In today’s world that is so full of uncertainties, future planning is as important as current planning. Some may even consider it as more important than current planning. In order to attain the objectives of tomorrow, we need to start today. It is like sowing seeds today to reap the fruits tomorrow. LIC understands that not everyone plans or desires in the same way. So we have Life Insurance as well as Term Insurance plans to cater to different mentalities.
Term Insurance plans are pure life cover plans that are exercised to negate the shock of any critical happening like accidents, illness and others. In such plans, you are covered for the term specified in the plan. If the insurer dies within this time span, the maturity amount is paid to the nominee. In any other case, it lapses.
Since the cover is not for the entire life, the premium amount is lower than for the life insurance cover. It allows you to opt for a heftier cover. It also entitles you to tax benefits under section 80C of the Income Tax Act, 1961. It is primarily for those who love to keep their investment and insurance separately.
Since the premium amount under Term Insurance is lower then Life Insurance, it gives you the option to opt for a larger sum to cover you in case of any unwanted event.
These plans allow increase in cover during the critical phases of your life. Say, when you are about to be a parent, they may increase your cover by 50%. This provides you more space to deal with a mishap. You can also enhance the cover as and when your ability to pay premium increases.
You get the option to attach riders to the main plan if you opt for Term Insurance. A rider allows you to cover occurrences other than death, like critical illness rider allows you to cover critical illness under the same plan along with the basic plan. You will receive the agreed amount in case the rider is activated.
As the name rightfully suggests, Life Insurance plans provide cover in case of policyholder’s death. On death, the amount insured will be paid to the nominee of the policy. The policyholder also gets a benefit of loan against the policy. Unlike term insurance plans, life insurance plans have guaranteed pay-out if the premium is regularly and correctly paid for the remaining lifetime.
As your age increases, your chances of dying increases. So premium for an older person’s life insurance is higher than that of a younger person. It is also a way of securing the lives of your loved ones after your departure.
In Life Insurance plans, you continue to pay the same premium after every regular interval for the rest of your life. There will be no abrupt change in premium amount.
Life Insurance also acts like pension funds in some cases. If you have opted for such a cover, you will receive a certain amount every month after a certain age. So in addition to the lump sum on your death, it also entitles you to regular returns.
You can avail loan against the policy if you are paying premium regularly once the policy has completed three years of existence.
The premium payment is subjected to exemption under section 80C and 10(10D) of the Income Tax Act, 1961. Pay-out on maturity is also not taxable under the same act.
Life Insurance can be availed by one and all. The premium amounts are very reasonable and if you cannot afford high premiums, you can choose a lower plan which will ensure that the premium is, well within your reach and you needn’t discontinue the policy after a certain period owing to inability to pay premiums. So, Life Insurance can never be only for the rich.
With ever increasing pollution and diminishing food quality, our vulnerability towards diseases has increased manifold times. We cannot anticipate what can fall upon us the very next moment. So, a LIC Policy is the need of the hour. We cannot stop unwanted occurrences but we can certainly try to negate the impact it will have. A helping hand is always welcome when we are in a crunch. LIC lends you that helping hand. It can minimize the impact on your financial position and reduce the losses that you could have suffered.
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