Month: August 2018

Women have, time and again, proven to be equal to their male counterparts. Today, more and more women have joined the work force and have become independent. Even in case of life insurance, women are realising the importance of having a cover on their lives. Whether it is purely for protection needs or investment needs, life insurance policies for women are becoming popular. The Life Insurance Corporation of India (LIC), one of the pioneering insurance companies in the market, offers attractive insurance solutions for women as well. So, for all you women out there looking for insurance, here are some of the best plans offered by LIC for your needs –

• • LIC’s Aadhaar Shila

    This is an endowment plan designed and offered specifically for women. Females having an Aadhar Card can buy the plan. The features of the plan are as follows –

    • Loyalty Additions are added after the completion of the first five policy years
    • At least 110% of the sum assured is paid in case of death
    • Optional Accident Benefit Rider is available with the plan. The rider pays an additional sum assured in case of accidental death during the policy tenure
    • Premium discounts are available if the chosen sum assured is Rs.2 lakhs and above.

    Read more about Types of life insurance plans

• • LIC’s Cancer Cover Plan

    Given the high incidence of cancer, women are advised to invest in a cancer insurance plan. LIC’s cancer insurance plan offers the following benefits –

    • Two coverage levels are available – level sum insured and increasing sum insured
    • The sum insured increases by 10% of the basic sum insured in the first five years of the policy or till the first diagnosis of cancer
    • Both early stage and advanced stage cancers are covered
    • In early stage cancer, 25% of sum insured is paid. Future premiums are then waived while the plan continues
    • In major stage cancer, the full sum insured is paid. All future premiums are waived. 1% of the sum insured is, thereafter, paid every month for 10 years whether the insured is alive or not

• • LIC’s e-term plan

    This is a pure term insurance plan which you can buy directly from the company’s website. The features include –

    • It’s a pure term plan where a death benefit is paid in case of death during the plan tenure.
    • Sum assured up to Rs.50 lakhs can be availed under the plan.
    • Coverage is available for up to 75 years.

    Read more about Why should women buy term life insurance?

• • LIC’s New Children’s Monck Plan

    If you want to create a fund for your children which pays regular returns, this money back plan is suitable for you. You can buy the plan for your child. The plan features are as follows –

    • Money back benefits are paid when the child attains 18 years, 20 years and 22 years.
    • 20% of the sum assured is paid as money back benefit
    • The plan attracts bonus additions. Simple reversionary bonus and a final additional bonus are paid under the plan
    • Two optional benefits are available. Under the first benefit, the survival benefits can be postponed. Upon postponement, a higher survival benefit is paid. Another optional benefit is the premium waiver rider. Under this rider, if the parent dies, future premiums are waived off but the plan continues

    Read more about Term life or money back plan which one to buy?

• LIC’s New Endowment Plus

  For investment savvy women looking for market-linked plans, this plan is the best. It is a unit linked plan which gives you the facility of enjoying market-linked returns along with insurance protection. Notable features include the following –

  • Higher of the sum assured or the fund value is paid as death benefit
  • Accidental death benefit rider is available as an optional cover
  • You can buy the plan with as little as Rs.20, 000 annual premium
  • Four funds are available for investment
  • Maturity benefit can be taken in instalments over 5 years
  • Flexible benefits like switching, partial withdrawals, etc. are allowed

These are some of the best LIC plans for women in 2018. You can choose any plan you need based on your requirements. Go for a cancer care plan or an investment oriented one, but do insure your life. You are, after all, valuable!

Read more about 5 tips to buy life insurance

Find the best life insurance plan on turtlemint.com

Life insurance policies are multi-faceted. They not only cover you against premature death, savings-oriented plans create wealth too. In fact, there are other benefit features in your life insurance plan too which give you liquidity. Unit linked plans provide you the facility of partial withdrawals so that you can access your money whenever you want. Traditional plans, on the other hand, provide you policy loans. These loans give you funds when you need them the most. Though loans are a good way to way to have access to your funds, there are some things which should be remembered before you take a loan. Do you know what these things are?

Let’s find out –

• • When is the loan available?

    You cannot avail a loan whenever you want to. Only if your life insurance plan acquires a surrender value can you avail the loan. Your plan acquires a surrender value only after you pay premiums for a specified number of years. Usually, premiums for the first two or three years are required before the plan acquires a surrender value. In case of policies where the premium paying term is 10 years and less, the first two years’ premiums are required. If the premium paying term is more than 10 years, the first three years’ premiums are required. So, check the policy to find out when you can avail the loan.

• • Maximum quantum of loan

    There is a limit up to which you can avail a loan. The limit is defined as a percentage of your policy’s surrender value which is available when you apply for the loan. Different plans have a different maximum limit of loan. Usually, you get up to 60% to 90% of the surrender value as loan. You should check the maximum quantum available and whether the quantum matches your requirement or not.

