Significance of Life Insurance Policy and Its Importance

Life Insurance is well thought-out to be a vital part of an individual’s investment set, not of necessity to accumulate wealth, but to feel financially secure Life insurance gives you and your family the protection that they deserve. When you decide to invest in Life Insurance, it is imperative that you understand your financial status.

Life Insurance Policy and Its Importance

Life insurance is a contract between an insured and an insurer, where The policy holder typically pays a premium, either regularly or as a lump sum and the insurer promises to pay a designated and profitable a sum of money (the “benefits”) upon the death of the insured person. Other events such as terminal illness or critical illness may also trigger payment Depending on the contract.

The insured should also needs attention about the benefits that he and / or his nominee will receive before deciding to go for the framing of the policy.

Significance of Life Insurance Policy can be –

Secure in Unpredictable Events

Life today is full of uncertainties; in this scenario Life Insurance ensures that your loved ones continue to enjoy a good quality of life against any unforeseen event. Life insurance makes you Secure in unpredictable events. Life insurance gives you and your family the protection that they deserve.

Setting Up for the Life Phases

Life Insurance not only provides financial hold after the event of death but also acts as a long term investment. You can meet your needs in different phases of your life your children’s education, their marriage, building your dream home or planning a relaxed retired life, depending on your life style and risk appetite. Traditional life insurance policies like traditional endowment plans, offer in-built guarantees and distinct maturity benefits through variety of artifact options such as Money Back, Guaranteed Cash Values, Guaranteed Maturity Values.

Healthcare and Hospitalization

Health insurance plans offer the benefits of shelter against grave diseases and hospitalization expenses. This benefit has assumed critical importance given to the rising incidence of lifestyle diseases and swelling medical costs.

Increases Profit and Improves the Habit of Saving

Life Insurance is a highly synchronized. The primary responsibility of stakeholders is to ensure the safety of the policyholder’s money. Through various rules and regulations they focus on ensuring the life insurers returns over a long-term. Life Insurance by Regular savings over a long period builds the habit of long-term savings.

Secure and Persistent Income Through Annuities

Traditional policies distribute the income to policyholders through annual declaration of dividends/bonus. Life Insurance is one of the best tools for retirement planning. The money saved throughout the earning life span is utilized to afford a steady source of income during the retired phase of life.

Mortgage rescue and other facilities: Policy holders are entitled to claim income tax exemptions for paying the premiums. Policyholders have the choice of taking loan against the policy. Insurance acts as an effective tool to cover mortgages and loans taken by the policyholders helping him to meet his needs in unplanned life stages.

Beside the number of advantages there are also some drawbacks that include:

Incompetent Facilities

As all Life Insurance Companies are not able to provide the exact kind of life insurance policy as preferred by policy holders. Moreover the services of insurance agents could sometimes do more bad than good.

Fake Promises

Some of them try to convince their clients to invest more or to choose certain policies which are not much beneficial to the clients.

Analyzing, number of advantages out numbers the disadvantages, investing in Life Insurance is always considered being a good move.