“Do I Really Need Life Insurance?”
Isn’t that what you ask yourself all the time? Here’s a small answer to that.
If you care for your family’s needs you will definitely consider insurance planning. Your life is certainly priceless to your family members; Life insurance coverage is essential to ensure that, in the event of your death, your dependents do not face any financial difficulties.
It is important that they receive a sum of money which is sufficient to meet their living expenses, achieve all goals and pay all outstanding liabilities.
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
» The date of maturity, or
» Specified dates at periodic intervals, or
» Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates ‘risk’, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation’s partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1.That of dying prematurely leaving a dependent family to fend for itself.
2.That of living till old age without visible means of support.
With a life insurance policy in place, you can:
Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.
Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Aid To Thrift:
Life insurance encourages ‘thrift’. It allows long-term savings since payments can be made effortlessly because of the ‘easy instalment’ facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one’s salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.
These are the questions in mind when you thinking about life insurance. With the cost of life insurance premiums plummeting in recent years due to improved life expectancy and increased competition between life insurance companies, arranging a life insurance policy needn’t mean breaking the bank or compromising on cover.
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest.
Policies can also be taken, subject to certain conditions, on the life of one’s spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent’s income and other relevant factors are considered by the Corporation for insurance planning
Insurance planning is a critical component of a comprehensive financial plan that includes evaluating risks and determining the proper insurance coverage to mitigate those risks. The principal goal of insurance planning is to identify and analyze risk factors in life and seek proper coverage to attain a peace of mind if disaster strikes.
The chances of recovering partly or fully are assured by having insurance. Therefore, insurance is an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.
Whether it’s to ask for more information about our service or just to say hi, we love to hear from people so please get in touch! Contact us for any queries!!
Or connect us on…
FACEBOOK, TWITTER, INSTAGRAM, QUORA, WHATSAPP