1.What is the main purpose of life insurance plans?
The main purpose of life insurance is to financially secure the family or dependents of the policyholder after their death. During the policy term, the dependents are covered under the policy. If the policyholder passes away within the policy term, the death benefit or sum assured will be paid out to the beneficiaries, helping them maintain their financial stability.
2.Why is life insurance important in India?
Life insurance is crucial in India because many families rely on a single earning member or a single source of income. In the event of the sole breadwinner's untimely death, the loss of income can cause significant financial strains for the family. Relying on emergency savings during such times may not be sustainable. Since life insurance plans are designed to provide a death benefit sum assured to the family upon the policyholder’s death, life insurance plays a vital role in ensuring financial stability.
3.What types of policies does Tata AIA Life Insurance offer?
Tata AIA Life Insurance offers:
● Term Plans
● Savings Plans
● Unit Linked Insurance Plans
● Money-Back Plans
● Retirement Plans
● Group Insurance Plans
● Combo Plans
4.Which are the popular term insurance policies sold by Tata AIA Life Insurance?
The various Term Insurance policies offered by Tata AIA Life Insurance are:
● Tata AIA Sampoorna Raksha Promise
● Tata AIA Maha Raksha Supreme Select
5.What is the difference between whole life and term life insurance?
The primary distinction between whole life and term life insurance is that whole life insurance, as the name implies, offers coverage for the entire lifetime of the policyholder. On the other hand, term insurance provides coverage for a specific period or a set number of years, as determined by the policyholder.
6.Which is better whole life insurance or term life?
The decision between whole life insurance and term life insurance depends on the requirements of the policyholder and their family. If you seek coverage for a specific term or up to 40 years, term insurance is an excellent choice, offering a higher sum assured with lower premiums.
On the other hand, a whole life insurance policy is ideal for those who wish to provide lifetime coverage for their family without the need to purchase a new policy. This policy ensures coverage until the policyholder reaches 100 years or for their entire life.
7.What is the difference between savings plans and Unit-Linked Insurance Plans?
Unit-Linked Insurance Plans (ULIPs) invest a portion of the premiums in market-linked funds19, meaning the returns are subject to market fluctuations, but are not guaranteed. On the other hand, savings plans help you accumulate wealth in low-risk avenues over time and offer guaranteed returns at the end of the policy term.
8.What is the best age to get life insurance?
One should purchase life insurance early to benefit from lower premiums. Although it is possible to get a life insurance plan later in life, policy premiums will be higher as older age is associated with increased health risks. When you are young, the risk of health issues is lower, which results in lower premiums.
9.Is it too late to get life insurance at 50 years of age?
Though it is advisable to purchase life insurance as early as you can, you can still avail of a new life insurance policy at the age of 50 years. However, given the higher age of the insured, the policy premiums will also be higher due to the risk of health conditions.
10.What is the minimum & maximum age to buy life insurance?
For most life insurance policies, the minimum entry age for buying life insurance is 18 years, while the maximum entry age could be between 65-75 years and may vary across different policies.
11.When should I buy a life insurance policy?
You can purchase life insurance at any stage of your life when you feel that you have upcoming financial responsibilities. It is also important to consider why you should buy life insurance. For instance, if you are the sole earning member of your family, a life insurance policy will ensure a financial backup for your beneficiaries in the event of your untimely death, which will lead to a loss of income. Most people purchase life insurance policy plans early in life to benefit from lower policy premiums.
12.Who Should Buy a Life Insurance Plan?
●Young Adults: As a young adult, one should have a life insurance policy so that they can prepare for future financial responsibilities and avail of lower policy premiums. Even though the current situation may not need life insurance protection, a young individual should plan for their future.
●New Families: Newly married couples or new parents should avail of a life insurance policy since they may have one or more dependents such as aged parents and/or young children. Since the financial obligations are greater, life insurance can help protect your family in case of a misfortune.
●People with Home Loans: If you have purchased a new home and are paying off the EMIs along with others bills, a life insurance policy can help you safeguard your family from these financial obligations in your absence. The sum assured of the policy can assist your loved ones in paying off any pending loans and debts.
●Business Owners: People who have just started their own business or are growing their venture should get life insurance plans. This is because losses to the business in your absence can impact your family. In such a situation, your life insurance policy can help safeguard your family and your business.
13.Do you get your amount back at the end of the term life insurance?
If you have a level term life insurance policy, you will not get any maturity benefits since the coverage will expire at the end of the policy term. In this case, only if the policyholder passes away during the policy term, the death benefit will be paid out to their beneficiaries.
Term plans with return of premiums, however, do offer the total premiums paid as a return at the end of the policy term. If the policyholder survives the policy term, they can get the maturity benefit.
14.Does life insurance offer tax benefits?
Most Life insurance plans offer the following tax7 benefits:
●Under Section 80C of the Income Tax Act, the policy premiums paid for the life insurance policy qualify for tax deductions.
●The death benefits offered by the life insurance policy are exempt from taxes under Section 10(10D) of the Income Tax Act.
●Health rider premiums, if any, paid towards the life insurance plan qualify for tax deductions under Section 80D of the Income Tax Act.
15.Do I need to pay taxes on the maturity benefits of my life insurance policy?
Maturity benefits from a life insurance policy are usually tax-free under Section 10(10D) of the Income Tax Act, provided the premium does not exceed 10% of the sum assured and the policy meets specific eligibility conditions.
16.Is there a loan facility on all life insurance policies?
No, not all life insurance policies offer a loan facility.
17.Can a minor be appointed as a nominee in life insurance?
Yes, a child or a minor (below 18 years of age) can be appointed as a nominee for a life insurance policy. In case of a claim, an appointee chosen by the policyholder will file a claim on behalf of the minor nominee.
18.Is life insurance necessary for senior citizens?
Yes, senior citizens should have a life insurance policy so that during their retirement years, they can protect their families in a number of ways. For instance, a whole life insurance plan can offer extended coverage to all the family members till the insured reaches 100 years of age.
If they have a savings insurance plan or a retirement insurance plan, it can offer payout benefits as a regular income to the retired policyholder and their family, thus helping them sustain themselves financially and achieve their financial goals.
19.How do I find the best life insurance policy?
To find the best insurance policy, you should first ascertain the needs of your family members and how much financial support they will need in your absence. According to their requirements, you can choose a reputed life insurance provider that offers a policy and a flexible sum assured that covers these needs. If you buy a life insurance policy online, you can compare different plans on the official website of your insurance provider to select the best life insurance policy in India for your family and yourself.
20.Who Should Buy a Life Insurance Plan?
To buy a life insurance policy, you generally need the following documents:
●Completed proposal form
●Age proof (PAN card, Aadhaar card, Birth certificate, etc.)
●Photo ID proof (PAN card, Aadhaar card, Passport, etc.)
●Address proof (Aadhaar card, Voter ID, Passport, etc.)
●Income proof (Bank statements, Salary slips, ITR receipts, etc.)
●Medical examination reports (if applicable)
●A recent passport-sized photograph
These requirements may vary slightly depending on the insurance provider.
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