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One of the advantages of a life insurance policy is the facility of loan that it
offers in times of need. At a time when there is a dire necessity and no other funds
are available, it is best to go in for loan on your life insurance policy. However,
most policies stipulate a limit as to the amount that could be taken on loan. Generally
the limit is 90 percent of the available cash surrender value on the policy. It
is much easier and a more economical source of borrowing. And above all, it does
not hurt your self-esteem. It is after all your own money that your are withdrawing. |
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Subject to certain limits and conditions prescribed by the Income Tax Act, premiums
paid to effect or to keep in force an insurance policy on the life of the assesses
or on the life of the wife or husband or any child (whether minor or major) of the
assessed irrespective of the status of the child, enjoys tax rebate under section
88 of the income tax act. In the case of contribution to pension funds, deduction
is available under Section 80CCC of the Income Tax Act. |
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Section 10(10D) of the Income-tax Act, 1961, provides total exemption on any sum
received under a life insurance policy, including the sum allocated by way of bonus
on such policy, other than any sum received under Sub-section (3) of Section 80
DD or sub-section (3) of Section 80DDA, any sum received under a Keyman Insurance
Policy, or under a policy issued in respect of which the premium payable for any
of the years during the term of the policy exceeds 20% of the actual capital sum
insured. |
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The additional benefits, over and above the benefits available under the insurance
policy that a policyholder may be entitled to at an extra cost are called Add -
on Benefits or Riders. One could opt for any one or more of the benefits at a little
extra cost. This additional protection for your loved ones ensures that you receive
a sum additional to the assured sum in case of any untoward event in your life. |
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Suicide: No benefits will be payable if death occurs due to suicide, within a specified
period from the date of commencement of risk. In addition benefits under a life
insurance policy may not be granted if the insurer has the right to repudiate the
claim. |
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Survival benefit is a benefit payable on survival of the life assured to a particular
pre-defined point of time in the insurance contract. For example, in the Money-Back
Policy, the life assured is paid a certain percentage of the sum assured every few
years. This survival benefit is payable only when the life assured is alive. It
does not matter if the life assured is suffering from any illness or not. However,
if the life assured dies, the benefit payable is Death Benefit and not survival
benefit. |
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In the event of death during the plan term, your family would receive the full sum
assured. |
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This benefit is an ‘Add-on’ (Rider) benefit. When you opt for this benefit,
the amount payable in the unfortunate event of death due to accident, would be substantially
higher than the basic sum assured that may be payable in the case of a policy that
merely provides for death benefit. As an illustration, if a person Mr. A has opted
for Accidental Death Benefit along with the basic cover on life dies in an accident,
then his nominee would be paid an extra benefit called the ‘Accidental Death
Benefit’ which is additional to the benefit receivable under the basic policy. |
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If you want more than regular accident death protection, you can choose this add-on
benefit. A helping hand for the family, the assured sum would be paid to you or
to your beneficiary in the event of your death, disability or dismemberment due
to an accident. The percentage of the sum assured you receive would depend on the
extent of disability. This amount would be over and above the basic assured sum.
For instance, If Mr. A has opted for the ‘Accidental Death, Disability and
Dismemberment Benefit’ then the life assured will receive a certain percentage
of the rider benefit if the life assured has suffered on his earning capacity by
loss of his limb, sight, hearing capacity, speech, etc due to an accident. While
the regular accident death protection rider provides the assured certain increased
sum after death, it does not provide any benefit if the life assured survives an
accident but suffers from dismemberment or disability due to the accident. The rider
in “Accidental Death Disability and Dismemberment” covers situations,
in addition to covering Accidental Death, where the life assured survives an accident
but suffers from disability and/or dismemberment. |
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In the unfortunate case that you become totally disabled, this add-on benefit waives
off all future premiums both on the basic cover and on all add-on benefits during
the disability period. All benefits of the original insurance plan would remain
valid until maturity, without your being required to continue to pay the premiums
for the base policy or the Add-ons. |
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For a small additional premium, the amount received on death would be higher. The
additional sum assured could be upto the amount assured by the basic plan. |
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A person who has opted for the ‘add-on’ benefit called ‘Accidental
Death, Disability and Dismemberment Benefit’, suffers from ‘Total and
Permanent Disability’ due to an accident, then he eligible for certain benefits
under the rider. A person would be said to be suffering from ‘Total and Permanent
Disability’ when the disability results from bodily injury caused by accident
within 180 days of the accident. Further the disability prevents the life assured
from engaging in any work continuously, completely and permanently. Depending on
the extent of disability, the life assured will receive a certain percentage of
the sum assured under this Rider. |
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A fact that would influence the judgment of a prudent insurer in deciding whether
to insure a particular risk, or the terms on which to insure it would be considered
material. Generally, all information required in the proposal form are considered
material and a non-disclosure or misrepresentation in relation to such information
sought could give rise to a right in favour of the insurance company to repudiate
the claim. |
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