Life Insurance is defined as an agreement or contract between an insurance company and a policyholder. The insurance company promises to pay a lump sum amount of money in exchange for a premium, upon the policyholder’s unfortunate death or after a set period.. Insurance is the best defensive measure for financial stability. Even if you have a lot of savings put aside in a safe place, there can always be some kind of disaster that will drain all of your savings.
A life insurance policy is a scheme that offers guaranteed financial protection for a specific term against the death of the policyholder. The financial protection offered as the sum assured on death of the life assured is payable to the assigned beneficiary of the life insurance policy. The insurer pays out the promised benefit amount either on the death of the life assured (as mentioned earlier) or at the end of the policy term on the date of maturity.
Following is the list of best life insurance companies in India:
Established in 1956, Life Insurance Corporation of India (LIC) is the oldest and largest insurance company and boasts of a very large customer base. With a claim settlement ratio of 98.62% for the financial year 2020-21, LIC offers a wide range of insurance products catering to various needs of its customers. The claim payout of LIC is great and offers a hassle-free and quick claim experience. The high CSR ratio and the annual premium is an indicative of the quick settlement of death claims and its remarkable performance in the market. There are number of benefits offered by LIC such as the variety of products, easy claim procedure, dedicated customer support, and a simplified purchasing process. The company has a large distribution network comprising of 8 zonal offices, 2048 computerized branch offices, and 1381 satellite offices.
SBI Life, one of the most trusted insurers in India, was incorporated in 2000 and is registered with the IRDAI in 2001. It is a collaboration between India’s largest bank, State Bank of India, and BNP Paribas Cardif. Serving millions of customers across the nation, the diverse range of products offered by SBI Life caters to individuals as well as a group of customers by pension, protection, health, and savings solutions. The claim settlement ratio (CSR) for FY 2020-21 is 93.09%, which indicates the fast claim settlements. The company also offers an easy and convenient way to file a claim through offline as well as online mode. Apart from high CSR, SBI Life Insurance offers various benefits including financial protection to family, hassle-free claim settlement process, flexible premium and payout options, and tax savings benefit as per prevailing laws of ITA, 1961. Another distinguishing feature is that the insurer operates across India through its 947 offices, 18,498 employees, and more than 29000 partner branches.
ICICI Prudential Life Insurance Company Ltd. is supported by ICICI Bank Ltd and Prudential Corporation Holdings Ltd. The company commenced its operations in the financial year 2001. With a claim settlement of 97.90% in FY 2020-21, it has constantly been amongst the top insurers in the Indian insurance industry. The company offers one day of death claim settlement option. To provide comprehensive protection, the insurer offers a wide range of insurance products to meet different customer needs including term insurance, unit-linked plans, retirement, savings, and protection plans. ICICI Prudential Life Insurance has implemented several initiatives to offer cost-effective products, consistent performance of a fund, superior quality service, and an easy, hassle-free claim settlement process to their customers.
Max Life Insurance Company Ltd, founded in the year 2000, is a collaboration between Max Financial Services Ltd. and Axis Bank Limited. It is one of the leading life insurance companies that offer a range of term insurance, participating and non-participating, linked, annuity, retirement, savings, protection, child, and growth plans. With a Claim settlement ratio of 99.35% and a claim paid percentage of 99.35% in FY 2020-21, the company is consistently making the claim process quick and hassle-free for your loved ones. Max Life Insurance has established a PAN India presence and its products are available across 1453 locations. The company offers tax-saving benefits, a variety of life insurance plans to suit different customers’ needs, different premium payment options, and large coverage at low premium rates.
HDFC Life Insurance Company Limited is a collaboration between HDFC Limited, the leading housing finance institution of India, and abrdn plc, a global investment company. Founded in 2000, HDFC Life is a popular long-term insurer in India, offering an extensive range of individual as well as group insurance solutions that meet several customer requirements such as pension, protection, savings, annuity, investment, and health. HDFC Life benefits its customers from its overall presence across the nation with 372 branches and various tie-ups and partnerships. The company offers a simple and hassle-free process of claiming insurance benefits and also provides a facility to settle death claims in 1 day. The claim settlement ratio of HDFC Life Insurance is 98.01% in FY 2020-21, which indicates the quick death claim settlements and reliability of the insurer towards its customers.
IndiaFirst life insurance company, headquartered in Mumbai, is a joint scheme between Andhra Bank (now called Union Bank of India), legal & general and Bank of Baroda., IndiaFirst Life Insurance with a paid-up share capital of Rs. 663 Cr., is one of the youngest life insurers in India. The company offers an extensive range of insurance products ranging from term plans to savings plans which can be purchased as per the financial needs. The main benefits of India First life insurance plans are their easy-to-understand insurance products at low premium rates, dedicated customer support, tax-saving benefits, availability of online plans and offline plans. The company offers a simplified claim settlement process that allows the nominee to file and track their claims easily. The CSR achieved in FY 2020-21 is 96.81% for individual death claims.
Kotak Mahindra Life Insurance Company Limited, established in 2001, is one of the leading insurance providers in India, covering over 34 million lives across the nation. It is a 100% owned subsidiary of Kotak Mahindra Bank Ltd., offering a diverse range of insurance solutions, including annuity, group, protection, retirement, and protection cum savings plans. The claim settlement ratio of Kotak Mahindra Life is 98.50% in the financial year 2020-21, representing the fast settlement of death claims. There are number of benefits involved with buying Kotak life insurance plans are quick claim settlement, transparency in their services, and high customer empathy. Apart from this, it also offers a 24X7 service option to provide their customers with all the information about their queries.
