New To Insurance? Keep These 5 Things In Mind While Purchasing Life Insurance

Nothing can be better than a happy and healthy family that supports you throughout your life in every possible way. And, to reciprocate the love and acre, you would want to keep them financially protected. This is where buying life insurance ensures financial protection for your family, when you are not around to take care of them. 

Generally, life insurance is a contract between the insurance provider and the policyholder. Here, the insurance company provides an assured sum to the insured's family for the premiums paid over the years. 

A picture containing person</p>
<p>Description automatically generated

Image Source: Shutterstock

During such situations, it is difficult for the family to manage emotional and financial stress together. Therefore, it is vital to make fund arrangements for your family to help them keep away from financial stress. 

You can even opt for life insurance plans such as Term plans, health insurance and ULIPs, etc. There are several benefits that a life insurance plan provides such as:

a)    Financial security and Peace of mind

b)    Wealth creation, depending on the plan you choose

c)    Flexibility of choosing an appropriate plan

d)    Tax benefits up to a certain limit 

e)    Death benefits to the insured's family

f)    Different Rider Options

Before choosing life insurance in India, it is essential to know about the different types of life insurance plans available, to make an appropriate decision in tandem with your financial goals. Below mentioned are the types:

1.    Term Insurance Plan

It is an affordable type of life insurance that provides the assured sum at the end of the tenure. You will need to pay insurance premiums for a particular period at regular intervals. With such insurance, the nominee is eligible for receiving the amount in case of your untimely demise. 

2.    ULIPs (Unit Linked Insurance Plan)

ULIPs are a type of life insurance that provides dual-benefit of investment and life insurance coverage. A part of your amount is invested in market-linked securities like debt, equity, etc., which might be a good source of passive income. Similarly, it also provides a life coverage, in case anything unfortunate happens to you.

3.    Child Insurance Plans

This is also a saving cum investment insurance plan that helps meet your child's financial needs when he/she grows up, such as their education expenses, dream to study abroad, marriage, etc,. 

4.    Endowment Plan

An endowment plan provides savings benefit along with life coverage. If anything unexpected happens to you during the tenure, the nominee will get the assured sum; if you outlive the tenure, you will receive the amount.

5.    Retirement Plans

It is similar to the endowment policy. If you survive the tenure, you can enjoy financial independence during your old age, or otherwise, your nominee will receive the amount.

A person using a computer</p>
<p>Description automatically generated with medium confidence

Image Source: Shutterstock

After knowing what is life insurance and its types, you should consider a few parameters to buy appropriate life insurance in India according to your financial goals and needs. A few of them below:

1.    Coverage Requirements

You need to assess your long-term financial needs and existing assets and liabilities to decide the amount of coverage your family might require in the future. Despite of being financially sound, it is advisable to buy life insurance, to avoid financial difficulties that might arise in the future.

2.    Tenure of the Policy

Depending on the age bracket in which you fall, you can decide the length of tenure. It is advisable to start investing at a young age because usually, the premium amount is quite reasonable. 

In addition, if you invest this amount for a longer period of time, your family will be eligible for receiving a larger corpus of the fund if anything happens to you. If you start investing at a later stage, you might have to pay a higher premium amount.

3.    Rider Options

A basic life insurance policy has certain exclusions. To compensate them, you can buy various rider options like critical illness rider with a basic life insurance plan to cover maximum diseases. The number of illnesses covered and other benefits vary across different providers.

4.    Compare Plans, their Benefits and Charges

You should always compare various insurance plans, their benefits and associated charges across various insurance providers using an investment calculator. The one that provides maximum benefits in the premium amount you can afford and levies minimum charges should be preferred. The associated charges might include administration charges, fund management charges, mortality charges, etc. 

5.    Tax Saving Options

You can save a fair amount of tax if you invest in life insurance wisely. Section 80C of the Income Tax Act, 1961 includes provisions for such deductions in detail. The upper limit of premium payments to avail such deductions is Rs. 1.5 lakhs per annum.

After estimating and comparing the different types of life insurance, you can choose an appropriate life insurance plan depending on your financial goals. It is preferable to choose credible Insurance providers like Max Life Insurance, who have transparent terms and conditions, and provides maximum benefits possible depending on the premium amount. The investors can be worry-free about the return on investments and the claim disbursal in case of emergency. 

Begin investing today to have a better tomorrow!

Latest Reads
Digital Marketing – The Best Way To Create Branding

In this digital world, where everything is automated, many companies try to implement digital solutions for their problems. By hiring the relevant services, it is possible to sort out any problems using technology. Marketing is one such aspect to be considered in the business world. There are...

Resources Education
Your Guide to Understanding 70Trades

Are you interested to know what 70Trades is? We’ve got the guide for you.  70Trades is a quick, easy-to-work-with, and intuitive trading platform. It has many strengths, allowing users access to a broad selection of tools to assist with making trades. The platform is criminally underrated and has a...

Resources Education
Have Battle Royale games become the best form of video game marketing?

Battle Royale games have so many users these days that they have become the perfect place for advertising. Games like Fortnite, PUBG, and Call of Duty: Warzone has been doing advertising for different movies, shows, and artists for a long time.

Resources Education
4 Top Streaming Tips in 2021

With the Delta variant wreaking havoc, plenty of people across the nation are choosing to spend more time inside and socially distanced. And that means plenty of time spent watching streaming platforms. With that in mind, here are four top ways to maximize your streaming experience in 2021. 1....

Resources Education
How to check if your payment app is reliable?

Direct-to-home (DTH) recharge is one of the most frequently used services today as you get to browse through hundreds of TV channels – domestic, regional, and international. The geographic spread of India is aptly covered by a large number of  DTH operators, with some having hold in one part of the...

Resources Education
Top 10 Fittest Bollywood Actors

Pursuing a career in show business is a hard path. Training to be a professional actor will take you through acting schools and many other classes to develop skills in singing, dancing, and other skills useful in entertainment. It also takes a lot of tries to land a role in a television show or a...

Resources Education
What is the Difference Between Bitcoin and Ripple?

Cryptocurrencies and blockchain are important points of discussion in the market today. There are many cryptocurrencies available at the disposal of people, but the most popular amongst them is Bitcoin. Ripple is another option that is gaining popularity amongst investors. So what exactly is the...

Resources Education
How to write a resume for college scholarships

Among thousands of applications, your scholarship resume is undoubtedly one of the factors that can make you stand out from the crowd. Beating the competition and clearing the trickiest entrance exam is just the first step in getting admission into your dream educational institution.

Resources Education
A Guide to Subtitling and Dubbing of Indian Films Abroad

The last five years have seen an explosion of success of Indian films abroad. While the phenomenal overseas box office of Dangal at more than 17bn INR will be hard to match, each year brings another bumper crop of cinematic contenders for Bollywood’s worldwide fans, especially in these days a small...

Resources Education

Sign up for our Newsletter

subscribe for latest stories

* indicates required