Life Insurance Policy: Best Life Insurance Plans In India 2024

What is a Life Insurance Policy?

Life Insurance is an insurance product that provides financial support to one’s family if he/she passes away due to an unfortunate event, during the policy term. It may help family members and other loved ones deal with the financial challenges that may come due to the life assured’s demise.

Why Do You Need a Life Insurance Policy?

Having understood what a life insurance policy is and how it works, you may want to know whether you need it.

Let us explain why you do, with the following reasons:

It Can Provide Support to Your Family
It Can Provide Support to Pay Off Debts
It Can Provide Peace of Mind
It Can Offer Opportunities to Create Wealth
It Can Allow You to Plan for Every Life Stage
It Can Provide Income during Retirement
It Can Offer Critical Illness Protection

Types of Life Insurance Riders Available in India

Riders help increase the scope of coverage of your life insurance policy by adding an extra layer of security. You may select from the given riders:

Types	Description
Accidental Death Benefit Rider	The accidental death benefit rider may help by providing a lump-sum payout to the family members to deal with the financial repercussions of the accident. This pay-out is made in addition to the base sum assured from the life insurance policy.
Critical Illness Rider	It provides a lump-sum pay-out on the diagnosis of a critical illness covered by the rider. This money may be used to treat the illness, fund travel tickets in case of foreign treatment, and even act as an income replacement.
Accidental Permanent Total/Partial Disability Rider	This rider may provide a fixed payout to the insured if they were to become totally or partially disabled due to an accident. The payout may help one cope with the financial difficulties that may arise as a result of the disability, such as loss of income.
Waiver of Premium Rider	As the name suggests, it may waive off the future premiums if the if the policyholder is diagnosed with a critical illness or is disabled due to an accident. Thus, the coverage of the plan continues to be active even if the policyholder may not be able to pay the premiums.
Family Income Benefit Rider	This rider allows you and your loved ones to receive periodic payments in case an unfortunate event occurs. These payments may assist you and your loved ones to live a life free from financial worries.

Features of a Life Insurance Policy

To understand what a life insurance policy is and its workings, let’s take a look at its features:

Death Benefits

The money received by the nominees of the policy on the demise of the life assured is called the death benefit amount. It can be considered the base of any life insurance policy and is present in all types of life insurance plans.

Maturity Benefits

Some life insurance plans may have a savings component attached to them. When such a plan matures, i.e., it reaches the end of the term, the policyholder receives the accumulated savings. This can be referred to as the maturity benefit.

Optional Riders

You may increase the scope of coverage for your life insurance policy by opting for add-ons. These may be available under some plans at a nominal additional premium. Riders may provide an additional layer of financial protection to you and your loved ones in different scenarios.

Multiple Premium Payment Terms

The premium of a life insurance policy is usually paid periodically over the entire premium paying term or one-time. If you opt for a single-premium plan, only a one-time, lump-sum premium payment is required. Additionally, if you opt for limited-term plans, premiums may be paid for a limited time during the tenure. This feature may allow one to pay for their life insurance coverage as they see fit.

Online Process

Nowadays, one may buy life insurance products online and complete different processes related to them via the same online means. All one has to do is log on to the life insurance website, browse through the different products, choose one, and then go ahead with buying it.

Claims Assistance

To support their policyholders and claimants during times of crisis, life insurance companies have a claims assistance service in place. By reaching out to an insurer’s claims assistance team, you may get help in filing claims, tracking them, and achieving a hassle-free claim settlement process.

Benefits of Buying a Life Insurance Policy

When you buy the right life insurance policy in India and insure your life, you may enjoy the following advantages:

Financial Protection for Your Loved Ones

One of the many advantages of life insurance may be the financial protection it provides. A life cover may ensure your loved ones do not face difficult situations when you are no longer around.

Wealth Creation through Investment

When you buy a market-linked life insurance policy, you may get to enjoy the dual benefits of life insurance and market-linked returns, subject to market risks. Along with the security of a life cover, your premium will be invested in equity funds, debt funds, or a combination of both. The gains from your investment may depend on market performance.

Long-term Savings

Life insurance plans with a savings component, for example, endowment plans, may help you generate long-term savings. Your life insurance premium may be used to provide you with a life cover as well as to accumulate wealth. When the plan matures, the savings may be paid out to you or your loved ones.

High Coverage at Lower Cost

If you prefer high life insurance coverage at an affordable rate, you may consider opting for term insurance plans. A term plan is a pure protection plan that helps secure the future of your loved ones. It may not offer any savings or investment features. Hence, its premiums may be lower, making it a cost-effective life insurance product.

