Question 1

What is Life Insurance?

Accepted Answer

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.

Question 2

How is life insurance different from general and health insurance?

Accepted Answer

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.

Question 3

Is Life Insurance an indemnity based cover?

Accepted Answer

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.

Question 4

Why do I need Life Insurance cover?

Accepted Answer

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.

Question 5

How much of Life Cover do I need?

Accepted Answer

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.

Question 6

Should you invest in Life Insurance Policy?

Accepted Answer

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.

Question 7

What are the types of Life Insurance Products?

Accepted Answer

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 | Savings Insurance Plan | Pension & Annuity Plans. Star Union Dai-ichi Life insurance has a host of Life Insurance products to help you achieve your various financial goals.

Question 8

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

Accepted Answer

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. 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.

Question 9

What is a Money back insurance policy?

Accepted Answer

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.

Question 10

What is a bonus and how a bonus is calculated?

Accepted Answer

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.

Question 11

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

Accepted Answer

'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.

Question 12

What is Sum Assured?

Accepted Answer

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.

Question 13

What is Death Benefit?

Accepted Answer

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.

Question 14

What is underwriting?

Accepted Answer

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.

Question 15

Who is an underwriter?

Accepted Answer

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.

Question 16

What is Insurable Interest?

Accepted Answer

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.

Question 17

What is a rider?

Accepted Answer

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.

Question 18

How do I purchase a rider?

Accepted Answer

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.

Question 19

What is Policy Term?

Accepted Answer

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.

Question 20

What is a term insurance plan?

Accepted Answer

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.

Question 21

Which is the best term insurance plan?

Accepted Answer

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.

Question 22

How is term insurance different from Endowment plan?

Accepted Answer

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.

Question 23

What is ULIP?

Accepted Answer

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.

Question 24

What is the difference between an endowment and ULIP product?

Accepted Answer

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.

Question 25

How is ULIP different from traditional plans?

Accepted Answer

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.

Question 26

What is 'Days of Grace'?

Accepted Answer

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.

Question 27

What is Lapse / When does the policy lapse?

Accepted Answer

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.

Question 28

What is Nomination?

Accepted Answer

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.

Question 29

What is Assignment?

Accepted Answer

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.

Question 30

What is Paid-Up Policy?

Accepted Answer

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.

Question 31

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

Accepted Answer

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.

Question 32

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

Accepted Answer

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.

Question 33

Where to submit the documents?

Accepted Answer

You have the option to submit the documents via email to customercare@sudlife.in

Question 34

What is the turnaround time for refund processing?

Accepted Answer

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.

Question 35

Can the entire amount of GST be refunded?

Accepted Answer

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

Question 36

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

Accepted Answer

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

Question 37

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

Accepted Answer

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.

Question 38

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

Accepted Answer

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.

Question 39

What is the effect of Section 80CCE?

Accepted Answer

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.

Question 40

What is the applicability of Section 80D?

Accepted Answer

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.

ULIP Plans

Know more about our ULIP Plans

What is a ULIP Plan?

How Does a ULIP Plan Work?

Choose Your Premium Amount

01. Choose Your Premium Amount

Choose Your Premium Amount

02. Select Your Funds

Select Your Funds

03. Unit Allocation

Unit Allocation

04. Charges

Charges

05. Fund Value

Fund Value

06. Switching and Top-ups

Switching and Top-ups

07. Maturity & Claims

Maturity & Claims

Why Consider Getting a ULIP Plan?

2-in-1 Benefit

01. 2-in-1 Benefit

2-in-1 Benefit

02. Flexibility

Flexibility

03. Higher Returns

Higher Returns

04. Tax Benefits

Tax Benefits

05. Transparency

Transparency

06. Long-Term Wealth Creation

Long-Term Wealth Creation

07. Goal-Based

Goal-Based

08. Partial Withdrawal Feature

Partial Withdrawal Feature

09. Top-Up Option

Top-Up Option

Fund Options in SUD Life ULIP Plans

Who Needs a ULIP Plan?

The Young Professional

How Does SUD Life ULIPs Work?

The Premium Split

01. The Premium Split

The Premium Split

02. The Investment Process

The Investment Process

03. The Insurance Component

The Insurance Component

04. The Flexibility Factor

The Flexibility Factor

05. The Charges

The Charges

06. The Maturity Process

The Maturity Process

07. The Claim Process

The Claim Process

Key Features of ULIP Plans

Types of ULIP Plans

1.Type I ULIPs

2.Type II ULIPs

3.Single Premium ULIPs

4.Regular Premium ULIPs

5.Whole Life ULIPs

6.Child ULIPs

7.Retirement ULIPs

How to Choose the Right ULIP Plan in India?

Pros and Cons of ULIP Plans in India

ULIP Charges

How to Maximize Returns from Your ULIP Plan?

1.Start Early

2. Choose Funds Wisely

3.Power of Rupee Cost Averaging

4.Top-Up Facility

5.Review and Rebalance

6.Invest for Long Term

7.Opt for Auto-Rebalancing (if available)

8.Increase Your Premium

9.Minimize Charges