It is a legal contract between a policyholder and the insurance company that guarantees the payment of death benefit to the nominee or beneficiaries when the insured expires due to unforeseen circumstances or a natural death.
Benefits Of Life Insurance
- 1) Risk Coverage: It provides risk coverage to the family of the insured in case of any unforeseen event, in form of monetary compensation in lieu of premium paid by the policyholder.
- 2) Various Plans: The insured can choose from various plans as per his convenience of insurance required and the premium amount that he is being able to pay.
- 3) Medical Cover: It covers many ailments and the expenses attached with hospitalization or medicines. It also covers many critical diseases and expenses of their treatment.
- 4) Wealth Creation: It helps in saving the money and investing in profitable ventures so that our money will grow fast and give better returns.
- 5) Guaranteed Income: With its guaranteed sum assured amount and also money back offers, it provides financial support to the insured and his family too.
- 6) Tax Benefit: The premium amount of insurance policy is tax deductible under Section 80C of Income Tax Act.
Types Of Life Insurance Policies
- 1) Term Insurance: This policy is for a longer span of time like 10, 20 or 30 years. These policies are cheaper than the rest of the policies as their premium amount is very low and also they prove to be beneficial in case, there is any unforeseen event.
- 2) Endowment Policy: The policyholder will receive the lump sum amount till the end of policy maturity. Rest all the conditions remain the same as above mentioned term insurance policy.
- 3) Unit Link Plan: This policy helps in building up the savings. The premium paid is kept for the repayment to the policyholder when term ends and some part of the premium is applied into other saving plans that helps in building up the wealth of the policyholder. It can be partially withdrawn when in need.
- 4) Pension Plan: This helps retired or private company employees in long run. The premium amount is accumulated in the form of assets and given to policyholder in the form of annuity or lump sum amount as instructed by the insured person.
- 5) Money Back: This provides a sum of money after every 3-4 years depending on the premium amount and total amount of the policy on maturity. It has many survival benefits that are provided to the insured person while the policy is still in force.
Documents Required For Claim Settlement
In case policy matures or due to any unforeseen event there is need to stop the policy, then you need following documents for claim settlement:
- 1) Death Certificate
- 2) Insurance Policy Bond
- 3) Identity Proof of the Beneficiary
- 4) Deeds of Assignment