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127 Important "Life Insurance ” Questions and its Answers

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After maturity how can I receive the total amount please let me know the process in details?

All Insurance companies reach you 90 days in advance with confirmation of maturity and transfer the amount in registered bank account . Companies may demand a signed discharge voucher , cancelled cheque…

Term life insurance policy issue with wrongly mentioned personal history. How can i resolve this issue?

You have to contact the company and tell them to change it. They may ask for proof. For example, if date of birth is incorrect, you can show Driver license or Passport as proof and ask them to Correct…

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What is the maximum amount one can avail as a home loan against an LIC insurance premium payment?

All insurance companies offer loan upto 90% of total surrender value on Participating plans . Loan is not allowed on Money Back plans . Let us assume you pay Rs 1 lakh per annum for 10 years in a participating…

How can I claim a refund of GST on an investment made in LIC policies?

No dear , this is service tax and there is no provision of any refund or set off .

How do you change your premium date with Life insurance Corporation of India (LIC)?

Dear It is like marriage date , you can not change your Policy anniversary .

What is the commission an LIC agent gets for a premium of Rs.1 crore?

Will depend on Type of policy , premium payment term and policy term . It may vary from 10% to 35% ,of premium paid

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What is the difference between a direct agent of LIC and an agent under a development officer?

A Direct agent works like an employee and gets salary plus commission whereas an agent under DO get only commission .

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If we surrender our LIC policy, in how many days will the amount reach our bank account?

If you have submitted all documents then your account will be credited on 4th day .

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How do you transfer an existing LIC or SBI life insurance policy to a new address after shifting?

They will be pleased to help . Send a request letter along with an authorised address proof .

If someone’s LIC bond is lost, how do I get the money back at the time of maturity?

Dear Now a days , money back is credited directly in account . But you should apply for a duplicate copy by visiting your service branch .

Will I get an accrued bonus if I surrender my LIC policy post 3 yrs of premium payment? And also which option is better, surrendering the policy with 30% of the premium amount or leave it as paid up till the maturity period?

If you have surrendered then it gets a paid up value which remain same for full term . Only benefit is you remain covered for reduced sum assured . But you are not entitled for any bonuses .

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How can I transfer my LIC agency to another branch?

Yes , agency is transferrable to another branch of LIC . Take a No objection from your Development officer and a no objection from new Branch , make an application with both NOC . it will be done in 30…

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What may happen when I can't pay the LIC premium within the due date?

Your policy will lapse . Insurance company will not be contractually bound to keep the promise . Insurance is important and premium should be paid in time .

Can I change our LIC premium from quarterly to monthly?

Yes you can and you will save over 6% in your annual premium . This can be done 30 days before the Policy anniversary date .

How does life insurance get taxed?

Proceeds of life insurance are tax free under section 10(10) D if sum assured is more than 10 times of annual premium .

How life insurance is an investment?

Dont treat life insurance as investment . It is a risk management plan where a pool is created and one transfer personal risk to the pool . Always use Life insurance as risk management product . You can…

How to cancel jubilee life insurance?

In India , there is no registered company with the name of Jubilee Insurance

Is an LIC agent a permanent or a government job?

LIC Agency is not a job . You become an agent to sell Insurance Policies of LIC . It is your own business where LIC provides you training and a Development officer mentors you . If you can give approx…

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My LIC policy was foreclosed without intimating me neither a notice was sent and the bank did not give me any settlement amount. What can I do my father had paid 13 out of 14 premiums?

A policy is foreclosed when the loan amount plus accrued interest exceeds the total surrender value. If it has exceeded the total surrender value then policy will be foreclosed without any intimation …

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What is the average premium that should be paid for a family floater policy from Life insurance Corporation (LIC) or State Bank of India (SBI) Life?

Dear Family Floaters are available in Health Insurance and not in Life Insurance . Neither LIC nor SBI Life offers family floater because both are life insurance companies .

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What is the difference between Life Insurance, Term Insurance and Health Insurance?

Life insurance provides financial security to your loved ones in the event of your death. Term insurance is a type of life insurance that offers coverage for a certain period of time and pays the death…

Which term plan is best whether Term plan with Maturity amount or No Maturity amount?

Dear Vanilla term is always better .The difference amount can be put in SIP which would give far superior maturity.

How does life insurance work when you die?

