• Accident: An unexpected event that results in injury or damage to the insured person.
• Age limit: The minimum and maximum ages specified by the insurer for applicants. Coverage is not provided for those below or above the stated age limits, and policies will not be renewed once the maximum age is reached.
• Agent: A licensed individual who acts as a representative of the insurance company, assisting clients in purchasing and managing their insurance policies.
• Application/Proposal form: The initial form required to apply for a policy. Typically completed with the assistance of an insurance representative, this form captures essential details provided by the applicant.
• Assignment: A legal transfer of a policyholder's rights and interests to another person or entity, either conditionally or absolutely, through endorsement or a separate document.
• Policyholder: The individual who owns the insurance policy and pays the premiums. This person may or may not be the insured.
• Life assured: The individual whose life is covered under the policy. If the life assured passes away during the policy term, the death benefit is paid.
• Sum assured: The amount the insurer agrees to pay upon the insured’s death or the occurrence of a covered event. This amount is selected when purchasing the policy.
• Policy tenure: The duration of the policy during which the insurance company provides coverage. It can range from a few years to a lifetime, depending on the type of policy.
• Premium: The regular payment made by the policyholder to keep the insurance coverage active. Failure to pay within the grace period may result in the termination of the policy.
• Premium payment mode: Policyholders may choose to pay premiums in different ways: regularly over the entire policy term, for a limited number of years, or as a one-time lump-sum payment.
• Maturity age: The age at which the policy term ends. For example, a policyholder may choose to be covered until age 65, after which the policy matures.
• Riders: Additional features or benefits added to a base insurance policy for extra coverage. Common riders include coverage for critical illness, accidental death, or permanent disability. The following are some of the riders:
  • Critical illness
  • Benefit on permanent disability or total disability due to an accident
  • Benefit on accidental death
  • Premium waiver
  • Hospital cash
• Death benefit: The total amount payable to the nominee upon the insured’s death during the policy term. This may include the sum assured and any additional benefits from riders.
• Maturity/Survival benefit: The amount paid if the policyholder survives beyond the policy term. In some policies, this is also known as the maturity benefit.
• Free-look period: A window (usually 15–30 days) after purchasing the policy during which the policyholder can cancel the policy and receive a refund, minus specific costs like medical and processing fees.
• Grace period: The additional time given to pay overdue premiums without penalty. This period varies depending on the payment schedule (e.g., 15 days for monthly payments, 30 days for annual payments).
• Surrender value: The amount paid if a policy is terminated before its maturity. Not all policies offer a surrender value, so it's important to check this before purchasing.
• Paid-up-value: A reduced sum assured paid if the policyholder discontinues premium payments after a certain period. The sum is adjusted proportionately to the premiums already paid.
• Underwriters: Professionals who evaluate the risk of insuring a person or entity and play a crucial role in approving or rejecting a policy application and settling claims.
• Revival period: If a policy lapses due to non-payment of premiums, the revival period is the timeframe in which the policyholder can reactivate the policy, subject to conditions set by the insurer.
• Exclusions: Risks or events not covered under the policy, such as certain natural disasters or riots. These exclusions are specified in the policy documents.
• Nominee: The person designated to receive the death benefit upon the policyholder's death. Nominees can be family members like a spouse, children, or parents.
• Claim process: The steps the nominee must follow to receive the death benefit after the insured's death, as outlined in the policy.
• Tax benefit: Life insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum of ₹1.5 lakh.

Selecting the right life insurance plan involves a few key steps to ensure it meets your specific needs.

• Assess Your Needs: Choose a policy that aligns with your needs. Evaluate the number of dependents, your income sources, and monthly obligations. List your financial goals, such as funding your children's education, planning for retirement, or purchasing a home, and select a plan that fits these objectives.
• Consult with an Advisor: Insurance advisors can provide valuable guidance. They will analyze your income, expenses, dependents, assets, and liabilities to recommend an appropriate coverage amount. They can help you choose from various options like term plans, unit-linked plans, endowment plans, or a combination, ensuring you get the best value for your investment.
• Compare Options: With numerous insurance providers offering diverse benefits and premium levels, it’s crucial to compare different products. Look for plans that provide maximum benefits at a reasonable cost.

Here's a comparison between Term Life and Whole Life Insurance to help you decide which is better for you:

Term Life Insurance

Whole Life Insurance

Ideal for individuals seeking coverage for a specific period. Provides only a death benefit with no maturity benefit. Offers additional riders for critical illness, permanent disability due to accidents, hospital cash, etc. Protects dependents from financial liabilities. High returns with low investment. Premiums are paid only for a limited term, not until maturity.

