Today we are going to talk about the most taken insurance policy that is life insurance. Yes it is one of the most purchased insurance policy by everyone.
It mainly has too many benefits as this will protect your family and will complete all your loans.
So you need not to have worry about the situation after your health. Get the best life insurance policy now and protect your family members.
What is life insurance?
It can be defined as a contract between the insurance policyholder and a insurance company. In which insurer pay a sum of money in exchange of a premium upon the death of a insured person.
It protects your family and also used to cover your personal loans and mortgages. It will provide immediate financial support to your family in the case of your death. Mainly, There are two types of life insurance plans
Pure protection and Protection and savings. Pure Protection plan is designed to secure your family future. It provides a lump sum amount in your absence. Protection and savings plan is a financial tool that helps you plan for your long terms goals.
Benefits of Life Insurance
There are three major advantages to having a life insurance policy that you should be aware of after you understand the meaning and types of life insurance.
The three major advantages of a life insurance policy are as follows:
1. Financial Security
Life is surprisingly unpredictable and full of uncertainty. It is difficult to eliminate the chance of a tragic occurrence such as death.
In this case, the family suffers financial difficulties as a result of the lack of a consistent source of income.
2. Tax Saving
You can also obtain tax benefits from life insurance policies under current regulations, such as the Income Tax Act of 1961.
Section 80C of the Income Tax Act of 1961 allows for a tax deduction for life insurance premiums paid. Section 80C allows for a deduction of up to Rs.1.5 lakh.
3. Long-Term Savings
It is important to consider life insurance while making long-term
investments.
Such insurance plans assist you in making systematic savings and creating a
corpus that can be used for a variety of purposes, including the construction
of a new house, the financing of quality schooling for your kid, and the paying
of a child's wedding expenditures.
Types of life insurance:-
There is different types of life insurance policies, and you can take as per your need. Each types of life insurance have different terms and conditions and you can select the insurance policy based on them.
Let's have a look at brief description about each type of life insurance policies.
1. Term life insurance:
Term life insurance is the simplest form of life insurance plan. It is easy to understand and affordable to buy.
It provides death risk cover for a specified period. In this case, the life assured passes away during the policy period and It pays the health benefit to the nominee.
It is Best known for high sum assured at a low premium. The benefit of terms plan is the money could be utilized to pay off loan monthly household expenses, child education, child marriage etc.
2. United linked plans ULIPs:
It is a comprehensive combination of insurance and investment. The use of premium paid towards ULIP is partly used as a insurance and partly is invested in funds.
Insurance company invests the accumulated amount in the capital market like equities, debts, bonds, hybrid funds or market funds. It is best known for long term investment option with much more flexibility to invest.
The benefit of ULIP is the option to invest on equity, either on debt or in hybrid funds through the life insurance company with the complete transparency.
3. Endowment plans:
Endowment plans is a combination of insurance and saving. In this case, a certain amount is kept for life cover. If the life assured outlives the policy term then the insurance company offers the maturity benefits.
It is also commonly known as traditional life insurance. It is best known for long term saving option for the people much lower risk appetite for investment.
4. Money back life insurance:
It is a type of life insurance policy wherein a percentage of the sum assured is paid back to the insured on periodic intervals as Survival benefits.
This is best known for short term investment product to meet short term financial goals. The benefit of money back plan is short term financial planning and a opportunity to earn returns on maturity.
5. Whole life insurance:
It covers the life assured for whole life and up to the age of 100 years. It also offer partial withdrawals after completion of premium payment term.
This is best known for life coverage for whole life and the benefit is lifelong protection to the insured and a opportunity to leave behind a legacy for heirs.
6. Child plan:
It helps to build corpus for child’s future growth. It also helps to build funds for child’s education and marriage. Most of the child plans waive off the future premium on death of the life insured and policy continues till the maturity.
It is best known for your child’s future. The benefit of child plan helps in fulfilling your child’s dream.
7. Retirement plan:
It helps to build corpus for your retirement. It helps you to live independently financially without any worries. This plan provide annual installments and one time payout after the age of 60 years.
It is best known for long term savings and retirement planning. The benefit of retirement plan helps in building corpus for retirement.
Conclusion
In today's world, having a life insurance coverage is a must. While many people invest in various types of life insurance policies, not everyone is aware of the numerous advantages they provide.
In the event of your death, a life insurance policy protects your family and provides financial help.
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