What is life Insurance?

Life insurance is a legally binding contract between the policyholder and an insurance company.
In exchange for the premiums paid by the policy holder, during the agreed Premium Payment Term (PPT) and payment frequency, a life insurance policy ensures financial support to the policy holder and the policy holder’s nominees in case of eventualities.

How is life insurance different from general and health insurance?

As the name implies, life insurance is a cover on your life. It ensures financial support to your family (spouse, children, etc.) in case of loss of life. Whereas, general insurance provides coverage for your other assets, such as cars, homes, etc. against loss or damage caused by unfortunate incidents like theft, fire, manmade or natural calamities, accidents, etc.
Health insurance provides coverage against medical emergencies including the cost of hospitalisation. 

Is Life Insurance an indemnity based cover?

A life insurance policy is not a contract of indemnity; it's a fixed benefit policy.
In case of indemnity-based policies, the insurance company replaces (or pays for) the damages, and the pay-out revives the insured to the same financial status before the occurrence of the loss.
Since the value of human life is not quantifiable, the principle of indemnity does not apply in the case of life insurance. 

Why do I need Life Insurance cover?

Life insurance is one of the best gifts you can give to your loved ones. Though no one likes to think about unfortunate events, when we do, we often worry about what may happen to the loved ones who are left behind.
If you are the breadwinner of the family, your life insurance cover would help the family members to continue living the same lifestyle in case of unexpected eventualities.
Additionally, life insurance policies help you build substantial wealth and fulfil your important life goals such as starting a new business, buying a new house or a car, renovating your old house, etc.  

How much of Life Cover do I need?

How much life cover you need depends on your life stage, household expenses per month, current income, liabilities, medical expenses, education expenses for your children, number of dependants, etc.
A Human Life Value (HLV) Calculator is one of the better ways to estimate the current value of all income you would earn in the future for your family. Please click the link below to calculate HLV: https://www.sudlife.in/human-life-value-calculator

Should you invest in Life Insurance Policy?

Every now and then, all of us probably come across the thought "what would happen to our loved ones when I am not there?"
Besides taking care of the household expenses, your children’s education, or financial liabilities of your family in your absence or post retirement source of income, life insurance works as a great investment plan for yourself.
Certain insurance policies can help you with your retirement plans or with your long-term goals, such as purchasing your dream home or starting your start-up, etc. A life insurance policy will also help you save on income tax and effectively increase your savings. 

What are the types of Life Insurance Products?

Buying a life insurance product is one of the most responsible financial decisions of your life. There are various types of life insurance products and each of these products has its unique benefits.
Here are the different types of life insurance products you can choose from:
Term Insurance | ULIPs (Unit Linked Insurance Plans) | Whole Life Insurance | Money Back Insurance Plans | Endowment Insurance Plans | Child Insurance Plans | Retirement Insurance Plans | Group Life Insurance I Savings Insurance Plan I Pension & Annuity Plans
Star Union Dai-ichi Life insurance has a host of Life Insurance products to help you achieve your various financial goals. Please click here to choose a tailor-made plan suitable for you:

Which type of Life Insurance cover suits me/ do I need?

Choosing the right type of life insurance plan can be a puzzling exercise, but it is one of the most important decisions you can make to ensure a comfortable and secured life for yourself and your family.

Here is a guide to help you choose the same:
Think carefully and note down your financial goals
● Calculate the insurance cover amount using the HLV tool(https://www.sudlife.in/human-life-value-calculator)
● Assess your total liabilities and household expenses
● Decide an amount that you can pay as comfortably pay as premium
● Your expected maturity amount.
● Undertake suitability analysis and find desired product to opt for.

What is a Money back insurance policy?

Money back policy is a type of life insurance plan that pays the benefits in regular intervals or as a lump sum at defined point/s during the term of the policy.
Money back plan is a great plan for youngsters and first-time investors.It can help them save small amounts regularly and meet their short term/ medium term wealth-creation goals.

What is a bonus and how a bonus is calculated?

Bonus is a share of the profit of an insurance company that is paid to the policyholders over and above the sum assured.
Insurance companies invest a percentage of the assets in securities, bonds, and other financial investment vehicles. When the insurance company makes a profit, a percentage of the surplus is shared with the policyholders as a bonus. Bonus, if declared by the Company, generally accrues at the end of every financial year.
The calculation of bonuses depends on various factors such as profits made in the previous year, history of claims, the projected interest rate in the future, returns on assets, etc.  Insurance companies calculate a bonus as a percentage of the sum assured or a specific amount for every thousand rupees of the sum assured amount. 