Financial Backup for Retirement Years

By opting for plans like annuity plans, you may be able to secure your retirement considerably, while also receiving life insurance coverage. An annuity provides regular pay-outs at the frequency of your choice during your retirement years. These pay-outs may be used to meet your short-term needs, such as paying for daily expenses and medical bills. It can also be used to meet long-term goals, such as travelling.

Tax Benefits

Check out the key tax benefits of life insurance policies below, as per the provisions of the Income Tax Act, 1961.

Section 80C:

This section allows you to claim the annual premiums you pay for your life cover as a deduction from your gross total income. You can claim a maximum amount of deduction of Rs.1.5 lakhs per year, subject to provisions stated in Income Tax Act 1961. In turn, this reduces your total taxable income and your tax liability. This deduction is available only under old Regime of Tax

Section 10(10D):

As per section 10(10D) of the Income Tax Act, 1961, the payouts received from your life insurance plan including the death benefits received by your nominee, are all exempt from tax, subject to satisfaction of conditions mentioned therein.

In case of Unit Linked Insurance Plans alone, the tax provisions differ slightly. The fund value paid out to the policyholder at maturity leads to long term capital gains, if policy is issued on or after 1 February 2021 with annual aggregate premium more than Rs. 2.50 lakhs per year. These payouts are tax-free for all ULIPs issued before February 1, 2021, subject to satisfaction of conditions mentioned under Section 10(10D) of Income Tax Act.

However, in case of ULIPs issued on or after February 1, 2021, the gains are tax-free provided the annual premium paid for the ULIP/s does not exceed Rs 2.5 lakhs and policy is satisfying conditions as mentioned in Section 10(10D) of Income Tax Act. However, if the premium exceeds this limit, the long term capital gains are taxable at the rate of 10% if such ULIP is equity oriented ULIP. If there are multiple ULIP policies which are issued on or after 1 Feb 2021 and total annual premium is exceeding Rs. 2.50 lakhs for ULIPS, customer at his discretion can select the policy which should be treated as capital assets and gain from such policy will be taxable as capital gains as mentioned above

Any income from life insurance policy (other than ULIPs) where aggregate annual premiums exceed Rs 5 lakh, will not be eligible for tax exemption under Section 10(10D) of the Income Tax Act, if the policy is issued on or after 1 April 2023. However, death benefits received under the policy will continue to be tax-exempt in the hands of the recipient³.

Who Can Purchase A Life Insurance Policy?

People of all abilities and ages (except those in their very senior years) may buy a life insurance policy. However, the premium and certain other aspects of the policy may differ depending on when you buy it. Let’s look at who can buy life insurance and what the process may be at each age.

Age	Description
People aged 20 to 30 years	Those in their 20s and 30s may be trying to start a family of their own. Hence, a life insurance policy may help them secure the goals that come with it.
People aged 30 to 40 years	Individuals in this age category may benefit from buying a life insurance policy in the form of enhanced financial security. Furthermore, the right type of plan may also help in securing their child’s future as well as their own during the post-retirement years.
People aged 40 to 50 years	A life insurance policy at this age may be crucial since one could face more serious health issues. Securing your family’s future becomes important when faced with such a scenario.
People aged 50 years and above	Even though one may have achieved most of their goals by now, buying a life insurance policy can still be beneficial. It may act as a support system during one’s retirement and help them leave a legacy for their children or grandchildren.
Smokers	Contrary to popular opinion, smokers may buy life insurance as well. The premium outgo may be impacted due to their smoking habits. However, securing their loved one’s future is still within the reach of most smokers as long as they are honest with the insurer about their lifestyle habits.
Individuals with disabilities	If an individual with disabilities is the main earning member of their family, they may be eligible to buy life insurance products. Additional medical tests may be required to determine the level of risk involved.
People with pre-existing medical conditions	These days, people with pre-existing illnesses may also be able to buy life insurance to safeguard their family’s future. For instance, people with diabetes may want to consider opting for the Diabetic Term Plan offered by Bajaj Allianz Life Insurance.

Factors Affecting Life Insurance Premiums

Before you buy a life insurance policy online or offline, it may help you to know the different factors that may affect the premium you have to pay:

Age

An increase in age may lead to higher health risks, leading to an increased mortality risk. Hence, as you get older, you may have to pay higher premiums when purchasing a life insurance policy.

Current Health Conditions

Your life insurance premiums may also be impacted if you have any ailments or conditions that may increase your mortality risks.

Term Length

If you purchase a life insurance policy with a longer tenure, you may have to pay a higher life insurance premium, as the insurer may covers your life for a longer period.

Smoking

Smoking may be considered to be a hazardous habit that increases the mortality risk of an individual to a great extent. Hence, the premiums smokers may have to pay for a life insurance policy may be different as compared to non-smokers.

