In the simplest of terms, life insurance pertains to a contract between an insurance company and the policyholder, wherein the insurance company agrees to pay a sum assured in case the insured person dies during the tenure of the policy. This sum assured is payable in return for the regular premium payments made by the insured person.
Here, we help you take a quick look at the protection provided by life insurance policies in the Indian market space.
Hospital Covers offered in a Life Insurance
There are several coverage benefits linked to life insurance plans. These include the death benefit, accidental death benefits, and additional benefits that can be availed through riders. Take a look for details of these covers:
1. Death Benefit
The death benefit is the sum assured paid to the beneficiaries in the event of the death of the policyholder during the policy term. The lump sum amount so paid is released only if the policyholder passes on naturally or due to health-related reasons specified in the policy. For example, in case a person dies peacefully in his or her sleep, it would be termed as natural death and the sum assured would be released to the beneficiaries as per the terms of the life insurance plan.
2. Accidental Death Benefit
To safeguard the beneficiaries from liabilities arising from the death of the insured due to causes that are not natural or health-related, life insurance policies offer the accidental death benefit rider. By paying an additional premium for this rider, the beneficiaries become eligible to receive the sum assured even if the insured passes away due to accidents or mishaps. Additionally, there is an amount over and above the sum assured which the beneficiaries are applicable to receive in case of accidental death. However, there are exclusions to this rider like acts of war, unnecessary risks like intoxicated driving, etc.
3. Other Rider Benefits
Apart from the accidental death benefit, life insurance companies offer other rider benefits as well. Some of these include critical illness cover, total and permanent disability, covers for hospital care, surgical care, and sometimes even covers for funeral expenses in case of the insured’s demise. These can be availed by paying an additional amount to the base premium of the policy.
i. Critical Illness Cover
Generally, illnesses which are heavily debilitating or even life-threatening, and may render you incapable to work for a considerably long time, resulting in a loss of regular income are considered as critical illnesses. The diseases usually covered by an insurance company in such cases are:
- Heart attack
- Organ transplant
ii. Total and Permanent Disability
Accidents or mishappenings that leave you with a permanent disability such as loss of limb, hearing, sight, speech impairment, etc. are covered under TPD insurance. Such disabilities strip you of your ability to work in your own occupation again. Thus, a lump sum cover is provided for you to pay the big worries off your shoulder, which you would have cleared in instalments otherwise. These include paying off the mortgage or other debts, making home modifications suitable for your altered condition or paying for rehabilitation costs, nursing and medical expenses, ongoing household expenses, etc.
iii. Waiver of Premium
This is a clause in a life insurance policy, present only if specifically issued to the policyholder, which waives the premium amount during the policy term in the event that the insured becomes critically ill or permanently disabled, as mentioned above. Unlike critical illness and TPD covers which can also be availed as separate insurance plans, waiver of premium is solely an add-on to your life insurance plan.
Coverage Value of a Life Insurance
With respect to any life insurance plan, its coverage refers to the death benefit. This is the sum assured that is payable in the event of the death of the policyholder. The amount is given to the nominee(s) mentioned in the policy document at the time of inception, or as endorsed at any later stage during the tenure of the policy. The coverage value depends on the add-ons and riders attached to the life insurance plan. The coverage value received by the beneficiaries after the claim has been successfully settled is tax-free in nature. The coverage value can be further supplemented by adding benefits that are not included in the basic plan coverage. Obviously, a higher coverage amount demands a higher premium.
Buy Life Insurance Coverage Online
The uncertainties of life are many. Health issues, accidents, and other unfortunate incidents may come upon you anytime and without warning. Given this, it is essential that you secure your life at the earliest to buy adequate coverage at the lowest possible premium costs. Log onto Coverfox.com to assess the different life insurance policies according to their features and benefits. Choose the life insurance plan that aligns with your needs and budget alike. Get yourself secured with a life insurance cover today.