LIC Registration – LIC new registration process – 2020

Life Insurance Corporation of India, popularly known as LIC is one of the oldest and largest insurance companies operating in India. Backed by the Government of India, LIC has the largest agent network, widespread branch network and huge customer base. LIC is one of the most trusted brands in India that offers a wide array of insurance products to cater to every need of people in the country.

When it comes to insurance or investment, it is not only important to buy the right one but also important to keep tabs on these financial investments regularly. It’s crucial to be updated on payments and status of the investments. LIC is one such brand that not only offers a variety of products but also provides excellent e-services to its customers.

Overview of LIC online registration

Be it for customers or for its agents, LIC offers convenience on its online platform with its registration facility. The process of LIC online registration is effortlessly easy and simple. If you are a customer of LIC holding their investment plans or if you are an agent, you can register yourself on LIC’s online portal to access details related to your existing investments/policy or on new investment opportunities or access your business information online.

Benefits of online registration on LIC’s portal:

LIC’s online portal offers various facilities on LIC policy registration. Following are the benefits that you can avail by using LIC’s online services:

  • Pay your LIC premium online:
    Be it your policy premium due or loan repayment/interest due, you can easily make payment in no time from anywhere using a debit card/credit card/net banking/UPI for BHIM payment methods

 

  • Check your policy status:
    Access the basic details of your policy like the sum assured, policy term, unpaid premium or premium paid etc. from anywhere anytime

 

  • Complete information about the accrued bonus:
    You can know how much bonus is accumulating each year for your policy

 

  • Details of your claim status:
    You can check your policies maturity date and benefits due. In case of any claims placed, status can be checked here

 

  • Check your loan status:
    If you have availed loan against your LIC policy, you can check the details relating to the loan outstanding and loan interest details etc.

 

  • Check premiums due:
    You can check premiums due for the year under premium-due calendar facility

 

  • Premium paid certificate:
    You can get premium paid certificate for an individual policy as well as for all policies on a consolidated basis for the current or previous years

 

  • Policy Bond:
    You can download copies of the policy bond and proposal form image

 

  • Complaints:
    You can register your grievances and complaints

 

  • Nominees:
    You can add or change nominees

 

  • Revival:
    You can get a revival quotation for all your lapsed policies

 

  • Benefit Illustration:
    You can also get benefit illustration for any LIC products

 

Wide range of services offered online for registered customers saves the time and effort of enquiry. This makes the information access easy for you and thus makes you have better policy knowledge. You will be updated with the status of your policy, bonus and claims etc. there is no way you will miss out on premium payments with the prompt online facilities offered on LIC’s online portal.

The step-by-step process of LIC online registration

LIC online registration process varies depending on the purpose of registration. You can register as an individual LIC agent or as an existing LIC policyholder. Let’s take a look at the step-by-step process flow for both types of registration.

Register as an insurance agent

If you want to be a LIC agent and manage your business online without visiting the LIC office on a daily basis, you can do so by registering yourself as an agent on the LIC agent portal. In order to become an agent, you need to pass the pre-licensing test conducted by IRDAI (Insurance Regulatory and Development Authority of India). Anyone who is 18 years and above with 10th grade completed from the registered board can appear for this test. LIC will even train you for appearing for the test. Once you obtain minimum marks in the pre-licensing test, LIC will issue your agent code to start working as LIC insurance agent. However, you will have to submit some documents like identity proof and address proof etc to get the agent code. With the agent code, you can register yourself as an agent on the LIC online portal. Following is the simple process to follow for online registration.

      1. Login to LIC official website
      2. Click on ‘Agent’s Helpline Module’ tab under online services. This will navigate you to a new page for registration.
      3. Click on ‘new user registration’
      4. Provide all the relevant details such as agent code, branch code, your email ID and contact number and set the password of your choice
      5. Click on ‘Generate OTP’
      6. OTP (one-time-password) will be sent to your registered mobile number or email ID
      7. Enter the OTP and submit. That’s it! Your registration is done!

 

Register on LIC e-portal as client or policyholder

If you are an existing policyholder of LIC, you can register yourself on LIC’s online customer portal. You can only access policies bought in your own name or in the name of your minor child. Before you start with the LIC online registration process, keep the following information handy:

Policy numbers

  • Premium installments for each policy (without GST or service tax)
  • A scanned image or copy of PAN card or passport

Following is the process flow for LIC policy registration on LIC’s customer portal

    1. Login to LIC official website
    2. Click on ‘customer portal’ tab under online services. This will navigate you to a new page for registration.
    3. For the first time registration, click on ‘new user’ tab
    4. Fill in all the relevant details such as your policy number, installment premium without tax, date of birth, mobile number, email ID, passport number and PAN.
    5. Confirm all the details you have provided by ticking the box given below and proceed
    6. In the next screen choose the password of your preference and finish the registration

To avail premier e-services, there are two ways

If already registered on LIC portal

  • You can log in with your user ID and password as a registered user and avail basic services
  • Further, you can add all of your policies under the same login
  • For availing all e-services, register your policies for availing e-services under the same login by filling out the request form provided
  • Fill in relevant details, print the form, sign and upload it along with a scanned image of PAN card and Passport
  • Once your documents are verified by LIC offices, email or SMS confirmation will be sent for you to access premier e-services

If you still have not registered yourself on the portal of LIC, then you need to follow these steps:

  • Login to LIC official website
  • Click on ‘customer portal’ tab under online services. This will navigate you to a new page for registration
  • For the first time registration, click on ‘new user’ tab
  • Fill in all the relevant details such as your policy number, installment premium without tax, date of birth, mobile number, email ID, passport number and PAN
  • Confirm all the details you have provided by ticking the box given below and proceed
  • Once you complete the process of initial registration with password selection, you can start adding all your policies under ‘add policy’ of ‘basic services’
  • Click on the registration form for availing premier e-services under the same login
  • Fill in relevant details, print the form, sign and upload it along with a scanned image of PAN card and Passport
  • Once your documents are verified by LIC offices, email or SMS confirmation/acknowledgment will be sent to you to access premier e-services

 

That’s it! This completes your LIC policy registration as LIC policyholder. You can start availing all the services offered on the online platform.

To sum it up, LIC online registration is the most convenient and easiest way to take control of your LIC investments. Have you already registered yourself on LIC online portal? If not, register yourself now with your existing LIC investments and get a hold of your further premium payments without any hassles/penalties, keep a check on your investment status, the bonus you are accumulating and get updated on newer LIC investment opportunities coming your way.

 

Things to know about cashless health insurance in India (Complete Guide)

With the dramatic rise in healthcare costs, medical emergencies can make a big hole in your pocket. Hence, it has become imperative for everyone to buy health insurance plans in India. While buying health insurance plans, people consider various things such as coverage offered, premium and additional benefits etc. But, the most important thing one must consider in any health insurance plan is the ‘’cashless facility’’ offered to avail the quality medical care services at the right time.

Overview of cashless health insurance

Cashless health insurance is a health insurance policy that comes with a cashless claim facility. As the name implies, in cashless health insurance plans, you don’t have to face the hassles of paying cash during medical emergencies and then getting it reimbursed from insurers. In this, your insurer will directly settle the medical bills to the network hospital where you avail healthcare treatments. Hence, in order to avail the quality healthcare treatment at the rightly needed time, it’s important to have an ideal health insurance plan that is supplemented by the cashless facility. With cashless health insurance, you can get the timely treatment even without having a contingency fund for medical emergencies.

Features of cashless health insurance

Today, health insurance policies come with wide array of features cover each and every aspect of healthcare emergency. There are plans to suit the healthcare requirements of individuals, families, senior citizens, women and group of people etc. Almost every insurer today is offering cashless health insurance policies. Features of these policies are designed by the insurance companies. Let’s take a look at some of the standard features offered by cashless health insurance plans.

Following are the features of cashless health insurance:

  • In-patient hospitalisation expenses
  • Pre and post hospitalisation expenses
  • Day care procedures
  • Domiciliary treatments
  • Daily hospital cash allowance
  • Emergency ambulance cost cover
  • Value added services
  • Pre-existing illness cover
  • Free health check-ups
  • No claim bonus
  • Organ donor cover
  • Critical illness cover, etc.

Top #4 Advantages of cashless health insurance

An ideal cashless health insurance plan is the one that offers you unending benefits in the time of need. Let’s take a look at the major benefits offered by cashless health insurance.

  1. Extensive coverage:
    Cashless health policies provide comprehensive coverage for all health issues including in-patient care, pre hospitalisation and post hospitalisation, domiciliary hospitalisation, day care procedures, health check-ups and ambulance coverage etc. Many policies provide additional coverage such as critical illness cover, parental care, maternity expenses and new born child cover etc. to make the coverage extensive.
  2. Convenience of instant cashless treatment:
    Cashless health plans are the quickest with the convenience of an immediate treatment facility at network hospitals without having to pay the cash. The best part is hospital network is widely spread across the country in almost all the insurance companies. Hence, cashless medical treatment can be availed by you conveniently even when you are travelling.
  3. Worry-free access to funds:
    If you have a cashless medical insurance, you can avail treatment in the time of need without any worry irrespective of your financial condition at the moment. Cashless insurance offers a sense of security as there is no worry of depleting savings or liquidating assets. You will be in a better position to handle the unforeseen situation with the financial security offered by cashless health plans.
  4. Saves tax:
    Along with all the financial protection and convenience benefits, cashless health insurance plans also offer tax benefits.Premiums paid towards health insurance plans taken for self, spouse, children and parents can be claimed under Section 80D of the Income Tax Act for tax deduction.

