The life insurance industry has undergone several changes in its regulatory framework which has impacted the business sector and its engagement with its customers.
Due to the Covid-19 pandemic, the life insurance industry has become more technologically advanced and customer-oriented with better operational performance and efficiency.
Cover for COVID-19 pandemic:
The novel coronavirus outbreak in 2020 has led life insurance companies to provide prevention against such other diseases caused by viruses. Though the customer’s point of view has changed, insurance industries are pushed to re-imagine their product strategies during this pandemic. Insurance companies worldwide are offering various life-insurance policies and Covid-19 specific policies to ensure financial stability as well as health assistance.
Customer Segment Health and Wellness Initiative:
The insurance industry at its emerging state used to offer an overall approach (general approach) to policies, but as we move forward, customers are provided with advanced customized solutions for their current needs. Hence life insurance has made customer-specific plans which focus on the health and wellness of the customer and are flexible. By taking the initiative for the customer’s health and wellness, life insurers are open to broad market opportunities and an enhanced customer relationship.
Development in the Customer Claim Settling:
The insurance industry is also focused on solving customer-oriented issues. Claims can be raised more swiftly in a shorter-time with online portal access to the customer.
Growing Benefits with Multiple Options:
The Covid-19 pandemic has led various insurance industries to come up with embracing proposals and offers that have not been explored before. Accordingly, it has given rise to advanced and modified trends to suit the customer’s requirements. This has resulted in different kinds of policies with additional benefits. Insurance being a significant investment and beneficial during a climacteric period like the Covid-19, the insurance industry has taken up strategic attempts by developing alternative products to manage the unforeseeable market environment. Other factors like the emerging middle class and young population along with protection against the unpredictable future and retirement planning have supported the development of the Indian life insurance industry.
Due to the Covid-19 pandemic, the life insurance industry has become more technologically advanced and customer-oriented with better operational performance and efficiency.
Cover for COVID-19 pandemic:
The novel coronavirus outbreak in 2020 has led life insurance companies to provide prevention against such other diseases caused by viruses. Though the customer’s point of view has changed, insurance industries are pushed to re-imagine their product strategies during this pandemic. Insurance companies worldwide are offering various life-insurance policies and Covid-19 specific policies to ensure financial stability as well as health assistance.
Customer Segment Health and Wellness Initiative:
The insurance industry at its emerging state used to offer an overall approach (general approach) to policies, but as we move forward, customers are provided with advanced customized solutions for their current needs. Hence life insurance has made customer-specific plans which focus on the health and wellness of the customer and are flexible. By taking the initiative for the customer’s health and wellness, life insurers are open to broad market opportunities and an enhanced customer relationship.
Development in the Customer Claim Settling:
The insurance industry is also focused on solving customer-oriented issues. Claims can be raised more swiftly in a shorter-time with online portal access to the customer.
Growing Benefits with Multiple Options:
The Covid-19 pandemic has led various insurance industries to come up with embracing proposals and offers that have not been explored before. Accordingly, it has given rise to advanced and modified trends to suit the customer’s requirements. This has resulted in different kinds of policies with additional benefits. Insurance being a significant investment and beneficial during a climacteric period like the Covid-19, the insurance industry has taken up strategic attempts by developing alternative products to manage the unforeseeable market environment. Other factors like the emerging middle class and young population along with protection against the unpredictable future and retirement planning have supported the development of the Indian life insurance industry.
You and your friend are nearly the exact same age, and both of you applied for the same Life Insurance policy. Your friend’s proposal was accepted, whereas your Life Insurance Advisor came back to you with an increased premium requirement for the same life cover. Confused? Besides your age, here are a few factors that may have influenced this outcome.
Gender
Statistically, Women tend to outlive Men by 5 to 7 years in India. This means that they are required to pay premiums for a higher number of years compared to men, but the quantum of annual premium is reduced. What this essentially means is that all other factors being equal, Women could end up paying slightly lower annual premiums than men for the same policy.
