Compare Life Insurance
Life Insurance is a financial cover for a contingency linked with human life, like death, disability, accident, retirement etc. Human life is subject to risks of death and disability due to natural and accidental causes. When human life is lost or a person is disabled permanently or temporarily, there is loss of income to the household.
Though human life cannot be valued, a monetary sum could be determined based on the loss of income in future years. Hence, in life insurance, the Sum Assured ( or the amount guaranteed to be paid in the event of a loss) is by way of a ‘benefit’. Life Insurance products provide a definite amount of money in case the life insured dies during the term of the policy or becomes disabled on account of an accident.
Why you should buy Life Insurance:
All of us face the following risks:
Dying too soon
Living too long
Life Insurance is needed:
- To ensure that your immediate family has some financial support in the event of your demise
- To finance your children’s education and other needs
- To have a savings plan for the future so that you have a constant source of income after retirement
- To ensure that you have extra income when your earnings are reduced due to serious illness or accident
- To provide for other financial contingencies and life style requirements
Who needs Life Insurance:
Primarily, anyone who has a family to support and is an income earner needs best Life Insurance. In view of the economic value of their contribution to the family, housewives too need life insurance cover. Even children can be considered for life insurance in view of their future income potential being at risk.
What are the types of Life Insurance:
There are various types of life insurance available to an individual depending upon the sole motive of insurance in order to meet contingencies. Below are types of life insurance options available to an individual:
Term Life Insurance
Protection for a set period of time with Term Insurance. In the event of death or Total and Permanent Disability (if the benefit is offered), your dependants will be paid a benefit. In Term Insurance, no benefit is normally payable if the life assured survives the term.
These types of policies are taken on the life of the parent/children for the benefit of the child. By such policy the parent can plan to get funds when the child attains various stages in life. Some insurers offer waiver of premiums in case of unfortunate death of the parent/proposer during the term of the policy.
These plans help a person obtain regular income post retirement when he or she no longer gets a salary.
Whole Life insurance
Whole life policies are totally opposite to term life plans. A whole life insurance policy covers risk to an individual for their whole life and generally no pay backs are provided under these types of policies.
Endowment Life Insurance policy
Endowment life insurance policies are referred as traditional policies as well. Endowment policies covers risk to an individual for a specific period of time as per the opted policy and it also pay backs sum assured and promised bonuses at time of maturity as well.
Money Back Insurance policy
Money back insurance policy is a type of life insurance under which money is paid to an individual at different stages of life yet covering their risk for a specific period of time.
Unit Linked Insurance Plan
Unit linked insurance plans are the modern form of insurance. In addition to insurance cover provided by the provider, money is also invested in various avenues therefore providing opportunity to derive good returns as well. So, it serves as an insurance policy and investment plan.
How much Life Insurance is needed:
The amount of Life Insurance coverage you need will depend on many factors such as:
- How many dependants you have
- What kind of lifestyle you want to provide for your family
- How much you need for your children’s education
- What your investment needs are
- What your affordability is
You should seek the help of an insurance agent or broker to understand your insurance needs and suggest the right type of cover.