What is a life insurance?
When a person (policyholder) comes into a contract with an entity (insurance providing company), according to which the entity agrees to pay a sum of money in case of an untimely death of the person, the contract is known as ‘Life Insurance’, or Death Benefits. It is also known as death benefits since it proves beneficial in the future. This contract entails certain terms and conditions which have to be adhered to. The major clause in the contract states that the company has to receive a determined amount by the policyholder either as an annual premium paid for a certain period of time or a lump sum paid once and for all.
What to consider?
There are a number of life insurance providers in the market, providing insurance seekers with a vast array of life insurance plans to choose from. Each plan entertains various requirements which differ from client to client. Depending on the insurance cover you opt for, your premium is ascertained along with different benefits of the cover. For instance, certain benefits include – payment of unexpected and expensive medical operations during the insured person’s course and the payment of their funeral expenses.
We tend to realize that death benefits, forms an important branch of the financial planning tree. It allows those who rely on you for their finances to continue themselves in your absence. Besides helping them with their expenses, they receive this amount without any liabilities to it, as such being tax free.
Types of Insurance policies
There are five types of life insurance policies, namely – term deposit, whole life policy, money back policy, endowment policy and Unit linked insurance plans (ULIPs). As we grow older and become responsible for greater subjects, we realize the value of an efficient financial plan. Usually becoming a parent strikes the realization in a human that buying a life insurance policy is quintessential.
In India there are many life insurance providers whom you can easily compare policies and opt for the one that perfectly suits you.
Take for an Instance
The ‘HDFC Life Click2Protect Plus’ plan; it is term deposit which is available for people aged between 18 – 65 years. The term extends from a minimum of 10 years to a maximum of 40. The minimum assured sum is Rs.25, 00, 000 and there is no upper limit. Hence, it provides an extensive coverage at a flexible term (between 10 – 40 years). Similarly, each such plans are designed to:-
1) Protect your family and kin or those relying on you for their expenses,
2) Ensure you leave behind an inheritance, for this proves as an asset to beneficiaries.
3) It helps beneficiaries get rid of outstanding payments.
4) It leaves a sense of fulfillment and gives you a peace of mind.