Life Insurance
Life Insurance
Life insurance policies provide protection against unforeseen circumstances such as the policyholder’s death or incapacity. Aside from providing financial security, many types of life insurance plans enable policyholders to optimize their savings by making recurring payments to various equity and debt fund alternatives.
You may get a life insurance policy to protect your family’s financial future against the ups and downs of life. The insurance coverage includes a substantial sum that will be paid to your loved ones if something occurs to you. Based on your financial needs, you may pick the length of the life insurance policy, the amount of coverage, and the payment choice.
The following are the many types of life insurance policies
Term Life Insurance
Term insurance is the purest and most inexpensive type of life insurance, allowing you to choose a high level of coverage for a certain period of time. With a low-cost term life insurance policy, you can protect your family's financial future (term insurance plans generally do not have any cash value, and thus, are available at lower rates of premium as compared to other life insurance products.) If you die within the policy time, your nominees will get the agreed sum Assured, depending on the payment type you choose (some term insurance plans offer multiple payout options as well)
Whole Life Insurance
Whole life insurance plans, often known as 'conventional' life insurance plans, give protection for the policyholder individual's complete life (typically till age 100), as opposed to any other type of life insurance that only provides coverage for a set number of years. While a whole life insurance policy pays a death benefit, it also has a savings component that helps the policy accumulate cash value over time. Whole life insurance policies have a 100-year maturity period. If the insured person survives beyond the maturity age, the entire life insurance policy becomes a matured endowment.
Endowment
Endowment plans fundamentally give financial protection against life's risks while also allowing policyholders to save consistently over a certain length of time. If the policyholder survives the policy term, the endowment plan matures, and the policyholder receives a lump sum payment. If something occurs to you (as the life insured), the life insurance endowment policy pays your family (beneficiaries) the whole sum assured.
Plans for Children
Child plans are life insurance policies that assist you in financially securing your child's life goals, such as higher education and marriage, even if you are not there. To put it another way, child plans combine savings and insurance benefits to help you prepare for your child's future requirements at the appropriate age. The money obtained on maturity can be utilized to help your child meet his or her financial needs.
Unit-Linked Insurance Plan (ULIP)
ULIPs are insurance policies that combine investment and insurance advantages into one contract. A portion of your payment for a Unit Linked Insurance Plan is invested in a range of market-linked equities and debt instruments. The leftover premium is used to provide life insurance coverage for the duration of the policy. ULIPs provide you with the freedom to allocate premiums to different instruments based on your financial needs and market risk tolerance.
Retirement Insurance Plans
Retirement plans are designed to help you build a sizeable corpus for your post-retirement days. They help you gain financial independence in your non-working years. A retirement plan allows you to save and invest for the long-term, thereby offering the potential to accumulate a significant amount of wealth. Since retirement plans offer insurance benefits, you can also ensure financial security for your loved ones by investing in these plans. Retirement plans give you the opportunity to get potentially better returns. This is done by investing your money in a mix of equity and debt. Moreover, the money you get on maturity is tax-free* subject to Section 10(10D) of the Income Tax Act of 1961. Retirement plans also allow you to move your money between funds tax-free*.
