A widely used tool of investment and saving is life insurance. Life insurance in India has been present in the market for a very long time and has a lot of trust attached to it. But many tend to invest in the product following the herd mentality and not really seeking to understand what this product is all about. It’s time to take a closer look at what a life insurance policy actually is.
Life insurance in India is a contract that is made between the insurer and the insured to cover risks to his life. The policy offers financial security to the policy holder in case he falls prey to an eventuality. Under this plan the insured needs to pay a specific premium amount towards the policy for acertain period of time to keep it active. In case of the sudden demise of the insured, the policy offers the entire sum assured to the nominee of the policy. Some plans under life insurance do not restrict the release of benefits only in case of death, but they also offer support in case of critical illness or terminal illness depending upon the type of contract both the parties have signed.Life insurance in India now also offers cover incase the policy holder dies due to a natural calamity or a terrorist attack.
Life insurance in India offers a lot of flexibility to the policy holder. For instance you have the liberty to choose the tenure of the policy, the sum assured you want and the mode in which you’d make your payments. You could either choose to pay the premium in a lump sum amount for the year, half yearly, quarter yearly or monthly.
The premium of the life insurance depends on the coverage you avail, your age, the sum assured you choose the tenure of the policy, riders you add etc. It is advisable to opt for a policy early in life as you can avail cover for a longer term at an affordable cost.
Benefits of life insurance in India –
• This policy offers you peace of mind as you are sure your family will be safe in case of your sudden demise
• Life insurance can be used as security to avail loanwhen required
• Some plans not only offer death benefit but maturity benefits, added bonus and profit on maturity. This makes for a great savings plan as well
• By investing in a life cover you also opt for a systematic investment scheme that gives you the opportunity to save a certain amount of your income regularly in a disciplined manner.
• Life insurance in India can be availed to meet certain financial goals like retirement plans or child plans. These help you to specifically save for a particular cause.
• You can also save tax on the premium paid and the benefits earned under section 80C of the Income Tax Laws of India
What is life insurance all about?