What is a Life Insurance Plan: 3 Must-Know Things

let’s move on to the four must-know to understand what is a life insurance plan all about.

What is a Life Insurance Plan: 3 Must-Know Things

Many of you wonder what an insurance policy is all about. Is it a smart move to buy one for your family’s financial future? Well, what comes in life will always be a mystery, and being prepared for this roller coaster is all that can be done for peace of mind.

There are different ways to manage unexpected situations that pop up tomorrow. By understanding what a life insurance plan is and its other aspects, you’ll realise it’s a popular, safe, and affordable investment for your family’s future. 

Now, let’s move on to the four must-know  to understand what is a life insurance plan all about.

What does Life Insurance mean?

Life insurance is a smart investment when you have a family to support. It enables you to secure the future of your dependents in case of untimely death by providing for the beneficiaries. This contract with an insurance company involves monthly or annual contributions by the policyholder. 

Once you’ve understood what life insurance means, there are two major factors that you should take into consideration before buying one. The sum assured and the tax. Instead of guessing, these investments prepare you for most potential what-ifs. There is also the tax factor, sections 80C and 80D, which offer tax deductions as per the Income Tax Act on insurance premiums.  

What are the Types of Life Insurance Plans in India

Now that you understand what is a life insurance, the first thing you must know is its types. Here are some of them listed below:

Term Life Insurance

Term life insurance is often an affordable way for individuals and families to secure financial protection for a limited duration. These policies provide beneficiaries with a death benefit upon the policyholder’s untimely passing away during the pre-determined coverage period. However, the insurance company will offer no payouts if you survive the entire term.

Whole Life Insurance

Whole life insurance, also known as permanent or lifetime coverage, ensures that protection lasts as long as premiums are paid. Along with its death benefit, whole life develops an asset aspect, where money accumulates within the policy over the years.

Unit Linked Insurance Plans (ULIPs)

These plans combine life insurance coverage with investment options. One part of your premium goes towards the insurance component, while the remaining amount is invested in market-linked funds. The death benefit is guaranteed, but the maturity benefit will depend on the performance of the chosen funds. 

4 Things to Remember When Buying Life Insurance

The best life insurance plan for you will depend on your individual needs and circumstances. After understanding what is a life insurance plan, here are some factors to consider when you buy one:

1. Younger and healthier individuals typically qualify for lower premiums.

2. Consider how much financial support your family would need if you were no longer around.

3. Premiums vary depending on the type of plan, coverage amount, and your health.

4. If you’re looking to build cash value alongside your life insurance coverage, a whole life or ULIP plan might be suitable.

Can You Buy Life Insurance Online

Yes, buying life insurance online is a hassle-free task these days. Here’s why you must consider buying online:

1. Select from the comfort of your home: Skip agent visits, research what is a life insurance and its types, and compare the best one for you using an online term insurance calculator.

2. Save Money: Cut out the middleman for lower premiums.

3. Compare Like a Pro: Easily compare plans & find the best value for your needs.

4. Faster & Easier: Apply in minutes with streamlined online applications.

What do you Know About Life Insurance Plans?

Life insurance is a powerful tool for financial security. It provides peace of mind knowing your loved ones will be taken care of in your absence. Now that you understand everything about them, you must know that you should buy only from a well-known insurance provider like Canara HSBC Life Insurance.

Their different types of life insurance plans are available online, and considering your individual needs, you can choose the right plan to protect your family’s future. Remember, starting early with life insurance can lead to lower premiums and ensure long-term financial stability for your loved ones.

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