New Insurance Care

Q . Why do we need insurance ?

1. Insurance acts as a financial back-up at the time of emergency

None of us know and can understand what the future holds for us and for over loved one. Unexpected emergencies and situations such as injury, accidents, illness, and even death can leave you and your loved one facing pain tremendous emotional strain. Insurance plans can help you and your family emotionally and financially strong so that you can focus on rebuilding your life which otherwise may be ruined. You can see several example of these situations in your  small local area . Not Noticing these issues doesnt mean that these are not happening.

2. Insurance makes retirement secure

A retirement life insurance policy is a type of insurance plan that helps you to save part of your income over a long-term period and makes you financially secure and safe post-retirement. The accumulated income will be given back to the insured person as a pension, which you can draw for your whole life. It looks very easy but in young life we all do this mistake and give minimum attention to saving.

3. Insurance helps in securing future

Your present life might be stable and secure with a steady income flow that meets your and the family’s needs. But life is uncertain and go in any direction. Some unforeseen crises can shake life and make you miserable. Without you, will your family be able to meet the requirements in the future? With the term insurance, you will be securing your self and your family to help them receive a lump sum amount to help them take care of their needs and choices.

4. Insurance encourages savings

Not only insurance help you but also Several life insurance plans, such as a money-back policy, help create regular savings by allocating some funds in the form of a premium every year. Unlike a basic life insurance plan that gives money back at the time of maturity, a money-back policy pays an amount to the policyholder after a few years of investing in the policy.

5. Insurance gives peace of mind

Along with financial security, insurance gives you peace of mind as you always feel secure about you and your family.  No Gift is as valuable as Insurance policy. You can make your daughter secure for whole life, no matter what changes or challanges life bring.

Q . How can an insurance company provide a large amount of settlement to the policyholder at an emergency time or on maturity time ?

When we purchase an insurance product, we pay premiums, and some pay a fixed amount of deductible to the insurance company. The insurance company collects the amount for all the policyholders and invests the fund securely and safely to accumulate over time and pay out the policyholder when they claim their insurance.

Q . Which insurance is mandated to buy in India?

Third-party motor car insurance is mandatory and compulsary to buy in India.

Q.Why is term plan the best?

Final Thought

While no one can predict the future and prevent any unexpected things from happening, all we can do is get some protection cover. Needless to say that insurance plays a big role in our life by helping to provide financial security and safety to you and your loved one at the time of emergency. Investing in insurance is not merely a tax-saving option, but making small investments over time will offer you security in advance and peace of mind and present joyful life.

Most of us always stress and argument why we need insurance anyway or quit the idea of buying an insurance product because it requires a considerable amount of money. But instead, one needs to look at the bigger and broad picture to safeguard life. Insurance premiums could be expensive but not having the  insurance could be far more costly and devastating impact on your life.

