Bajaj Allianz Life Insurance Products
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Term plans provide comprehensive coverage at affordable rates, ensuring that your loved ones continue to pursue their life goals even in your absence.
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What is Life Insurance?
Life insurance is a contract or an agreement between two parties - a life insurance company and a policyholder. The life insurance company, also known as the insurer or the insurance provider, agrees to pay a specified sum of money to the nominee, upon the death of the insured person or after a certain set period.
In return for this benefit, life insurance companies charge a premium from the policyholder. This life insurance premium can be paid as a one-time lump sum amount, or it can be paid periodically, on a monthly, quarterly, semi-annual or annual basis.
Some life insurance policies offer other benefits too, in addition to the life cover. These benefits are typically paid out at the end of the policy term, when the plan reaches the maturity date, as per the terms & conditions of the policy. As a result, these payouts are called maturity benefits. They may either be specified at the time of purchasing the policy, or they may vary based on the return your investments earn.
Get Information
- View our Life Insurane Plans
- What is Life Insurance?
- Why do you Need a Life Insurance Policy?
- How does Life Insurance Work?
- Types of Life Insurance
- How to choose the right kind of Life Insurance Policy?
- Why Choose Bajaj Allianz Life for your Life Insurance?
- What is a Life Insurance Calculator and how does it work?
- What are the types of Life Insurance Calculator?
Why do you Need a Life Insurance Policy?
There are many things in life that you can quantify and plan for in advance. For instance, if you are keen on taking an international trip, you can estimate and determine your budget with a great deal of accuracy. Similarly, if there is a wedding in your family, it is possible to plan for the event in a precise manner, because you know exactly what to expect.
But then, there are some things in life that you cannot plan for, accurately. A sudden illness, an unexpected death, or an unforeseen accident - these instances can place a great deal of stress on your finances, but you have no way of predicting if and when they may occur.
A life insurance policy helps you be financially prepared for such contingencies.
If you are the sole earning member of your family, or even if you contribute to the household finances in some way, your demise may put financial strain on your loved ones. In case you are a homemaker too, you undoubtedly contribute to the family’s needs in a non-financial manner. In your absence, your loved ones will have to pay for additional assistance. A life insurance policy helps cover all these financial requirements.
You need a life cover to ensure that in your absence, your dependents are not financially burdened in any manner. A life insurance plan helps your loved ones meet their everyday needs and achieve their life goals as planned, without much financial distress.
How Does Life Insurance Work?
The basic underlying principle of life insurance is to offer financial coverage to the nominee in case of the insured person’s demise. The asset insured in a life cover is the life of the policyholder. Here is a closer look at how life insurance plans work.
If you are looking for a life cover, you need to purchase a life insurance plan from an insurance provider. The life cover offered by the plan is valid for a specified period, and the cover is predetermined. In return for this benefit, you need to pay premium charges to the insurer.
For instance, say you are 28 years old today, and the life insurance policy you purchase offers a sum assured of Rs. 50 lakhs for a period of 30 years. This means your life cover will be active till you attain the age of 58. For this cover, say you are charged an annual premium of Rs. 10,000. In case of your unfortunate demise during this period, the life insurance company will pay the sum of Rs. 50 lakhs to your nominee, subject to you paying your premiums regularly and as per the terms & conditions of the policy. On payment of the 50 lakhs to the nominee, the policy will be terminated.
But what happens if you survive the policy term of 30 years? Do you receive any financial payouts? Well, the answers to these questions depend on the type of life insurance plan you opt for.
Types of Life Insurance
Although the concept of life insurance is simple, the life insurance industry is home to a wide range of products. There are different types of life insurance plans, each of which has its own unique benefits and features. Here is a preview of the five most common types of life insurance.
Term Insurance- Endowment Plans
- Unit Linked Insurance Plans(ULIP)
- Whole Life Policy
- Annuity Plans
The most fundamental priority for any breadwinner is to ensure that their loved ones are financially taken care of in case something happens to the earning members of the family. Term insurance may help in fulfilling this basic need. It is the simplest kind of life insurance, and it is a pure life cover.
This means term plans only offer life insurance and do not include any savings or investment component. So, if the policyholder passes away during the policy term, their nominee receives the sum assured under the plan. However, if the policyholder survives the policy term, no payouts are made in case of a regular term plan. In Term plans with Return of Premium (ROP), you get back your premiums at the end of the policy term if you survive this period.
Check out the key features of term insurance below.
- Most affordable kind of life insurance
- Tax benefits~on the premiums paid, subject to provisions of the Income Tax Act, 1961
- Return of premiums paid at the end of the policy term in case of term plans with Return of Premium (ROP) option
Endowment plans are also known as savings plans. These plans not only offer a life cover but also help you generate return on your investment, that are paid at maturity. In case of the policyholder’s demise during the policy term, the insurer will pay the sum assured to the nominee. On the other hand, if the policyholder survives the policy term, he/she is paid a lump-sum amount at maturity. The maturity benefit can be utilized to meet life goals such as children’s marriage or retirement.
Check out the key features of endowment policies below.
