Life Insurance

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

Life Insurance is the key to good financial planning. On one hand, it safeguards your money and on the other, ensures its growth, thus providing you with complete financial well beingLife Insurance can be termed as an agreement between the policy owner and the insurer, where the insurer for a consideration agrees to pay a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness, critical illness or maturity of the policy.

Life insurance plans, unlike mutual funds, are beneficial when you look at them as a long term avenue of investment which also offers protection through life cover. Life insurance policies are broadly categorized into 2 types; Traditional Plans and Unit Linked Insurance Plans (ULIPs).

Traditional policies offer in-built guarantees and define maturity benefits through variety of products such as guaranteed maturity value. The investment risk in traditional life insurance policies is borne by life insurance companies. Additionally, the investment decisions are regulated to a large extent by IRDA of India rules and regulations, ensuring stable returns with minimal risk. Investment income is distributed amongst the policy holders through annual bonus. These policies are ideal for policy holders who are not market savvy and do not wish to take investment risks.

ULIPs, on the other hand provide a combination of risk cover and investment.

ULIP stands for unit linked insurance plans. ULIP is a combination of insurance and investment. Here policyholder can pay a premium monthly or annually. A small amount of the premium goes to secure life insurance and rest of the money is invested just like a mutual fund does. Policyholder goes on investing through the term of the policy – 5,10 or 15 years and accumulates the units. ULIP offers investors options that invest in equity and debt. An aggressive investor can pick equity oriented fund option whereas a conservative one can go with debt option.

Term Plan helps the customers in safeguarding their families from financial worries that arise due to unfortunate circumstances. Term plans are pure risk cover plans with or without maturity benefits. These pure risk plans cover your life at a nominal cost
Term plans also let you avail the benefit to cover your outstanding debts like mortgage, home loan etc. In case of something happens to you, the financial burden is borne by the insurance company and not your loved ones.

Term Plan offers you the following benefits:

  • High insurance Cover at lower costs

  • Financial security against loans and mortgages,

  • Single premium payment option available

  • Available with host of Additional rider benefits

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