Life Insurance

1. What is life insurance?

This is the basic life insurance FAQ. Life insurance is a contract between you and the insurance company. The insurer agrees to pay the policy benefits to your nominees in case of

2. Why is life insurance useful?

Life cover is useful to ensure the financial stability of your family in case you are unable to earn due to an accident or illness. The policy also pays the benefits to your beneficiaries in case of an untoward event. Procuring such coverage ensures that your family can to meet their expenses and sustain their lifestyles even in your absence.

3. Is life insurance necessary?

One of the things to know about life insurance is that while it is not necessary, purchasing a policy is a smart investment decision. This is especially if you have dependents such as spouse, parents, and children. The life plan will provide financial security to your family if you are not around. Moreover, life policies offer several benefits and are a flexible instrument. Some of these include the flexibility of adding riders for greater coverage or withdrawing part of the accumulated corpus to meet expenses such as children’s education or wedding.

4. How do I decide on the amount of life insurance cover I need?

The maturity benefits primarily depend on the premium you pay during the policy term. This amount depends on several factors such as your lifestyle, spending habits, income, expenses, and debt obligations. It is recommended you procure coverage that is approximately between eight-ten times of your annual income.

5. How much does life insurance cost?

The insurance cost depends on the type of policy chosen. In addition, factors like the sum assured, premium amount, age, and coverage influence the insurance cost. The total insurance costs include mortality charges, administrative charges, and investment fees. To know all about life insurance costs, you must read the policy document.

6. Are different options available to pay the premium?

Yes, insurers provide several options for premium payment. You may choose monthly, quarterly, semi-annually, or annual payment options. Some policies are available with a one-time premium.

7. What are the consequences if I do not pay the premium on time?

A grace period of up to 30 days is available from the premium due date. If you do not pay the same within this period, the policy becomes defunct and all benefits are lost. You need to pay the revival premium when you want to restart the coverage.