Life Insurance

What is Life Insurance?

Life insurance is a contract between two parties - an individual (the insured or policyholder) and a life insurance company (the insurer or insurance provider).

The insurance provider assures the policyholder of financial coverage for their family until the end of the policy tenure. In case of the individual’s demise, the financial protection by the insurer is extended to the insured’s family in the form of a lump sum payout or monthly income.

In the case of policies where a maturity benefit is payable, the policyholder can claim the benefits if they survive until the end of the policy tenure. These benefits, too, can be paid out as a lump sum or as regular income.

To keep the life insurance cover active, the insured pays a premium to the insurer on a monthly, quarterly, half-yearly, or annual basis. The premium amount payable is determined on the basis of various factors, including the life insurance coverage.

How does Life Insurance work?

Life insurance plans provides financial protection to your family in case of your unfortunate and untimely death during the policy term. In return for regular premium payments, the insurance company commits to pay a fixed amount to your nominee in case of death, known as the sum assured.

For example, a person buys a life insurance policy with a sum assured of ₹1 Crore for 20 years and pays an annual premium of ₹8,000. If the person passes away within those 20 years, the nominee receives ₹1 Crore from the insurer. This amount can help cover household expenses, pay off loans, or secure the family’s future. 

If the person survives the policy term and has chosen a plan with maturity benefits (like an endowment or money-back plan), a lump sum amount is paid at the end of the term. 

Let’s understand common types of life insurance and how it works with the help of an example: 

1. Term Insurance 

Term insurance is a pure protection plan. It provides life cover for a specific period. If the policyholder passes away during the term, the nominee receives the sum assured. No maturity benefit is provided if the policyholder survives, unless a Return of Premium option is chosen. 

Example: 

Ravi buys a 30-year term insurance policy with a sum assured of ₹1 Crore. He pays an annual premium of ₹10,000. If he passes away within 30 years, the nominee receives ₹1 Crore. If he survives the term, there is no payout, unless he opted for a term plan with return of premium option. 

2. Endowment Plan 

An endowment plan offers life cover along with savings. The policyholder receives a lump sum amount on maturity if they survive the policy term. If they pass away during the term, the sum assured is paid to the nominee. 

Example: 

Neha purchases a 20-year endowment plan with a sum assured of ₹30 Lakh. She pays regular premiums during the policy term. If she passes away within 20 years, the nominee receives ₹30 Lakh. If she survives, she will receive a maturity benefit. 

3. Money-Back Plan 

A money-back plan provides periodic payouts during the policy term along with life cover. The policyholder receives a percentage of the sum assured at regular intervals. The remaining amount and any bonuses are paid on maturity or to the nominee in case of death. 

Example: 

Rahul buys a 10-year money-back plan with a 25-year income period and a sum assured of ₹15 Lakh. He shall receive a fixed income every year from the 11^th year till the 35^th year. If he passes away during the policy term, the nominee receives the sum assured. 

4. Unit Linked Insurance Plan (ULIP) 

ULIP combines life cover with investment. A part of the premium is invested in market-linked funds (equity or debt), and part is invested in life cover. The payout depends on market performance and the sum assured. 

Example: 

Deepak buys a 15-year ULIP with a sum assured of ₹25 Lakh. He chose to invest in a mix of equity and debt funds. If he passes away during the policy term, the nominee receives ₹25 Lakh or the prevailing fund value, whichever is higher. If he survives, he will receive the fund value based on market performance. .

What are the benefits of life insurance?

Here are the key advantages of a life insurance:

Financial Protection

A life insurance plan ensures that your family will be financially secure in your absence. The life insurance coverage pays out the sum assured to your family or beneficiary if you meet an untimely demise during the policy term.

Wealth Creation

In the case of savings plans or Unit-Linked Insurance Plans, you can invest in the policy through your premium payment over the long term. This financial corpus is paid out as the maturity benefit if you outlive the policy term.

Assured Returns

Savings plans or retirement savings plans offer guaranteed and assured returns on maturity. You can save your money over the years as you pay your premiums. On maturity, this amount can be availed of either as a lump sum or as a regular income.

Tax Benefits²

Under Section 80C of the Income Tax Act, you can claim a tax deduction of up to ₹1.5 Lakh on the paid premiums. The death benefits and maturity benefits/bonuses/loyalty additions (subject to policy conditions) are tax-exempt under Section 10(10D).

