What Is The Importance Of Insurance For Life
Insurance for life protects both you as well as your family. If someone is the sole earning person of the family, then after that, Insurance for life will offer some financial relief to those who are financially dependent on him. Some policies give you the option of getting returns through investment along with cover. You can choose from 7 types of life insurance policy or insurance life products up to life insurance for 1 crore depending on your need:
1. Term Insurance Plan
This plan is valid for a specified period of time, such as 10, 20, or 30 years. This package provides coverage for the duration of your choice. In such an Insurance for life policy, there is no maturity advantage of such a life insurance policy.
These are life insurance policies that do not have a savings or benefit portion. As a result, they are less expensive than other policies. In term insurance, the recipient receives a set amount of money if the policyholder dies.
2. Endowment Policy
This form of Insurance for life policy combines insurance and investment. This policy provides liability coverage for a set period of time, during which the guaranteed amount, as well as the bonus, is returned to the policyholder.
In an endowment scheme, the face value of the policy is compensated after the policyholder’s death or after a given number of years. Some policies also pay in case of critical illness.
3. Moneyback Insurance Policy
This policy is only one type of endowment policy. There is also a combination of investment and insurance in this policy. The difference is that in this life insurance policy, along with the bonus, only the instalments are assured during the policy term.
The last instalment is available at the end of the policy. If the policyholder dies during the policy term, the beneficiary gets complete assurance. Although the premium of this policy is the highest.
4. Lifelong Life Insurance
In a whole life insurance plan, you get lifetime protection. That is, there is no term of the policy. Upon the death of the policyholder, the nominee gets an Insurance for life claim.
Other life insurance policies have a maximum age limit, which is usually 65–70 years. After that death, the nominee cannot claim death. But under the insurance life India, the nominee can claim the death of the policyholder even at the age of 95. The premium of this policy is very high.
Under this policy, the policyholder has the option to partially withdraw the sum assured. Apart from this, they can also make money in the form of a loan instead of a policy.
Both protection and investment remain in this plan as well. In the traditional endowment insurance policy and money back policy, the returns are somewhat fixed, whereas in ULIPs there is no guarantee of return.
The reason for this is that the portion invested in ULIPs is put into bonds and shares and you get a unit just like a mutual fund. In such a situation, the returns are based on market fluctuations.
However, you can decide how much of your money should be invested in stocks and how much money should be invested in bonds.
6. Retirement Plan
Insurance for life cover is not available in this plan. It is a retirement solution plan. Under this, you can create a retirement fund by assessing your risk.
After a certain period, a certain amount will be paid to you or the beneficiary after you as a pension. This payment can be on a monthly, half-yearly or yearly basis.
7. Child Insurance Policy
These schemes have been designed keeping in mind the expenses and other needs of the children. In the child plan, a lump sum is paid after the death of the policyholder, but the policy does not lapse. All future premiums are waived and the insurance company keeps investing on behalf of the policyholder. The child receives money for a fixed period of time.
Part-1 video version is also available here
Part-2 please see bottom of the article.
Other Types Of Insurance For Life
1. Postal Life Insurance For Government Employees
Postal life insurance for government employees is like other Insurance for life, the only difference Is that it is run by the Indian Postal Department. Apart from this, it is a traditional insurance policy and not a term insurance or ULIP plan. It was started in 1884 for postal workers.
Along with the single insurance policy, Postal Life Insurance also has a group insurance scheme for other employees of the Department of Posts (Gramin Dak Sevaks).
2. Insurance Universal Life
Universal Life Insurance (UL) is a hybrid Insurance for life policy that combines the elements of life insurance with the investment savings option.
Insurance Universal Life combines the ability to create savings by providing you with a life insurance policy. This allows you to have flexibility in the savings or investment portion of the premium.
Universal life insurance also includes an element of a long-term investment strategy as it requires you to create values in the investment portion through the amount paid monthly.
3. Life Insurance For Home Loan
If you have taken a home loan, then a large part of your salary will go in the form of EMI.
In such a situation, God forbid, but if something happens to the person earning income through a job or business, then it will become almost impossible for his family to repay the instalment of the home loan.
The basic principle of financial planning is that any person should buy life insurance for a home loan to cover all his or her type of financial liabilities.
In such a situation, when you take a home loan, new financial liability arises. By taking an insurance policy to cover all home loans, your future generations will get an inherited house, not a loan liability.
4. Insurance Non-life
The loss from a specific financial event is repaid to the insured, it is called non-life insurance. General insurance, property insurance and contingency insurance are other names for insurance non-life.
It can be defined as any insurance that is not related to life insurance. People, legal liabilities and assets are covered under a non-life insurance policy.
5. Life Insurance For Family
Life insurance for a family is a policy that provides coverage under a single policy to the entire family. Family health insurance is basically a form of effective health insurance cover.
But in a family health insurance policy, you have to pay a lower premium amount and it saves your money along with protecting your family.
6. Insurance For Life Cover
Insurance for life cover is a type of life insurance plan that provides life coverage to the policy-holder for the entire life i.e. up to 100 years of age, but for this, the policy-holder will have to pay the policy’s premium on time.
