Life is highly unpredictable and
wrapped in the fog of uncertainty. This uncertain life is loaded with so many
responsibilities. Nobody has a control on one’s death nor can one predict it.
Two of the biggest problems of life are dying early and living too long. Death of an earning person with family to look
after causes serious turbulence in the life of the family members. Thus, dying
early without sufficient back up for family members is a seriously problem.
Another very serious problem of life is living too long beyond your earning
age. Old age without money is the most pathetic condition imaginable.
To solve these problems life insurance
plays a very important role. The primary role of insurance plans is to provide
immunity against financial losses arising from pre-defined perils (initial
cause of loss) to a person. On the same principle the life insurance branch
works. These plans are devised to check the financial impacts of the above
To counter the impacts of the
first plan i.e. dying too young the ideal product is Term insurance. A term
insurance plan is a type of life insurance that protects the dependents of the
policyholder from the financial burden arising from his death. With relatively
a very small Premium the insurance company pays a good amount of money called
sum Assured to the nominee if the Policyholder dies within the currency of the
policy. With a premium as low as INR 10K a person can get a term policy
carrying a Sum Assured of INR 1 crore. A term plan is a highly customizable
plan depending on the company you buy it from. Many insurance companies offer a
range of extra benefits called riders. The Riders have diverse range of
benefits like double payout in case of accidental death, part payment of sum
assured on contracting a critical disease etc.
Having the backing of term
insurance your family is fortified against the financial consequences arising
from your untimely death. As a term plan doesn’t pay anything on surviving the
policy period some people have complaints with it. Among these people another
life insurance product called TROP or Term with return of premium is very
popular. This product has all the features of a term plan but for the fact that
the insurance company returns all the premiums collected over the years on
policyholder’s survival of the Policy term. A TROP plan is little costlier than
a regular term plan.
For people who want to grow their
money while giving financial protection to their family should go for Endowment
plans. Endowments are life insurance plans that carry Maturity benefit i.e. the
insurance company pays the sum assured even when the policyholder survives the
policy period. Thus, in this plan you can enjoy the returns while you are
To solve the second problem that
is living too long one must have good investments. Life insurance provides ample
investment opportunities with its investment plans like ULIPs. ULIP stands for
Unit linked insurance plan. It is a product that along with providing a risk
cover for the policyholder provides investment opportunities in qualified
investments such as stocks, bonds or mutual funds. For people having a risk
appetite should consider investing in ULIPs.
Another type of life insurance plans
that are very useful for solving the problems faced because of living a long
life are Pension plans. These plans facilitate savings in phases in the form of
premiums paid to the life insurance company and in return the company pays
monthly income on retirement called pensions. Having regular income post
retirement is a very desirable position to be in. It makes you independent and
keeps your dignity intact. With proper planning done in consultation with a
life insurance expert one can even retire earlier than his colleges and enjoy
the remaining years of life pursuing hobbies rather than toiling for money.
Life insurance plans are really
necessary to live a happy life without worries. These plans are answer to many
of your tax saving goals as well. Many tax deductions are applicable for people
who invest in life insurance plans. They even help you save big amounts of
money for future requirements like to fund the higher education or marriage of
your children. There are specialized life plans to aid the aforementioned
requirements called Child insurance plans. These plans are dedicated to
accumulate a good amount of corpus to facilitate your child’s bright future.
Life insurance is a very big
industry and a range of products are being sold under its umbrella that solves
many problems of people. They provide benefits during life and helps in
fulfilling your responsibilities even when you are no more. With life insurance
plans you can ease the burden of your death on your family on one hand and
lessen the burden of your old age on yourself on the other hand. While solving
these problems you may also grow your money with lucrative investment plans of
life insurance and earn passive money on your heard earned money.
It is an ideal situation when
your money works for you rather that you work for money. With effective
planning this is possible with life insurance plans. The fog of uncertainty is
dense your effective planning are the rays of light that generate hope and
alleviate fear from your life.
Life is not meant to be lived in
anxieties rather it is meant to be enjoyed to the fullest. In order to live a
blissful life one must have peace. Peace doesn’t dwell in the midst of
insecurity. Consult your life insurance advisor and get your need analysis
done. An ideal life insurance cover should have enough proceeds from the
insurance company to pay off all your debts and leave enough for your family to
live comfortably without compromising on their current standard of living. The
family should not compromise on their dreams, that should be the though while
deciding a life insurance cover.
These plans have big impact on the times to come
in your life. With effective planning now you can make your future self proud
of you. Let your family be indebted to you for your care and consideration.