Low Premiums

If you plan to get life insurance, purchasing the policy at a younger age ensures lower premiums, owing to lower health risks. The premium amount is higher if you buy life insurance later at an older age.

Long Term Coverage

Some term insurance plans offer a long coverage, with some plans offer cover up to 100 years of age²⁰. With this, you can ensure that you and your family are protected for your whole life.

Who needs Life Insurance?

Life insurance is important for everyone, irrespective of age, profession, and lifestyle. These are the broad categories of individuals who should have life insurance:

Working Professionals

At a young age, when you just begin working, you can avail lower premiums. Salaried individuals with life insurance can provide extensive financial coverage for their loved ones with affordable premiums that don’t affect their other expenses.

Newly-Weds

Married couples tend to have greater financial responsibilities, such as loans for buying a new home, car, or household items. A life insurance policy with joint coverage covers both partners under a single plan for better management.

Working Parents

Life insurance safeguards a family’s financial future if a working parent passes away unexpectedly. It ensures income for dependents, covering essentials like education, housing, and daily expenses and also helps clear any outstanding debts.

Homemakers

Life insurance is important for stay-at-home moms and homemakers. In case of the death of the lady of the house, the life insurance coverage should be able to help the rest of the family sustain themselves and find help to manage the home.

Retired Individuals

During your retirement years, a life insurance plan can help replace your salary. Here, retirement insurance plans can offer regular income, which makes it easier for you to take care of yourself and your family.

Business persons

Starting a business venture can utilise your savings and you may also need to take out a loan. Life insurance can help you secure your business and your family’s needs so that any unpaid debts do not burden them in your absence. Additionally, the Married Women’s Property Act (MWPA) in term insurance ensures that payouts go to your intended nominee and is safeguarded from creditors.

How much Life Insurance cover do you need?

Calculating your life insurance coverage can be a simple process once you know more about it. Here is what you need to consider when estimating the life insurance coverage needed:

Family’s Needs

Life insurance can help cover major financial events in your life. Hence, even when you are not around, your family should be able to meet all their goals and fulfil their dreams. Also decide on a coverage that will handle their smallest needs.

Financial Capacity

Your current income will decide the life insurance coverage your family needs. The coverage should be at least 10 to 20 times your annual income. Your financial capacity is also important when it comes to making reasonable premium payments.

Income Replacement

If you are the sole earning member of your family, your income supports your family. When you cannot provide for them, your life insurance should offer financial assistance to them at least equal to your monthly income.

Loans and Debts

Unpaid loans can eat into life insurance coverage. Hence, it is better to pay them off as early as possible. But in the event of your death, life insurance can ensure that your family does not suffer under the burden of these unpaid debts.

Medical Emergencies

It is always prudent to set aside some life insurance coverage for future medical emergencies for your family. This will enable them to get the quality healthcare required in your absence. Also, consider future inflation rates when considering this amount.

Changes in Life Stage

Your life insurance cover should meet your long-term financial requirements. As you enter a new life stage, such as marriage or childbirth, it should provide adequate support in case of any unfortunate events.

Why do you need Life Insurance?

These are some reasons why life insurance is a must:

Long-term Financial Stability

A life insurance plan helps create a safety net for your loved ones. In the event of your untimely death, the sum assured can help your family manage living expenses, maintain their lifestyle, and achieve long-term financial stability

Moreover, you can opt for a savings-oriented plan, such as an endowment plan or ULIP. It helps systematically build a corpus that can support future financial goals like buying a house or planning for retirement.

Secure your Child's Future 

Every parent aspires to provide their child the best education and a secure future. Life insurance, particularly child education plans or savings plans, ensures that even if something happens to you or your spouse, your child’s educational needs remain protected.

The payout from a life insurance policy can fund your child’s education, extracurricular activities, and other major expenses. This provides peace of mind as their future is not compromised by life’s uncertainties.

Financial Liabilities

Many families rely on loans for home purchase, education, or business needs. In the absence of the primary earner, these financial liabilities can become a major burden for the family.

Life insurance helps prevent such situations by ensuring that outstanding debts like home loans, personal loans, or education loans can be paid off using the sum assured. This keeps your family protected from additional stress and prevents legal or financial complications arising from unpaid debts.

Spouse’s Retirement

While you may be planning for your retirement through savings or pension plans, an unexpected death can leave your spouse vulnerable, especially if they depend on your income.  