    Following are the details –

    DescriptionAll members of the family below 60 years of ageSelf, spouse and children below 60 years age

    Either of the parents above 60 years age

    Self- 60 years above

    Spouse and children below 60 years of age

    Parents above 60 years age

    Maximum premium for self, spouse and dependent childrenINR. 25,000INR. 25,000INR. 50,000
    Maximum premium for parents (dependent/non-dependent)INR. 25,000INR. 50,000INR. 75,000
    Total deductions availableINR. 50,000INR. 50,000INR. 1,00,000

Types of cashless health insurance policies in India:

There are various types of health insurance policies offered in India with cashless facility. Following are the types of cashless health insurance policies available in India:

  1. Cashless individual health insurance:
    Cashless individual health insurance policies provide coverage to an individual against various unforeseen medical events depending on the terms and conditions of the policy.
  2. Cashless family health insurance:
    Cashless family health insurance provides coverage to an entire family in a single policy against various unforeseen medical events as per the terms and conditions of the policy.
  3. Cashless senior citizen health insurance:
    Cashless senior citizen health plans provide healthcare coverage to senior citizens with many exclusive features like coverage for pre-existing illness, day care and critical illness etc.
  4. Cashless mediclaim/group health insurance:
    Cashless mediclaim insurance policies provide coverage to the group members. These are the employee sponsored health insurance plans providing coverage against various unforeseen medical events.

Top #5 best cashless health insurance plans

There are a wide variety of cashless health insurance policies available in the market. Best one or the right one out of these plans may vary depending on each individual’s requirement. However, here we have tried to list out five best cashless health plans available in the market.

Following are the details:

Plan namePlan typeEntry ageRenewabilityWaiting period for pre-existing illnessSum insured (in INR)Premium
Apollo Munich Optima Restore PlanIndividual/ Family floater91 days to 65 yearsLifelong36 monthsINR 3 lakhs to INR 50 lakhsINR 7,971
Star Family Health Optima PlanFamily floater16 days to 65 yearsLifelong24 monthsINR 2 lakhs to 15 lakhsINR 10,608
HDFC ERGO Health Suraksha PolicyIndividual/ Family floater3 months to no limitLifelong48 monthsUp to INR 10 lakhsINR 8,044
Religare Care PolicyIndividual/ Family floater91 days to no limitLifelong48 monthsINR 2 lakhs to INR 60 lakhsINR 6,318
ManipalCigna ProHealth planIndividual/ Family floater91 days to no limitLifelong48 monthsINR 2.5 lakhs to INR 100 lakhsINR 6,996

(Premium is taken for a 30-year-old healthy male for INR. 5 lakhs sum insured. Star family Health optima plan premium is for a 30-year male + a 28-year-old spouse, as the plan is family floater)

  1. Apollo Munich Optima Restore PlanApollo Munich Health Insurance is one of the leading private health insurers in India with a wide gamut of health plans in its product offering. The company offers best in class services with 4500+ network hospitals across the nation. Let’s take a look at some of the amazing features offered by optima restore health plan.

    Following are the key features/facilities offered by the plan:

    1. The plan offers comprehensive coverage for various expenses that include hospitalisation, daycare, pre hospitalisation and post hospitalisation, organ donor expenses and daily hospitalisation allowance etc.
    2. The policy offers no-claim benefit for each claim-free year which is up to 50% along with multiplier benefit that can double the NCB benefit up to 100% of sum insured.
    3. The plan comes with an automatic sum insured restoration benefit
    4. The policy offers you portability benefit which helps you get all the previous transferable benefits under the policy
    5. You can stay active and earn up to 8% renewal discount by using stay active mobile application
    6. Complimentary health check-up at the block of every two years
    7. Policy comes with an optional add-on cover called ‘critical advantage rider’ that covers eight major illnesses for up to INR. 10 lakhs. Policy also offers e-opinion facility post-diagnosis of critical illness
    8. Policy requires no pre-medicals for a person aged below 45 years and for sum insured below INR 15 lakhs
  • Star Family Health Optima PlanIndia’s first standalone insurance company, Star Health Insurance Company offers various uniquely crafted health insurance plans for you and your family. With its largest network of 9600+ hospitals, the company displays excellent service quality. Star family health optima is one of the best plans offered by the company to secure your entire family under one umbrella. Let’s take a look at the key features and facilities offered by the plan.
    1. Policy offers extensive coverage for the whole family at reasonable cost of premium. Coverage mainly includes, hospitalisation, pre hospitalisation and post hospitalisation, 405 day care procedures, organ donor expenses, domiciliary hospitalisation and newborn cover etc.
    2. 100% automatic restoration of sum insured benefit
    3. Policy offers no claim bonus of up to 35% of the sum insured
    4. Recharge benefit to enhance the sum insured up to 30%
    5. Health check-up benefit of up to 1% of the sum insured
    6. Policy offers you portability benefit which helps you get all the previous transferable benefits under the policy
    7. Policy requires no pre-medicals for person aged below 50 years
  • HDFC ERGO Health Suraksha PolicyHDFC ERGO General Insurance Company offers diversified range of health insurance plans to suit various healthcare needs of its customers. With wider network of 9500+ hospitals, the company endures your healthcare needs are addressed effortlessly. Health Suraksha plan of HDFC ERGO comes with various amazing benefits and features. Let’s take a look at the features of the plan.
    1. Policy offers wider coverage that includes in-patient care, day care treatments, organ donor cover, pre hospitalisation as well as post hospitalisation and non-allopathic treatments, emergency ambulance charges etc.
    2. Policy offers optional add-ons like maternity cover, critical illness benefit and convalescence benefit etc.
    3. Policy offers family discount of up to 10% on premium for covering two or more family members
    4. Policy offers 5% cumulative bonus for each claim free year
    5. Automatic sum insured restoration benefit
    6. Health check-up allowance of up to 1% of the sum insured
    7. Policy requires no pre-medicals for person aged below 46 years
  • Religare Care PolicyReligare Health Insurance is one of the most trusted brands that offers a wide range of health insurance plans. With 4700+ network hospitals, Religare makes global healthcare treatment easily available for you. Religare Care is one of the best plans offered by the company with various valuable features. Let’s take a look at the facilities offered by Religare Care policy.
    1. Policy comes with complete package of wide coverage that includes in-patient care, pre hospitalisation and post hospitalisation, day care treatments, organ donor expenses, outpatient cover, daily hospitalisation allowance, ambulance charges and domiciliary hospitalisation etc.
    2. Sum insured restoration benefit of up to 100% is offered
    3. No claim bonus of 10% on each claim free year up to a maximum of 50% is offered. The plan also comes with additional no-claim bonus of 50% making the total to 100%
    4. Complimentary health check-up once a year
    5. Policy offers discount on choosing longer policy term
    6. Policy requires no pre-medicals for person aged below 46 years. However, the requirement may depend on sum insured chosen and health history
  • ManipalCigna ProHealth PlanManipalCigna Health Insurance Company formerly known as Cigna TTK Health Insurance Company offers a wide range of health insurance solutions. ProHealth plan is one of the best products offered by the company to secure you and your family. Let’s take a look at amazing facilities offered by the plan.
    1. ProHealth policy offers flexibility in choosing the plan based on your healthcare requirements – plans available are Protect, Plus, Preferred and Premier
    2. Policy comes with comprehensive coverage that includes in-patient hospitalisation cover, day care treatments, organ donor expenses and pre and post hospitalisation cover etc.
    3. Policy offers up to 10% of long tenure discount and family discount on premium
    4. Restoration benefit of up to 100% of sum insured
    5. No claim benefit of 5% to 10% (depending on the plan chosen) is offered which can be accumulated up to a maximum of 100% of sum insured
    6. Policy comes with voluntary deductible of INR. 1 lakh, INR. 2 lakhs and INR. 3 lakhs which can help you reduce your premium to a certain extent
    7. Complimentary health check-up for every three years
    8. Policy provides you an option to earn healthy rewards that can reduce your premium
    9. Policy provides maternity cover and worldwide emergency benefit
    10. Policy comes with optional add-ons – critical illness cover and waiver of copay.

11 most important points to consider before buying cashless health insurance plans

To buy the right cashless health insurance plan, certain important points are to be considered. Following are the important points to consider while buying:

  1. Coverage:
    Coverage offered by the policy needs to be given utmost importance at the time of buying. It’s important to have adequate coverage in case of an unfortunate event. Not just the amount of sum insured, coverage offered needs to be comprehensive in terms of features and benefits also. Consider wider coverage policies that can cover almost every medical situation. There are policies that come with restoration features, wherein sum insured gets reinstated when it’s exhausted. Consider policies with such features.
  2. Exclusions:
    It is important to consider what is not covered in the policy before you buy it. Cashless health claims also can get rejected if you are not aware of the limitations. Being aware of exclusions helps you make a rational decision.
  3. Claim settlement ratio:
    The claim settlement ratio or incurred claim ratio of the health insurance company is an important consideration while buying your cashless health insurance. As the ratio signifies company’s potential to pay claims, it’s ideal to go with cashless health plans of insurers with high claim settlement ratio.
  4. Co-payment:
    Co-payment refers to portion of medical expenses that needs to be paid by you as an insured before placing the claims with the insurance company. Hence, it’s important to look for policies that have no co-pay clause.
  5. Network hospitals:
    Cashless facility can be availed only at network hospitals of the insurance company. Hence, to avail treatment without any hassles anytime, it’s good to go with insurer having wider hospital network.
  6. No claim benefits:
    No claim benefit is one of the common features in any cashless health insurance. Basically, you can avail this benefit for being healthy and not making any claim during policy year. Benefit for each claim-free year can be accumulated up to a maximum of 50% by most of the policies.
  7. Lifetime renewal:
    With the rising age, it’s difficult to get the comprehensive medical cover. Hence, it’s important to consider policies that are renewable for lifetime in order to avoid coverage hassles and high premium.
  8. Waiting period:
    Almost every cashless health insurance plan comes with waiting period, after which financial benefits can be claimed for specific treatments, illnesses and procedures. Policies with less waiting period can help you get financial aid without much waiting. Choose the policies based on your requirement.
  9. Portability:
    If you have to switch from one insurer to another for any reason, portable cashless health plans transfer all your earned benefits to the new plan. Hence, portability is an important consideration.
  10. Additional benefits:
    Health insurance policies do come with additional benefits like critical illness cover and accidental cover etc which can enhance your healthcare cover. Consider such features while buying cashless health insurance
  11. Cost:
    Though, the cost of the policy is not the primary consideration, it’s important to avail all the required benefits at an affordable cost. You can compare the quotes of various cashless health plans online on side by side basis.

How to buy cashless health insurance plans?

