Life Insurance Plans

_{1. Term Life Insurance Plan}

Term life insurance is a pure life insurance plan, which offers life cover at a nominal cost for a limited period. The low cost of financial safety ensured by a term insurance plan allows you to expand your umbrella beyond the risk of death.

You can customize the base term insurance plan by adding accidental disability and death, and critical illness benefits. Term insurance plans do not offer a maturity value if you survive the policy term. However, you may opt for the return of premium option, which would return all the premiums you have paid for the cover at expiry.

2. Unit Linked Insurance Plans

Unit-linked insurance plans or ULIPs are versatile investment plans from life insurance companies. These plans offer a life cover and also let you invest in funds with different risk levels. You can build your investment portfolio while availing all the tax benefits available with these types of life insurance policies.

ULIPs also provide you with options to manage your portfolio automatically. These life insurance plans are best if you want to multiply your wealth over a long investment period. This is one of the reasons you must use ULIPs into your retirement portfolio.

3. Saving Plans

Saving plans are also known as guaranteed life insurance plans, which guarantees the maturity value based on your investment amount. These plans also acts as a life insurance plan, which can help you enhance your family’s life cover umbrella every time you start investing in these plans.

The accompanying life cover is ideal as you should increase your cover when you start investing in a new financial goal. With these life insurance plans, you can be sure to achieve your financial goal irrespective of market performance. These plans are best if you want to leave a legacy for your children or grandchildren.

4. Child Insurance Plans

Child insurance plans or child education plans are a type of life insurance plan from life insurers. However, these plans are dedicated to meet the needs of a child’s higher education and marriage goals.

While you are building the corpus to meet your child’s future needs, you can also keep the investment protected from unforeseen events. This protection will allow your investment to continue in your absence and provide the intended financial support to your child upon maturity. Such plans also provide special riders that continue to offer protection to the child in case the parent passes away.

5. Retirement and Pension Plans

Retirement or pension plans are life insurance plans dedicated to providing you with a venue to save and then receive a pension. Your retirement plan has two important phases – accumulation and distribution. You go through the accumulation phase in your working years and build a huge retirement corpus. It is a type of savings and investment plan and the corpus generated is invested further to generate regular income.

This corpus will remain invested in a safe retirement and pension plan, which will also pay a regular sum of money to you as a pension. You can use different types of retirement and pension plans depending on your risk appetite and age.

6. Endowment Plans

An endowment policy is a combination of life insurance with savings plan. You can save regularly over a set length of time to build up a substantial corpus that you can enjoy when you reach retirement age. The Sum Assured will be paid out in a lump sum if the policyholder survives the policy period. An endowment policy can help you achieve financial goals such as paying for your children's school or marriage, buying a home, or even arranging your retirement. In case of unfortunate demise of life insured during the policy term, the benefit is paid to the nominee.

7. Money Back Plans

Money back plans are insurance Plans that offer guaranteed returns on the investments. If you are looking to buy a life insurance plan that offers life cover along with regular payouts, then you may consider buying a money back plan. These plans provide survival benefits after a few years from the start of the plan. The survival benefit will be paid out only if the policyholder is alive. However, irrespective of the Survival Benefits already paid, the entire Sum Assured is paid to the beneficiaries, if the policyholder passes away when the policy is in force.

8. Whole Life Insurance Plans

Whole life plans are a unique genre of life insurance plans. Whole life insurance plans continue till you attain 99 or 100 years of age. Depending on the plan, you can choose to pay the premiums till the age of 60 and continue the cover till the age of 99 or 100.

If you survive till this age, the plan will pay the benefit amount to you, else it goes to your family upon your natural death. You can also include a return of premium in this plan. It will allow you to receive a tax-free lump-sum amount at your retirement.

9. Health Insurance Plans

Life insurers offer defined benefit health insurance plans, where the benefit payment depends only upon the diagnosis of a covered health condition. The plan will pay a lump sum amount regardless of your actual expenditure on the treatment.

Life insurer’s health insurance plan usually covers diseases which can progress unpredictably and may not have a definite cure. For example, heart ailments, cancer, renal failure, etc.

These defined benefit health insurance plan helps you to handle your recovery costs and run the household smoothly within this time. These plans are also, pure protection plan like the term life insurance.

• Young and single people

   – It’s advisable to buy life insurance plan at an early stage because premiums offered by the insurance companies are relatively lower when you are young. You also have lesser responsibilities when you are unmarried. Besides, the chances of getting diseases increase as the person ages and so is the amount of premium asked by the insurance companies.

• Newly married people

   – Marriage comes with additional responsibilities, thus people who have just got married and started families need to get a life insurance plan to cover different risks in life. This is because when you get married and start a family, you have dependents to look after. Therefore, it’s advisable to buy a life insurance policy before you get married or when you are newly married as this will cost you less premium.

