A person needs cover till his/her family is financially dependent on him/her. Typically, you need to be covered till you kids start earning and are not dependent on you. It’s good to take maximum cover offered by an insurance company. Among the types of insurance, “Term Plan” is considered to be the best bet for getting maximum cover in every sense. In India, LIC is the only company who offers cover for a maximum duration of 35 years for its “Term plan” “Amulya Jeevan”. Stay tuned for more articles.

Do you know that the insurance we pay for Vehicle is not money back type? Try to know why it is offered like this and you will know why you should prefer “Term” insurance over other types of insurance.

1. Compare premiums offered by different insurance companies for the same kind of insurance.
2. Look for reliability and how long they were in market. The problem typically occurs during claim procedure. So know the complete claim procedure before taking a policy. Many private life insurance companies tend to reject claims by showing some clause so be careful and go with trusted brands.
3. Typically, ‘Term’ plans offers value for the money and are cheap as they don’t give any returns. These policies are discouraged by agents as they don’t earn big commissions on this. Remember, the more they make you to invest more the money they get. All these insurance companies pay big commissions during first three years and continue paying nominal commission for life time. These commissions are paid for their “effort” in collecting premiums. Now that banking is modernized, policy holders pay online or opt for auto debit.
4. There are many terms and conditions for rejecting the claim, so one needs to be aware of this.
5. Some life insurance companies provide riders for a premium. This can be useful when the insurer doesn’t expire but looses earning potential due to disability or critical illness.
6. Some insurance policies doesn’t cover if a person does in terrorist attack, riots etc. So it’s very important to ask whole lot of prepared questions before buying a life insurance policy or for that matter any insurance policy.

We need to understand that Life Insurance is needed by a person to give protection to his/her dependents (parents, spouse and kids) in case he expires. So how much money does his family needs? It depends on his past, current and future liabilities or expenditure on his family. For example, if his family currently needs 20,000 per month to meet living expenses, children’s education costs, premiums for investments to sponsor higher education for his children, marriage costs etc. So the money his family gets from the insurance company should meet all these requirements.

It’s a tendency of any human being to invest in those plans which gives returns than those which doesn’t. So we tend to invest in plans with money back or Unit Linked Insurance Plans etc. Though it is not a mistake to invest in these plans, these plans typically involve more costs and give less return.

Many people take this insurance policy to save tax. You have many other financial instruments to save tax and life insurance is just one of them. Your primary reason to invest should be to secure your dependents.

We already told you that insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event.

Unexpected event could be loss of life, vehicle theft, hospital expenditure due to health problems etc.

Though no body wishes that this happens to them, one needs to be prepared for these eventualities for leading a secure and happier life.

Life Insurance

Life Insurance is must for every individual who earns bread and butter to his/her family. If you are just a dependent and no body is relied on you for financial support any time in your life then you don’t need to take an insurance policy.

These are the most popular life insurance products:

• ULIPs
• Term Plan
• Endowment Plan