As most of the cashless health insurance plans are available on an online platform, buying is more convenient. Plan of your choice can be bought anytime, anywhere within a few clicks online. You can buy cashless health insurance plans through Turtlemint through following steps:

  1. Go to Turtlemint and choose the category of insurance as ‘health’
  2. Click on ‘buy new policy’ and select your profile details such as gender, members to be insured, age, health history and contact details etc.
  3. Compare the plans available and select the cashless health plan based on your need
  4. Provide necessary coverage details
  5. Make the payment online. That completes the buying process!

Documents required for buying cashless health insurance plans

Following are the documents required for buying cashless health insurance plans:

  1. PAN card is mandatory
  2. Age proof – Birth certificate/SSLC mark sheet/Voter ID/Passport etc.
  3. Identity proof – PAN card/ driving license/voter’s ID/ passport/aadhaar card, etc
  4. Proof of address – Driving license/passport/latest electricity bill/ telephone bill etc.
  5. PhotographsRequirement of pre-medical check-ups may vary depending on the policy’s terms and conditions.

What is the process of cashless health insurance claim?

Usually, in cashless health insurance policies, TPA (third party administrators) work like a bridge between the insurance company and the network hospitals that helps to speed up the claim process. Some insurance companies will have their in-house claim processing team which makes the process even quicker. Generally, TPAs or insurers will have their help desk set up in their network hospitals to help the claimant.

Cashless health insurance claim process may vary depending on whether it is emergency hospitalisation or planned hospitalisation. Let’s take a look at the process.

  • Cashless emergency hospitalisationDuring medical emergencies, if the insured gets admitted at any network hospital, following is the process to be followed for cashless claim:
    • Once the insured is admitted to the hospital, insured needs to show health card issued by his/her insurance company. Health card will have all the vital details such as name of the insurer, policy number and plan type etc.
    • Insured needs to contact TPA/insurance desk and initiate the cashless claim by filling up pre-authorisation request usually within 24 hours of hospitalisation
    • Third party administrator/insurance company will review all the initial documents submitted
    • Once the cashless request is approved by the insurance company further documents are to be produced by the hospital to expedite the claim process
    • Once final set documents submitted by hospital are verified, claim amount will be directly settled with the network hospital
  • Cashless planned hospitalisationIn case of planned hospitalisation at the network hospital for any treatment/procedures, following is the process to be followed:
    • You can go through the insurance company’s website to take a look at the list of network hospitals available for treatment or can seek this information by contacting the customer support team of the insurance company
    • Once you choose your preferred network hospital to get treated, you need to fill-up pre-authorisation cashless request form which can be downloaded online on TPA website or can be obtained from insurance desk at the hospital
    • It’s important to submit this pre-authorisation from within specified time limit prior to hospitalisation. Time limit may vary from insurer to insurer
    • Hospital authorities or an attending physician will also go through your request form, verify the details and sign
    • The submitted request form will then be checked by TPA/insurance desk for eligibility and authenticity
    • Post verification by insurance desk or TPA, approval will be sent to network hospital for cashless treatment
    • On producing the final documents by hospital, payment of claim will be directly made to the hospital

    Documents required for cashless claim settlement

    Requirement of documents may vary on claim to claim basis. However, there are certain common documents that are needed for cashless health claims. Following are the documents required:

    1. Claim form duly filled and signed
    2. Doctor’s advice for hospitalisation
    3. Discharge summary of the hospital
    4. Doctors’ prescription, treatment details along with original medical bills and receipts given by hospitals, diagnostic centres, doctors and pharmacies
    5. Diagnosis reports (ECG/Scan/X-ray, Lab test reports etc)
    6. Police FIR copy for accident cases
    7. Health card copy, etc.

    Exclusions under cashless health insurance

    Though, cashless health insurance policies provide comprehensive coverage against most of the medical emergencies and health conditions, there are certain exclusions applicable under these plans. Some of the exclusions come with waiting period, thus temporary in nature. Some of the medical costs are permanently excluded from the policies. Let’s take a look at exclusions under cashless health insurance.

    • Temporary exclusions
      • Medical expenses incurred during the first 30 days (initial waiting period) of the policy
      • Specific medical illnesses/treatments – usually come with the waiting period of 12 -24 months
      • Pre-existing illnesses – usually come with the waiting period of 24 -48 months
      • Maternity expenses – Generally come with the waiting period of 9 months to 6 years
  • Permanent exclusions
    Following are some of the general exclusions under cashless health insurance:

    • Non-medical expenses
    • Pregnancy and childbirth
    • Fertility treatments
    • Sexually transmitted diseases
    • AIDS/HIV
    • Self-medication/treatment
    • Unproven and experimental treatments
    • Congenital illnesses
    • Mental disorders/illnesses
    • Cosmetic treatments
    • Treatments received outside geographical limits
    • Self-inflicted injury
    • Breach of law
    • War and nuclear perils
    • Alcohol and drug abuse
  • To conclude, cashless health insurance plans give you peace of mind and sense of complete financial security against various health issues and emergencies without having to worry about personal financial condition. With a wide variety of plans available for purchase online, compare them on a cost-benefit basis and secure your health!

Insurance Definition Types Benefits Features India

Insurance is the most effective risk management tool which can protect individuals and businesses from financial risks arising out of various contingencies. The emotional and psychological loss can never be compensated, but at least the financial loss can be compensated with insurance. Though there are uncertainties in life which you cannot mitigate, but insurance will surely help you transfer the financial risk associated with the same.

What is insurance?

Insurance is a legal contract between two parties- the insurance company (insurer) and the individual (insured), wherein the insurance company promises to compensate for financial losses due to insured contingencies in return for the premiums paid by the insured individual. In simple words, insurance is a risk transfer mechanism, where you transfer your risk to the insurance company and get the cover for financial loss that you may face due to unforeseen events. And the amount that you pay for this arrangement is called premium. There is insurance available for various risks, starting from your life to mobile phones that you use. In the end, it’s essential to protect what is ‘important’ to you.

How does insurance work?

The concept of insurance works on the basis of ‘risk pooling’. When you buy any type of insurance policy from the insurance company for a specified period with specific cover, you will make regular payments (referred to as premiums) towards the policy. Similarly, Insurance Company collects premium from all of its clients (referred to as insured) and pools the money collected to pay for losses arising out of an insured event. In case the insured event takes place, and you make a claim, losses will be compensated by the insurance company from the pool of policyholder’s premiums. In case you don’t make a claim during the specified policy period, no benefits will be paid to you. However, there are various types of products offered by insurance companies today which also involve savings element attached to it.

Types of insurance available

There are various types of insurance products available in India. Mainly, insurance products are classified as:

  • Life insurance products
  • General insurance products
    Life insurance covers you against the risk of death. Life insurance policies come in many variants such as term plans, endowment plans, whole life insurance plans, money back plans and unit-linked investment plans etc. Many life insurance products can be a great tool for long-term savings also as it comes as a combination of protection and savings. General insurance products cover financial losses caused by various risks other than death. General insurance products come in various types covering a wide range of risks such as health insurance, motor insurance, marine insurance, liability insurance, travel insurance and commercial insurance etc.
    Insurance is an effective risk management tool that protects what is precious for us –life, health, home and businesses etc. The requirement of insurance may vary from one individual to another, but there are certain types of insurance products that are must-have for every individual for ensuring a secure future.

Must-have insurance products

Knowing the importance of insurance is the need of the hour. Following insurance products are the must-have for any individual today.

  • Life insurance:
    As no one wants to leave their loved ones financially shattered, life coverage is one of the must-have for every individual having dependents. In case of life insurance, the sum assured or the coverage amount will be paid out to the nominee of the insured in the event of the death of the insured. Life insurance is a crucial requirement to ensure the financial well-being of your loved ones even in your absence. The coverage amount opted should be able to provide complete financial protection – to replace income loss, to repay debt and also to create a financial buffer that can be utilised by insured’s family for future financial stability. Though life insurance products come in many variants, it’s important to first avail the term insurance with adequate coverage.
  • Health insurance:
    Health uncertainties are part of life. Keeping in mind the rising cost of healthcare and an increasing number of diseases, it’s important to have the financial cushion to protect yourself against health contingencies. Health insurance policies are of many types such as individual health insurance, family floater health insurance, critical illness health insurance and senior citizen health insurance. It’s important to have adequate health insurance coverage that can protect you from financial crisis during medical emergencies.
  • Motor insurance:
    Motor insurance policies are the mandatory legal requirement in India for every vehicle owner under the Motor Vehicle Act. Be it two-wheeler, car or a commercial vehicle, its compulsory to avail third party liability motor insurance to protect oneself against the claims that may arise from another party during an accident. However, motor insurance policies come in a comprehensive package wherein your valuable assets (bike or car) are covered against the various risk of damage or loss along with the personal accidental cover to you as the owner. Keeping in mind the rising incidents of road accidents and the asset value, it’s most important to have a comprehensive motor insurance policy.
  • Accident and disability insurance:
    Accidents are unexpected and are inevitable. Sometimes accidents can result in disabilities that can further have huge impact on your earning capacity. In order to have financial stability for yourself and your family, it’s important to be insured against accidents.
  • Home insurance:
    Home is one of your most valuable possessions that also includes many precious belongings and memories. Though you try to secure it to the fullest, your property is exposed to various risks like theft, damages due to natural disasters etc. which you may not be able to mitigate completely. Hence, in order to protect your home against losses and damages that may arise due to many insurable events, availing home insurance is the most effective solution.Though you need to be prepared for future uncertainties by availing insurance cover, you may not need all types of insurance. The priority of any insurance product may vary depending on your individual need. Insurance is a large industry with numerous product types available to cater to every sort of need. Some of them mentioned already are of top priority for every individual. Priority of rest other types of insurance may purely depend on your unique need or situation. Let’s take a look at some of the insurance types that are of lesser priority.
  • Standalone critical illness insurance:
    Critical illness insurance plan may not be needed for every individual, specifically, if you do not have any family history of critical illness. Critical illnesses are sometimes covered in health insurance plans and also comes as a rider along with life insurance plans. Hence, a standalone cover for critical illness depends purely on the requirement of an individual.
  • Travel insurance:
    Travel insurance may be the priority for frequent travellers. But, it may not be needed for all. The need for insurance may vary depending on each individual’s unique needs. For example, if you are planning a domestic trip and your comprehensive health insurance plan covers you across the country for any medical emergencies, travel plans may not just be needed for you. More specifically, the travel insurance plan may not be your priority if you can afford to lose your pre-paid trip expenses. Sometimes travel covers also come as your credit card travel benefit.Likewise, there are many insurance types that are not suitable or required for every individual. It’s important to think about the benefits that you can reap before investing in an insurance plan.

