Death is inevitable then why do you need life insurance? It’s primarily we don’t live in isolation and there is something called a family we all connected!
During the phase of your life, people get married, have a family. And although death does all apart, still, life insurance offers some relief in the form of a financial independence to the family.
In the context of the discussion, let’s provide you some details about the life insurance and more! If you are willing to apply for a life protection plan, knowing these details will prove handy for you while being confident!
What is life insurance? Life insurance could be stated as a contract between you and your insurer. When you buy an insurance policy, you become a policyholder or an insured. You need to pay a certain amount to your insurer which is known as the premium. In the unfortunate event of your death, the company pays a lump sum to your assigned beneficiary. This amount of money serves as a provision for unforeseen situations.
Why do you need life insurance? If you love your family and don’t want them not to suffer in case of your absence, then availing the life insurance should be one of the best things to do. Life insurance plan will surely ensure your family’s well-being in your absence. Although money can’t make up the loss of a loved one in the family, the money will surely address some financial issues. Thus, having a financial back up is indeed a blessing in disguise as it will make your family financially independent.
What are the types of life insurance? Life insurance types are many. Let’s break them down to make you understand things easily!
Term insurance is the simplest form of the life insurance, and also the cheapest. It covers you for a particular period of life. Your family get a lump sum amount in the event of your death. However, you are not eligible to receive any amount if you survive through the policy. You will also pay a smaller premium and is easy to afford.
Whole life insurance
Whole life insurance plans cover you throughout the policy period or till the time you are alive. Your family get a lump sum amount if you die. They are also entitled to get a bonus that matures on the assured sum.
An endowment policy is a savings-linked insurance plan. Just like other policies, your family or the beneficiary continues to receive a lump sum amount. If a policyholder survives through the term, even he/she receives the maturity proceeds.
In this policy, a portion of the assured sum is paid to you throughout the scheme’s duration which is called the survival benefit. Once the term matures, a policyholder receives the balance amount as the value of the maturity. If you die during the term, your beneficiary receives the entire assured sum. Also, they still receive full money irrespective of the periodical survival benefits earlier paid to you.
United Linked Insurance Plans (ULIP) are a scheme in which a part of your premium goes towards the life insurance while another is invested in a debt or equity.
Child insurance plan ensures the financial future of your child. You can invest in a scheme when your child is a minor and avail the amount when he/she is mature. You can divert the amount towards his/her education costs. The child is the beneficiary, and if you are no longer alive, your child receives the lump sum amount.
The Bottom Line Everyone should invest in life insurance as it offers a great deal of financial independence! Now that you are aware of the basics of it, you can apply for it online, and get started!