What is Life Insurance Policy?

A life insurance policy is a financial protective shield one has for their family. Life insurance plans ensure a lump sum payment to the beneficiary on the occurrence of the death of an insured person. This is done to cushion the family members from the sudden loss. In the wake of emotional and physical damage, the family is still financially protected in exchange for individual premiums from the insured person.

 

These premiums can be monthly premiums for some years or a lump sum amount. The details of the insurance can vary from policy to policy. However, the policyholder should make sure that they yield maximum benefits from the investment they are making in the plan in the form of premiums.

 

Several benefits can be added to life insurance, like funeral costs and other coverage. These can be looked into in-depth while understanding what life insurance is? Life insurance benefits can also be availed in extraordinary situations like that of a critical illness. Life insurance serves both as a protective as well as an investment plan.

 

In the case of the sudden death of the only earning member of a family, life insurance policies help the family keep afloat while trying to get back on their own. Life insurances can be great investment sources as well since premiums are eligible for a tax deduction.

We all should understand the benefits of life insurance
Bharti AXA Life Guaranteed Wealth Pro
Invest Rs. 5,000#/Month for 10 years | Get Rs. 14,39,732^

Why Do You Need Life Insurance Plan?

A life insurance policy is an essential part of your coverage and investment plan. These are some of the primary reasons why you need life insurance :

 

icon

Finances for Children's Education

Higher education can be expensive. In case of an unfortunate event like the death of a parent, the child might not be able to cope with the expenses of the same. Life coverage helps the family to sponsor education for their children.

icon

Solid Post Retirement Plan

A life insurance policy can become a constant source of income after retirement. This adds security to the investment portfolio of an individual.

icon

Serious Illnesses

With critical illness coverage, the individual has medical bills covered and has a source of income when the individual has to stop working in several cases.

icon

Lifestyle Requirements

The life insurance policy will take care of other lifestyle requirements of the family members in case of the demise of an individual.

Life Insurance Plans by Bharti AXA Life

Bharti AXA Life brings to you several options under life insurances, each with a different purpose and a unique set of benefits.

 

  • Savings Plan

    Saving Plan is typically a life insurance product that allows you to save and create a corpus to meet your future needs. These are intended to assist policyholders in developing a regular savings habit while also providing considerable returns when needed while providing life coverage at the same time.

  • Term Plans

    Term insurance is a type of life insurance that provides financial protection in the case of the policyholder’s demise. It is a life insurance policy that offers financial protection and coverage to the policy beneficiary if the insured dies during the active period of the term insurance policy.

  • Investment Plans

    Investment plans are essentially financial instruments that aid in the creation of long-term wealth in addition to providing life coverage. Various investment plans in India enable us to invest our savings in various money-market products in a disciplined and periodic manner in order to achieve our financial objectives.

Bharti AXA Life provides several other plans and policies to give you the best life coverage and added benefits that you can avail of with life insurance policies.

Types of Life Insurance Policies

There are various life insurance policies available for us to choose from.

 

Comparison of Different Types of Life Insurance Plans

Type of Life Insurance Policy

Overview

Maturity Benefits

Death Benefits

Purpose

Term insurance

This policy is one of the simplest forms of a life insurance policy. As the name suggests, you can invest in a term insurance policy for a specific number of years, such as 10 years, 15 years, 20 years and so on.

No maturity benefits with term insurance plan

The term insurance plan provides lump-sum death benefits to the policyholder's family in case of the unforeseen and untimely demise of the policyholder.

Offers financial security to the policyholder and his family. Moreover, the policyholder can also opt for rider benefits for wider coverage and added benefits.

Unit Linked Insurance Plans

This policy comes with dual benefits of investment and insurance. A part of the premium paid by the policyholder is used for insurance purposes, while the remaining part of the premium is used for investing in market-related options, such as stocks, shares, equity, etc.

The ULIP returns on maturity are tax-exempted under Section 10(10D) of the Income Tax Act, 1961.

ULIP plan provides death benefits to the policyholder's family in case of the policyholder's unforeseen and untimely demise.

ULP not only offers financial protection to the policyholder and his family, but it also offers wealth creation as well.

Whole life insurance

Whole life insurance offers coverage for policyholder's entire life

Offers maturity benefit if the policyholder crosses 100 years of age.

Offers death benefits to the policyholder's family in case of the unforeseen and untimely demise of the policyholder.