- Maturity benefits if the policyholder outlives the policy term
- Tax benefits~ on the premiums paid, subject to provisions of the Income Tax Act, 1961
If you are a bit of a risk-taker, you may want to invest in market-linked assets to create wealth over the long term. A Unit Linked Insurance Plan (ULIP) can help you with this. It is a kind of life insurance that combines the benefits of insurance and market-linked investments. ULIPs are preferable for individuals who wish to get the advantage of a life cover as well as market-linked wealth creation under a single policy.
At the time of purchase, you can choose to invest in different ULIP funds such as debt funds, equity funds or a mix of the two. You can even switch your ULIP funds as and when required based on your goal and risk appetite. At the time of maturity, your fund value will be paid out to you as your maturity benefit as per policy terms & conditions.
Check out the key features of ULIPs below.
- Lock-in period of 5 years
- Option to switch ULIP funds as per your changing goals and risk appetite
- Tax benefits~ on the premiums paid, subject to provisions of the Income Tax Act, 1961
Usually different types of insurance plans offer coverage for a specified period from the date of purchase. So, for instance, if you purchase a life cover at the age of 30, and if it is valid for 30 years, you will be covered till the age of 60. However, what happens in case of your demise after the age of 60? In case you have any dependents at that age, there will be no life cover to protect them. Here is where a whole life insurance plan can help.
A whole life insurance policy is a kind of life insurance plan that offers coverage till the insured person attains the age of 99 or 100. Unlike regular life insurance plans that offer coverage for a limited period, the protection offered by a whole life policy generally lasts till 100 years of age.
If you have a spouse or children who are financially dependent on you even after you have retired, a whole life insurance policy may be preferred for your insurance portfolio.
Check out the key features of whole life insurance policies below.
- Tax benefits~ on the premiums paid, subject to provisions of the Income Tax Act, 1961
- Guaranteed^ protection for life
During your working years, you will have a steady stream of income to rely on. However, once you have retired, you may not have any source of primary income from your job. You need to set up a source of alternate income to meet your day-to-day needs after retirement. Annuity plans can help you with this. They offer the benefit of regular income to retired policyholders.
The policyholder can invest in one go or over a period of time in an annuity plan, which is further invested by the insurance company and the policyholder is paid the annuity amount with the generated returns as per the terms & conditions of the plan. The annuity payouts can start immediately after the policy is purchased and initial investment is made, as is the case with immediate annuity plans. Alternatively, the payouts can begin after a specified period, as is the case with deferred annuity plans.
Check out the key features of annuity plans below.
- Option to receive annuity payouts immediately or after a specified period
- Offers joint life options to cover your spouse with joint annuity plans
- Risk-free guaranteed income payouts for whole life
What is the Right Age to Purchase a Life Insurance Policy
It is always preferred to purchase your life insurance policy when you are young and healthy. This is because your mortality risk is lower when you are younger. As a result, life insurance companies charge a lower premium for young policyholders who have no health issues. That said, here is a closer look at the implications of buying a life insurance policy in different age groups.
In Your 20s
Your life insurance premiums tend to be the lowest when you are in your 20s. However, at this age, most people do not think of buying a life cover because they may not have many financial responsibilities.
In Your 30s
Your life insurance premium in your 30s may be a bit higher. But people generally turn their attention to buying a life cover in this age group, because this is when they may decide to get married and have children.
In Your 40s
Your life insurance premiums will witness a sharp rise at this stage, since the mortality risk rises significantly. But if you don’t have a life insurance plan by the time you reach your 40s, it is preferable to consider getting a life cover , as you may have a family that depends on you and it becomes essential to cover your debts and other potential expenses, as well as plan for retirement.
In Your 50s
Buying life insurance in your 50s may not be the best financial course of action. By this age, you may have developed some health issues, which will drive your life insurance premiums further upward. However, it still makes sense to opt for a life insurance cover at this age, as not many insurers will provide a life insurance beyond 60years of age.
Important Life Insurance Term You Should Know
1
Policyholder
The policyholder is the person who purchases and owns the life insurance policy. Only the policyholder can make changes to the contract of insurance, as per the terms and conditions of the policy.
2
Life Assured
The life assured or the life insured is the person whose life is covered by the life insurance policy. This life assured may or may not be the same as the policyholder.
3
Sum Assured
The sum assured is the minimum amount guaranteed by a life insurance plan in case the life assured passes away during the policy term.
4
Nominee
The nominee is the person who is designated as the beneficiary in the life insurance policy contract. A policy can have more than one nominee.
5
Policy Tenure
The policy tenure or the policy term is the period over which the life insurance coverage offered by a policy is valid. The life insured’s death is covered by the policy only if it occurs during the policy tenure.
6
Premium
The life insurance premium is an amount levied by life insurance companies in return for the life cover provided to the insured person. This premium can be paid as a one-time amount or as periodic payments on a monthly, quarterly, semi-annual or annual basis.
7
Death Benefit
The death benefit is the sum that life insurance companies pay the nominee in case of the life assured’s demise during the policy term as per terms & conditions of the policy. These payouts are exempt from tax as per section 10(10D) of the Income Tax Act, 1961 subject to provisions stated therein.
