount you receive will be substantial.

After some time, can the premiums change?

Answer: This relies on a number of variables, including the addition of riders, the disclosure of vices like smoking or drinking, or the disclosure of a hazardous job nature, among others.

What distinguishes term insurance from life insurance?

Answer: While a term insurance plan does not offer maturity benefits and only entitles the policy holder’s nominees to the sum assured in the case of the policy holder’s death during the plan term, a life insurance policy does offer maturity benefits.

Can more than one claim be considered?

Answer: Multiple claims from various insurers may be taken into consideration as long as their specifics were disclosed when the insurance was purchased.

How do I purchase a life insurance?

Answer: Always remember to only conduct business with licenced and reputable insurance agents and firms. When you are comfortable doing business with an insurance agent or company:

• Make a decision regarding the amount, duration, and cost of the coverage you require.
• Find out which types of plans will give you the support you require, then choose the one that is ideal for you.
• Before signing an application, thoroughly study it to ensure that all of the questions have been answered truthfully and completely.
• If you don’t intend to follow through with your plan, don’t acquire life insurance. If you leave during the first few years of the coverage, it may be highly expensive.
• Review your contract thoroughly to ascertain what is and isn’t covered.
• Make your check payable to the firm, not the agent, when you purchase an insurance.

What does “free to look” mean exactly?

Answer:

• You should tell your agent straight away if you recently bought a life insurance policy but afterwards changed your mind about it because you might still be in your “free to search” period.
• You have a minimum of 10 days after the date a life insurance policy was delivered to analyse and assess the contract.
• A 30-day review period must be offered with each policy purchased via mail. The insurance provider must reimburse you for your money if you decide to return the policy for any reason during the “free to look” time.

Is it true that some companies won’t turn applicants down?

Answer: When a firm runs these commercials, it’s crucial to make sure you comprehend what they are actually providing. These advertisements are for “assured issue” insurance that don’t inquire about a person’s medical history. The business is aware that it is taking a chance since persons in poor health could purchase its plans. By increasing premiums or limiting the quantity of insurance you may get, the corporation balances the risk. However even after hike in premiums for certain medical conditions, it will be prudent for any person to buy a Life Insurance and financially secure his dependents post his death.

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