Insurance

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.

The death claim is paid to:

  • The nominee, as declared by you in the proposal form.
  • The legal heirs, in case you have not specified the nominee.
  • The appointee named by you, in cases where the nominee is a minor at the time of claim.
  • The assignee in case there is a registered assignment.
  • The Karta, if the policy is issued under the HUF Clause.
  • The Trustee, if policy is issued under the MWP Act.

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.

Yes. You can change your nomination at any time till the maturity date. All you need to do is to inform us about the change through a specified form.

No. The assignee will have to reassign the policy in your favour, to enable you to have the right to deal with the policy.

There are several benefits of 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.

These benefits are applicable only if all the eligibility conditions are satisfied. The conditions are:

  • The accident must be caused by outward violent and visible means and should not be self- inflicted.
  • The death must be a direct result of the injuries caused by that accident, within a specified period.
  • For claim in case of accident or disability, the claimant should submit all the reports (police, hospital etc) pertaining to the accident as required by the company.You must send us within 6 months of the disability date.
    – Written notification of your disability arising out of the accident.
    – Proof of your disability.

You will have to undergo one or more medical examinations conducted by medical practitioner/s appointed by us, if required.

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 the due date. This grace period is 30 days from the due date in case premium payments are made on a 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 a 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. The 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 at least 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.

GST and Insurance - What you need to know

GST is an integrated tax, merging most of the existing indirect taxes such as Service tax, VAT etc into a single system of taxation. GST works on the concept of “One Nation One Tax”. This is one of the biggest tax reforms in India since Independence and has been implemented from July 1, 2017.

GST has been implemented from July 1, 2017 onwards.

Implementation of GST is expected to substantially reduce costs especially in the manufacturing sector. The benefits of which could cascade into other sectors in the long run. It is also anticipated to bring in more transparency, automation and simplification in tax compliance.

The types of GST are:

  1. CGST: Central Goods & Services Tax – Levied on supply of all goods and/or services within a State, by the Central Government.
  2. SGST: State Goods and Services Tax – Levied on supply of all goods and/or services within a State, by the respective State Government.
  3. IGST: Integrated Goods and Services Tax – Levied on all interstate supplies of goods and/or services, by the Central Government.

GST would replace the following taxes:

Taxes currently levied and collected by the Centre:

  1. Central Excise duty
  2. Duties of Excise (Medicinal and Toilet Preparations)
  3. Additional Duties of Excise (Goods of Special Importance)
  4. Additional Duties of Excise (Textiles and Textile Products)
  5. Additional Duties of Customs (commonly known as CVD)
  6. Special Additional Duty of Customs (SAD)
  7. Service Tax
  8. Central Surcharges and Cesses, if they relate to the supply of goods and services

State taxes that would be subsumed under GST are:

  1. State VAT
  2. Central Sales Tax
  3. Luxury Tax
  4. Entry Tax (all forms)
  5. Entertainment and Amusement Tax (except when levied by the local bodies)
  6. Taxes on advertisements
  7. Purchase Tax
  8. Taxes on lotteries, betting and gambling

GST will be applicable in Jammu & Kashmir only after the state assembly passes a special law accepting the applicability of CGST & IGST.

Yes, GST will be applicable to NRI customers, provided the consideration is not received in foreign exchange. In such case, IGST will be charged to NRI customers. Rate for NRI customers will be same as the Resident Indian customers.

The Government through its press release dated 7 June 2017, has clarified that existing cesses such as SBC and KKC will be abolished from the date of GST roll-out.

Yes, GST is applicable on premiums of all insurance policies, except the following;

  1. Janashree Bima Yojana (JBY);
  2. Aam Aadmi Bima Yojana (AABY);
  3. Life micro-insurance product as approved by IRDA having a maximum amount of cover of ₹50,000
  4. Varishtha Pension Bima Yojana;
  5. Pradhan Mantri Jeevan Jyoti Bima Yojana;
  6. Pradhan Mantri Jan Dhan Yojana;
  7. Pradhan Mantri Vaya Vandan Yojana;
  8. Any other insurance scheme of the State Governments as recommended by the GST Council.

The following are the existing product (category-wise) GST rates:

  • Term Plans/ Health Plans / Riders – 18%
  • ULIP Charges / Other Charges – 18%
  • First Year / Single Premiums – 4.50%
  • Renewal Premiums – 2.25%
  • Single Premium Annuity Plans – 1.80%

* Subject to changes in tax laws. Same rates apply to Non-Resident customers (NRI’s) s well.

No. GST will be a single destination-based consumption tax that will replace existing indirect taxes, including Service tax, VAT, Octroi, Sales Tax, Excise Duty, etc.

If policy premium is due for payment on or after the roll-out date of GST, then GST will be applicable on premium.
If the premium is paid in advance, there would be no implications under the GST law. However, for premium not paid or balance amount due, the same would be taxed at the GST rate.

Yes, the details of GST paid by the customer on premiums would be disclosed separately on the premium receipts issued under “Taxes and Levies as applicable”.