What are the type of bonuses and when are they paid?

‘Bonus’ is an extra amount given by the Insurer over and above the Sum Assured. In life insurance,there are a different types of bonuses that the insurance companies pay to the policyholders.
Types of bonuses:
● Simple Reversionary bonus (SRB)
● Compound Reversionary bonus (CRB)
● Terminal Bonus
● Interim Bonus
● Cash Bonus
The above bonuses are paid at different times. For example:
A compounded reversionary bonus, the yearly bonus is added to the sum assured, and considering compound interest rates, the next year's bonus is decided on the new sum assured amount.
A simple reversionary bonus is paid on a yearly basis.
An interim bonus is paid on death of Life Assured or after the policy matures before the end of a financial year. Bonus is accrued in Life Insurance policy every year. In case of an unfortunate event before the next bonus declaration, interim bonus is declared for the policy holder’s family.
A terminal bonus, depending on the performance of a policy over a period of time, a one-time bonus is paid to the policyholders upon maturity or Death.
A cash bonus is paid at the end of the financial year. 

Is bonus Guaranteed?

Life insurance companies invest the accumulated fund that is paid by the policyholders (in the form of premiums) in assets like bonds, securities, etc. When these investments generate profit for the insurer, the bonus is accrued. In most cases, the bonus is paid annually.
Bonus is usually applicable for participating insurance plans, however, technically, it's not guaranteed.
The amount of bonus is not fixed. It can vary depending on the amount of profits the insurance company makes.

How is Human Life Value calculated?

Human Life Value (HLV) is calculated based on the current value of all income you were supposed to earn in the future for your family. HLV helps you decide how much insurance coverage your family would need in case of the unfortunate event of your passing away. There are two ways one can calculate HLV; one is called an income replacement method, and the other one is a need-based model.
However, you must remember that HLV is not a fixed value; it keeps changing with your changing income, varying liabilities, and other factors.
Please click the link below to calculate HLV:

What are the benefits of Life Insurance policy?

Life insurance is one of the most crucial parts of your financial plan. Life insurance policies have numerous benefits.
Some of the key benefits of Life Insurance are:
● A life insurance plan brings you peace of mind that your loved ones would be financially taken care of, even in your absence.
● Life insurance can help you create wealth. Certain plans will help you build a corpus that you may need to fulfil your different financial goals.
● Life insurance gives Income Tax deductions (up to Rs. 1.5 lacs (of your Taxable Income) under Section 80C of the Income Tax Act 1961.
● Life insurance also gives Income Tax exemptions on the benefits (survival/maturity/death) received as per Section 10(10D) of the Income Tax Act 1961.
● Retirement planning becomes easy with certain life insurance policies, such as annuity-based plans.
To know more, click here:https://www.sudlife.in/products/life-insurance

What are different premium payment types?

A life insurance policy gives you and your family a safety net. Your life insurance can cover your loved ones from financial difficulties if you face an eventuality. However, it’s important to know which life insurance plan is suitable for you as it totally depends on your need.
There are different premium payment options to choose from:
• Regular Premium Payment
• Single Premium Payment
• Limited Period Payment

Can I take a life insurance policy on my own life?

Yes, if you are an adult and are eligible to enter into a life insurance contract, you can take a life insurance policy on your own life.
You need to calculate the amount of life insurance cover (sum assured) you need, the number of years you want the life insurance cover, the number of years you want to pay the premium for and who would be the nominee.
You just need to ensure that an insurable interest exists between you and the nominee, for eg..your parents or your spouse.

What are the factors that affect my life Insurance premium?