Exide Life Insurance Company Ltd., a profitable and established life insurer started its operations in 2001-02. The company is headquartered in Bengaluru and is 100 % owned by HDFC Life. Exide life insurance focuses on providing long-term protection and savings policies. It provides plans in several, verticals such as savings and investment, retirement planning, and life insurance coverage. Additionally, Exide Life settled over 98.54% of the claims filed in the year 2020-21. Along with easy and quick claim settlement, the company also offers online services, mobile applications, online payment options, and tax benefits.
Tata AIA Life Insurance Company Ltd. is a joint endeavor, formed by Tata Sons private limited and AIA Group Ltd. With a claim settlement ratio (CSR) of 98.02% for individual claims, Tata AIA is one of the most popular insurers which offers a comprehensive range of insurance products from wealthy solution plans to savings plans to protection plans. The company offers a simple and hassle-free claim settlement process through online as well as offline mode. Apart from easy claim experience, one can also avail of tax benefits under sections 80C and 10(10D) of the Income Tax Act, 1961. There are other benefits also that you can receive under Tata AIA Life Insurance plans such as 24X7 customer service, bonuses, and loyalty additions to increase savings, flexibility in choosing policy terms, and premium payment frequency.
The perks of buying a life insurance policy are beyond protecting the policyholder's family in tough times. Undoubtedly, it is a necessity for a breadwinner to safeguard their dependents in case of their unfortunate and untimely demise, accident or physical disabilities that lead to a loss of income. Having said that, there is a long list of other benefits that make it a must-have.
Sadly, most people are not aware of the many benefits offered by a life plan. All they care about are the death and disability benefits. However, there are plenty of other benefits offered by life policies such as maturity benefits, tax benefits etc.
Let's take a look at the benefits:
Till date, many people don't know that life policies can also be used as loan collateral. Based on the type of the life insurance policy and the surrender value, the policyholder can opt for a loan from a bank or NBFC (Non-Banking Financial Company) as per applicable terms and conditions. Loan Amount: Generally, the loan amount is a percentage of the surrender value of the life policy and it can go up to 90%. There are few companies that only allow for a loan up to 50 percent of the total premium amount paid by the policyholder.
Following is the list of best life insurance companies in India:
Almost every life insurer offers various payment periodicities to its policyholders- annual, half-yearly, quarterly or monthly mode.
If a policyholder chooses to pay the policy premium on an annual basis, the company can use it for investment purposes that automatically means more profits and benefits for the company.
Once a policyholder chooses the payment periodicity, this discount is often already included in the premium rate charged by the life insurer.
Following is the list of best life insurance companies in India:
Most individuals are unaware of the online payment benefit (the payment mode chosen by an individual drastically affects the premium of the policy). As a matter of fact, an company's administrative costs considerably go down when an individual opts to pay his premiums online. This is because there is no paperwork-related cost involved. Also, the life insurer is able to save a significant amount on the commission, which they pay to the agents for offline life insurance buying and renewing.
Please Note- This discount varies from company to company.
There are some life insurers that provide an option for policyholders who own a business. In the case of a policyholder's demise, their business partners can purchase the policyholder’s share without any hassles. In this scenario, the business partner will simply have to sign an agreement with the life insurer and the pay-out received after selling the policyholder's share will be given to their dependents.
However, it's important to understand that the nominee or the dependents of the policyholder won’t get a stake in the company.
For paying a life policy premium, a policyholder is eligible for a tax rebate under Section 80C of the Income Tax Act 1961. Irrespective for oneself, their spouse or their children, the premium paid for parents and in-laws is exempted.
This benefit is offered by all the life insurers - be it private sector life insurers or public sector life insurers.
Additionally, the maturity benefit of life policies also qualifies for tax deductions under Section 10 (10D) of the Income Tax Act, 1961.
Here are some basic steps you should follow to choose the right kind of policy for yourself:
The market has many insurance products such as the term plans , endowment plans, money back plans and ULIPS’. The tax saving instruments is also opulent and people take insurance for Rs 25 lakh, Rs 1 crore and so on. However, simply picking a random figure is not the way to buy an insurance policy.
Primarily, it depends upon the age of the person, the number of dependents, liabilities, and so forth. Let us just assume that a person falls between the age bracket of 18-24 years of age and is single and unmarried. This means that he does not have many responsibilities. The financial liability could be a loan or his parents depending upon him. Now under such a situation, a small insurance plan would be bought. In case the person has a good source of income, then he could also opt for large cover as the liabilities will increase once married and there will be additional responsibilities upon the shoulders.
Now if a person falls between the age bracket of 24-33 years of age then ideally the person will be married and he also needs to protect the interest of his life partner. Such a person should buy the life insurance plan immediately and not delay any further. The life insurance cover will differ across various stages of life.
The life insurance cover should be such that it covers all outstanding liabilities provides money to your spouse and covers the expenses of children education, marriage, etc. When you choose the cover do calculate the yearly family expenses and your liabilities as well. Now multiply the sum with the number of years you are looking forward to supporting the family.
The life insurance cover should be enough at any point in time to take care of the family today and tomorrow.
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