LIFE INSURANCE
Since life itself is uncertain, all individuals try to assure themselves of a certain sum of money.
Life insurance is taken not only to take of an individual but also family members in case of death. The insurance company undertakes to insure the life of a person in terms of financial way in exchange for a sum of money called premium ,in other words Life insurance is a agreement between the policyholder and the insurance company according to which the latter agrees to provide a sum assured called the death benefit in the event of an unfortunate demise of the life assured. This premium may be paid in one lump sum, or monthly, quarterly, half yearly or yearly. The company promises to pay a certain sum assured either on the death of the policyholder or In case of survival of the policyholder throughout the policy tenure, a maturity benefit is paid to the life assured .Thus, the person is sure that a specified amount will be given to him when he attains a certain age. His children will get that sum in the event of his death.
How Does Life-Insurance Work?
Life insurance policy, is a legal agreement that ties both the insured and the insurance provider to each other. It contains all of the information on the terms and conditions under which the insured person or policy nominee gets insurance benefits from the provider. Insurance is a means of ensuring that you and your family members are protected in the event of a financial emergency. You purchase an insurance policy for it, and the insurance company assumes the risk and provides insurance coverage at a certain rate. The insured or nominee can submit a claim with the insurer in the event of an unforeseen incident. The insurer evaluates the claim request and covers the claim based on the claim criteria.
Types of Life Insurance we offer:
- Term Insurance
- Child Insurance Plans
- Savings Plan & Investment
- Money back Policy
- Group Life Insurance
- Term Insurance with Return of Premium
- Unit Linked Insurance Plans
- Endowment Plans
- Whole Life Insurance
- Retirement Plans
Reasons to Invest in Life Insurance
Nobody has an idea which way their life will go. Life is very uncertain, nobody can predict the event of their life. To stay financially secured from the uncertainties of life one should consider purchasing life insurance. If you are not sure about whether life insurance is a good choice for you, below mentioned are some reasons why investing in a life insurance policy will help you ensure financial security for your loved ones:
Helps In Saving Taxes: One major advantage of purchasing a life insurance policy is that you avail tax deductions on the premiums you pay. Under the Section 80C and 10(10D) of the Income Tax Act, 1961 one can avail tax benefits for the premiums paid towards life insurance policy.
Helps In Planning For Retirement: Not every type of life insurance policy can help you create a corpus for retirement. Some life insurance providers have retirement plans that can help you build a corpus for retirement while providing life cover. The earlier you choose to purchase a retirement plan the more money you will have to fulfil your financial requirements post-retirement.
Will Help You Loved Ones Pay Off Your Debts: In case of your untimely demise of the life assured during the policy, a death benefit amount is provided to the nominee/family of the life assured. In case of your untimely demise your loved ones may have to deal with your debts, the death benefit amount can help your loved ones to pay off your debts.
Provides a Financial Safety Net: In case you are the sole breadwinner of the family your untimely demise will not only emotionally affect your family member but also financially. Under such circumstances a life insurance policy can help you provide a financial safety net for your loved ones even in your absence.
Provides Mental Peace: Biggest advantage of purchasing a life insurance policy is that a life insurance policy provides peace of mind. When you purchase a life insurance policy you ensure financial security of your family and you ensure you’ve done whatever you could to secure the future of your family in case you are not around.
Can Act as an Savings Tool: A life insurance policy encourages disciplined savings habits in an individual. Apart from encouraging disciplined savings habits some life insurance policies offer loans against the policy facility which can help you at times when you require immediate funds.
Can be Customised: Depending on different life insurance providers one can customise their life insurance policy by adding riders which are additional coverage that come in exchange of additional premium. Riders help you customise your life insurance plan according to your requirements.
Whole Life vs Term Insurance
Whole Life and Term Life Insurance plans are both types of life insurance plans. These are two types of life insurance plans that are most preferred by people. Whole life insurance plans provide life cover to the life assured until the demise of the life assured and on the other hand, term life insurance plans provide life cover to the life assured for a specific duration. Below mentioned is a detailed comparison between whole life and term life insurance plans to help you understand the difference between the two types of life insurance policies;
Reasons to Invest in Life Insurance
Quick Policy Issuance
At EDIFS you can purchase life insurance in just a matter of minutes. You can compare and purchase a life insurance plan by simply entering your details and such as Age, Mobile Number and Date of Birth and instantly compare available plans and purchase the life insurance policy that best meets your requirements.
