Life protection or life insurance should be of prime importance for every individual. Most of them are aware of it but do not understand the need to have one. It has become a significant financial decision that customers must make but still aren’t aware of the features. However, massive progress has been experienced in the last financial year. About 29 million individual policies were issued in India in 2020. Well, if you wish to know the features of life insurance before opting for it, take a look.
1. Investment Components
Some of the whole life insurance policies come with two prolonged aspects. One is an investment, and another is insurance, and it means half of the money you pay goes to insurance while remaining to debt or equity or both. One of the features of life insurance is it covers both aspects.
2. Higher Returns on Investments
By investing in the funds, you can get higher returns on the investments. For that, you have to invest in suitable funds and by evaluating the risk parameters. Also, some plans are there that let you switch between your evolving goals.
3. Maturity Perks
Another feature of life insurance is the maturity perks, where it can double as a saving instrument. If the person has survived the entire tenure, no claim has been made; you get the total amount on maturity. It acts as a saving component and behaves as a protective cover. So, it is vital to consider investing in life insurance.
4. Coverage Against Liabilities
To achieve your goals and fulfill your dreams, a certain amount of financial support is needed. It can be in the form of mortgages, loans, or any other debts. Irrespective of whether it is a credit card debt or a student loan, any liability can be a financial strain. The funds from life insurance can be used to clear the debts.
5. Different Types of Policies
Many are not aware that different policies are available, and it is not one that everyone has to take. According to your needs and financial objectives, you can speak with the insurance company and understand the features of life insurance. After that, you can avail the one that you think is a suitable choice.
6 Opting for Riders
The plan also permits you to opt for riders and enhance life insurance coverage. It can be an accidental total permanent disability, critical illness, etc., which will protect you and your loved ones.
7. Death benefits
One more feature of life insurance is it safeguards your family if you lose your life in an unfortunate circumstance. The amount will be given to the nominee mentioned by the insurer in the contract. It is referred to as a death benefit, and it is a crucial aspect of the scheme.
8. Cash Loans and Withdrawals
There are many whole life and universal policies that will enable you to borrow or withdraw money by utilizing the insurance’s cash value in the form of collateral. The interest rates will be pretty low, and you can use your life insurance policy’s cash value to pay off the premiums. You can only do so when you wish to put a pause on paying up the premiums. You need to pay back the loan. Otherwise, your beneficiaries will get a much lower death benefit.
9. Employee Assistance Programs
This particular feature will provide you with all the resources for the issues that might affect your professional and personal life. The resources are free and will help address all types of problems, such as significant life events, substance abuse, legal concerns, marital issues, and stress.
- Child and spouse term riders
Life insurance policies that come up with such features will allow you to buy life insurance for your child or spouse until 26. When you can afford to purchase individual policies, this particular option will be a lot easier to obtain life insurance policies.
- Cash value plans
Policies that come with this particular feature will pay you upright upon your demise. Apart from that, it will also accumulate value during your lifetime. You can utilize the cash value in the form of a tax-sheltered investment. In other words, it will act as a fund through which you can use and borrow to pay up all your life insurance policy premiums later on.
Types of life insurance policies available
Even though life insurance has numerous unique features, there are several types of life insurance policies available in the market. Look below!
- Term Insurance: This is the most famous and basic insurance you will encounter. You will buy a policy for a specific time, and for that, you need to pay the premiums. For instance, if an individual opts for an insurance policy till the age of 60 and suddenly meets his/her demise, the nominee of his/her policy will get a death benefit.
- Unit-linked insurance: This particular insurance is a combination of insurance and investment. This policy will provide the policyholder when a certain amount sum. Half of the premium gets paid for the investments on bonds or stocks, and the other half is paid for the policy itself. The investment will provide plenty of returns, which the policyholder will receive once the insurance ends
In the end
These are the top features of life insurance specifying why you should have one. In February, the life insurance companies saw an increase of 21% in premium to Rs 22425 cr. Therefore, it is evident that people are opting for life insurance. So, now it’s time to go ahead and check the schemes to apply for one.
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