Occupation

Some occupations, such as firefighting, being a police professional, and so on, may be riskier and more dangerous than others. Hence, to combat the increased mortality risk of the individual, the premiums may be impacted too.

Lifestyle, Habits, and Hobbies

A lifestyle with habits such as alcohol consumption and an unhealthy diet, or risky hobbies such as adventure sports, may also affect your premium.

Family Medical History

If your family’s medical history shows any serious hereditary ailments, it may mean you are at risk for those illnesses, too. Hence, your premium outgo maybe affected too.

Understanding the Life Insurance Coverage Amount

When you buy life insurance online or offline, you may want to ensure your life insurance policy is sufficiently useful.

Here are some factors to keep in mind during the process:

Current and Future Income

Consider the amount you are earning currently and what you may earn in a few years’ time. The life insurance coverage amount should be adequate to make up for these incomes in your absence.

Remaining Working Years

As long as you are the main earning member in the family, they are likely to be dependent on you for that period. Hence, consider the number of years your family may depend on you and choose a life cover amount accordingly.

Regular Expenses of Your Family

If it is your income that pays the bills and other household expenses, then you may want to ensure the life cover amount shoulders that responsibility as well.

Debts and Loans

Note down any outstanding loans or debts you may have currently. If you were to pass away, the sum assured should be enough to help your family meet their needs as well as to pay off these liabilities.

Future Financial Goals

You may want to calculate the cost of these goals, such as buying a house or sending children to study abroad and choose a life insurance cover amount accordingly.

Important stages in your family’s life

The life cover amount you choose should be sufficient to support your family at different stages even in your absence that have planned in the long run.

Final Expenses

It may be crucial to ensure that in case of your unfortunate demise, the burial and related expenses are taken care of. Hence, you may want to consider them when finalising the life insurance coverage amount.

Other Coverage

If you have any other insurance policy, such as an employer group term insurance policy, you may want to consider the same as well before you buy separate life insurance online or offline.

How to Buy a Life Insurance Policy?

Buying a life insurance policy in this day and age has become a much simpler process than before. Broadly, there are two ways you can approach this process: buy the policy via the traditional offline route or buy life insurance online. Let’s look at both.

Offline

Visit the nearest branch of Bajaj Allianz Life Insurance Company. Our Branch Locator page can help you locate the branch nearest to you.
Alternatively, you may also contact a life insurance agent and convey your needs to them.
Reach out to a representative at the branch and inform them of your wish to buy a particular plan. You may be provided with a proposal form for the same.
Submit the proposal form after entering the relevant information and reading the terms and conditions thoroughly.
Pay the premium via one of the different payment modes available.
Allow the representative to guide you through any other steps if required.

Online

Visit www.bajajallianzlife.com to initiate the process to buy a life insurance policy online.
Click on the ‘Plans’ tab to select the category of life insurance you want, and then choose an appropriate plan from the category.
Now, provide important personal information, such as your name, contact details, gender, occupation, address, and so on to continue the process to buy life insurance online.
Finalise some vital policy-related information, such as the life cover amount, tenure, premium payment term and frequency, and so on.
Adjust the policy variables until you come across a premium quote within your budget.
Click on ‘Buy Now’ to generate the proposal form and then fill it out.
Submit the proposal form and pay the premium, after which the process to buy a life insurance policy online may be considered complete.

How to Choose a Suitable Life Insurance Policy?

To ensure you receive optimal protection, it may be essential to choose the right kind of life insurance policy. To do so, it may help you to keep the following factors in mind:

Goals

The kind of life insurance cover you should be opting for may depend largely on your goals. For instance, if you seek only financial protection for your loved ones, a term plan may be a suitable option. If long-term savings and investment opportunities are on your mind, you may want to consider endowment plans or ULIPs.

Age

Before finalising any life insurance policy, you may want to review whether it is the appropriate plan for your age. Life insurance premiums might be lower for younger individuals. Thus, they may find it beneficial to select a plan with higher coverage and extensive features, since the premium may still be relatively lower. Similarly, if you may be nearing your retirement age, you may want to opt for annuity plans. They may provide the monetary support you need during your post-retirement years.

Risk Appetite

Certain types of life insurance policies, such as ULIPs, allow the policyholder to invest in the market in the funds of their choice. However, this may also mean having to deal with higher market risks. Therefore, it may be imperative to review your risk appetite and then buy a life insurance policy accordingly. Those with no risk tolerance may find a term plan suitable, while those with low-to-moderate risk preferences may opt for endowment plans or debt ULIPs. A higher risk appetite may be more satiated by ULIPs with a predominantly equity portfolio.

