Future planning is very important to ensure the well-being of your loved ones and, above all, secure their financial future. Creating a safety net to achieve long-term goals is vital to protecting what matters most to you.
Life insurance is crucial in this area. It provides a contract whereby you pay premium payments that guarantee financial security. In case of any unfortunate event, life insurance ensures that your family gets a one-time cash sum, thus always having the security they want when things are pressing.
Let’s find out how life insurance works, its benefits, and the different types of life insurance plans available to you.
What is Life Insurance?
Life insurance is an agreement wherein you pay premiums to an insurer, and the latter will furnish the sum assured for your family in case of any unforeseen event. Life insurance ensures the safety and security of your dependents when you are not around by guaranteeing their financial stability.
Key Advantages of Life Insurance Plans
Life insurance provides several advantages that can help you effectively plan for the future:
- Financial Protection: Life insurance is an important channel of financial protection. Your policy ensures that your loved one will be protected financially. If any unfortunate event happens, the sum assured in the life insurance policy will help your family handle the expenses and continue your lifestyle.
- Encourage savings: Life insurance habitually involves discipline in savings. As long as you are regular with the payment, your life insurance is active and gradually creates a safety net.
- Tax Benefits: Tax benefits are one of the principal features of life insurance plans. Under Section 80C of the Income Tax Act, 1961, all the premiums paid towards it can be claimed for deduction, reducing your taxable income up to ₹1.5 lakh each year.
- Asset Building End: Some life insurance products offer life cover with an investment facility, like ULIPs. These plans help grow investments over time, helping you fund education or your retirement.
- Retirement Security: Some of the best Indian life insurance plans present various retirement options that ensure a steady income once work-life ends and also facilitate some medical care in later years.
Types of Life Insurance Plans in India
The best life insurance plan in India is chosen on the basis of financial goals and family needs. Here’s a quick overview of types of life insurance plans:
- Term Life Insurance Policy: This is the most basic and least expensive form of life insurance. It covers a certain period, which could be 10 to 30 years. If the policyholder experiences an unfortunate event within that term, the beneficiaries get a death benefit.
- Whole Life Insurance Plan: This plan offers coverage until you turn 99 and builds cash value over time, which can be acquired or borrowed. It is perfect for leaving a financial legacy.
- Unit-Linked Insurance Plans (ULIPs): Combining life insurance with investment, ULIPs allocate part of your premium to life cover and the rest to market-linked investments. They are great for those who want to build wealth while being protected.
- Endowment Plans: These plans offer life cover and savings. If you outlive the policy term, you receive a lump sum maturity benefit, making it suitable for saving towards specific goals like buying a home.
- Money-back policy: This kind of policy pays a part of the sum assured at specified intervals during the coverage period and the remaining sum assured upon unfortunate demise. It is best suited to those who want liquidity at intervals and still have life cover.
- Child Insurance Plan: This insurance plan gives life cover and adds to the ‘dreams fund’ through investment for higher education, early marriage, and others.
- Retirement Plans: Also called pension plans, these help build up a corpus for retirement so that one may withdraw an income stream during the golden years.
Choosing the life insurance plan
Select the best life insurance plans in India for the welfare of your family, your financial needs, personal goals, and your budget accordingly. Some of the most reliable providers include Canara HSBC Life Insurance, whose diverse range of plans secures your future and meets your family’s financial aspirations.
Appropriately choosing the right life insurance will always ensure that you will protect your family, plan all major life events, and work toward building wealth over time.
