How will life insurances help with retirement funds?

Life insurance is mainly purchased to leave a legacy behind for the nominee of the policy. However, life insurance can be incorporated to fund retirement to make retiring a more financially secure decision. An effective way to do so is to buy a simple term policy with an adequate death benefit. A term life policy gives the most value for the money. Here’s how the life insurance policy can benefit financing the retirement:

Is Life Insurance Only For Accidental Death?

The primary benefits for life insurance plans are easy to understand – your family receives a significant amount of money if your demise were to occur unexpectedly within the policy period. With a life insurance plan in your kitty, you can be sure that your loved will have enough resources to continue working towards their life goals in your absence. Here it is essential to know that life insurance policies also provide financial protection and benefits above and beyond your untimely demise. If you are wondering whether life insurance plans offer protection against accidental death only, here are other benefits of life insurance plans to consider –

Reasons for Claim Rejection

Being the only breadwinner for your family, you may understand the financial impact of your untimely demise on your family. With awareness and adequate planning, however, you can minimize the effect of financial instability on your loved ones. Life insurance plans serve as a robust safety net for your family. If anything were to happen to you, your loved ones can file for a life insurance claim and receive a significant amount of money as an insurance benefit, which will help them pay off any outstanding debts and support their life goals in your absence.

The Changing Requirements at Different Life Stages

In life, you may have to deal with increasing inflation and rapidly-changing lifestyles, which may create unique financial challenges for you and your loved ones. Thankfully, having life insurance can provide the required assistance to bail you out in times of uncertainty. In other words, having life insurance allows you to keep your financial protection in sync with changing life stages. Throughout your life, your needs and requirements change, which may imply that the same amount of coverage is insufficient. Here, life insurance plans allow you to re-evaluate your coverage needs as you reach important milestones in life. Here is how your life insurance coverage may change throughout life –

What Is Not Covered Under Life Insurance?

Life insurance plans provide comprehensive financial protection to you and your loved ones at affordable premiums. In case anything happens to you (i.e. policyholder), your family would receive a pre-decided Sum Assured as an insurance benefit. However, certain types of deaths or eventualities are not covered by life insurance policies in India. Life insurance plans are subject to specific term and conditions relating to different kinds of deaths. Here is an insight into the different kinds of deaths that your life insurance policy may not cover –

Which Factors Influence Your Life Insurance Premiums?

Life insurance plans are ranked among the best financial instruments to secure your family’s future against life’s uncertainties. The premise of life insurance coverage is simple – you select an insurance coverage based on your financial needs and agree to pay a specific amount of money as premium to the insurance company.

How to Calculate Your Life Insurance Premium Amount

The premium payable under a life insurance policy varies according to the policy buyer’s age, selected coverage (or Sum Assured), medical history, gender, lifestyle, and annual income, among other factors. Moreover, the amount of premium for the same life coverage may vary from one insurer to another. Here is an insight into the calculation of life insurance premiums and reasons why the quoted amount varies between insurers.

How to Process Life Insurance Claims

The primary purpose of buying a life insurance policy is to create a financial safety net for your loved ones against life's uncertainties. As a policy buyer, you must focus on selecting the right life insurance policy from an insurance company with a high claim settlement ratio (CSR). An insurer who has a CSR closer to 100% and a streamlined claim settlement process can help ensure timely and hassle-free settlement of a valid insurance claim. Here's how the claim settlement for life insurance policies works.

Why Life Insurance Riders are Important for Me

Buying a life insurance policy is as crucial as any other saving that you make for your loved ones or yourself. While both market-linked investments and bank deposits help you maximize your savings, it is life insurance that serves as the much-desirable protection for your family in your absence. To ensure that you have adequate financial protection in the form of life insurance, however, it is necessary that you back it up with additional utilities in the form of riders.

Can I purchase life insurance under the Married Women's Property (MWP) Act?

In India, married residents can purchase life insurance coverage for their spouses under the Married Women's Property Act. According to Section 6 of the MWP Act, if you are a married man, then you are eligible to purchase life insurance protection for your wife and children under the Act. If you purchase life insurance with the MWP addendum, the proceeds from the policy will effectively be a part of your beneficiaries' property.

Do I have different options to pay my premium?

Life insurance, especially in the form of term insurance plans, is not only essential to guarantee long-term financial safety for your family. At the same time, term life insurance plans also serve as an efficient instrument for tax saving.

At what age should I purchase a Life Insurance Policy?

You should buy Life Insurance as soon as possible, and definitely as soon as you start earning. Buy when you are young so that your family's future is secure and you get insurance at a cheaper cost. In insurance-cum-investment plans, buying early also gives a greater chance for your wealth to grow.

I have heard about doing a need analysis before buying Life Insurance. What is this?

Need analysis is about identifying what's right for you. This includes retirement, child's future education costs and insurance for your family. These needs vary for each person, so the need analysis ensures that your policy suits your needs.

When I buy Life Insurance as an investment, why is my medical history required?

Life cover is a key feature of all Life Insurance products. The insurer needs to know your medical history so that your cover is complete and claims are paid quickly in case the worst happens.

How should I decide the number of years for which to pay Life Insurance Premium?

Your payment term should depend on the financial goal for what you are saving for. For your child's education, the policy should mature when your child enters college. For a large goal like retirement, your payment term should be as long as possible, to enable you to maximize your savings to care of your non-working years.

What are the various charges in a Life Insurance Policy?

The Government has defined the various charges that could be there in a Life Insurance policy, along with a maximum limit for each. Please refers to your policy documents or plan brochures for further details.