Provides a financial backup to the policyholder for his entire life

Child Insurance Plans

They offer investment cum insurance provision wherein not only can you financially secure your child's future, but you can also go for wealth creation as well.

Offers maturity benefits

Offers death benefits to child incase of the unforeseen and untimely demise of the policyholder.

Offers a financial safety net to your child so that he or she can achieve his or her goals without any financial constraints

Retirement Plans

This plan offers financial security to the policyholder after his retirement age so that the policyholder can achieve his or her dreams without any financial constraints

Offers maturity benefits

Offers death benefits to the policyholder's family in case of the unforeseen and untimely demise of the policyholder.

This plan ensures that you do not face any financial hassle when you retire. Moreover, it provides monthly incomes, ensuring that you are financially secure, even when you are not earning.

Benefits of Life Insurance

Here are some of the benefits of life insurance. These life insurance benefits will help you decide why you should get life insurance.

 

icon

Tax Benefit from Life Insurance Policy

All the premiums that you pay for life insurance are considered for a tax deduction so you can avail significant tax benefits from the policies that you have taken.

icon

Whole Life Cover Online

Whole Life insurance plans offer a complete life cover which provides a full life cover (till age 100) to the policyholders, unlike term insurance, where the individual has to be pay premiums until the policy matures.

icon

Best Critical Illness Coverage

Unfortunate events cannot be seen coming. However, it is crucial to be prepared for the same. Critical illness coverage can help you cope financially with a particular situation

icon

Lifestyle Requirements

The life insurance will take care of other lifestyle requirements of the family members in case of the demise of an individual.

 

These are some of the most common benefits of life insurance plans.

Features of Life Insurance Plan

Some of the most common features of life insurance plans are :

 

icon

Premium Waiver

Some life insurance waives further premiums in case the policyholders have a severe illness or are disabled under any circumstances.

icon

Accelerated Death Benefits Online

In case the policyholder gets a terminal illness, they can claim cash advances in exchange for the death benefit. This can help pay for the treatment and other expenses.

icon

Spouse 26 Child Riders Online

Some of the life insurance policies helps you to add a cover for your spouse and your child until they are 26 years of age. This feature is useful if you cannot afford to get separate covers.

icon

Mortgage Protection Plan

Several life insurances have a mortgage protection cover. The insurance pays your mortgage in case the policyholder dies.

Who Should Buy a Life Insurance Plan?

There are several groups of people who must have a life insurance policy. Here are some groups that should buy a life insurance policy :

 

  • New families

    Couples who are about to get married or have been married recently should get a life insurance policy. Newlyweds have lower premiums and several added benefits like maternity coverage and others.

  • Existing Families

    Families with a single breadwinner and children can have several benefits from life insurance. The policyholders can add benefits to the insurance and protect their family and their children's future.

  • Employees with Company Insurance

    Several companies offer life coverage to their employees. Still, it is essential to have separate coverage since the insurance gets terminated in case an employee leaves the job.

  • Business Owners

    Several life insurance plans have additional benefits of insuring your business. This cover helps you to claim insurance in case of significant losses in your industry. It helps to recover from losses with financial security.

  • Young Individual

    Usually, young individuals do not invest in life insurance, but mortgage protection and critical illness protection can help the policyholders in unfortunate circumstances.

    Anyone other than these groups of people can also opt for life insurance since it protects several areas such as a mortgage, critical illnesses, home loans, and others.

How to Choose the Best Life Insurance Plan?

Choosing the right life insurance plan can be a long process. Here are some tips to keep in mind while selecting the best life insurance plan. These factors majorly impact the process of choosing a life insurance plan :

 

  • Insurance Advisor

    Every policyholder should make sure that they engage with an experienced and a qualified insurance advisor to consider several factors while choosing the perfect life insurance for you.

  • Calculate Life Cover Amount

    Factors like income sources, dependent members, debt, liabilities, plans, and others should be considered while choosing the perfect life cover amount. Insurance advisors can help individuals with this.

  • Compare Different Plans

    While getting an insurance plan, it is essential to compare different plans and see what various benefits these plans provide. Once you compare and analyse several different strategies, you will be able to decide which is the perfect one for you.

  • Frequency of Premiums

    Before getting life insurance, make sure you decide if you want to pay the premiums monthly, annually, or lump sum amount at once. This will have a significant effect on your monthly budget, so plan this while choosing a plan.

  • Go For Medical Tests

    Even if the insurance company does not insist, go for medical tests before getting insurance. The premium rates are lower if the medical tests show that you are in good health.