Smoking & Drinking Habits
All right, this one’s a no brainer. Smoking causes millions of deaths worldwide, and is directly or indirectly responsible for at least 15 different types of cancer. Heavy drinking has similar ill effects on your health, damaging the liver and other vital organs, and reducing overall life expectancy. Your smoking and drinking habits are bound to have a material impact on your life insurance premiums. Yet another reason to ditch the cancer stick and stick to your ‘two drinks a day’ limit.
Present Health Condition
Some policies (especially the ones in which the life cover is high) will require you to undergo a medical examination to allow the insurance company to better understand your present health condition. Irregularities with respect to your heart health, for instance, can lead to an increased premium; or to the insurance company not issuing the policy at all. Any serious issues with respect to your present medical condition are bound to influence your premium amount.
Family’s Medical History
You may be in the pink of health, but if you have a family history of illnesses such as heart disease, diabetes, hypertension, or cancer, it may lead an upward revision in premium estimates. Diseases that tend to be hereditary in nature will obviously have a more material impact on your premiums.
Occupation & Lifestyle
The job you’ve chosen will materially impact your mortality risk – and your subsequent Life Insurance premiums. For instance, the percentage of fatalities every year is far higher for coal miners as compared to those employed in white collar jobs. Your hobbies and pastimes affect your risk of dying as well – if you enjoy tightrope walking or cliffhanging in your spare time, you can be sure that your Life Insurance Company won’t be quite so kind while computing your premium requirement.
Weight
A Body Mass Index (BMI) of over 30 is likely to be viewed as unfavorable by your Life Insurance provider, and will likely lead to higher premiums. Your BMI crosses 40 - and you may become uninsurable. Just another reason to start your morning run and shed a few useless pounds.
Gender
Statistically, Women tend to outlive Men by 5 to 7 years in India. This means that they are required to pay premiums for a higher number of years compared to men, but the quantum of annual premium is reduced. What this essentially means is that all other factors being equal, Women could end up paying slightly lower annual premiums than men for the same policy.
Smoking & Drinking Habits
All right, this one’s a no brainer. Smoking causes millions of deaths worldwide, and is directly or indirectly responsible for at least 15 different types of cancer. Heavy drinking has similar ill effects on your health, damaging the liver and other vital organs, and reducing overall life expectancy. Your smoking and drinking habits are bound to have a material impact on your life insurance premiums. Yet another reason to ditch the cancer stick and stick to your ‘two drinks a day’ limit.
Present Health Condition
Some policies (especially the ones in which the life cover is high) will require you to undergo a medical examination to allow the insurance company to better understand your present health condition. Irregularities with respect to your heart health, for instance, can lead to an increased premium; or to the insurance company not issuing the policy at all. Any serious issues with respect to your present medical condition are bound to influence your premium amount.
Family’s Medical History
You may be in the pink of health, but if you have a family history of illnesses such as heart disease, diabetes, hypertension, or cancer, it may lead an upward revision in premium estimates. Diseases that tend to be hereditary in nature will obviously have a more material impact on your premiums.
Occupation & Lifestyle
The job you’ve chosen will materially impact your mortality risk – and your subsequent Life Insurance premiums. For instance, the percentage of fatalities every year is far higher for coal miners as compared to those employed in white collar jobs. Your hobbies and pastimes affect your risk of dying as well – if you enjoy tightrope walking or cliffhanging in your spare time, you can be sure that your Life Insurance Company won’t be quite so kind while computing your premium requirement.
Weight
A Body Mass Index (BMI) of over 30 is likely to be viewed as unfavorable by your Life Insurance provider, and will likely lead to higher premiums. Your BMI crosses 40 - and you may become uninsurable. Just another reason to start your morning run and shed a few useless pounds.
An insurance cover provides a safety net to our unpredictable lives. Most of us need an assurance that our family members will be taken care of in the event something were to happen to us. As a parent, nothing could be more important to you than your child's safety. Similarly, you would want to ensure family do not struggle in your absence, or because you suffered a permanent disability. This makes buying life insurance cover one of the most wise financial decisions we ever make. An insurance cover is more than just a source of income; it's an assurance that you cared.
