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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 mentioned problems.
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 alive.
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.