The average human lifespan has increased substantially in recent years. However, the risk of dying too soon is always present. In many situations, premature death has an emotional impact and has a financial impact on a family. This is especially true if the deceased was the breadwinner.
This is where a life insurance policy may help. To enjoy the best life insurance benefits, you need to find the best life insurance policy for you. It might assist in minimising the financial effect of the policyholder’s death by a payout called the death benefit. Aside from that, there are several more benefits to having life insurance. Continue reading to find out.
What is life insurance?
Life insurance is a policy that protects against the risk of death. If the life insured dies within the policy’s term, the insurance pays a death benefit. Life insurance plans are legal contracts in which you are required to pay a premium in exchange for the coverage provided by the insurance provider.
Furthermore, in addition to early death, some of the best life insurance policies cover survival to the end of the policy term, at which point a maturity benefit is given.
To calculate the life insurance cover that you are eligible for, you can use a life insurance calculator.
5 Amazing Features Of Life Insurance Plans
Now that you have a basic understanding of a life insurance policy, it is time to look at the features offered by the best life insurance policies-
1. Issued in the name of the policyholder
One of the main features of the best life insurance policy is that they are only issued in the policyholder’s name. A policyholder is a person who buys a life insurance policy and pays the required premiums.
In most cases, a standard life insurance policy has only one policyholder. However, this is not always the case. Some plans, such as a joint life insurance policy, allow for multiple policyholders.
2. Flexible premium payments
As previously said, to enjoy a life insurance policy, you must pay premiums to the insurance service provider that is calculated by a life insurance calculator. You may also select the frequency with which you want to pay your premiums.
You can, for example, choose to pay your life insurance payments in one single sum. Alternatively, you may pay them at regular periods such as monthly, quarterly, half-yearly, or annually.
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3. Customizable tenure
When you buy a life insurance policy, you must select the duration of the coverage. The best life insurance policy provides protection only until the end of the chosen tenure, known as the policy term. The life insurance is only valid throughout this period.
This tenure can be tailored to your specific needs and requirements. For example, if you need life insurance coverage for the next 20 years, you may simply select a term of 20 years. There are also specific life insurance plans that provide whole life coverage, which means they are good until you reach the age of 99 or 100. This changes depending on the plan.
4. Customizable sum assured
The sum assured component of a life insurance policy is the payment made by the insurance company to your nominee in the case of your death. You may tailor the sum assured when purchasing the policy, much like you can modify the duration of a life insurance plan. That being said, here’s something you should be aware of.
The premium you must pay for a life insurance policy is determined by the sum assured amount you select. As a result, the premium for a life insurance plan with a sum assured of Rs. 1 crore is likely to be greater than the premium for a similar plan with a total assured of Rs. 50 lakhs.
5. Pay-out on death or maturity
Another essential aspect of the best life insurance policy is that the insurance company only pays out the sum promised in one of two circumstances: the policyholder’s death or the maturity of the life insurance policy. Payouts are only given on death in the case of pure term insurance plans.
The death benefit is paid when the insurer pays out the sum promised to the nominee in the event of the policyholder’s death. Similarly, when a payout is paid to the policyholder upon the policy’s maturity, this is referred to as a maturity benefit.
Key Advantages of life Insurance Policy in India
1. Death Benefits
Individuals can get life insurance to safeguard themselves and their families in the event of untimely death in the insurer’s life. The insurer pays the sum guaranteed, plus any applicable incentives, in the amount indicated in the contract. This is referred to as the death benefit.
2. Investment Components
Certain whole life insurance policies provide both insurance and investing benefits. While half of your premium is spent on insurance, the other half is invested in either equity, debt, or a mix of the two.
With a protective covering and excellent returns on investment, you get the best of both worlds. You may maximise this component by investing in funds that match your investment horizon and risk tolerance.
3. Maturity Benefits
By providing maturity benefits, life insurance plans can also serve as a financial tool. If the insured lives the policy period with no claims, the whole premiums paid are refunded at the policy’s maturity. As a result, your life insurance policy might include a savings component in addition to providing protection.
4. Tax Benefits
Individuals can minimise their tax liability by investing in particular instruments under Section 80C of the Income Tax Act (ITA). One of them is term insurance. The premium paid for your life insurance policy is eligible for a maximum tax deduction of Rs. 1.5 lakh under section 80C.
Furthermore, any reimbursements from your insurance coverage are entirely tax-free under Section 10(10D) (provided your premium does not exceed 10 percent of your Sum Assured annually).
Wrapping It Up
In the event of an emergency, the best life insurance policy can be used as a financial weapon. While you cannot escape the problems that life throws at you, you can certainly mitigate the dangers that you encounter. Some of the best life insurance policies offer to cover your life risk and assist you in creating a secure financial net for your loved ones. So, buy a life insurance policy to protect your family’s happiness.
Investing in the best life insurance policy is one of the efforts you can take to financially secure your life objectives, thanks to the various features and advantages of life insurance at your disposal. Before you buy a life insurance policy, make sure to look into the available features so that you may tailor the policy to your specific needs.