• • Interest applicable on loan

    Loan is a credit which you take from the insurance company. As such, you have to pay an interest rate on the loan. Interest is calculated on an annual basis on the amount of loan which you avail. The rate is determined by the insurance company based on the market rates. Sometimes, you might find the rate to be 2% more than the existing bank rate. So, always keep the applicable interest rate in mind before you apply for the loan to ensure that the repayment would be affordable.

• • Loan in case of paid-up policies

    Paid-up policies are those in which you have stopped paying the premiums. If the minimum premiums have been paid, the policy continues on a reduced sum assured without you having to pay future premiums. In case of paid-up policies, the surrender value is limited as premiums are discontinued. When you apply for a loan, you get a very limited amount. Moreover, if you do not repay the loan and the outstanding liability exceeds the surrender value, the policy is foreclosed. So, try and avoid taking a loan in a paid-up policy. You might lose your coverage

• Foreclosure

  As mentioned earlier, foreclosure applies when you take a loan in a paid-up policy and the loan with interest exceeds the surrender value. The surrender value is the maximum value which is payable to you in between the term of the plan. If the outstanding liability exceeds this value, the company is forced to foreclose the policy. Foreclosure is an early termination of your policy. The company informs you before foreclosing the policy and requests you to pay the loan to avoid foreclosure. If you do not repay the loan or respond to the company’s notice of foreclosure, the policy is foreclosed. Any remaining surrender value (after deducting the outstanding loan) is refunded to you on foreclosure.

Here are some tips of buying life insurance

So, be careful when you take a loan. Take note of these points before you take a loan so that you don’t face any surprises later on.

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Unit linked insurance plans became a rage among investors when they were launched. With various investor-friendly changes in the plan, ULIPs are now more in demand. Such is the popularity of ULIPs that even pension plans are offered in the unit linked version. However, many of you are unaware of the various aspects of unit linked pension plans. So, here is everything you need to know about such plans so that you can buy one for your retirement funding –

What are unit linked pension plans?

Unit linked plans are insurance plans which are developed along the lines of mutual funds. The premium collected under unit linked plans is pooled together and is then invested in different stocks and shares of the capital market. Investors can, thus, earn market-linked returns along with enjoying insurance cover and other flexible benefits. Unit linked pension plans create a corpus which is specifically designed to fund your retirement. The fund created under unit linked pension plans is used to pay annuities which create a regular source of income post retirement.

How do the plans work?

Here is how unit linked pension plans work –

• You pay the premium you want to invest, choose the sum assured and the policy term
• Relevant charges are deducted from the premium
• The allocated premium paid is invested in a fund which is chosen by you
• The fund value increases or decreases according to the market performance and the premiums paid

The benefits payable

The benefits under a unit linked pension plan are as follows –

• If the insured dies during the policy term the death benefit is paid which is higher of the fund value or the sum assured. The nominee can choose to take the death benefit in lump sum or in annuity pay-outs.
• When the plan matures you get various options. You get an option of receiving 1/3rd of the fund value in cash. This benefit is called commutation of pension and is tax-free. Thereafter, the remaining value is to be taken in annuity instalments. You can defer the annuity date or buy a single premium deferred annuity plan with the remaining fund value.

Charges involved

Unit linked plans have various charges which are deducted from the fund value. These charges are as follows –

• Premium allocation charge – this is the first charge which is deducted from the premium amount before the premium is invested in the chosen fund
• Fund management charge – this charge is deducted monthly for managing the portfolio of the fund
• Policy administration charges – administration charges are incurred in servicing the policy. These charges are also deducted monthly
• Mortality charge – this charge is deducted for the insurance cover provided with the plan.
• Discontinuance charge – there is a lock-in period of 5 years before which the plan cannot be surrendered. If you surrender the plan during the lock-in period, discontinuation charge is levied.
• Other charges – the plan might charge you for any changes in the policy. Moreover, there might be a charge for switching, premium redirection or partial withdrawals if they are not free.

(Here are 5 simple tips to buy life insurance)

Flexible features of the plan

Unit linked plans offer various flexible features which are unique to them. Unit linked pension plans are no different. Here are some of the flexible features you can find –

• Switching – switching lets you change between the available funds if your investment strategy changes. Specified number of switches in a policy year is free under most plans exceeding which there might be a charge
• Partial withdrawals – after the first five policy years you can withdraw a portion of your fund value. This is called partial withdrawal. Every plan has a limit on the minimum and maximum partial withdrawal
• Top-up – investing an additional premium under the plan can be done through top-ups. Top-ups are allowed under some unit linked pension plans which also increase the sum assured.
• Premium redirection – under this feature you can redirect subsequent premiums to be invested in another fund.

Unit linked pension plans, therefore, not only ensure a retirement income, they also grow with the economy. Moreover, the death benefit or the commuted benefit is tax-free. (Know more about the tax benefits of life insurance here). Thus, if you want to create a substantial corpus for your retirement, unit linked pension plans should be your ideal choice.

Read more about what is insurance and how does it work?

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Check out our video if you wish to know more about charges in ULIPS