Insurance is a cover that gives security in case of any damage and misfortune. Life insurance gives financial security to the members of the family in case of the demise of the person who is earning for the family. In today’s time, life insurance is very important especially for those who are the sole earners in the family.
We will tell you why the life insurance is very important and the types of life insurance available in India. Our tips are as follows
Life insurance serves the following purposes:
- First, on the premature death of the sole earner, the life insurance will provide the financial security to the rest of the members (in most of the cases dependant members) of the family. Because in case of the death of the sole earner (it should not happen but you never know what destiny holds) the life insurance gives the financial security to the rest of the members of the family.
- Second, the life insurance also provides financial aid in case of your children’s higher education and at the time of their marriage.
- Third, it provides you the financial aid (pension) at the time of your old age when you would be having no other source of earning.
Types of life insurance
Term Insurance
- Cheapest and the essential form of insurance.
- If you survive till the date of maturity of the policy you will not get any benefit except the tax benefit during the tenure of the policy.
- It serves the financial aid to the nominees (in most of the cases dependant members of your family) in case of your sudden death.
Money-back plans
- You will receive the fixed amount of money at regular intervals throughout the duration of the policy.
- In case of death, the whole amount will be paid to either nominees or the members that you included when you started the policy.
Unit-Linked Insurance Policies (ULIPs)
- It serves the dual purpose; it is insurance as well as an investment plan.
- A part of your monthly premium will go into insurance and the rest of the money will get invested in the funds.
- They are more of like mutual funds except they give benefit of insurance also.
Pension scheme
- It gives a fixed income at an age of your retirement.
- It is a pension scheme that will help in your old age especially when you attain an age of senior citizen.
- Under this scheme, you can mention the age from when you would like to receive the monthly pension and the amount you want to invest.
- There are many pension plans available and you can choose which one is best for you. These products are controlled by IRDA (Insurance Regulatory and Development Authority).
Who offers life insurance?
In India, life insurance policies are offered by both public and private sector (private sector in collaboration with international companies).
Life Insurance Corporation of India (LIC) is the sole organisation in the public sector.
Besides LIC, there are many companies in private sector that offers insurance policies. Few examples of such companies are ICICI Prudential Life Insurance, Birla Sun Life insurance, Kotak Life Insurance and many more.
Therefore, life insurance is essential. Get yourself insured by choosing the plan that meets your needs.