How to decide on the type of insurance you need?

Before you buy any insurance, it’s important to understand the need for insurance. Here are certain things to keep in mind at the time of deciding what type of insurance you need.

  • Purpose of cover
  • Risks that you want to be covered against
  • How long you might need the coverage
  • Affordability

List of benefits and importance of insurance
Insurance is a risk management tool not only benefits the individual and businesses but also benefits the society and economy in numerous ways. Following are some of the important benefits of insurance:

  • Provides peace of mind:
    Insurance provides protection against various uncertainties that can put you or your family in financial crisis. By covering the uncertainties of human life and businesses, insurance provides a sense of security. Having life insurance gives you peace of mind that the financial stability of your family will remain intact even when you are not around. Having health insurance gives you a sense of security that you do not need to shell out all your savings in the event of medical emergencies.
  • Promotes risk control:
    As insurance works on risk transfer mechanism, it promotes risk control activity.
  • Promotes economic growth:
    As insurance funds are invested in various projects like water supply, power and roads etc, it contributes to the overall economic growth of the nation. Also, insurance provides employment opportunity to people. Insurance contributes to economic growth in many other ways such as getting Foreign Direct Investment, paying taxes on the profit earned and by investing in the capital market etc.
  • Distribution of risk:
    Risk of insurance is spread across various individuals and organisation instead of concentrating on only one.
  • Helps to get loan easily:
    There are loan facilities offered against insurance policies. In case of home loans, having an insurance cover can help to get the loan easily from the lender.
  • Inculcates savings habit:
    There are many life insurance products that come with investment cum protection benefit. Such products inculcate a regular saving habit among individuals. Plans like endowment insurance plans help in achieving long-term financial goals. Pension plans help to receive regular income flow in older age.
  • Provides tax benefit:
    Insured gets the tax benefits for premium paid depending on the insurance product type. For example, the premium paid towards life insurance plans qualifies for tax deduction under Section 80C of the Income Tax Act. And, the premium paid towards health insurance plans qualifies for tax deduction under Section 80D of the Income Tax Act.

Following are some of the examples that demonstrate the importance of insurance:

    • Case 1:
      Ram, a software engineer living in Bangalore meets with an accident and dies on the spot leaving his wife and son in deep emotional shock. He was just 40! He also has a home loan of INR. 30 lakhs running. Luckily, Ram has taken a term insurance cover of INR. 1 Cr. at the age of 32 years for 25 years of the policy tenure. His wife received compensation from the insurance company within 10 days which helped her pay off the debt and invest the corpus for future needs. If he had not taken the wise decision of investing in life insurance, his family would have been a huge financial crisis today! Insurance is important to secure your family’s future.
    • Case 2:
      Sunil, an employee in a multinational company in Mumbai suddenly fell unconscious due to high fever. He was then rushed to the nearest hospital. He was admitted for 3 days in the hospital for diagnosis and treatment. When he was discharged after 3 days, his hospital bill came up to around INR. 70,000. Luckily, he had taken a health insurance coverage for INR. 3, 00,000. As the hospital was listed in the network hospitals of his insurer, bills were directly settled to the hospital. If he had not known the importance of insurance, he would have to pay INR.70, 000 out of his pocket. Insurance helps you to have financial stability during unforeseen events.

To conclude, shield your life and important assets against all the uncertainties with the help of insurance. Know what insurance coverages you need, compare and invest wisely. It’s important to understand that the need for insurance is to secure what you love.

Top child investment plans in India

Children always hold a special place in your hearts. They are your bundle of joy and you try to bring your child up in the best possible way. That is why you choose the best education, the best clothes, the best food and also the best future for your child. Whatever you do for your child, it involves money. Whether you want your child to go to the best schools or have the best toys, you need money to fund your child’s dreams. Especially when your child wants to build a career for himself/herself you need sufficient funds for higher education. Given the rising cost of education, affording quality education for your child is tough. When it comes to higher education, the challenge becomes more difficult as higher studies are expensive.

When you are earning, you set aside funds for your child’s future expenses and higher studies. But what would happen in case of an unforeseen emergency? In case of your premature death, can you ensure a secure financial future for your child?

You can if you choose a child insurance plan.

Child insurance plans – meaning 

Child insurance plans are life insurance plans which help you plan for your child’s secure financial future. These plans aim to create a financial corpus for your child when he/she grows up whether or not you are alive. There is an inbuilt premium waiver benefit under child plans. This benefit kicks in when the policyholder, who is the parent, dies during the policy tenure. In case of death of the policyholder, the premiums are not required to be paid but the policy continues. The insurance company pays the premiums on behalf of the policyholder. Then, when the policy matures, the promised maturity benefit is paid. Thus, child plans promise a lump sum benefit on maturity even when the parent dies during the policy term. This lump sum benefit helps provide the child with the financial corpus necessary to pursue his/her dreams.

Salient features of child plans

Child plans have the following salient features –

  • Child plans can be offered as traditional endowment or money back plans or as unit-linked insurance plans.
  • The plans are available only for parents who have a minor child
  • The insured can be the parent or the child. Under most plans, the insured is the parent while the child is the beneficiary.
  • If the parent is the insured, in case of death of the insured during the policy tenure, the death benefit is paid immediately so that the family can deal with the financial loss suffered. The premiums are then paid by the insurance company and when the plan matures, a maturity benefit is paid.
  • If the child is the insured and the parent dies during the policy tenure, nothing is paid on such death. The premiums are waived off and the plan continues till maturity. If the child dies before the completion of the tenure, the death benefit is paid and the plan is terminated. However, if the child survives to maturity, the maturity benefit is paid.

Benefits of child plans

Child plans are highly recommended for parents who want to create an assured financial corpus for their child’s future. This is because of the following benefits which child plans provide –

  • Child plans create an earmarked fund for your child’s future. This fund is protected and grows even when you are not around to contribute towards its growth.
  • You can choose money back plans which pay a part of the sum assured at important milestones of your child’s life, i.e. at the time your child enrols for higher secondary, when your child graduates, when your child gets married, etc.
  • Unit linked child plans create a corpus which is inflation-proof and provides attractive returns as per the latest market trends.
  • The premiums paid towards child insurance are allowed as a deduction under Section 80C up to INR 1.5 lakhs. This helps in lowering your tax liability while at the same time planning for your child’s future. The benefits received, both death and maturity benefits, are also completely tax-free under Section 10 (10D). So, child plans help you save taxes and also create a tax-free corpus.

Top #6 child insurance plans in India

Now that you know that child plans are beneficial, you must be wondering which policy to buy for your child’s future. There are more than twenty life insurance companies in the market and each offers a child insurance plan. Thus, if you feel confused about choosing the best child insurance plan, here is a list of some of the best plan which you can find in the market today –

Name of the planType of planEntry age limitsTerm of the planSum assured
LIC’s New Children’s Money Back PlanParticipating money back plan0 to 12 years25 – entry ageINR 1 lakh onwards
HDFC Life YoungStar UdaanParticipating endowment and money back plan30 days to 60 years15 to 25 yearsDepends on the premium amount, age, term and plan option selected
HDFC Life Click2InvestUnit linked insurance plan30 days to 65 years5 to 20 yearsRegular or limited premiums – 7/10 times the annual premium

Single premium – 1.25 times the single premium

Bajaj Allianz Future GainUnit linked insurance plan1 year to 60 years10 to 30 yearsDepends on the premium, age and policy term selected
LIC’s Jeevan TarunParticipating endowment cum money back plan90 days to 12 years25 – entry ageINR 75,000 onwards
Bajaj Allianz Lifelong AssureParticipating Whole life plan10 to 55 years100-entry ageINR 1 lakh onwards
Bajaj Allianz POS Goal SurakshaTraditional endowment plan18 to 55 years10 or 15 yearsINR 30,000 to INR 10 lakhs

A brief overview of the best child insurance plans

Here’s a look into what makes the above-mentioned child insurance plans the best –

LIC’s New Children’s Money Back Plan 

This is a traditional money back plan which earns bonuses and, thereby, pays a substantial corpus. The child is the life assured and the parent is the policyholder. The plan’s features are as follows –

  • 20% of the sum assured is paid as money back benefits thrice during the policy tenure when the child attains 18 years, 20 years and 22 years of age.
  • There are two optional benefits under the plan. The first one is to postpone the money-back benefit wherein increased money back benefit is paid at a later date. The other one is the premium waiver rider which, if selected, waives the premium if the parent dies during the policy tenure.
  • Premium discounts are available in the premium is paid annually or half-yearly and also if the sum assured is INR 2 lakhs and above.

HDFC Life YoungStar Udaan

This is a participating traditional plan which gives you the option of buying the plan as an endowment plan or a money back plan. The plan’s features are as follows –

  • There are two death benefit options of Classic and Classic Waiver
  • There are three maturity benefit options of Aspiration, Academia and Career where Aspiration is an endowment option and the other two are money back options
  • 3% or 5% of the sum assured is added as guaranteed additions in the first five policy years
  • Premiums are payable only for a limited period

HDFC Life Click2Invest

This is a unit linked plan which gives market-linked returns as well as insurance coverage. The plan’s features are as follows –

  • Eight investment funds are available which suit the different risk profiles of different investors
  • Switching, partial withdrawals and premium redirection facility is available under the plan
  • The premiums can be paid regularly, for a limited duration or in one lump sum

Bajaj Allianz Future Gain

This is a unit linked insurance plan which has the following salient features –

  • There are two readymade investment strategies to choose from
  • The sum assured and the premium payment frequency can be changed during the policy tenure
  • Top-ups can be paid for increasing the investment into the plan
  • Five optional riders are available with the plan

LIC’s Jeevan Tarun

This is a child insurance plan which allows you the option of an endowment plan or a money back plan. The plan allows four benefit payment options. Under these options, you can either choose to receive the entire benefit in one lump sum or in the form of money-back payments. Other features of the plan are as follows –

  • The child is the life assured and the parent is the policyholder
  • There is an optional premium waiver rider which helps in waiving the premiums if the parent dies during the policy tenure
  • Premiums are payable only for a limited tenure
  • Premium discounts are available which help in reducing the premium amount

Bajaj Allianz Lifelong Assure

This is a participating whole life plan which runs till you reach 100 years of age. The plan’s features and benefits are as follows –

  • 3% of the sum assured is paid as cash backs after the premium payment term is over. The cashback is paid till you reach 99 years of age
  • On maturity or death, 200% to 300% of the sum assured is paid
  • There are five additional riders for a wider scope of coverage
  • Cash bonuses are paid from the end of the sixth policy year
  • Premiums are payable only for a limited period

Bajaj Allianz POS Goal Suraksha 

This is an endowment plan which does not earn bonuses and has affordable premiums. The features of the plan include the following –

  • Premiums are payable only for a limited period
  • The maturity benefit is guaranteed
  • Guaranteed additions are added to the plan corpus on the maturity of the plan

How to buy the best child insurance plan?