It guarantees the death benefit to the beneficiary of the policy (death benefits) if the unfortunate demise of the policyholder occurs during the term of the policy. The insured can decide the sum insured at the time of purchasing the policy.
Under Insurance for life cover in India, if the policyholder survives to the age of 100, then the policyholder will be provided with matured endowment coverage in the form of maturity benefits.
This plan provides you cover as long as you are alive. It is also called a perpetual life insurance plan as it provides risk cover for the entire life. It offers double the benefit of life cover and bonus.
Premiums have to be paid for the first 10-15 years and the insurance cover is extended for the entire life of the policy-holder.
For example, if you are 30 years old and you opt for a whole life plan, whose amount is Rs 30 lakh, then you will stop paying the premium when you are 45 years old, but the post-mortem dues coverage will cover your entire will last for life. The premium is paid for a limited time, which is why it is expensive.
7. Life insurance for tax benefits
The life insurance for tax benefits can be claimed under Section 80C and 80D of the Income Tax Act on the premiums deposited for life and medical insurance policies. GST on insurance premium ranges from 2.5% to 18%.
Importance Of Insurance For Life
Secure financial condition
It helps you to secure your finances during any emergency. Some life insurance plans come with a survival benefit from which you receive the sum assured at the maturity of the plan. On the other hand, term plans are pure security plans.
Means of saving tax
A policy taken under life insurance can help you claim a maximum deduction of Rs 1.5 lakh. 1.5 lakh under Section 80C of the IT Act, you will get tax exemption under Section 10 (10D) of the Income Tax Act from any bonus or amount received under a life insurance policy.
A person can also earn money using insurance. Insurance schemes like Unit Prakash Bima Yojana not only help in securing but also help in creating a good fund for other financial goals. The Sum Insured also acts as a security against which you can get a loan from banks.
Diversification of liability
When you take a home loan, you have the responsibility to repay the loan amount of 15 to 20 years or more. It runs as monthly instalments (EMIs).
Imagine a scenario when in the case of a joint home loan something happens to the home loan payer? If insurance or something happens to your spouse, having an insurance plan helps limit liability. In such a case, even if something happens to the insurer, the loan amount can be refunded.
If you are the only earner in your family, it is important to get an insurance plan. Insurance protects those you depend on. This provides a cushion against your financial liabilities before making any investment or loan for your financial goals.
Experts recommend taking a term insurance plan in the initial phase of life insurance as it will pay a small premium for it and provide a larger cover.
Best Insurance Policy For Life In India And Insurance Quotes Life Term
It is a pure term insurance plan that provides the family of the insured with the necessary financial security in case of his unfortunate demise. The scheme is not linked to the stock market.
Features and Benefits:
- The premium is applicable for deduction from taxable income under the Income Tax Act, 1961.
- Under this scheme, non-resident Indians (NRIs) will also be covered, even if they are not in the country, but will have to be present in the country at the time of medical tests.
- The company offers a free look period of 15 to 30 days. Within this time the policyholder can return the policy if he is not satisfied with its conditions.
- You can avail of the scheme through an online application process and no intermediary will be involved.
IProtect Smart by ICICI Prudential is an effective term insurance policy that provides 360-degree coverage at a very affordable premium. It also allows you to file a claim against 34 critical illness diseases.
Features and Benefits:
- Under the policy, you will get options to choose a payment option, which includes lump sum, income and rising income for your nominee.
- It also provides a terminal disease benefit. This means that you will get the claim amount in case of serious illnesses as well.
- It comes with a comprehensive cover that includes an extensive list of critical illnesses.
- Suicide cases are also liable to get coverage under this plan.
- The minimum term of the policy is 10 years and the maximum is 35 years
- The minimum sum assured is 8 lakhs.
SBI, the trust of many and a brand that has been in the banking and finance industry for a long time. SBI Life Eshield is the most pure term insurance policy that offers a range of benefits at an affordable premium.
Features and Benefits
- The plan provides the option to select life cover and benefit from a rising cover.
- It comes with an inbuilt quick terminal illness benefit and two rider options
- If you are a non-smoker then you will be likely to get a huge discount on premium.
- The minimum term of the policy is 5 years and the maximum is 30 years.
- Under the same, you will get coverage up to 75 years.
PNB MetLifeBima Company Limited is a joint effort between Punjab National Bank – India’s largest nationalized bank – and Insurance MetLife – a global insurance brand.
PNB MetLife Insurance is one of the notable life insurance companies in India and was launched in 2001. PNB MetLife insurance plans are considered to be one of the well-crafted plans in the insurance market. Company Incharge Insurance plans offer options such as long term saving, life cover and retirement.
PNB MetLife Insurance Term Plans offer better insurance as well as investment options. PNB MetLife has a healthy claims settlement ratio of 92.90%.
Insurance sun life plan provides an annual income to the policyholder, which accumulates for 10 years or 12 years by the end of the policy term. This annual income rises with a 5% income booster and thus savings increase every year until it is withdrawn.
Part-2 video version of the article: