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Home / Personal Finance / What is Life Insurance?

What is Life Insurance?

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Life is full of uncertainty where we do not know about what is going to happen in the next second. Superpower is running the world in which we all believe in any form and plan of execution is also maintained by that almighty only. We can only make contributions via efforts and apart from that everything happens as per the set plan of God. We all have lots of relations in the world and few of them gets depend on us. Hence, we always need to support our dependents in all the ways including financially and mentally. Life can show any card any time; hence to reduce the financial problem of the family one should have the insurance of life. Yeah, it assures your life and works as a parent of the family.

Life Insurance Cover

Why It Is Important to Take Life Insurance?

Life is unpredictable, none can fill the place of anyone but at the same time, money has the power to reduce the pain to some extent because life can finish but the passage of time and challenges of life will move in routine. That is why Life Insurance is an integral part of life and everyone should have the same. It also facilitates money back policy in which a person can get 10 times of the principal amount upon maturity and is known as the term plan. Lots of policies are there which works for the future of an individual.

Life Insurance Policy

Types of Insurance

If we discuss in basic terms, policies are of two types: General Insurance and Life Insurance

  • General Insurance: Under this category, materialistic things get assured like property, shop, car, bus etc… Premiums get to differ with plans and upon any miss-happening like fire, theft, damage, accident etc… a person will be liable to claim for the insurance. General Insurance is mandatory for the vehicle as per the norms of traffic rule.
  • Life Insurance: A life cover is provided under the category of life insurance. If a person has dependents in the family then it should be done for sure.

Which Kind of Plans Available in Life Insurance?

  • Term Insurance Plan: This plan / policy is much cheaper amongst all other plans as it does not deal with the cash value. It has some specific time like 20/30 years and the claim can be done only in case of miss-happening. The premium for the plan is too low.
  • Endowment Policy: It is a little different from the previous plan because here the beneficiary will get some approximate amount upon maturity of the plan if he or she survives till that period.
  • Money Back Policy: After some time, the policyholder will get some amount of the invested money. The lump-sum amount will get paid to the user on the maturity of the plan.
  • Health Insurance: Under the category, a person will be able to claim for any major health issue like Cylinder blast, snake bite, accident etc… The company provides insurance for the health of an individual.
  • Pension Plan: Under this policy, the amount collected in the form of a premium is accumulated as assets and distributed to the policyholder in form of income by way of an annuity or lump sum depending on the instruction of insured.

Always be protected for your loved ones. We wish you a happy and healthy life forever.

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