Dear Life insurance contract says that nominee would make a claim by submitting desired documents and Insurance Company would pay the claim amount . Claim amount will be Sum assured plus accrued…

If I buy a term insurance plan from any insurer and unfortunately the company gets shutdown in the middle of term then what happens to my insurance policy, will it be active or not for the entire term?

Dear As per Insurance Act , no insurance company can shut down . At the most , another company would take it over and all liabilities will be taken care of .So dont worry , your insurance company…

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How can I know my claim details and balance amount in my policy?

All Insurance companies have call centres where you can call from Mobile registered with insurance company . They will be pleased to give you all details of your policy . Moreover , all insurers have…

Can I pay the LIC premium online after ECS dishonored?

Yes , you can

Can a state government employee work as an LIC agent?

No , a government employee can not take an agency which has scope of public dealing. But many employee take agency in name of family member and work . But this is not ethical.

How can get my LIC policy number with details by name and date of birth?

Dear . it is difficult but you can try by visiting LIC Branch office and share your PAN number and date of birth or your mobile . Your chances of success is more if you know the Branch .

Can an NRI continue to hold a running LIC policy in India?

Yes , an NRI can hold a policy . But claim or maturity will be paid in Indian Rupees only ,through a bank account in India.

How can I check my LIC installment premium without tax?

You pay 4.5% tax on first premium and 2.25% on renewal premium .

What is the grace period for LIC premium payments?

Dear Under annual mode , you get a grace period of 30 days . In other modes , you get a grace period of 15 days . In case of death during grace period , LIC would pay full premium after debit of…

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What is the late payment charge for an LIC premium for half yearly and quarterly?

You get 30 days grace period to pay your premium . After 30 days , if you pay within 30 days then LIC charge late fees of annualised 6% i.e.5% in same way if you pay within 60 days then you pay…

What will I get if I break the LIC insurance in between?

If you break in between the term then you shall receive surrender value . This surrender value is initially around 35 % of premium paid but keeps increasing with passage of time . For example , if premium…

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Can I transfer my LIC one plan to other LIC plan?

No , it can not be done . Each plan is a contract and premium rates are worked out as per features on one scheme . Best wishes

Can I change my wrong DOB on an LIC policy?

Yes , you can do that by giving a valid proof . Policy will be underwritten again and may demand additional premium if revised age is more .

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Can we pay the LIC premium for the next two years?

No there are no system of advance premium . You can do bank ECS to ensure regular premium . Please note Insurance is not bank and they are not allowed to keep advance premium . Best wishes …

Can I buy a LIC policy without the help of any LIC agent?

Dear No , all LIC plans can be bought through intermediaries only . LIC has launched one Term plan under Direct model which you can buy directly . Good agents are like Financial Doctors who suggest…

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What is the policy of the Lic Kanyadan? What are the advantages of it?

LIC Kanyadan is a sales pitch of LIC Jeevan Lakshya Plan because it has emotional appeal with India Family . You can save for your daughter with promise of guaranteed fulfilment whether you are live or…

How do I change a nominee name in LIC online?

This is very simple . Visit your Branch office and give a request for change of nominee from Old Nominee to _New Nominee _______________. Your name and signature / Policy No Take an acknowledgement…

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How does LIC pay money to a policy holder after maturity?

Dear On maturity , LIC send discharge documents 90 days in advance . On submission of discharge voucher , maturity claim along with accrued bonuses are credited in account of Policy holder .

Can I take term plan on the base income generate from rental and interest on fix deposit?

No , rental and interest income is not generated income hence can not be considered as basis for calculation of sum assured . This income will continue in case of death .

How do I become an LIC agent?

Approach your nearest LIC office and meet a Development officer . They would organise a training and exam . Once you pass the exam , LIC would enrol you as agent . Hope this suffice Best wishes …

Can you make your friend a nominee in your life insurance?

No , you can not make your friend as nominee

What if my private company has provided me health and term insurance of good amounts? Shall I still buy the personal insurance now or wait for some years until I quit the company and then buy the personal health and term insurance?

Your group insurance is a rented property . You have it till you are part of group . You will be left uninsured the day you leave or asked to leave the group . Which private Corporate would keep you in…

How term insurance works ?

It is very simple . Let us say that we have a pool of 100 people and each one of us have a mobile of Rs 10000 . On the basis of past 10 years , we know that 3 mobiles are lost each year : So total…

Is it possible to combine multiple term insurance from different fund houses?

