Life Insurance is the financial security to protect your family and loved ones before and after your death. The insurance policy is an agreement between an insurance company and the policyholder which promises to pay a fixed amount of money in return for a premium after a set period.
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Life Insurance Policies:
There are two types of Life insurance policies:
- Pure Protection plan
- Saving Plan
Pure Protection Plan: These are designed to protect your family’s future by providing a lump sum payment in case of your death or absence.
Saving plan: Saving Plan is a plan specifically for the financial product that is the planning for long-term goals like buying a home and fees for children’s higher education.
Benefits of Life Insurance
- Finance Security
- Death Benefits
- Maturity Benefits
- Guaranteed Returns
- Wealth Creation
- Tax Benefits
- Riders
- Retirement Planning
- Loan Facility
Finance Security:
The primary benefit of a life insurance policy is that it provides stability in time in your family’s financial situation in your absence.
Death Benefit:
In the sudden circumstances that may occur, the policyholders, the insurer, will provide the financial security in the form of your absence or death, and the nominee is paid the whole amount of the assured as the bonus.
Maturity Benefits:
The policy matures, and then some life insurance plans offer the policyholder the premium amount paid during the policy term.
Guaranteed Returns
This plan guarantee that the receiver will get a fixed amount of money after some time. In return, the investor will help you pay the loan for a home, higher education and others.
Wealth Creation
Wealth Creation is a plan such as ULIPS wealth benefits, in which investors can invest the premium amount in different funds based on the risk, but it goes for the long term.
Tax Benefits
The policyholders can have tax-saving benefits up to some lakhs as per the income tax act,1961, for the life insurance premium amount paid.
Riders
Riders are the critical illness, wavier or others who can add to your current base plan, which helps the investors to their specific needs according to the policy.
Retirement Policy
The Retirement policy is the insurance that gives a monthly pension to the policyholder on the maturity and secured environment.
Loan Facility
At a certain time, life insurance allows you to opt for a loan and borrow some plans depending on the policy term and conditions.
Comparison of Life Insurance Plans in India
| Basics | Term Plans | Whole Life Insurance plans | Endowment Plans (Guranteed Returns) | Unit Linked Insurance Plans | Term Return of Premium plans | Pension/Annuity
Plans |
| Overview | Life cover against premium for a specific duration | Protection for lifetime i.e policy coverage till you are 100 yrs old | Protection + Guranteed returns as high as 6.5% | Protection + investment in various assets classes. | Premium paid are refunded upon end of the policy term | Provides regular pension for post retirement expenses |
| Policy Term Range | 5-85 | Till you turn 100 years old | 5-35 | 10-20 | 5-65 | Whole Life |
| Maturity Benefits | Maturity Benefits available only if return of premium option is chosen | Plan matures when you turn 100 yrs old | Yes at the end of the policy term | Yes at the end of the policy | Survival Benefits on Maturity | Regular income till survial |
| Death Benefits | Life cover | Life cover | Sum assured | Sum assured | Life Cover | Few plans offer this |
| Ideal for People who want | Financial protection for family at affordable rates | To leave a legacy for their family | Secured and guaranteed return for tension free investment | A well diversified portfolio with good returns | Guranteed Benefits upon maturity + Life cover | To secure Retirement by regular income. |
How does it Work?
Life insurance works if you choose a life insurance that fits you, and you are married and have kids that plan to make the promises to higher Life beneficial for your children’s education and future.
It has terms and conditions you should pay monthly or annually. In case of your sudden death, the nominated person should get the life insurance money if they go through the documentation process and verify it.
How to Buy it Online?
Online Life insurance you can buy from different websites. Just follow the steps given below:
Step 1: You should decide the goals for the one you want to get the life insurance.
Step 2: Compare and research the different types of life insurance that match your goals.
Step 3: Provide the preliminary information to get personalized options.
Documents required for the online investment plans:
- Name, Age, Current city.
- Amount of investment.
- Term and Plan Duration
- Select the investment options.
Documents required for Term Plans:
- Do you smoke or chew tobacco?
- Select the annual income
- Occupational Type
- The educational qualification
Step 4: Avail the plans and compare what suits you.
Frequently Asked Question
Why is life insurance a safe investment?
It is the policy that has the best way to secure your family and future; it is for the long run.