8
Maturity Benefit
The maturity benefit is the amount that the life insurance provider pays the policyholder at the time of policy maturity. This sum may be predetermined (partly or fully as per the product opted for) at the time of purchasing the life insurance plan, or it may vary based on the investment value (in case of ULIPs).
9
Free look period
The free look period is a window of time during which the policyholders are free to return the life insurance plan for cancellation if they are not satisfied with the terms and conditions of the policy. The premium paid will be returned to the policyholder less the risk premium for the period the cover was provided, any expenses on medicals conducted and stamp duty. This free look period is generally 15 days from the date of receipt of the policy document for most policies. For electronic policies and policies sourced through distance marketing, the free look period is 30 days.
10
Life insurance rider
A life insurance rider is an additional cover that offers financial coverage for specific incidents or expenses. You can purchase life insurance riders for an additional rider premium or charge at the time of purchasing your base life insurance plan. Some common riders include a critical illness rider, accidental death benefit rider, waiver of premium rider, etc.
How to Choose the suitable Life Insurance Policy?
There are many different types of life insurance, as you have seen above. To determine the suitable life insurance plan for your needs, you need to take various factors into consideration. Here is a preview of some of the aspects that help you choose the suitable life insurance policy.
Goal
Your financial goals play a key role in determining the kind of life insurance plan you need to choose. Different types of life covers come with various benefits that make it easier to attain specific goals. Here is a quick guide to help you understand which type of life insurance may be suitable for different life goals.
- Term insurance: Helps you put a financial safety net in place for your loved ones at pocket-friendly premiums
- Savings plans: Helps you meet medium-term and long-term financial goals with savings
- Unit Linked Insurance Plans: Helps you create wealth over the long term with market-linked investment options
- Annuity plans: Helps you set up a source of alternative income for your retired life
- Child insurance plans: Helps you meet the costs of your child’s future expenses such as education, wedding, etc.
As you can see, each type of life insurance plan offers its own specific benefits. You can choose the kind of life cover plan that will help you achieve your own goals and your family’s goals.
Age
Most life insurance plans offer lower premiums for younger policyholders. So, it is always a good idea to buy your preferred life insurance policy when you are young and healthy. That said, there are some kinds of life insurance - like retirement plans or annuity plans - that are better suited for older people.
Life insurance policies also come with specific entry age limits. So, consider these age limits before you choose the right life cover for your needs.
Risk Appetite
All life insurance plans offer guaranteed death benefits. However, only some types of life insurance plans like guaranteed savings plans and annuity plans offer guaranteed, predetermined payouts or benefits. Others, like Unit Linked Insurance Plans, cannot guarantee the benefit that will be paid when the plan reaches the maturity date. This is because the maturity benefits depend on the market-linked investments that you opt for.
If you are a more conservative investor who needs to know exactly what amount will be paid out to you on maturity, you can opt for guaranteed savings plans. On the other hand, if you have a higher risk appetite and wish to take on more risk in order to increase the possibility of creating market-linked wealth, you can opt for ULIPs.
Market Conditions
The kind of life insurance plan you choose also depends on the general market conditions. If the market is quite unpredictable, it may be a better option to choose life insurance plans that offer guaranteed returns. But if the market is performing well, you can purchase ULIPs and invest in equity ULIP funds to benefit from bullish market movements.
Policy inclusions
Every life insurance policy and the riders you choose come with some specific inclusions. In case any of the covered incidents occur, you or nominee can raise a claim with the insurance provider as required. Before you select the type of life insurance policy for your portfolio, you need to check out what is included in your policy. That way, you can choose a plan that covers a wide variety of contingencies.
Policy exclusions
Life insurance policies also come with specific exclusions. You need to check out these exclusions before you buy a life insurance plan, so you are aware of the situations for which you cannot raise a claim. Some common exclusions may be as follows -
- Death by suicide during a specified period after policy purchase
Coverage
The sum assured is another major factor you need to consider. It is essentially the amount of coverage that you get with your policy. If you do not have any life insurance plan yet, you may consider purchasing a life cover that offers significant coverage at affordable premiums like a term plan. You can even make use of a life insurance calculator to check the suitable amount of coverage for you and your family, based on your annual income, your existing debts, your existing investments and more. You can then use the coverage you need as a benchmark while shopping for a life insurance plan.
Claim settlement ratio
The claim settlement ratio represents the percentage of claims settled by an insurer during a given period. It is typically calculated on an annual basis, and it is computed as the ratio of the total claims settled during the year to the total claims received during the year.
The higher the claim settlement ratio, the better, because it indicates that the life insurance company is more trustworthy and will settle your nominee’s claims promptly. So, choosing a life insurance policy from an insurance provider with a higher claim settlement ratio can be a preferable financial decision.
Fund performance
This is a factor that is specific to Unit Linked Insurance Plans (ULIPs). Before selecting a ULIP, check the funds available for investing under the ULIP of your choice. Take a look at the performance of these funds over the past year or the past 5 years or even further. Although past fund performance does not guarantee future performance, this analysis can help you get a better idea of the ULIPs whose funds have a good track record. You can then make your choice accordingly.
Why choose Bajaj Allianze Life Insurance For Your Life Cover
Bajaj Allianz Life Insurance is one of the foremost life insurance companies in India. If you are curious about how purchasing a life cover from Bajaj Allianz Life Insurance can benefit you, check out the top reasons to choose us.
