Life Insurance for low incomes

By now you would know that a Life Insurance policy is one of the most reliable means to guarantee the financial security of your family in your absence. An insurance claim can prove to be the desired financial cushion for your family and dependents in times of major financial crisis. Thus it is best to stay well informed of the circumstances under which you are eligible for a Life Insurance policy claim.
Life Insurance claims are made under two circumstances:

• When a Life Insurance policy matures
• The passing away of the life insured

It’s important that you continue paying your premiums and stay invested throughout the policy period. This would ensure that you and your family receive the claim payout that you are entitled to. However, there are instances wherein the nominee of the policy may be refused the claim payout.

Below are five such instances of when an insurance company could refuse your claim request.

Providing incorrect information

At the time of purchase of your Life Insurance policy, if you provide all information and take all the required medical tests, your claim will possibly be accepted. But if you provide incorrect information, you could end up finding your policy null and void. For example – if you state in your Life Insurance application policy that you do not smoke or consume alcohol when in reality you do. Hiding facts or misrepresenting facts is considered "material misrepresentation," and in all probability, your application for a claim will be rejected

Non-disclosure of medical history

It is mandatory for you to disclose old and existing medical details such as genetic conditions, ailments, surgeries, operations, etc. as they influence your policy premium. Non-disclosure of such factors could lead to non-acceptance of your Life Insurance claim.

Not paying your premiums

If you miss a premium payment, you are generally given a 15 day grace period to make the payment, during which your policy will still be in effect. If you do not pay your premiums even during the grace period, your policy will lapse. Sometimes, even after this grace period is over, you can get your policy active again. However, what you need to remember most importantly is that your beneficiaries will not receive any payout if your policy lapses and is not in force in the unfortunate event of you passing away.

Not updating nominee information

The benefits of a Life Insurance policy are paid to the nominee or the beneficiary in your absence. Hence, it is necessary to keep the Life Insurance company updated with details of your nominee, their address, contact information, etc. Failure to do so can cause trouble and even rejection of your Life Insurance claim.
The above being said, make sure that you choose your nominee wisely. If you are married, you could nominate your spouse or children. If you are single, nominating your parents or a family member is a good idea. In case of the nominee being a minor, a guardian will need to be mentioned along.

Risky hobbies and suicide

Most Life Insurance policies usually have a two-year exclusionary period for suicide. What this means is in the event of a suicide in the first two years of buying a policy, the policy nominee will receive only the paid premiums and not the sum assured. This is a so-called "suicide clause"; it could change from insurer to insurer. Some insurance companies can still decline a claim if you do not disclose at the time of taking up the policy that you take part in high-risk hobbies, such as racing, skydiving, etc.

Insufficient or incomplete documentation

To submit a claim request, you will have to submit a duly completed form along with the required documents. In the absence of supporting documentation attached to the form, the Insurance company can reject your claim.
All this being said, please do remember that your Life Insurance provider never intends to reject your claims. It always helps if you understand your policy along with its coverage and exclusions completely. Keep the above mentioned points in mind to provide your family and loved ones the protection

No matter where you come from, what you do and how much you earn, Life Insurance is a must for you. It protects your family's future and their well-being in your absence. Your income should not stop you from buying Life Insurance; in fact, it becomes all the more crucial for you and your family.

Policy premiums as low as Rs. 500

Here is something you should know - there are a lot of affordable Life Insurance policies with premiums starting as low as Rs. 500, that come with sufficient family coverage. Speak to an Insurance provider to help you properly analyse and help you find the most suitable Life Insurance policy.

Know about Micro-insurance

Micro-insurance is one of the most suitable options for you. Micro-insurance plans are very affordable and provide a cover of Rs 50,000 or less. The untimely passing away of the sole earning member could be a huge loss to your family – in such times of crisis, micro-insurance plans work well as a sufficient financial protection plan for your family.

Heard of sachet insurance?

Sachet insurance are ticket-sized insurance plans meant to cover for a very specific need; they therefore come with low premiums and low coverage. These insurance plans are tailored to focus on a particular risk or a specific requirement. To give you an example, you can buy a small bite-sized insurance plan that offers to you protection for a short duration towards vector-borne diseases such as dengue and malaria.

Something for everyone

Even if you have no formal income proof, or have a really low salary, there’s still a Life Insurance plan for you! Some insurance plans offered come under an ‘affinity’ group cover. What this means is as part of an ‘affinity group’, people who share non-employer-employee associations such as being borrowers or depositors of a bank, professional societies, etc. can get affordable Life Insurance plans.

You decide when to pay

Pay according to your convenience! There are multiple Life Insurance plans that allow you to pay whenever you want to. As the premium amount usually increases as one reduces the frequency of payment, paying at your convenience is advisable as it allows you to save ahead of time and pay whenever you are able to.

Choose the coverage that suits you best

You may have a varying income level, but everyone has dreams and aspirations for themselves and their families. Look for insurance companies with multiple value and payment amount options in their Insurance policies. These options help people from different income brackets take up Life Insurance and thus have enough funds to see through any emergencies.

Plan for the long term

Every family comes with a set of necessary life goals such as buying a house, marriage, retirement and children’s education. These expenses call for Life Insurance so that you and your family achieves your set life goals. As a responsible earning member of the family, it’s important for you to realise the need and value of protecting your family sufficiently.

Pay as per your convenience

You can also choose to pay according to your convenience! There are multiple Life Insurance plans that allow you to pay whenever you want to. As the premium amount usually increases as one reduces the frequency of payment, paying at your convenience is advisable as it allows you to save ahead of time and pay whenever you are able to.

What you need to keep in mind is no matter how much you earn, Life Insurance is a must for you and your family. While the reason to choose Life Insurance may be different for different people, the need to have Life Insurance remains the same.