Q: What is Money Back insurance Policy?
Ans: Money back policy is a type of traditional life insurance plan. It provides the dual benefit of insurance and investment. It offers the lump sum assured at the maturity of the policy or in case of early death of the policy holder.
Q: What are the features of money back Insurance policy?
Ans: The key features of money back insurance policy are as follows: Guaranteed returns: Since money back policy provides insurance cover along with safe investment option, there are guaranteed returns from this plan. Income on the maturity: Like traditional life insurance, money back insurance policy provides the sum assured at the end of the policy term Income during lifetime: Money back policy ensures that the insured party receives a sum every few years (usually 5 years) after the completion of the policy tenure. Income on death: In case of the policy holder’s death the beneficiary will receive the sum assured as death benefit. Availability of add-ons: The policy holder can add on riders with the basic policy. Money back insurance policy riders include term rider, personal accident rider, disability rider, critical illness rider etc. Bonus amounts: There are two types of bonus amounts with this policy , namely, reversionary bonus and additional bonus.
Q: What are the riders available with Money Back Policy?
Ans: The riders available of money back policy are as follows: Critical Illness rider: This rider offers a guaranteed sum if the Insured is diagnosed with some critical illness including major organ failure, coronary diseases, different types of cancer etc. Accident rider: In case the policy holder’s unexpected death due to accident the nominee receives a sum assured Disability benefit rider: This type is rider helps in case the policy holder is left paralyzed due to some major accident in his life. Hospital cash rider: The policy holder receives daily cash for hospital expenses in case of any medical emergencies. Term rider: This rider is a kind of death benefit. It is the sum assured handed over to the nominee only in case of premature death of the policy holder before the completion of the policy tenure. Waiver of premium rider: This rider prevents the policy from getting lapsed in case the policy holder fails to pay regular premiums due to some reason. Accelerated sum assured rider: This is a type of critical illness rider. This rider offers the sum assured to the policy holder immediately if a critical illness is diagnosed. The policy holder doesn’t have to pay the premiums any longer. The policy terminates but the total sum assured is received.
Q: since Money back policy involves investment, is it risky?
Ans: All investment products involve some amount of risk. Only Money Back Policy is a type of endowment plan that is less risky and guarantees good return.
Q: What is the tax benefit with this plan?
Ans: There are tax benefits with this plan. By opting for money back plan you can reduce your tax liability. If the maturity amount is more than five times the premium paid during policy tenure, the sum assured gets exempted from Income Tax deduction.
Q: Who is most suitable to buy Money Back policy?
Ans: Anyone who wants to make investment through low risk instruments, one who wants both wealth creation and life insurance, one who expects good returns from his investments, and also who wants to get paid during the term of the policy to meet different requirements in life, can buy Money back policy.
Q: What if I fail to pay my regular premiums?
Ans: If you fail to pay your premium on time the policy will enter Grace period. If you again fail to pay your due premium during this period your policy will be lapsed. But if you already have the Waiver of premium rider added to your basic policy, the policy will be saved from being lapsed.
Q: What is the premium payment frequency of Money Back plan?
Ans: There is no fixed premium Payment frequency of money back plan. The frequency is generally of quarterly, half yearly or yearly basis. However, it completely depends on the decision of the Insurance Company.
Q: What are the advantages of Money back policy?
Ans: Here are a few advantages of a money back insurance policy: Money back policy is the only insurance policy that provides the triple privilege of survival benefit, maturity benefit and insurance cover. It provides regular payouts during policy term. It is an insurance policy cum a long term investment plan with guaranteed returns It ensures regular income and long term savings It provides income Tax benefits It is less risky Death benefits are available with this plan A number of riders are also available with this plan

Here are the key ULIP terms that you must be familiar with:

Q. What is Fund Value
The fund value lets you know how much your investment is worth at any given time. You can calculate the amount the multiplying the number of units owned by the Net Asset Value (NAV) or monetary value of each unit.

Q. What is Sum Assured
The sum assured refers to the life insurance payout. The beneficiary receives the sum assured on the policyholder’s unfortunate demise during the policy term.

Q. What is Withdrawal (Partial)
ULIPs allow partial withdrawals from the collected corpus in certain circumstances after the lock-in period. The policyholder can withdraw a small amount from the fund to deal with certain financial situations.

Q. What is Fund Switch
A fund switch allows you, the investor, to make changes to your investment allocation as part of your plan. The number of funds allowed per year depends on your policy.

Whole Life Policy FAQs
How is Whole life insurance as an investment?
A. While whole life insurance mostly serves the purpose of providing protection, the Single Premium Whole Life Insurance policy is a particular kind of policy which offers the dual purpose of not only providing insurance cover but also acts as an investment.

Can I borrow against my Whole Life Insurance policy?
A. A whole life insurance policy not only provides cash value but also has no date of expiry, which enables the policy holder to easily borrow against their such a policy. For more details regarding borrowing against your whole life insurance policy, you can contact your insurer who can guide you better.

What is Death Benefit in a Whole Life Insurance Policy?
A. Death benefit is the annuity or pension which is paid to a beneficiary after the passing away of the life insured. The same concept is followed in whole life insurance policies where the beneficiary gets the amount of the life insurance policy as lump sum or through regular payments following the insured’s death.