But how do we decide how much amount would be a good policy cover? Many people struggle with this question and often end up feeling that their policy could prove inadequate. That's because they have not considered the future against most of the possibilities. Here are a few tips that will help you in deciding the right coverage.
1) Annual Income
Financial experts say you can determine this amount by taking into account your current annual income. They advise a coverage that is at least 10 times the annual income. However, you can pick a plan that is 20 times your current annual income if you consider the rising inflation, cost of living, education and other healthcare facilities.
2) Loans
Find out how much liability you have in terms of the vehicle or home loan. Include that as expenditure your family will have to manage and then decide on insurance coverage. Remember – your goal is to make the life of your family easier.
3) Financial Goals
It's not just your current responsibilities but the ones you might have to fulfil in future that determine your insurance cover. You need to ensure a good amount is available for the higher education of your children. What about their healthcare needs? This will also have to be factored in as the cost of medical care is rising each day.
4) Age
One of the most important factors determining the right coverage would be your age. If you are aged between 25-35 years, pick a cover that's 20 times your annual income plus your liabilities. If you are in your late 40s, pick a cover that's ten times your annual income plus your debt.
5) Policy Tenure
You have to pay an annual premium for the insurance cover you buy. Therefore, get one when you are young so that you get coverage for a long time for the same investment. Life insurance bought at a young age also results in cheap premiums.
But how do we decide how much amount would be a good policy cover? Many people struggle with this question and often end up feeling that their policy could prove inadequate. That's because they have not considered the future against most of the possibilities. Here are a few tips that will help you in deciding the right coverage.
1) Annual Income
Financial experts say you can determine this amount by taking into account your current annual income. They advise a coverage that is at least 10 times the annual income. However, you can pick a plan that is 20 times your current annual income if you consider the rising inflation, cost of living, education and other healthcare facilities.
2) Loans
Find out how much liability you have in terms of the vehicle or home loan. Include that as expenditure your family will have to manage and then decide on insurance coverage. Remember – your goal is to make the life of your family easier.
3) Financial Goals
It's not just your current responsibilities but the ones you might have to fulfil in future that determine your insurance cover. You need to ensure a good amount is available for the higher education of your children. What about their healthcare needs? This will also have to be factored in as the cost of medical care is rising each day.
4) Age
One of the most important factors determining the right coverage would be your age. If you are aged between 25-35 years, pick a cover that's 20 times your annual income plus your liabilities. If you are in your late 40s, pick a cover that's ten times your annual income plus your debt.
5) Policy Tenure
You have to pay an annual premium for the insurance cover you buy. Therefore, get one when you are young so that you get coverage for a long time for the same investment. Life insurance bought at a young age also results in cheap premiums.
Your family looks up to you for emotional and financial support. You should do everything in your power to take care of their needs when you are present in their lives and even when you are not around. Life insurance plans give you an option to create a financial safety net for your family.
It is critical that you continue paying the premiums for your life insurance plans so that your family gets financial support during tough times. Whichever life insurance plan you opt, it is important for a policy to remain active if your beneficiaries need the benefits.
Seven important benefits of life insurance renewal:
Continued Financial Security: Not paying your life insurance plan premium on time and letting your policy lapse goes against the purpose of buying insurance. No active policy means no financial coverage. So, in the case of your untimely demise, your family will not get any benefits, which could leave them struggling financially even to make their ends meet. Renewing your life insurance plans within the due date keeps your family financially secure.
Evade High Premiums: When you buy a life insurance plan at a young age, you get lower premiums since your insurer associates your young age with low risk and good health. If you do not renew your policy, you lose the low-risk tag and later, when you consider buying a new life insurance plan, you might need to pay much higher premiums than before because of your age, medical condition, etc.
Get Full Policy Benefits: If you do not renew your life insurance plan, your family will not get any death benefits or any other additional rider benefit. This means that all the premiums you have paid are for nothing. You might also need to pay interest for reinstating your life insurance plan online. If you renew your policy in time, your family gets the full benefits of the policy.