With life insurance, you can ensure that your spouse has access to a retirement corpus, even in your absence. The sum assured or maturity benefits from certain plans can help them meet living expenses, healthcare costs, and other retirement needs, maintaining their financial independence.

Tax Benefits

Apart from protection, life insurance also offers tax advantages. Premiums paid towards life insurance policies qualify for tax² deductions under Section 80C of the Income Tax Act, up to ₹1.5 Lakh in a financial year.

Additionally, the death benefit and maturity payouts from eligible life insurance plans are tax-free under Section 10(10D). This means your family receives the entire sum assured or maturity amount without any tax deductions, creating a tax-efficient financial legacy for their future security.

Factors That Affect Life Insurance Premiums

The following factors can affect your life insurance premiums:

Sum Assured

Sum assured determines the premium amounts as it will be higher if you choose a higher life cover. However, this does not mean you should opt for inadequate life insurance coverage. Select a coverage amount to help you pay manageable premiums.

Age

Many people buy life insurance when they start working. By purchasing a policy at a young age, you can ensure affordable premium payments. Buying life insurance at an older age means higher premiums.

Gender

Life insurance premiums vary as per your gender, as men and women tend to have different health risks at different stages of their lives. For instance, women have higher longevity due to lower health risks and hence pay lower premiums for term plans.

Medical History

Your medical history or any previous illnesses in your family can influence your premiums. If you still have any health conditions due to any past illnesses, it is likely that you will be paying a higher premium than someone with no medical history. Note that correct disclosure is mandatory at the time of application. Claims may get rejected in case incorrect medical history is shared during application.

Lifestyle Habits

People with healthy lifestyles tend to have healthier bodies and fewer illnesses. This means their life insurance premiums are also lower. But if you have smoking or drinking habits, your life insurance provider will charge a higher premium rate for you.

Occupation

If you have an in-office job involving no physical risk, this factor will be considered for your premium calculation. However, your premiums will be higher if you work in high risk jobs like mining, construction, etc.

How to claim Life Insurance?

You can follow these simple steps to file a claim:

Claim Intimation

Write to Tata AIA Life Insurance to inform us about the claim or call us. The written claim intimation should contain:

 Policy number

 Insured’s name

 Date and place of death

 Cause of death

 Claimant’s name

Alternatively, you can also file the claim offline, at any of our office branches.

Documents Required

A few essential documents are needed to file the claim. They are:

 Claimant’s statement

 Original policy document

 Death certificate

 Police FIR

 Post-mortem exam report in case of an accidental death

 Certificate and records from the hospital

 Advance discharge form

There may be a requirement for additional documents.

Submission of documents

The claims process can only begin once all necessary documents have been submitted. When filing the claim online, upload soft copies of the documents. For offline submission, visit any of our office branches.

Claim Settlement

As per IRDAI regulations, the claim settlement timeline is 30 days from receiving all the documents, including any clarifications from our end. However, in case of further investigations for the claim settlement, this regulatory timeline can be extended up to 90 days from the day of the claim intimation.

What are the types of death not covered in Life Insurance?

Though life insurance covers natural deaths and accidental deaths, here are some of the common causes of death that cannot be covered under life insurance:

Death due to criminal/high-risk activities

Life insurance will not cover your death caused by your involvement in illegal or criminal activities. Also, death caused by high-risk sports will not be covered.

Pre-existing illnesses

Inform your insurer about any pre-existing condition during the policy purchase. The benefits can only be paid out if this information is already available with the insurer.

Death due to intoxication

The use and overdose of drugs and alcohol can lead to death. But your life insurance policy cannot cover this type of death.

Death due to natural calamities

Life insurance cannot cover damages to the insured’s life arising from natural disasters or calamities.

