Insurance penetration still in the country is 2.7 percent as compared to 4.7 percent in the Pan Asia benchmark. Even if someone is protected there is substantially protection gap currently it is around $8.5 trillion.
We are in the era where the conventional joint Family inter-dependency is minimizing and nuclear dependency is growing up. Its People with modern tech enhancement and modern changes people are more prone to spending. For Instance, the income in the age group from 20 to 55 has more than doubled in India in the past ten odd years so their spending and so their liability.
We are in the time where protection means protected against the income we generate, protection against the liability occurs in the absence of income. Similarly, it stands true for the age group above 55 to 65 and beyond. No of person increasing in this group is increasing every financial year. So, their Retirement plan in accordance with complete financial protection must go hand in hand.
Now is the protection being costly? The answer is no… Its Rs.300 monthly spending can provide a Crore. On life cover if planned early. A 3 Lac per annum income can spend 300 to 400 rupees as monthly spending towards this protection. Does it contradict any investment objective? The answer is absolutely no. If death happens after one starts his career and receives the just earning, salary then return on investment will sound meaningless.
So, protection is not expensive. Its awareness, product variants, the concept of on board the customer is decisive to drive to insure the idea.
How a product is reformed and revamped now a days there are regular payment option, limited payment option with lifelong coverage… Payment of claim can be a lump sum, it can be periodically payment with income option… Technology enhancement, Hassle free Claim process, Improved underwriting norms are the deliverable of the Insure the next.
Turning 30 is a major phase in any one’s life. While we may wish that anything uncertain would not happen to us, life throws a lot of surprises. These surprises may be bitter. But to make them less bitter, it is important that one buy a term insurance plan and secure the peace of mind.
Please Note:
Types of Death Covered / Not Covered in Term Plan
Types of Deaths Covered and Not Covered by Term Insurance
Natural Death
The natural death or caused by health-related issues is covered by term life insurance plans. In case the policyholder dies due to any type of critical illness or medical condition, the beneficiary of the policy will get the sum assured as the death benefit.
Accidental Demise
Term plans also provide coverage in case of death of the insured due to an accident. Moreover, many term life plans come with an additional accidental death benefit rider under which extra sum assured is paid to the beneficiary of the policy along with the basic sum assured, in case of accidental demise of the insured person.
However, there are certain exceptions to this. The death of the insurance holder under the influence of alcohol or any type of drug while driving or due to involvement in any type of criminal activities leads to claim rejection. Moreover, life insurance plans also exclude the death of an individual due to involvement in adventure sports like skydiving, parachuting, rafting, bungee jumping, etc.
Death by Suicide
In case the insured commits suicide during the initial 12 months from the date of policy commencement, the beneficiary is eligible to receive 80% of the premium paid if the policy is a non-linked one. In case of linked plans, if the policyholder commits suicide during the initial 12 months from the date of policy commencement, the beneficiary of the policy receives 100% of the total premium paid. However, if the policyholder commits suicide after the completion of 1 year of the policy, the benefits of the policy will be nullified and the policy will be terminated. There are certain life insurance companies that may or may not provide coverage for the suicide death. Moreover, it is very important for insurance buyers go through the terms and conditions of the policy and know the inclusions and exclusions of the policy before purchase it.
Self-inflicted injuries
In case the death of the insured happens due to self-inflicted injuries or a hazardous activity, the claim made by the beneficiary will be rejected by the insurance company.
HIV/AIDS
The insurance company will not accept the claim if the death of the insured occurs due to any type of sexually transmitted diseases like HIV or AIDS.
Intoxication
If the policyholder dies due to overdose of drugs or alcohol, then the insurance company will not provide any death benefit to the beneficiary.
Homicide
In case the insured gets murdered by the beneficiary and the investigation reveals the involvement of the nominee in the crime, the insurance company will reject the claim. The claim request will be put on hold by the insurance company until the beneficiary gets the clearance.
Tsunami or Natural Calamity
In case the death of the policyholder happens due to the tsunami or any other natural calamity, the insurance company will not provide any coverage until and unless the insured has opted for any rider benefit for the same.
Claiming for more than two policies
If the beneficiary makes claims for two or more term insurance policies, then he/she should follow the steps as per the guidelines of Insurance Regulatory and Development Authority of India. In fact, the nominee should submit the details of existing term life insurance plan while purchasing a new one. The information about the policy should be provided in the proposal form. The nominee will have to present the insured’s death certificate to the insurance company. The new insurance company will verify the information with the existing insurer. After the verification is successfully completed
The Bottom Line
Prior to purchasing a term life plan, it is very important for insurance buyers go through the policy documentation. Having proper knowledge of both inclusions and exclusions of the policy can help the policyholder avail the coverage and prevent any type of discrepancy during the claim processing.
Somnath Mitra
Insurance Expert