Claim Settlement Ratio
Bajaj Allianz Life Insurance Company has a claim settlement ratio of 99.02%1 for financial year 2021-22. This means we honor our promise to protect your loved ones, and your nominees will not have to worry about their genuine claims being rejected unnecessarily.
A High Credit Rating
CARE Ratings has issued a rating of CARE AAA (IS)$ to Bajaj Allianz Life Insurance Company. This rating indicates that the company is stable, and your loved ones will be financially protected in your absence.
Quick Claim Approval
95.49%% of the non-investigative individual claims for FY 2021-22 were approved within just one working day. Our quick claim approval process ensures that your beneficiaries do not undergo any financial distress following the loss of a loved one.
Credible History
Bajaj Allianz Life Insurance Company has already insured over 2.87 crore lives2 so far. With such a credible and trustworthy history, we may be the preferred choice for you if you want to secure your loved ones financially today.
A High Solvency Ratio
The Insurance Regulatory and Development Authority of India (IRDAI) mandates a solvency ratio of 150%. As on 31st March, 2022, Bajaj Allianz Life Insurance Company recorded a solvency ratio 581%**, indicating financial strength and an ability to settle genuine claims promptly.
A Trusted Brand
Over the years, Bajaj Allianz Life Insurance Company has emerged as one of the most trusted brands in India. The company is a partnership between two powerful and successful entities in their own right - Bajaj Finserv Ltd, one of India’s most diversified non-banking financial institution and Allianz SE, one of the world’s leading asset managers and insurer.
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Unit Linked Insurance Plans
The new-age Unit Linked Insurance Plans enable you invest systematically over long term to help you meet your long-term life goals. Take advantage of the combination of wealth creation and protection in a single plan. Tax benefit is the cherry on the top.
Retirement Plans
Start investing today to build a significant corpus for your retirement. Retirement/pension plans provide you financial security and makes you financially independent even post retirement, so that you enjoy a relaxed and comfortable retired life without compromising on your life goals..
Group Life Insurance
Group insurance policies provide insurance solutions, including life and retirement, to a group of people under one policy
Child Plans
A crucial part of parenting involves prudent financial planning to secure your child’s future needs even if something happens to you. A child insurance plan helps build funds for your child’s education or marriage, or any other important milestone, while also protecting your child in the absence of the parent.
Investment Plans
Grow your savings and avail tax benefits by investing in investment plans. Chose a plan that best suits your needs to fulfil your life goals.
Savings Plans
Savings plans provide the best of both insurance and savings to help you realize your long-term life goals. It helps create a supplementary income by providing returns with moderate risk on your investment
Health Plans
Health plans take care of your financial needs when medical emergency strikes, and ensures you are still on track to achieve your life goals without worrying about erosion of your savings to meet the medical expenses.
What is a Life Insurance Calculator and How Does it Work?
A life insurance calculator is an online financial tool that you can use to plan your insurance purchase. There are two kinds of life insurance calculators that are commonly available online, and they can help you quantify certain important parameters. Check out the details below.
Life Insurance Coverage Calculator- Life Insurance Premium Calculator
Not sure of the amount of coverage you need? In that case, a life insurance coverage calculator helps you figure out the minimum sum assured you need to protect your loved ones. All you need to do is enter some important details like your age, your annual income, the period over which you are planning to work, and other such details. This calculator will then give you an estimate of the cover amount that you need.
If you have a good idea about the amount of coverage that you need and the policy that you want to buy, but aren’t very clear about what it will cost, this is the calculator that can help you out. The premium calculator gives you an estimate of how much the cover you wish to buy will cost. You can then use these details to plan your budget accordingly.
While these are the most basic financial tools needed to plan your life insurance purchase, there are also other aspects that you may want to get more clarity on. For instance, you may want to know how much of a retirement corpus you need, you may want to plan for your children’s education, or even check how much you need to invest in your ULIP annually.
For all these needs and more, Bajaj Allianz Life Insurance offers a variety of calculators like Child Education Planning Tool, the ULIP Calculator, the Pension Calculator and more. Check out the range of financial calculators we offer here.
What are the Features of a Life Insurance Calculator
A life insurance calculator comes with many useful features such as the following.
Ease of Use
Life insurance calculators are very easy to use, since they are beginner-friendly and extremely simple.
Free of Charge
You need not pay anything to use most of these financial tools. They are available online free of charge.
Instant Results
Life insurance calculators give you instant results. You just need to enter the details required, and you can get the desired information within a matter of seconds!
Easier Financial Planning
Life insurance calculators help you plan your finances easily within just a few minutes. All you need to do is enter the inputs needed, and the calculators will give you the results about the amount of life cover needed or the cost of life insurance, as may be the case.
Features of a Life Insurance Policy
A life insurance policy comes with many distinct features that also double up as benefits. Here is a quick look at the some common characteristics of life insurance policies in India.
Death Benefits
Death benefits are paid out by all life insurance plans as per the terms & conditions of the plan, if the insured person passes away during the policy term. If the death occurs in a manner that is covered by the policy, the nominee receives guaranteed^ death benefits under the plan.