  • Add Accidental Death Rider

    While getting life insurance to, add an accidental death rider to your life insurance to protect your family in case of any accidents. This add on is significant to avoid unpredictable situations where the family might face financial situations.

  • Claim Settlement Ratio

    The claim settlement ratio is a metric used to gauge the percentage of life insurance claims an insurer has settled during a financial year against the number of claims it has received including pending claims from the previous year. The claim settlement ratio of Bharti AXA Life is 99.05% (As per annual audited figures submitted to IRDAI for individual death claims for FY 2020-21).

  • Solvency Ratio

    The solvency ratio defines how good or bad an insurance company's financial situation is in accordance to defined solvency norms. The solvency margin is computed by comparing a company's obligations to its current assets. In other words, the solvency ratio is calculated by dividing a company's after-tax operating income by its debt liabilities.

  • Affordable Premiums

    The insurance company should offer affordable premiums to the policyholder so that no one faces hassle while investing in a life insurance policy in today's time. Along with affordable premiums the company should also offer high returns to the policyholder to ensure that the policyholder and his family are financially secure and are able to lead a secure and hassle-free life.

  • Simple Claim Settlement Process

    The insurance company should offer hassle-free claim settlement to the nominee/beneficiary of the policy holder.

3 Step Claim Settlement Process by Bharti AXA Life :

 
  • Claim Registration

     

    You can register your claim by walking in to your nearest Bharti AXA Life branch. You can also email/call us to register your claims. However, claim registration through calling will be considered verbal intimation. Claim will be formally registered only when written intimation is received.

  • Claim Evaluation

     
    • Our claim specialist will assess the claim.
    • We will reach out via SMS, Call or letter in case we require any further information or documentation.
    • For all eligible ULIP contracts, Fund Value accrued under the policy is paid to the nominee within 48 Hours from receipt of claim intimation.
  • Claim Settlement

     
    • We target to process all claims within 5 working days
    • However, if the claim requires an investigation, the regulator gives the insurer up to 4 months to make a claim decision.

These are some of the significant factors one needs to keep in mind while choosing the best life insurance plans for themselves and their families.

How Do You Save Tax with Life Insurance Policy?

Before getting to know how you can save tax on life insurance, let us first understand how your taxable income is calculated vis-à-vis the tax saving investments you make.

 

Consider the taxable portion of your income amounts to Rs 5,00,000. This means that your tax liability for the year would be calculated for Rs 5,00,000, in accordance to your income bracket. Therefore, if some investment option is said to give a tax benefit up to Rs 50,000 per year, for example, then this Rs 50,000 is deducted from your taxable income, i.e., Rs 5,00,000. Thus, your tax liability would now be calculated on Rs 4,50,000.

 

  • The more tax saving options you invest in, the lower your taxable income becomes. It is suggested that you should explore a variety of tax-saving options spanning different sections of the Income Tax Act, 1961. This way you can reduce your taxable income component substantially.

  • These options include tax saving life insurance plans, health insurance, mutual funds, PPF (Public Provident Fund), NPF (National Provident Fund), home loan, etc.

  • The life insurance tax benefits are in accordance to Section 80C of the Income Tax Act, 1961. You can claim a maximum deduction of Rs 1,50,000 per year against the premiums paid for the life insurance policy. Please note that tax laws are subject to change from time to time.

  • The tax saving life insurance plans include policies taken for yourself, or your spouse, or dependent children.

  • However, you must be able to show that you are paying the premiums against these options from your income. Kindly note that you and your employed spouse cannot claim life insurance tax benefits on the same plans in one year.

What are the payout options available for life insurance policy?

Multiple payout options for the life insurance policy are available, such as

 

Option

Overview

Lump-sum payments

In case the policyholder wants the payout all at once, he or she can go for a lump-sum payment option

Instalment payments

In case the policyholder wants the payout in a timely and at periodic intervals, he or she can go for instalments payment option

Annuities

regular payments till the policyholder lives

 

Important documents to buy a life insurance policy

  • Age Proof of the policyholder
  • Photo Identity Proof of the policyholder.
  • Address Proof of the policyholder.
  • Medical Examination Report of the policyholder (if required)

