What is Life Insurance Policy its Types & Benefits
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All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

Buy Life Insurance Now
  • 19th Nov 2019
  • 2,586

All You Need to Know About Life Insurance - Its Benefits, Features, and Types of Life Insurance

To understand what is life insurance, you need to first know its importance. A life policy is an official understanding that in case of the policyholder’s death during the policy tenure, the nominees receive a sum assured from the insurer.

Here is a discussion on all you need to know about life insurance.

Important benefits of life insurance

Various life insurance benefits can secure your future effectively. Listed below are some of these.

  • Provides financial coverage
  • The sum assured offered by the insurer provides for your family’s financial wellbeing.

  • Offers a variety of options
  • You can choose from different types of insurance policies. Some plans offer maturity benefits along with death benefits.

  • Offers a cover for health
  • Some life insurance plans offer critical illness and hospitalization covers.

  • Provides tax benefits
  • The life insurance premium is tax-deductible under Section 80C of the Income Tax Act,1961.

Important types of life insurance plans

The different types of life insurance policies available are:

  • Term plan
  • This plan provides cover for a specific period and offers only death benefits

  • Whole life plan
  • This cover is offered for your entire life

  • Endowment policy
  • This is one of the types of life insurance in India, which has a savings component

  • Money back policy
  • This is life insurance policy offers a portion of the benefit as a regular income

Claim process

Understanding what is a life insurance policy cannot be completed without knowing about the claim settlement process. To claim the death benefit, the nominee must contact the insurer at the earliest once an unfortunate incident occurs. The following information has to be provided to the insurer:

  • Cause, death, and place of death
  • Death certificate
  • Copy of insurance document
  • Deeds of assignment
  • Any other additional document required by the insurer

If the life insurance claims are accepted by the insurer, the money will be transferred to the nominee.

Principles of the life insurance policy

The types of life insurance policies available in India have four main principles:

  • Good faith
  • The faith that the insurer and the insured will share all the information honestly

  • Law of large numbers
  • Experiments done in large numbers ensures long-term stability

  • Insurable interest
  • The level of interest a person has in a policy determines if the insurer will accept or reject the application

  • Minimal loss and risk
  • It is expected that the policyholder will lead a secure lifestyle that ensures his or her safety and minimizes the insurer’s risks

Things to consider before buying life insurance

Before you buy a term insurance plan or any other life policy, consider these factors:

  • Research
  • Take your time to research about the different policies to find the best one

  • Read the terms and conditions
  • Read the policy documents carefully to understand the plan properly

  • Free-look period
  • Free-look period is a certain duration during which you can return the policy. We, at Kotak Life Insurance, offer a 15-day period.

  • Premium payment options
  • The insurers allow you to pay the premiums in specific periods of your choice. The available choices are monthly, quarterly, semi-annual, or annual.

    Buy Term Insurance Online

Life insurance claims

To learn all about life insurance, understand the types of claims you can make. You have two choices, which are death claim and maturity claim. A death claim will be filed by your nominee while you can file a maturity claim on surviving the policy term.

- A Consumer Education Initiative series by Kotak Life

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