It is foolish to step out of home without life insurance. In an Uncertain World, life insurance is a must. Life insurance protects you and family from risk. You may not be there for your family, but make sure to leave a safety net behind.
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Always avail life insurance to protect your family and not as an investment. The purpose of availing life insurance is risk cover. IndianMoney.com advises you to avail a term life insurance plan.
A term life insurance plan is a type of life insurance plan which is pure risk protection. You pay a premium for a sum assured and enjoy risk cover (protection) for a certain time called tenure of the policy. On death of a policyholder within the tenure, the sum assured is paid to nominees as a death benefit. A term life plan has no survival benefits.
IndianMoney.com advises on availing life insurance to protect family and not for investments or tax saving.
A life insurance plan is useless without sufficient coverage. Term life insurance plans give maximum coverage for minimum premiums. IndianMoney.com advises you to avail term life insurance to get maximum cover for lowest premiums.
Many insurance agents push endowment plans as they offer savings benefit. The insurance agent also pockets a handsome commission. IndianMoney.com advises availing life insurance of sufficient coverage. If you have home loans or other major loans, make sure to avail term life insurance. Don’t make the mistake of leaving home loan and car loan EMIs for family members to repay.
IndianMoney.com tells you to avail term life insurance to protect family and repay loans. Availing a life insurance is useless if the cover is not enough to repay loans or give family the living standards they currently enjoy.
You may be tempted to avail life insurance as an investment. Unit Linked Insurance Plans or ULIPs are insurance cum investment plans. These are market-linked and offer mortality cover and the investment benefit. Endowment plans offer insurance and the savings benefit.
IndianMoney.com tells you not to avail life insurance as an investment. An endowment plan with all the bonuses (guaranteed/revisionary and terminal bonuses) offers just 7-8% a year. Most of the premiums paid on ULIPs goes for investments and very little is left for mortality cover. IndianMoney.com says never mix insurance and investments. Avail term life insurance for protection and make investments according to risk profile.
Avail life insurance only if you can afford the premiums. If you avail ULIPs and Endowment plans and cannot afford premiums, you will be forced to surrender it. You lose insurance cover and get very little on surrendering the plan.
IndianMoney advises you to opt for term life insurance as premiums are low, ensuring affordability. It also protects the family leaving you free to make the investments.
SEE ALSO: Is It Safe To Buy Online Term Plan
You already know that an insurance agent sells endowment plans to pocket commissions. An insurance agent can also cost your family the claim settlement.
IndianMoney advises filling the insurance proposal form yourself. If you are a smoker, the insurance agent may advise not to mention it. On an untimely death if the insurer finds you have not mentioned crucial/important facts or details, it may cost your family the claim settlement. Your family will not get the money they deserve and badly need.
It is your right to return a life insurance plan which doesn’t meet financial goals. Life insurance agents mis-sell insurance plans to pocket commissions. IndianMoney.com tells you if the agent sells a life insurance plan which doesn’t meet financial goals or he hides/fails to disclose important facts, this is mis-selling.
IndianMoney.com advises you to understand the free look period where a life insurance plan can be returned on not being happy with the terms and conditions. Return the life insurance plan within 15 days of receiving policy documents and claim a refund.
An insurance agent may persuade you to avail an endowment life insurance plan. These plans have high premiums and you could struggle with the premium payments. This would force a surrender of the endowment life insurance plan.
What is surrender value in life insurance? If you surrender the life insurance plan before tenure, you get part of the money paid as premiums after deducting charges called surrender value. You get surrender value only after paying 2-3 premiums depending on the premium paying term of the life insurance plan.
IndianMoney.com advises availing a life insurance plan which you can afford. Too high premiums might force a surrender of the plan. Surrender in the initial years of the life insurance plan and not towards the end of the tenure.
IndianMoney.com advises not to avail life insurance just for tax benefits. Avail life insurance for protection of family and to meet financial goals. Avail riders like a critical illness rider which help meet expense hospitalization bills.
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