Life Insurance is a contract for payment of a sum
of money to the person assured (or failing him/her,
to the person entitled to receive the same) on the
happening of the event insured against. Usually
the contract provides for the payment of an amount
on the date of maturity or at specified dates at
periodic intervals or at unfortunate death, if it
occurs earlier. Among other things, the contract
also provides for the payment of premium periodically
to the Corporation by the assured.
Life
insurance is universally acknowledged to be an institution
which eliminates 'risk', substituting certainty
for uncertainty and comes to the timely aid of the
family in the unfortunate event of death of the
breadwinner. By and large, life insurance is civilisation's
partial solution to the problems caused by death.
Life insurance, in short, is concerned with two
hazards that stand across the life-path of every
person: that of dying prematurely leaving a dependent
family to fend for itself and that of living to
old age without visible means of support.
Why is it superior to other
forms of Savings ?
Protection:
Savings
through life insurance guarantee full protection
against risk of death of the saver. In life
insurance, on death, the full sum assured
is payable (with bonuses wherever applicable)
whereas in other savings schemes, only the
amount saved (with interest) is payable.
Aid to thrift:
Life
insurance encourages 'thrift'. Long term saving
can be made in a relatively 'painless' manner
because of the 'easy instalment' facility built
into the scheme (method of paying premium either
monthly, quarterly, half yearly or yearly). Take,
for example, our Salary Saving Scheme popularly
known as SSS. This scheme provides a convenient
method of paying premium each month by deduction
from one's salary. The deducted premium is remitted
by the employer to the LIC. The Salary Saving
Scheme can be introduced in an institution or
establishment subject to specified terms and conditions.
Liquidity:
Loans
can be raised on the sole security of a policy
which has acquired loan value. Besides, a
life insurance policy is also generally accepted
as security for even a commercial loan.
Tax Relief:
Tax relief in Income Tax and Wealth Tax is
available for amounts paid by way of premium
for life insurance subject to Income Tax rates
in force. Assessees can avail themselves of
provisions in the law for tax relief. In such
cases the assured in effect pays a lower premium
for his insurance than he would have to pay
otherwise.
Money when you need it:
A suitable insurance plan or a combination
of different plans can be taken out to meet
specific needs that are likely to arise in
future, such as children's education, start-in-life
or marriage provision or even periodical needs
for cash over a stretch of time. Alternatively,
policy moneys can be so arranged to be made
available at the time of one's retirement
from service to be used for any specific purpose,
such as for the purchase of a house or for
other investments. Subject to certain conditions,
loans are granted to policyholders for house
building or for purchase of flats.
Who can buy a Life Insurance Policy
?
Any person who has attained majority and is eligible
to enter into a valid contract can take out a life
insurance policy for himself and on those in whom
he has insurable interest. Policies can also be
taken out, subject to certain conditions, on the
life of one's spouse or children. While underwriting
proposals, factors such as the state of health of
the life to be assured, the proponent's income and
other relevant factors are considered by the Corporation.
ATM Locater 
ATM Locater
Advertisement
©2001. All Rights Reserved. Designed & Maintained By General
Data Pvt. Ltd.