Life insurance is designed to protect you and your family against financial uncertainties that may result due to unfortunate demise or illness. You can also view it as a comprehensive financial instrument - as a part of your financial planning offering you savings & investment facilities along with cover against financial loss. By choosing the right policy as per your needs i.e. customized solutions, you will be able to plan for a secure future for yourself and your loved ones.
When you make a nomination within your life insurance policy, as the policyholder you still continue to be the owner. However in the event of your death during the term of the policy the nominee, who did not have any right under the policy while you were alive will be entitled to give a valid discharge for the policy monies. He or she may not be the rightful heir in which case the legal heir can implement his rights and claim the money from the nominee.
If your intention is that your policy monies should go to a particular person only then you need to assign the policy in that person's favour. Thereafter the insurer will pay the policy monies ONLY to the assignee who becomes its owner, irrespective of whether he or she is your legal heir. When a policy is absolutely assigned to another person, you cease to have any right to deal with the policy in any manner.
Thanks to assignments, the proceeds of a policy can be protected against the claims of any of the policyholder's creditors. Assignment is a legal instrument and the insurer cannot be held responsible for its legal liability. The insurer will nevertheless register the assignment in its books.
There are several benefits in buying insurance. Other than the risk cover, the most important benefit is your eligibility to receive Income Tax Relief under Section 88 of the Income Tax Act, which means, premiums paid by you, reduce your tax liability. Such exemptions are also available for premiums paid on health covers.
Besides, it helps you build up compulsory savings.
Also through a valid assignment the beneficiaries of the policy are protected from claims of creditors. Life insurance policies can also be a great source of help as a security while availing of loans. One could also surrender his policy for cash benefit in case of emergencies.
For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries and constitutes a separate property, for which the life assured is not required to pay property tax.
The additional benefits, over and above the benefits available under the insurance policy that a policyholder may be entitled to at an extra cost are called Add - on Benefits or Riders. One could opt for any one or more of the benefits at a little extra cost. This additional protection for your loved ones ensures that you receive a sum additional to the assured sum in case of any specified untoward event in your life like accident, disability or major illness.
Identifying the right plan to meet your specific needs is the first crucial step towards insurance planning. At SHRIRAM LIFE we help you through this decision by identifying your various needs and offering plans that are customized for you.
We offer you a grace period for non-payment on due date. This grace period is 30 days from the due date in case premium payments are made on quarterly, half-yearly or yearly basis. It is 15 days from the due date for monthly payments. During this period the policy remains in full force and no interest is charged. If you fail to pay a premium during the grace period, your policy automatically lapses, but can be revived by paying all unpaid premiums.
Survival Benefit is payment of the Sum Assured in specified number of installments through the term of the policy. At the end of the policy term, the maturity amount is reduced by the amounts already paid. Balance amount will be paid along with Vested Bonuses. However, if death occurs during the policy term, the Sum Assured is paid in full without any deductions, along with Vested Bonus.
A lapsed policy can be revived during the lifetime of the assured, but within a period of 5 years from the due date of the first unpaid premium and before the date of maturity. Revival of a lapsed policy is considered either on non-medical or medical basis depending upon the age of the life assured at the time of revival and the sum to be revived. If the revival of the policy is completed by payment of over-due premium within 6 months from the first unpaid premium, only the late fee for the overdue premium needs to be paid, and medical evidence or health is not required.
When a policyholder wishes to encash his policy to meet an urgent need for cash, he can terminate the policy contract by surrendering the policy against its accumulated cash value. Policy can be surrendered provided it has been kept in force for atleast 3 years. If it has been in force for five years the cash value or vested bonus is also added to the surrender value.
Since surrender value is only a percentage of premiums paid, it constitutes a loss to the policyholder. Therefore, it is not advisable to surrender a policy, except under unavoidable circumstances.
According to SHRIRAM LIFE rules and regulations, once you pay the premiums on an endowment type life insurance policy for 3 full years, the policy does not become wholly void even if no subsequent premiums are paid.
Such policies are known as paid-up policies. In such cases, the sum originally assured is reduced to a sum bearing the same ratio to the full sum assured as the number of premiums actually paid to total number of premiums originally stipulated as payable under the policy.
The bonuses already vested while the policy was in full force, will remain attached to the paid up policy.
When a policy becomes paid-up, the benefits payable under the policy are considerably reduced, so that it cannot provide comprehensive cover to the policyholder or his dependants as per the original intention while taking the policy.
For instance, all Rider Benefits will cease completely.
The cost of insurance goes up with advancing age. The next time you obtain a policy, the terms may not be as advantageous as available earlier.
The chances of insurability also diminish with the advancement of age despite the fact that insurance is needed more along with increasing age and growing responsibilities.
The reinstatement of a policy once converted into a paid-up policy requires cumbersome formalities to be completed, including evidence of continued insurability.
A paid-up policy cannot participate in the bonus declared by SHRIRAM LIFE.
It is strongly advised that you should always try your level best to keep your life insurance policies in full force.
In case of Shriram Life Insurance Co. Ltd., every proposal is accompanied by a Moral Hazard Report (MHR) which covers details about identity, occupation, financial position etc. This is in addition to agents recommendation in the proposal form.
List of suspicious transactions have been communicated to all the Divisional Offices through our circular. When such transactions are identified post facto the contract, a statement may be submitted to FIU-IND within 3 working days of identification in the prescribed formats.
Divisional Offices have been instructed to intimate such kind of transactions to the Principal Compliance Officer (PCO) at Head Office - Hyderabad immediately so that PCO can consolidate the same and send it to Financial Intelligence Unit - Delhi (FIU-IND).
Insurance is the subject matter of solicitation. Shriram Life Insurance Company Ltd. IRDA Registration No. 128
Head Office:Ramky Selenium,Plot No:31 & 32,Beside Andhra Bank Training Centre,Financial District,Gachibowli,Hyderabad-500032,Phone No:040-23009400