Life Insurance

What is Life Insurance?

In the simplest sense, life insurance is a contract between two parties, namely, 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 secures the financial needs of your family and ensures their well-being in case of your untimely demise.
 

To keep the life insurance coverage active, you need to make the premium payments towards the policy as per the selected. However, there are different types of life insurance policies, and they all serve different purposes.
 

Term insurance is the simplest form of life insurance. Under a term plan, your family will be protected by a pure life cover and will receive death benefits in case of your death. After the benefits are paid out, the life cover will be terminated.
 

Life insurance policies like savings plans comprise long-term savings as well as life insurance. With a money-back plan, endowment plan, or guaranteed returns plan, a maturity benefit is payable when the policy matures. However, this is subject to your survival until then.
 

Similarly, Unit-Linked Insurance Plans combine life insurance with investment. You can choose a ULIP as per your risk appetite and investment goals. During the policy term, you invest in the funds under the policy, and on maturity, you can earn market-linked returns⁷ from your investment.
 

A life insurance plan allows you to choose from flexible policy terms, premium paying terms, and a mode, as per your needs and convenience. The policy term determines how many years your life insurance plan will offer coverage to your family. The premium paying term can be chosen for the number of years you want to pay your premiums. You can also pay a one-time lump sum as the premium if you want to avoid paying monthly/yearly premiums.
 

Life insurance does not always cover deaths caused due to specific illnesses, injuries, and accidents. These riders²⁴ cover a range of unforeseen risks like hospitalisation costs, critical illnesses, accidental death and disability, and more. The riders come at an additional but nominal cost and cannot be purchased unless you have a valid life insurance policy.
 

There are also some exceptions and exclusions under life insurance. Before purchasing a life insurance policy, it is advisable to understand these exclusions so that you can get the most out of your life insurance policy.

What are the benefits of life insurance?

Here are the important reasons why you must have 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 Benefits⁹

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 age. With this, you can ensure that you and your family are protected for your whole life.

Who Needs Life Insurance the Most?

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 join the workforce, you can avail of lower premiums. Salaried individuals with life insurance can provide extensive financial coverage for their loved ones without letting expensive premiums 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

If either or both parents are earning, life insurance is important. This is essential since a family with a child/children means more financial responsibilities. Life insurance or a child plan can help the parents cover various financial risks.

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 consume your savings. You may also need to take 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.

How Much Life Insurance Coverage Do You Need?

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

Your 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.

Your 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. With change in 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

Your life insurance plan helps create a financial corpus for your family’s future financial security. With a savings plan, you can plan early and save enough for the future to meet your financial goals.

Secure your child's future

Be it a child education plan or a savings plan, life insurance can help you secure your child’s future needs. And in case of your death or your spouse’s death, your child will still be able to realise their dreams.

Financial liabilities

Loan repayments can be a hassle, and non-repayment can lead to bad credit and increase the chances of earning a penalty fee. In your absence, you can keep your family away from the risk of unpaid debts with a life insurance plan.

Tax Benefits

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).

Spouse’s retirement

A planned retirement helps you meet various needs. But in your absence, your spouse should not be deprived of a retirement plan in your absence. With life insurance, you can secure a retirement corpus for their future needs.

Tax benefits

You can claim tax deductions under Section 80C of the Income Tax Act on your policy premiums. And since the death benefits, too, are tax-exempt under Section 10(10D), your family can inherit a tax-free legacy for their security.

Factors That Affect Life Insurance Premiums

The following factors can affect your life insurance premiums:

The sum assured

Choosing a high life insurance sum assured means higher policy premiums. However, this does not mean you should opt for inadequate life insurance coverage. Select a coverage amount to help you pay manageable premiums.

Your age

Most people buy life insurance when they start working. By purchasing a policy at a young age, you can ensure affordable premium payments since you will likely be healthier during your youth. Buying life insurance at an older age means higher premiums.

Your 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, men are generally more prone to heart conditions than women.

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 ailments, it is likely that you will be paying a higher premium than someone with no medical history.

