Life Insurance is a policy provided by the insurance company that offers overall financial coverage against premiums for a limited duration to the nominated beneficiary. The best life insurance policy offer death benefit upon the demise of the insured due to sudden death, unforeseen accidental death, or disability.
Offering you a wide range of insurance policies to compare from, our website assists you to purchase the right insurance by providing you with product comparison and unbiased quotes.
What is Life Insurance Premium?
A life insurance premium is an amount paid by the insured to get the benefits of a life insurance policy. Premium is the value of life insurance that is paid on an annual basis, but the insurer can also select and pay premium half-yearly or monthly. Such premiums help to increase the cash value of the insurance plan.
It’s true that the life insurance company decides the payable premium by the insured but the policyholder gets full liberty to choose the sum assured and the term of the policy.
Why should you buy a life insurance policy?
Life insurance policy is crucial for a secure future for your children and other family members. The perks of purchasing life insurance are much more than people know of. The most common benefits that people are aware of is that of disability and death benefit. Other benefits of life insurance include-
1. Discount on online payment
So many of us are not well aware of the fact of how beneficial online mode of payment is. Did you know? If you choose to pay the premium via an online payment method, the insurance company’s administrative prices drastically lower down.
The low cost is applicable due to zero paperwork and no commission charges, which at times a buyer has to pay to the agents in the offline procedure to buy or renew a policy. The discount rates vary from one insurance company to another but the best part is while proceeding towards an online payment mode you get a first-hand experience and know the whereabouts of getting a policy, in other words, total transparency is maintained.
2. Takes care of Business
Helps to support business and their partners if the other face sudden death. Without any difficulty, the business partner can buy the policyholder’s share. All the partner needs to do is sign an agreement with the life insurance company and the amount received after the sell of the insured’s share will be transferred to the nominee. It must be remembered that the nominee will not receive a stake in the company of the deceased.
3. Tax Benefits
Under the Section 80C of the Income Tax Act 1961, an insured is eligible for a tax rebate for paying a premium. The tax benefit is applicable by all life insurers, whether it is a private or public sector insurer every life insurance policy offers this benefit. Also, under Sector 10 (10D), the maturity benefit of life policies qualifies for tax deductions.
4. Loan Collateral
Not all people are aware of the fact that life assurance policies act as loan collateral. An insured can take a loan from NBFC (Non-Banking Financial Company) or a bank based on the surrender value and the type of insurance policy.
Reasons why life cover policy is necessary:
- Ensures that your family receives financial support at the time of sudden demise
- Support the educational and other needs of your children.
- The saving plan offers a permanent source of income after retirement.
- Additional income source if due to any unforeseen circumstances (accident or critical illness) there occurs financial loss
- The opportunity to explore other financial options and lifestyle needs.
Secure your family financially
Whether you are married, a parent, or consist of a large family, life insurance ensures to provide with financial assistance to your family even after death. Several other financial benefits that the right insurance policy can provide are-
- Covers medical bills.
- Pay off debts like mortgages, credit cards, and other loans.
- Funeral cost assistance
- Assist to pay real estate taxes & helps with other real estate problem.
- Child education expense coverage (higher education expenses included)
- Support family plans (which may include supporting family business)
- Another important advantage of life insurance is that payments are made directly to your beneficiaries, not your assets, which means that your loved ones can get the money they need instantly and without getting affected by income taxes.
Life insurance is can contribute and help a lot at the time of crisis. No matter whichever type of life insurance plan one chooses, the prime goal is to assist your loved ones with immediate financial needs at difficult times, even when you are not present (sudden death).
It is also important to understand and know about the policy you are to purchase. Some policies include benefits which might not benefit you that much, therefore it’s important to compare different policies and learn what’s best suited for you and your family. You can compare various policies online without facing any difficulty.
While if you choose an offline method, you might face a lot of issues handling agents, moving around from one office to another along with extra expenses. This blog aims to inform you about the different types of life insurance policy and their benefits so that you can make an informed decision about life insurance.
Life Cover is a contract between the policyholder and the insurance company. In some contracts, insurance pays the insured in case of survival. However, these terms differ for one policy to another-
Types of life insurance policies in India
|Life insurance plans in India||Coverage|
|Endowment plans||Savings along with insurance cover|
|Term plans||Overall risk coverage|
|ULIPS||Investment benefits along with insurance|
|Child plans||Adequate savings for your child’s education, wedding and other expenses related to children|
|Whole Life Insurance plan||Lifetime coverage|
|Retirement plans||Post retirement financial aid|
|Money back plans||Periodic returns with insurance coverage|
Brief on the Life Insurance plans mentioned in the chart above-
1. Endowment plans
Also, termed as traditional life insurance plans. Endowment plans come with a saving element. As compared to other policies risk factor, this policy carries a lower level of risk but the returns are also less.
One of the key benefits of this plan is that this plan offers a long-term financial planning tool that gives you returns on investment at maturity time.
2. Term plans
One of the most basic forms of life coverage is term insurance/term plans. This plan offers death coverage for a stipulated duration. If under any circumstances the insured faces death in the policy tenure the insurer offers pre-decided death benefit (as a lump sum) on a monthly or annual basis.
At Bestinsurancepolicy you can easily purchase a term insurance plan without any kind of difficulty and also compare policies under one platform. One can also enhance the term plans by getting additional riders which are optional. The insured can add them as per their expectations.
Related Blog: What term insurance plan is all about?
3. Child plans
This plan acts as an effective insurance tool to generate funds for the insured’s child. Child plan helps to build savings for the child which can be later used for the child’s education/higher education or marriage.
The benefits of a child plan are either paid on an instalment basis or at one go when the child attains 18 years of age
4. Whole Life Insurance plan
Offers coverage as long as the policyholder lives. By effective comparison at Bestinsurancepolicy, you might also come across with policy plans that insurer coverage up to the age of 100 years. The assured sum along with the bonus (if any) is paid to the nominated beneficiary on the demise of the policyholder.
The whole life insurance plan offers a wide coverage along with low premium making it an ideal policy for many.
5. Retirement plans
The usual retirement plans allocate the insured with benefits that are received in the form of instalments per year or as a one-time pay-out when the insured reaches 60 years. If the policyholder lives longer than the term of the policy, the policymakers give vesting benefits or in case of sudden demise, the nominee receives the death benefit. In case the policyholder faces death when the policy is active the insurance company offers a pre-decided amount to the beneficiary of the policyholder.
5. Money-back plans
As the name suggests, money back plan gives the insured a stipulated amount of assured sum which is returned to the insured at intervals (pre-decided). This kind of plan is best suited for individuals who require their investments to be led by a liquidity element.
The insurance provider may also come up with bonuses, for which, check with your insurance company accordingly.