The above-mentioned plans are the best child plans available in the market today. However, when buying a plan, you should keep the following points in mind –

  • Buy a plan early when your child is young. The premiums would be low and you can choose long coverage duration. When the policy tenure is long you can create a good corpus over time.
  • Ensure that the sum assured is sufficient to take care of your child’s future expenses. A low sum assured would not provide the desired financial security and fall short in meeting your child’s requirements.
  • The tenure should be such that the policy pays the benefits when your child needs it. Match the tenure to that age of the child when money would be needed for higher education or marriage.
  •  Choose a plan based on your risk appetite. If you want guaranteed returns, go for traditional endowment or money back plans where the benefits are promised. However, if you are looking for market-linked returns, choose ULIPs.
  • Ensure that the premiums are affordable so that you can pay the premiums over the tenure of the policy.

Besides the above-mentioned points, you should also compare the available policies and then buy. Comparing lets you choose the policy which offers the best coverage benefits and has the lowest premium rates. To compare, judge the policies on the following parameters –

  • Coverage offered – the higher the better
  • Premium rate – the lower the better
  • The nature of the plan – it should suit your risk profile and requirements
  • Riders available – the plan should offer optional riders so that you can customise your coverage
  • Coverage duration – the plan should offer the duration that you need

Only after you compare the plans should you buy the best child insurance policy. To compare the best child insurance plans you can choose Turtlemint. Turtlemint is an online website which lets you compare the best child insurance plans offered by the leading insurance companies. All the above-mentioned plans can be found on Turtlemint’s website for easy comparison. You can also purchase the desired policy after you shortlist which plan you need. So, Turtlemint offers you a one-stop place to compare and buy the best child insurance plan.

Secure the future of your beloved child through child insurance plans. Compare and buy the best child plan and ensure that your child’s dreams are fulfilled even when you are not there to fulfil them yourself.

Frequently Asked Questions

  1. What is the difference between a beneficiary and a nominee?A beneficiary is one who is entitled to use the policy benefits. A nominee, on the other hand, is an individual who is authorised to collect the death benefit when the insured dies. The nominee might not be the beneficiary. The nominee’s only duty is to collect the death benefit. He/she might not be entitled to use the benefits himself/herself.
  2. What documents are required to buy a child insurance plan?To buy a child insurance policy you would have to submit the following documents –
    • A duly filled in proposal form which states all the details of the proposer and the life insured (if different)
    • Identity proof, age proof, address proof and photographs of the proposer/parent
    • Identity proof, age proof and photographs of the child
    • Income related documents of the parent if the sum assured is high
    • Any other documents as required by the insurance company.
  3. How much does it cost to insure a child?The cost of insuring the child depends on the child’s age, the sum assured, policy term and premium paying term. If the sum assured is high, premiums would be higher. Premiums also increase with an increase in the age of the child. If the policy duration is long, the annual premium would be less. Lastly, if the premium is paid annually, the premiums would be low compared to premiums paid half-yearly, quarterly or monthly.
  4. Up to what age can minor children be insured under child plans?If the child plan is being taken on the life of a child, the maximum entry age of the child is usually limited to up to 12 years.
  5. Can any parent buy a child insurance plan?Yes, either the mother or the father can buy a child insurance plan provided that the parent is an earning member.

Know everything about whole life insurance

Who doesn’t like the security of being covered lifelong when the life insurance policy doesn’t have an expiry date? Whole life insurance policies promise such lifelong coverage and much more. Let’s understand how –

What are whole life insurance plans?

Whole life insurance plans are those plans which provide coverage until you reach 99 or 100 years of age. Thus, these plans essentially run for your entire lifespan if you die before reaching 100 or 99 years of age. 

Salient features of whole life insurance plans

Whole life insurance plans which are available in the market have some salient features which are as follows:

  1. These plans can come in different variants. These variants include the following –
    • Pure protection plans, also known as Term Insurance Plans wherein only a death benefit is paid whenever the insured dies before attaining 100 years of age
    • Endowment plans wherein coverage runs till 100 years. In case of death, a death benefit is paid if the insured survives till 100 years of age, a maturity benefit is also paid
    • Money-back plans wherein regular money back benefits are paid after the completion of the premium paying tenure. The benefits are paid till death or till the insured reaches 100 years of age, whichever is earlier.
    • Unit linked plans wherein coverage is allowed for up to 100 years. The death or maturity benefit depends on the market linked returns earned by the invested premium.
  2. Premiums are usually payable only up to a specified age. Whole life plans are, therefore, limited premium paying plans.
  3. Endowment and money back whole life plans might be issued as participating or non-participating plans. Participating plans are those which earn bonuses.
  4. There is no fixed tenure of the plan. The tenure depends on the entry age of the insured. It is calculated by deducting the entry age with 100 or 99 as per the coverage of the plan. So, if you are aged 30 years and the plan allows coverage till 100 years, the policy tenure would be 70 years.

Types of whole life insurance plans

Whole life insurance plans can come in different variants. These variants include the following –

  • Whole life term plans – whole life term plans are pure protection plans which have no definite coverage tenure. The plan runs till the insured attains 99 or 100 years of age (depending on the plan’s maximum coverage age). If the insured dies before attaining 99 or 100 years of age, the death benefit is paid. If, however, the insured survives the policy tenure and attains 99 or 100 years of age, no maturity benefit is paid under these plans.
  • Endowment whole life plans – These plans are savings oriented whole life plans which provide lifelong insurance protection as well as a savings corpus. The coverage under the plan runs until 99 or 100 years. In case of death before the insured reaches 99/100 years of age, a death benefit is paid. If, however, the insured survives till 99 or 100 years of age, a maturity benefit is also paid. Endowment whole life plans are usually offered as participating plans where bonus accrues during the policy tenure.
  • Money-back whole life plans – These plans are limited premium plans. Under the plan, money back benefits are paid after the completion of the premium paying tenure. Money-back benefits continue lifelong until the insured attains 99 or 100 years of age. A maturity benefit might also be paid at the maturity age. If, on the other hand, the insured dies before reaching 99 or 100 years of age, the money-back benefits stop and a death benefit is paid. Money-back whole life plans are usually offered as participating plans and they earn bonuses.
  • Unit linked whole life plans – These plans provide lifelong coverage for up to 99 or 100 years. Moreover, the premiums are invested in the market and so the plans promise attractive market-linked returns. The death or maturity benefit depends on the market linked returns earned by the invested premium. In case of death, the higher of the sum assured or the fund value is paid. If, however, insured survives till 99 or 100 years of age, the plan matures and the available fund value is paid.

Benefits of whole life insurance plans

Whole life insurance plans have some specific benefits which are as follows –

  1. The plans ensure lifelong coverage and therefore allow you to create financial security for your family in your absence
  2. Savings oriented whole life plans also create a corpus while at the same time providing insurance coverage 
  3. Since premiums are payable for a limited period, you don’t have to pay the premiums in your older age. However, coverage would continue even when you are old.
  4. The premiums paid are allowed as a deduction under Section 80C of the Income Tax Act up to INR 1.5 lakhs. Thus, premiums paid for whole life insurance plans lower your taxable income. The benefit received from whole life insurance plans is also tax-free benefits as they do not attract any tax under the provisions of Section 10 (10D) of the Income Tax Act.

Who should invest in whole life insurance plans?

Whole life insurance policies are suitable for every individual. You can choose these plans for protection needs and to create a financial corpus in your absence. While term plans offer coverage for a limited duration, whole life plans would ensure that your family would be taken care of whenever you die. 

Whole life plans are also suitable for individuals looking to create a corpus for their financial goals. You can choose endowment, money back or unit-linked whole life policies and create a savings corpus while enjoying lifelong coverage.

The plan can also be taken for child planning as you would be promised a benefit whenever you die. Your child’s needs would, therefore, be taken care of in your absence.

