Insurer: ING Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and periodic returns on investment

ING Secure Income RP is available in 2 variants- Base and Economy.

Bonuses

Loan facility

Maximum Entry Age: 60 Years

Maximum Age at Maturity: 70 Years

Policy Term: 10- 20, 25 and 30 Years

Premium Payment Term: Equal to Policy term

Minimum Premium: Rs 12,000 per annum (Base), Rs 8,000 per annum (Economy)

In case of unfortunate death of life insured, Sum Assured along with accrued bonuses will be paid.

For base variant, assured income for next 5 years which is equivalent to 120% of Sum Assured becomes payable.

Maturity Benefit:

On maturity, Sum Assured along with accrued bonuses will be paid. Additionally, 10% of Sum Assured will also be payable.

Riders:

You can opt for the following riders- Accidental death, disability, dismemberment rider, additional life cover and critical illness rider.

Loan:

After 3 policy years, you can avail loan facility.

Under Section 10(10D) death claim is completely tax free.

What else should I know about?

Reinstatement: If your policy has lapsed, you can revive within 5 years from the due date of unpaid premium.

Grace period: You can pay due premium within 30 days from renewal date.

Free Look Period: Secure Income Insurance RP plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

ULIP’s or traditional life insurance plans?

For many years, traditional or endowment insurance plans has been the investment cum insurance solution for Indian customers. When unit linked insurance plans were launched with promises of high returns, the trend shifted and people started buying ULIP’s. In 2010, when IRDA put a cap on ULIP charges, traditional plans have made a comeback with the insurer’s promoting them.

Given below is analysis of ULIP’s versus traditional plans head to head:

Life Cover: The minimum life cover in most ULIP’s is 5 times the annual premium. And in many ULIP’s, death benefit is equal to both life cover and fund value.

In contrast, in most traditional plans, you get only Sum Assured (and bonuses if any) and life cover could be as low as Rs 50,000. It is true that you can increase the life cover in traditional plan as per your preference but that will also result in increase of premium.

Returns: The returns in Unit linked insurance policy depend on market performance. If you continue policy for longer term, risks are mitigated and you can get good returns. Traditional plans have guaranteed returns which are specified at the beginning of life insurance plans. However the returns are low and not practical as compared to the consistent increase in cost of living.

Charges: ULIP charges were high earlier but there is cap on charges now. New ULIP’s are coming with zero allocation charges and also can be bought online which further decreases the cost. In traditional plans, charges are unknown.

Flexibility: ULIP’s let you make switches between funds, make premium redirection and even partial withdrawal. Traditional plans do not offer such features. However there is loan feature with many traditional plans which you can apply against. The interest rate for loan will be charged for the same.

Surrender: If you cancel ULIP before 5 years, there will be cancellation charges and the premium will be paid only after lock-in period. For that time duration, it will put in discontinued fund. After the lock-in period of 5 years, you can surrender ULIP without any cancellation charges. The fund value will be paid as per the NAV of the fund. Traditional plans have surrender value after policy has been continued for 3 policy years. The surrender value is higher of special surrender value or guaranteed surrender value. Special surrender value is declared by insurer from time to time and guaranteed surrender value in most traditional plans (regular premium) is equal to 30% of all the basic premiums paid minus first year premium.

Conclusion:

Unit linked insurance plan is for individuals who can manage and shift funds when required and are comfortable around equity based risks. The life cover is good but not enough for securing family members.

Traditional plan (Invest n Forget) are for individuals who are unable to manage funds and do not understand the intricacies of unit linked insurance plans. The life cover in traditional plan is not enough and one should always go for term plan for ensuring financial security for family members.

Both traditional and ULIP’s should be kept for complete term to reap the benefits.

How and when to discontinue from Life Insurance?

Life insurance is a complex financial product. More often than not, one gets stuck by buying the wrong insurance policy and seeks a way out. However after buying life insurance policy, it is not easy to discontinue as it is a long term insurance product. There is free look period of 15 days when you can cancel the policy with just few nominal charges which get deducted as a part of medical tests, stamp duty etc.

The following exit strategies are provided based on life insurance products:

Term Plans:

With the onset of many online term plans which are comparatively very cheap, many people want to discontinue their old term plans. However before discontinuing, it would be best to buy the new term plan as the cover should not break and there might be medicals involved which could take time. Once the new policy gets issued, you can cancel the earlier term insurance policy.