Market Conditions

This may be an especially vital factor to consider if you are planning to buy a ULIP. The returns from such a life insurance policy in India may depend largely on the market performance amongst other factors. If you think the market may be experiencing a high soon, you may want to opt for a higher equity-laden ULIP portfolio. However, if you wish to stay away from the fluctuations of the market, you may opt for a plan with guaranteed returns.

Policy inclusions

Whether you buy life insurance online or offline, one thing you may not want to miss out on is reading through the policy inclusions. It may help you get a clearer idea of the situations and events covered under the plan.

Policy exclusions

Along with the inclusions, reading through the life insurance policy exclusions is crucial, too. Exclusions can refer to specific events or situations where your policy may offer no coverage.

Coverage

The life cover amount, also called the sum assured, is the maximum amount the nominees may receive on the demise of the life assured. With inflation rates rising, a higher coverage amount may be more beneficial.

Fund performance

Some types of life insurance policies, such as ULIPs, may require you to understand the funds within the plan. The returns you may earn from the plan depend on how it performs in the market. To get an idea of the same, you may want to look at and analyse the past performance of these funds. Note that past performance may not be indicative of future results.

How to Pay for a Life Insurance Policy?

There are many ways to pay the premium of your life insurance policy and many mediums of payment as well. The frequency and term of your premium may depend on the type of policy chosen.

If you buy a life insurance policy offline, the premium may be paid via cheques, demand drafts, or other similar means.
If you buy an online life insurance policy, the premium for the same may be paid via safe and secure digital payment portals.
For single-premium life insurance plans, the premium may be paid as a one-time lump-sum payment.
For regular premium life insurance plans, the premium may be paid at regular intervals on a monthly, quarterly, half-yearly, or annual basis.

You may also choose limited-term life insurance products where the premium may be paid for a limited period only.

How Can Your Family File for a Life Insurance Claim?

The meaning of life insurance lies in the coverage and assurance it provides to you and your family. As a life insurance policyholder, you may want to know how to benefit from this assurance by raising a claim when required. Your loved ones should also ideally know the process so they may not face any issues in your absence.

In case of the life insured’s death, the nominee may initiate the process to raise a claim by submitting the claim form to the insurer. Depending on how the demise may have occurred, certain documents may be required. For instance, demise due to an accident may require an FIR. After submitting the same along with other documents, the claim shall be reviewed by the insurer and processed accordingly.

Sources and references:

https://cleartax.in/s/life-insurance-taxability
https://www.livemint.com/money/personal-finance/life-insurance-what-is-the-ideal-amount-of-coverage-for-you-mintgenie-explains-11656733892117.html
https://www.moneycontrol.com/news/business/personal-finance/budget-2023-tax-exemption-for-traditional-insurance-policies-9978941.html

Life Insurance Plans

What is a Life Insurance Policy?

Why Do You Need a Life Insurance Policy?

Types of Life Insurance Policies in India

Term Insurance

Endowment Plans

Unit Linked Insurance Plans (ULIP)

Whole Life Policy

Annuity Plans

Types of Life Insurance Riders Available in India

Features of a Life Insurance Policy

Death Benefits

Maturity Benefits

Optional Riders

Multiple Premium Payment Terms

Online Process

Claims Assistance

Benefits of Buying a Life Insurance Policy

Financial Protection for Your Loved Ones

Wealth Creation through Investment

Long-term Savings

High Coverage at Lower Cost

Financial Backup for Retirement Years

Tax Benefits

Who Can Purchase A Life Insurance Policy?

Factors Affecting Life Insurance Premiums

Age

Current Health Conditions

Term Length

Smoking

Occupation

Lifestyle, Habits, and Hobbies

Family Medical History

Understanding the Life Insurance Coverage Amount

Current and Future Income

Remaining Working Years

Regular Expenses of Your Family

Debts and Loans

Future Financial Goals

Important stages in your family’s life

Final Expenses

Other Coverage

Identity proof

Address proof

Age proof

Income proof

Medical reports

Passport-size photographs

If PAN is not available, Form 60

How to Buy a Life Insurance Policy?

Offline

Online

How to Choose a Suitable Life Insurance Policy?

Goals

Age

Risk Appetite

Market Conditions

Policy inclusions

Policy exclusions

Coverage

Fund performance

How to Pay for a Life Insurance Policy?

How Can Your Family File for a Life Insurance Claim?

Why You May Consider Buying a Life Insurance Policy Online?

Access to Information at Fingertips

Online comparison

Instant Payment Online

Important Life Insurance Terms You Should Know

Bajaj Allianz Life Insurance Plans

Why Bajaj Allianz Life Insurance ?

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Claim Approval%

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Assets Under Management (AUM)**

Number of Lives Covered#

Solvency Ratio^

Frequently Asked Questions

Life Insurance Guide

Articles

Calculators

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