Best for those who want both protection and a maturity benefit. Suitable for building a future corpus. Covers the insured for their entire lifetime. Policyholders can surrender the policy for a lump sum if they wish to discontinue. No provision for riders. Provides a death benefit but does not protect against debts. Offers both death and maturity benefits. Premiums are higher and paid for a specified term. Allows for loans against the policy when needed.

• Term Insurance: Term Insurance provides coverage for a specified period without any maturity benefits. It offers a death benefit only, with no return if the policyholder outlives the term. This plan is recommended if you are seeking high returns for a low investment, with options for riders like critical illness or disability. You can choose to receive the death benefit as a lump sum, monthly payments, or a combination.
• Unit-Linked Plans: This plan allocates part of the premium for insurance and part for investment in bonds, equities, debts, or market funds. You can select the investment option based on your risk tolerance.
• Endowment Plan: A traditional plan where the premium is split between risk coverage and investment. It provides both maturity and death benefits, with periodic bonuses paid either at maturity or with the death benefit. It involves lower risk compared to other investment products.
• Money-Back Plan: This plan offers periodic payouts as a percentage of the sum assured, along with bonuses declared by the insurance company. It's ideal for short-term financial goals and provides regular income throughout the policy term.
• Whole Life Insurance: Offers coverage for the insured's entire life, sometimes extending up to 100 years. Provides both death benefits and maturity benefits if the insured survives beyond 100 years. Allows partial withdrawals after the premium payment term and has higher premiums compared to term plans.
• Child Plan: Designed to build a corpus fund for your child's future needs, such as education or marriage. Offers annual or lump sum payments upon reaching 18 years. Some plans waive premiums if the parent passes away, keeping the policy active until maturity.
• Retirement Plan: Provides financial stability during retirement, with a lump sum or annual installments paid upon reaching age 60. In case of the insured's death, the nominee receives a higher death benefit than the coverage value, and if the insured outlives the policy, the fund value is available for annuity.

The following are the top Life Insurance Companies in India:

• Life Insurance Corporation of India
• ICICI Prudential Life Insurance
• SBI Life Insurance
• Aditya Birla Life Insurance
• Bajaj Allianz Life Insurance
• Max Life Insurance
• Reliance Life Insurance
• HDFC Standard Life Insurance
• Birla Sun Life Insurance

Term insurance differs from traditional life insurance in that it does not offer maturity benefits. Traditional life insurance pays out the sum assured along with any accrued bonuses upon maturity. In contrast, term insurance provides only a death benefit, which means the sum assured is paid to the nominee in the event of the policyholder's death. If you wish to receive a maturity benefit with term insurance, you can opt for a Term Return of Premium (TROP) plan. Under this plan, if the policyholder survives the policy term, the total premiums paid during the term will be refunded. However, unlike traditional plans, there is no additional maturity benefit or sum assured paid out; only the premiums paid are returned.

You can pay your life insurance premiums through the following methods:

• By cheque or draft
• Through NEFT/RTGS
• Online via the insurance company's official website
• Through the insurance company's Bill Desk

Before purchasing an insurance policy, review the following aspects:

• Details of premiums to be paid
• Lock-in period
• Policy revival conditions
• Implications of premium defaults
• Applicable charges
• Terms and conditions of the policy
• Guaranteed benefits

Accurate disclosures in the insurance proposal are essential. Any incorrect or false information could lead to a claim being denied.

If you stop paying premiums after a certain period, the insurance company may offer a paid-up value option. This allows you to reduce the sum assured proportionate to the premiums you've already paid. Any associated benefits will also be adjusted accordingly. This type of policy is known as a reduced paid-up value policy.
Paid-Up Value = (Number of Premiums Paid / Number of Premiums Payable) x Sum Assured

The beneficiary is the individual designated to receive the policy benefits upon the policyholder's death.

If the premium is not paid by the due date, a grace period is allowed: 15 days for monthly premiums and 30 days for annual premiums. If payment is not made within this grace period, the policy may lapse or be terminated.

The free-look period is a timeframe during which you can review the policy terms and return it if you are dissatisfied. This period typically ranges from 15 to 30 days from the policy purchase date. When returning the policy, expenses for medical check-ups and stamp duty will be deducted, and the remaining premium will be refunded.

Premiums paid for life insurance policies are eligible for tax benefits under Section 80C of the Income Tax Act, 1961.