Life India Corporation, an insurance limited which is probably as old as the story of mankind, which made its debut over 100 years ago. Loss and disaster existed in the primitive men as well. Since 1912, the Life Insurance Companies Act came into effect to support business insurance and later on 1st September, 1956 the Life Insurance Corporation of India was started with the sole aim of Life insurances. It continues to be the dominant life insurer and creating milestones with its commendable performance.
Life is uncertain where any sort of unavoidable risks, illness or even death stands in our path which changes everything all of a sudden. It is a very busy life where people hardly spend time with each other. The sweat has to be saved in some form to support the family when there is any emergency or even death. There comes the Life Insurance policy which provides financial support when there is a sudden demise.
There are hundreds of policies available to cater the needs of a common man. The necessity varies from people to people and in business as well. To mention a few, there are policies such as Pension Plans, Health Plans, Micro insurance Plans, Group Schemes, Keyman insurance for business, Endowment plans, Money back plans, Term Assurance plans and much more.
How Life Insurance Policy Works?
A life Insurance Policy is a contract with the insurance company where in exchange of premiums, the company provides a lump sum amount to the beneficiary, known as death benefits in case of the policy holder’s death.
Life Insurance policies have an edge over other saving schemes with features like contract of Insurance, Protection, Liquidity, Tax relief, Money when you need it, Aid to thrift, etc. LIC encourages thrift where it allows long-term savings and the payments can be made effortlessly with easy instalments monthly, quarterly, half yearly or yearly. Liquidity defines to acquire any emergency loans against the policy.
Life Insurance generally provides protection for a determined period of time, where permanent insurances such as whole & universal life insurances provide lifetime coverage.
More About Money Back, Non-Money Back or Endowment Policies
Money back policy offers guaranteed returns with maturity benefits and bonuses timely at fixed intervals such as 4th, 8th, 12th year and at the maturity of the policy. Since the company offers money, the premiums are generally on the higher side.
Non-Money back policies – as the name implies there is no money offered at specified intervals but the sum assured is obtained at the end of maturity.
Endowment policies are generally low yield policies where the premium is higher than a term plan and the surrender value is low compared to the paid premium. This plan is applicable for a specified tenure such as 10, 15, 20 etc where the assured sum is obtained after maturity or the nominee gets the amount after the death of the policy holder. There are different types of Endowment policies such as Unit-linked endowments, full endowments, low cost endowment, profit endowment and non-profit endowment. According to the requirement, the endowment policies vary from educational, child plan to marriage endowment plans.
This kind of policy provides both life cover as well as good returns and the company always provides the option to participate in bonuses in endowment plans.
Rules /Terms of Policy Withdrawal
For three consecutive years, it is not advisable to withdraw the policy, as only a very less percentage of the premiums paid will be obtained. If you are not a regular premium payer, then forget this amount as well.
After three years, the policy can be withdrawn; a proportion of the premium is provided along with the bonuses (if any). The surrender value varies depending on the type of policy, the policy amount, amount of premium and the policy term.
Continuing the policy for more than 15 and 20 years, the policy holder will be entitled to get the Final Additional Bonus and the Loyalty Bonus. It is always advisable to keep the policy going till the specified term unless there is an emergency.
Know About Your Policy Benefits, Bonuses and Gains
Bonus:
The additional amount that the policy holder will get along with the maturity amount, which is declared at the end of every year and it is per thousand of the sum assured on an annual basis. This bonus will not be obtained in case of any surrender of the policy.
Final Additional Bonus:
This is obtained if the policy is continued after or till 15 years with regular premiums. If Guaranteed Additions are opted, then this FAB will not be obtained.
Guaranteed Additions:
These are assured additions / sums obtained for a specific period either in the beginning or at the end in addition to the sum assured.
Loyalty Additions:
These are given by the company to the policy holder to appreciate and applaud the loyalty if the policy is carried out for a full term.
Cost of Life Insurance:
All insurance policies cost is different based on the requirement. The cost of Life Insurance depends on the policy holder’s age, Medical History, nature of work, type of policy selected, sum assured, policy terms, premium amount and the payment frequency.
Life Insurance Policies come with packed benefits, hence know your policy well, study the policy documents before signing the contract and ask the queries whenever something comes to mind. Life is precious and hence insure it timely to benefit the loved ones.