You mean to club term insurance from multiple insurers then it is not possible because each insurance is separate contract .

How old do you have to be to get life insurance ?

Insurance is a legal contract and as per Indian contract Act , you need to be of age 18 and with a sound mind to enter into a contract . So any one above age 18 can take insurance

How much life insurance should I have?

Dear Depends on your annual income . You should have minimum insurance of 10 times of your annual income . So if you earn Rs 10 lakh then you should have a cover of Rs 100 lakh . If you have any…

How many days does it take to get a refund for a surrendered LIC policy?

Surrender value of an LIC policy should be credited in 15 working days else LIC is liable to pay interest .

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I need a Life Insurance cover of 1cr. Should I take up to 1cr including ADD ONs or should it be 1cr plus add ons? Should my total cover include add ons or exclude add ons?

Dear Go for basic cover of Rs 1 crore which is guaranteed under all deaths . You can add add ons like Accident Disability and Critical illness which increase scope of risk .

What is the taxability of amount received by nominee/legal heir from LIC on death of an individual?

As per Section 10(10D) any sum received by legal heir from LIC including the sum allocated by way of bonus on such policy on death of the individual is exempt from tax other than: Sum received…

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How do I change a nominee name in LIC online?

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ലൈഫ് ഇന്‍ഷുറന്‍സ് എടുക്കുമ്പോള്‍ എന്തൊക്കെ ശ്രദ്ധിക്കണം ?

Please check this video.

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Can a term insurance be considered for Section 80D?

No , only health insurance is taken in section 80 D . If you take a rider of critical illness with term insurance then rider premium will be taken in section 80 D.

How many types of term insurance are there?

There are two types 1. Pure term where sum assured is paid only on death of insured . There is no amount on survival . 2. Return of premium term where sum assured is paid on death and paid premiums are…

Should I buy LIC's Jeevan Akshay plan?

Depends on your need , if you have large amount of money and want regular uninterrupted income . Please note that you are buying insurance of the interest rate . In 2008 , interest rate was 9 % and today…

171

What should I do with an old life insurance policy?

There are two possibilities You have a lapsed policy where you are not paying premium . Please check how many premiums were paid by you . If you have paid three premium then your policy would have surrender…

How do I claim a life insurance policy if the family members are not living together and both the policy holder and the nominee have died?

You will have to get a succession certificate from court. Please contact a local lawyer along with NOC from legal descendants .

How does Return-of-Premium Life insurance work?

It is a bait to catch those customers who feel term insurance is waste because there is no survival benefit . Such people are lured that all paid premium are returned and you do not loose any money. Little…

How to know whether my insurance will cover Covid or not ?

Dear All health insurance covers Corona treatment. So do not worry . There are two specific product Corona Kawach and Rakshak which supplements your cover . Hope this clarifies …

If we are taking a life insurance cover of 1 Cr, what should be the average amount for the riders? (Critical Illness and Disability Addon)?

Dear As per IRDA directive , maximum amount amount on rider can not exceed more than 30% of the premium of Base plan . For example , if you are paying a premium of Rs 10000 then you can but riders from…

Can we have 2 term insurance like one from company and one personal?

Dear Yes you can take multiple covers but ensure that all previous policies are declared to new insurer else it will be called moral hazard . Cover under Term Insurance is calculated on the basis…

What happens if I stop paying for Unit Linked Insurance Plan?

ULIP has a lock-in period of 5 years. If you stop paying premium after one year then all fund value would move under a discontinued policy. Your life cover and charges would stop. The discontinued fund…

An LIC agent told me that if I invest 5 lakh per year for 5 years in SBI Life Retire Smart scheme, then from 10th year onwards I will get 40000 per month pension for rest of my life. And after our expiry (me and my spouse), nominee will get the Corpus amount. Is it true or Am I missing something? How to verify it?

Dear You have been given wrong information through mis-selling . Facts are stated below : SBI Retire Smart is a Unit Linked Plan . Which means your money is invested in market as per fund chosen…

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Can you guide me about the best SBI pension plans for NRIs?

Dear You need to first understand that how a pension plan work before selecting the best : Each Pension plan has two stages . In first stage you accumulate and create a corpus which can grow either…

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If husband and wife are working, then each person required term plan or single person is ok?