Dedicated Customer Service
Our customer assistance team is available all 7 days to provide information and clarify all queries related to purchasing a life insurance policy or its claim settlement. Our knowledgeable team of experts is always available to solve all your queries and serve you in the best manner.
Availability of Top Plans
We have partnered with all the top life insurance providers in India to provide our customers the best life insurance plans. This helps our customers to get the best plans conveniently at one place with the ease of comparison.
FAQ About Investment Plans
It is advised to buy an investment plan so that it can be your and your family’s financial support in the case of an emergency. You should also consider buying an investment plan if you want to accumulate wealth over a period without making regular payments. Tax exemption under Section 80C and 10(10D) is also one of the key reasons you should buy investment plans.
Apart from insurance, you can invest in stocks, savings and mutual funds.
Some of the investment instruments that give the highest returns are fixed deposits, bonds, PPF or public provident fund, National Savings Certificate, National Pension Scheme, mutual funds and ULIPs.
If you want to invest in short-term savings, it is advisable to choose bank fixed deposits, savings account, short-term debt mutual funds, large cap mutual fund schemes, money market accounts, or gold and silver.
If you are risk-averse and want to invest in an option that is safe, it is highly recommended that you choose fixed deposits, public provident fund PPF, bonds, National Pension Scheme, National Savings Certificate, mutual funds and more.
There is no specific time or age at which one should invest in an investment plan. However, experts advise to start investing in the younger years as a young investor can earn great returns by taking bigger risks. Even if there is a loss of money, the investor would be able to recover through income generation in the early years of life.
The two best investment options for long term investors are unit linked insurance plans or ULIPs and bank fixed deposits.
If you want a stable source of monthly income, investing in Post office Monthly Income Scheme, bank fixed deposits, returns from mutual funds, and Senior Citizen Saving Scheme (SCSC) would be a good choice.
If you want to secure your child’s future with an investment plan, it is advised to go with a ULIP or Sukanya Samriddhi Yojna, if your child is a girl.
If you have made an investment in a ULIP, you would be able to claim tax deduction on premiums paid up to Rs. 1.5 Lakhs according to the Section 80C of the Income Tax Act, 1961. Moreover, learn that maturity proceeds from ULIPs will be tax free under Section 10(10D) of the Income Tax Act, 1961, based on certain terms and conditions. Lastly, death benefits paid to the nominee(s) in case of death of the policyholder are tax free. In case of addition of a top-up, one can claim tax benefits under Section 80C and 10(10D) of the Income Tax Act.
If you want to start investing early in your 20s, it is advisable to start building an emergency fund, determine your investment goals, make contributions in PPF, start saving for your retirement, keep short term savings accessible and invest a bit of your savings in long-term investment opportunities.
If you want to save money from your salary for investment purposes, it would be significant to come up with a budget, determine your financial objectives, invest in right investment plans, maximize tax saving under Section 80C, choose the right insurance and build an emergency fund.
A ULIP or unit linked insurance plan is the ultimate combination of life insurance cover and investment. ULIPs possess a lock-in period of 5 years. ULIP is one of the best solutions for an investor looking forward to investing on the basis of their appetite. Under ULIP, one gets an opportunity to make investment in debt, equity, bond or money market or hybrid. You can even change the sum assured, premium payment terms, and premium payment frequency under ULIP apart from adding riders to enhance the cover.
If you haven’t planned your retirement as of now, go ahead and do it. If you want to do the perfect retirement planning in your 40s, it is advisable to consider retirement plans, ULIPs, money back plans, or whole life plans for the same.
Clear investment objectives, diversification of investments, seeking professional advice, proper research of all options, thorough comparison and taking your time are some of the things you must practice before investing your money in an investment option of your choice.
Life Insurance Companies India
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