• Working couple with kids

   – A working couple having children should necessarily buy a life insurance policy. In case of the sudden death of one of the partners, a life insurance policy will leave the other partner in a much better position to manage family’s finances.

• Senior citizens or retired individual

   – Buying a life insurance policy is extremely important for senior citizens as this will help them live a relaxed and comfortable life post retirement. Some policies can also serve as a replacement for income to support them and their family, minimizing their future financial worries. Thus, getting a life insurance plan is one of the best ways to take care of them and make them and their loved ones feel financially secure.
  

Hence, keep these above-mentioned pointers in mind as this will help you decide whether buying a life insurance policy at your current stage is required or not.

Typically, any individual between the ages of 18 to 65 years can purchase a life insurance policy in India. However, in some cases, it may depend on the kind of insurance policy.

Greater Transparency

When you buy a life insurance plan online, you have the opportunity to assess and go through each benefits and features at your own pace. You can also check the exclusions and conditions of the policy with the available policy document.

You can clarify and verify your findings with the 24x7 customer service and regulators before purchase.

Ease of Purchase

The online purchase process of life insurance policies is a simple step by step process. You can pause and save your application midway to complete it later. If you are eligible, you can even avoid a visit to a clinic for a medical check-up, which will be completed either online or on the telephone.

Paperless Process

The entire application process for life insurance policies is paperless, and you do not need to submit or send a paper document anywhere. You need only scanned copies of your documents.

Safer

With a completely online application process, you can be sure to deny unauthorized access to your documents to anyone. As you upload all the documents directly to the secured servers of the insurer.

Easy Management

Online life insurance policies are easy to manage. If you have more than one life insurance plans, you can use electronic insurance account (EIA) to manage all of them from a single portal. EIA also helps you to appoint an administrator for the life insurance policies in your absence. The administrator can only file the claims for the policies and cannot change nomination or other details.

Life insurance companies require certain documents when you apply for a life insurance policy. These documents can be directly uploaded onto the website in case of online policy application, or can be submitted to a policy manager in case of offline purchases. Apart from these, you will be needed to fill in information such as personal details, lifestyle related details, health details, etc.

Different life insurance plans have been designed to serve different financial needs. Using the right plan to serve your goal will ensure you can get the most out of it. Also, apart from buying the best life insurance plan, you should look for the right life insurer.

Here’s a step-by-step process you can follow to select the best life insurance plan from the best life insurance providers:

Step 1: Understand Your Needs

The kind of life insurance plan you should buy depends on the financial goal you want it to fulfil. For example, if you are looking for long-term protection you will need a term insurance plan. However, if you want to save for your retirement you can use a ULIP or savings plan.

You should also define your need specifically in numbers and type of life insurance plan. For example:

Protection goal: You need 10 to 15 times your annual income as life cover (requires Term insurance plan)

Child’s higher education goal: Build a corpus of Rs. 40 lakhs in 20 years with pay out option in last four years (requires Child insurance plan or ULIP plan with Goal Protection Option)

Retirement goal: Save 20% of your income for retirement (requires ULIP plan, Guaranteed Savings Plan or Deferred Annuity plans)

Step 2: Select the Life Insurance Provider

You can look at multiple parameters to judge the performance of a life insurance provider. The most important ones are as follows:

Claim Settlement Ratio (CSR): This ratio shows the number of cases resolved by the insurer in a financial year out of the total received claims. A claim settlement ratio of 95% or above is considered good. Canara HSBC Life Insurance has reported a claim settlement ratio of 99.23%^ for the financial year 2023-24.

Online & Offline Presence: Presence is an important factor which defines how easily you or your family can approach the insurer in an emergency. To judge this factor, you can connect with the insurer online via chat, e-mail or call, while the number of branches across the country would define the offline presence.

Quick Claim Settlement Conditions: With growing technological advantages, life insurers can settle claims faster nowadays. However, only the best offer to settle within one working day. For example, Canara HSBC Life Insurance has a fast claim settlement program, InstaPromise, to settle death claims within one working day for eligible policies.

Claim Settlement Process: One of the primary purposes of life insurance is to ensure a smooth life for your loved ones. So, you would want them to have it easy when it comes to benefitting from the life cover you provided. Much of it depends on the experience they have at the time of claim settlement. The best life insurers make sure to simplify and handhold the family at the time of death claims.

Solvency Ratio: Solvency ratio defines the insurer’s ability to pay the claim demand without hiccups. A solvency ratio of 2 or above is considered good for a life insurer. Otherwise, you can also check the credit rating for the insurer, which is a more comprehensive parameter to follow.

Persistency Ratio: Persistency ratio indicates how long investors stick with the insurer. 13th month and 61st-month persistency ratios are especially useful in assessing the investor engagement of life insurers.

