What makes Life Insurance attractive?
Life can be really unpredictable. One day you are given the red-carpet treatment and the next day, it is pulled away from underneath. An unfortunate event is something you just cannot foresee. This is where life insurance comes to your rescue. Life insurance gives your loved ones a financial cushion after your unfortunate demise, be it untimely or not.
What is Life Insurance?
With Life Insurance, the insurer guarantees to pay a sum of money to the insured’s beneficiary in the event of the death of the insured person. You are required to pay insurance premiums over a period of time, after which the designated beneficiary receives a lump sum as a death benefit. This insurance policy provides for the monetary needs of your family after your death.
Elements of Life Insurance
There are two main elements of life insurance:
- Death Benefit
This is the sum of money given to the insured’s beneficiary by the insurer in the event of the death of the insured. The death benefit is what the whole life insurance policy is made for in the first place – to get a guaranteed amount after death to cover the risks.
- Premium Payments
For the insured to receive the death benefit, he/she has to make premium payments over a specific amount of time. There are many factors that decide the amount and period of these payments such as age, financial status, medical history, etc. If the premium payments are made as required, the insurer is duty-bound to pay the death benefit as decided. In case you have opted for permanent life insurance, you have a third element as well – cash value. This cash value can be withdrawn and used over the lifetime of the insured for loans, many purchases, or even to pay policy premiums. It is considered a great form of investment as well.
Advantages of Life Insurance
It can be overwhelming to decide on insurance plans. If you are puzzled with the choice of going for a plan or not, perhaps these few advantages could help you out.
- Protection to your Family
This is the biggest advantage to consider. The sudden death of a person, especially the bread winner may put the family in a terrible state, both emotionally and financially. An insurance policy helps to protect your family financially after your demise.
- Not all Insurance Plans pay-out only after the Insured’s Death
Some of the top insurance companies also offer plans that allow you to enjoy the benefits during your lifespan. For example, the permanent policy enables you to have a cash value account that grows over time and can be used to fund many of your activities and purchases in life.
- Insurance plans are affordable
Even the most premium insurance plans are becoming increasingly affordable. You have a variety of options in insurance to choose from. So, choose one that goes with your budget. Buying an insurance policy does not necessarily mean digging a hole in the pocket.
- Insurance claims are not taxable
The death benefit claimed after the insured’s demise is not taxable which also serves as a huge advantage.
What are good options for Life Insurance Plans?
There are quite a few popular insurance plans you could opt for. You must evaluate each plan according to your requirement first and then select the most appropriate company to get insured with. Insurance policies differ in types as well, ranging from term life, whole life and endowment to even child insurance plans. You must take factors such as tenure, additional cover, premium payment, life-stage increments, etc. into consideration before you make your final choice.
Here are a few of the best life insurance plans in India today:
- SBI Life eShield
- HDFC Life Click 2 Protect Plus
- Aviva i-Life
- Future Generali Care Plus
- Birla Sun Life BSLI Protect@Ease Plan
- LIC’s Jeevan Pragati Plan
- Max Life Online Term Plan Plus Basic Life Cover
- ICICI Prudential iProtect Smart
- Bharti Axa Life Elite Secure
- PNB MetLife Mera Term Plan
We know, life insurance can be quite confusing to a layman. Thus, it is recommended that you speak to an expert and understand life insurance before you plunge in. After all, you must be well aware of what you are putting your money into.