Recent occurrences have been eye-openers for everybody. But amongst all the learnings, one lesson that stood out was that we need to expect the unexpected and be prepared to embrace changes both big and small in our lives. While we can’t predict the future and know what changes can occur in the future, we can certainly prepare and protect financial future of ourselves and our loved ones through life insurance.
While purchasing life insurance, several questions pop in our mind. Our unfamiliarity with some life insurance terms is what mainly contributes to creating a lot of the confusion. Below we have simplified eight important life insurance terms for you.
Sum Assured is the amount that the insurance provider agrees to pay to the nominee or nominees on the unfortunate passing away of the life assured. The life cover amount is typically chosen by the policyholder based on the financial loss that would occur on the occurrence of such an event. The sum assured will be paid to the nominee if the policyholder dies during the policy tenure.
Maturity age defines the duration of the policy. E.g., if you are 30 years of age and opt for a term plan with the maturity age of 70 years, it means that the policy will cover you for 40 years.
Riders are additional paid features that help you to widen the scope of your base life insurance policy. Typically riders can be bought during the time of purchase of the policy or in some cases even later during policy anniversary/depending on T&C of policy bought. Different insurance policies provide different rider options. Some riders offered by Future Generali India Life Insurance Company are:
-Accidental Death Benefit Rider
-Accidental Total and Permanent Disability Benefit Rider
When purchasing a life insurance policy, the policyholder nominates a person or more to receive the death benefit. On the unfortunate passing away of the life insured, the nominee receives the death benefit. The main difference between Death Benefit and Sum Assured is that the Death Benefit can be sum assured or even higher than that.
Maturity Benefit is the amount paid to the policyholder when Life Assured survives through the policy term. The policy term is pre-decided by the policyholder at the time of purchasing the policy.
Sometimes we purchase a life insurance policy, but we still have some doubts about it. A Free-Look Period is a time-frame that allows the policyholder to glance through the terms and conditions of the policy and return it if he/she is not entirely convinced of it. However, the insurance company might deduct the expenses that were incurred on medical examination, stamp duty and providing life insurance cover and will refund the remaining premium. As per IRDAI, the Free-Look Period lasts 15-30 days after the policyholder receives the policy document.
In the case the policyholder is not able to continue the plan to the point of maturity of the policy, he/she can ask the insurance company to close the plan and the life insurance company might pay an amount to the policyholder depending on the terms and conditions of the policy. This amount is called the Surrender Value.
In some of the products offered by life insurance companies, in case of policy lapse due to non-payment of premiums, the policyholder still has the option to revive his/her policy. The revival period, however, must be done within a specific time frame. This time frame can differ from policy to policy.
Life insurance is not as complicated as it is made out to be. It is a financial tool that can offer tangible solutions to our financial woes. Want to know more about how you can protect the financial security and dreams of your family? Get in touch with our financial advisors here: https://life.futuregenerali.in/customer-service