What is Life Insurance? Life insurance is a form of insurance
that ensures the well being of one’s family members in case of any unforeseen
loss to the health of the insurer. It is an agreement between the insurance
company and the insurer where the insurer agrees to pay periodic premiums and
get the compensation in case of death of the insurer or other incidences, like
critical illness, terminal illness or at the maturity of the policy.
Life insurance can be broadly divided
into two categories:
- Traditional Plans
- ULIPs (Unit Linked Insurance Plans)
In Traditional Plans, there is a
guarantee of the fixed amount on maturity and they are fully regulated by IRDA
rules and regulations. The risk factor is minimal. This is perfect for those
who do not have much knowledge of market and are not interested to take
investment risks.
Whereas, ULIP on the other hand, has
higher risk factor and at the same time offers higher & better returns than
traditional plans.
Advantage of
Taking Life Insurance:
Yong Wai
Meng, insurance
expert says that Life Insurance is regarded as one of the best ways to
safeguard your loved ones from an unforeseen financial burden, in case of your
death. However, these days life insurance also comes with a spectrum of retirement
benefits to the insurer.
ü It secures future: Life insurance has
multi-sided benefits to offer to the insurer and his/her family. It secures
future of the entire family and there is peace of mind about tomorrow’s
financial dependence.
o It is the safest
option to make compulsory savings.
o It acts as a great
help for your child’s higher education.
o In case of any loan
or mortgage, insurance will work like your backbone
ü Good investment option: One of the best features
of Life insurance is it helps to slowly and steadily increases the wealth. It
is one of the risk free wealth building instrument.
ü Tax saving benefits: Life insurance
policies come under section 80C or 88 or 80D or 80CCC (depending on the type of policy)
of Indian Income Tax Act 1960 and helps in tax saving.
ü Works as a Pension Plan: Life insurance
works as a good pension plan to and help in financial stability at the old age
when you will not be able to work and may not have other sources of income.
ü Numerous options: There are life
insurance policies of various types, with different kinds of benefits and
varied premium amounts etc; in short you can find one tailored for you.
ü Benefit of loan: On certain life
insurance policies, one can even take a loan up to a fixed percentage of the
policy amount. Hence this works as a guarantee for loans too.
ü Consistent, safe accumulation: One of the
greatest advantages of insurance policy is that, your cash will get accumulated safely and
on its maturity you will be entitled of that entire amount along with the
interest earned and also additional benefits as per the insurance company’s
policies.
For more details, visit website http://yongwaimeng.com/ or check https://www.crunchbase.com/person/yong-wai-meng
