Life insurance has a specific purpose. It provides financial security to a person’s family from untimely death. In India, people still feel hesitant about life insurance. There is a lack of awareness about this. Today a large number of people do not have life insurance. Not having enough cover is also a problem.
- Life Insurance has a specific purpose.
- Today a large number of people do not have Life Insurance.
- The big question is what the usefulness of Life Insurance is?
The question is what is your responsibility towards the family as an earning person? Often a person has many responsibilities. They want to send their children abroad for higher education. They have to raise money for their daughter’s marriage. If they have a home loan, they want to repay it in two or three years. Want to make a regular source of income for retirement.
Amount of Life Insurance should be taken?
Accurate knowledge of current monthly expenses and future financial goals should be made. Adequate life insurance should be equal to our present and future responsibilities. In this, the home loan can also be considered as the liability of the person. In simple language, the sum insured should be 16 to 22 times of the annual income.
When does Life Insurance need to be taken?
The right time to take life insurance is when the person does not have any kind of responsibility. That is to say, the sooner life insurance is taken, the better it is. Mortality factor increases with age as the premium increases. Also, due to increasing health problems, there may be difficulty in getting the right life insurance. Term plan is always a better option for life insurance. Under the term plan, a larger sum assured can be availed by paying a lower premium. With the help of this, life can be lived with confidence with the family’s financial security.
Why Life Insurance Important?
Many times in life, we get caught in trouble due to our fault or sometimes someone else’s fault. In such a situation, if your family is dependent on you, then they will have a lot of trouble. After you leave, they do not have to be tempted to eat, drink, study etc. For this life insurance is necessary. Life insurance can be very useful for your family in case of any untoward incident. In such a situation, it is necessary to buy it before any accident occurs.
Types of Life Insurance
There are broadly seven types of life insurance policies. These include endowment policy, term insurance, money back, whole life insurance plan, ULIP plan, children plan, and retirement plan. All these have their advantages and disadvantages. In such a situation, people should choose according to their needs.
Buying a life insurance policy means that you agree to the contract or contract. You give your consent when purchasing the policy. If you have agreed to the maturity date while purchasing the life insurance policy, then you cannot change it later. For example, if you have taken a 60-year plan, you cannot change the maturity date. You will have to take another cover for 80 years.
Loan from Life Insurance Company
You can also take loan from Life Insurance Company. What the interest rate will be on this loan depends on when you take the loan. This interest rate is dependent on an index. For example, the 10-year G-Sec or base interest rate set by banks is approved by the Insurance Regulatory Development Authority (IRDAI). This may vary by insurer.
While Surrendering the Life Insurance policy
If you surrender your policy after a few years while surrendering the life insurance policy, its charges will depend on your policy and its features. Surrender value has no direct link to the payment paid, but in the unit link policy it depends on the unit value or on the profit earned by the traditional policy. If you have ULIP (ULIP) then after 5 years you will get full unit value because surrender charge becomes zero after 5 years. The surrender value in a traditional policy is any discounted value of the profit earned. Surrender charges are different in every life insurance policy and are written in contract.
Correct information in the contract of Life Insurance
The life insurance contract follows the principle of Uberima funds, which means complete trust. In this, you have to provide the necessary personal information, health status and earlier health-related problems. If you do not provide the correct information, your claim may be rejected. The contract of insurance policy contains all information about this.
Get complete information about the Life Insurance policy
According to Section 45 of the Life Insurance Act, you cannot reject a policy after 3 years. If the insurer re-evaluates and issues the second policy after the first policy, then it is important to be fully informed of the claim and the terms and conditions. You can give a declaration of health after being completely sure about the Life Insurance policy.
Loans and repayments have an impact on premium?
No, the endowment policy of Life Insurance offers loans, while unit-link insurance and term insurance do not. In general, the accepted loan surrender is a ratio. Keep in mind that loans and repayments have no effect on the premium. If you do not pay the loan, the amount is recovered from your insurance. As a rule, a person should take a cover of 10 times the annual income. In a term-insurance policy, the nominee gets the amount only if the insured dies. There are no survival or maturity benefits of the policy. If you have not set a nominee while taking the policy, the legal heir will get insurance benefits. Succession documents are sought by the insurer at the time of settlement of the claim.
Life insurance is a type of contract in which the family or dependents get the cover amount after the death of the insured. There are two types of life insurance – one for the whole life and one term insurance. The premium in term insurance is low as it offers a pure life cover without any savings and profit. Whole life policy provides cover for whole life. Therefore, its maturity is not determined. The insured is required to pay the premium till death and his family gets the amount after his death.