Best whole life insurance policies in India

There are a lot of insurance companies in the market and each company offers one or more whole life insurance policies. As such, choosing the best policy proves confusing for many. So, here is a list of the top five whole life insurance plans which promise the best coverage features at very affordable premium rates – 

Name of the planType of whole life insuranceEntry age Sum assured 
Tata AIA Life Insurance Sampoorna RakshaTerm insurance plan18 to 70 yearsINR 50 lakhs onwards
ICICI Pru iProtect SmartTerm insurance plan18 to 65 yearsDepends on the premium paid, age and term
Aegon Life iTerm Insurance PlanTerm insurance plan18 to 65 yearsINR 25 lakhs onwards
HDFC Life Sampoorn Samridhi PlusTraditional endowment plan30 days to 60 yearsINR 65,463 onwards
LIC’s Jeevan UmangTraditional money back plan90 days to 55 yearsINR 2 lakhs onwards
SBI Life Shubh Nivesh Traditional endowment plan18 to 60 yearsINR 75,000 onwards

Overview of the best whole life insurance plans

Let’s check the features and benefits of the above-mentioned whole life insurance plans which make these plans the best – 

Tata AIA Life Insurance Sampoorna Raksha

This plan is a term insurance plan which allows coverage to 85 years of age. You have the option of converting the plan to a whole life plan and avail coverage till 100 years of age. The features and benefits of the plan include the following –

  • The death benefit can be received in four options. The options are as follows –
    • Sum assured is paid in one lump sum
    • Sum assured is paid partly in a lump sum and partly in monthly incomes for the next 10 years
    • An increased sum assured is paid in one lump sum 
    • An increased sum assured is paid partly in a lump sum and partly in monthly incomes for the next 10 years
  • Premiums can be paid throughout the policy tenure or for a limited period
  • There are optional riders too which can be selected for enhancing the coverage 

ICICI Pru iProtect Smart

This is a term insurance plan where whole life cover can be selected. If the whole life coverage option is selected, coverage is provided until 99 years of age. The features of the plan are as follows –

  • There are four coverage benefits to choose from. These coverage options are as follows –
    • The life which covers death, terminal illness and waives premiums in case of disabilities
    • Life Plus which covers death, terminal illness, accidental death and waives premiums in case of disabilities
    • Life & Health which covers death, 34 critical illnesses, terminal illness and waives premiums in case of disabilities
    • All in One where all the coverage benefits are included. The benefits are death, terminal illness, waiver of premiums in case of disabilities, 34 critical illnesses and accidental death.
  • The death benefit can be received in a lump sum, in monthly installments or in a combination of both. There is also an option of increasing the monthly instalments.
  • The sum assured can be increased on marriage or childbirth through life stage protection feature available under the plan

Aegon Life iTerm Insurance Plan

This is also a term insurance plan with an option to avail lifelong coverage until you reach 100 years of age. The other features and benefits of the plan are as follows –

  • Premiums can be paid only up to 60 years of age while the policy runs lifelong
  • The death benefit can be either taken in a lump sum or in regular monthly incomes or in a combination of lump sum and monthly incomes
  • There is an inbuilt rider of terminal illness benefit in this plan which pays the sum assured if you suffer from a terminal illness
  • You can increase the sum assured if you marry or have a child 

HDFC Life Sampoorn Samridhi Plus

Sampoorn Samridhi is a traditional savings oriented insurance plan wherein you can choose to avail whole life cover till you reach 100 years of age. The plan’s features include the following –

  • Guaranteed additions are added to the sum assured in the first five policy years
  • Premiums are payable for a limited period
  • Bonuses are added regularly which enhance the corpus accumulated under the plan
  • There is an inbuilt accidental death benefit option which pays a benefit in case of accidental death

LIC’s Jeevan Umang

LIC’s Jeevan Umang is a participating whole life plan which earns bonuses. The salient features of the plan are as follows –

  • Money-back benefits are offered @8% of the sum assured after the premium payment term is completed
  • Simple reversionary bonuses are paid throughout the policy term which enhances the corpus
  • The full sum assured is paid on maturity of the plan even after the payment of money back benefits
  • There are four additional optional riders to add to the plan for an enhanced coverage 

SBI Life Shubh Nivesh 

This is a traditional endowment plan which offers you to choose to avail whole life coverage. The plan’s features are as follows –

  • Deferred maturity benefit option is available under the plan. Under this option, you can choose to receive the sum assured in installments after 5, 10, 15 or 20 years.
  • On survival till 100 years of age, the sum assured is paid again even if the deferred maturity  option was selected and you received the sum assured in installments before maturity
  • Single premiums are also allowed under the plan

Riders available in whole life insurance plans

Riders are optional coverage benefits which are available with the basic whole life insurance plan. If riders are selected and the covered contingency occurs, the rider pays an additional benefit. There is a range of riders which are offered by life insurance companies. Some of the popular riders which are available with whole life insurance plans include the following –

1. Accidental death benefit rider

This rider covers accidental deaths during the policy tenure. If you die in an accident during the coverage period, an additional sum assured is paid along with the death benefit of the base policy.

2. Premium waiver rider

The premium waiver rider covers disabilities. If you suffer permanent disablement due to an accident, the rider would waive off the premiums payable in your whole life insurance plan. The policy would continue and the premiums would be paid by the insurance company on your behalf. Thereafter, in case of death or maturity, the promised death or maturity benefit would be paid.

3. Critical illness rider

This rider covers specified critical illnesses and major surgical procedures. If during the term of the plan, you are diagnosed with any of the covered illness or if you undergo any of the covered medical treatment, the rider pays a lump sum benefit. This lump sum benefit is the rider sum assured which helps you in meeting the medical costs associated with your critical illness.

4. Terminal illness rider

Terminal illness rider covers terminal illnesses. If during the term of the plan, you are diagnosed with a terminal illness, the rider pays the policy’s sum assured beforehand so that you can deal with the expenses of the illness.

These are some of the popular riders which are available with whole life insurance policies. Each rider requires an additional premium and you can choose as many riders as you like. However, the rider premium should not exceed 30% of the premium of your base policy. You can, therefore, choose the above-mentioned riders as long as the maximum premium criterion is fulfilled.

Whole life insurance plans offer unparalleled insurance protection for your entire lifetime. They even come in different variants and so they can be selected to fulfill all your financial requirements. If you are seeking comprehensive protection, you can choose whole life term plans which offer only death benefits. On the other hand, if you want to create savings, there are endowment and unit-linked plans too which allow lifelong coverage. So, choose the most suitable type of whole life coverage that you need and get yourself insured lifelong. 

Frequently Asked Questions

  1. How much coverage should I opt for?The coverage amount of your whole life policy should be optimal enough to provide sufficient financial means to your family in your absence. Opt for at least 10 or 12 times your annual income as the coverage under whole life term plans.
  1. Can I borrow money against whole life insurance plans?Savings oriented whole life insurance plans allow you the benefit of policy loans. You can, therefore, avail loans in your endowment and money-back policies. Whole life term plans and unit-linked plans, however, do not allow the facility of loans.
  1. Is whole life insurance a good investment for retirement?Under many savings oriented whole life insurance plans, you start getting regular income after you complete the premium paying term. So, if you pay premiums until retirement, you would get regular incomes under such whole life plans. Moreover, the incomes would be promised lifelong. As such, whole life plans are a good investment choice for your retirement.
  1. Do whole life plans allow tax benefits?Yes, premiums paid for whole life insurance plans are allowed as a deduction up to INR 1.5 lakhs under Section 80C. Moreover, any money back benefits, death benefit or maturity benefit that you receive from the plan would also be completely tax-free in your hands.
  1. Can I buy whole life plans online?Yes, almost every insurance company allows you the facility of buying its policy online. You can, therefore, buy whole life plans online. When buying online, you can choose Turtlemint. Turtlemint is an online website which sells the best whole life insurance plans. Turtlemint is tied up with all the leading life insurance companies of India and offers their whole life plans through its portal. Through Turtlemint you can compare the available whole life insurance plans and then choose the best plan for yourself. The buying process is easy as you can buy online through some simple steps. In case you need any guidance you can get in touch with Turtlemint’s team of experts who would guide you to buy the best whole life plan matching your requirements.

Personal Loan Protection Insurance Plans In India

Financial responsibilities and requirements might arise anytime and if you don’t have the required funds to meet your financial obligations, you might resort to loans. Personal loans are a very popular source of finance for many. They are unsecured and are offered without much fuss. You also get repayment tenure of up to five years over which you can repay the loan affordably. But what if an eventuality occurs making you unable to pay off your loan?

Death, disability, critical illness and unemployment are some common eventualities which might cause you to default on your loan. The loan burden would, then, fall on your family and create a financial crisis. Can you avert this crisis?

Yes, you can. There are personal loan insurance plans available in the market. These plans take care of your loans if you are unable to clear them due to unavoidable contingencies. In case of death, disability, illness or unemployment, the loan insurance plans pay the outstanding liability preventing the burden from falling on your family.

Salient features of loan insurance plans

Here are some important features of loan protection plans which make them unique –

  • The plans can cover death, disability, unemployment and, in many cases, critical illnesses too
  • The plan can be offered as an individual loan insurance plan or a group loan insurance plan
  • If there is any co-borrower for the personal loan, the co-borrower would also be covered under the plan
  • The coverage is offered in two variants – the level sum assured and decreasing sum assured. Under level sum assured option, the coverage amount remains the same throughout the policy tenure while under the decreasing cover option the coverage amount reduces every year. You can choose any coverage option that you like
  • Premiums for the plan can be paid in one lump sum through the single pay option or throughout the term of the loan. If you choose to pay premiums over the loan tenure, the amount of premium would be added to the EMIs and collected with the repayment amount.

Benefits of having a loan insurance plan

The main benefit of having a loan insurance plan to cover your personal loan is the fact that the policy prevents the loan burden from falling on your family’s shoulders. If your earning capacity is hindered due to death, disability, sickness or unemployment, the loan insurance policy would pay off the outstanding amount of loan and get rid of your liability. Moreover, since these policies also cover co-borrowers, the co-borrowers would also be secured of repayment of the loan even in your absence. The cover, therefore, proves to be beneficial.

Another advantage of buying a loan insurance plan is the tax benefits that you can get. The premiums paid for the plan are allowed as a deduction under Section 80C of the Income Tax Act up to INR 1.5 lakhs. Thus, you can also save your tax liability through the loan protection plan while at the same time insuring your debts.

Top #6 Things to keep in mind when buying loan protection plans

When you are buying a loan protection plan to cover your personal loan liability, here are some things which you should keep in mind –

  1. The plan is not mandatory in nature. Though the lender might insist on you buying a loan protection plan, the choice to buy the plan rests entirely on you. If you think you can repay the loan without any defaults, you might opt-out of buying the policy. However, having coverage is better for financial security.
  2. The exact coverage under loan protection plans varies from plan to plan. Some plans might cover only accidental deaths or disablements while others might also cover natural deaths and/or unemployment. So, when buying the loan protection plan, find out the eventualities which are covered by the plan. The more comprehensive the plan the better it would be.
  3. You should always compare different loan protection plans and then choose one. The lender might offer you a plan as per its choice but you have the freedom to compare other available plans and then buy one which has the best benefit structure at the lowest premium rate.
  4. The premiums of the policy depend on the term of the loan, the loan amount, your age and medical condition. If the loan amount is high, loan tenure is long, age is high or you have adverse medical conditions, the premium would be high.
  5. Always ensure that the premiums are affordable when you buy the policy. If the premiums are unaffordable your EMIs would increase and the loan cost would prove to be a burden.
  6. In case you foreclose the loan by paying the due amount before the stipulated tenure, the loan insurance coverage might also end. So, check the foreclosure terms in the coverage before buying.

