0 hidden charges. 0 forex
debit-card
Enjoy automated investing and saving on Fi

What are the Best Life Insurance Schemes in India?

article image

What are the Best Life Insurance Schemes in India?

Table of Contents

When you are the primary breadwinner in the family, your shoulders are often burdened with responsibilities. But, should you ever find yourself in a situation where your family cannot rely on you for income, life insurance comes in handy here.

Life insurance is probably the best way to ensure that your loved ones will not be in a financial fix, even if something happens to you. While the loss will be irreplaceable, at least they would not have to depend on others financially. 

Life insurance is a scheme that guarantees financial assistance to your family in your absence. A lump sum amount is paid out to the family left behind if the insured dies during the term of the plan. So, it is advisable that you start investing in a plan as early as possible. There are a plethora of options, and you must choose one that caters to the maximum of your priority needs.

Best Life Insurance Plans

Choosing the right life insurance plan can be a time-taking task as you need to consider a lot of things. Having enough options is yet again essential. So, to sort out your problem, here are a few options that you might want to look at to shortlist the best one for you and your family. 

Postal Life Insurance Scheme

Well, as the name suggests, it is a life insurance plan introduced back in 1884 in British India. Currently, it offers a maximum insurance amount of ₹50 lakhs. Initially, the plan was launched for postal employees, and so it is named Postal Life Insurance Scheme. Later on, they also offered group insurance policies as well.

Who can apply? 

  • Employees of central and state public enterprises
  • Central and state government employees 
  • Government institutions and university employees 
  • Employees of local bodies, autonomous bodies, cooperative societies
  • Joint ventures with at least 10% government or PSU stakes
  • Group insurance scheme for Gramin Dak Sevaks

Features and Benefits

  • A beneficiary can be added to the postal life insurance scheme 
  • After 3 years of the policy, a loan can also be availed against it
  • Under certain circumstances, the revival of policy is also possible
  • A whole life insurance policy can be changed to an endowment assurance policy
  • You enjoy tax benefits under Section 80C of the Income Tax Act
  • Claims are processed quickly

Types of Postal Life Insurance Scheme 

  • Bal Jeevan Bima: Children Policy
  • Santosh: Endowment Assurance
  • Yugal Suraksha: Joint Life Endowment Insurance
  • Suvidha: Convertible Whole Life Insurance
  • Suraksha: Whole Life Insurance
  • Sumangal: Anticipated Endowment Assurance
  • Scheme for physically handicapped individuals

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) 

Aided by the government of India and offered by Life Insurance Corporation, Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance plan available for people between the age of 18 years to 50 years. All you need to have is a savings account in a bank where the auto-debit option is enabled. The annual premium automatically debited is ₹436. 

PMJJBY offers a sum assured of ₹2 lakhs. If the insured individual dies, the family receives a sum of ₹2 lakh irrespective of the cause of death. You can visit the website of LIC and get enrolled in this scheme. 

Pradhan Mantri Suraksha Bima Yojana (PMSBY) 

All those individuals looking for a stable government-aided life insurance plan can get enrolled in the PMSBY. People between the age of 18 and 70 can register for this life insurance scheme. With a premium of ₹20 per year, individuals can get enrolled. In case of death or full disability, ₹2 lakh is provided and ₹1 lakh if the insured suffers a partial disability. To register, you need a bank account and allow auto-debit for the premium. 

What are the different types of life insurance plans?

When you are planning to purchase a life insurance plan, make sure you are aware of the various types of life insurance. There are terms like endowment plan, savings plan, etc. Check the details given below about different types of life insurance-

Term Insurance Plan

It is a low-premium and purest life insurance plan. In case of the insured's death during the policy term, all the benefits of the plan are paid to the insured's nominee. It differs from a whole life insurance policy since most players give coverage up to the age of 85 years in term plans.

ULIPs

Unit Link Insurance Plans or ULIPs are a mixture of insurance and investment. It lets you invest a part of the plan in Equity and use the rest as life cover. You can choose among the various fund options available to help grow your corpus while you also get life cover.

Whole Life Insurance Plans

This is an entirely permanent life insurance plan. Under this plan, the nominee of the insured gets the death benefit in case the insured passes away. The plan has no maturity benefit but continues to assure protection as long as the premium is paid. Normally, whole life insurance covers up to the age of 99 years.

Savings Plan

Under a savings plan, you invest through premium to receive a fixed maturity amount. It is mostly done for a specific financial goal like weddings, education, etc. The amount at maturity is fixed and is usually a non-participating plan.

Endowment Plans

Under an endowment plan, the insured individual gets a lump sum amount upon maturity of the plan. Also, in case of unfortunate death of the insured, the nominee gets the death benefit. Endowment plans have a fixed tenure, and maturity value is decided at the time of investing.

Pension Plans

Here you invest and pay a premium for your after-retirement financial goals. Invest now and get the returns after you retire. In case of death before the pension starts, the nominee gets the assured amount, or in case of death during the pension years, the nominee will receive the pension for life, depending on the type of pension plan chosen.

Summing it up

Having a life insurance plan should be a part of your future planning. And the thing about life insurance is that the premium prices get costlier as you get older. So, it’s wise to start investing in one as early as possible, preferably if you’re in your twenties. Most of the plans are available for people above the age of 18 years, so make the most of it. You must take into consideration the payable premium, the coverage offered by the plan, their claim settlement history, the market review, etc. All these points are essential to consider, so you get the maximum possible benefit as and when required. 

Frequently Asked Questions

1. What affects your life insurance premiums?

Several factors may affect your life insurance premium, and it is vital that you have an idea of the same-

  • Age affects the premium. The lower your age, the lower the premium 
  • Gender may also affect the insurance premium
  • Pre-existing diseases heavily impact the insurance 
  • Health history of the insured and the family
  • Geographical location
  • Smoking habits and consumption of intoxicants

2. Who needs life insurance?

A life insurance plan is something that every individual should get enrolled on irrespective of their current medical condition. Health issues cannot be predicted, but you can definitely have a backup that can keep you calm in times of need. It is even advised that you should get life insurance as early as possible. 

3. What are the major exclusions of life insurance?

Not everything is calculated in a life insurance plan. And so, there are a few exclusions in almost all the life insurance Schemes. These are-

  • Suicide
  • Death due to involvement in illegal activities 
  • Wrong/ incomplete information about existing diseases

4. What are the schemes of insurance?

Following are the major types of insurance schemes in India:

  1. Life Insurance
  2. Health Insurance
  3. Motor Insurance
  4. Home Insurance
  5. Travel Insurance
  6. Personal Accident Insurance
  7. Critical Illness Insurance
  8. Fire Insurance
  9. Marine Insurance
  10. Liability Insurance.

5. What are the Government health insurance schemes in India?

There are multiple government health schemes in India. Some of them are -

a. Ayushman Bharat Yojana

b. Pradhan Mantri Suraksha Bima Yojana

c. Central Government Health Scheme (CGHS)

d. Employment State Insurance Scheme

e. Universal Health Insurance Scheme (UHIS)

Time to switch to Fi. Smart banking and only that.
Related Posts
Get the Fi app