Life Insurance - A Helping Hand

Today, life insurance is the fastest growing financial sector in India. There are several insurance companies are available in the market that are offering various types of insurance policies with several riders and benefits. Life insurance is used to provide the financial security to the dependants of the policy holder.

Under Section 80C life insurance premiums offers tax benefit to the insured person. Some insurance policies have inbuilt investment plans or wealth creation along with insurance. There are a variety of products are offered for different life stages like retirement plans, child plans, pension plans etc. some of the product also offer loan facility along with the insurance policy.

There are various kinds of insurance policies are available that are:

Term insurance policy:

In term insurance policy, company provides financial help to the insured person’s family after any mishappenings occur with the policy holder. Under section 80C, Income Tax Slab also plays a vital role because a person can choose the minimum or maximum amount from the slab for reducing the income tax. It is the cheapest insurance policy that provides high sum assured at low cost. This policy will be available for 5, 10, 15, 20 or 30 years. The insured person does not get the money before completion of the term policy.

Money-back policy:

In money back policy, specific portion of the sum assured is returned to the policy holder, in case of survival of the insured. In case, if the policy holder dies during the term period then, the beneficiary of the policy gets the death benefit in the form of sum assured plus accumulated cash. In this premiums are very high as compare to the term insurance policy.

This policy is offered for the limited time period. In this, policy holder can pays  fixed premiums periodically (monthly, quarterly, annually) during the policy period. The premiums paid on money back policies are eligible for the tax Deduction Under Section 80C.

Whole life insurance policy:

Whole life insurance policy provides the cash value and many premium guaranteed by the insurance company. The major benefits of this policy are cash value, guaranteed death benefits, known and fixed annual premiums and mortality. The person can get the cash value at any time of the policy term.

Endowment policy:

In the Endowment Policy, the cash value inside the policy equals the death benefit at a definite age. This plan is more expensive than a whole life insurance plan or universal life insurance plan. The reason of this is that the period of this policy is short with an early endowment date.

Life Insurance provides the coverage plans that suit the individual’s requirements. The insurance policy agreement includes policy coverage, insurance policy amount and policy duration.