The phrase ‘insurance’ invokes a range of mental images and ideas among different people. In almost all these ideas is the realisation of the finite and fragile nature of life, especially when thinking about ‘life insurance’. While some people may be able to get over this realisation and do what seems right for the people they love, others may find it difficult to face.
Among various reasons, this may be one of the causes why some people hesitate to take advantage of all the features and benefits that life insurance has to offer. With the range of plans available in India today, you should be able to find plans that suit your needs and expectations.
If you still wonder why you should have a life plan, or if you need one, here is a look at the features and benefits of life insurance that should help you decide.
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Life Insurance Features
Life insurance is a term that encompasses a range of plans. This includes pure life plans, plans that offer wealth creation, plans that offer savings, and more. Let’s take a look at some of the features of life insurance.
The most primary feature of a life policy that you ought to know is the life cover. Put simply, life insurance enables you to create a financial support system for your family if something unfortunate were to happen to you. Through life plans, you can find a way to care for your loved ones, even when you’re not around.
Even with the simplest term insurance, there is a range of rider options available for consumers to choose from. Riders are add-on features that may vary across policies and insurance providers. Some of the common riders are premium waiver, accidental death, permanent disability, critical illness, and terminal illness.
Wealth Creation and Savings
While this may not apply to all types of life insurance plans, some plans offer wealth creation or savings as a part of the plan. These features are commonly offered by policies like ULIPs or Endowment Plans. Here, a part of the premium is redirected, so you can reap additional benefits from your insurance upon plan maturity.
Nomination is an important aspect of life plans. To make the best use of the policy and enable your insurance benefits to reach the right destination after you are gone, naming a nominee in your policy is important. You can name multiple nominees, and you can also change the nominee during the policy tenure.
Key Benefits of Life Insurance Plans
Given the variety of life insurance plans available in India, there is an array of benefits that are offered to the consumers. Here are some of the benefits of life plans.
People tend to shy away from insurance because they believe that there is nothing to be gained if the death benefit is left unutilized. This may be the case with some plans, but there are numerous other policy types that will earn you a maturity benefit. This could be in the form of a return of premium, or it could be the wealth created through the dual nature of the plan over the years.
Most life plans will offer some form of tax exemption. This may vary across plans. To understand this aspect better, consult your financial advisor, or your insurance provider.
The need for financial assistance may arise at any point. In such instances, some policies allow you to avail of a loan against the plan. In most cases, the rate of interest charged may be lower as compared to personal loan rates. This may depend on your premium payment history.
Through all these features and benefits, life insurance plans offer a way to create a safer future for your loved ones. With a little research, you may find for yourself a plan that fulfils more than your expectations.