A loan insurance plan is a good addition to your personal loan as it shoulders the burden of repaying the loan in case you cannot. So, buy the coverage and ensure that the loan is paid in all circumstances. You would be able to avoid late payment charges in case of defaults and your credit score would also not be hampered. The premiums are not very high and if you compare the plans before buying, you can even get the best plan at the lowest rate. So, secure your personal loan under a loan insurance plan and buy yourself peace of mind.

List of Claim Settlement Ratio of Life Insurance Companies

There are 24 life insurance companies in the market and each company offers a range of life insurance plans. The plans are competitive in terms of their coverage benefits and premium rates and so choosing the best life insurance plan might prove to be a challenge. You, therefore, need another parameter to judge life insurance companies. Claim settlement ratio is one such parameter which says a lot about an insurance company. Let’s understand what the ratio is and how it acts as a vital parameter –

What is the claim settlement ratio?

Claim settlement ratio is a ratio which shows the number of claims which the insurance company has settled against the total number of claims made on it. The ratio is calculated using the following formula:

Claim settlement ratio = (number of claims settled / total number of claims made) *100

Features of claim settlement ratio

Claim settlement ratio has the following features which should be kept in mind –

  • The ratio is expressed as a percentage
  • The ratio is calculated based on the claims settled in one financial year. There are different ratios for different financial years
  • The ratios are calculated and published for all insurance companies by the Insurance Regulatory and Development Authority of India (IRDAI)
  • The number of claims settled is calculated by the ratio. It does not depict the amount of claim settled by the insurance company.

Interpreting the claim settlement ratio

The claim settlement ratio gives you an insight into the claim settlement record of the insurance company. If the ratio is high it means that the company has settled most of the claims presented upon it. For instance, if the claim settlement ratio is 98%, it means that out of 100 claims, the company has settled 98 claims. A high ratio, therefore, indicates that the company fulfils its promise of claim settlement and is trustworthy.

Alternatively, a low claim settlement ratio is a bad sign. Companies having a low claim settlement ratio have higher instances of claim rejections or pending claims. This is bad for you, the customer because it jeopardises the chances of your claims being honoured.

So, when comparing life insurance companies, you should check the claim settlement ratio of each company. Companies which have a high ratio should be favoured because those companies are more likely to settle your life insurance claims than companies which have a low claim settlement ratio.

Things to remember

Though the claim settlement ratio is an important indicator of a life insurance company’s claim records, there are some things which you should keep in mind –

  • The ratio considers the number of claims settled within a financial year. It does not depict the time taken by the insurance company to settle each claim. If the company takes a long time to settle its claims, it would be a drawback.
  • The ratio does not indicate the number of claims pending with the insurance company.
  • The ratio should not be the only parameter in judging life insurance companies. You should also judge the plans offered, their coverage benefits, premium rates, claim process and reputation of the company to choose the best life insurance policy.

Claim settlement ratio of life insurance companies

The following table shows the claim settlement ratios as well as the claim rejection ratios of all life insurance companies. Claim rejection ratio is the opposite of claim settlement ratio. It measures the number of claims rejected by the insurance company against the total number of claims made on it in a financial year. Let’s check both the ratios for a better understanding of the claim records of different life insurance companies. For term plans, term plan claim settlement ratio is checked but that is a part of the company’s claim settlement ratio. IRDA does not publish any specific data for term plan claim settlement ratio.

The claim settlement ratios are for the financial year 2017-18:

Name of the companyClaim Settlement RatioClaim Rejection Ratio
Life Insurance Corporation of India98.04%0.67%
HDFC Life Insurance Company Limited97.80%1.66%
Max Life Insurance Company Limited98.26%1.72%
ICICI Prudential Life Insurance Company Limited97.88%1.77%
Kotak Mahindra Life Insurance Company Limited93.72%5.69%
Aditya Birla SunLife Insurance Company Limited96.38%2.80%
TATA AIA Life Insurance Company Limited98%2%
SBI Life Insurance Company Limited96.76%2.63%
Exide Life Insurance Company Limited96.81%3.04%
Bajaj Allianz Life Insurance Company Limited92.04%5.79%
PNB MetLife India Insurance Company Limited91.12%8.05%
Reliance Nippon Life Insurance Company Limited95.17%4.48%
Aviva Life Insurance Company Limited94.45%4.83%
Sahara India Life Insurance Company Limited82.74%8.48%
Shriram Life Insurance Company Limited80.23%17.80%
Bharti AXA Life Insurance Company Limited96.85%2.36%
Future Generali India Life Insurance Company Limited93.11%5.34%
IDBI Federal Life Insurance Company Limited91.99%7.49%
Canara HSBC OBC Life Insurance Company Limited95.22%4.54%
Aegon Life Insurance Company Limited95.67%4.33%
DHFL Pramerica Life Insurance Company Limited96.62%2.20%
Star Union Dai-ichi Life Insurance Company Limited92.26%6.53%
IndiaFirst Life Insurance Company Limited89.83%10%
Edelweiss Tokio Life Insurance Company Limited95.25%4.76%

When you are comparing life insurance policies, do keep the claim settlement ratio of the insurance companies in mind. Compare the insurance companies on www.turtlemint.com with regards to their claim settlement ratios and choose a company which has the maximum possible ratio. You can compare and choose the best life insurance company on https://www.turtlemint.com/life-insurance and opt for the one which best suits your needs.

Best Single Premium Policy India

Life insurance policies allow you flexible premium payment modes. There are regular premium plans, limited premium plans and single premium insurance plans. Under regular premium policies, you pay premiums throughout the term of the plan. Under limited premium plans, premiums are paid for a limited period which is lower than the total plan duration. Single premium policies, on the other hand, involve payment of a lump sum premium when you buy the plan. You pay the premium at once and enjoy coverage throughout the chosen term of the policy.

Many individuals who have a lump sum amount of money to invest choose single premium life insurance plans. The benefits of these plans include the following –

  • Since the premium is payable at once you don’t have to remember the premium payment due date during the plan tenure
  • The policy remains in force throughout the term since there is no possibility of a lapse from non-payment of premiums
  • Single premium traditional life insurance policies acquire a surrender value from the second policy year itself
  • The policy is ideal if you cannot guarantee payment of premiums over the policy tenure
  • Almost all types of life insurance plans allow a single premium payment mode. You can, therefore, choose any type of life insurance plan for your coverage needs and pay a single premium for the policy

Who can buy single premium life insurance policies?

There are no special eligibility parameters to buy single premium policies. You just have to be within the minimum and maximum entry age bracket specified under the policy to be eligible to buy a single premium life insurance plan.

Why should one buy single premium life insurance policy?

You should opt for a single premium life insurance policy if you want life insurance coverage but do not wish to keep paying premium for a long period of time. This type of policy is best suited for people who have short lived careers like players, actors, etc. or who get a large amount of money by inheritance.

Single premium policies do not have regular premium commitment and even businessmen sometimes prefer to opt for the same.

How does the single premium plan work?

The working of a single premium life insurance policy is quite simple. Here’s how the plan works –

  • You choose the type of life insurance plan that you want to buy
  • You can then compare the available plans in that category
  • Choose a plan based on your coverage requirements and check whether the plan offers the single premium mode of payment
  • You can then choose the coverage level, policy tenure and pay the required single premium
  • The insurance company underwrites your insurance proposal and issues the policy
  • You don’t have to pay any more premiums in the future and the policy continues for the specified tenure
  • If you die during the term of the policy, the promised death benefit would be paid and the policy would be terminated
  • In case the term comes to an end, the policy matures and you get the maturity benefit

Tax implications of single premium policies in India:

Before buying a single premium life insurance plan you should understand the tax implications of the premiums paid and the benefits received. The tax treatment of single premium policies, therefore, is as follows –

  • The single premium paid would be allowed as a deduction under Section 80C only if the sum assured is 10 times the amount of the single premium paid.Let us understand this with an example.
    • Single Premium amount is INR 10,000
    • Sum Assured needs to be >INR 1 lakh,
      i.e. 10 times the premium amount, i.e. 10 * 10,000 = 1 lakh
    • If the Sum Assured >= INR 1 lakh, the single premium paid towards that plan is tax free U/S 80C
    • However, if the Sum Assured < INR 1 lakh say INR 80,000, i.e. < 10 times the premium, then only 10% of the sum assured would be eligible for tax exemption
    • Thus, for Sum Assured of INR 80,000 where single premium amount is INR 10,000,
      an amount of 10% of the Sum Assured, i.e. 10% of 80,000 = INR 8,000 would be eligible tax deduction U/S 80C and not the remaining INR 2,000
  • Even in the case of maturity benefit, if the sum assured is not at least 10 times the single premium paid, the entire maturity benefit would be taxable in your hands.So, in our previous example,
    • Single Premium amount is INR 10,000
    • Sum Assured needs to be >INR 1 lakh,
      i.e. 10 times the premium amount, i.e. 10 * 10,000 = 1 lakh
    • If the Sum Assured >= INR 1 lakh, the maturity benefit in that plan is tax free U/S 10(10)D
    • However, if the Sum Assured < INR 1 lakh say INR 80,000, i.e. < 10 times the premium, then the entire amount received on maturity would be taxed as per the current income tax slab rates.
  • In case of the death benefit, however, the benefit received would be completely tax-free irrespective of whether the sum assured was 10 times the single premium paid or not.
  • Single premium policies should be held for at least two full policy years before they are surrendered to claim tax benefits on the surrender value. If the single premium policy is surrendered after two policy years, the surrender value would be tax-free in your hands. If not, the surrender value would be fully taxable at your income tax slab rates.

