Life Insurance: Features
Life insurance can be used to achieve many financial goals. It can provide financial coverage for your family members and dependents. You can also use life insurance policies to leave wealth behind as a tax-efficient legacy.
Let’s find out what each type of life insurance is and how they differ.
Term Insurance
Term insurance is a low-cost form of life insurance. Financial protection is provided to the nominee(s)/dependent(s) in case the policyholder dies during the policy tenure. Insurers will pay term insurance money to ensure your family’s financial security in the event you are not there.
Parents, married couples, and young professionals should all purchase term insurance. Term insurance premiums may be deducted from taxable income according to Section 80C of Income Tax Act. They could also provide an instant tax benefit*.
Life coverage – Term plans offer high-quality life insurance for a modest premium. For Rs 490 per monthly premium, ICICI Pru iProtect Smart provides a 25 year old non-smoker with Rs 1 crore term insurance coverage.
Fixed premium – Premium amount and coverage (sum assured) are determined at the time you select and buy. The premiums for fixed life insurance will remain the same throughout the chosen term.
Extended coverage – Term policies can provide coverage for up to 60 years. A premium is paid by the policyholder, and it remains fixed for the duration. Whole life insurance can be purchased with ICICI Pru iProtect Smart if your age is over 99.
The nominee can make a claim for money through various payout options. The payout from life insurance can be made in one lump sum payment, i.e. One payment or an income form, i.e. You can choose to pay monthly or annual payments, or you can combine both lump sums and income forms.
Optional critical disease benefit+ – ICICI Pru iProtectSmart term insurance provides the optional benefit to pay out on the diagnosis for up to 34 critical diseases. You do not need to pay hospital bills in order to claim this amount.
Optional Accidental Death Cover – You can add accidental coverage to your policy at any time, either before or after you purchase it. Your nominee will get Rs 1.5 million if your life insurance policy includes Rs 1 crore of accident benefits (Rs 50 lakh for accident benefit). Maximum accidental death coverage with ICICI Pru iProtectSmart Smart is Rs 2crore
Terminal illness benefit – Some term plans pay your entire insurance amount, i.e. Sum assured even before you die if you have a terminal disease.
Waiver premium# – The ICICI Pru iProtect smart term plan covers all premiums that were due to be paid by policyholders in the event of permanent disability.
Life Insurance for Every Life Stag
The life insurance policy is an essential part of any financial plan. Experts warn that as we age, our needs for coverage change dramatically. There are many variables that can affect the equation, including children, homes, retirement, and even kids. Bob Bland is the CEO of LifeQuotes.com. We talked to him about his thoughts on what policies are best and when they should be obtained.
Scenario 1 You’re a recent college graduate without any children
You don’t need to have life insurance if there are no dependents and student loans. Bland advises that you should be suspicious of anyone who claims otherwise.
Scenario 2
In the event of the worst, you don’t want your spouse drowning in debt. A term life policy is a good option if your spouse has a mortgage or car loan. Bland estimates that a 20 year, $500,000 plan would cost between $15 and $45 per month.
Scenario #3: You are in your 30s, married, and you’re a first-time father.
This is when you need life insurance. According to financial experts, a plan should pay at least 10 times your annual income. Bland recommends term policies of between $750,000 and $1 million each breadwinner if you need to cover college tuition. This type of coverage could be purchased for as low as $52 per month by a married couple.
Scenario 4
Bland recommends that you have an insurance review if you plan to leave the security and stability of a salaried position. He says, “The first step is to check with your HR department to see if your company’s life insurance is transferable in case you need it.” You’ll need to find your insurance. Policies are still quite affordable, but don’t be discouraged. Bland states that for $2.5million in coverage, a 45-year old man in good health would only have to pay $112 per month.
Scenario 5
Bland states that an established couple can have surprisingly low life insurance if they are at the top of their income. “The reason being: each person is economically independent.” He recommends a more conservative policy that would pay for funeral expenses and family debts such as mortgages.
Scenario 6
Bland advises against life insurance if you have a great pension, little debt or children to support. Bland suggests that you examine your financial situation. A basic policy is recommended if one spouse’s death would leave the beneficiary spouse in a difficult spot.
Additional Resource:
https://www.forbes.com/advisor/life-insurance/how-it-works/
https://www.guardianlife.com/life-insurance/what-is-life-insurance
https://igilife.com.pk/