Life insurance FAQ

Why do I need life insurance?

Life insurance provides financial protection to your family in case of your untimely demise. It ensures that they have a source of income and financial stability to cover living expenses, debts, and future needs.

What types of life insurance are available in India?
There are various types of life insurance policies in India, including Term Insurance (pure protection), Whole Life Insurance (provides coverage for your entire life), Endowment Plans (savings and insurance combined), and Unit-Linked Insurance Plans (ULIPs, offering investment options).

Is life insurance only for breadwinners?
No, life insurance can be beneficial for anyone with financial dependents or responsibilities. It helps ensure the financial well-being of your loved ones, including children, spouses, or aging parents.

How much life insurance coverage do I need?
The amount of coverage you need depends on your financial obligations, such as loans, household expenses, education expenses, and your future financial goals. We can help you determine the right coverage amount.

Can I change my life insurance policy later if my circumstances change?
Yes, most life insurance policies in India offer flexibility. You can typically modify the coverage amount or switch to a different type of policy based on your changing needs.

What is the difference between premium and sum assured in a life insurance policy?
The premium is the amount you pay periodically (e.g., monthly, annually) to keep the policy in force. The sum assured is the amount your beneficiaries receive upon your death.

Are the premiums for life insurance tax-deductible in India?
Yes, premiums paid towards life insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act, up to a specified limit.

Can I buy life insurance for my children or parents?
Yes, you can purchase life insurance policies for your children or parents to ensure their financial security. These policies can help cover educational expenses or provide support in case of their demise.

Is it possible to surrender or cancel a life insurance policy?
Yes, most life insurance policies have a surrender value, which means you can cancel the policy and receive a portion of the premiums paid, subject to certain terms and conditions. However, surrendering a policy is typically not advisable unless it's in your best financial interest.

Why do I need medical insurance?
Medical insurance provides financial protection against the high costs of medical treatments and hospitalization. It ensures that you can access quality healthcare without the burden of steep medical bills.

What are the different types of medical insurance plans available in India?
There are various types of medical insurance plans in India, including Individual Health Insurance, Family Floater Plans, Senior Citizen Health Insurance, Critical Illness Insurance, and Group Health Insurance provided by employers.

Is medical insurance necessary if I'm already covered by my employer's group health plan?
While employer-provided coverage is valuable, it may not always be sufficient. Having a personal medical insurance policy can offer additional coverage, especially during transitions or job changes.

How does the claim process for medical insurance work?
When you require medical treatment, you can file a claim with your insurance provider. The insurer reviews the claim and, if approved, reimburses you or directly settles the medical expenses with the hospital.

What factors should I consider when choosing a medical insurance plan?
Consider factors like coverage limits, network hospitals, co-payment requirements, waiting periods, and premium costs. Your choice should align with your healthcare needs and budget.

Are pre-existing conditions covered under medical insurance?
Most insurance policies have a waiting period during which pre-existing conditions are not covered. After the waiting period, these conditions may be covered, subject to policy terms.

Can I include my family members in my medical insurance plan?
Yes, you can include your spouse, children, and sometimes even dependent parents in a family floater medical insurance plan for comprehensive coverage.

Are premiums for medical insurance tax-deductible in India?
Yes, you can avail tax benefits under Section 80D of the Income Tax Act for premiums paid towards medical insurance for yourself, your family, and parents.

What are cashless and reimbursement claims in medical insurance?
Cashless claims allow you to get treatment at network hospitals without paying upfront (the insurer settles the bill directly). Reimbursement claims involve paying the bills yourself and then getting reimbursed by the insurer.

What is a mutual fund?
A mutual fund is a professionally managed investment fund that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities.

How do mutual funds work?
Mutual funds collect money from investors and hire professional fund managers to invest in various assets. Investors receive units in the fund proportional to their investment, and the fund's performance determines the value of these units.

What are the different types of mutual funds available in India?
Mutual funds in India can be categorized into Equity Funds, Debt Funds, Hybrid Funds, Index Funds, and exchange-traded Funds (ETFs), among others.

How can I invest in mutual funds?
You can invest in mutual funds through various channels, including asset management companies (AMCs), banks, stockbrokers, and online platforms. Common investment modes include lump-sum investments and systematic investment plans (SIPs).

What returns can I expect from mutual funds?
Mutual fund returns vary depending on the type of fund and market conditions. Historically, equity mutual funds have provided higher returns over the long term, while debt funds are more stable but offer lower returns.

Are mutual funds safe investments?
Mutual funds come with risk, but they are regulated and managed by professional fund managers. Diversification and professional management can help mitigate risk, but returns are not guaranteed.

What is the ideal investment horizon for mutual funds?
The ideal investment horizon for mutual funds depends on your financial goals. Generally, for equity mutual funds, a long-term horizon (5-7 years or more) is recommended, while debt funds can be suitable for shorter durations.

How do I choose the right mutual fund for my goals?
To select the right mutual fund, consider factors like your investment goals, risk tolerance, time horizon, and the fund's past performance. It's advisable to consult a financial advisor for personalized guidance.

Are there tax benefits associated with mutual funds?
Yes, there are tax benefits like long-term capital gains tax exemptions for equity funds held for over one year and indexation benefits for debt funds. Consult with a tax advisor for specific details.