• ¹89,43,554 families protected till 31^st May 2025.
• ²Tax benefits of up to ₹46,800 u/s 80C is calculated at highest tax slab rate of 31.20% (including cess excluding surcharge) on life insurance premium paid of ₹1,50,000 as per old tax regime. Tax benefits under the policy are subject to conditions laid under Section 80C, 80D,10(10D), 115BAC and other applicable provisions of the Income Tax Act,1961. Good and Service tax and Cess, if any will be charged extra as per prevailing rates. The Tax Free income is subject to conditions specified under section 10(10D) and other applicable provisions of the Income Tax Act,1961. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.
• ³All funds open for new business which have completed 5 years since inception are rated 4 or 5 Star by Morningstar as of December 2024.
• ⁴©2024 Morningstar. All rights reserved. The Morningstar name is a registered trademark of Morningstar, Inc. in India and other jurisdictions. The information contained here: (1) includes the proprietary information of Morningstar, Inc. and its affiliates, including, without limitation, Morningstar India Private Limited (“Morningstar”); (2) may not be copied, redistributed or used, by any means, in whole or in part, without the prior, written consent of Morningstar; (3) is not warranted to be complete, accurate or timely; and (4) may be drawn from data published on various dates and procured from various sources and (5) shall not be construed as an offer to buy or sell any security or other investment vehicle. Neither Morningstar, Inc. nor any of its affiliates (including, without limitation, Morningstar) nor any of their officers, directors, employees, associates or agents shall be responsible or liable for any trading decisions, damages or other losses resulting directly or indirectly from the information.
• ⁵Illustrated premium of ₹501 is the monthly premium excluding taxes for a 20 yr. old female, Standard Life, Non-Smoker for ₹1 Cr. Sum Assured with Policy Term of 20 yrs. (Regular Pay) under Life Promise Option with first year premium discount of 10% for digital purchase and 8.5% for salaried person. Please refer Benefit Illustration for more details.
• Premium is subject to applicable taxes, cesses & levies which will be entirely borne/paid by the Policyholder, in addition to the payment of such Premium. Tata AIA Life shall have the right to claim, deduct, adjust, recover the amount of any applicable tax or imposition, levied by any statutory or administrative body, from the benefits payable under the Policy. Kindly refer the sales illustration for the exact premium.
• ⁶5-year computed NAV for Multi Cap Fund as of June 2025. Other funds are also available. Benchmark of this fund is S&P BSE 200.

