Have you ever been on a roller coaster? It offers you such a surge of adrenaline that you need a harness to keep you safe from the unexpected twists and turns it provides before arriving at your destination.
Our lives are also like a roller coaster ride, where we never know what will happen next as we wait for an unexpected turn. In life as well, we all need something similar to the harness that will provide protection during uncertain times.
Life insurance is the ideal harness that may allow you to confidently enjoy life’s journey. This real-life harness provides you with many possibilities, which you can also modify to meet your requirements.
In recent years, there has been a surge in interest in life insurance plans. As the need for insurance grows, so do the number of questions and concerns. Before deciding on which life insurance policy to purchase, it is critical to perform thorough research.
To assist you, we have compiled a list of frequently asked questions (FAQs) about life insurance and provided answers below.
1. What is life insurance?
A life insurance policy is a contract between a policyholder and an insurance provider. This agreement stipulates that if an insurer dies, the insurance company is obligated to pay a lump sum payment to the policy buyer’s selected beneficiary, which is usually pre-determined.
However, it is a two-way process. In exchange for a sum promised, the insured/policy buyer commits to pay a set sum of money to the firm in the form of premium payments, which can be one-time, monthly, quarterly, or yearly for most life insurance policies.
Following that, either the policy buyer receives the cash at the end of the policy term, or the selected beneficiary gets the money shortly after the death of an insurance buyer.
2. What is the importance of life insurance?
Before making an investment, it becomes absolutely necessary that we clearly understand the importance of life insurance.
A term insurance policy is a sort of life insurance policy that protects your family financially from life’s risks. Life insurance is essential because it protects your family and allows you to leave them a non-taxable amount in the event of your untimely death.
Due to cheaper premiums and a more significant sum assured, acquiring a life insurance plan from a young age is recommended. An online term insurance calculator can also tell you your eligibility, and total sum assured.
3. For how long should I purchase a life insurance plan?
The life insurance policy provides advantages to both you and your family. Its term is determined by various criteria such as current debt, future goals, daily expenditures, and others. You can use all of these criteria to assess your sum assured and policy term, which should typically cover your life until retirement.
For example, if you buy a term insurance policy at the age of 30, you will pay a lesser premium and receive a more significant sum insured than if you buy it at 40. The optimum insurance term should last until you reach the age of 60 or until you retire.
Your purchase of a life insurance policy also entitles you to tax deductions under sections 80C, 80D, and equivalent provisions of the Income Tax Act of 1961.
4. Am I covered under life insurance if I am a smoker or use tobacco?
Life insurance, such as term insurance plans and health insurance, is financial protection that offers tax advantages under Section 80C of the Income Tax Act of 1961. It applies to those above the age of 18. You may also choose the term duration of your life insurance policy.
When you buy at a young age, your premiums are usually lower, and you get a lot of coverage. If you smoke or use tobacco, your rates may be substantially higher, while your coverage level may be reduced. You may also be subjected to a complete medical examination. It is also up to the insurer whether or not they wish to cover you if you are a smoker.
5. Is life insurance worth buying?
Each person has a unique set of objectives. This type of insurance provides income replacement for your dependents, which is very important if you are the sole provider for your family. Furthermore, your peace of mind is unaffected by the fact that premium payments are guaranteed1.
As a result, you may select from various endowment insurance plans based on your needs, with each endowment plan promoting guaranteed returns for multiple aspects of your life.
6. Is life insurance expensive?
No cost is too high to protect your life from financial disaster. You must evaluate different term life insurance plans and select the best one for your needs.
Aside from that, it is also determined by the age of the policyholder. If you are young, your premiums will be lower than if you are old.
7. What if I don’t pay my premium on time?
When your premium is past due, you generally have up to 30 days (15 days for monthly mode) to pay it. If you do not pay your premium after the grace period, your insurance becomes null and void, and you will be unable to collect any benefits.
However, you can reactivate your policy if you pay all of your past-due payments, subject to specific policy terms and restrictions, and you will resume receiving insurance benefits.
Top 3 Life Insurance Policies That You Must Consider
1. PNB Metlife Mera Term Plan
PNB Metlife Mera Term Plan, a pure protection plan, is an excellent choice for safeguarding your family’s financial future. The plan meets your family’s security needs at an affordable rate and assures your family may achieve their future aspirations in the event of your untimely death.
2. Canara HSBC Oriental Bank Of Commerce – iSelect Star Term Plan
Canara HSBC Oriental Bank Of Commerce – iSelect Star Term Plan is a non-linked individual life insurance plan that provides various options and helps you meet your family’s financial needs after your untimely death.
3. LIC Tech Term Insurance Plan
The LIC Tech Term plan is a non-linked, non-participating online pure risk premium plan that provides the insured’s family with the necessary financial protection in the event of their untimely death. The plan allows you to select between two benefit options: (a) Level Sum Assured and (b) Increasing Sum Assured.
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Wrapping It Up
Life insurance is not mandatory, but it is a wise investment, especially with a dependent spouse and children. It provides financial support to your family even after your death. Furthermore, it has a variety of advantages and gives you a lot of flexibility with your investment.
These answers are supported by empirical research and credible data. We hope you understood the importance of life insurance and found relevant answers to your queries.