In your busy life, you try to fulfill all the needs of your family but something is left behind. You can take an appropriate decision by taking a life insurance policy for your loved ones. We will discuss life insurance in detail in this article. In this you will know what is the policy, why should you take it, what You need it. , which policy is right for you and for how long should you take it, we will discuss further.
what is life insurance
Life insurance is a companion to the policyholder’s family that provides financial security and support in your absence. Life insurance is a provision between the policyholder and the insurance organization. In which the policyholder pays a certain part of his income as premium on monthly or annual basis. which is for your specific period of time Financial coverage is provided to the nominee after death.
Why should I buy life insurance?
This increases your reach to face all kinds of financial situations in future. Life insurance can be as per our needs. This assures us that the premium we have paid is a valuable heirloom of our family that will provide coverage after a certain period of time. let’s talk about it discuss in depth
Why do you need life insurance?
1. Secure the financial future of your family – After death, there is a reduction in the family income, in challenging times like lack of income for children’s education, their maintenance, serious illness, family and social functions etc. Provide assistance.
2. Meet your financial goals – Insurance is done as per the need keeping in mind the future. In this, goals like repaying loans, buying a car, owning your own house, old age diseases and post-retirement expenses can be met. This can also be adopted as a form of future capital accumulation.
3. The mind gets peace – A person does everything for his family only. His mind becomes satisfied after gathering the necessary resources for his future. Even in his absence the family and their loved ones will not have to face risk.
Types of Life Insurance Policies
You should choose the right insurance keeping in mind your need and financial goals. Here we will cover different types of long term and short term coverage which will help you in selecting an appropriate option –
1. Term Life Insurance
Its name itself suggests that it has been designed for premium payment for a fixed period (10-30 years), which can be taken as per your convenience.
This is long term life insurance. In this, you cannot receive the insurance amount even after the completion of the payment period, because it is designed to give the benefit of coverage directly to the family after the death of the insured person.
Life insurance policies are also provided with a number of riders, which include accidental death benefit, critical illness assistance, permanent disability benefit, etc.
These can be obtained keeping in mind the risk to yourself and your family. Riders are an additional element to an insurance policy that can be obtained along with the base policy.
2. Unit Linked Insurance Plans (ULIP)
Unit Linked Insurance Plan is a similar arrangement between the insured and the insurer. It is a linked insurance plan, in which the premium we pay is used to invest in both debt and equity.
A fund manager is appointed by the insurer. It gives us information about the fund, and also discusses with us whether the fund should invest in debt or equity or both.
The benefit received in this is not fixed but is higher than other policies. Which will be provided in lump sum on completion of the insurance period.
3. Whole Life Insurance Policy
Whole Life Insurance As per the name, it provides you insurance for your entire life. In this, there is no fixed period for payment of premium, but the premium is paid till your death, which is later provided along with the benefit to the nominee of the policyholder.
Its important feature is that along with the insurance amount, it also has a source of savings which can be reinvested to increase the amount.
4. Group Insurance Policy
This is a type of life insurance policy in which not an individual but a group is insured. In this, a company collectively insures its employees under one policy. This insurance lasts as long as he is working in that company. Its cost is low and profit is in fixed proportion.
What is the right time to take a life insurance policy ?
There is no fixed time to take the policy, it depends on your income and circumstances. If you take the policy at a young age, it has more benefits as the policy term will last longer and the premium paid will also be less.
On the contrary, if the policy term is shorter, the premium paid will also be higher. It should be taken in youth, before reaching working age and falling ill with age.
Is life insurance exempt from income tax ?
Yes, you can claim income tax deduction up to Rs 1.50 lakh on the premium amount paid in a year on your life insurance premium under Section 80C of the Income Tax Act, 1961. Payments for death claims are tax-free under Section 10(10D) of the Income Tax Act, 1961.