Maturity Benefits
Maturity benefits are the financial payouts made when the policy attains maturity. A life insurance plan is said to have attained maturity on the maturity date i.e. every life insurance policy comes for a fixed tenure and when the tenure ends the policy is set to attain maturity. Not all life insurance policies offer maturity benefits. Term plans, which are pure life covers, only offer death benefits.
Optional Riders
Riders or add-on covers are optional benefits that you can buy at the time of purchasing your life insurance policy. These riders offer financial benefits over and above what the base plan offers on the payment of nominal extra charges. Some common life insurance riders include the critical illness benefit rider, accidental death benefit rider, accidental permanent total/partial disability rider, waiver of premium rider and family income benefit rider.
Multiple Premium Payment Terms
The premiums payable for your life insurance plan can be paid as a one-time, lump sum amount if you buy a single premium plan. In case you buy a limited premium plan, you can pay your premiums periodically over a few years. The premium payment term in this case will be shorter than the policy term. And if you buy a regular premium plan, you need to pay your life insurance premiums periodically over the entire policy term.
Online Process
It is now possible to complete the entire customer journey online, right from the time of purchase to claim application and processing. You can browse through the website of your preferred life insurance companies, select the policy you want, and make your purchase online. Then, over the course of your policy term, you can pay your premiums online. And in case the insured incident occurs, your nominees can even file a claim with the insurer online.
Claims Assistance
Claims assistance and customer support is an important aspect of life insurance providers that you need to account for before you buy a life cover. Choose a provider that offers a simple and hassle-free claim filing process, with assistance over multiple communication mediums.
Benefits of Buying a Life Insurance Policy
There are different types of life insurance plans available in the market today, and each comes with its own set of benefits. The preferred life insurance policy for your needs is the one that fulfils your requirements perfectly. To make the right decision, check out some benefits of life insurance plans below.
Financial Protection for your Loved Ones
The first and foremost benefit of a life insurance plan is that it helps protect your loved ones financially. You may be the sole or the main breadwinner in your family, and your spouse and your children may be financially dependent on you. Alternatively, you may be taking care of various non-financial aspects of your home.
Whatever the situation may be, in case of your unfortunate demise, your loved ones may undergo a financial strain. A life insurance policy ensures that this does not happen. The guaranteed death benefits paid out by life insurance companies may help your loved ones meet their day-to-day expenses, pay for their life goals, and settle any debts in your name.
Tax Benefits
Life insurance plans also offer a variety of tax benefits. These benefits include deductions and exemptions, which together help reduce the burden of income tax. 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.
Section 10(10D):
As per section 10(10D) of the Income Tax Act, 1961, the payouts received from your life insurance plan at maturity, or 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. These payouts are tax-free for all ULIPs issued before February 1, 2021.
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. However, if the premium exceeds this limit, the long term capital gains exceeding Rs 1 lakh 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 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.
Wealth Creation Through Investment
Another key benefit of life insurance plans, or ULIPs in particular, is that they help you create market-linked wealth over the long term through disciplined investments. In ULIPs, you can choose to invest in different kinds of ULIP funds like debt funds, equity funds or a mix of the two. Depending on the market movements, the potential for your ULIP investments to create market-linked wealth over the long term may increase.
Long-term Savings
Life insurance plans like endowment policies also come with the benefit of long-term savings. The maturity payouts that life insurance companies make at the time of policy maturity, if the policyholder survives the policy term, may help meet the costs of various long-term life goals like. children’s higher education or wedding or cost of travel.
High Coverage at Lower Cost
Term life insurance, which is the simplest kind of life cover, offers high coverage at affordable premiums. This benefit can be useful for people who wish to primarily secure the financial future of their loved ones. It can also be beneficial for individuals who already have a life insurance plan, but wish to increase their coverage at affordable premiums
Assured Income for Retirement
Some life insurance plans also offer retirement benefits for policyholders. This includes guaranteed^ income plans as well as annuity plans. Guaranteed^ income plans offer periodic payouts for a specified period of time. This period can be aligned with your retirement phase. Similarly, annuity plans are specifically designed to offer a steady stream of income to policyholders in their post-retirement life.
Types of Life Insurance Riders available in India
You can further enhance the benefits offered by your life insurance policy by purchasing add-on covers along with the base plan at nominal extra cost. You can choose from different types of life insurance riders. Here is a preview of the most common types of life insurance riders you can buy.
Accidental Death Benefit Rider
The accidental death benefit rider offers financial benefits if the insured person passes away due to an accident. These benefits are in addition to the sum assured under the base plan. So, for instance, if you have a life insurance plan that offers a cover of Rs.50 lakhs, and you also purchase an accidental death benefit rider that offers a cover of Rs.20 lakhs, the life insurance provider will pay Rs.70 lakhs in case of accidental death.
Accidental Permanent Total/Partial Disability Rider
Accidents may not always lead to the death of the victim. In many cases, the accident may result in permanent total or partial disability. The cost of treating or managing these disabilities may be unforeseen and the policyholder may not be able to meet these expenses. An accidental permanent total/partial disability rider offers financial protection in case of such unexpected contingencies.
