There are several objectives of insurance like providing financial security to one’s family in case of unfortunate happenings, tax savings, wealth creation, financial planning for children’s education/marriage and provision for old age.

Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event. In case of life insurance, the event being the death/disability of the insured, or in case of maturity of the insurance policy.

To help provide financial protection for an insured’s loved ones in the event that something unfortunate should happen to him/her. To start building a strong and diversified financial plan.

Other savings plans like Bank Fixed Deposits, NSC, PPF, Units have short maturity tenures, compared to life insurance policies. (Eg.: NSC for 6 years, PPF for 15 years & life insurance can be up to 100 years). Hence, other saving plans have limited impact on financial planning prospects.

Whereas, a Life Insurance Policy pays the Sum Assured and bonus (with bonus policies) even if the Policyholder expires before the end of the payment term. Hence, this provides greater security to the person and his/her family. As such, insurance policy is superior to other savings plans.

A person who is eligible to enter into a contract (i.e. should have completed 18 years of age & as per other conditions specified under the Indian Contract Act, 1872) can take an insurance policy either for himself/herself or for his/her dependents.

Several insurance companies can offer exciting insurance policies where the money that a customer puts in as protection money also works as an investment over a long period of time.

The procedure is simple:

i.	The potential customer should approach the insurance companies directly or through insurance agents of the concerned companies or through intermediaries (brokers).
ii.	Complete a proposal form giving full details.
iii.	Submit Certificate of Proof of Age, identity proof, residence proof and other relevant documents as required by the Insurer.
iv.	Insurance contracts are based on utmost good faith i.e. the details furnished by the proposer are accepted in good faith and this will form the basis of the contract.

There are four main types of life insurance:

i.	Whole Life Policies	-	Under this policy, the insured is covered for life. The insured does not receive money while he is alive; the nominee receives the sum assured plus bonus (if any) upon death of the insured.
ii.	Endowment Policies	-	These policies offer cover to the insured for a specific period. The insured receives money on survival of the term or on death (depending upon the nature of the contract) and is not covered thereafter.
iii.	Term Policies	-	These policies offer cover to the insured for a specific period. The insured receives money only on death during the specific period.
iv.	Unit-Linked Policies	-	Unit Linked Insurance Plans let you make a single investment for both - insurance and market linked returns. In case of survival, the policyholder would receive the Fund Value; while on death of the insured, the nominee would receive the Sum Assured or the Fund Value, whichever is higher. The benefit structure may vary between different insurers.

However, the type of insurance suitable for each individual will differ depending on his/her risk appetite.

Yes, as no single policy can meet all insurance objectives, it is usually recommended that an individual should acquire a portfolio of policies covering his/her various needs.

It is very difficult to place a monetary value on human life. Theoretically, therefore, an individual can have life policies for any amount. However, in practice, it is determined based on the needs for insurance and the capacity to pay premiums regularly.

Though it is not a thumb rule, most companies arrive at the amount of insurance by taking a minimum of six times of the annual income of the person, if such income is not fluctuating. If the income is fluctuating, it is desirable to work out the average annual income and then determine the amount of insurance. However, the cover granted can change as per the company’s discretion.

From an individual’s standpoint, one should be able to save at least 10% of his annual income.

Most of the foreign partners in the Indian market are well-established global insurance players with a proven track record in the business. All insurance companies in India are regulated by the IRDA (Insurance Regulatory and Development Authority) which has laid down very clear criterias defining the manner in which insurance companies can invest a customer’s funds. In fact, every insurance company needs to have a minimum paid up capital of Rs. 100 crores, which acts as a safety net.

Further, the insurance companies are also required to maintain their solvency margins depending on their volume of business. The minimum solvency margin required to be maintained by any insurer is Rs. 50 crores.

Whole life plans are a special type of term assurance wherein the term of the policy is whole of the life. Therefore, it follows that benefits under the policy are payable on death of the policyholder/insured or as specified in the policy contract.

However, for administrative purposes some companies pay benefits, on policyholder/insured attaining a certain age.

Term assurances are the purest and cheapest form of insurance. Term assurances are plans where benefits are payable only on the death of the policyholder/insured within the term.

Endowment plans are among the most popular forms of insurance as they provide both insurance coverage and also act as a savings instrument. These are the plans wherein benefits are payable on death within the term or survival to maturity whichever is earlier.

Money back plans are a special type of endowment plan and are also called as anticipated endowment assurance plans. Under money back plans, survival benefits are spread over the term of the policy i.e., certain percentage of sum assured is paid at regular intervals. Apart from the above, death benefit continues like an endowment plan i.e., full sum assured shall be payable on death within the term irrespective of earlier survival benefits.

