Life Insurance Plays A Key Role In Keeping Our Family Secure: Subhrajit Mukhopadhyay, Chief & Appointed Actuary, Edelweiss Tokio Life Insurance

Tell us a little bit about the thought process leading up to the launch of your new product- “Zindagi Plus.”

At Edelweiss Tokio Life, each solution is designed keeping the consumer at the centre and we continuously attempt to offer product solutions that are dynamic, future-ready and abreast with the newer world. In line with our way of working, we engage with customers to identify their concerns, observe their behavioural patterns which help us gain deep insights about their mindset. This gradually helps us identify the right set of problems and enables us to develop differentiated products.

Based on the insights that we gathered during the thought process of Zindagi Plus, we designed a comprehensive, all-inclusive solution that remains relevant in the absence of the breadwinner. With Zindagi Plus, we have enabled our customers to provide a financial protection for their dependants and go a step forward and cover their spouse as well.

The “Better Half” benefit seems to be quite similar to the premium waiver benefit option offered by a number of other Life Insurers. How is it different?

Under the waiver of premium option, the premium waiver is triggered in case of a specific event defined under the plan. This option is available with Zindagi Plus as well and the premium is waived off in case the life insured is diagnosed with specified critical illnesses. This benefit is a survival benefit in order to compensate the insured to continue to stay covered even if he is diagnosed with a critical illness.

On the other hand, Better Half is an option available to the insured where he provides an insurance cover to the spouse in the event of his death.

Typically, in case of the death of the bread earner, the family faces an emotional and financial vacuum. While the base plan provides for the death benefit on the death of the primary insured, Better Half Benefit ensures that the person on whom the family is subsequently dependant gets life cover. This feature especially benefits non-working spouses, who usually do not opt for a term insurance.

In Better Half Benefit, on the death of the life insured, the following benefits are applicable:

A lump sum amount is paid immediately

Spouse cover starts for 50% of the base sum assured, while no future premiums are required to be paid by the spouse

In case of death of the spouse, the Better Half Sum Assured is paid to the nominee and the policy terminates.

Please tell us a bit about the” life stage” benefit that the plan offers. Does the increase in Sum Assured require medicals and fresh underwriting, in this case? 

An individual experiences multiple life-changing events like getting married, having children, buying a dream home. While these stages bring a lot of happiness in an individual’s life, it also brings a set of responsibilities.

In order to take care of these increased responsibilities, we offer an option - ‘Life Stage Benefit’ to the customer to increase his protection and secure his family during these key life stages. Under Life Stage Benefit, the policyholder can add Life Stage Sum Assured on the occurrence of one or more of the following events –

50% of Base Sum Assured on 1st Marriage | 25% of Base Sum Assured on the birth of 1st child | 25% of Base Sum Assured on the birth of 2nd child | lower of 50% of Base Sum Assured or home loan amount on taking a Home Loan. This increase is subject to a maximum sum assured limit based on the prevailing company policy.

The policyholder can opt for this benefit without undergoing any medicals examinations.

Tell us a bit about the “Decreasing Sum Assured” benefit that you offer under this plan. Broadly speaking, what quantum of cost savings can a client expect, in percentage terms, by opting for this feature?

Under Decreasing Sum Assured, the base sum assured remains constant until policyholder reaches the age of 60 years and reduces thereafter by 50%. Decreasing Sum Assured is reflective of the pattern of an individual’s income, wealth, and consumption needs throughout their life. Typically, your financial needs and liabilities reduce when you are past the retirement age of 60 years. This feature addresses that reality.   

The premium payable under this option is lower than that for Level Sum Assured wherein the base sum assured remains constant throughout the policy term.

Following example is for the illustrative purpose (The premium mentioned are exclusive of GST)-

Life Insured, Male age 30 years has the following three options to choose from –

Option 1 – buy a plan to age 60 years with a premium of Rs. 8,577/-

Option 2 – buy a plan to age 80 and continue with cover for a premium of Rs. 13,338/-

As the financial responsibilities for most people reduce post 60 years, continuing a high insurance cover and paying for it beyond 60 years may not be a necessary option.

With Decreasing Sum Assured, it’s a win-win situation for the customer i.e. get covered till age 80 years as per the income and needs pattern and pay a lower premium i.e. Rs. 11,435/- from the beginning.

Does the product offer the option to not avail the “decreasing sum assured” benefit, or is it inbuilt into the plan?

Yes the product offers an option to either choose “Level Sum Assured” where the life cover remains same throughout the policy term or “Decreasing Sum Assured” wherein the life cover remains constant until policyholder reaches the age of 60 years and reduces thereafter by 50%. It is an optional feature.

Lastly, what would your advice be to those who are looking to buy Life Insurance for the first time?

Life Insurance plays a key role in keeping our family secure. The most important goal of one’s life is to secure his/her family’s future. Life Insurance is the simplest way to protect one’s family against uncertainties in life and financial losses associated with them. Regardless of the various investments done over the years, certain eventualities, such as critical illness or death, substantially affect your family’s financial condition and term plans help securing an individual’s financial future against these eventualities. It covers for the loss of income that may come upon one’s family in their absence or if one falls critically ill.

Additionally, it is also important to know the amount of cover that an individual needs. Our advice is to assess and determine the appropriate cover amount based on the financial responsibilities and choose features available in the term plan that matches your needs for example – Zindagi Plus offers Better Half Benefit which covers spouse on the death of the life insured.