Everyone in today’s world is living a really fast life and nobody can predict what’s going to happen in the next second. And the fear of pandemic is also there. So it is better to take early precautions like taking the life insurance policy for you as well as for your family members so that in any case of uncertainty your family needs not to suffer from any financial problem. Different companies are coming up with insurance plans. It is up to the choice of the person which one he selects, either he goes for private company’s plans or with the public company plans. If you want to get your life insured, it is better to take the plan in early age. More the early you start the plan of the life insurance less will be the amount paid as premium per year and vice versa.
As the educational level in the economy is increasing day by day people are understanding the value of these insurances. Even the government is introducing such plans at very low prices that even a poor person can get the insurance plan. Let’s have a look at the variety of life insurance plans.
- Term insurance: this plan provides life cover to protect your family members at very reasonable prices. these are one of the simplest plans of life insurance which acts as the financial security to your family members in case of your absence in the future.
- ULIP: these are unit-linked insurance plans that combine financial investment with life insurance. There are wider options in investing in the funds and it also allows you to withdraw money after 5 years of lock-in.
- Endowment plan: these are traditional, risk-free investment plans along with insurance shields. These are also known as money back policies as they are not related to the security market. It offers you a bonus both reversionary and terminal, if you stay connected to it enhances the maturity sum.
- Saving plans: these are the combination of life insurance and investment. It secures you and your family and will help you to meet up the financial needs at any stage of your life. These are usually long term policy plans that will ensure you with fixed maturity amount at the end of the policy.
- Retirement plan: this policy of insurance helps you to build your income after retirement. You can either go for guaranteed income for the rest of your life by investing in a lump sum amount. Or the person can go for retirement corpus as the risk appetite.
- Whole life insurance plan: this plan of insurance covers your life up to the age of ninety-nine. you can use it as your financial dependents for a relatively long period or can say the entire life. The defined term period can differ according to the choice of the person.
These are some of the types of insurance policies that a person can go for. It is purely his choice of which one he wants to invest in. there are many benefits of having life insurance policies. Let’s have a look at them.
- Peace of mind: if a person is having a good insurance plan, surely he will have the ultimate peace of mind. In any case of mishappening in the future, his family will be financially safe. It will not only ensure your life in your absence but will also help to meet the financial requirement when you retire from the job. Every person has some other financial liabilities, a good insurance plan will help to overcome that as well.
- Wealth creation: some of the insurance policies help to create an opportunity to create wealth. It will not only give you a lie cover but some of the policies will help you to invest in a different set of markets that will deliver you with risk-adjusted returns that will not only beat inflation but will also help to grow the corpus. For example, a person age 30 is investing rupees twenty thousand per month in a company’s plan for twenty years. At the end of the policy, he will surely get one crore at the eight percent annual return. That is a good amount for retirement.
- Tax savings: another important benefit of life insurance is that it provides a tax benefit. The premium paid for the insurance plans offers the tax deduction under the income tax law of the country. as the premium will be deducted from the gross income that means it will result in lowering the tax amount that is to be paid to the government. Even the amount received for the insurance plan is also tax-free under the income tax law. Because of the dual benefits, people are more going towards investing in insurance plans.
- Buy young save more: if you are young and you want to invest in the insurance plan the premium paid will be comparatively very low. But if you buy the same policy at an older age automatically the premium paid for the pan will become high. So it is better to go for the insurance plans right at the starting of the career so that you can save more for yourself and your family. For example, if a person at the age of 20 buys a best life insurance of 1 crore for 30 years of coverage. His annual premium of six thousand rupees approximately, if he buys the same plan but at the age of 30 he will have to pay ten thousand approximately and f he buys the same plan at the age of 40 he will have to pay the premium of eighteen thousand rupees approximately for a year.
Due to Covid 19, life insurance companies have made changes to their underwriting guidelines. For those who have impaired health risks, or who live with a chronic illness such as Diabetes, options are going to be more limited than in years past. Matt Schmidt of Diabetes Life Solutions states ” Many life insurance companies are ‘tightening’ up their underwriting and making it a little tough to acquire coverage if living with Diabetes. Life insurance for diabetics has never been easy, but currently, you’ll have a harder time. Depending on your age of Diabetes onset, and level of control, some carriers may postpone you for the time being.”
So because of so many benefits, it has become very important for all people to invest in life insurance policies. As it will help you like your insurance cover and will also become a source of income after your retirement. If you have not invested in the life insurance plans, go invest in the multiple options that are available to you these days. Go for the best and affordable option.