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Basics of an Insurance Plan: How To Get Started ?

Secure your family’s future with the right life insurance plan that offers protection, savings, and peace of mind at every life stage.

Written by : Knowledge Centre Team

2026-01-08

887 Views

7 minutes read

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Well-being and the safety of your family always remain your topmost priority. You work hard and earn a living to make sure that you have enough wealth to help your family members achieve their goals. Life insurance is a class of financial instruments that can help you fulfil your financial obligations to your family.

Life insurance is the answer to questions like - What if something happens to you? Who will then take care of your loved ones? How will they look after their needs and goals?

With such an important place, a life insurance plan is a financial term you should know almost everything about. Let’s dive deeper into the details in this blog.

Key Takeaways

  • Life insurance is essential for long-term financial protection of your loved ones.

  • You can choose from different plans like term insurance, savings, ULIPs, and retirement plans based on your goals.

  • Riders enhance your policy with extra coverage for critical illness, accidents, etc.

  • Tax benefits under Sections 80C and 10(10D) help you save more.

  • Regular income payout options support your family’s everyday expenses in your absence.

Why Buy the Best Life Insurance Plan?

The purpose of life insurance is to protect your family’s future in your absence. Life insurance becomes necessary if you are the breadwinner for the family. It gives you peace of mind, and your family will be secured financially.

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However, safety is not the only reason to have life insurance. Here are a few important reasons why life insurance is a must for you:

a. Long-term financial protection of your dependents
b. Building tax-free wealth over a long time
c. Funding your retirement
d. Preserving your money from inflation and taxes
e. Generating tax-free income

Life insurance has an investment solution for each important financial milestone you need to cover in life like a child’s goal and retirement. Thus, for one reason or the other, you will need life insurance.

Secure Your Family’s Future with the Right Life Insurance Plan

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Additional Benefits of Buying the Best Life Insurance Plan

Providing life cover to you is the major benefit of life insurance, but surely not the only one. Here are other things life insurance brings to the table.

  • Add-on Covers or Riders: These are the added features that enhance the existing benefits associated with a life insurance policy. You can choose these riders to increase the scope of the policy.

    Typical examples of riders include Accidental Death Benefit (ADB), critical illness rider, etc. For example, if you have chosen the Accidental Death Benefit rider in your policy and in case of an unfortunate death in an accident, then your family would get an additional amount above the decided life cover.
  • Tax Benefits: Life insurance policies provide you with tax benefits as well. You can avail of a tax deduction of up to ₹1.5 lakh on the premium paid by you under Section 80C of the Income Tax Act. This helps lower your taxable income.

    Also, the maturity amount can be tax-free under section 10(10)D of the Income Tax Act. Thus, life insurance provides 2 major tax deductions.
  • Regular Income Pay-Out: Life insurance includes the facility of regular income payout that provides your family with an assured income at regular intervals. This income helps a family cover their day-to-day expenses, including kitchen bills, rental costs, and monthly utilities (phone, electricity, etc.), without much hassle.

    This income thus acts as a replacement for the income that used to come from the earning member of the house.

Types of Life Insurance Plans

Based on your financial goal, you can choose a different type of life insurance plan. Here are the most popular types of life insurance plans in India:

  1. Term Insurance Plan: It is a type of life insurance that provides life coverage for a specific term or a period in return for regular premium payments. The Sum Assured is paid to the beneficiary in case of an unfortunate death in the course of the policy. It is the most affordable and the simplest life insurance.

  2. Savings Plan: A savings plan provides you with the opportunity to save systematically and create a corpus that can be used to meet both long-term and short-term needs of your family. A savings plan involves maturity benefits in case you survive the term of the policy, as well as safe and steady returns to you.

  3. Endowment Plan: An endowment plan also combines insurance as well as a savings plan into one. The investment offers risk-free returns since the return is not market-linked. Here, you will receive a maturity benefit created through savings, as well as a death benefit if you pass away during the policy term.

  4. Unit Linked Insurance Plan (ULIP): Unit-linked insurance plans give life coverage as well as an opportunity to invest and earn returns. Thus, ULIPs provide you with dual benefits of both insurance as well as investment in a single product. Here you can choose to invest amongst the variety of funds offered according to your preference and risk-taking ability. The returns here are linked to the market. ULIPs also give you the option to withdraw regularly after the lock-in period.

  5. Retirement Plans: Retirement and pension plans help you accumulate a part of your savings over time. These plans help you build your retirement corpus or get a steady flow of income or both.

Life Insurance Terms You Should Know

Now that you're familiar with the various types of life insurance, it's also important to understand the associated terms. These terms remain almost the same in all the life insurance policy types:

  • Premium: Premium is the prerequisite to any policy. This is the amount you pay to the insurance companies to keep your policy running. If you do not pay your premiums, your policy can be cancelled. A life insurance company gives you the option to pay your premiums regularly or in a lump sum.
  • Nominee: The nominee is the person/heir that you, as a policyholder, nominate. The nominee is the one who receives the death benefit in case of your untimely demise. The nominee can be anyone, be it your wife, children, parents, or other family members.

    Know all about a nominee in a life insurance plan.
  • Death Benefit: This is the main benefit of the life insurance policy. The death benefit is the amount an insurance company will pay to your family in case of your demise during the policy term. It is the amount you are covered for. The death benefit in the policy is based on many terms associated with the policy.
  • Maturity Age: The age at which the policy bought by you matures or expires. A policy reaches its maturity age once its decided tenure is over. After attaining this age, the policy no longer exists. For example, if you have purchased a term plan for 30 years when you are 30 years old, then the maturity age will be when you reach the age of 60.
  • Riders: As discussed above, these are the additional benefits that increase the sum assured. These riders cover those areas which are not covered by your basic policy and thus give you a chance to enhance your policy’s scope.

Final Thoughts 

Life insurance is the best investment you can make to ensure the financial safety of your loved ones. Also, there is no single period in which life insurance is beneficial. It is important at every stage of your life, be it your early twenties, or when you are married and expecting to have a child. Life insurance plays a huge part.

By choosing Canara HSBC Life Insurance, you gain access to flexible plans, reliable coverage, and investment-linked options such as ULIPs that help you achieve both protection and wealth creation goals. The right policy ensures that no matter what life brings, your family’s dreams and lifestyle remain safeguarded.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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