Critical Illness Rider
A critical illness is any life-threatening condition that requires medical and/or mechanical support to the body’s vital organs. Without this support, the patient may pass away. Some common critical illnesses include renal failure, cancer, heart disease and other such ailments. The costs of treating and managing a critical illness can run into lakhs of rupees. With a critical illness rider, you can be rest assured that in case you are diagnosed with a critical illness which is covered under the rider, you need not worry about the financial repercussions of this diagnosis.
Waiver of Premium Rider
If the policyholder is diagnosed with a critical illness or if they are physically or otherwise disabled due to an accident, they may not be able to continue working and earn for their family. Additionally, with the extra costs of treating the illness or the disability, they may not be able to pay the premiums due for their policy. In such a situation, this rider, offered under some Bajaj Allianz Life plans, comes in handy, since it waives off all future premiums.
Family Income Benefit Rider
In case the policyholder is unable to continue working due to a critical illness diagnosis or a permanent disability, their family may suffer from a total or partial loss of income. This may also be the case if the policyholder passes away. But the family income benefit rider, offered under some Bajaj Allianz Life plans, ensures that if any of the covered incidents occur, the insurer pays out periodic income regularly to the beneficiary.
How to buy a Life Insurance Policy
No matter which type of life insurance you wish to purchase, the steps involved and the paperwork required are generally the same. Here are all the details you need to know.
Driving licence, Passport, school/college certificate, etc.
Utility bill, passport, Aadhaar card, etc.
PAN card, Aadhaar card, driving licence
Passport size photographs of the applicant
Income tax return, employer’s certificate or Form 16
Medical Test Reports, as required for some policies
Frequently Asked Questions
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What are the different types of life insurance policy add-ons, and are they worth spending on?
Life insurance policy add-ons are riders that you can purchase for an additional premium. Some of the most common types of add-ons include the following -
- Accidental death benefit rider
- Critical illness rider
- Accidental permanent total/partial disability rider
- Income benefit rider
- Waiver of premium rider
These add-ons can be purchased at the time of buying your life insurance policy. They are worth the additional premium because these riders offer extra coverage in case of specific contingencies at a nominal cost.
For instance, if you have a life insurance plan without any optional riders, and if you are diagnosed with a critical illness during the policy term, you may not have any coverage for this contingency in your base plan. But with an optional add-on rider like the critical illness benefit rider, you will receive financial payouts from your policy that can help you meet the cost of treating the critical illness.
By paying just a nominal additional premium for the riders of your choice, you can extend the coverage offered by your life insurance plan significantly, thanks to these optional riders.
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What are the benefits of whole life insurance?
A whole life insurance plan, as the name indicates, offers coverage till the policyholder reaches the age of 99 or 100. The main advantage of a whole life insurance policy is that the policyholder will be covered throughout their life. This means that if they pass away at any point before the age of 99 or 100, as the case may be, their nominees will receive the guaranteed sum assured under the plan.
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What happens if you fail to pay life insurance premiums?
If you do not pay your life insurance premiums as and when they are due, the grace period will begin. This period is generally around 30 days for annual, half yearly or quarterly premium modes and around 15 days for monthly premium plans. In case you manage to pay the premium within the grace period, your policy will continue to remain active. However, if you do not pay your life insurance premiums even during the grace period, the policy will lapse, and the benefits under your life insurance plan will no longer be applicable. You can revive your lapsed policy within a specific period post the grace period, by paying some additional charges, as applicable for different plans.
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What does a life insurance company do with the premiums?
The premiums paid for traditional investment policies like term insurance and endowment plans are invested by insurance providers in assets like government securities, corporate bonds and even in equity as per the product. Companies have to follow the IRDAI stipulated regulations while investing the premiums. In case of Unit Linked Insurance Plans, the premiums are invested in ULIP funds chosen by the policyholder.
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What happens to your insurance policy when you die?
If you have a life insurance policy, and if you pass away during the policy term, your nominee will have to file a claim with the insurance provider. Once the claim is verified and approved, the insurance company will pay the death benefits that are due under the plan to your nominee, as per the policy terms & conditions and the policy will terminate.
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What factors determine life insurance premiums?
In most Life insurance plans, premiums are calculated based on a number of different factors such as the age of the applicant, their gender, their lifestyle habits, their occupation and their health history.
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What are the various charges in a life insurance policy?
ULIP life insurance plans come with various charges over the course of the policy term. Some of the common costs associated with life insurance include premium allocation charge, policy administration charge, mortality charges and surrender charges.
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What should I keep in mind while buying a child plan?
A child plan is a kind of life insurance plan that helps you meet the costs of the major life goals in your children’s lives, such as their education and their wedding. Before you buy a child insurance plan, here are some things to keep in mind -
- The policy term must align with the investment horizon of your life goals
- The maturity payout should be sufficient to meet the cost of your life goals
- The plan may have a premium waiver benefit, so your children are not inconvenienced in case something happens to you
- You should factor in inflation when you compute the cost of your child’s education or wedding
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What is the minimum amount of life insurance you need?
The amount of life insurance you need depends on a number of factors. Here are some things you should consider before deciding on the amount of coverage you need to buy.
