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Seeking for Financial Protection - Life Insurance can be the perfect choice!

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Life insurance is one of the perfect resources to replace your income for your family after you die. Life insurance policy offers crucial financial planning benefits if it is perfectly fitted to your wants and requirements offered at a competitive price.

Before buying any life insurance policy, you should always discover the best type and you should be fully aware of all the terms and conditions as well as the life insurance services included in that policy. Purchasing of this policy is one of the most maligned decisions in your life, so choose it cautiously.

How to choose the most fitted life insurance plan as per your income?

There is an array of life insurance products in India, so choosing one of them is not that easy task. You should consider the following before selecting a term policy -

1) Opting for online method rather than offline -

Nowadays, selecting policy online is the most effortless and convenient method. The major advantage is that you can compare all the policies going into every companies portal, this will prove to be economical and expedient. Not just in terms of price, but you can look into the details of each policy like features and many other things.

2) Your purchase should only be based on your requirements -

You should always ensure that whatever decision you are going to take in terms of buying life insurance policies, is based after self-analyzing your needs and necessities. One should not just take the decision of buying after getting influenced by peers.

3) Be definite about the time -

People generally look at the amount of cover (which is also important) but consideration of the tenure of the term insurance plan is equally crucial. An insurance policy must cover till the time a person's retirement.

4) Always consider the inflation factor -

Whatever amount your policy is covering today, may not be good enough for your family after a certain amount of time. For example, if you are taking an insurance policy which is covering 10 lakhs, for now, it may not sound enough to you after a decade.

How much insurance you need for your kid?

Apart from your insurance policy, you should be concerned about your kid's insurance policy. Here are some imperative points that should be thought out.

The permanent life insurance policy has a cash value. Though you get life insurance once after your death, the premiums you are paying each year go into funding a cash account that theoretically should grow in value over time. That is why parents start investing in the life insurance of the kids from the time they are very small in age. As they get interest in the savings earnings and protection at the same time.

But investing too much on the life insurance for your children is certainly not a good investment vehicle. If you are investing a small proportion of your income to the kid's policy, it is acceptable. But in case if your kid is suffering from a specific medical problem since birth or after the birth, then this point is not valid. You can then invest a decent amount in a child's life insurance policy.

How much coverage in a life insurance policy your parents need?

Buying a life insurance policy for your parents is even more important than buying it for yourself. However, how would you know how much insurance policy covers and how much your parents need in a health insurance plan? It totally depends on some factors -

1) Firstly, it depends on your parent's age

2) It also depends on your parent's health condition. If your parents are fit and fine, you can get insured with less coverage but if you think the other way then you can opt for policies covering a higher amount.

After considering these factors, you can contact an insurer and he will do the needful for your parents. You can even check it online.

Types of life insurance products in India

There are many kinds of life insurance products which are available in India. Some of them are -

1) Endowment plan - Insurance + Savings

2) Child's Plan - needed to bring to accomplish your child's education, ambition, marriage etc

3) Term plan - All risk covered

4) Money back - Periodic returns with insurance cover

5) Unit-linked insurance plan (ULIP) - Investment opportunity + insurance

6) Retirement plan - Retire grace graciously by planning it

7) Whole life insurance - Life coverage to the life assured for the entire life

Benefits of ULIP insurance plans -

Though there are many advantages of investing in ULIP insurance plans. The leverages that this kind of insurance policy offers is -

  • Has flexible investment options

  • Major tax benefits

  • Less risk involved

  • Regular and disciplined savings

  • Liquidity at the time you need it

  • Full transparency

  • Life cover

We hope that this quick guide help you cover some of the petty doubts regarding life insurance and how it is the best choice for your financial protection.

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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