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Life Insurance
There are no two ways about the fact the Life insurance is a must-have for just about everyone. So it’s important to make the right choice when it comes to buying life insurance. This calls for a keen understanding of the topic and the value a life insurance policy can add to your life and the lives of your loved ones.
The way to go about achieving this is by making sure that life insurance cover is adequate, generally we recommend to take a minimum risk cover of atleastto the extent of 10 times of your annual income. The life cover secures your loved ones future by paying a lump sum amount in case of an unfortunate event. Life insurance not only covers the risk arising due to an unfortunate event, but also gives you additional benefits like tax benefits, savings and wealth creation over a period of time
Types of Life Insurance Plans
The choice of buying Insurance Cover in India is left to individual, however people mostly buy insurance plan forgetting the main objective of optimum cover. If properly planned one can choose the right mix of products to match the life insurance requirements at different stages of life. Broadly, these are the basic types of life insurance plans:
- Term insurance
Term plans are the most basic form of life insurance. They provide life cover with no savings / profits component. They are the most affordable form of life insurance as premiums are cheaper compared to other life insurance plans. - Endowment plans
Endowment plans differ from term plans in one important aspect i.e. maturity benefit. Unlike term plans which pay out the sum assured, along with profits, only in case of an eventuality over the policy term, endowment plans pay out the sum assured under both scenarios – death and survival. - Unit linked insurance plans (ULIP)
ULIPs are a variant of the traditional endowment plan. They pay out the sum assured (or the investment portfolio if it’s higher) on death/maturity. Since ULIPs invest in stock markets they are well-suited for individuals with appetite for risk. - Further different benefits like whole life cover, money back , return of premium plans have been designed using the basic types of life insurance products.
The VR Creators Life Insurance Offerings:
Be it pure protection term insurance plan or plans for saving for your retirement or children’s future we have everything to offer in our kitty bag of Insurance products. We are LIC’s Officially authorized & recognized IRDAI certified LIC Life Advisor with tones of years of experience, providing Professional & value based Insurance services to our esteemed clients across India & Globally (NRI clients).Rated among top advisors in the region, We strive to provide continuous ONLINE & OFFLINE support to our clients right from choosing the plan, Opening of LIC policy to till maturity claim settlement.We just don’t sell policies; we provide need based solutions according to the individual need of the customers. We are best known for our professional approach and honest advice. We feel happy and privileged to meet our clients at given point of time, which makes as easily accessible to our clients.
The Life Insurance Corporation of India, worlds no.1 insurer and the most valued Brand, came into existence on 1st September, 1956, through the LIC Act,with the objective of spreading life insurance more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost .From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. In its 61 years of existence, LIC has grown from strength to strength be its customer base, agency, branch office network, new business premium and has a significant role in spreading life insurance widely across the country, also investing in the countries overall development. With market share of 75% and a net asset worth Rs.28,45,042croresand Sovereign guarantee by Government of India you don’t have to look beyond LIC for all your life Insurance Investments needs.
Use of Life Insurance
The major principle Life Insurance works on is the concept of ‘Create and Save’, where as all other savings and investment alternatives work on ‘Save and Create’ model. Hence even in the absence of the bread winner of the family, Life Insurance can prove advantageous in meeting several financial goals of the family and create individual assets on survival. Here are some of the important take aways:
- Financial cover against loss of life, which makes sure your family can support itself in your absence
- Child’s education
- Child’s marriage
- Buying a house
- Pension or regular income post-retirement
- Post-retirement income for NRIs
These are just some of financial goals you can achieve with the help of life insurance. More importantly, life insurance plans are flexible. This means although you won’t find an insurance plan dedicated to buying a house, you can buy an endowment plan (traditional or market-linked) with the aim of paying for a house at a future date or build virtual assets using the concept of Life Insurance.
How much life insurance do I need?
Although, it is not possible to attach a rupee value to human life, it is nonetheless important for you to estimate the value of your life in terms of what it will take for your family members to be financially independent in your absence. In insurance parlance this is the sum assured and the financial estimate of the value of your life is called Human Life Value or HLV.
Calculating the HLV involves two steps:
The fundamental method of calculating the human life value involves two steps:
- Add up all expenses like household expenses, lifestyle expenses among others
- Calculate future liabilities (like outstanding loans) that your family members will have to pay off in the event of your death.
Once you add the two figures, you get your human life value, which in effect is the sum assured for your life insurance policy.
Key Points to remember:
- There is no one-size fits all life insurance plan. Your life insurance plan does not have to be like your friend’s or colleague’s or relative’s insurance plan. Your needs and goals are different and this must reflect in your insurance plan.
- The earlier you start the better it is, since life insurance premiums are lower at an earlier age and begin to rise as you age
- Go for term plans along with other savings plans. Term Plans are the most affordable form of life insurance which means you get a larger life cover at a lower premium.
- Use life insurance riders effectively to enhance the effectiveness of your life insurance policy. A rider is an add-on to the primary policy, which offers benefits over and above the policy subject to certain conditions.
- Review your insurance cover periodically with a help of a professional Life Planner