Life Insurance Claim Process

  • The first step involves registration of your claim. It is advised to get a hold of the claims form, which you can find both at our physical outlet as well as our online portal. The claims form will involve filling in details such as cause of death, name of the beneficiary, the location of the death, and personal details such as date of birth of the beneficiary, policy number and name of the beneficiary, amongst other aspects.
  • The second step consists of arranging all the necessary documents that you will require in order to ensure that your claim goes through successfully. Some of the main documents that you should keep handy if you are planning to file a claim include the death certificate pertaining to the deceased registered under the policy, age of the deceased, original copies of the policy document, ID proof of the beneficiary, and any medical reports/records pertaining to the beneficiary's demise.
  • Once the claims form and the necessary documents are submitted, the claim will be processed within a duration of 30 days. In some cases, additional steps will be undertaken by the insurer. This is especially true in cases where claims are made within a period of 3 years since the purchase of the policy, in lieu of which additional investigation is undertaken. This includes checking with the hospital where the deceased registered under the policy was admitted before his/her demise.

Claim in case of Death

Generally, following steps are followed :

 
  • The policyholder's family needs to fill up the claim form provided by Bharti AXA Life.
  • The policyholder's family needs to provide the certificate of death of the policyholder as proof.
  • The policyholder's family must also provide the relevant life insurance documents to claim death benefits.

Claim in case of Maturity

Generally, following steps are followed :

 
  • Fill up the policy release form provided by your insurer and get it signed by 2 witnesses.
  • Provide your form to your insurer a few days before the policy's maturity for a seamless and hassle-free maturity claim.
  • After your policy matures, your insurer will verify your information and send the amount to your bank account.
Bharti AXA Life Guaranteed Wealth Pro
Invest Rs. 5,000#/Month for 10 years | Get Rs. 14,39,732^

Products We Offer

Bharti AXA Life Flexi Term Pro

  • A Non-linked, Individual, Non-participating Pure Risk Premium Life Insurance policy
  • The plan offers two options: Without Return of Premium and With Return of Premium
  • Under the Without Return of Premium variant, you have the option between Single Life cover or Joint Life Cover i.e., cover for your spouse under the same policy.
  • Flexibility in policy and premium payment terms

Bharti AXA Life Guaranteed Wealth Pro

  • A non-linked, non-participating individual savings life insurance plan
  • Flexibility to choose the payout structure
  • Multiple income options
  • Option to receive tax free income beginning from the second policy year itself
  • Option to get lifelong income along with life cover till 100 years of age

Bharti AXA Life Shining Stars

  • Non-linked, non-participating limited pay endowment Life Insurance plan
  • Designed to take care of the financial needs of your child.
  • Flexibility to opt between 2 Maturity Payout Options
  • Flexibility in Policy Term/Premium Payment Terms
  • A great short-term investment option for a child insurance policy.

Frequently Asked Questions (FAQs)

Who is most likely to buy life insurance?

A life insurance gives you more than just a life cover. It helps create wealth over the long term, and most importantly, life insurance gives you peace of mind that your family will live comfortably under all circumstances.

Buying life insurance, therefore, is a wise decision for people at different life stages.

  • For newly married people as they start a new phase of shared responsibilities
  • For young parents as they plan for their child’s future and life goals
  • For individuals with financial liabilities and with families to support, children to educate and get married, and plan for their own retirement
  • For people doing retirement planning as they look forward to the golden phase of their lives and pursuing their life dreams.

Why should I consider buying life insurance?

At its core, life insurance is a financial benefit for the inevitable contingencies of life. These include death, disability, or retirement, and often result in a loss of income for the household. This is where a life insurance plan truly benefits you and your family.

You should buy a life insurance plan to:

  • Provide financial support to your immediate family after you
  • Finance your child’s education plans
  • Get a steady second source of income
  • Gain insurance benefits in case your earnings are impacted due to a critical illness
  • Gain tax benefits immediately as per existing tax laws.

What Happens to a Life Insurance policy if the policyholder outlives?

Having life insurance gives you the freedom to take more risk for securing your life and provisioning a large financial corpus in the form of insurance coverage for life’s contingencies.  All of this while you continue to pursue your life goals. A life insurance plan also gives you the certainty that should something happen to you, your family would be financially secure.

Life insurance plans help your family stay financially protected in case of an eventuality. Also, the insurance coverage augments the total accumulated value of your investments, ensuring that your loved ones continue to have a lifestyle that you intended for them.

#For 30 Year Old Male, Endowment Plan Option, online purchase of policy excluding underwriting extra premium & GST. ^As lumpsum payout at the end of 20th year.