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| What is Life insurance |
Life insurance is an agreement between an individual and an insurance company, where the insurance company provides financial security to pay regular (known as premiums) to the insurance company. In the event of the death of the policyholder or if the policy expands, the insurance company will pay a lump sum to that individual over a period of time or to his or her family, according to the agreement.
How Life insurance can be helpful
Insurance can be useful to achieve a number of financial goals for each individual and their family. Here are some important ones:
• Financial cover for the loss of life, which ensures that your family can support themselves when you are away
• Child education
• A child's marriage
• Buying a house
• Pension or normal retirement pension
• Post-retirement NIV funding
This is one of the financial goals you can achieve with the help of life insurance. Most importantly, life insurance strategies are flexible. This means that even though you did not receive a home insurance plan, you can buy a home equity plan (customary or market-related) with the intention of paying for the house at a later date.
Types of Life Insurance
In general, there are five basic types of life insurance plans:
• Term insurance
Term plans are a basic form of life insurance. They provide health cover without any saving / profit component. They are the cheapest form of life insurance as the premiums are cheaper compared to other life insurance plans.
• Endowment plans
Endowment plans are different from term plan in one important aspect , Unlike periodic plans that pay a guaranteed sum, plus profit, in the event of a policy term termination, the expansion plans produce a guaranteed amount under those two conditions - death and survival.
• Unit linked insurance plans (ULIP)
ULIPs are different from the traditional transfer scheme. They pay a guaranteed amount (or investment portfolio when high) on death / maturity. With ULIPs investing in stock markets, it is appropriate for people who are willing to take risks.• Whole life policy
The whole life insurance plan covers the owner for the rest of his or her life. The main feature of a lifetime policy is that the validity of the policy is not defined and so one enjoys life cover throughout one's life.• Money back policy
This differs from the Endowment plan. The refund policy provides periodic payments over the policy term. To achieve that, a portion of the guaranteed amount is paid periodically. If the policyholder survives the period, you receive a lump sum.How much life insurance do I need
Although, it is not possible to attach a rupee amount to someone's life, however, it is important for you to estimate the value of your life depending on what it will take for your family members to be financially independent in your absence. With insurance coverage this is a guaranteed sum and the financial value of your life value is called Human Life Value or HLV.
Calculating HLV involves two steps :
The basic method of calculating one's life value involves two steps:
• Include all expenses such as household expenses, living expenses among others
• Calculate future debts (such as unpaid loans) that your family members will have to pay off when you die.
When you add these two figures, you get your lifetime value, which is a guaranteed value for your life insurance policy.
Points to keep in mind
• No fixed amount fits for your life insurance plan. Your health insurance plan should not be like your friend or colleague's insurance plan. Your needs and goals are different and this should be reflected in your insurance plans.
• Firstly you start better, as life insurance premiums are lower at a very young age and begin to increase as you age
• Go to term plans - they are the most accessible form of life insurance which means you get great health cover at a lower premium
•Use life insurance riders to improve your life insurance policy. The rider is a supplement to the main policy, which offers benefits over the policy depending on the specific circumstances.
•Feel free to talk to an experienced and relevant agent about the details of the policy and whether it is right for you.
How can i select the right life insurance for me?
Once you have identified the need to take out life insurance, you should know about getting some basic steps right to choose the best life insurance policy.
Choose the best life insurance plan / policy in 3 easy steps :
• Involve your insurance adviser
While this may seem trivial, engaging a reliable and competent insurance advisor early in the phase of your quest for life insurance is important. Most people are not empowered to make a decision on their own and require the expertise of an insurance advisor.
• Calculate the health cover
An insurance adviser will help you calculate the amount of life cover - or a guaranteed sum. You will evaluate sources of income, the number of dependents, your debts and debt and expenses based on your lifestyle and access to life cover. She will also determine the best plan that can be - a term plan, an affiliate program, an affiliate program or a combination of strategies, to help you find the best health cover. You can also check your Life Calculator insurance requirements online, which is the fastest and easiest way to find out.Similarly, if you have other needs such as planning your child's education or marriage, your retirement pension or women's insurance plan, trust your counselor to do the math and you will find the right solution.
• Compare insurance plans
With so many insurance companies on the market offering a variety of plans, you should make sure you choose the right one. An insurance advisor will do your homework comparing life insurance plans from various insurance providers to the relevant parameters that recommend the most comprehensive plan based on your needs.
What Are the Benefits of Buying Life Insurance?
· Life insurance gives three main benefits , namely protection, long-term savings, and investment. Here is an understanding of each of these benefits.
Life is unpredictable and full of uncertainty. The risk of an unrepentant event such as death cannot be eliminated. In such a case, your family will have to deal with the financial problems caused by the loss of your regular income. Investing in a life insurance plan provides a safety net at such times. Your insurance provider is responsible for paying the beneficiary or determining the benefit of the foreordination, thus keeping your family safe even when you are away.
2.Long-term savings
It is important to consider life insurance if you want to save longer. Such a product is to help you maintain order and build a corpus for your future. The amount collected can be used for many purposes, such as buying a new home, financing your child's future education or meeting his or her wedding expenses, among many others. In addition, life insurance strategies also offer standard coverage in the form of financing, so, it is a great way to meet your retirement goals.
3.Investment
Unit-Linked Investment Plans (ULIPs) offered by life insurance providers are primarily investment instruments. This market-linked product serves as a tool for wealth creation. ULIPs provide significant returns on premiums paid in insurance policy. Most life insurance plans offer significant benefits during maturity, making them an attractive investment vehicle.
In addition to the major benefits mentioned above, life insurance plans offer other benefits. You can claim tax deductions under section 10, 80C, and 80CCC of the Income Tax Act, 1961 in the premium paid on your insurance policy. You can also take out a loan for your insurance in case you need a mortgage.
Buying a life insurance plan is a must. While many are investing in such a plan, not everyone is aware of the many benefits it offers. Life insurance programs help your family through difficult times and provide financial support when you are away. Besides, implementing an insurance policy entails the practice of saving money, thus being able to build a good company. Therefore, you can choose to invest in a life insurance plan and fulfill your obligations in the best possible way.
Why should I buy life insurance online ?
Buying life insurance online is quick, effective and very expensive. Companies have evaluated the needs of their customers over the years and have now made insurance available online. Below are some of the benefits of buying insurance online:
1.) Direct Purchase - Customers face distributors when buying insurance online. Purchasing offline, saves the commission payable to the distributor and therefore applies. You eliminate the need for a third party which is why you save time and money.
2. This way one can easily compare the pros and cons to finally choosing the right insurance plan that meets your needs.
3.) Access to online reviews - Customers always leave an online update about their experience with the company. You can access these updates and make sure you have all the details about the product and company before making a decision.
4.) Automatic Services- The online platform is not limited to sales, rather, it is a fast and efficient channel at the same time. The policy holder can access online services such as downloading a policy document or brochure, getting instant insurance quotes online, when the policy expires, updating online, paying an annual premium, tracking your investment, making a claim whenever needed etc. You can do this independently and quickly.
5.) Customer Support- You get 24x7 customer access when buying insurance online. The company has the option to chat on their website where you can ask employees anything. You can find clarity of the doubt, or look at policy options and be able to access any information online.
In conclusion, it makes sense to explore the option of buying insurance online, to save time and money and to easily access other options. It's not as tricky as the offline process, it's easy and fast. All your paper work is also stored in an online account so you eliminate the need to print etc.
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