- Your current total annual expenses
- Inflation
- The cost of the major life goals on your wish list
- The cost of the life goals of your dependents
- Any liabilities and debts you have in your name
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What's the best type of life insurance?
There are different types of life insurance plans available in the market today. It is not easy to classify any one of these as the best type of life insurance. Each kind of cover comes with its own advantages. Choose a plan which best suits your life goals and financial requirement. For example, if you are looking for a pure life insurance then Term Plan or Whole Life plan can work you. However, if your aim is to grow your savings, you can opt for plans like ULIPs that not only offer life cover but also market-linked wealth creation through market-linked returns.
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What makes endowment plans the preferred savings tool for many people?
An endowment plan, also known as a savings plan, gives you the benefit of insurance along with guaranteed savings. In some endowment plans you can also get additional benefits or what is called as bonus, if declared by the insurance provider
If you survive the policy term, your insurance provider will pay the guaranteed benefits as per the terms and conditions of the plan along with bonus (if applicable). You can then make use of these payouts to meet any life goals you may have at that stage in life, such as your children’s education, their wedding or your retirement.
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What is not covered by life insurance?
Although the exact list of exclusions may differ slightly from one life insurance policy to another, there are some kinds of deaths that are not covered by most life covers. Here are some such common exclusions -
- Death by suicide during a specified period after policy purchase
- Exclusions as per riders chosen
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What is the difference between a limited premium and a regular premium insurance plan?
The premium for a life insurance plan can either be paid as a one-time lump sum amount (in case of single premium plans), or as periodic payments on a monthly, quarterly, semi-annual or annual basis. In limited premium insurance plans, your premium payment term is shorter than the policy term. But in regular premium plans, you have to pay your premiums throughout the policy term.
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What is a rule of thumb for how much life insurance you need?
The exact amount of life cover needed varies from one individual to another. The calculation is based on a number of factors like future milestones and goals, family expenses, retirement needs, debt repayments, your age and health.
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What are the things I should look for when selecting an insurance provider?
If you are planning to buy a life insurance plan, you need to look for the following things to select the suitable life insurance provider.
- Claim Settlement Ratio: This ratio indicates the percentage of claims settled by the insurer during the year. A higher claim settlement ratio (example over 90%) is preferable.
- Solvency Ratio: The solvency ratio indicates if the company’s cash flow is enough to meet its liabilities. A high solvency ratio is preferable.
- Customer reviews: You can also get a better idea of how the insurance provider operates and what their pros or cons are from the reviews of existing customers.
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What happens to my life insurance if I lose my job?
Losing your job, by itself, will not affect your individual life insurance policy. However, if you are unable to pay the premiums for your cover as per the due dates, and even during the grace period offered, your policy will lapse. However, if you have a group life insurance plan offered by your employer, the cover will be invalid if you lose your job.
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Can you avail a loan against your life insurance plan?
Not all life insurance policies offer the option of availing a loan against the plan. You can avail a loan against some kinds of life insurance plans. Generally, you can get a loan against a traditional endowment policy. However, you will generally not be able to avail a loan against term insurance or ULIP plans.
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What is underwriting in life insurance?
Underwriting is the process by which experts determine the amount of risk associated with an individual who has applied for a life insurance cover. They make use of several factors such as the age of the applicant, their gender, their mortality risk and other aspects to assess the acceptance of the policy and the premium to be charged to the customer
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What happens if the insured person commits suicide within six months of buying the policy?
Generally, death due to suicide within one year or so of buying the policy is not covered in all life insurance plans. So, if the insured person commits suicide within six months of buying the policy, his/her family may not be able to get the full sum assured. The insurer may just provide a certain percentage of the premiums paid or the surrender value as on the date of death, provided the policy is in force.
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What happens to a life insurance policy if the policyholder outlives the policy term?
If you have purchased a term insurance plan, no payouts are made if you outlive the policy term. But if you have an endowment plan or a Unit Linked Insurance Plan, you will receive maturity benefits from your policy if you outlive the policy term. In case of endowment plans, you will receive the guaranteed maturity benefits along with any bonus (if applicable). In ULIPs, you will receive your fund value at maturity.
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What type of life insurance do you need?
The type of life insurance you need depends on your individual requirements and your family’s needs and goals. Here is a preview of what type of life insurance may be suitable for different kinds of individuals.
- Term life insurance plans: Ideally suited for people who want a significant life cover at affordable premiums
- Endowment plans: Ideally suited for individuals who are looking for savings coupled with a life cover
- Unit Linked Insurance Plans: Ideally suited for policyholders who want the benefit of insurance and market linked returns in one policy
- Retirement Plans: Ideally suited for retired people who wish to set up a source of alternative income
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How to pay life insurance premiums?
You can pay your life insurance premiums online, via different payment channels such as internet banking, debit or credit cards, UPI or even mobile wallets. If you prefer to pay your life insurance premiums offline, at any of the Bajaj Allianz branches, you can do so via a Cheque,Demand Draft, Credit/Debit Card, Bank Transfer (NEFT/RTGS) or QR Code. The modes of payment accepted may vary from one insurance provider to another. So, before you make a payment, check the accepted payment modes and choose an option accordingly. Alternatively, you may register for Autopayment facility and ensure you pay your premiums in a hassle free manner without missing premium due dates.