ULIPs:

All ULIP’s have lock in period of 5 years. So if you cancel policy within 5 years from the commencement of policy, you will have to wait till the 5^th year to get the fund value. There is no point cancelling unit linked insurance plan within 5 years as the cancelling charges along with other charges will reduce invested amount too much.

Exit a ULIP if you are near to mid policy term, charges are high and fund value is not getting much growth.  If your ULIP is not performing due to higher charges, hold on to them for few more years till the fund value improves. Because most ULIPs charges drop over the policy term and stock markets could also improve in longer duration. Do not cancel ULIP if you are near to maturity as you might get loyalty additions.

If you have taken child plan, make sure there are safeguards for your children when you withdraw from the plan.

Traditional Plans:

These plans are tricky. In traditional plans, you get surrender value after 3 years. The surrender value is equal to higher of special surrender value or guaranteed surrender value. In most traditional plans, the guaranteed surrender value is 30% of all base premiums paid barring first year premium. The special surrender value is declared from insurer from time to time. So if you can cancel traditional plan, you are entitled to higher of the surrender values among the two.

It is best to continue the traditional plan as cancelling traditional plan leads to the good loss of invested amount. If emergency amount is required, you can apply for loans against the policy after ascertaining the interest rate charged from the insurers. Loan facility is available with many insurers.

Insurer: Sahara Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

• Bonuses
• Sum Assured Rebate
• Riders available
• Loan facility

Maximum Entry Age: 60 Years

Maximum Age at Maturity: 75 Years

Policy Term:  15 Years

Premium Payment Term: Policy Term

Premium Payment Mode: Yearly, Half Yearly, Quarterly, Monthly

What benefits does Sahara Umang offer?

Death benefit:

In case of unfortunate death of the life insured, Sum Assured along with vested bonuses will be payable.

Maturity Benefit:

At the end of policy term, Sum Assured along with vested bonuses will be payable. Additionally, one year after policy maturity, 10 installments of 10% of Sum Assured will b e paid.  If policy has been continued for more than 15 years, terminal bonus will be paid along with 10^th installment.

Large Sum Assured Rebate:

For Sum Assured equal or above Rs 200,000, discount on premium will be provided.

Riders:

By paying additional premium, you can increase financial security by adding following riders:

- Accidental Benefit & Accidental total & Permanent disability benefit rider

- Critical Illness rider

Loan:

You can apply for loan after 3 policy years.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Umang plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Insurer: Reliance Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Loan facility

Riders available

Maximum Entry Age: 65 Years

Maximum Age at Maturity: 75 Years

Policy Term:  5 Years- 35 Years

Minimum Premium: Rs 2,000

Minimum Sum Assured: Rs 25,000 per annum

Premium Payment Mode: Yearly, Half Yearly or Monthly

What benefits does Reliance Endowment offer?

Death benefit:

In case of unfortunate death of the life insured, Sum Assured along with bonuses will be paid.

Maturity Benefit:

At the end of policy term, Sum Assured along with accrued bonuses will be paid.

Riders:

You can opt for the following riders with the plan- term life, accidental death and total and permanent disability, critical conditions and family income benefit rider.

High Sum Assured Rebate:

For Sum Assured equal or above than INR 1 lacs, a rebate on premium is also made.

Loans:

You can avail loan against the policy after the policy acquires surrender value for maximum amount of 90% of surrender value.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Endowment plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Plan Name: Endowment to Age 60

Insurer: Max New York Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Riders available

Loans available

Maximum Entry Age: 50 Years

Maximum Age at Maturity: 60 Years

Policy Term: Age 60 – Entry Age

Minimum Sum Assured: Rs 100,000 per annum

Premium Payment Mode: Yearly, Half Yearly, Quarterly or Monthly

What benefits does Max New York Life- Endowment to Age 60 offer? 

Death benefit:

In case of unfortunate death of the life insured, Sum Assured along with bonuses will be paid.

Maturity Benefit:

At the end of policy term, Sum Assured will be paid.

Bonuses:

After the policy has been in effect for two years, bonuses will also be added. You also have the option to receive bonus when declared instead of waiting till maturity.

Riders:

You can opt for personal accident benefit rider, term rider, dread disease rider, waiver of premium rider, term renewable and convertible rider and payor rider with the plan.