• ⁷Guaranteed Income shall be total of Guaranteed annual Income plus Income Booster payable in a year. Guaranteed Income as per the chosen Income Frequency shall commence after maturity till the end of the Income Period, irrespective of survival of the life insured(s) during the Income Period.
• ⁸Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. For ULIP policies, maturity income will be taxable if annual aggregate premium exceeds ₹2.5 Lakh in a financial year. For non ULIP insurance policies, maturity income will be taxable if annual aggregate premium exceeds ₹5 Lakh in a financial year. Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere on this site. Please consult your own tax consultant to know the tax benefits available to you.
• ⁹Premium excluding taxes for Tata AIA Fortune Guarantee Plus for age group of 18 to 50, Male/Female, Standard life, Plan Option 1 (Regular Income), Premium Payment Term 10 years, Policy term 15 years, Income term 30 years. Income will start from 16th year. Total Guaranteed Benefit: ₹46,06,600
• ¹⁰Under SurgiCash Benefit of the Tata AIA Health Secure Rider, the payouts are offered basis the categories of surgeries: 10% of sum assured up to Rs. 50,000 for day care procedures such as eye cataract, nasal sinus operation, 25% on Category 1 surgeries, like Amputation of foot or hand, 50% on Category 2 surgeries, like knee or hip replacement, 75% on Category 3 surgeries, like Aortic Valve Repair, and 100% on Category 1 surgeries, like CABG. Refer list of surgeries for benefit payouts.
• ¹¹Market-linked returns are subject to market risks and terms & conditions of the product. The assumed rate of returns or illustrated amount may not be guaranteed and depends on market fluctuations.
• ¹²As per the duly approved product design and terms & conditions of the product, this includes first year digital discount of 10% for Limited Pay/Regular Pay and 8.5% salaried discount. For Single Pay, 1% discount will be available for online purchase and salaried discount each.
• ¹³Under Life Promise Plus Option, an amount equal to the 100% of the Total Premiums Paid (excluding loading for modal premiums) shall be payable at the end of the Policy Term, provided the life assured survives till maturity and the policy is not terminated earlier.
• ¹⁴Available under Regular Income with an Inbuilt Critical Illness Benefit option
• ¹⁵Partial withdrawals only available 3 times during the entire policy term and only for reasons specified in IRDA Regulations as amended from time to time
• ¹⁶Benefit of early ROP allows the customer to get the Maturity benefit under Tata AIA VitaHealth in advance, up to certain percentage of Total premiums paid for health-related expenses. For more details kindly refer to sales brochure.
• ¹⁷Riders are not mandatory and are available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/Intermediary/ branch.
• ¹⁸Guaranteed returns in this plan depends on Age at Entry of life assured, Premium payment term, policy term, premium amount and plan option chosen.
• ¹⁹The word Guaranteed and Guarantee means the annuity payout is fixed at inception of the policy and will be payable for whole of life or till death of the Annuitant(s).
• ²⁰Not applicable under PoS, please refer sales brochure for more information
• ²¹As on 31^st March 2025, the company has a total Assets Under Management (AUM) of ₹130,053 Crore
• ²²Retail Sum Assured for FY2024-25 is ₹7,90,982 Crore. https://irdai.gov.in/document-detail?documentId=6552249
• ²³Applicable to only non-early claims more than 3 years of policy duration, non-investigation cases, up to Sum assured of 50 lacs. Applicable for branch walk in. Time limit to submit claim to Tata AIA by 2 pm (working days). Subject to submission of complete documents. Not applicable to ULIP policies and open title claims.
• Tata AIA Sampoorna Raksha Promise (UIN:110N176V07) - Non-Linked, Non-Participating, pure risk, Individual Life Insurance Product
• Param Raksha Life Pro + is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V02) and (2) Tata AIA Vitality Protect Advance A Non-Linked, Non- Participating Individual Health Product (UIN: 110N178V01). These products are also available for sale individually without the combination offered/ suggested. This benefit illustration is the arithmetic combination and chronological listing of combined benefits of individual products. The customer is advised to refer the detailed sales brochure of respective individual products mentioned herein before concluding sale.
• The complete name of Tata AIA Fortune Guarantee Plus is Tata AIA Life Insurance Fortune Guarantee Plus (UIN: 110N158V14) - Non-Linked, Non-Participating, Individual Life Insurance Savings Plan.
• Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V01), and Tata AIA Vitality Protect Advance, an individual, non-linked, non-participating health insurance plan (UIN: 110N178V01). Both Tata AIA Smart SIP and Tata AIA Vitality Protect Advance are also available for sale individually. This benefit illustration is the arithmetic combination and chronological listing of combined benefits of individual products. The customer is advised to refer the detailed sales brochure of respective individual products mentioned herein before concluding sale.
• Tata AIA Smart Pension Secure (UIN: 110L182V04) - Non-Participating, Unit Linked, Individual Life Insurance Pension Plan
• Tata AIA Pro-Fit comprises of Tata AIA Health Pro, A Non-Participating, Unit-linked, Individual Health Insurance Plan (UIN: 110L180V01), Tata AIA Health Secure, A Non- Participating, Unit Linked, Individual Health rider (UIN: 110A050V01) & Tata AIA VitaHealth, A Non-Participating, Non-Linked Individual Health Product (UIN: 110N181V01). Tata AIA Health Pro and VitaHealth are also available for sale individually.
• Tata AIA Maha Raksha Supreme Select (UIN: 110N171V10) - Non-Linked, Non-Participating, Pure Risk, Individual Life Insurance Product
• The complete name of Tata AIA Fortune Guarantee Pension Plan is Tata AIA Life Insurance Fortune Guarantee Pension Plan (UIN:110N161V11) - A Non-Linked Non-Participating Individual Life Insurance Plan
• For ULIP products
  • In this policy, the investment risk in investment portfolio is borne by the policyholder. The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.
  • Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. Please know the associated risks and the applicable charges, from your Insurance Agent or Intermediary or Policy Document issued by the Insurance Company.
  • The fund is managed by Tata AIA Life Insurance Company Ltd. For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale. The precise terms and condition of this plan are specified in the Policy Contract.
  • Past performance is not indicative of future performance. Returns are calculated on an absolute basis for a period of less than (or equal to) a year, with reinvestment of dividends (if any).
  • Investments are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market.
  • Please make your own independent decision after consulting your financial or other professional advisor.
  • Tata AIA Life Insurance Company Limited is only the name of the Insurance Company & the Unit linked insurance product with Tata AIA /Tata AIA Life Insurance as its prefix is only the name of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
  • The performance of the managed portfolios and funds is not guaranteed, and the value may increase or decrease in accordance with the future experience of the managed portfolios and funds.
  • Premium paid in the Unit Linked Life Insurance Policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the Insured is responsible for his/her decisions.
  • Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the Insurance Company.
• L&C/Advt/2025/Jul/2785