Lifestyle habits

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

Your occupation

If you have a desk job involving no physical risk, this factor will be considered for your premium calculation. However, your premiums will be higher if you work in 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.

• ¹Tax 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.
• ²85,76,889 families protected till 31st December 2024.
• ³All funds open for new business which have completed 5 years since inception are rated 4 or 5 Star by Morningstar as of Aug’24..
• 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.
• ⁵Individual Death Claim Settlement Ratio is 99.13% for FY 2023-24 as per the latest annual audited figures.
• ⁶This includes first year digital discount of 10% for Limited Pay/Regular Pay and 5% salaried discount. For Single Pay, 1% discount will be available for online purchase and salaried discount each.
• ⁷Market-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.
• ⁸Guaranteed returns in this plan depends on Age at Entry of life assured, Premium payment term, policy term, premium amount and plan option chosen.
• ⁹Income 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.
• ¹⁰Computed NAV for Multi Cap Fund is from inception till Nov’24. Fund inception: 5th Oct’15. Other funds are also available with this plan. Benchmark of this fund is S&P BSE 200.

• ¹¹The 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).
• ¹²Under 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.
• ¹³Illustrated Premium is the monthly premium excluding taxes for 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 for digital purchase and 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.
• ¹⁴Under 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.
• ¹⁵With digital discount, Female age 55 years, Annual Premium 25 Lakh (excl. taxes),  Premium Payment Term 12 years, Policy Term  45 years, Income deferment post Premium Payment Term 5 years, Income Term 28 years
• ¹⁶Loyalty Additions will be credited only if Policy is in-force and all due premiums have been paid. For Regular Pay & Limited Pay, additional units @ 0.20% of units in each of the funds under Regular Premium Account will be credited (post deduction of applicable charges) to the respective funds every Policy Anniversary starting from eleventh (11th) Policy Anniversary till end of Policy Term. For Single Pay, additional units @ 0.35% of units in each of the funds under the Single Premium Account will be credited (post deduction of applicable charges) to the respective funds every policy anniversary starting from sixth (6th) Policy Anniversary till end of Policy Term. Loyalty Additions are not payable on Top-up Premium Account.
• ¹⁷The 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).
• ¹⁸Return of Purchase price means return of all premiums paid excluding any extra premium, any rider premium, taxes and other statutory levies, if applicable
• ¹⁹Benefit 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.
• ²⁰Guaranteed 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.
• ²¹Retail Sum Assured for FY2023 is Rs 4,43,479 Crores
• ²²As on 31st December 2024, the company has a total Assets Under Management (AUM) of ₹119,602.78 Crores
• 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.
• ²⁴Riders 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.
• ²⁵Available under Regular Income with an Inbuilt Critical Illness Benefit option
• Tata AIA Sampoorna Raksha Promise (UIN:110N176V01) - 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: 110L179V01) 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: 110N158V13) - Non-Linked, Non-Participating, Individual Life Insurance Savings Plan.
• Tata AIA Smart SIP - Non-Participating, Unit Linked Individual Life Insurance Savings Plan (UIN:110L174V01)
• The complete name of Tata AIA Fortune Guarantee Pension is Tata AIA Life Insurance Fortune Guarantee Pension (UIN:110N161V10) - A Non-Linked Non-Participating Individual Life Insurance Plan. Multiple options are available in this plan: Immediate Life Annuity, Immediate Life Annuity with Return of Purchase Price, Deferred Life Annuity (GA-I) and with Return of Purchase Price, Deferred Life Annuity (GA-II) and with Return of Purchase Price.
• Tata AIA Vitality Protect Advance (UIN: 110N178V01) - A Non-Linked, Non- Participating Individual Health Product
• Insurance cover is available under this product. This product is underwritten by Tata AIA Life Insurance Company Limited. The plan is not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance. This product will be offered to Standard lives only.
• 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, Tata AIA Life Insurance Smart Sampoorna Raksha Supreme and Tata AIA Life Insurance Fortune Pro are only the names of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. The underlying Fund's NAV will be affected by interest rates and the performance of the underlying stocks.
  • 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/Feb/0475