It is often that we come to know, or are told that Life Insurance is a matter of solicitation, and truly so. By definition, Life Insurance is the insurance that pays out a sum of money either on the death of the insured person, or in some cases, after a set period. But that’s not all! There is much more to life insurance than what meets the eye. Here are 10 things that you didn’t know about this imperative financial step in your life!
1. Life Insurance is an Investment
If one or more members of your family are financially dependent on you, then life insurance acts a great investment option.
2. Type of Life Insurance
There are essentially two types of life insurance, viz.-
Term Life Insurance – The best term insurance requires you to pay lower premiums, however they offer coverage only as long as the term you opted for. Of course, this type of insurance covers you for higher assured sum in case of eventuality, within the term of the insurance.
Benefit Plans – This type of insurance includes plans such as ULIP, Endowment and Money Back. It often requires higher premiums, but since it helps accumulate cash value over time, it proves to be worth every rupee spent. In this case, you are covered as long as you pay the premiums.
3. Life Insurance is Extremely Affordable
As is the case with almost all financial products, even life insurance varies in price from low to high, thus implying that regardless of your current financial standing, you can easily afford an insurance policy! Now isn’t that amazing?
4. It Is Never Too Early To Get On Board
Whether you are aged 25 or 30, you can almost always buy life insurance. After all the earlier you start, the more cash value you accumulate, the lower is the premium you pay and the better it is for you and your loved ones!
5. The More the Coverage, the Better
You may think that the insurance is a just a way to help your family pay off your debts and manage immediate expenses, but the fact of the matter is that your insurance must cover the expenses for your family for at least 2-3 years if not more. Hence, you may need more coverage than you initially think.
6. Life Insurance Claims are Convenient
Since they are not based on an assessment of vehicle or property as in case of auto-insurance or fire insurance, life insurance claims get through fairly quickly, sometimes in a matter of 15-20 days!
7. Life Insurance Premiums are Usually Tax-Free
Life insurance premiums are often exempt from tax liabilities. As a matter of fact, the death benefits received by your family through your policy is also exempted from tax, thus ensuring that they get the maximum benefit from it.
8. You Can Take a Loan Against Your Insurance Policy
Yes, that’s true! Albeit, only in case of traditional policies such as Endowment and Money Back, and not for term policies. That being said, it is a great way to gain access to some additional funds, without putting up any asset as collateral!
9. Your Family Can Reap the Benefits Only If they Know How To
In order for your family to benefit from your policy, make sure you keep them updated regarding the whereabouts of your policy papers. It is also a good idea to introduce them to your agent.
10. Your Premium Will Be Fixed
The first time you take the policy, your premium is based on your health. The healthier you are, the lesser are your premiums. However, once you start paying the premiums, no matter how your health deteriorates, your premiums will always remain the same!
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*Insurance is a subject matter of solicitation.