Loan:

You can apply for loan against the policy after the policy obtains surrender value.

Are there any tax benefits?

Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Endowment to Age 60 plan can be cancelled within few days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Insurer: HDFC Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Bonuses

Maximum Entry Age: 50 Years

Maximum Age at Maturity: 60 Years

Policy Term: 10 Years

Premium Payment Mode: Yearly, Half Yearly, Quarterly or Monthly

What benefits does HDFC Assurance Plan offer?

Death benefit:

In case of unfortunate death of the life insured, Sum Assured with bonus additions will be paid.

Maturity Benefit:

At the end of policy term, Sum Assured along bonuses will be paid.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Assurance plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Insurer: Bajaj Allianz Life Insurance

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Life Time Care is an endowment plan which is available in the following variants:

- Economy: base package

- Protect: accidental death benefit,    accidental permanent total/partial disability benefit, waiver of premium benefit is included.

- Health: critical illness and hospital cash cover included

- Total: this pack has all the above mentioned riders.

-Bonuses

-Discounts

-Riders available

-Loan facility

Maximum Entry Age: 60 Years

Maximum Age at Maturity: 80 Years

Minimum Premium Payment Term: 10 Years

Minimum Premium: Rs 1,500 per annum

Premium Payment Mode: Yearly, Half Yearly or Monthly

What benefits does Bajaj Allianz Lifetime Care offer? 

Death benefit:

In case of unfortunate death of the life insured, Sum Assured along with bonuses will be paid.

Maturity Benefit:

At the end of policy term, Sum Assured with bonuses will be paid.

Riders:

You can opt for the following riders with the plan- Family Income Benefit, Comprehensive Accident Protection, Critical Illness and Hospital Cash.

Increase Sum Assured:

On occurrence of particular events like marriage, birth of children etc, you can also increase the Sum Assured.

Discount:

For large Sum Assured, discount on premium will be made. For female policyholders, further discount will be provided.

Loan:

Loan facility is available with the policy.

Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Lifetime Care plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Insurer: Life Insurance Corporation of India

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Bonuses

Riders available

Loan facility

Large Sum Assured Rebate

Maximum Entry Age: 60 Years

Age at Maturity: 100 Years

Premium Payment Term:  10, 15, 20 Years

Minimum Sum Assured: Rs 100,000 per annum

Premium Payment Mode: Yearly, Half Yearly, Quarterly or Monthly

What benefits does LIC Jeevan Tarang offer? 

Death benefit:

In case of death during pay term, Sum Assured along with vested bonuses will be paid. In case of death after pay term, Sum Assured along with loyalty additions will be paid.

Maturity Benefit:

When the life insured reaches age of 100, Sum Assured along with loyalty additions will be paid.

Accidental Benefit Rider:

You can opt for accidental benefit rider which pays additional Sum Assured on demise of life insured as a result of accident.

Term Assurance and Critical illness are the other riders available with the plan.

Loans:

You can apply for loans against the policy.

Discounts:

If opted for Sum Assured equal and above INR 2 lacs, discounts on premium will be made.

Are there any tax benefits? 

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Jeevan Tarang plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.

Plan Name: Jeevan Mitra

Insurer: Life Insurance Corporation of India

Category: Traditional Plan

Objective: Financial protection of family and returns on investment

Accidental Rider

Maximum Entry Age: 50 Years

Maximum Maturity Age: 70 Years

Policy Term:  15 to 30 Years

Premium Payment Term: Regular

Minimum Sum Assured: Rs 50,000 per annum

Premium Payment Mode: Yearly, Half Yearly, Quarterly or Monthly

What benefits does LIC Jeevan Mitra offer? 

Death benefit:

In case of unfortunate death of the life insured, twice or thrice of Sum Assured (as per variant opted) along with vested bonuses is paid.

Accidental Rider:

You can opt for accidental rider which pays additional lump sum on death or disability of life insured because of accident.

Maturity Benefit:

At the end of policy term, premiums paid with vested bonuses will be paid.

Bonuses:

These are added at the end of each financial year and are a percentage of Sum Assured. The percentage depends on the performance of the company.

Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.

Under Section 10(10D) death claim is completely tax free.

Free Look Period: Jeevan Mitra plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.