Predicting the future remains a tricky endeavour in a constantly changing society. Hence, it is important to have extra money to cater for unexpected life events. Life insurance serves as this buffer, promising financial support to loved ones should tragedy strike. Beyond its core function, these policies offer diverse features. Understanding the full scope of a life insurance contract reveals its adaptability to various needs and circumstances. Explore the hidden facets of your policy to unlock its true potential.
What Does Life Insurance Mean?
Life insurance is a deal between a person and an insurance company. It includes specific terms. Typically, the person pays regular premiums based on a set coverage amount. These payments keep the policy active. In return, the life insurance companies offer benefits. If the policy ends, the person gets maturity benefits. If they pas away during the policy, the beneficiary receives death benefits. Extra benefits may also be included, depending on the plan.
Why Would You Want To Buy Life Insurance?
These reasons will make you want to buy life insurance.
- Family Financial Safety: If the insured person dies before the policy ends, the insurer pays death benefits. This support eases financial strain after the family’s main earner dies.
- Debt And Loan Clearance: Death benefits can also cover any remaining debts or loans. This protects family and friends from inheriting financial burdens.
- Tax Benefits: As per section 80C of the Income Tax Act policyholders can avail up to 1. 5 Lakhs for deductions. This applies to premiums for their own policy and those of their spouse or children.
- Medical Cost Support: Insurers often offer additional benefits. These can help cover hospital stays and post-discharge care.
Different Kinds Of Life Insurance
The list below shows the types of life insurance plans that can be bought in India.
- Term Life Insurance: Where the assured passes away before the policy lifetime expires, the beneficiary is paid. This can be in lump sump or in installments bases on the agreed monthly or yearly payment. Yet, nothing is reimbursed to the insured in case he or she survives the policy.
- Whole Life Insurance: This policy lasts until the Insured turns 100. It allows loans against cash value. Upon death, the beneficiary gets the cash value. However, if there is an unpaid loan, the amount decreases.
- Unit-Linked Insurance: This combines investment and life coverage. Profits from the investment boost the insured’s fund.
- Endowment Plan: This offers savings and family protection. It pays benefits at the policy’s end, even if the insured dies early.
- Money-Back Life Insurance: This plan supports the insured’s short-term goals with regular payments from the guaranteed sum.
To arrive at the best solution for the policy that best suits you, you need to analyse all the policies available in the market very closely.
Insurance today is necessary because more and more people are getting sick too young due to their vices and their stressful careers. The Aditya Birla Capital Digital app offers instant life insurance coverage. Choose from diverse policies, pay premiums online, and secure a plan in moments. Financial peace of mind is just a few taps away.
