Life insurance in India made its debut well over 100 years ago, it is an important financial tool that could benefit you at different stages. In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the basic concepts.
It is a contract with an insurance company. In exchange for premiums (payments), the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries in the event of the insured person’s death.
Typically, life insurance is chosen based on the needs and goals of the owner. Term assurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage. It’s important to note that death benefits from all types of life insurance are generally income tax-free.
Life insurance can be an important asset to have, no matter what is your age. If you have a family of your own, insurance can help your family survive financially, if they didn’t have your income to support them any longer. And for retirees, it can benefit surviving family members, can be used to support any funeral expenses, or, for some kinds of life insurance, can be used to fund activities like college tuition or a down payment on a house.
No matter where you are in life, you probably can find positives to having life insurance. And you can discuss your situation with an advisor to figure out what is the best plan for your. Here are some strong advantages of having a life insurance:
Death in the family can leave members insecure emotionally and financially with an uncertain future. But being insured can smooth over the transition and provide your family with financial assistance as they adjust – potentially to a new income level, especially if you are the primary supporter of the family.
If you and your spouse are planning to support your children’s college education in the future, insurance can allow your spouse to still achieve this goal if something were to happen to you. Funeral expenses can set any family back, no matter if you are young and single or retired and married. Costs for services can fluctuate greatly depending on if you’re cremated, buried, have a full funeral service or just a gravesite gathering. As you grow older and accumulate more property or expand your estate, you might want to investigate the taxes your heirs would be assessed upon your death. It would be an advantage for your heirs if you were insured, to cover those inheritance taxes so they wouldn’t have to come up with the money themselves, or sell some of the estate.
The types of policies that are available are:-
Few Things You Should Know Before Purchasing Your Policy
1.Review Your Insurance Needs
2.Decide How Much Coverage You Need
3.Assess Your Current Life Insurance Policy
4.Be Sure You Can Afford the Premium Payments
5.Have an Insurance Agent Help You Evaluate the Future of Your Policy
6.Keep Your Current Policy
7.Understand Renewal Policies
8.Read Your Policy Carefully
The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, and must be evaluated carefully, as it is an integral part of any personal financial plan. While purchasing coverage, you should review all the potential risks and the financial impact of these risks on your financial health.