Today ensuring the financial future of one’s loved ones is a top priority of almost all individuals. In this regard, life insurance has emerged as a key component of financial plans that safeguard the future of the insured and their dependents. In fact, more individuals are seeing life insurance as a financial tool due to its key benefits as the same helps protect one’s family’s financial standing by extending them death benefits in the absence of the insured, allowing them to account for financial obligations. In addition, many policies help individuals to mobilize savings and accumulate substantial wealth over time to meet long-term goals such as retiring early, paying for a child’s higher education, and investing in a high-end asset.
The availability of multiple life insurance plans allows individuals to pick a plan that suits their requirements and helps them meet their goals accordingly. On that note, let’s check out the popular life insurance options and explore their unique features to understand one’s needs and requirements.
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- Term insurance: This life insurance plan is known to offer solid coverage for a given period, ensuring the dependents of the insured are taken care of even in their absence. For a pre-defined sum assured the insured has to pay a regular premium amount. The amount of the premium is based on the insured’s age, needs, and financial standing. In case of the unforeseen, the insured’s family receives a sum assured which helps cover financial liabilities and existing obligations that help meet them without eroding savings. These aspects make term insurance plans an ultimate safety net, offering the insured and their family peace of mind regarding their financial future. They can use a SIP return calculator to determine the premium, the estimated payout, and more and then make an informed choice accordingly.
- Critical illness: This life insurance plan is an important cover to build a financial net against serious health issues. The policy typically covers specific diseases that are listed in a policy document. When an individual is diagnosed with an illness covered under the insurance during the active coverage period, they will receive a lump sum amount from the insurer that will help them pay for their treatment and medical expenses. It acts as a safety net and helps cover for diseases more effectively. Typically, critical illness cover includes diseases such as cancer, hypertension, heart disease, and respiratory illness. However, the list of illnesses tends to vary across insurance providers and may come with different clauses. In addition, individuals should provide all crucial details related to their health conditions to make sure their claim gets accepted during an emergency.
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Investment Plans:
Unit-Linked Insurance Plan: Those looking for both benefits of insurance and investment in a single plan will benefit from ULIPs. This plan provides individuals with comprehensive protection against life risks and at the same time enables investments in multiple instruments such as debt, hybrid funds, and equity. ULIPs allow individuals to invest in instruments that match their goals and risk-taking comfort level and also adjust the allocation across resources based on their goals and the performance of the units. This flexibility to withdraw or switch funds as per evolving needs helps make the most of different investment instruments and their return potential.
Endowment plans: Endowment plans offer guaranteed returns as they are not exposed to market volatility. They provide the best of insurance and savings. To elaborate, a part of the insurance premium goes to the life cover and the other part goes to the savings part. Under this plan, the beneficiary of the policy receives a lump sum amount if the insured suddenly passes away. On the other hand, if the insured outlives the policy term they get the survival benefit which can be used to meet financial goals or plan retirement. This guaranteed aspect of the policy makes it popular among salaried individuals and those looking for predictable returns from their insurance plan.
- Child plans: These plans enable individuals to build a corpus for their kid’s future which will help them to account for their key milestones with ease. Most individuals opt for child plans to streamline their kid’s higher studies. Typically, individuals can tailor this insurance plan to their specific financial needs by predefining the timeline for when they would need a financial boost. This allows them to save up in the plan for the future and boost their plan with their evolving needs. This particular plan helps individuals safeguard the future of their kids and ensure that their needs and requirements are well taken care of even if they are not around their children in the future.
- Retirement plans: Insurance plans that help make retirement goals feasible are gaining popularity among individuals. This plan is meant for the long run and could help individuals save up their hard-earned money for their future by mobilizing savings with the promise of extending guaranteed returns to the insured. Most retirement plans prioritize capital protection, extending the comfort of knowing one’s funds are safe. Based on one’s goals and risk-taking capacity individuals should park money into different savings and investment plans. In addition, they should consider getting a retirement insurance plan for guaranteed returns that will help them meet their goals over time.
These popular life insurance plans are designed to help individuals account for their protection needs. However, different plans are designed to cater to different needs, and hence their accompanying features and limitations must be checked in detail to understand their scope and limitations. In other words, individuals should check the features, exclusions, fine print, and premium coverage to compare different plans and determine whether the same matches their requirements or not. In addition, individuals should check more about the insurer, and find details about their product review, customer service, and record of claim settlement to understand what to expect from them during claim settlement. Having insight into these details helps understand the scope of the policy and the proficiency of the insurer more effectively.