Life insurance is an essential financial investment you must have to protect your loved ones financially, but it’s also important for your sound financial health. Therefore, understanding which factors affect your life insurance premium is very important before you purchase your insurance policy.
Here's a list of key factors:
● Age - One of the most vital factors that influence life insurance premiums is your age. While you are young, it's assumed that you are less likely to suffer from serious illness and pass away prematurely. Hence, if you avail a life insurance policy in your early-stage of life, you may expect a lower premium.
● Medical history/Family history - A history of illness, especially critical ones like cancer, heart disease, etc. might negatively impact your premium. Usually, an insurance company will ask for a medical examination and would also look at metrics like your blood glucose level, cholesterol, blood pressure, etc. before deciding your premium. If your family has a history of certain critical medical conditions, it might increase the premium.
● Occupation - Your premiums could be higher if your occupation involves higher than usual risks, for example, you are a pilot or you perform dangerous duties.
● Avocation/lifestyle – You may be charged a higher premium if you have high-risk hobbies. For example, scuba diving, rock climbing, flying, etc. Also, tobacco and alcohol consumption habits affect your premium amount negatively as smokers and alcohol consumers have a higher mortality rate.
● Gender - Statistically, women have a longer lifespan than men. Hence if you are a woman, you can expect a better offer from your insurance company.
● Sum Assured – Higher the Sum Assured, higher would the total policy premium.
● Policy Term – Longer the Policy Term, higher would be the total policy premium.
● Premium Payment Term – Longer the Premium Payment Term (PPT), lower would be the monthly premium

Can life insurance policy offer hospitalization benefits?

A life insurance policy covers your life risk; however, it does not offer hospitalisation benefits directly. Hospitalisation coverage benefits are offered by health insurance policies.
Life Insurers offer fixed benefit health insurance products/ rider which are also known as critical illness product or rider. A critical illness product/ rider provide coverage on diagnosis of specified illnesses and help you deal with your financial burdens.
To know more:https://www.sudlife.in/products/life-insurance/riders

What is a Critical Illness Insurance?

A Critical Illness benefit provides coverage against specified life-threatening illness/ diseases. A fixed amount/ benefit amount is paid in lump sum payment if the policyholder is diagnosed with a covered critical illness.
Buying a critical illness product is a prudent decision.
To know more our health insurance product click: https://www.sudlife.in/products/life-insurance/riders

What is Sum Assured?

As the name indicates, sum assured is the assured or guaranteed sum (amount) that is pre-determined / chosen by you and that is paid to you or your nominee (provided you have paid all the premiums in full) at the happening of the even insured (either you survive till the end of the policy term or in the unfortunate even of your passing away before the term) The insurer pays this sum as per the life coverage chosen by you when you purchased your life insurance policy. This amount helps your family to take care of financial liabilities

What is Death Benefit?

The amount of claim paid to the nominee/beneficiary under the life insurance policy after the life insured passes within the policy term is called the death benefit. It is the lump sum amount that a nominee receives when the life insured dies within the policy period.
Death benefit is a final pay-out to your beneficiaries in case of your unfortunate passing away during the policy's term, while the policy is inforce. A death benefit is the primary and possibly the most vital reason why you should purchase a life insurance policy for your family.
There are various types of death benefits:
● Lump Sum Payout: Here, the death benefit is paid as a lump sum amount in one go to your nominees if you pass away.
● Regular Payout: This death benefit comes in regular monthly instalments for a pre-decided period of time.
● Part Lump Sum and Part Regular Payout: This option is a mix of a lump sum amount and regular payouts for a specified time period.

What is underwriting?

Life insurance premium depends on the life risks associated with the individual purchasing the policy.
Underwriting is the process of ascertaining the risk the insurer should undertake in insuring a customer.
Professional underwriters review the criteria on your application to see if it's possible to offer you a policy and, if so, how much coverage you're eligible for.
It helps the insurer understand the likelihood of the insured customer's passing away, as that would mean the death benefit would have to be paid to the beneficiaries of the insured.
With the use of the underwriting manual, an underwriter will look into everything starting from your health to hobbies, from occupation to addictions, and would determine if an insurance policy can be offered to you and how much insurance should be granted. 

Who is an underwriter?

An underwriter analyses and determines the risks involved in offering insurance policies to individuals and business establishments. They also assess and decide the premium amount of the said insurance policies.
Underwriters use software, data analytics, and other technical means to evaluate the risks and advise the insurance companies of possible insurance claims in the future.

What is Insurable Interest?

Insurable Interest is one of the fundamental principles of insurance. It is defined as the concern of an individual towards obtaining an insurance policy for an item or an individual against any type of unforeseen events such as losses or death.
The subject matter of the contract must provide some financial gain by existing for the insured (or policyholder) and would lead to a financial loss if damaged, destroyed, stolen, or lost.
To have insurable interest most typically means you are financially dependent or would have financial hardship if the insured person were to pass away.

What is a rider?