An overview: Best single premium policy in India

Here is a comparative list of some of the best single premium policies in India –

Name of the planType of planEntry age bracketSum assuredTerm Single premium payable
LIC’s Jeevan ShantiTraditional immediate/deferred annuity plan30 to 100 yearsNANAINR 1.5 lakhs onwards
Pradhan Mantri Vaya Vandana YojanaTraditional pension plan60 years onwardsNA10 yearsINR 144,578 to INR 15 lakhs
AEGON iMaximize Single Premium Insurance PlanUnit linked insurance plan8 to 60 years1.10 or 1.25 times the single premium paid5 or 10 yearsINR 1 lakh onwards
ICICI Pru Immediate Annuity PlanTraditional pension plan30 to 100 yearsNANADepends on the annuity amount
HDFC Click 2 InvestUnit linked insurance plan30 days to 65 years1.25 times the single premium paid5 to 20 yearsINR 24,000 onwards
LIC’s Single Premium Endowment PlanTraditional Endowment Assurance90 days to 65 yearsINR 50,000 onwards10 to 25 yearsDepends on age,the sum assured and term
LIC’s New Bima BachatTraditional money back plan15 years to 66 yearsINR 35,000 onwards9,12 or 15 yearsDepends on age,the sum assured and term

Overview of the best single premium life insurance plans in India:

Here’s a brief look into the features and benefits of the best single premium life insurance plans listed above –

LIC’s Jeevan Shanti

This is a pension plan which can be taken as an immediate annuity plan or a deferred annuity plan. The plan’s features are as follows –

  • There are nine options to avail annuity payments
  • The annuity amount is promised at the time of buying the policy and it is payable throughout your life
  • If deferred annuity option is selected, guaranteed additions are also paid
  • The loan can be availed under the policy after the policy has completed one year

Pradhan Mantri Vaya Vandana Yojana

This is a pension plan which has been introduced by the Government for senior citizen’s investment and pension needs. The plan offers pensions during the policy tenure. The features of the plan are as follows –

  • If the insured dies during the policy tenure, the single premium paid is refunded back
  • On maturity, the single premium paid and pension instalments are paid
  • Pension is payable during the policy tenure and can be availed in monthly, quarterly, half-yearly or annual instalments.

AEGON iMaximize Single Premium Policy 

This is a unit linked plan which gives you attractive returns with just one investment. The plan has the following features –

  • There are six investment funds to choose from
  • Top-ups are allowed to increase your investment any time that you want
  • Partial withdrawals are allowed after the completion of the first five years

ICICI Pru Immediate Annuity Plan

Under this plan, you get lifelong income in the form of annuities after you pay the single premium. Other features of the plan include the following –

  • There are 12 annuity pay-out options
  • The annuity instalments can be deferred in which case the annuity rates would increase
  • If you have invested in the National Pension Scheme (NPS), you would get a discount on the purchase price

HDFC Click 2 Invest

This is a unit linked insurance plan which also allows single premium payment mode other than the regular and limited premium payment modes. The features of the plan are as follows –

  • There are eight investment funds to choose from
  • The plan can be easily bought online by filling up a Short Medical Questionnaire (SMQ)

LIC’s Single Premium Endowment Plan 

The plan creates a guaranteed corpus for you and promises the payment of a death benefit or maturity benefit. The features and benefits of the plan include the following –

  • The plan participates in the insurer’s profits and earns simple reversionary bonuses throughout the policy tenure.
  • A final additional bonus might also be paid on death or maturity of the plan
  • Premium discounts of up to 30% of the sum assured are allowed if you choose the higher sum assured levels of INR 1 lakh and above.

LIC’s New Bima Bachat

This is a with-profits money back policy which provides liquidity during the policy tenure. The plan’s benefits are as follows –

  • Loyalty additions are promised after the first five policy years
  • 15% of the sum assured is paid as money back benefit from the end of the 3rd policy year and every three years thereafter
  • The single premium paid is refunded back on the maturity of the policy along with loyalty additions
  • The premium discount is available at high sum assured levels

These are some of the best single premium life insurance plans available in the market. Turtlemint offers life insurance plans, you can select the plans based on our requirement buy visiting https://www.turtlemint.com/life-insurance

You need to choose a plan as per your coverage needs and enjoy the plan’s benefits. The premium is payable only once while you can enjoy coverage for the selected plan duration. Single premium policies are, therefore, a convenient way to avail insurance.

IRDAI Claim Settlement Ratio 2017-2018 – Latest data

A Comparative List of Different Companies

Life insurance policies are long term contracts. They promise the payment of the plan benefit if the insured dies during the term of the plan. You buy a life insurance policy with the expectation that the plan benefit would give you and your family a financial corpus to tide over tough times. It is, therefore, at the time of claims that the benefit of a life insurance policy is truly felt. But what if your claim is not paid by the company?

Life insurance companies always endeavour to pay all the claims that are intimated to them. However, due to some reason or another, all the claims might not be settled. To measure the proportion of claims that the company has settled, a report of Claim Settlement Ratio (CSR) is calculated and published by the Insurance Regulatory and Development Authority of India (IRDAI). IRDAI calculates the CSR of all life insurance companies in a financial year and publishes it annually. The ratio is, therefore, also called IRDAI Claim Settlement Ratio. Let’s understand what the ratio is all about –

What is Claim Settlement Ratio?

Claim Settlement Ratio, as mentioned earlier too, is the ratio of the number of claims settled by the insurance company against the total claims raised on it. The formula for the ratio is as follows –

Claim Settlement Ratio = (number of claims settled / total claims made) * 100

For instance, if 100 claims are made on an insurance company and the company settles 98 claims, the Claim Settlement Ratio would be 98%.

Importance of Claim Settlement Ratio

The claim settlement ratio of an insurance company highlights the company’s credibility in settling its claims. A high ratio indicates that the company settles a maximum of its claims which is a favourable aspect. It means that your claim would have a higher probability of getting settled. A low ratio, on the other hand, is a bad sign as it shows that the insurer settles a limited number of claims. This might jeopardise your claim settlement and should be avoided. Thus, the claim settlement ratio helps you find out which insurance company is better than the others in terms of claim settlements.

Top #3 Things-to-know about Claim Settlement Ratio:

Here are some important aspects of the ratio that you should know –

  1. The ratio is always expressed as a percentage
  2. If you deduct the ratio from 100, you would get the percentage of claims rejected by the insurance company or pending at its end.
  3. The ratio measures the claims settled in one financial year starting from 1st April of one ear and ending on 31st March of the next year. So, if the ratios are for the financial year 2018-19, it would measure the claim settlement record between 1st April 2018 and 31st March 2019.

Claim Settlement Ratio of Life Insurance Companies:

Here is a table showing the Claim Settlement Ratio of all life insurance companies for the financial year 2017-18:

Name of the companyClaim Settlement Ratio
Life Insurance Corporation of India98.04%
HDFC Life Insurance Company Limited97.80%
Max Life Insurance Company Limited98.26%
ICICI Prudential Life Insurance Company Limited97.88%
Kotak Mahindra Life Insurance Company Limited93.72%
Aditya Birla SunLife Insurance Company Limited96.38%
TATA AIA Life Insurance Company Limited98%
SBI Life Insurance Company Limited96.76%
Exide Life Insurance Company Limited96.81%
Bajaj Allianz Life Insurance Company Limited92.04%
PNB MetLife India Insurance Company Limited91.12%
Reliance Nippon Life Insurance Company Limited95.17%
Aviva Life Insurance Company Limited94.45%
Sahara India Life Insurance Company Limited82.74%
Shriram Life Insurance Company Limited80.23%
Bharti AXA Life Insurance Company Limited96.85%
Future Generali India Life Insurance Company Limited93.11%
IDBI Federal Life Insurance Company Limited91.99%
Canara HSBC OBC Life Insurance Company Limited95.22%
Aegon Life Insurance Company Limited95.67%
DHFL Pramerica Life Insurance Company Limited96.62%
Star Union Dai-ichi Life Insurance Company Limited92.26%
IndiaFirst Life Insurance Company Limited89.83%
Edelweiss Tokio Life Insurance Company Limited95.25%

Against the claim settlement ratio, here is a graph showing the claim settled vis-à-vis claim rejected –

As can be seen from the chart, Sahara India and Shriram Life had higher claim rejections and lower claim settlement ratio compared to the other life insurance companies in the market.

Top life insurers as per their claim settlement ratio

If the claim settlement ratios of life insurance companies are compared, here are the top 10 companies which have the highest claim settlement ratio

Max Life Insurance is leading the race followed by LIC and TATA AIA. Other insurers are also close behind in the 97% and 96% range which is a good claim settlement ratio.

Avoid the perils of choosing an insurance company with a poor claim settlement ratio and ensure that all insurance related details are compared thoroughly before making a purchase. Turtlemint uses state of the art technology to provide you the best options for choosing an insurance plan by simply visiting the relevant pages linked below & choosing your insurance type. Apart from Life Insurance you can also buy Health Insurance, Two-wheeler Insurance & Car Insurance.

Choosing the right life insurance company

A life insurance policy ensures financial security in your absence and so you should ensure that you buy the best policy. To choose the best life insurance policy, choice of the best life insurance company is also important. This is where the claim settlement ratio comes into the picture. A company with a higher ratio is better than the one with a lower ratio. However, the claim settlement ratio should not be given importance alone. It should be one factor in the choice of the best policy, other features & benefits of the insurance policy should also be taken into account during comparison after choosing the relevant type of insurance policy here.

This is because of the following reasons –

  1. The claim settlement ratio measures the number of claims settled. It does not indicate the time taken by the insurance company to settle its claims. If the company is settling its claims after a long time, a high ratio would be of no importance. You would not get the claims quickly and easily which might have a negative impact.
  2. The ratio measures the claims settled in one financial year. If a claim is presented on 28th March, it might be settled in the first week of April. In such a case, the claim would be considered to be made but not settled. The claim is not reflected to be pending with the insurer.
  3. Besides the claim settlement ratio, the other facets of the policy should be compared. You should give importance to the coverage benefits, premium rate, policy duration, available riders, etc. to choose the best policy. Choosing a policy inferior in terms of coverage and premium over a superior policy simply because of the company’s high claim settlement ratio might not be the most prudent choice.

Choosing the right insurance policy can be a daunting and intimidating task, especially if you are a beginner, please feel free to reach out to our insurance advisor in the chat option on this webpage to help us assist you with this ordeal.

If you wish to browse life insurance plans yourself, visit this page & simply choose your policy requirement type along with a few details to help us show you the most relevant insurance policies

IRDA’s Claim Settlement Ratio is an important parameter when comparing life insurance companies but it should not be the only one. Shortlist a policy after judging its suitability in terms of coverage, premiums, policy term and other factors and then consider the claim settlement ratio to make the final choice.