With passing time, life insurance have become popular and important. Various aspects such as health, education, marriage, etc., have made people more inclined to buy life insurance. A life insurance policy ensures financial security and helps lower any risk related to money. Covid-19 has made it more clear to people how times can be uncertain and has made them more aware of the importance of life insurance.
Life insurance: Definition, Types, and Benefits
Life insurance is a contract between the policyholder and the insurance company where the policyholder pays a certain amount of money in premium. In return, the insurance company provides financial backup to the policyholder's family in case of mishap mentioned in the policy.
There are various types of life insurance policies that an investor can choose from. Some of them are Savings Plan, Protection Plan, Wealth Creation Plan, Retirement Plan, and Child Plan.
Some of the benefits of life insurance include –
- Life Coverage : Getting a life insurance provides financial support in case the policyholder dies.
- Tax Benefits : Buying life insurance makes you eligible for tax rebates. The premium you pay in the policy might entail exemption on taxes as per current tax laws. However, tax laws are subject to change from time to time.
- Returns are fixed : Life insurance ensures fixed returns. Various benefits, such as death benefits, are assured- provided all due premiums have been paid and policy is in force. However, returns are not fixed in case of unit linked insurance policies (ULIPs).
Buying Life Insurance Online? 7 Things to Keep in Mind
With Covid-19 restraining physical activities, there’s a digital alternative for everything. People now prefer carrying out their activities online as much as possible. People have now started to buy life insurance as it is convenient in these unprecedented times. Here are a few tips to keep in mind when you buy insurance online.
1. What is your goal of buying a Life Insurance Policy?
Start with why you want to buy a life insurance policy? There can be different goals, such as a child's education, health expenses, marriage, etc. Setting your goals will make it easier for you to choose and buy life insurance.
2. Calculate the amount of life cover according to your needs
You should list various aspects before you buy life insurance, such as your current income, health expenses, debts, loans, etc. It is ideal to have a rough estimate of the amount that you will require as Life Cover.
3. Go for a reputed and top-rated life insurance company
A top-rated life insurance company is financially strong and has good reviews. This is why, you must opt for a reputed life insurance company with a high claim settlement ratio.
4. Buying Life Insurance at an Early Age Is Beneficial
Life Insurance premiums that the policyholder pays are cheaper when bought at an early stage.
5. Do thorough research
Doing thorough research opens various options and lets you choose your plan according to your needs. It bridges the gap of any future discrepancies and helps you choose the best policy.
6. Compare policies
Comparing policies helps avoid missing out on benefits and helps you have clarity on the goals, benefits of the policy, objectives, whether the policy matches your requirements, etc.
7. Do not hide anything
It is important to disclose everything when you buy life insurance, such as your health conditions, smoking or drinking habits, any debts, etc. Disclosing everything will be beneficial in the long run and will make sure that you do not face any issues.
You should look out for top-rated life insurance companies that provide ideal life insurance policies to customers. They come with variety of features such as cashless benefits, tax benefits, maturity benefits, death benefits, etc.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.