Life Insurance

Key Features of Life Insurance Policies

Long Term Saving:

Life insurance helps you in saving and building your wealth. It is a systematic way to safeguard you financially and take care of your future plans like a child’s education, marriage, retirement etc. Therefore, you get the dual benefits of savings as well as protection.

Life Stage Specific Planning:

Life insurance companies offer plans customized for different stages of life. Every family has certain goals which require thorough planning. These goals may include planning for your kid’s education, buying a house, retirement planning, etc.

Life Cover:

The primary and the most important advantage of a life insurance policy is providing a life cover. The insurance company is liable to pay the life cover to your nominee in case of any unfortunate event. This life cover ensures to keep you and your family secured always in an unfortunate event.

Benefits of Life Insurance

Here are the benefits of investing in a life insurance policy:

Provides Life Cover:

Life cover, which is an integral part of a life insurance policy, protects the policyholder against the risk of death either for a specific term or for the entire life.

Financial Security to Family:

In case of an untimely death of the life assured, the life insurance company pays the beneficiary the sum assured, i.e., the pre-determined lump sum amount. This way, life assured’s family is financially secured and wouldn’t have to undergo hardship to make ends meet.

Build Corpus:

With a life insurance policy, you can safely build a robust corpus while you enjoy your life’s precious moments with your family. You also get complete assurance of being provided the sum assured from the day of policy inception.

Financial Goals:

You can meet your short-term and long-term financial goals without worries. Financial goals such as your child’s education and marriage or building funds for your retirement can be easily met with a life insurance policy.

OPT for a Bank Loan:

You can opt for a bank loan on your life insurance plan. There are plans that cover you for your preferred tenure, and while a prospective bank approves your loan application on the accumulation of the corpus.

Tax Benefits:

All the premiums paid are tax exempted under Section 80C of Income Tax Act, 1961. It also makes your maturity benefits tax free as per Section 10 (10D) of the Income Tax Act, 1961. Not just that, the death benefit (pay outs) received by the beneficiary is tax exempted under Section 10(10D) of the Income Tax Act, 1961.

Peace of Mind:

A life insurance policy acts as a roadmap for meeting your financial needs across different stages of life, while at the same time offering tax exemptions.

Common Jargons used in Life Insurance

Some of the commonly used terms in life insurance are as follows:

Life insured or insured: The person for whom the life insurance cover is being availed

Sum assured: The predefined amount that will be paid by the insurer to the beneficiary if the insured dies during the policy period.

Premium: The amount that an individual pays for availing a life insurance cover

Underwriter: The person who reviews the application and decides whether or not to accept the applicant.

Free-look period: A period of time during which a new life insurance policyholder can terminate the policy without incurring any penalties.

Maturity benefit: The amount that an insurer will pay to the insured if he/she survives the policy term.

Surrender Value: The amount that will be paid by the insurance company if a policy is surrendered mid-way through the policy period.

Rider: An additional coverage option that can be attached to the policy to make the cover more comprehensive.

Life Insurance

Life Insurance

Key Features of Life Insurance Policies

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