A rider is an optional add-on benefit that can be opted for at an additional cost with your basic insurance policy. A rider provides additional coverage and they come in various forms such as accidental death benefit cover, critical illness cover, total and permanent disabilities cover, long-term care cover, etc.
Riders can be purchased at the same time you buy an insurance policy and it's much more cost-effective than buying separate policies for different needs.
To know more, check this link:https://www.sudlife.in/products/life-insurance/riders

How do I purchase a rider?

Your basic insurance policy ensures financial support to your loved ones in your absence. However, it's always a possibility that you may need additional coverage depending on your preferences and life situations. Riders offer you such additional coverage and may be availed of when you buy your primary insurance policy at an extra cost.
For various affordable rider choices, please refer to:https://www.sudlife.in/products/life-insurance/riders

What is Policy Term?

Policy term simply means the lifetime of a term insurance policy. Policy term is the period of time a term insurance policy remains active, and in case of unfortunate eventuality during this term, your beneficiaries will receive the death benefit. Policy term is decided at the time of purchasing an insurance policy and is different than a premium paying term which refers to the period you are required to pay the premiums.

What is premium payment term?

The premium payment term is the total number of years you are required to pay the premiums. Insurance companies often offer flexible payment terms, and you can take advantage of that while purchasing your policy.
You can decide how you want to pay your premium. For example:
● Single premium - where you can pay the entire premium amount as a lump sum payment.
● Regular premium payment term - where the premium payment term and policy term are the same.
● Limited premium payment term - where the premium payment term is shorter than the policy term.

What is deferment period in an annuity policy?

In a deferred annuity plan, your annuity payment starts after a certain period called deferment period. Unlike an immediate annuity, where the annuity pay-out starts immediately after you invest your money, in this case, the pay-outs start after the deferment period is over. During this period, no premium needs to be paid. This is a good option if there's time for you to retire and you do not need a retirement income immediately and during this period the premium paid by you is invested and allowed to grow so that the annuity layouts can be more.

What is vesting age?

The vesting age is the age when the policyholder starts to receive the pension.
Vesting age is usually applicable in the cases of annuity plans. In certain annuity plans, you get dual benefits - life coverage and a pension that is paid to you once you reach a certain age. This age is your vesting age.
In most cases, the minimum vesting age is 30 years, and the maximum is 80 years.

What is premium discontinuance?

Premium discontinuance refers to the situation where a policyholder stops paying premiums under the Policy before the expiry of grace period or surrenders the Policy.

What is premium discontinuance fund?

Discontinued Policy Fund is the segregated fund that is set aside and constituted by the fund value of all policies discontinued during the lock-in period and stays there until the lock-in period is over.

What is accidental death benefit rider?

An Accidental Death Benefit rider is an add-on to a life insurance policy that provides an additional benefit in the event of life insured’s death due to an accident. If this rider is attached to a life insurance policy and if the insured dies due to an accident, the rider pays out an additional lump sum in addition to the death benefit of the policy.
To know more:https://www.sudlife.in/products/life-insurance/riders/accidental-death-and-total-permanent-disability-benefit-rider

What is Grace Period?

Grace period in a life insurance policy refers to a specified period of time, after the premium due date, during which policyholders can pay their premium and avoid lapsation of their policy. The grace period is decided by the insurance company, depending on the frequency of premium payment and can extent upto 30 days. Typically for monthly mode, a grace period is 15 days and for other than monthly modes 30 days.

What is nomination?

Nomination in a life insurance policy is the process of appointing an individual/s who will receive the policy benefits in the event of the life assured’s/ insured persons death. The nominee can be the insured persons spouse, children, and/ or parents. The nomination provision is in accordance with Section 39 of the Insurance Act,1938.

Who is a nominee?

In a life insurance policy, the nominee is an individual/s who will receive the death benefit in the event of death of the policyholder's during the policy term. According to Section 39 of the Insurance Act, 1938, a policyholder can have one or more nominees and at any point during the policy period, nominee can be changed as many times as needed.

What is a term insurance plan?

Basic term insurance plans are beneficial for most of us and we all should have a term plan to give a basic financial security for our families.
A term insurance plan is a simple, low-premium insurance product that offers financial coverage for a specified amount (sum assured) for a specified time period (policy term). In case of death of the policy holder during the policy term, the Sum Assured is paid to the Nominee and the policy terminates.
In case the policy holder survives the policy term, no benefit is given and the policy terminates at the end of the policy term.
Some Term Insurance plans come with the option of return of premium (ROP) where all the premium amounts (excluding GST) paid by the policy holder during the policy term are returned to the policy holder at the end of the policy term
Some term insurance plans come with add-on benefit like disability benefits, accidental death benefits, protection against critical illness, etc.
To know more, click here:https://www.sudlife.in/products/life-insurance/term-plans/sud-life-protect-shield

Which is the best term insurance plan?