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How should I decide the number of years for which to pay life insurance premiums?
The premium payment tenure is an important parameter to choose before you buy your policy. Here are some scenarios in which different kinds of premium payment types make sense:
- Single premium plan: If you have a lump sum amount of money or if your source of income is not reliable
- Limited premium plan: If you have a limited career span, if you are closer to retirement, or if your income fluctuates a lot
- Regular premium plan: If you have a reliable source of income, if you want extended tax benefits across several years, or if you are disciplined when it comes to premium payments
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How can my nominee register a claim?
In case of the policyholder’s demise during the policy term, the nominee can register a claim on the insurance provider’s website or by submitting the claim form and other required documents at the insurance provider’s branch office.
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When should you buy term insurance?
You may consider buying your term insurance plan when you are young and healthy. This is because your mortality risk is lower when you are young. So, the life insurance premiums are also lower. In addition to this, buying term insurance when you are young allows you to ensure that your family is protected right from the time you start earning. This way, you can protect the financial future of your family in advance.
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Why should you consider life stage benefits when choosing a term plan?
Your financial needs are not fixed across your entire lifespan. As you move from one life stage to the next, you may have different goals and requirements. For instance, your financial needs when you are in your 20s and single may be limited to meeting your everyday expenses and repaying your student loan, if any. But in your 30s, if you are married and have children, your growing needs will include taking care of your kids, paying for their education, repaying your home loan if any, and so on. A term plan that offers life stage benefits makes it possible for your insurance cover to adapt to these changing needs. It ensures that you are not underinsured as you grow older.
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Why do I need a cancer cover?
A cancer cover is a kind of critical illness cover that offers financial benefits in case the policyholder is diagnosed with any kind of cancer. One can opt for a standalone cancer cover or a critical illness rider which can also cover cancer. It is an essential financial product because the rates and the incidents of cancer is on a rise. So, in case of a cancer diagnosis, a cancer cover ensures that the patient can opt for the quality medical care without worrying about the cost of the treatment.
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Why is the claim settlement ratio important while choosing a life insurance provider?
The claim settlement ratio is a number that tells you the percentage of claims an insurance provider settled within a given period of time. It is typically calculated on an annual basis. The formula for this ratio is as follows -
Claim settlement ratio = (Total claims settled during the year ÷ Total claims received during the year) x 100
This number is important because it gives you more clarity on how credible the insurance provider is, and what proportion of their claims remain unsettled. A higher claim settlement ratio is considered to be good for a policyholder.
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Is life insurance needed after the age of 60?
Life insurance may be needed after the age of 60 in the following scenarios -
- If you are still an earning member of your family
- If you have family members who are financially dependent on you
- If you have some unpaid debts in your name
- If your demise will lead to any kind of financial stress for your loved ones
~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.
^Conditions Apply – The Guaranteed benefits are dependent on policy term, premium payment term availed along with other variable factors. For more details, please refer to sales brochure (also available on the Website of Bajaj Allianz).
1Individual claim settlement ratio FY- 2021-2022
%95.49% of non-investigative individual claims approved in one working day for FY 2021-22. 1 day is counted from date of intimation of claim before 3 PM on a working day (excluding Non-NAV days for ULIP) at Bajaj Allianz Life offices.
2Individual and group
**Solvency ratio 581% as at 31 March 2022 against IRDAI mandated 150%.
*Bonus depends on company performance and bonus (if any) will be declared by the company yearly
$For details refer to press release published by CARE
SMS Service
Dear Customer,
To get SMS updates on your policy - now you can refer to our glossary of pull sms services from the table:
| GLOSSARY - PULL SMS TABLE! | |||
|---|---|---|---|
| No. | Service | Type Keyword | Send To |
| 1 | For Callback for service related queries | SUPPORT<space>POLICY NO | 8108222251 |
| 2 | For Callback for renewal premium payment related queries (From Registered Mobile Number) | RENEW<space>POLICY NO | |
| 3 | For Branch Address | BRANCH<space>PIN CODE | |
| 4 | For Callback for Reinvestment related queries (From Registered Mobile Number) | REINVESTMAT<space>POLICY NO | |
| 5 | For Fund Value of Policy (From Registered Mobile Number) | FV<space>POLICY NO | |
| 6 | For Account Statement (From Registered Mobile Number) | ACCSTMT<space>POLICY NO | |
| 7 | To Update Email Address (From Registered Mobile Number) | EREG<space>Unique ID*<space>DOB of policyholder in DDMMYYYY<space>email id | |
| 8 | For Callback for queries related to fund switching | FSWITCH<space>POLICY NO | |
| 9 | For IT Certificate (From Registered Mobile Number) | TAXCERT<space>POLICY NO | |
| 10 | For Claim status | CLAIM<space>POLICY NO | |
Disclaimer: By using above SMS services kindly note that you would be authorizing to receive call(s) / SMS from Bajaj Allianz Life Insurance Co. Ltd through its representatives on your tele-contact no with respect to the query for which you have requested call back even if it is registered under NCPR/NDNC registry with your telecom operator.
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