Accidents, mishaps, untimely demises, etc. are some of the strong indicators that show how fragile human life can be. This makes it imperative that you systemically insure your life, and that’s where a life insurance policy comes into the picture.
To help you understand more about this insurance policy, here’s a quick lowdown on its key advantages.
- Death Benefit:
This policy allows you to protect your loved ones financially. In case of an unfortunate event such as the death of the insurer, insurance companies offer a payout. This amount is equivalent to the sum assured along with applicable bonuses, as specified by your policy. This feature is known as the death benefit. This gets claimed by the next of kin, but can be used or shared in
accordance with the law and your last Will and testament. Even to cover all legal beneficiaries for which one might have to hire
- Wealth creation options:
Another advantage of a life insurance policy is it offers two-pronged benefits of both – insurance and wealth creation, especially the ULIP. The premiums paid towards ULIP are divided into two parts. One part is utilised as premium, while the other is used for wealth creation. This way, you get the best of both worlds: protective cover and wealth creation opportunity. You can seek professional help to select the right policy for you and make informed decisions.
- Maturity Benefit:
When it comes to life insurance policy, you can double it as a savings instrument thanks to its maturity benefit advantage. This advantage is effective if the insured survives the policy term and no claims have been made. The total premiums paid are returned to the insurer at the end of the policy tenure. In this manner, this insurance plan can have a savings component, while also offering a protective cover.
- Coverage Against Liabilities:
While many of your goals may call for financial support in the form of loans, mortgages, and various other types of debt, these liabilities invariably come with great financial strain. This may worsen for your family members if something unfortunate happens to you. Opting for this policy ensures that your family has adequate finances to steadily meet your loan and mortgage repayments.
Several insurance companies offer an array of riders, ranging from Critical Illness to Accidental Total Permanent Disability available. These riders are meant to enhance your original policy and help protect you and your loved ones financially.
Present times have made life insurance plans an absolute necessity today. These plans are known to be risk minimisation and protection tools that take care of you and your dependents in multiple ways. By understanding the advantages of this plan, you can make a clear and informed decision.