There are various term insurance policies to suit your different goals. Basic term plan, term plan with critical illness cover, term plan with return of premium, term plan with accidental death cover, are the key plans
Buying a term insurance plan is important if you have dependents in your family. By choosing the right term insurance plan you can ensure that your loved ones have enough financial coverage in the case of any eventualities.
The important advantages of the right term insurance plans are:
● High insurance cover yet affordable premiums
● Additional financial security
● Tax benefits
You should choose a plan after evaluating your financial goals and financial priorities.
For more information on term plans click here:: https://www.sudlife.in/products/life-insurance/term-plans

How is term insurance different from Endowment plan?

Term insurance plans and endowment plans both offer life insurance coverage. But a term plan only provides financial cover to your family in case of your unfortunate passing away.
Term plans have a lower premium and a higher sum assured compared to endowment plans..
An endowment plan has multiple benefits. It builds your wealth besides protecting your loved ones after you. In the case of term insurance, your money does not grow over time, however, an endowment plan helps you save money for a specified period of time and get a lump sum amount in addition to providing life cover.

What is ULIP?

ULIP (Unit Linked Insurance Plan) is an insurance plan that offers twin benefits. It is an investment avenue to fulfil your wealth creation goals and offers life cover for your family in case of your unfortunate passing away.
A part of the premiums you pay is invested in the funds such as equity, debt, or a combination of both as per your preference and the other part goes toward life coverage. ULIPs are more transparent plans where the charges & investment portions are pre-defined and the returns are directly proportional to the risk of the investment avenue preferred. The charges provides protection to your loved ones and the investment avenue provides wealth creation.
To know more, please refer:https://www.sudlife.in/products/life-insurance/ulip-investment-plans/sud-life-e-wealth-royale

What is the difference between an endowment and ULIP product?

An endowment plan comes with a maturity benefit or death benefit of the sum assured, ULIPs come with a triple advantage of insurance, wealth creation and tax-saving investment.
In ULIPs, the premium paid by the policy holder is partly invested in funds and partly on life cover. The policy holders can choose the funds to invest depending upon their risk appetite and investment horizon.
While endowment plans offer guaranteed benefits (maturity and death), returns on ULIPs are not guaranteed and can be higher since they are market linked and subject to performance of the funds. Also, ULIPs give the flexibility of switching funds and tweaking your investment strategy easily.
An endowment plan involves lower risk than a ULIP because the performance of funds in ULIPs depends on the market conditions. Also, partial withdrawal is allowed in ULIPs, after 5 years, which is not allowed in Endowment plans.

How is ULIP different from traditional plans?

ULIPs serve dual benefits and provide insurance coverage and investment means in a single product. ULIPs are linked to the market and depending on market conditions, in certain cases, they may deliver higher returns. ULIPs involve relatively higher risk though.
Term plans, endowment plans, and whole life insurance policies come under traditional plans. These involve low risk and provide fixed returns in case of loss of life or at the maturity of the term

Can I buy a Term Plan?

A term plan is an excellent and pure form of life insurance that ensures financial security for your loved ones in your absence. If you have children or other dependants, a term plan is a must for you. It's a great plan for young adults too. The premium of a new term plan increases with age, so it's a good idea to get a term plan as early in life as possible.
As term insurance plans offer income tax benefits under Section 80C of the Income Tax Act, buying one for yourself and your family is a great way to ensure financial freedom.
For more details, you can refer to: https://www.sudlife.in/products/life-insurance/term-plans

Can I buy an annuity Plan?

An annuity plan is one of the low-risk insurance products. It lets you save for the future and helps you pursue your dreams even after you retire.
Be it traveling the world, taking up a new hobby, or buying that second home - an annuity plan helps you fulfil all such goals with guaranteed lifelong income. Annuity plans are risk-free, and it ensures regular income letting you maintain your lifestyle post-retirement. You can choose between immediate annuity or deferred annuity plan options depending on when you want the annuity income to start.
For more:https://www.sudlife.in/products/life-insurance/pension-annuity-plans

What is accidental death total and permanent disability rider?

