Explain the importance and benefits of life insurance

You must safeguard your family’s future, especially if you are the head of the family, and run the family primarily with your income. With life insurance policies, you can keep your family safe and protected even when you’re not around. life insurance can be referred to as a contract between an insurance policyholder and the insurance company. The policyholder agrees to pay the term insurance premium, in exchange for life coverage for a specified term. The funds can be claimed after a set period or after the insured person’s death. The term insurance premium can be paid monthly, quarterly, or yearly. 

In this particular article, you will discover the types and benefits of life insurance policies that provide you with a life cover. Through these plans, you can make your family members and loved ones financially independent when you are not around.

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Types of Life Insurance Plans

In order to understand and further avail of the benefits of life insurance, you need to know the types of life insurance plans. Understanding the aspects of each will help you decide the plan that suits you the best.

1. Term Insurance

You can get a life cover to protect your loved ones with term insurance at the most affordable rates. It is very easy to compare term plans online.

2. ULIP

United Link Insurance Plans are a combination of life insurance and financial investment. Here you get facilities of a wide range of fund options and portfolio strategies.

3. Whole life insurance plan

With such a kind of plan, you can get coverage up to the age of 99 years. This policy differs from other standard term insurance plans, which have fixed terms of 10, 20, or 30 years.

4. Endowment plans

Endowment plans are traditional saving insurance plans that are risk-free and offer insurance shields. They provide bonuses such as reversionary bonuses and terminal bonuses.

5. Savings plan

These life insurance plans combine life insurance cover and investment benefits. While some plans offer you a fixed amount as a maturity benefit when the policy ends, with some you can create a regular income throughout the term.

6. Pension and retirement plans

You can build your source of pension income with retirement insurance plans. You get to choose how to accumulate your retirement corpus.

Also Read: Term Insurance Premium vs. Health Insurance Premium

Understanding the benefits of life insurance policy

Life insurance policies are essential in various ways. The list of benefits given below will guide you to choose a policy.

1. Your family’s financial future is secured

Every parent wishes their children to be taken care of even when they are not around. With a life insurance policy, you can ensure that loved ones will not suffer when you are not present. The aim in life, after all, is to have security for yourself and your family.

2. Establishing financial goals

Everyone has some goals in their life, and money needs to be saved to fulfill them easily. When you compare the term plan and choose the one that suits your requirements you can move towards your goals. A life insurance plan helps you build a corpus and also protects you with a life cover. With systematic and regular payments, the affordable insurance premium allows you to accumulate enough funds.

3. Peace of mind

Your life might be stressful in different ways, but having a life insurance policy will give you peace of mind that you are prepared to save yourself and your loved ones from financial troubles. Whether it’s your retirement or you wish to provide financial assistance to your family, life insurance guarantees protection and contenement.

4. Tax saviour

If you have a life insurance policy, you are eligible to declare an income tax deduction on the life insurance premiums that you pay under Section 80C of the Income Tax Act, 1961.

5. Loans and liabilities

You should surely consider buying an insurance plan if you have taken a loan from somewhere. It makes sure that the burden of your loan doesn’t fall on your dependent in your absence. The most affordable method to get your home loan protected and provide safety for the shelter of policyholders’ families is by having term insurance plans.

6. Planning your child’s education

With the sky-rocketing of education plans, your absence can ruin your child’s future. The right life insurance plan, like a child plan, can ensure that your death doesn’t mean the end of your child’s aspirations.

7. Security for dependent spouse/ parent

If your spouse or parents are dependent on you financially, you must buy a life insurance plan. With this policy, you can provide them with an economically independent life even when you are not around.

Conclusion

Understanding the kinds and benefits of a life insurance policy will help you compare term plans and other possible options. The benefits are plenty and are very helpful in the long term when you are thinking of securing your family’s future. Take your time, go through the terms and policies, and choose the right insurance plan for yourself and your family.

Also read: What is Term Insurance with Maturity Benefits? | PLI (Postal Life Insurance) Interest Rate on Loans 2022-23 | HDFC Life vs ICICI Prudential: HDFC Life Insurance and ICICI Prudential Life Insurance policy which is better? | How 4th Generation ULIPs are Changing Life Insurance in India

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