What is Life Insurance?

In case of an unfortunate event, like untimely demise of the breadwinner, is not only an emotional loss, but also a financial loss for his/her family. Life Insurance is protection against such financial loss that results from the insured Individual’s death.

Simply put, life insurance provides you and your family with the financial security and certainty to deal with the consequences of an unfortunate event like death.

“Why should I buy life insurance?”
At different stage of life, you have different financial needs. In order to meet these needs, you need to protect yourself against financial risks. In addition to protection, you must find avenues to invest your saving and give them an opportunity to grow. Life insurance can help you fulfil both these financial objectives.

“How do I understand a Life Insurance Policy?”

It is necessary to know the following key terms in order to understand a life insurance policy:


Premium is the amount of money (price) you have to pay to continue your insurance policy. The premium amount depends on:

  • Your age
  • Policy selected
  • Mode of premium payment
  • Term of premium payment
  • Term of the policy

You can choose to pay premium monthly, quarterly, half yearly, annually or as a Single payment.


Term stands for the number of years you choose to insure yourself.

Policy terms vary for different plans. Some policies have fixed terms while others offer you a range of terms.

It is the period, in years, during which the contractual benefits are payable

Premium Paying Term

It refers to the number of years you pay premium on your policy.

Usually the premium paying term is the same as the policy term. However, some policies offer you the option of selecting a premium paying term that is lower than the policy term.

Sum Assured/ Face Amount

Sum Assured (SA) is the agreed amount payable under the policy, upon the happening of insured events (e.g. Death, Maturity, Rider Benefit payout etc.) in relation to Life Assured (LA is the person whose life is covered under the insurance contract).

Bonus / Participating Profit

Bonuses are declared under traditional participating policies i.e. the policies that participate in the profits of Insurance Company.

Bonus is based on an insurance company’s assumptions about the future performance. Like any bother assumption, actual results will vary.

Survival Benefit

It is the amount of money received at pre-fixed, regular intervals by the insured person, upon survival.

Maturity Benefit

It is the amount of money received by the insured, upon survival till the end of policy term.

Cover or Death Benefit

Life cover or death benefit is the amount of money the nominee receives from the insurance company upon the insured’s death.

If additional riders such as Accident Death Benefit or Additional Sum Assured have been selected, the amount of money receivable by the nominee could be higher.

Returns or Pre-tax yield

Interest earned on the premium, on a compounded basis, is the pre-tax yield.

Post-Tax Yield

Many life insurance policies entitle the policy holder to tax benefits on the premium paid. If the premium is used as a tax deduction under section 80C, then the effective premium paid by the insured is lower. Interest earned on the effective premium, on a compounded basis, is known as the post-tax yield.

“What are the reasons for buying Life Insurance Policy?”
Life insurance majorly helps you in:

  • Getting risk cover against unfortunate event
  • Achieving life stage needs
  • Long term investments
  • Wealth creation
  • Cover against illness and accidents (Depending on plan opted)
  • Coverage against liabilities
  • Retirement planning
  • Tax benefits as per prevailing tax laws

“What are the documents necessary for Life Insurance?”

  • Completely filled insurance Application Form
  • Health Declaration Form
  • Medical Examiner’s Report
  • Insurance Agent Form
  • Age Proof Document (Citizenship Certificate or Birth Certificate in the case of Minor)

“What do I do if I lose/misplace my Insurance Policy?”
If you lose your insurance policy, you can apply for a duplicate policy document. You will be required to pay the document preparation charges and also sign an indemnity. If the value of the policy is high, you may also be asked to provide a surely along with the indemnity.

“Where should I pay my premium?”
In order to make premium payment hassle-free, we offer various online and offline options for you to pay your premium. You can view all these options on the Premium Payment Procedure  page and choose the option that is most convenient to you.
“Why is a medical examination required when buying insurance?”

Current health status and personal medical history are key factors in insurance evaluation process. While low Sum Assured is granted basis the health disclosures in the proposal form, in high Sum Assured cases medical examination of the client is conducted through the empaneled Diagnostic Centers. Similarly, if Client is having any medical history then also medical examination is needed to evaluate current health status of the client. Based on medical examination. Findings an insurance proposal can be accepted at standard rates or the risk is postponed or declined or accepted with extra premium on health grounds.

“I have not paid premium for some time. Can I revive my policy?”
If premiums are not paid within the grace period, 30 days for annual, semi-annual and quarterly frequency policies and 15 days for monthly premium payment frequencies, your policy lapses. When your policy lapses, the benefits under the policy either get reduced or cease fully. A lapsed policy can be revived within the period of premium payable “Revival Period”. Refer your policy document for the revival period allowed for your policy.

“What is Grace Period?”
Premiums under your policy are payable on or before the due date. However, we understand that sometimes you may not be able to meet the premium payment deadline. To help you with this, offer an extended period of 15-30 days from the due date as grace for you to make the payment premium. This period is referred to as days of grace or grace period. The exact grace period depends upon the type of policy
“What is the difference between “Nomination“ and “Assignment“?”

Nomination is an act by which you authorize another person to receive the policy money in the event of your death. The person so authorized is called a Nominee.

Assignment is a method by which you (policy holder) can transfer your right, title and interest in the policy to another person either wholly or in part. An assignment can be made by an endorsement on the policy document or as a separate deed. Assignment can be Absolute or conditional contingent upon the happening of a specified event.

“How do I change my address?”
Visit your nearest Prabhu Mahalaxmi Life Branch and submit the Request for change in Contact Details Form along with the address proof.

“Can I change my nominee?
Yes, you can change your nominee by submitting  Change in Nomination Form to us at  your nearest Prabhu Mahalaxmi Life Branch.