Accidental death and total and permanent disability rider provides financial assistance to you in case you suffer a total and permanent disability due to an unfortunate accident. It can be bought with your base policy to extend the benefits of the same. If you are the sole breadwinner of your family, buying an accidental death and total and permanent disability rider is essential, as it can safeguard your family's financial future against life's uncertainties.
To know more:https://www.sudlife.in/products/life-insurance/riders/accidental-death-and-total-permanent-disability-benefit-rider

What is 'Days of Grace'?

Premium under a life insurance policy becomes due on the due date as mentioned on the face of the policy document, which will be aligned to the issue date of the policy. Life insurance being a contract between insurer and insured, it is obligatory on the part of the insured to pay the premium as and when it becomes due, and on the part of the insurer to pay the sum that is assured. In case the premium is not paid by the due date, policy lapses. But, usually insurer allows additional time to pay the premium after its due date which is called ‘Days of Grace’. So, if the premium is paid within the days of grace the policy does not lapse.

What is Lapse / When does the policy lapse?

If the premium is not paid within the days of grace then the policy lapses. Typically, the days of grace for policies with monthly mode of payment is 15 days and for all other modes it is one month not less than 30 days.

What is Nomination?

Nomination is the process of designating a person to receive the policy moneys payable under life insurance policy upon happening of the risk event specified in the policy. Life insured at the time of taking a policy or at any time later during the term of the policy, may nominate a person who he thinks will suffer the financial loss upon his/her (LA) sudden demise. Nominee is authorized only to give a valid discharge to the policy proceeds when the claim is payable.

What is Assignment?

Assignment in simple terms is transfer of ownership of the policy. With assignment the interest of the insured (Owner) is transferred to the person usually for a monetary consideration he receives or as a gift. There are two types of Assignment -
conditional and absolute assignment. In the conditional assignment ownership is transferred back upon fulfilling a condition which is mutually agreed upon. In absolute assignment complete ownership is transferred. In this kind of assignment creditors of the policyholder cannot have any claim against the policy moneys and proceedings of the policy forms part of the assignee’s estate.

What is Paid-Up Policy?

The policy, under which at least 3 full years’ premiums have been paid, is treated as paid-up policy. After policy acquiring paid-up value, if the further premiums are not paid, then the policy is not treated as void but will continue to cover the risk for the reduced sum which is Paid-up value.

What is the effect of policy becoming paid-up?

When the premiums are paid only for 3 years and no further premiums are paid, then the policy value is reduced to a sum bearing the same ratio as the number of premiums paid bears to total number of premiums payable under the policy.
Formula to calculate Paid-up value is:
Paid-Up value = (Number of premiums paid / Number of premiums payable) X Sum Assured
On policy becoming paid-up, it will not participate in profits declared further, hence no bonus is allowed.

What is Fully Paid-up policy?

The Life insurance policy under which all premiums have already been paid but still not matured is called a fully paid-up policy.

Which sections of Income Tax are applicable for premiums paid under life insurance policy?

Sections 80C, 80CCC, 80D of Income Tax Act 1961 are applied in respect of premiums paid under life insurance policy.

What is the tax benefit allowed for premium paid under life insurance policy?

Premium paid under life insurance policy in any financial year is allowed as deduction from gross income for the corresponding assessment year, under section 80C, subject to a maximum of Rs. 100,000. Section 10 (10D) states that proceedings received under a life insurance policy or Key-man insurance policy, are not taxable.

What is the tax benefit available for premium paid under pension policy?

Premium paid under a pension policy in a financial year is allowed as deduction from income for the corresponding assessment year, under section 80CCC, subject to a maximum of Rs.100,000. Pension received under pension policy is treated as income and is taxed as such.

What is the effect of Section 80CCE?

Section 80CCE of Income Tax Act 1961, states that the total premium that is allowed as deduction under Section 80C and 80CCC taken together, in any assessment year cannot exceed Rs.100,000.

What is the applicability of Section 80D?

Any sum paid to effect or to in force a health insurance policy on the life of assessee, or his/her spouse or dependant parents/children subject to a maximum of Rs.15, 000 is allowed as deduction from the income chargeable to tax.

What are the other conditions that apply to life insurance premium?

a) If premiums under a policy are not paid for at least 2 years, and the policy holder discontinues the policy, then the premium paid in the year of termination of the policy is not allowed as deduction for that year. Besides, the premium paid in the preceding year for which deduction was allowed, is treated as income for the year in which the policy is terminated and is taxed.
b) If the annualized premium under a single life insurance policy exceeds 20% of the Sum assured, and then the premium does not qualify for deduction.

