Consider these Things Before You Buy a Life Insurance Plan


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Life insurance is important

Why do you need life insurance?

Protect your family’s financial future. Insurance is about protecting you and your family. Parents want their children to be well taken care of, even when they’re not there. Life insurance ensures that your loved ones are financially secure.

Accomplish your financial goals

Money is something that we all need to save for. By helping you to build a financial portfolio and providing protection for your life, life insurance plans can help you reach those goals. Life insurance plans encourage disciplined savings. You can accumulate funds by paying a small amount each month as an insurance premium. Even better, this monthly payment keeps growing. You’ll be able to achieve your long-term and more significant financial goals years from now.

Peace of mind

Life insurance can give you security. Life is unpredictable and life insurance can provide financial support to your loved ones when you’re no longer there. A retirement plan will provide you with a monthly income that allows you to plan for your retirement.

Tax savings

You can generally claim an income tax deduction for your premiums on life insurance under Section 80C of the Income Tax Act 1961**. Death claims payouts are exempt from tax under Section 10(10D), Income Tax Act 1961**.

There are many reasons to have a life insurance plan

Financial goals for the long term

By combining the protection of life insurance with savings, life insurance plans can help you build a solid financial foundation for your long-term financial goals.

Protect your child’s future

Parents want their children to have the best possible future. You can ensure that your child has the best possible future by purchasing life insurance.

Lenders and loans

A term plan is a good option if you have borrowed money. This ensures that your dependents don’t bear the loan burden. Term insurance policies are the best way to protect your home loan amount and provide shelter for the policyholder’s loved ones in the event of their death.

Planning for education of children

Child education plans can help you save money and build a fund for your child’s education. These plans offer life insurance so that your child will receive the amount assured even if the policyholder dies.

Dependent spouse

You must purchase life insurance if your spouse is financially dependent upon you. This will allow your spouse to live a financially independent lifestyle in the event of your death.

Leave a legacy that is tax-free

Life insurance payouts are exempt from tax under Section 10(10D** of the Income Tax Act 1961. This means that you can leave a tax-free legacy for your loved ones.

Retirement planning

Life insurance plans allow you to invest and build a financial portfolio for retirement, so you can enjoy your post-retirement life comfortably

Buying Life Insurance

These are some helpful tips that will help to understand your Life Insurance requirements and make the right choice regarding your life insurance plan.

Your current life stage

You will experience many stages as you age. These life stages include your first job, marriage, childbirth, teenage years, retirement, and getting your first real job. You will have different goals and plans at each stage of your life. These goals can be achieved by planning ahead.

Set a financial goal

It is important to set clear, precise and achievable goals. It is not possible to set specific, measured goals such as “I want a comfortable retirement” or “I want my child to go to college.” One example of a measured and specific goal is “I want my child to attend an international business school within 10 years.” This would be Rs 22 lakh* today, and Rs 43.27 crore** in 10 years. It is something I must plan for.” Our goal calculators will help you determine your goals.

Calculate how much Life Insurance you will need

Your liabilities and dependents will determine the Life Cover you need. Other factors include assets, future income, and any existing Life Cover. Your Life Cover should not exceed 10 times your annual income. If your annual income is Rs 10, lakh, you need a minimum of Rs 1 crore in Life Cover. Use our Human Life Value Calculator to determine how much Life Cover you will need.

The longest term is the best.

Your money will grow exponentially if you keep it invested for longer periods of time. If you invested Rs 1 lakh each year for five years, Rs 5,63,298/ – @ 4.4% interest rate and Rs 6,33.593/ – @ 8.8% interest rate would be saved. If you were to invest for 5 more years (total of 10), your savings would be Rs 12,48 6,635/- @ 4.4% interest rate and Rs 15,64,549/– @ 8.8% interest rate.

Verify all benefits and charges

It is important to take the time to fully understand all charges associated with your life insurance policy. Also, make sure to check out the tax benefits included in the insurance policy.

Learn the claims aspects

The claim settlement process of a company can be viewed by looking at the speed and quality of the claims settlement process. The Claim Settlement Ratio can be viewed online. This ratio shows how many claims the company has settled compared to how many claims it has received. A company with a higher Claim Settlement Ratio is recommended.

Keep informed about all available servicing options

You should check the number of service touchpoints offered by the insurance company. Check to see if there are many branches in your area, how many services are available on digital platforms and other similar information. These details will help you to get prompt servicing at a later point in your policy.

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