Cost of Life Insurance: The premium you invest in a life insurance plan also consists of many expenses of the scheme. While you try to logically aim at the least cost, you should not forget the other end of the bargain – policy benefits. You should compare different policy features and benefits along with the cost and all other factors to secure the best deal.

Life is a journey filled with milestones, uncertainties, and responsibilities. Amidst the flow of these experiences, one question often arises: when is the right time to invest in a life insurance policy? Let us understand this with the following:

In your 20s	Twenties are the best time to invest in a comprehensive life insurance policy because you get several benefits such as, lower premiums, a bigger corpus, and of course, an early habit of saving. At this age, there is also a greater room for experiment with higher risk investments that can yield higher benefits. Some of the best life insurance options include ULIPs and Term Plans.
In your 30s	Most people start planning or have a family of their own by the time they enter their thirties. They experience major life transitions and financial security of their family and the futures of their children gain more importance. Life insurance policy must be now a part of your financial planning. One can opt for several life insurance options like plain term plan, ULIPs and child plans.
In your 40s	Forties is the time when buying the best life insurance plan becomes inevitable because this is when most people’s income contributes to their family’s income. There are responsibilities and dependents, medical expenses, and children’s education to take care of. Simple term plans or debt-oriented funds for insurance-cum-investment products work best. Plus, a retirement plan should be considered.
In your 50s	Isn’t it too late to get insured? Well, no. Many individuals may have outstanding debts and mortgage. Hence securing the mortgage is vital to ensure that the family gets to retain the assets even in absence of the life assured. Since, most people have settled and have large daily expenses to meet by now, one must start saving and building funds for a peaceful retirement by buying the best life insurance plan for a stress-free life. If you are not protected yet, buy the life insurance plan even in your 50s.
In your 60s	It is never too late to buy the best life insurance plan. Despite high premiums, getting insured in your sixties can be great for financially securing your loved ones, paying off outstanding loans or making up for lost income. It makes sense to opt for annuity plans and instruments that help in estate planning and wealth creation, to help ensure the well-being of your loved ones.

A life insurance policy plays a very important role in securing the financial future of your family. And when it comes to the security of your family, you must not compromise. So, once you have decided to buy a policy, the next step is to find the best insurance policy provider. Here is a list of things that you need to consider when on the hunt to find the perfect life insurance provider:

Compare Life InsurancePlans	The first thing you need to do before choosing an insurance company is to compare. You must first compare life insurance plans offered by the insurance companies and then choose the best one as per your insurance needs.
Claim Settlement Process	Always look for a life insurance company with good claim settlement ratio. Also, you must understand the company’s claim settlement process so as to avoid any confusion in the future.
Credibility of Insurer	It’s advisable to look for a reputed life insurance company with a good claim settlement ratio and customer-friendly approach.
Check on Customer Service	This is yet another factor that one must consider before selecting a life insurance company. You must take note of the insurance companies’ attitude towards the potential customers. Always make sure that the customer support team is supportive and is ready to help you whenever it is required. All these things will help you make a wise choice.
Consider Reviews and Complaints	It makes sense to look out for the online reviews, testimonials, or complaints to find out about the life insurance company. This will help you understand the problems faced by the customers and how insurance companies deal with it. If you find ample of complaints of the same nature against the insurance company, then you must not ignore it. As this will give you a proper idea about which company you need to consider and which you do not.
Solvency Ratio	The solvency ratio of a life insurance company indicates the company’s ability to meet its debt obligations along with other financial commitments. The best life insurance companies have high solvency ratio. Before you buy a life insurance policy, check the solvency ratio of the life insurer.

With so many insurance providers in the market today, choosing the most reliable and best life insurance company can be a daunting task. Thus, follow the above-mentioned pointers as this will help you choose the best insurer for a plan that meets your financial needs.

Adding riders to your life insurance policy enhances your financial safety umbrella and coverage. Riders are additional benefits you can add to your policy and include more events that may lead to financial distress. Here are a few prominent riders you can add to your life insurance plans:

You select a premium payment mode while purchasing the policy. With level premium policies the premium payment mode remains the same throughout the premium payment term. You can pay the life insurance premium in the following modes:

• Monthly
• Quarterly
• Semi-annually
• Annually

You should choose the premium payment mode most convenient for you as per your income flow. For example, if you are salaried, the monthly mode of premium payment will keep the headache of regular planning and budgeting away. You can simply submit standing advice for the auto-debit of the premium.

However, paying the entire year’s premium in a single instalment may offer a small discount.

Automate Your Life Insurance Premium

Paying life insurance premiums on time is important, whether it is for a pure protection plan like a term cover or a wealth-building plan like a ULIP. Best way to ensure timely premium payment is when you automate the debit directly from your account.