Are maturity benefits taxable?

As per Section 10(10D) of the Income Tax Act,1961 maturity proceeds, including bonuses, of a life insurance policy are exempted from tax. However, this exemption is not applicable when:
i.  Sum assured is less than 20 times of annual premium for policies issued between 01-April-2003 and 31-March-2012 (less than 10 times for policies issued after 31-March-2012).
ii. ULIP issued 01-February-2021 onwards, having total premium of more than Rs. 2.5 lakhs in a financial year.
iii.Other than ULIP issued 01-April-2024 onwards, having total premium of more than Rs.5 lakhs in a financial year.
The provision is subject to amendment from time to time .

Is death benefit payable to the nominee taxable?

No, death benefit paid to the nominee of a life insurance policy is not taxable. Under Section 10(10D) of the Income Tax Act, 1961, death benefit in a life insurance policy is exempted from income, subject to certain conditions. The provision is subject to amendment from time to time.

What sections of IT act provide exemptions to Life Insurance products ?

The following sections are vital for individuals to plan their investments and taxes effectively:-
1.Section 80C and Section 10(10D) of the Income Tax Act provide tax deductions/exemptions with respect to life insurance policies.
2.Section 80C of the Income Tax Act allows individuals to claim deductions on their taxable income for investments made in life insurance policies (along with other investment    instruments). The maximum deduction allowed under Section 80C is Rs. 1.5 Lakhs per financial year.
3.Section 10(10D) of the Income Tax Act exempts the maturity proceeds, including bonuses, of a life insurance policy from tax. However, this exemption is not applicable in cases    mentioned above.

What is the investment pattern of funds by the insurer?

Investment of funds held by the insured is regulated by Section 27 of Insurance Act 1938.

What is Section 40 of Insurance Act 1938?

Section 40 of Insurance Act 1938 prohibits a person from paying any remuneration or commission for procuring insurance business to any person other than an insurance agent or an insurance intermediary.

What does Section 41 of Insurance Act 1938 state?

Section 41 of Insurance Act 1938 states that no person shall offer any rebate as an inducement to any person to take or to continue the life insurance policy. It also prohibits the person from accepting such rebate to continue or to take a life insurance policy.

What is indisputability clause?

Section 45 of Insurance Act 1938 states that a policy of insurance shall not be called in question after 2 years from the date of effecting the policy by the insurer on the ground that a statement made in the proposal or report by medical officer or any supporting document leading to issue of the policy is false or wrongly stated unless the insurer proves that the statement which was made in the proposal or any supporting documents was on a material matter or suppressed the material factor or fraudulently made and that the policy holder knew it at the time of making the statement that it was false.
But, insurer can call for proof of age at any time and it shall not be treated that policy is called in question.

Which act regulates the licensing of insurance agents?

Section 43 of Insurance Act 1938 deals with licensing of insurance agents. Any person with required qualifications can apply in determined manner , by paying fee not more than Rs250. He will be issued a license and after obtaining license only he is authorized to procure the life insurance business.

What is the difference between traditional participatory and traditional non-participatory policies?

As the name suggests, a participating policy is a plan where the insurance company shares profits with the policyholders in the form of bonuses or dividends. These benefits are over and above the guaranteed maturity benefits. For non-participating policies, the insurance companies do not share any bonuses/dividends with the policyholders.
Participating insurance policies involve moderate risk and higher return (depending on the market conditions), whereas non-participating policies have zero risks but you get only life insurance coverage with pre-determined maturity benefits and no share of profit.

What is an Annuity plan?

An annuity is the fixed amount you get each year from your insurer. It helps you get regular payments for your entire lifetime, either in one go or in instalments. A few of the key features of an annuity are - a) It gives you a regular income for life b) it’s not linked to market scenarios, hence it involves very low risk.

There are two types of annuity plans. In an immediate annuity plan, you pay a lump sum amount to your chosen insurer and the payment of the annuity starts immediately without any accumulation phase and continues lifelong or for a limited period.
In the case of a deferred annuity, pay-out starts after the accumulation period. A fixed annuity plan provides you with a fixed income throughout the tenure and it's not market-linked. In a variable annuity plan, your premium money is invested in funds or equities, and depending on the performance of those investment instruments, your return is decided. This plan has an accumulation phase and a vesting phase.