Dear Each life is independent and generating income . Each life must insure to protect future income generation . So both can take term insurance if meeting eligibility criterion. Best wishes …

If there's no death in those 20 years of term plan, will the premium be returned? What happens to the money we pay as premium?

Dear Insurance works on the principle of pool creation and contribution . Insurance company only manages the pool . So if 1 lakh lives are insured under Term plan and 100 die in a year then 99900…

What is meant by ‘riders’ in a life insurance plan?

Dear Riders are add ons which you can add to your base products like Personal accident benefit and Critical illness. To illustrate , you pay a price for Base Pizza and add toppings , your final…

Is it advisable to take a life insurance for a senior citizen at the age of 62 years?

Dear It is not advisable as mortality cost becomes very high . Moreover, by age 62 all financial liabilities are over. You should buy if you have dependants on income generated by you. But if you…

168

I took an LIC term plan (Plan no. 825) at the age of 25 (2018), which did not had any option of add ons at that time. How can I correct this now for both Critical Illness and Disability Addon ? Any alt solution ?

Dear As per my knowledge , riders are not available in table no 825 . You can buy Critical illness and Accidental insurance from a General insurance Company . Shailesh

If the difference between a term plan and a return of premium plan is 700rs per month for 40 years, for a same cover, is term plan still a better one?

Dear Yes , term is always better . Why should you pay extra . Save the money in mutual fund and you will get appreciation to cover all premium paid for term insurance . Never buy term in monthly…

Can I upgrade my term plan in future when I am able to afford(spend) more to it?

Dear No , each additional sum assured need fresh underwriting . Today , you are being insured as per your health and financial condition . In future , you may not have same health or financial position…

If I die after just 2 years of life term insurance, am I guaranteed to get the full amount?

No , as per Section 45 a claim can not be repudiated after payment of 3 annual premium and after completion of 3 full year .

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PNB metlife super saver plan with health benefits plan me invest karna sahi he kya?Ye tax benefit deta he kya? 80C and 80D? Ye plan income tax section 10(10d) me add he kya?

Dear PNB Super Saver is a good plan keeping in mind various options available but each rider has a cost . Yes Premium paid is covered under section 80 C Proceeds are tax free under section…

370

Can we extend term plan period after completion of the term fixed before?

Dear Insurance is a contract for a term and premium is calculated for a term only . You shall have to reapply and your premium and risk will be evaluated afresh . So it can not be extended …

How do we determine the right life insurance amount ?

Dear It should be done through HLV ( Human Life Value ) method For example : You are 30 year old and earning Rs 10 lakh per annum . Human income generation is considered till age 65 . You will generate…

If I take a plan now and if I am not able to afford the plan for a higher premium, so after a few years can we take another term plan. Basically, can I take two plans?

Dear Yes , you can buy as many plans as you wish . But ensure that you are sharing details of all existing plans when you are applying for new . Because underwriter would like to know that how much…

Do a person get claims of life insurance upon his/her death in extraordinary conditions like earthquake pandemics or terrorist attacks. Or there are any technicalities to it ?

Yes Earthquake , Pandemic and Terrorist attack are covered unless force majeure is approved by regulator IRDA . If Force Majeure is applied the claim can be withheld . One company can not apply that and…

141

If a person dies and does not have any life insurance or cover but he was a tax payer, is he eligible for any kind of benefits from IT department?

Dear There is no benefit from Income Tax Department , but other countries provide benefits to Tax Payer.

Which plan I should buy if I am able to afford only one TERM PLAN or HEALTH INSURANCE?

Dear Health insurance is important but can be taken care in Government Hospitals where treatment will be free . But Death cover under Term Insurance is critical because it affects your family whom…

I am a handicap person, and this disability exists since my birth. My annual income is 4.5 lakh. I have tried to cover myself, but because of disability no company is ready to cover me. They reject me at the stage of medical checkup. What should I do?

Insurance has a risk and underwriters accept the risk on the basis of facts given in Proposal Form . So they shall not accept an undesirable risk . You need to create your own fund for any eventuality…

If we take insurance of two companies, will we get the claim of both companies if we get sick?

Dear Health insurance works under the principle of indemnity and you will be compensated to the extent of loss only . No one stops you in buying multiple insurances but you shall get claim from…

I am single and intend to stay that way for the rest of my life. Who can be dependents in my insurance plan, if there is no spouse, parents, children etc.?

