Life Insurance
What does life insurance mean?
Life Insurance is a promise or legal binding between the one receiving the insurance i.e. The insurance policyholder and the other insuring the former, one on the consideration of payment of a certain amount at regular intervals or as the case may be. A Life Insurance Policy Covers Death - natural or accidental and provides monetary compensation to his or her family i.e. The beneficiaries. Various riders to cover critical illness or other benefits can be taken.
What is the significance of life insurance policy?
A Life Insurance is not only a contract, it is also a promise and trust between two dealing individuals or businesses. The person who is promised financially or legally is known as the insured and the person insuring is known as the insurer. At that time of someone’s untimely demise, the concerned person’s family needs financial support equally as the emotional one. The Life Insurance policy compensates the family financially after the unfortunate event occurs as life is full of uncertainties. The aspect of financial compensation and stability cannot be ignored in any way especially in this aspect to survive.
Why does one need a life insurance cover?
Having life insurance calms the insurers down at the back of his/her mind with questions such as
Financial security: Money paid to the insurer’s family after the unfortunate death of the insurer compensates to some extent the financial losses or covers certain financial obligations.
Security of child’s education: Certain child benefit policies help you to accumulate money with regular cashback to cover expenses for your child education at his various stages of life.
Removes loan burden: With the help of life insurance sum-insured, loans can also be repaid and your family doesn’t have to go through the stress of finding ways to arrange it.
Enjoy tax benefits: Life Insurance premiums make you enjoy yearly tax deductions up to Rs1.5 lakhs as per Sec 80C.
Types of life insurance
Below mentioned are the 8 types of Life Insurance.
|
Types of Insurance |
Overview |
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Term Life Insurance |
All eventual risks are covered under this policy. |
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Whole Life insurance |
This policy provide life insurance cover till 100 years. |
|
Endowment life insurance policy
|
This Policy is savings cum life insurance cover combined together. |
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Money back insurance policy
|
This Policy provides returns on a periodic basis combined with life insurance cover. |
|
Retirement insurance plans
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This plan facilitates one to create a reasonable corpus for retirement. |
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ULIP life insurance plans
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This is a market-linked insurance cum investment plan. |
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Child insurance policy
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This plan aims to provide all future financial requirements of one’s child along with life insurance cover. |
Bottom Line
Life is the most precious gift for all living beings. When it comes to ensuring that it is safe, we need to look at the bigger picture and always say “YES” to save it. But since life is also equally uncertain, insuring it becomes a necessity.