According to Reserve Bank of India’s newly introduced guidelines, the Premium Amount paid using an NRE account will be eligible for GST waiver. This means that when an NRI customer buys an Insurance Plan from an Indian Life Insurance Company, he or she becomes eligible to avail a GST waiver on the insurance premium paid to keep the policy active.

What is the eligibility Criteria for getting GST refund for NRI policyholders?

Below is the criteria for NRI policyholders to qualify for GST refund:
● The residential status of the policyholder should be Non-Resident Indian
● Entire premium payment should be made from an NRE bank account

What are the documents which needs to be submitted while placing a request for GST refund?

1) Scanned copy of duly signed GST declaration form (Click here to download form)
2) Proof of the NRE account from which the premium is debited: Bank account statement (must include the premium payment transaction) or Letter from the bank confirming account     type as NRE account and premium paid transaction from the same account.
3) International address proof (Mailing or Permanent)
4) Passport copy with entry and exit stamp

What is the turnaround time for refund processing?

The refund will be processed within 15 days of payment of renewal premium and submission of required documents or date when pending documents are received, whichever is later provided both the premium payment and document submission is in same month and before 30th of the month.

Can the entire amount of GST be refunded?

● For ULIPs policies, GST levied on premium allocation charges will be refunded
● For all other policies, the entire GST amount will be refunded

How is the GST refund processed?

● For ULIPs policies, units will be adjusted to account for the refund amount
● For all other policies, the refund amount will be transferred electronically to the registered NRE bank account

Can GST paid in premium payment towards revival of a policy be refunded?

Payments made towards revival/reinstatement of policies by the 30th of the month with the necessary documentation are eligible for GST refund.

Can I pay only base premium without GST along with required documents?

Yes, Partial payment without GST is acceptable provided all the required documents are submitted.

Can I seek refund in a bank account from where Premium was not paid?

No, GST amount can be transferred only to the NRE account from where the premium payment was made.

Can GST refund be claimed for an application that has been withdrawn or postponed?

No, GST refund can only be claimed for issued policies.

Can office/employer address of a foreign country be accepted in case the GST refund claimant is either seafarer or mariner or in merchant navy?

GST refund can be provided to seafarer or mariner or in merchant navy only if the foreign country residence proof is in the name of policyholder. Office/employer address of foreign country cannot be accepted.

Is bank statement with masked NRE account number considered as a proof for NRI GST Refund?

To initiate the GST refund, we require the full account number clearly visible. In case it is masked on the bank account statement, a cheque leaf with the full account number will be required. For validation, there must be 100% match in the policyholder’s name and the last 4 digits of the account number printed on the bank account statement and the cheque leaf.

Can GST be refunded in case of auto debit?

Customer needs to submit relevant documents with SUD Life before 30th of the debit month.

General Queries

a) Policyholder is a Resident Indian, but payer is an NRI
    In this case, Resident Indian policyholders are not eligible to receive NRI GST refund.
b) Life Assured is a Resident Indian, but proposer is an NRI
    In this case, since payment is made from an NRE account, GST can be refunded if the ‘Qualification Criteria’ are met.
c) Proposer is a Resident Indian but Life Assured is an NRI
    In this case, since the premium is not being paid from an NRE account, GST cannot be refunded.
d) Premium paid from NRO account
    In this case, since the premium is not being paid from an NRE account, GST cannot be refunded.
e) Premiums are paid from both NRE and NRO accounts
    Premiums paid partially from NRE account are not eligible for GST refund.
f) Payment made using international credit card payment and SWIFT payments
    GST refund is applicable only for payments made through Netbanking, Debit card, Electronic Clearing System (ECS), Direct Debit Mandate or cheque from NRE account.
     Any other mode of payment cannot be used to claim GST refund.
g) Premium payment made from NRE joint account towards 2 applications
    In this case, if the proof of payment (bank account statement of NRE account) mentions the policyholder’s name, then GST is refund is applicable for both applications.
h) Payment is made from a different NRE account and refund is claimed from a different NRE account.
    In this case, GST refund will not be applicable since refund must be claimed from the NRE account used for premium payment.
i) Premium is paid through transfer of funds (TOF) from an existing policy
    In this case, GST refund is not applicable.
j) Premium payment made from multiple NRE accounts and payment mandate captured from a single NRE account
    In this case, GST refund is not applicable since complete payment must be made from a single NRE account.