Life insurance is a financial protection for any unavoidable event that is inevitable with human life like death, physical impairment, accident and retirement. Human life is always subject to risks of untimely death and disability as a result of natural or accidental causes. There is a loss of income to the family when human life is lost or permanently/ temporarily impaired.
Human life cannot be valued. However, a lump sum can be determined on the basis of loss of income in the upcoming years. In life insurance, the sum assured that would be paid on the event of loss of income is called as ‘benefit’. Life insurance policies offer a predefined sum of money in case of any untoward event happening to the policyholder.
Want to know more on Term Life Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Why you should buy Life Insurance:
Each human faces the following risks:
Life Insurance is needed:
Who needs Life Insurance: Basically, the breadwinner of each family must avail life insurance. With homemakers contributing so much to the family, they too must avail a life insurance policy. Children too maybe considered for insuring their life as their potential future income is at risk.
How much Life Insurance is needed:
The sum assured would depend on the following factors:
Kinds of Life Insurance Policies:
Term Insurance: You can avail protection over a pre-defined period of time with term insurance. On death of policyholder, nominee / beneficiary would receive death benefits from the insurer. If the policy holder survives the term, there are no survival benefits.
Whole Life Insurance: In whole life insurance, you are insured for a lifetime. Insurer pays out death benefits on any event that cause loss of income to the family which includes death or any untoward incident causing permanent or temporary disablement.
Endowment Policy: Endowment policy is a savings linked insurance policy which has a specified maturity. On any untoward incident that causes death or physical disability, the insurer pays out sum assured to the nominee / beneficiary. If the policy holder survives the predefined term of the policy, then the maturity proceeds would be paid out.
Money-Back Policies: Under a money back policy, a certain percentage of the sum insured is paid out to the policy holder on a periodic basis as survival benefits. When the term expires, the remaining amount is paid out as maturity proceeds.
Children Policies: These policies are applicable on the life of a parent for the benefits of the child. With children policies, parents get funds which help them plan various life events. Few insurers waive premiums payable in case of unfortunate death of the parent/proposer within the term of the policy.
Annuity (Pension) Plans: Retirement benefits like employee provident fund, gratuity and so on are paid in lump sum. This lump sum amount is often spent immediately. Retired individuals find it difficult to meet expenses as there is no regular income. Therefore, pension is the best method of retirement planning as it offers regular income. It is only wise to invest in annuity plans while earning. You can be financially independent by investing in annuity plans.
Unit Linked Insurance Policy
ULIP stands for unit linked insurance plans, is a fine mixture of insurance and investment. Here policyholders pay premiums on monthly or annual basis. A small portion of the premiums paid goes toward life insurance and the rest is invested in investment instruments like mutual funds.
SEE ALSO: What Life Insurance to Buy
Directly from insurers
When you decide to avail an insurance policy:
You May Also Watch
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.