How Life insurance plans, with benefits and privileges, are the best investment

 

Life insurance plans are framed for the benefit of the insured by the insurer during times of medical urgency. The plans are like a contract between the insurance company and the insurance policy holder with mutual benefits. As per the contract, the insurance company agrees to pay a certain amount of money during the insured person's death against periodic payment of the premium amount. There are two basic varieties of life insurance term policies: level term and decreasing term. The two different varieties of policies differ in the amount of death benefit provided to the relatives of the insured person during the terms of the policy.

The premium to be paid for the life insurance plans is based on the age and health condition of the person insured during the start of the policy. Generally, the premium value remains the same for the entire policy term length, depending on the renewable term. Most long-term life insurance plans guarantee that the premium amount does not change during the policy term. In contrast, short-term policies may affect payable premiums to rise in accordance with the insured's new age.

In most life insurance plans, the insured does not get back refunded any amount of the premium paid till the expiry of the policy, even though the insured has not claimed any amount during the period. This type of policy only ensures the insured's financial protection during medical exigency.

Benefits and privileges of life insurance plans

Life insurance plans are considered to be an effective financial tool for an individual due to their several offers and benefits. Customers with life insurance plans need not worry about their loved ones regarding financial security during their absence. The life insurance plans provide life cover and help to obtain financial aid during an emergency for self and dependents. Life insurance plans are also considered the best investment plan since they provide customers with various opportunities to invest as per their needs during retirement. Term insurance plans provide life cover for the insured and his depend at the most affordable rates. Hence, investment in life insurance plans is often the best since it covers major expenses and provides financial assistance during medical complexities.

Why life insurance plans are the best investment

The various lucrative life insurance plans offer the customer the chance to accumulate wealth and works as an alternative best investment plan. The life insurance plans well to maintain the financial stability of the insured and their near ones even during the absence of the insured. The whole life insurance plans covering 99 years of age are often beneficial if financial dependence persists for longer. Life insurance is a crucial part of any investment and is often considered the best financial investment due to its financial security, assurance of a secured future for children, prevent loan burden, financial assistance after retirement and tax benefits.

Money obtained from life insurance plans ensures that family goals are not affected. Life insurance plans provide the opportunity to give the best education to children. Life insurance plans help repay the loans without losing assets or getting stressed arranging funds. Tax benefit is another criterion for making life insurance policies a better investment plan since it can avail annual tax deductions up to 1.5 lakh under 80C for insurance premium paid. 

The continuous renovating world has enhanced the expectation among consumers for a profitable and best investment plan of life term insurance policy. The traditional feature of life insurance policies with the condition of non-refundable premium amount has created displeasure among the consumers, which in turn paved the way to create new term policies with the feature of “return of premium”. The insurance policies with the new feature are considered the best investment plan, although the premium for it is often higher than traditional policies, which refunds the premium amount. Moreover, the term policy with the new feature needs to complete its full term to get the refund back.

Get the right life insurance that covers all your needs

 Life Insurance is a source of having a savings plan for the future so that you can have a constant source of income post-retirement and towards other financial contingencies and requirements. Life Insurance is one of the ways to protect as well as save in a disciplined manner.

Life Insurance provides financial coverage for various contingencies of human life. Life Insurance Plans can help create a significant financial budget for your long-term financial goals by helping you save money with the protection of life cover.

Life Insurance provides financial support to your family during your demise. It is important to buy a Life Insurance Plan that covers the mortgage, education and other expenses to secure your dependents after your demise.

Types of Life Insurance Plans in India:

There are different types of Life Insurance Policies in India:

·         Term Insurance plan – Term insurance plans or death benefit plans are insurance policies which offer compensation to the dependants in case of the death of the life assured.

·         Unit-linked insurance plan – Unit-linked insurance plan are insurance policies in which a part of your premium go towards mutual fund investment while the remaining goes towards the death benefit.

·         Endowment plan – Endowment plans are insurance policies in which a part of your premium goes towards the death benefit, and the remaining is invested by the insurance provider.

·         Moneyback policy – Also known as survival benefit, Moneyback policies pay a certain percentage of the plan’s sum assured at regular intervals.

·         Whole life insurance- Whole life insurance policies offer life cover for an individual's whole life.

·         Group life insurance – Group life policy or employee-based coverage is a health insurance plan offered by the employer of a member organization. A group insurance policy offers financial independence to the employee's family if the insured employee dies.

·         Child Insurance plans- Child insurance provides financial aid to children throughout their lives and the death benefit is available after parents' demise.

·         Retirement plan – Also known as pension plans, retirement plans are a combination of investment and insurance. A part of the premium goes towards creating a retirement fund for the policyholder.

How to choose the right Life Insurance Plan?

Choose the right insurance that covers all your needs to get optimal benefits. Below are a few of the things to keep in mind before choosing a Life Insurance Plan:

·         Plan your life insurance goals with the help of a suitable life insurance policy.

·         Calculate the insurance cover you need and discuss it with your financial advisor.

·         Determine the premium amount you have to pay for the required life insurance.

·         Select a suitable policy term, keeping in mind at which age you expect your income to stop.

·         Choose a reputed life insurance provider with a CSR (Claim Settlement Ratio) of over 95% for consecutive years.

·         Be transparent to your insurance provider and do not conceal any details. It is mandatory to declare existing ailments. Providing accurate information is crucial to avoid claim rejection in future.

·         Plan for a life insurance policy at an early age since life insurance premiums are lower when you are younger.

·         Choose a comprehensive policy that protects you or your loved ones against critical illness, accidents, permanent disability, and terminal illness.

·         Read your life insurance document carefully and evaluate your insurance needs regularly.

Life Insurance is an essential financial tool to keep your future secured when your fixed income stops or to secure your loves ones' future post your demise. Choose an insurance policy that offers maximum benefits and covers all your needs.