This will not only ensure that your policy always remains active, but it will also save any additional charges you may incur in late payment fees. Also, this is the best way forward for your wealth-building goal.

a. Pay Premium Online

You can use any of the following methods of payments to pay your Canara HSBC Life Insurance policy’s premium online:

• Credit/Debit Card
• Internet Banking
• Prepaid Wallets or Cash Cards
• Bharat QR Code
• UPI (Unified Payment Interface)
• Insta Pay

While you can transact using any credit or debit card on our online payment channel, you can also use your debit card with a pin if you are a customer of these banks. Other than this, using these banks to pay your premium you can also convert the premium to EMIs.

b. Pay On Call – IVR (Interactive Voice Response)

You can also pay your premium by calling the following toll-free numbers

• For Resident Indian customers: 1800-891-0003 / 1800-103-0003 / 1800-180-0003
• For NRI customers: 0124-4315200

c. Pay Through Cheque

You can also draw an account payable cheque or DD for your premium amount and send it to us at the following address:

• Name on the Cheque/DD: “Canara HSBC Life Insurance Co. Ltd”
• Mention the following at the back of the cheque:
  
  
  • Policy Number
  • Name
  • Mobile Number
• For payment through DD, also send your bank statement which reflects the premium amount for the policy
• Address:
  Canara HSBC Life Insurance Company Limited (IRDAI Regn. 136)
  139 P, Sector - 44,
  Gurugram - 122003,
  Haryana, India.

d. Pay at Hub Offices or Bank Branch

You can also visit any of the nearest Hub Branch, or bank’s branches to pay your premium using Card, Bank Transfer, or Cheque/DD.

Insured Person & Policyholder

Insured person is the individual whose life the insurance plan covers. For example, if you buy the best life insurance plan for your spouse, he or she would be the insured person. The person paying the premiums becomes the policyholder.

Sum Assured

With so many insurance providers in the market today, choosing the most reliable and best life insurance company can be a daunting task. Thus, follow the above-mentioned pointers as this will help you choose the best insurer for a plan that meets your financial needs.

Policy Term

The policy term is the total length of time during which the life insurance policy is expected to be in force. That is when you have been paying all the premiums in time and have not surrendered the policy.

Premium Payment Term

Usually, you need to pay an annual premium throughout the policy term, i.e., policy term = premium payment term (PPT). However, you can choose to pay the premium within a shorter period, i.e., policy term > premium payment term.

Riders

Riders are additional insurance covers which can enhance the cover of your policy with either an additional sum assured or by covering an additional risk. For example, if you are looking for the best life insurance plan, you can include accidental death and disability rider to your term life insurance policy.

Lock-in Period

Policies have a lock-in period within which you cannot withdraw or surrender the policy. For ULIPs the lock-in period is five years, while for other plans this is two years. Only investment plans have a lock-in period.

Cash Value or Surrender Value

Life insurance plans other than the pure protection plans like term and health insurance, acquire cash value after the lock-in period. As you invest more money into the plan, the cash value also increases. Loan on the life insurance policy is based on this cash or surrender value.

Nominee

Nominee is the person who receives the amount promised by the life insurance company in the event of the life insured's death. The nominee, also known as the beneficiary, is generally parents, wife or children of the life insured.

Life Insurance Premium

The life insurance premium is the regular amount you pay to buy a life insurance plan. The premium is generally an annual amount. However, you can change the premium payment frequency to something more convenient for your investments. For example, as a salaried investor, you may find monthly premium payments more convenient.

Death Benefit

This is the amount that is payable upon the death of the insured in the life insurance plan. Term and critical health insurance plans have a defined death benefit amount. However, other life insurance plans like endowment, moneyback or ULIP plans may have a guaranteed death benefit which may include accrued bonuses.

Maturity Benefit

Maturity benefit is the amount payable at the maturity of the life insurance policy. Maturity benefit is payable only in endowment, ULIP, moneyback and whole life insurance plans. This benefit is payable only in two cases – 1. You (the policyholder) survives the policy term, 2. You have opted for a premium protection option under the plan.

Grace Period

You should pay the life insurance premiums on or a little before the due date. This will ensure that your premium is invested at the right time and enjoys maximum growth, and your life cover also continues. However, if you miss the due date Grace Period is there to save you. Grace period is the time available to you for paying the premium without affecting the policy. You usually have 15 days grace period for monthly premium payment modes and 30 days for other modes.

Lapsed Policy

If you continuously default on your premiums the policy goes into a vegetative state and is said to have lapsed. Lapsed policies acquire paid-up value as per the premium you have paid. Endowment and Moneyback life insurance policies usually acquire a cash value after two years of continuous existence. So, if you stop paying the premiums before completing two years, your premiums are forfeited.

Revival Period

This is the time given for a policy to be revived after the lapse. In this period you can revive your old policy by paying all the remaining premiums. At times you may also have to go through a medical check-up.