Easypolicy FAQs
FAQs
 
Investment Plans FAQs
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Q- What is investment insurance plan?
A- Investment linked insurance plans are life insurance plans that combine the benefit of insurance with investment and are also called savings cum protection plans. A part of the Premium that you pay provides insurance and a part of it is invested for the purpose of wealth generation. You can choose between traditional investment plans and Unit linked plans.

Q- What are traditional investment plans? Why should I buy them?
A- In a traditional plan, most aspects are fixed and guaranteed. They are more like savings plan where your money is invested largely in debt funds and fixed deposits. The maturity amount is guaranteed. There might also be guaranteed additions that are specified in the policy itself. Bonus or loyalty additions are the only benefits that are non-guaranteed and may or may not form a part of the returns, depending upon the policy. Market conditions (ups and downs of the market) do not impact the returns. They can be endowment plans or money back plans. They are ideal if you wish to save for a purpose and cannot take the market linked risk.

Q- What is a money back plan?
A- Money back plan is a fixed duration investment cum insurance plan where you get periodic payments of the Survival Benefit during the Term of the policy. These payments are a fixed percentage of the Assured survival benefit. In case of death during the term of the policy, full Sum Assured is payable without any deduction of survival benefits paid earlier. Any additions if applicable are paid at the Maturity date or with the sum assured.

Q- What is endowment policy?
A- Endowment policies are fixed duration investment-insurance plans with a guaranteed sum assured. The policy holder is also entitled to bonus accumulated over the time. In case of death the total sum assured and the accumulated bonus is paid to the nominee. If the policy holder survives the term, maturity amount and accumulated additions are paid to the policy holder.

Q- Do I have to undergo medical tests to take an investment plan?
A- Assessment of health Risk is an important criterion to get life insurance. You may be required to undergo medical tests depending upon on the insurance company norms and sum assured. Generally for lower sum assured, medical tests may not be required. Most insurance companies require you to fill a health questionnaire to assess your health risk.

Q- What is survival benefit? / What is maturity amount?
A- Survival benefit is the benefit or the money you get back in case you survive the duration of your insurance. Investment linked insurance plans are based on this very premise and so act as savings plan for fixed goals. It is also called the maturity amount.

Q- What is sum assured?
A- Sum Assured is the Death Benefit i.e. the amount for which you have been Insured for. This amount is payable only to the nominee in case of death of the insured person.

Q- Are returns from the investment plans taxable?
A- In an investment linked life insurance plan, returns are not taxable, be it sum assured or the maturity amount.

Q- What is premium payment term?
A- Premium payment Term is the duration for which you have to pay regular premiums. It may be equal to or less than the Policy term depending upon the type of policy.

Q- What is guaranteed addition?
A- Guaranteed addition is a percentage of sum assured which the insurance companies guarantee. It is added to the basic sum assured or the maturity amount, as the case may be, and is payable at the time of policy maturity. It is calculated for each year that the premium has been paid.

Q- What is loyalty addition?
A- Loyalty addition is a kind of Bonus amount declared by the insurance company from time to time depending upon the company performance. It is a non guaranteed amount calculated on the sum assured. This amount is added to the Maturity amount and is payable to you on the maturity date.

Q- What is surrender value?
A- Investment plans acquire a cash value over the time. Cash value paid to the policy holder in case he wishes to terminate the policy before the term of the insurance policy is over is the surrender value of the policy. Any bonuses and additions, if applicable, are included in this surrender value. Please note that this is applicable only if the policy holder wishes to terminate the policy. In case of a death claim, full sum assured is paid along with applicable additions.

Q- Can I take a loan on my policy?
A- Certain policies have the facility to provide loan to the Policy holder. Loan amount is calculated on the Surrender Value acquired on the policy. Rate of interest charged on the loan may vary from company to company. The loan duration has to be less than or equal to the remaining policy duration. If the loan is not repaid during the tenure, loan amount and applicable interest is deducted from the Maturity amount.

Q- What happens if I miss a premium?
A- If you miss the premium paying date, you can pay the premium during the grace period which is usually 15 to 30 days from the premium date.

Q- How does my policy lapse?
A- The Policy lapses if you do not pay the Premium by the premium paying date or during the grace period. You are allowed to revive the policy within 3 years of the policy lapse.

Q- How can I revive my policy?
A- Policy revival time after the lapse is generally 3 years and for some may be 5 years. You need to pay all balance premiums to revive the policy. Some companies offer special revival where the policy date will be changed in case you cannot pay all the balance premiums.

Q- What types of riders are available on investment plans?
A- Based on insurance company and type of Policy and, there might be different Riders options available along with the policy. Riders generally available for traditional plans are:
• Term rider
• Critical illness
• Accidental death and dismemberment
• Accelerated sum assured
• Partial and permanent disability
• Waiver of premium
• Hospital cash


 
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