The Ultimate Guide to buy a life Insurance Policy


Life Insurance Policy

Life insurance policies are insurance plans that provide financial protection to the insurance policy holder as well as their family for their requirements and also in their time of want. It mostly is taken up to protect the family in case anything unfortunate happens to the sole bread earner of the family. This becomes possible with the payments of an amount every month, every year, every quarter – year or every six month; this amount is called the premium which builds the corpus amount that is the sum assured or the cover amount that will be received when claimed for or in case of the maturity of the policy. One should indulge into extensive research before they choose a life insurance policy as every person has different and varied requirements. Comparing life insurance policies will get you a good deal.

Benefits offered

Most life insurance policies, depending on their functioning, will offer many benefits to the insurance policy bearers as well as to their families or nominees. The best life insurance plan to take up will be the one that will offer you the maximum number of benefits within a reasonable premium that you have to pay. You need to choose the plan which would offer all the benefits mentioned below after you research and compare various plans. The following are the benefits:

  • Death Benefit

A death benefit is a benefit that is given by the insurance company to the nominees or the family member of the insured. In the event of the unfortunate demise of the insurance policy holder, their family might become unable to sustain themselves in case they were dependent on the insured in terms of finance as the policy holder was the sole bread earner of the family. The death benefit might be given to the nominees of the insured as a lump sum or can be given to them through a period of time like an income. The death benefit is usually a percentage of the premiums paid or is the actual sum assured which is paid off. Some insurance policies give out the death benefit as well as the sum assured.

  • Accidental death benefit

There is an extra benefit that some insurance plans offer or it is taken as a rider with the original plan. The accidental death benefit is an extra sum of amount that the family or the nominees receive in case the death of the insured was caused due to an accident and the cause of death was not natural. Accident can wreak anyone’s life; hence this extra benefit is offered to help the family out.

  • Maturity benefit

Every life insurance policy has a term or a tenure that it functions for after which the insurance policy reaches its maturity age.

A maturity benefit is basically a benefit that includes the amount that is given to the insured or the nominees of the policy holder receives after a life insurance policy matures. For this to happen, the life insurance policy should be functioning actively meaning that the premiums should have been paid till date. The maturity benefits usually comprise of the amount of the original sum assured, an accrued guaranteed addition, vested simple revisionary bonus if there is any are there as well as the terminal bonus if it is applicable.

These benefits are only given when the policy matures. Make sure that you have been paying and have paid all the premiums necessary for the maturity benefit to be received.

  • Survival benefit

A survival benefit is a benefit that is given to the insurance policy holder in case they survive through the tenure of the life insurance policy. This is usually given with term insurance plans. In case of the survival of the insured through the period that they are insured, a sum amount of money is paid to them for, basically, not dying within the term of the life insurance policy. There is a type of life insurance plan that is a whole life insurance which basically means that it will protect you for your entire life, mostly till the age of 100. So, in case the insured of that plan gets to celebrate their 100th birthday which means that they have survived the whole tenure of the life insurance policy and they will be subjected to receiving the survival benefit.

Types of life insurance policies
You can choose which life insurance plan you could take up to lead a financially smooth life. The following are the types:

  • Endowment Plan
  • Term Plan
  • Money Back
  • Child Plan
  • ULIP – Unit Linked Insurance Plan
  • Retirement Plan
  • Whole Life Insurance

What should a potential plan holder look for in a plan?

A person should look for the best life insurance plan which will be a plan that will provide the maximum benefits for the most reasonable price. First, asses all your requirements and see to it that your family members are also counted in while you do so and then you can take up a plan that will provide protection to them in case of your death. Also, to choose a sum assured and hence the premiums, you need to take into account about how much your family’s standard of living is. It means that you need to figure out how much sum assured would it take for your dependent family to be able to sustain in case of your sudden demise.

Also, it is not necessary that the cheapest plan would be the best plan. Sure, cheap is desirable! But, cheap plans will not cover your every requirement. The cheaper the plan, the lesser the benefits you get. So, if you have dependent, you need to re – think on getting a cheap plan. You should look for a plan that will give you the maximum amount of benefits for a reasonable price and the best bet you can make after you compare various life insurance policies. Buy the best life insurance policy in accordance with you and your family’s requirements and stay financially protected.