All about life insurance

Life insurance is chiefly a risk-management tool meant to offer financial protection to your dependents in the event of your death. If you are adequately insured, your life insurance should enable your dependents - spouse, children or parents - to maintain their current lifestyle and pursue their financial goals. ASPECTS OF LIFE INSURANCE Features of life insurance Eligibility: All citizens of India and persons of Indian origin (PIOs). Entry age: 18 years and above. This limit varies across insurers and policy types. Tenure: Typically up to the age of 80 years, depending on the policy type and insurer. Sum assured: Depends on the policy type, tenure, premium, your health and income. Premium: Depends on the insured's age, the sum assured, policy type and policy tenure. Premium frequency can be monthly, quarterly, half-yearly, yearly or single (premium). Policy holding: Individual and joint. Nomination: Facility is available. Exit option: Policyholders can terminate their policies at a financial loss. Types of life insurance Term life insurance: This is a no-frills policy in which the nominee gets the sum assured if the policyholder dies during the tenure of the policy. Nothing accrues if you outlive the policy term, though there are some costly policies that pay premiums back. Term life insurance premiums are typically low. Saral Jeevan Bima: This is a standard individual term life insurance policy that IRDAI has mandated all life-insurance companies to provide from January 01, 2021. With a maximum sum assured of Rs 25 lakh, it will have the same features across all insurers (though prices may differ) just like the standard health-insurance product 'Arogya Sanjeevani'. Endowment plan: If you die during the policy term, your nominee gets the sum assured plus some returns, depending on the policy performance. If you survive the policy term, you still get back the sum assured and returns earned by the policy. Child plan: Similar to an endowment plan, it is a savings-oriented plan that is used to create savings for a child's education or marriage. Money-back plan: In this variant of the endowment plan, a part of the sum assured is returned to the policyholder at periodic intervals

This article was originally published on December 02, 2021, and last updated on September 22, 2022.