Life insurance policies can be critical for financially safeguarding your family in the event of a disaster, yet many individuals do not have them. According to a recent poll, over half of all American people do not carry life insurance. One factor is that individuals believe the term plan is prohibitively expensive. When asked to estimate the cost of a 1 crore term life policy for a healthy 30-year-old, for example, the majority of survey respondents estimated 50,000 rupees per year or higher. In reality, the average annual expenditure is closer to 20,000 rupees only.
5 Top Benefits of Life Insurance
Life insurance policies offer a variety of helpful benefits. Among them are:
1. Life Insurance Payouts Are Tax-Free
If you have a life insurance policy and die while it is active, your beneficiaries will get a lump sum death payment. Life insurance policy payouts are not considered income for tax reasons, and your beneficiaries are not required to disclose the money on their tax returns.
2. Your Dependents Won’t Have to Worry About Living Expenses
Many experts advise getting a term plan that is seven to ten times your annual salary. People who rely on your income should not have to worry about their living expenditures or other big charges if you have a policy (or policies) of that amount. For example, your insurance policy may cover the expense of your children’s college tuition, eliminating the need for them to get student loans.
3. Life Insurance Can Cover Final Expenses
Since many people do not have enough money to handle even a 2 lakh rupees emergency expenditure, having to pay for a funeral can be a significant financial strain. If you have a life insurance policy, your beneficiaries can utilize the proceeds to cover your funeral expenses without having to delve into their funds or use credit.
Some insurance companies provide ultimate expense plans. These plans provide limited coverage and have minimal monthly rates.
4. You Can Get Coverage for Chronic and Terminal Illnesses
Many life insurance companies provide endorsements, also known as riders that you can add to your policy to improve or modify your coverage. Under some conditions, an expedited benefits rider permits you to obtain part or all of your death benefits. Some plans, for example, allow you to spend your death benefit while you’re still alive to pay for your treatment or other expenditures if you’ve been diagnosed with a terminal disease and are projected to survive fewer than 12 months.
5. Policies Can Supplement Your Retirement Savings
In addition to paying death benefits, whole, universal, or variable life insurance policies can accrue cash value. You may utilize the cash value that accumulates over time to cover costs like purchasing a car or making a down payment on a property. You can even use it throughout your retirement years if necessary.
A life insurance policy, on the other hand, should not be used in place of standard retirement funds such as a 401(k) or an IRA. Furthermore, cash value life insurance is far more expensive than a term plan, which does not have a savings component and just provides a death payment.
5 Best Life Insurance Plans in India
A life insurance policy is a contract between an insurance company and a policyholder. In exchange for a premium, the business promises to pay money to the policy’s nominee. When there is a crisis, such funds can be quite beneficial.
As a result, today, we present you with bite-sized information on five of the finest life insurance policies available in India.
1. Canara HSBC Oriental Bank Of Commerce – iSelect Star Term Plan
Canara HSBC Oriental Bank of Commerce’s life insurance plan, the iSelect Star Term Plan, protects you from all of life’s uncertainties. A highly adjustable term plan that may be adapted to your life stage and insurance needs by offering a variety of coverage, premium payment, and benefit payout choices.
The iSelect Star Term Plan offers a variety of alternatives, including whole life coverage and spouse coverage in the same policy. The plan also provides the option to obtain a return of premium benefit, which implies that if you outlast the policy’s term, all of your premiums will be refunded. Along with this, the plan also provides tax savings benefits that can be received as per the various income tax slabs.
2. LIC Tech Term Plan
Everyone in India is familiar with LIC. Although they provide many different forms of life insurance today, we will focus on their tech term plan. To be eligible for insurance under this plan, an applicant must be at least 18 years old. This term plan has a sum insured of 50 lakhs. In general, life insurance firms in the nation do not offer such a large sum of money.
3. Aegon iTerm Plan
Aegon’s iTerm plan is yet another excellent life insurance option. Again, the applicant who is having his or her life insured must be at least 18 years old under this plan. You should be aware that the minimum amount of money is Rs. 25 lakh. This plan, however, has a maximum maturity age of 100 years.
4. SBI Shubhnivesh plan
If you can trust SBI for everything, why not their life insurance plan? We have the Shubhnivesh life insurance policy for you today. This plan is only available to people over the age of 60. If you are over that age, you will have to choose another plan. However, getting a suitable plan for those above this age is quite rare. Aside from that, the plan’s maturity age is 65 years.
5. Bajaj Allianz iSecure Term Plan
The Bajaj Allianz iSecure Term Plan is one of the most excellent life insurance policies available. The lowest amount of money you may guarantee with the assistance of this plan is 2.5 lakhs. Isn’t it incredible? The candidate’s entrance age for this plan, like many other term plans, must be 18 years or older. Aside from that, the plan’s maturity age is 70 years.
The Bottom Line
Life insurance isn’t only for the affluent. No matter what your income level is, life insurance may ensure that your loved ones can make ends meet if you die. And, contrary to popular belief, the term plan may be less expensive than you think.