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Sabse Pehle Life Insurance

Sabse Pehle Life Insurance is a campaign initiated by Life Insurance Council to create awareness on the importance of life insurance. Know in detail about Term Plan, ULIP and Tax Savings.

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Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Life Insurance Council is an official body which represents all insurers. They coordinate discussions between the general public, the government bodies and the regulatory boards. The Council has launched a campaign named ‘Sabse Pehle Life Insurance’ to promote the significance of insurance policy in India.

What is Sabse Pehle Life Insurance?

‘Sabse Pehle Life Insurance’ is a joint mass campaign being launched by the Life Insurance Council which translates to ‘First thing is life insurance’. This campaign aims at raising awareness amongst the masses about the importance of life insurance. So before the launch happens, let’s take a look at some commonly asked questions about life insurance plans:

Life Insurance Basics

1.What is life insurance?

Life insurance is an agreement made between the policyholder and an insurance company in which the insurer pays a lump sum amount as a death benefit to the beneficiary in the event of the policyholder’s death. In return for this, the insured person has to pay premiums for a stipulated period of time. Life insurance offers a life cover to the policyholder which gives financial stability to secure the future of their family.

2.Why should I buy Life Insurance?

Life is unpredictable and anything could occur which would endanger your life, leaving your family without much financial support. While taking care of their own needs, they would also have to pay off the loans that you both were supposed to pay together. Life insurance gives your loved ones a financial aid in case something were to happen to you.

3.What are the different types of life insurance policies available in India?

The different types of life insurance plans are:

  • Term Insurance
  • Unit-Linked Life Insurance
  • Endowment Plan
  • Whole Life Insurance
  • Money-Back Insurance

4.What are the benefits of buying life insurance plans online?

When you buy life insurance plans online, there is no agent involved which eliminates the commission. This is why online insurance plans are cheaper than offline plans.

Term Insurance Basics

1.What is a Term Insurance Plan?

Term insurance plan provides a life cover in the event of your demise and doesn’t have any maturity benefits. This is the simplest form of insurance and cheaper than most other options available in the market.

2.What are the benefits of buying a Term Life Insurance Plan?

There are various benefits of buying term insurance, some of them are:

  • Premiums of term plan are more affordable
  • Term insurances allow riders (additional benefits) to be added to the policy
  • You can also claim the insurance premium under Section 80C and avail tax benefits

3.What are the tax benefits of term insurance plan?

You can claim the online term insurance tax benefit under Section 80C and Section 10(10D). The tax benefits under Section 80C of Income Tax Act, 1961, allow you to claim the premiums paid towards life insurance of up to INR 1,50,000. Under Section 10(10D), you can also claim tax exemption on the entire death benefit amount.

4.What is an accidental death insurance benefit?

Accidental death insurance benefit is an insurance rider that can be added to your current life insurance plan.This benefit covers any accidental death that may take place with certain exclusions and time limit for claiming the death benefit.

5.What is critical illness insurance benefit?

Critical illness insurance benefit is an insurance rider which covers any critical illness and provides with a lump sum amount to pay for the medical expenses. This benefit can be added to your current online term plan as an additional perk to enhance your life coverage.

6.How to calculate Term Insurance Premium?

To calculate your term insurance premium, visit the term insurance calculator.

ULIP Insurance Basics

1.What is ULIP (Unit-Linked Life Insurance)?

ULIPs or Unit-Linked Insurance Plans invest some part of your premium towards life insurance and the rest into a financial instrument. The policy has a lock-in period of 5-years and can be continued even after the lock-in ends. You can choose the financial instrument like equity or debt according to your risk appetite.

2.Is ULIP a good option to create wealth?

ULIP enables you to invest in financial instruments while also safeguarding life insurance for yourself. It is a good option for creating wealth as they allow you to claim the premium under Section 80C. Also, the amount of return received after maturity of the policy is tax-free under Section 10(10D) of the Income Tax Act, 1961. This gives you dual tax benefits on investing in ULIPs.

3.What are Death and Maturity Benefits in a ULIP?

ULIPs provide both death and maturity benefits. In the event of death during the policy term, the death benefit received by the beneficiary is the sum assured or the fund value (whichever is higher) or both. On maturity of the policy, you get the sum assured or the fund value (whichever is higher). Both the death and maturity benefits are tax-free.

Tax Savings with Life Insurance:

1.Do I have to pay tax on life insurance premiums?

If the premium paid towards life insurance is more than 10% or 20% of the sum assured, then the premium is fully taxable.

2.Will my beneficiary or nominee have to pay tax on my insurance payout?

No, the beneficiary or nominee will not have to pay any taxes on the life insurance payout received in the event of your death.

3.Is Unit-linked Insurance Plan taxable?

You get tax benefits for investing in ULIPs. You can claim the premium paid towards securing an insurance policy under Section 80C. Also, the amount of return received after maturity of the policy is tax-free under Section 10(10D) of the Income Tax Act,1961.

Life insurance may be bought by many to save up on taxes but the perks of insuring yourself are known to few. ‘Sabse Pehle Life Insurance’ campaign wants the general public like you to know the advantage of buying life insurance early in life and reaping the benefits later.

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  • 3 Payout Options
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  • Option to exit the policy with premium refund at the age of 60*
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Ref. No. KLI/22-23/E-BB/2435

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- A Consumer Education Initiative series by Kotak Life