Most of the time, people are seen to buy insurance for a car, a motorbike, or a home. They think that buying vehicle insurance will protect them at the time of accidental cases or third party damage. What about insuring your life? According to surveys, it has been seen that most of the people don’t buy life insurance. But, life insurance is as important as other types of insurance. No one knows what the future holds for all of us. Unexpected emergencies can occur anytime anywhere. Therefore, it is better to be financially protected for the future than asking for monetary help from others. Life insurance plans benefit mostly from the sole earner of the family.
Let’s gather more information about the importance of buying and types of life insurance in a well-detailed manner:
Importance of Buying Life Insurance Plan
- Financial assistance even after the insured person is gone: One of the important benefits of having life insurance plan is its financial protection. With this, the family members will not have to depend on others for monetary help. If you are a sole earner of the family then your entire family is dependent on you for children’s fees, household expenses, medical costs, etc. What if you are gone and no one in the family is earning? In such a critical situation, life insurance plan can help the surviving dependents with financial security.
- Managing all the debts: There are times when people take some debts because of any emergency. It could be anything like a vehicle loan or any sorts of debts. With such insurance, you don’t have to deal with debts when the sole earner of the family has gone. These financial liabilities will be taken care of by different life insurance plans.
- Tax benefits: Another important benefit is that you can save taxes on insurance policies. No matter what type of policy you are buying, you can save your tax.
- Stress-free and peace of mind: The state of peace can be achieved by the insured person by buying it. Insurance can secure family members financially in bad times. What better you could do for your family and loved ones? Therefore, buying life insurance plan will give you complete peace of mind.
Types of Life Insurance Plans
Whenever you think to buy life insurance plan, you will get to know about its different types. By understanding these types, nature, and coverage, you can easily buy life insurance. Let’s have a look at these types briefly:
1. Term Life Insurance Plan
The most basic type that is commonly purchased by the people is the term insurance. With this type, the insured person will get life cover without any savings. If you are looking for an affordable plan with cheap premiums then you must go with a term insurance plan. In this, a fixed sum of money will be paid to the beneficiaries if the insured person expires during the policy term. There will be no payout if the insured person survives.
2. Endowment plans
Another plan of life insurance is the Endowment plans that are different from the term plans. It is different mainly in the aspect of maturity benefit. In the endowment plans, the payout of the sum assured will be given under both conditions– survival, and death. Because of this reason, the premiums of endowment plans are a bit higher than other life insurance plans.
3. Whole life policy
In the whole life insurance policy, the policyholder will get covered over his life. If we will talk about the main benefit of whole life policy then it is the validity of the policy. The validity of this plan is not defined therefore individual can enjoy this throughout his life. The policy will expire only in case of an eventuality. As long as you are paying the premiums, the beneficiary will get the benefit upon the policy holder’s death.
4. Money back policy
This plan can be considered as a type of endowment plan as it provides periodic payments during the policy term. Also, a portion of the sum assured will be paid out at regular intervals to the beneficiary. In case the policyholder survives during the term, he/she will get the balance sum. After the death of the policyholder over the term, the beneficiary will receive full sum assured.
5. Unit linked insurance plans
ULIPs pay out the sum assured on death or maturity. This kind of life insurance plan is linked to the markets. The main thing is that people can choose the allocation for investments in debt or stock. In addition to this, it is also a combination of insurance and investment.
Based on the need, premium, and budget, you can choose life insurance plan to keep your family financially protected for the future.