Avoid the Waiting Period: Life insurance plans have a waiting period before the inclusion of some benefits. When your existing policy lapses, you lose the waiting period covered. So, when you purchase a new life insurance plan, the waiting period is renewed, and you have to begin afresh.
No Medical Tests: Life insurance plans require you to undergo medical tests to determine your health risk and premiums. If you buy a life insurance plan at a young age, you have a lower risk because of your good medical history. This means you can get lower premiums. However, when the policy lapses, you have to undergo medical tests again when purchasing a new life insurance plan. This could result in higher premiums and more hassle.
Get Full Tax Benefits: The premiums of life insurance plans are eligible for taxes deduction under Section 80C of the Income Tax Act, 1961. But when your policy lapses, you cannot claim tax benefits for that year. This causes your taxable income to shoot up. Renewing your life insurance plan ensures you get full tax benefits as applicable.
Avail Full Tenure Advantage: Life insurance plans have a minimum and maximum entry age, usually between 18 and 65 years, and tenure up to 40 years. For instance, if you buy a life insurance plan at 58 years and continue it for eight years but fail to renew it later, you may lose out on the benefits of the past premiums and become ineligible to buy another life insurance because of the maximum age limit.
Renewing a life insurance plan is hassle-free if you opt for timely renewal. Staying covered under a life insurance plan at all times ensures that you do not have to worry about your family in case of an unforeseen situation.
It is critical that you continue paying the premiums for your life insurance plans so that your family gets financial support during tough times. Whichever life insurance plan you opt, it is important for a policy to remain active if your beneficiaries need the benefits.
Seven important benefits of life insurance renewal:
Continued Financial Security: Not paying your life insurance plan premium on time and letting your policy lapse goes against the purpose of buying insurance. No active policy means no financial coverage. So, in the case of your untimely demise, your family will not get any benefits, which could leave them struggling financially even to make their ends meet. Renewing your life insurance plans within the due date keeps your family financially secure.
Evade High Premiums: When you buy a life insurance plan at a young age, you get lower premiums since your insurer associates your young age with low risk and good health. If you do not renew your policy, you lose the low-risk tag and later, when you consider buying a new life insurance plan, you might need to pay much higher premiums than before because of your age, medical condition, etc.
Get Full Policy Benefits: If you do not renew your life insurance plan, your family will not get any death benefits or any other additional rider benefit. This means that all the premiums you have paid are for nothing. You might also need to pay interest for reinstating your life insurance plan online. If you renew your policy in time, your family gets the full benefits of the policy.
Avoid the Waiting Period: Life insurance plans have a waiting period before the inclusion of some benefits. When your existing policy lapses, you lose the waiting period covered. So, when you purchase a new life insurance plan, the waiting period is renewed, and you have to begin afresh.
No Medical Tests: Life insurance plans require you to undergo medical tests to determine your health risk and premiums. If you buy a life insurance plan at a young age, you have a lower risk because of your good medical history. This means you can get lower premiums. However, when the policy lapses, you have to undergo medical tests again when purchasing a new life insurance plan. This could result in higher premiums and more hassle.
Get Full Tax Benefits: The premiums of life insurance plans are eligible for taxes deduction under Section 80C of the Income Tax Act, 1961. But when your policy lapses, you cannot claim tax benefits for that year. This causes your taxable income to shoot up. Renewing your life insurance plan ensures you get full tax benefits as applicable.
Avail Full Tenure Advantage: Life insurance plans have a minimum and maximum entry age, usually between 18 and 65 years, and tenure up to 40 years. For instance, if you buy a life insurance plan at 58 years and continue it for eight years but fail to renew it later, you may lose out on the benefits of the past premiums and become ineligible to buy another life insurance because of the maximum age limit.
Renewing a life insurance plan is hassle-free if you opt for timely renewal. Staying covered under a life insurance plan at all times ensures that you do not have to worry about your family in case of an unforeseen situation.