Life Insurance
From the name life insurance, it is clear that it covers your life. We provide financial support to families in difficult situations. In life insurance, there is a contract between the policyholder and the company. This allows the company to provide financial protection to the insured by receiving some money each month. If the insured person dies during this policy, the company will pay a fixed amount to the family or nominee.
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Life insurance is a contract between an individual and an insurance company in which the insurance company pays a monthly fee (called a premium) to the policyholder and provides financial protection.
Under this rule, if the policyholder dies or the policy expires, the insurance company will ultimately pay a lump sum to the policyholder or his family. There are different types of life insurance on the market to suit the individual requirements and needs of policyholders.
Type Of Life Insurance
1 Term Life insurance plan
This plan can be purchased for a limited period of time. B. 10, 20, or 30 years. In this plan, you can choose the period and use it. There are no maturity benefits in such life insurance contracts. They offer life insurance without a savings/gain component. Therefore, they are cheaper than other policies. Term insurance pays out if the policyholder dies during the term of the policy.
e. A certain amount will be paid to the beneficiary under the policy.
2. Money Back
A type of endowment insurance. This policy is also a combination of capital investment and insurance. The difference from this life insurance is that the insurance money and bonus are only paid in installments during the contract period. The final installment will be paid at the end of the contract. If the policyholder dies during the policy period, the full amount of the policy will be paid to the beneficiary. Although the premium for this policy is the highest.
3. Endowment Insurance
Life insurance consisting of insurance and capital investment. This insurance provides risk protection for a period of time, at the end of which the insured amount is returned to the policyholder along with a bonus. With endowment insurance, the face value of the insured amount is paid at the time of the policyholder's death or after a certain number of years. Some policies are also paid in case of serious illness.
4 Savings and Investment Plans
This type of life insurance plan guarantees the insured and his or her family an average amount of money for future expenses. Such plans not only provide an excellent savings tool for short- and long-term financial goals, but also guarantee a certain amount of money to your family in the form of insurance. includes both traditional linking plans and proprietary linking plans.
5. ULIP
This plan also maintains protection and investment. While traditional endowment insurance and refund schemes provide some degree of guarantee of earnings, ULIP does not guarantee earnings. This is because the investment portion of the ULIP is invested in bonds and stocks, allowing you to acquire stocks like a mutual fund. In this case, returns follow the ups and downs of the market. However, you can decide for yourself how much to invest in stocks and how much to invest in bonds.
6. Whole Life insurance
In life insurance, you can get whole life protection from H. comprehensive life insurance.
In other words, there is no policy duration. If the policyholder dies, the insured person receives the insurance benefit. Other life insurance companies usually have an age limit of 65-70 years. If subsequently deceased, the candidate cannot claim death. However, if the policyholder dies at the age of 95, the nominee can still make a claim against the life insurance company. The premium for this policy remains very high. This policy allows the policyholder to withdraw a portion of the insured amount. He can also borrow money against policy.
7. Child Insurance
These plans are designed with the costs of raising children and other needs in mind. A child plan provides a lump-sum payment upon death of the policyholder, but the policy does not expire. All future premiums will be waived and the insurer will continue to invest on behalf of the policyholder. Children receive money for a certain period of time.
8. Retirement plan
This plan does not include life insurance. This is a retirement solution plan.
What Financial Goals Can Life Insurance Secure?
A life insurance plan can help individuals and their families meet a variety of financial goals. Some of the goals of those assisted by life insurance are:
- Financial security in case of death.
- Education for children.
- Child marriage.
- Buying/Owning a Home.
- Post-retirement pension or regular income (income).
Life insurance can help you reach certain financial goals. Life insurance is very diverse. You can plan defined life goals and include (adjust) insurance to achieve them. B. Have an asset life plan (traditional or market-related) that sets the future.
What are the benefits of life insurance?
Now that we know what life insurance means and the types, let's understand his three main benefits of life insurance. The three main benefits of life insurance are: It's hard to underestimate the possibility of an unfortunate event like death. In such situations, families face financial problems as they do not have a steady income.
1 Security
Investing in life insurance early in life acts as a safety net against such potential events. A life insurance company is obligated to pay a specified sum assured to a nominee or beneficiary. This means that the family will continue to be protected even if the policyholder is absent.
2 Long Term Savings
Life insurance is important when considering long term investments. These types of insurance help you save systematically and build a corpus that can be used for a variety of purposes, such as: B. Construction of a new home, good education for children, and marriage costs for children.
In addition, some life insurance policies offer monthly payments in the form of annuities. This is the ideal way to reach your retirement savings goals.
3. INVESTMENT OPTIONS
Life insurance companies primarily offer investment vehicles, Unit Linked Insurance Plans (ULIPs).
These market-linked life insurance products offer substantial returns over time, making this ULIP a reliable investment vehicle.
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