Is Whole Life insurance an option for senior citizens?
A. Yes, whole life insurance is a viable option for senior citizens as this policy provides comprehensive cover and does not have any age limit attached under eligibility. Following the death of the insured, the beneficiary named in the policy will receive the payout / death benefit. Whole life insurance policies offer a number of useful benefits like tax exemptions, growth of cash value, permanent protection, uniform premium payments, cash access via loans and other withdrawal options.

Are early withdrawals allowed under whole life insurance policies?
A. Withdrawals from cash value may not be allowed under whole life insurance policies. However, you an check with your insurer for withdrawal provision under such a policy.

Are whole life insurance policies suitable to supplement post-retirement income?
A. Yes, whole life insurance policies are quite suitable to supplement one’s post-retirement income. The cash value of the policy can provide post-retirement income.

Q: What is an Endowment Policy?
Endowment policy is a type of Life insurance policy. It covers the life insured for a specific period of time. If the Life insured survives till the end of that specified period (maturity period), he will be paid the lump sum assured along with bonuses (if any) by the Insurance Company. If the Life insured dies within the maturity period the Insurance Company will pay the sum assured to the beneficiary.
Q: How endowment plan is different from Term insurance plan?
The main difference between an endowment plan and term insurance plan is as follows- In case of term insurance plans, a lump sum is paid to the beneficiary if the Life insured dies within the maturity period. If the death of the insured does not occur within the maturity period, no sum is payable by the Insurance Company. Whereas in case of endowment plans, if the insurer dies before the maturity date, the nominee will get lump sum assured by the insurance company. But if the life insured survives till the policy maturity period, he will be paid the sump assured along with the accrued bonus (if any).
Q: What are guaranteed in endowment plans and what are not?
The lump sum of money assured by the Insurer will be given to the Insured if he survives until the policy matures. If the insured dies early, that is before the policy maturity period, his beneficiaries will get the lump sum assured by the insurer. This is the only guaranteed part of the endowment policies that you will get the assured sum on the policy maturity date or before in case of early death of the insured. What is not guaranteed in the policy is the bonus. You will receive bonus or not depends on the number of years the policy was in force.
Q: What are the additional bonuses on endowment policy?
Bonus is the money paid additionally with assured sum by the Insurance Company to the life insured. There are mainly two types of additional bonuses on endowment policy : Reversionary bonus: This is the extra money that is paid additionally to the sum assured at the time of early death of maturity of the policy. Terminal bonuses: It is a discretional extra amount of money paid additionally on the maturity of the policy or the early death of the life insured.
Q: How to know whether I should buy endowment policy?
An endowment plan not only provides all the basic benefits of a life insurance plan but also some additional benefits like ‘double endowment’ , ‘educational endowment’ , ‘marriage endowment’ plans etc.. The policy holder is also allowed to add riders with the basis plan. But endowment plans can be a bit more expensive than any other traditional life insurance plans. Always read and understand the rules and regulations as well as the features and benefits of the policy thoroughly before buying a policy. So depending on your requirements and your financial capability you have to decide whether you should buy an endowment plan or not.
Q: Who needs an endowment plan?
Endowment plans give the triple benefit of life coverage, savings and wealth growth. So an endowment plan is appropriate for anyone of any age if he/she is looking for a policy which gives more than just life coverage.
Q: Is endowment policy good?
Endowment policies are a great investment option for individuals who want to save money in a disciplined way in order to fulfil the future financial needs. Along with the benefit of savings, it also provides life protection to the family of the insured in case of any eventuality.
Q: Should I invest endowment policy?
If you want to inculcate the habit of savings along with the benefit of insurance coverage, then the endowment plan is one of the best options of investment for you.
Q: How is an endowment policy taxed?
The premium paid towards the policy and the maturity proceeds are applicable for tax exemption under section 80C and 10(10D) of Income Tax Act. 1964.
Q: Do endowment policies payout on death?
Yes, in case of demise of the insured person, a lump-sum amount is paid as a death benefit to the beneficiary of the policy
Q: Can I receive bonus along with the assured sum after the policy matures?
Yes, the life insured can get bonus, provided the policy is run for a certain minimum period of time. So it is not guaranteed.