Riders are additional benefits added to the base plan or policy at an extra premium.

Riders are additional benefits added to the base plan or policy at an extra premium.

Riders/Add-ons are the additional benefits, which can be added to the basic policy by paying marginal additional premium. Each company has got their own set of riders and the most common riders offered by insurers are:

• Term rider
• Critical illness rider
• Accidental death and dismemberment rider
• Waiver of premium rider
• Payor benefit rider
  
  

An Accident Death Benefit provides for an additional benefit amount equivalent to the Sum Assured purchased, subject to underwriting rules, in the case of death due to an accident before the insured reaches age of 70 or before the expiry of the basic policy, whichever is earlier.

This rider will waive future premiums of the policy to which it is attached (up to age 60), in the event of any total and permanent disability occurring to the insured during the policy term or in the event of a policy owner’s death. The insured’s family continues to enjoy the coverage, as Tata AIG Life pays the premium towards the basic policy, to ensure that the policy remains in force. These benefits come to the insured at a low cost.

Incase, within the policy term, the policyholder is diagnosed for critical illness, then an amount equal as specified in the policy contract is paid immediately to the policyholder and the rider is discontinued. However, the basic policy continues.

The list of critical illness covered under different products by Tata AIG Life Insurance Company Limited. is as mentioned below:

• Cancer
• Stroke
• Heart attack
• Coronary bypass graft surgery
• Chronic renal failure
• Recipient of major organ transplants like heart, lung, liver, kidney, pancreas, or bone marrow transfer
• Aorta surgery
• Benign brain tumor
• Heart valve surgery
• Paralysis
• Parkinson’s disease
• Total blindness

Permanent total dismemberment means that the life assured is incapacitated to work or follow an occupation and obtain wages, compensation or profit.
The following are considered to constitute such disability:

• irrecoverable loss of entire sight of both of the eyes
• amputation of both hands
• amputation of both feet
• amputation of one hand and one foot

This rider can be attached to a child's policy. In the event of the premium payor's death or total and permanent disability of the payor (before reaching age 60 and before the insured child reaches age 21), all future premiums of the basic policy will be waived. Such premiums will be waived, until the insured child reaches age 21 or the payor reaches age 60, whichever is earlier. The basic policy will be kept in force, as though the payor has made regular premium payments.

First premium is the yearly, half yearly, quarterly or monthly premium payable with the proposal form.

First Year Premium is premium payable in the first policy year.

All premiums subsequent to the first premium are called as renewal premium.

The specific period for which series of premium are paid to keep the policy inforce.

For initial premium:

a.	If any individual application form is submitted at the branch along with instrument/Cash, upfront temporary receipt is handed over by the branch to the customer and thereafter follows pt. b & c (as the case may be)
b.	If the payment is received by net disbursal, acknowledgement for such payment is made by way of official receipt, which is sent along with the Policy Document (For Issued Business only i.e. for policies, which have been issued).
c.	Refund is made by means of an account payee pay-order /demand draft to the customer (For Non Issued Business i.e. for policies which have not been issued due to some pendency).

For Renewal Premium:

a.	If for any individual, renewal premium is submitted at the branch along with instrument/Cash, upfront temporary receipt is handed over by the branch to the customer and thereafter an official receipt is provided to the customer.

Subject to certain limits and conditions prescribed by the Income Tax Act, 1961, 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 80C of the Income Tax Act 1961.

In the case of contribution to pension funds, deduction is available under Section 80C of the Income Tax Act 1961, and the amendments made therein form time to time.

* Tax laws are applicable as per the Income Tax Act, 1961 and are subject to amendments made therein from time to time

At the end of each financial year, the Company may declare a bonus, which may be a percentage of the sum assured and may be compounded annually

Note: Bonus is not guaranteed and depends on the performance of the company. Past performance is not a guide to future results.

At the end of each financial year, the Company will declare a rate of reversionary bonus. This percentage will be applied to the sum assured plus existing declared reversionary bonuses making it a compounded bonus.

The person(s) or entity (ies) (e.g. corporation, trust, etc.) named in the policy as the recipient of insurance proceeds upon the death of the insured.

Customers can call Tata AIG Life on the toll free number 1800 119966 either through a BSNL or MTNL landline number. However, incase they are unable to get through, they can dial the below mentioned numbers:

Customers can even send in a SMS by keying in "SERVICE" to 58888. On receipt of the SMS, Tata AIG Life’s Customer Service Representative will call back the customer within 24 hours.

Customers can also write to customercare@tata-aig.com or fax on (022) 6706 0376.