Insurance cannot bring your loved one back to you but it can take care of your loved one after you. Insurance provide the financial aid to the dependents of the deceased one. As death is deemed but uncertain, a wise and responsible man must consider his duty to make an arrangement so that his family lives with piece and respect.
However, Life Insurance Company believes that its customers buy it but think that they will never use it. This is the reason why many insurance products have been launched so that life insurance becomes valuable both in case of survival and the dead.
Life insurance products are basically of four types
Term Insurance: This is the most basic type of insurance. The benefit will be paid in case of death and no benefit on the survival up till a certain age. The premiums are very less. These are of limited term like 10, 20, 30 so on.
Whole life insurance type
Whole life insurance provides the insurance coverage throughout the life. There is no term of the policy. The premiums are slightly higher.
Endowment insurance is a combination of savings and insurance. It is of limited term. The death benefit is payable in case of the death before the term or the sum assured is paid in case of survival to the end of the term. The premiums are high as they are saved as an investment.
Unit linked Policy
Unit linked Policy is similar to endowment insurance but the saving component of the premium is invested into the equity market and returns are anticipated from the market’s growth. Thus, it provides a potential growth of the survival benefits. The funds invested in the market are managed by the portfolio managers of the insurance company.
The choice of correct insurance product is very essential as an insurance customer, the bread earner of the family, has to finance his family needs and also have to save money for the future. Financial needs generally vary with the age as follows:
You might be in higher education or landed on the first job. Being unmarried and without dependents, you’re financial needs are narrower. It is the time to save maximum for your future. Some might be paying off student’s debt.
Recommended for you is term insurance or endowment insurance for shorter term as maturity amount may be used in future for family goals.
May have married and have children; moderate income and often high expenditure; large debt. Expenses are high but need for savings is trivial.
Moderate termed term or endowment assurance for the payment of expenses like children’s higher education or marriage. ULPI products are a good choice if economy is stable and a slight risk investment can be taken.
Age 35- 60
Children become independent, debt reduce, loans paid off, income may increase and exceed the expenditure. The biggest financial need is to save for retire and make provision for sickness.
At such age, it is advised to take a whole life assurance or endowment insurance policy.
Above 60 yrs.
Insurance for Senior Citizen. Normally retires. The maturity payments of insurance contract must be used to buy pension.
There are many innovative conditions and terms available in the market. The policies must have to be compared amongst companies and company providing best accumulation plus add on covers, riders must have to be encouraged.
Recommended Read :
- How to select a Life Insurance Policy?
- Life Insurance for Women
- Types of Life Insurance Policy
- Why Money Back Policy is Popular Among Life Insurances?
- Advantages of Money Back Life Insurance Policy
- Why Everyone Should Take Life Insurance?
- Life Insurance without Limit of Age?
- Life Insurance for Senior Citizen
- Endowment – Life Insurance and Savings
- Is Life Insurance a Part of Investment
- What is Term Insurance Policy?
- What is Accelearated Death Benefit Adb?