How flexible are life insurance policies?

Life insurance is a financial product in which a contract is made between the policyholder and the life insurance company. The insurance company pays a lump sum amount to the nominee/insured in the form of insurance coverage in exchange for the premium after a specific period or in the event of the insured’s death. Lets find out How flexible are life insurance policies.

What Is A Life Insurance Plan?

A life insurance plan is an agreement between an insurance company and a policyholder that provides financial coverage by guaranteeing a certain amount to the nominated beneficiary in the unfortunate event of the insured person’s death during the term of life insurance plans.

In exchange, the policyholder agrees to pay a set amount of money as a premium, either on a regular or one-time basis. If the policy covers you, you will also be covered for critical illness. It attracts a higher life insurance premium because it provides more insurance coverage.

What Are The Benefits Of Having A Life Insurance Plan?

The benefits of purchasing a life insurance plan extend beyond simply protecting the policyholder’s family in difficult times. Without a doubt, a breadwinner must protect their dependents in the event of their untimely death, accident, or physical disabilities that result in a loss of income. Having said that, there are a slew of other advantages that make it a must-have. Let’s go over each of these advantages one by one.

1. Can Be Used As A Loan Collateral

Many people are unaware that life insurance plans can be used as loan collateral. The policyholder can apply for a loan from a bank or an NBFC (Non-Banking Financial Company) based on the type of life insurance policy and the surrender value.

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2. Makes You Eligible For Online Payment Discount

The majority of people are unaware of the convenience of online payments (the payment mode chosen by an individual drastically affects the premium of the policy). When a person decides to pay his premiums online, a company’s administrative costs are significantly reduced. This is due to the absence of any paperwork-related fees.

In addition, the life insurer can save a significant amount of money on commissions paid to agents for offline life insurance purchases and renewals.

3. Tax Benefits

A policyholder is eligible for a tax rebate under Section 80C of the Income Tax Act of 1961 for paying a life insurance premium. The premium paid for parents and in-laws is exempt, regardless of whether they are themselves, their spouse, or their children. This benefit is provided by all life insurers, whether private or public sector life insurers.

Furthermore, the maturity benefit of life insurance plans is tax-deductible under Section 10 (10D) of the Income Tax Act of 1961.

4. Gives You Option To Opt Payment Periodicity

Almost every life insurer provides its policyholders with the option of receiving payments on an annual, half-yearly, quarterly, or monthly basis. If a policyholder chooses to pay the policy premium on an annual basis, the company can invest it, which means more profits and benefits for the company.

When a policyholder selects the payment frequency, the discount is frequently already factored into the premium rate charged by the life insurer.

Best Life Insurance Plans Available In India

Our lives are unpredictable and fraught with danger. When something bad happens to one of the family members, the entire family suffers. And if that person is the sole breadwinner, the suffering is exacerbated. This is where life insurance comes in. Though human life cannot be quantified, a monetary sum can assist dependants in continuing to live their lives without sacrificing their needs and requirements.

Let’s discuss some of the best life insurance in India.

1. iSelect Star Term Plan – Canara HSBC Oriental Bank of Commerce

Canara HSBC Oriental Bank of Commerce’s iSelect Star Term Plan is a pure protection term plan that provides comprehensive coverage to the insured’s family. As one of the insurance policies available on the market, this plan is appropriate for individuals who want to secure the future of their loved ones at a low premium rate.

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2. TATA AIA Fortune Maxima Plan

This is a non-participating unit-linked whole life insurance plan that ensures the insured’s family’s financial security. The plan enables the policyholder to maximise the corpus of whole life insurance by investing in market-linked securities. Investment in this plan can help the insured achieve both short- and long-term financial goals while also providing the benefit of whole life insurance coverage.

3. SBI Life Smart Shield

This is a non-participating term insurance policy that provides financial protection to the insured’s family in the event of an accident or illness. SBI life Smart Shield, as a comprehensive term life insurance plan, provides insurance coverage at a low premium rate.

4. Reliance Nippon Life Online Income Protect Plan

This is a non-participating, non-linked term insurance plan that covers the family’s financial liabilities in the event of an emergency. The plan also provides the family with a regular monthly income, allowing them to maintain their standard of living even if the insured is not present.

5. Pramerica Smart Wealth Life Insurance Plan

This is a non-participating Unit Linked Insurance Plan that provides insurance coverage to the insured’s family and the benefit of long-term investment returns. The plan helps to establish the habit of systematic savings with the goal of wealth creation by investing in five different fun options based on one’s preferences and risk tolerance.

Wrapping It Up

Life insurance plans are now regarded as one of the essential pillars of financial planning. A life insurance policy not only protects the family financially in the event of untimely death but also serves as a long-term investment option for achieving life’s financial goals.

However, with such a wide variety of insurance policies on the market, selecting the best life insurance plan that meets all of your needs is always a difficult task. As a result, it is critical to compare various plans online and ensure that the plan you select provides all of the benefits.

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