Whether you are a care-free bachelor or a senior professional, Life Insurance is essential at every stage of life. While many people link life cover to emergency planning only, they are an integral part of strong financial planning that helps you secure the future of your loved ones in your absence. Read on to learn about the Life Insurance cost, what all they cover and more.
Life Insurance: Must-know Things
Life Insurance is a contract between the policyholder or life insured and the insurer, where the latter will pay a lump sum as a death benefit to beneficiaries after the demise of the former in exchange for premium payments.
Purpose: Life cover not only offers a financial safety net for your family members, but also the much-needed peace of mind to the policyholder. Buying Life Insurance also brings along a tax rebate. You can avail an annual tax deduction of up to Rs 1.5 lakh under the Section 80C of the Income Tax Act if you have opted for the Old Regime.
Uses: In case of the sudden demise of the policyholder, the sum assured will save the bereaved family members from financial hardships. The amount received by beneficiaries can be used to pay for living expenses, mortgages or loan balance, funeral cost, children’s college and tuition fees. Additionally, many Life Insurance plans provide living benefits, including the coverage of medical bills against the treatment of terminal or chronic illnesses.
Factors Affecting Premiums: What will be your Life Insurance cost, will depend on the premium you will be required to pay for meeting your financial goals. Majorly, your age, gender, health and medical history, coverage amount, and the type of insurance you choose affect Life Insurance quotes. Notably, the odds of receiving better premium quotes are higher when you are younger and healthier.
Coverage: Except for suicide, Life Insurance plans typically cover all causes of death, including car accidents, heart attack, homicide, illnesses, old age, war and/or terrorist activity.
Essentials to Consider When Choosing the Best Life Insurance
Here is all you need to be mindful of when selecting a Life Insurance policy that meets all your needs well.
- Define Goals: It is important to find out the goal behind buying a Life Insurance plan, which may differ from person to person. If you are looking forward to offering financial safety to your loved ones, then go for a Term Life Insurance plan. You must buy a unit-linked insurance plan if your goal is to fund your child’s education or buy your dream house.
- Calculate Coverage: You must consider your debts, mortgages, loans, funds for your children’s higher education or marriage, inflation, and expenses for maintaining the lifestyle while deciding on the sum assured. Also, you can deduct your liquid assets such as available cash and other investments to conclude the required cover amount or the death benefit.
- Opt for a Comprehensive Plan: Medical emergencies can affect your income adversely. Considering this, include the critical illness rider in your Life Insurance policy that offers coverage against serious medical conditions like kidney malfunction, heart diseases or cancer. Also, you must avail the permanent disability rider that waives off all your future premiums if you get permanently disabled due to an accident.
- Determine the Premium Amount: Use online premium calculators like the one by ACKO to know the Life Insurance cost you have to pay for the required cover amount. These tools also let you compare different plans to find the most suitable Life Insurance policy that not only provides the maximum coverage but also fits your budget.
Other than the above-mentioned factors, you must select the correct policy term, choose a reputable insurer with a high claim settlement ratio, not conceal facts, read the final policy document carefully and consider buying Life Insurance at an early age in order to get the best life cover and achieve financial stability.
Conclusion
Life cover helps you provide the needed protection to your loved ones in this world full of uncertainties. Besides acting as a financial safety net, life cover functions as a savings instrument that helps reduce tax liability. While reasons to buy Life Insurance plans are many, buying the one with the lowest Life Insurance cost and maximum coverage is important. Reach out to ACKO, a reputable insurer in the domain, to know more.
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