Dear Unless you have made a will , it would go as per law of succession i.t to next of kin . Through will , you can nominate a charity / Hospital or any one of your wish . This is quite common internationally…

I have just completed 24 years and am planning to take a term insurance and health insurance for myself and health insurance for my parents. what I wanted to know is whether I should take it through insurance agent or directly through website?

Dear Compliments for taking a right decision . Always buy from a reliable established agent who sells on the basis of your need . Check reference of agent , talk to customers then select . Do not…

If i bought a term life insurance and I end up paying till maturity age. What's my benefit then ? will I get any premium ?

Dear Pure Term Insurance offer sum assured on death only and nothing is payable on survival . However , there are product available like Term insurance with return of premium paid . Such products…

In SBI Life retire smart scheme, an agent told me that monthly pension will be 0.8%. That is 9.6% per annum. Is it on higher-end? What are the normal rates?

Dear You are given wrong information . No one would and can give return of 9.6% . Please understand SBI Life Retire smart is only process of accumulation of money . This accumulation would…

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Is Postal Life Insurance a better scheme to do?

Dear PLI is a good product as saving option because bonus rates of PLI is better than LIC or private insurers . But they lack clarity , service and settlement. Do not consider it as life cover option…

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I have a question if my company is providing term insurance for me then should i have my own term policy for my self while i am working in that company?

Dear Your company insurance is like rented property , you are not owner . The day you leave the job , your cover would leave you . Company insurance is a group insurance cover and that is not sufficient…

How do you become eligible to get a term insurance ?

Dear To avoid moral hazard ,Term insurance eligibility : Income generation - Income proof like ITR or Bank statement with regular credits Education Reason of purchase All…

If a person dies abroad, will term insurance taken in India is still valid? and sum assured will be given to nominee in case of death?

Yes , term insurance is universal and claim will be paid in case death happens in foreign land . Supporting documents are very important including a certificate from embassy . There are few black listed…

396

What are underwriters in a life insurance policy?

Dear Underwriters assesses the risk on the basis of Proposal . Each Proposal form has material facts and underwriters can take decisions as below : Accept the Proposal and thus agree to accept the…

Is there any reliable website to check the claims made by LIC agents regarding the schemes? It should be easy to understand as well.

Dear Each website has their own purpose and give their own interpretations . Every person need to verify all facts under Buyer Beware . IRDA allows 15 days freelook period after receiving the policy…

What is Monthly Pension after Commutation of Total Contributed Amount in LIC schemes?

Dear Each pension scheme has two components : Accumulation part which you are referring to . Here you accumulate money to build a corpus which can be used for your old age pension . No such scheme…

What would happen if the insurer company goes bankrupt? Would my family still get the insured amount in that case?

Dear IRDA and Insurance Act regulates all insurers . IRDA ensures quarterly audit of each insurance company and solvency margin . In case of any early warning , IRDA would ensure that weak insurance…

What's the logic behind taking the term plan for 20yrs only?

Dear I think you have been misguided . There is no concept of 20 year term . It all depends on your requirement . Ideally , you should take term insurance till age when you have financial dependants…

Whether it is good to reveal any pre existing health issue like cervical spondylitis etc in term plan?

Dear Yes , there is a questionnaire and you should answer all giving details of your health . It is advisable that you give case history so that Insurance Company take right decision .

Can a house wife earning rental income and filing IT regularly take term plan? If yes which one?

No , she can take term plan on basis of passive income . Rent is considered passive income because it will continue even after death.

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What is difference between Term Insurance and Life Insurance?

Dear Term insurance is a type of life insurance where sum assured is paid on death only and there is no money on maturity or survival .

Shouldn't we consider inflation while calculating the insurance cover? Because considering a life cover of 30 years or any no of years, inflation will play major role in evaluating the value of insurance cover one has.

Dear Sum assured is taken on the basis of your income generating capacity today. In future you may earn less or more but insurance amount remain same as facts of today. So inflation can not be considered…

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I'm still a student and my age is 23. I want to buy a term insurance now so that my premium remains low. So can I still buy a 2 Cr sum insured term insurance without actually securing a job?

Dear No , you are not eligible for Term Insurance of more than Rs 10 lakh. For higher sum assured , you need a regular earning and ITR. For a sum assured of Rs 2 crore , you need an income statement…