financial cover and life cover offered by life insurance policies

Life is full of uncertainties; we can predict about that what will happen next in our life, unforeseen events can occur any time in anyone’s life. Hence, it’s become mandatory and a smart step to take prevention, here life insurance is the best option to invest, as it not only protect or safes you but your family even in absence of you.

What is Life Insurance?

Life insurance, as the name suggest is an insurance policy or a contract between an insurer and an individual, which offer financial coverage in exchange for a payment over a period of time. In case, if the policyholder passes away during the policy tenure, the insurance company will offer a lump sum amount to his or her nominee. There are several types of life insurance policies available in the market that offers savings in addition to protection.

 Types of Life Insurance Policies

• Term Insurance Plans – These are the plans that can purchase for a fixed period of time. These policies do not have a cash value, and are thus relatively low in comparison to other kinds of life insurance policies. However, the policy will only turn out beneficial in case the policyholder demise during the policy term.
• Endowment Policy-Endowment plan is similar to term life insurance policies, as in term life insurance a lump sum amount is pay to the beneficiary or nominee in case of the death of the policyholder similarly a lump sum assured is given to the nominee in case of policyholder demise in endowment plan.
• Unit Linked Insurance Plans (ULIP)-ULIP provides a chance to create wealth in addition to offering the security of life cover. It gives an option to the insured to shift your money between debt and equity funds.
• Whole Life Policy-Whole life insurance plans also known as an ordinary life or straight life insurance policies. These plans provide coverage for the entire policy term as long as the policyholder pays the premiums. In case of untimely demise while the policy term is in progress of the policyholder, a predetermined amount will be paid to the beneficiary or nominee.

Benefits of life insurance policy

• Risk Cover- As we know that uncertainties are unpredictable, here life insurance is the best choice. It provides a high life risk cover that keeps you and your family protected.
• Promotes savings in the loan run-Life insurance is a long term investment where the insured is required to make a fixed payment regularly. Hence, it helps the policyholder inculcate the habit of savings.
• Death benefit - Investing in a life insurance gives the policyholders and their family a safe and secure future. Life insurance safeguards the interest of people who have diminishing incomes with advancing age, people who meet with accidents or for retired people.
• Loan facility- It is one of the biggest benefits of life insurance is that, one who avail a life insurance policies will have a choice of availing a loan against the policy. The amount of loan is a percentage of the cash value or sum assured under policy depending on the policy provisions.
• Tax Benefits- Life insurance policy offer a tax benefit under section 80C of the Income Tax Act. Under this section, investments made in the specified instruments are subject to refund. It is an effective way for the salaried person to reduce tax liability. To know more about policies explore https://www.applykaroo.com/insurances.php