Overview Life Insurance in Ranchi
Ranchi is the capital city of the state of Jharkhand. It was the centre point of the movement to get a separate state of the tribal population of the former state of Bihar. The state of Jharkhand was carved out of Bihar in the year 2020. The city has seen a huge increase in the infrastructure and other facilities in the education and health care sector to give the lives of its residents a better turn. Despite the multiple developments being undertaken in the city as well as the state, there is a long way to go to provide the citizens with the optimum facilities in every sector.
The citizens of Ranchi have the benefits of being in an industrial hub with many employment opportunities. Ranchi is an urban city but the life insurance sector in the city has a long way to go to provide good coverage for all the citizens of the city. Given below are key details related to the life insurance cover in Ranchi.
Additional Reading: Types-and-benefits-of-group-life-insurance-policies
What is life insurance?
Life insurance is one of the many types of insurance covers that are provided to the citizens of the country. This coverage is used to insure the life of the insured person and provide them with a sum assured as maturity benefits at the end of the tenure of the policy. If the insured person does not survive the policy term, the nominee or the legal heir of such person will receive death benefits.
There are different types of life insurance policies that are available for the people of Ranchi to choose from. Some of such types are mentioned below.
- Term plans
- Retirement plans
- Money-Back plans
- Endowment plans
- ULIPs
- Whole life insurance plans
- Child plans
- Group life insurance
Additional Reading: Term-life-vs-whole-life-insurance
What is premium? What are the factors affecting premium payment?
Insurers charge an amount in the form of a premium for providing such coverage. This premium can be charged on a monthly, quarterly, semi-annually or annual basis. The frequency of premium payment has to be decided by the policyholder at the time of buying the policy and cannot be changed unless allowed by the insurer. The premium amount can be paid through online or offline modes as per the convenience of the policyholder.
Failure to make regular and timely premium payments will less to termination or lapse of the life insurance cover provided by the insurer. Some insurers allow the policyholder to maintain the life cover despite the failure or default to make premium payments. Such benefits are available under a separate rider which has to be bought by the policyholder as an additional cover.
There are many factors affecting the premium payment on any life insurance cover. Some of such factors are mentioned below.
- Age
The age of a person is one of the prime factors determining the premium amount. Insurers charge lower premiums on the cover provided to younger people than to people in their late 40s or 50s. As the age of the person increases, they are considered to be high-risk individuals to provide coverage. Hence the cost of insurance or the premium amount increases.
- Smoking or non-smoking
Smokers are considered to be of higher risk to contract life-threatening diseases and hence pose as high-risk individuals in the eyes of the insurer. hence the premium charged to provide a life cover to such individuals is higher.
- Coverage amount
The amount of premium is directly dependent on the coverage amount rewired by the policyholder. A higher coverage amount will require a higher premium to be paid especially if the tenure is not for a lifetime.
- Coverage tenure
The coverage tenure unlike the coverage amount is indirectly proportional to the premium amount. If the tenure of the policy is longer or for a lifetime, the premium amount will be lower and vice versa.
- Number of persons included in the cover
A life insurance policy can be used to insure the life of a person or their entire family. If the policy is to provide cover for the entire family, then the amount of premium charged will be higher and vice versa. The amount of premium will also be higher in the case of senior citizens with medical conditions are included in the life insurance plan.
- Medical conditions
The list of medical conditions that are already existing in any person also factors in the calculation of the premium amount. If the person has serious medical conditions but that are included in the list of the insurer to provide life insurance, the premium on account of such medical conditions will be higher.
- Profession and income level
A person having a stable job and high income will be charged a relatively lower premium for life insurance cover. A person with a stable or low-risk job where the risk to life is minimum will be charged a lower premium than in other cases.
- Obesity
It is often said the obesity is the root cause of many medical conditions. Hence obese people are considered to be high-risk individuals and the premium charged for a life insurance cover provided to such people is higher.
Additional Reading: What-are-the-different-types-of-insurance
What are some of the exclusions of life insurance policies?
Life insurance is taken to insure the life of the insured person. However, there are cases when providing a life cover is not feasible for the insurer. Hence, each insurer has a specific list of medical conditions or situations that exempt them from paying any claim payment to the insured person. It is also known as the exclusion list which is different for every insurer based on their guidelines.
Some of the common exclusions usually provided by insurers are mentioned below.
- A loss of life due to war
- Consumption of drugs, alcohol or any intoxicating stuff
- Loss of life due to pregnancy or childbirth
- The insured person cannot participate in any dangerous activity
- The insured person cannot participate in any criminal act
- Loss of life due to pre-existing diseases
- A loss of life due to self-inflicted injuries or suicide
- A Loss of life due to excessive smoking leading to lifestyle diseases
Additional Reading: Can I Take Out Money Out of My Life Insurance Policy?
Life Insurance in Ranchi FAQs
1. What is the minimum amount of tax deduction under section 80C for life insurance premium?
A. There is no minimum amount of tax deduction under section 80C for life insurance premiums. The maximum amount under this section is Rs. 1,50,000.
2. Is the death benefit equal to the sum assured?
A. No. Death benefit will include the benefit on account of additional riders as well as accrued bonuses and accumulated funds along with returns in case of investment-linked plans. Hence death benefits will not always be equal to the sum assured.
3. What is the amount of coverage needed for any person in Ranchi?
A. The amount of coverage needed will vary from person to person. Policyholders should consider the following factors while determining the amount of coverage needed for themselves or their family members or both.
- The number of family members financially dependent
- The applicant is single or a married person with a family
- The average monthly expenses including coverage for inflation
- The long-term financial goals of the family
- Retirement age of the applicant
- Any existing long term or short-term debt
4. What are the top 5 points to consider while buying life insurance?
A. The top five points to consider while buying life insurance are,
- Reputation of insurer
- Claim settlement ratio of the insurer
- Coverage and tenure provided
- Number of persons included in a plan
- List of exclusions and the waiting period of the policy
- Premium amount
- Riders provided by the insurer
5. How to apply for a life insurance policy?
Even if you have accidental deaths covered under the base plan, having an additional accidental death benefit cover is a good idea. If an accident occurs, then along with your base life for the tenure of the policy an additional amount is also paid by the insurance company. This helps a policyholder to take care of their medical expenses during an accident.