What Is Life Insurance
Life Insurance refers to a policy or coverage through which the policyholder is able to provide the financial stability of his family members upon the death of. If you are the sole earner in your family, providing for both your children as well as spouse.
If this happens your death could financially ruin the entire family. Life insurance policies make sure that this scenario is not the case by offering financial aid to your family when you die. death.
Types of Life Insurance Policies
There are seven primary kinds of insurance policies available for life insurance. These include:
- Term Plans – Term Plan –The death benefit in the term plan is only applicable for a certain time like 40 years after the date of the policy purchase.
- Endowment plan The endowment plan is a type of life insurance policy in which the premiums are used to pay your death benefits and the remainder is put into the account of the insurance company. Benefits for maturity, death benefits and periodic bonus are just a few kinds of benefits that come from endowment plans.
- Unit Linked Insurance Plans or ULIPs– ULIPs –Similar to the endowment plan in that a portion the insurance costs goes to mutual fund investments while the rest goes towards your death benefits.
- Whole Life Insurance– HTML1 Whole Life InsuranceAs the name implies these policies provide protection for the entire existence of an individual instead of a specific time period. Certain insurers might limit the entire life insurance period to a maximum of 100 years.
- Children’s Plan Child’s Plan Child’s Plan HTML0Investment Cum insurance plan that provides financial assistance to kids throughout the course of their life. The death benefit can be accessed in a lump-sum amount following the parent’s death.
- Cash-back– Money-Back-Such policies cover a certain amount of the sum guaranteed at regular intervals. This is referred to as a the survival benefit.
- Pension Plan The HTML0 Retirement Plan Retirement PlanAlso called pension plan, these policies are a combination of insurance and investment. Part of premium go towards creating an accumulation of retirement funds that the owner of the plan can access. It is offered in a lump-sum payment or a monthly installment following the time the policyholder has retired.
Benefits of Life Insurance
If you have a life insurance policy that covers life insurance, you’ll take advantage of the following benefits from the policy.
- Tax benefitsTax Benefits Tax Benefits –If you pay premiums for life insurance that are paid, you can enjoy tax advantages in India as per the sections 80(C) as well as 10(10D) in the Income Tax Act. Therefore, you could save significant amounts of tax when you choose life insurance.
- Promotes Saving Habits The encourages saving habits Encourages Saving HabitSince you are required to pay premiums for insurance purchasing an insurance policy can help promote the practice of saving money.
- ensures your family’s financial securityThe policy ensures your family’s financial future The policy ensures financial security for your family.The policy will ensure that the financial security of your family remains intact even after your death.
- helps you plan your retirement The Helps Plan Your Retirement HTML0 helps plan your retirement-Certain Life insurance plans serve as investments. For example pension plans provide the option of a lump-sum payment as soon you retire, which can help you save for retirement.
Once you have a basic understanding concerning life insurance,, read further to learn about the different aspects of other insurance policies.