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LIFE INSURANCE

Welcome to the realm of safeguarding your family's financial well-being, where we understand the importance of life insurance in protecting your loved ones' future.

What is Life Insurance?

Life insurance is a financial contract between an individual (the policyholder) and an insurance company. In exchange for regular premium payments, the insurance company provides a lump-sum payment, to the designated beneficiaries upon the death of the insured person. The purpose of life insurance is to provide financial protection and support to the family or dependents of the insured in the event of their death.

Why Life Insurance?

  • Financial Security: The primary benefit of a life insurance policy is that it offers long-term financial protection to the policyholder’s family in case of an eventuality.
  • Tax Benefits: Policyholders can claim tax benefits on the premiums paid under section 80C. They can also claim tax exemptions under section 10(10D) as per the prevailing tax laws.
  • Wealth Creation: Certain types of life insurance policy plans, such as ULIP, endowment, or savings plans offer wealth creation benefits along with protection benefits. You can choose the types of plans based on your risk appetite and build a corpus for your future goals.
  • Retirement Planning: Annuity-based life insurance plans give a monthly pension to the policyholder and on maturity a lump sum amount. This helps to plan a secured retirement.
  • Death Benefits: In case of any unfortunate event with the policyholder, the insurer provides financial benefit in the form of a death payout. The appointed nominee receives the entire sum assured plus the bonus accumulated over time.

Types of Life Insurance

  • Term-Life Insurance: Term insurance is a type of life insurance that provides coverage for a specified term or duration. Unlike permanent life insurance policies, such as whole life or universal life, term insurance does not build cash value over time. Instead, it offers pure death benefit protection.
    It is suitable for individuals who want to ensure financial protection for their loved ones during a specific period, such as the years when they have dependents or outstanding financial obligations like a mortgage. It's a practical choice for providing a safety net during the policy term without committing to the higher premiums associated with permanent life insurance.
    Term insurance is purchased for a specific period, commonly ranging from 5 to 30 years. If the insured person dies within this period, the death benefit is paid out to the beneficiaries. If the term expires and the insured is still alive, the coverage ends
    term expires and the insured is still alive, the coverage ends without any payout.
  • Whole-Life Insurance:Whole Life Insurance provides coverage for the entire lifetime of the insured, as long as the premiums are paid. In addition to providing a death benefit, whole life insurance also includes a savings or investment component, known as the cash value, which accumulates over time.
    Whole life insurance is often chosen by individuals who want both a death benefit and a savings or investment component. It is considered a long-term financial planning tool and can be part of an overall strategy for wealth accumulation, estate planning, and providing financial security for heirs. However, it's important to note that whole life insurance typically comes with higher premiums compared to term life insurance.

Things to Remember While Purchasing Life Insurance

  • Assess Your Needs: Understand why you need life insurance. Consider factors such as providing financial support to dependents, covering outstanding debts, or leaving a legacy.
  • Calculate the amount of coverage your beneficiaries would need in the event of your death. This should factor in expenses like mortgage, education, debts, and living costs.
  • Choose the Right Type of Insurance: There are different types of life insurance, including term life and whole life. Term life insurance provides coverage for a specified term, while whole life insurance covers you for your entire life and may include a cash value component. Choose the type that aligns with your needs.
  • Understand Premiums: Premiums can vary based on factors like age, health, and coverage amount. Ensure you can comfortably afford the premiums throughout the life of the policy.
  • Consider Riders: Riders are additional features or benefits that can be added to a life insurance policy. Common riders include accelerated death benefit, accidental death benefit, and waiver of premium. Evaluate if any riders are relevant to your situation.
  • Check Policy Exclusions: Understand the policy exclusions, limitations, and any conditions that may affect the payout. Be aware of situations where the policy may not provide coverage.
  • Medical Underwriting: Be prepared to undergo a medical examination as part of the underwriting process. Your health status can influence the cost of premiums and the approval of your application.
  • Review Policy Periodically: Life circumstances change, so it's important to review your life insurance policy periodically. You may need to update coverage based on changes in your financial situation, family structure, or other factors.
  • . Read the Fine Print: Carefully read the terms and conditions of the policy. Understand the inclusions, exclusions, and any conditions that may affect the policy