Life insurance is one of the greatest requirements of our modern-day lives. A person simply cannot afford to live without a good life insurance cover. Thankfully, some amazing types of life insurance allow you to protect yourself and your loved ones. Life is unpredictable, and no one knows what dangers await at the next juncture. Life insurance is important to stay protected. Read on to learn more about the best life insurance plans and how they help to shield you and your family.
Types of life insurance
Before you choose
a life insurance policy for yourself, you need to be aware of the types of
plans available. The life insurance requirements vary from person to person, so
your needs may not match those of your best friend. You need to understand what
benefits the different types of life covers offer and then opt for the kind of
policy that suits you the best. Here are some options for you:
1. Endowment life
insurance
Endowment life insurance plans are one of the
most popular types of life insurance available in India. Here, the components
of insurance and investment are clubbed under a single policy, and you get
several benefits. You pay a fixed premium for a fixed sum assured. A part of
the money you pay is invested by the insurance provider, and your fund grows.
If you happen to die within the policy period, your nominees get the death
benefit, along with the interest earned, and the policy terminates. If you outlive
the policy period, you get the maturity benefit, which is the sum of money
invested along with the interest earned.
2. Term life
insurance
Term insurance is another very handy form of life
insurance. As the name suggests, it offers coverage for a specific term. If you
outlive the policy period, you don't get anything in return. However, if you
die within the policy term, your nominees receive the sum assured. Since term
insurance usually doesn't have a return component, it is one of the most
inexpensive forms of life insurance. You can get a huge amount of coverage for
a small premium. It is ideal for young people who have dependent family members
and other financial liabilities.
3. Whole life
insurance
Whole life insurance is a type of coverage that
offers [protection till the last day of your life. Most whole life insurance
plans are valid for periods of 90 or 100 years, which suffices for the lifetime
of most people. If you die within the policy period, your beneficiaries get the
sum assured and the policy comes to an end. If you outlive the policy period,
there may be a maturity benefit, but this varies from policy to policy, so read
the policy wording carefully.
4. Child insurance
Child insurance plans are life insurance policies
that an adult buy to protect his child. The child is the beneficiary and if
anything happens to the parent, the policy swings into action and takes care of
the financial responsibilities of the child. There are also periodic payouts
that help the child to meet his or her life milestones with ease.
5. ULIP
Unit-linked insurance plan, or ULIP as it is
better known, is one of the best life insurance products available in India. A
ULIP has a strong investment component in it. A portion of the premium you pay
is safely locked in a life fund and kept for your beneficiaries. The other part
is invested in the financial markets, as per your risk appetite. It allows you
to build up a healthy corpus for your future while you keep yourself insured as
well.
6. Annuity life
insurance
And finally, you have the annuity life insurance
plans. There are two types of annuity plans, also known as pension plans -
immediate annuity and deferred annuity. In a deferred annuity plan, you pay a
small amount regularly, and after your retirement, you get a regular payout that replaces your income. In an immediate annuity plan, you pay a lump sum
amount of money upon retirement, and the payout begins immediately. This is a
very good way to take care of your finances after you retire and your regular
salary stops coming in.
Conclusion
As you can
clearly see from the points mentioned above, there are some excellent types of life insurance policies that
help you to stay protected comprehensively. Choose the best one for yourself
and keep a safe financial cushion around your family at all times.
