All About Life Insurance - Meaning and How to Buy It?
Published On Nov 18, 2021
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In its most primitive sense, life insurance entails being financially prepared for any eventuality. It ensures that your family and you are provided with financial assistance in the event that you are unable to generate the necessary money on your own (maybe due to an accident, retirement, or untimely demise).
A contract between an insurance policyholder (insured) and an insurance firm is known as life insurance in legal terms (insurer). The insurer agrees to pay a predetermined quantity of money (also known as "Sum Assured" or "Cover Amount") upon the insured person's death or after a specified period of time under this contract.
Why Life Insurance?
Following are the reasons you might want to invest in a life insurance policy
1. Remarkable Returns
Several financial gurus in India advise that everyone should buy a life insurance policy, not only to protect their families financially when they are unable to work but also to profit from the investment. In India, several life insurance policies provide a significant benefit that no other financial tool can match.
Furthermore, when compared to other investment options, life insurance is a safe bet. At the end of the term, or following the insured's death, the money you put into your insurance is returned to you in full as the sum promised.
2. Financial Aid
It is critical to properly plan your finances at various phases of life. Life insurance can help in this situation. You can use term life insurance to protect your family financially in the case of your untimely death.
This would not only assist them in meeting their financial commitments but will also enable them to live a financially independent existence without sacrificing their lifestyle.
3. Death Benefit
The insurance company offers compensation in the form of a death benefit if something unforeseen happens to the insured, resulting in a loss of income for the insured's family. The appointed nominee receives the entire sum assured, as well as any bonuses that have accrued over time.
How To Buy Life Insurance?
Most life insurance firms have adopted digitalization for their clients' convenience, which has resulted in increased consumer satisfaction. The following methods can be used to make these payments: Net banking, debit/credit card, mobile banking, and other online payment systems are accessible. You can also choose to have your bank deduct the pre-set premium amount from your account on particular dates, as determined by your policy conditions - quarterly, half-yearly, monthly, or annually. Payment deductions can be made by ECS, NEFT, Standing Instructions (SI) mandate, eCMS, auto-debit facility, and other methods, depending on your preferences.
Premium payments can be made in cash or by check for policyholders who want to pay their premiums offline. Cheques can be deposited at any insurance company branch, and cash payments can be made by bank transfers to the relevant life insurance company.
A life insurance policy is intended to safeguard your loved ones. Simply put, the death benefit received by the nominee(s) replaces the financial support you provided to your dependents. More people are hurrying to acquire the greatest life insurance as a result of the outbreak. Purchasing a life insurance policy is worthwhile because of the financial protection it gives. In certain ways, this smart financial instrument should be considered an essential component of financial planning.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.