Term Life insurance is Regulated!

Term Life insurance is a long-term product.  How do I know that the insurance company won’t winds up its business before the end of my plan?

 Most private insurance companies in India are relatively new and lack a past track record, which may act as a deterrent. This is where the Insurance Act 1938 comes in. It is compulsory for all private insurance companies to maintain a ‘minimum solvency margin’ of INR 150 crore. Simply put, this solvency margin is the additional capital that an insurance company is required to hold.  As the business grows, the company needs to bring in additional capital to maintain the required solvency margins.  These funds are kept in custody for repayment in case the company declares bankruptcy or decide to wind up its business before paying out the policy benefits (claim and/or maturity) of all the policies that it issues. 

Most life insurers make huge promises while selling the product.  However when it comes to paying the claim, they have a myriad of excuses.  There is no one to help me…

The basic premise of life insurance is to ensure that an event such as death or disability does not render the family helpless and financially insecure.