WHY LIFE INSURANCE
Are you considering investing in a life insurance product but uncertain about how it functions?
This page is dedicated to providing you with a comprehensive understanding of its workings and guiding you in selecting the most suitable products. At every stage of life, individuals have specific needs that demand adequate financial resources to fulfill. Life insurance steps in to address these needs by offering customized products tailored to different life stages.
It’s undeniable that life insurance is essential for everyone, making it crucial to fully comprehend the value a life insurance policy can bring to your life and that of your loved ones. Essentially, a life insurance policy is a contractual agreement with an insurance company. In exchange for premium payments, referred to as death benefits, a lump sum amount is provided to the designated nominees or beneficiaries upon the insured individual’s passing.
When selecting a life insurance policy, an advisor will assist you in aligning it with your needs and goals, enabling you to choose the most appropriate options.
WHY IS IT IMPORTANT
The significance of life insurance cannot be overstated, especially when it comes to providing protection for your family or dependents in the event of your absence.
Contrary to the misconception that life insurance is merely an expense, it is, in fact, a fundamental tool that not only safeguards your family but also contributes to wealth accumulation.
For individuals without immediate financial dependents, life insurance remains relevant. Various expenses may arise that require additional income, and life insurance plays a crucial role in meeting these financial obligations while ensuring the security of your current income.
In the case of individuals with families, the unexpected loss of a loved one creates a void, leaving surviving family members to grapple with emotional distress and the ongoing financial burdens that persist, including rent, childcare costs, loans, and more. In such trying circumstances, the absence of the primary earner’s income can lead to immediate financial hardship, placing a heavy burden on your loved ones. To prevent such a situation, it is imperative to give serious consideration to life insurance to ensure the well-being of your family.
WHAT TO BUY?
When it comes to purchasing insurance policies, the market offers a wide array of options to choose from. Your Financial Advisor plays a crucial role in assisting you in selecting the most suitable one based on your specific needs and requirements. To make an informed decision, it’s essential to provide your Advisor with a comprehensive overview of your current financial situation, as well as your short-term and long-term objectives.
Various categories of insurance plans are available, including Retirement plans, Money Back Plans, Child Protection Plans, Endowment plans, and more. It’s worth noting that life insurance serves as a valuable tool that not only offers protection but also facilitates disciplined savings, ultimately building a substantial financial reserve. Collaborating with your advisor, you can define your goals, align them with your financial aspirations, and pave the way for a stress-free life with a financially secure future.
TYPES OF INSURANCE
TERM LIFE INSURANCE
This category offers the most budget-friendly life insurance option, with premiums that are comparatively economical when contrasted with other life insurance products. The policy concludes by disbursing the Sum Assured to the beneficiaries upon its maturity.
WHOLE LIFE POLICY
True to its name, this policy provides coverage for an individual’s entire lifetime. It combines both insurance and investment elements. The insurance component safeguards the nominee in the event of the policyholder’s demise, while the investment element allows the holder to access funds through borrowing or withdrawals.
ENDOWMENT PLAN
Endowment Plans distinguish themselves from term plans primarily through their Maturity Benefit. These plans provide the Sum Assured, coupled with profits, under both circumstances – in the event of death and upon survival. The profits accrued in these plans result from investments in equities and debt.
MONEY BACK POLICY
Money Back Policies disburse periodic payments throughout the policy’s term. If the policyholder passes away, the beneficiaries receive the full Sum Assured, and if the policyholder survives the policy term, they receive the remaining amount, which is the Sum Assured.
UNIT LINKED INSURANCE PLANS (ULIPS)
As the name implies, these plans are linked to the financial markets. They are a variation of traditional endowment plans and provide a predetermined Sum Assured upon either the policyholder’s demise or maturity, whichever occurs earlier.