5 Common Questions Asked About Life Insurance

Life insurance is a contract between you and an insurance company. You make regular premium payments to the life insurance company. In exchange, the company pays a death benefit to your beneficiaries when you die. 

Some Questions About Life Insurance Policy

What Is Life Insurance And Why Do I Need It?

Life insurance is a simple financial product where you pay a premium to the insurance company and your nominees - spouse, children, or other loved ones – get a lumpsum amount called the sum-assured in the event of your untimely death.

What Are The Benefits Of Life Insurance?

• It acts as financial security for your family.
• It secures your child’s future as it can take care of education costs or marriage expenses.
• If you have existing loans, then your family is not burdened with the repayment of the loans in case of your sudden demise.
• A life insurance policy can secure your retirement. You can opt for a life goal-based unit-linked insurance plan (ULIP) like the Bajaj Allianz Life Goal Assure, A Unit-linked Non-Participating Life Insurance Plan, which places your life goals at the core of its offering. You get a choice of eight funds, four investment portfolio strategies, and additionally loyalty additions (for annualized premium of Rs.5 Lakhs or more for policy term 10 years or greater) that are payable from the sixth year, and a Fund Booster (for policy term 10 years or greater) payable at maturity. Plus, it returns the mortality charges or life cover charges on maturity. One can refer to the sales literature of the product to get detailed information.
• You are eligible for tax benefits at the time of purchase of a life insurance, and you or your nominees get a tax-free pay out at the time of maturity of the insurance policy subject to provisions stated under the Income Tax Act, 1961.

What Happens If I Am Unable To Get Life Insurance?

If this happens, you may want to find out why your application wasn’t processed or accepted. Health, low finances, place of residence, a dangerous hobby or occupation etc could be some of the reasons that could lead to you not getting life insurance.

What Is The Correct Age To Get Life Insurance?

The suitable time to buy would be when you are younger, preferably in your 20s. When you’re younger you are usually healthier and you tend to pose less risk to an insurance provider, which is why you will be offered the most affordable rates.

What Are The Different Types Of Life Insurance Plans I Can Avail?

Broadly, the common life insurance plans can be classified in three categories:

• Term insurance plans are for a fixed period. These are considered to be the simplest form of life insurance where you can get a high sum-assured for a low premium.
• Traditional Life Insurance plans give a lump sum amount or periodic income or both at maturity to you or your nominees in case of your demise. Under Traditional Life insurance, returns could be low risk and conservative.
• Unit Linked Insurance Plans help you build market linked wealth in addition to having life insurance. It provides market linked returns but also involves a high risk.

Conclusion

Whatever life insurance you choose, make sure your and your family’s financial goals are aligned with the decision. Also ensure that you do not remain under-insured by taking a lower sum-assured than what is needed in your situation.

Also read- Various Types Of Life Insurance Plans In India

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.