Life insurance has been an integral part of our lives for ages. The concept of life insurance is defined as a contract between an insurance company/insurer and a policyholder, which provides a benefit to the beneficiary upon the death of the insured, in exchange for premium payments.
It acts as a substitute for the income of the insured after his/her death and is one of the best financial decisions one can take for the family and loved ones. There are different types of life insurance policies like whole life insurance, term life insurance, annuity, endowment life policy etc. A policyholder opts for the policy that works the best as per his/her needs and goals.
The amount of premium to be paid is determined by several factors such as sum assured chosen, gender and age, medical history of the insured’s family, lifestyle, the tenure of coverage and so on.
Is it important to buy Life Insurance?
An important question that arises is – Is Life Insurance necessary? The following highlight the importance of Life Insurance:
Brings financial security and meets the requirement of the family:
This is one of the important reasons as to why people purchase life insurance. It is seen as a long-term planning instrument for safeguarding the financial state of the family in the case of any uncertainty. Life insurance provides a cover when the family relies on the income of one person. It caters to their requirements in the event of illness/death of the policyholder. It is a commitment towards the responsibility of your loved ones; provides you with peace of mind.
Helps to pay off debts:
After the death of the insured, the assured amount from the insurance helps pay off mortgages and other lingering debts. This is of immense help to the family/dependents, during their grief. After the debts are paid off, the remaining amount is given to the family of the insured to meet their requirements. The best tool for such a need is a term insurance plan which offers a large sum assured at very nominal premium rates.
Long-term saving with tax exemption:
Life insurance not only protects your loved ones but also ensures the build-up of wealth for the family after the insured’s death. The money can be used for planning children’s education, marriage, dealing with student loans, retirement, wealth creation, assisting with parents’ medical aids etc. Many life insurance companies have the option of customized plans for different stages in life, which can help during retirement.
On paying premiums for the policy, the beneficiary/family of the insured can avail tax benefits on the premiums paid. Also, the proceeds received for a life insurance plan are tax-free.
Acts as an investment tool:
With the help of whole life insurance, you earn survival payments. Also, if you own a business or has a partner in the business, life insurance is a must so that you do not leave the business or your partner with financial issues.
Buying Life Insurance in India
In India, you can easily purchase life insurance as per your requirements and agenda. There are multiple options to choose from such as:
- Term Insurance: Provides coverage for a specific term
- Whole Life Policy: Provides coverage for a lifetime
- Pension Plans: Provides lump-sum amount to the policyholder after his/her retirement which is used for buying an annuity plan
- Money Back Policy: Opted by many. Provides death and maturity benefit and periodic returns
- ULIPs: Provides multiple investment options to the insured. The insured benefits both, in terms of insurance and investment.
You can compare different insurance policies on websites such as Coverfox.com to find the right Life insurance. However, you would want to consider important criteria like policy terms, tenure, premium, coverage amount etc., before purchasing a policy.
In India, some of the most bought term insurance policies are:
- LIC eTerm Insurance
- HDFC Life Click 2 Protect 3D Plus
- Max Life Online Term Plan Plus
By opting for life insurance, you ensure financial security and stability in times of crisis, like loss of income due to a sudden illness, accident or death. Also, life insurance is an important financial planning instrument for a business or other ventures. Many insurance plans are tailor-made for your needs and requirements; so go ahead and invest in the apt insurance plan for yourself from Coverfox.com.