It is often observed that people take the idea of buying an insurance policy seriously only when they or a close family member suffers a sudden mishap like an accident or critical illness. It is only when you realise the uncertainty of life, you think of a life insurance plan as a priority.
What is a good insurance plan?
There are numerous insurance companies, which provide different types of insurance plans, and this makes it difficult to choose a plan for yourself. A good insurance plan is the one that fits your requirements and provides a substantial cover. Good life insurance, in short, is one that offers financial security and protection to you and your family. Other than this, life insurance provides many other additional benefits that we will discuss further. Before that, let’s see the six major types of life insurance plans you can choose from:
- Term Insurance – Term insurance is the most affordable and basic life insurance plan. It is purely a protection plan that provides financial security to your family in your absence after death.
- Savings Plan – Savings plan is a type of life insurance plan that comes with the benefits of both protection and investment. A savings plan provides financial security to your family after your death. Most of the savings plan offers a fixed amount at the end of the policy that is known as Maturity Benefit. Some plans provide regular income throughout the policy tenure.
- Whole Life Insurance Plan – The whole life insurance plan covers you for a longer period as compared to other life insurance plans. Usually, life insurance policy provides cover for 10-30 years, whereas the whole life insurance plan covers you upto the age of 99 years.
- Retirement and Pension Plan – Retirement and Pension plan is a way to create your pension source. You can invest a lump sum amount and get immediate income, or you can choose to compile your retirement corpus depending on your risk appetite.
- Endowment Plan – Endowment plans are life insurance plans that provide insurance shield as well as the investment benefits without any risks.
If you have identified the need for buying a life insurance plan, you are sure to find an insurance plan to fit those requirements. Here are some benefits of purchasing life insurance that will convince you to buy one instantly:
- Security – Life insurance provides financial protection to you and your family in case of an unfortunate event like death.
- Death benefits – Investing in life insurance is a sure way to protect your family in case of your demise financially. In case of an unfortunate event, the insurance company pays the full amount that is the sum assured with a bonus to the insured person’s family.
- Return on Investment – The life insurance plans get you better scheme when compared to other investment plans. The amount invested in life insurance is not just safe but will also generate good returns and will be returned on the completion of tenure or demises of insured.
- Tax benefits – Under Section 80C of the Income Tax Act, investments made in specified instruments enjoy a tax deduction. The current rebate amount under section 80C is ₹100,000 that can be invested in life insurance premiums, employee provident fund, equity-linked mutual funds, etc.
- Ascertained income benefits – Buying a life insurance policy frees you from the worry of how your family will manage bills, rents and other expenses after you as it ensures regular income flow in your absence.
- Riders – Riders are additional benefits like critical illness cover, family income benefit, personal accident, etc. which can be added to the basic life insurance cover to increase the coverage.
There is no doubt that life insurance is a must-have for every individual especially if you are the breadwinner for your family. Identify your need and buy the best suitable insurance that will cover you and your family against the unfortunate events.