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Life Insurance Benefits

Everything You Want To Know

Life insurance is a contract signed between a person and an insurance company. In exchange for premium paid at regular intervals, the insurance company promises to pay a lump sum known as a death benefit to the beneficiaries of the policyholder after the death of the policyholder. The intention of the life insurance is to provide a financial benefit to the dependents of the person buying the life insurance, to guard them against financial pitfalls in the event of the premature death of the insured person.

The death benefit that accrues to the beneficiaries upon the death of the insured person replaces the income that was earned regularly by the policyholder. This amount can be used by the dependents to pay off debts, meet living expenses and fund education and other long-term goals.You can buy different types of life insurance plans, including term insurance, endowment plans, retirement insurance plans and Unit Linked Insurance Plans (ULIPs). You can buy life insurance online as well, in simple steps. Buying life insurance online is a simple way to make sure your loved ones will continue to be financially secure in your absence.

Types of Life Insurance Policies

Different Types of Life Insurance Policies

Term Life Insurance : This is the type of life insurance policy that comes with a death benefit which is payable only in case the policyholder dies before the term of the plan. The nominee can make death claim after the demise of the policyholder. But if the policyholder survives the policy term, then death claim cannot be made, and the policy coverage will cease without any maturity value.

Endowment Policies : This type of insurance plan is a combo of guaranteed returns and life coverage. This type of plans offers lump sum payout on maturity and enables the nominee to make death claim in case of untimely death of the policyholder.

Money Bank Policies : This type of insurance plan offers a percentage of the assured sum of the policy at regular intervals and returns the remaining portion of the corpus along with bonus, if the policyholder survives the policy term. The entire sum assured will be returned in case of unfortunate event before the policy term.

Pension or Retirement or Annuity Plans : This is a wealth building plan for non-working years of the policyholder and offers financial protection to the family members as well. This plan comes with various withdrawal options such as lump sum payment, regular income, or both.

ULIP : The Unit Linked Insurance Plans are wealth builder plans that offer the benefit of both an investment plan and an insurance plan. Customers can invest in various funds, such as equity, hybrid, bonds, and others, as per their risk appetite and receive market-linked returns from investments.

DOCUMENT REQUIREMENT & BENFITS OF LIFE INSURANCE PLAN

Documents Required for Buying a Life Insurance Policy

Following are the documents you will require to purchase a life insurance policy:

Passport-sized photographs.
Age Proof (Driving License / PAN Card / Passport / SSC Certificate).
Proof of Residence (Passport / Telephone Bill / Electricity Bill / Ration Card / Water Bill / Voter ID).
Identity Proof (Ration Card / Voter ID / PAN Card / Passport / Driving License).
Proof of Income (Pension Pass Book / Income Tax Returns / Form 16 / Salary Slip)

Benefits of a Life Insurance Policy

Comprehensive Plan for Different Stages of Life : Not only does life insurance offer financial support in case of the policyholders’ unforeseen and accidental death, but also serves as a long-term investment in the sense that it encourages you to lay down your objectives, whether it is the education of your children, their marriage, constructing the home of your dreams, or even planning for a peaceful retired life. The planning will be done based on your risk appetite and life stage.
Promotes Savings in the Long Run : Since life insurance policies are long-term agreements wherein the policyholder is required to make a fixed periodical payment, it helps the policyholder inculcate the habit of savings.Saving money regularly over a relatively long period of time helps in building a good corpus which will in turn help in meeting your financial requirements at different stages of life.
Loan Facility : People who obtain life insurance plans will have the option of borrowing money against it, which may assist them to cover unforeseen expenses as they progress through life without jeopardising the policy's benefits.
Tax Benefits : Life insurance policies offer attractive tax benefits and help you save a significant amount of money which would otherwise be spent on taxes.