What is Life Insurance?

Life Insurance is a contract between you and a life insurance company, which provides your beneficiary with a pre-determined amount in case of your death during the contract term.

Buying insurance is extremely useful if you are the principal earning member in the family. In case of your unfortunate premature demise, your family can remain financially secure because of the life insurance policy that you have purchased.

The primary purpose of life insurance is therefore protection of the family in the event of death. Today, insurance is also seen as a tool to plan effectively for your future years, your retirement, and for your children's future needs. Today, the market offers insurance plans that not just cover your life and but at the same time grow your wealth too.

Do I need life insurance?

If you have dependants and financial responsibilities towards them, then you certainly need insurance. Having a family means dependants; this in turn means financial commitments. Financial commitments come in the form of loans, children's education, medical expenses etc.

Imagine what would happen if you were to lose your life suddenly or become disabled and cannot earn. Being insured in a situation like this is a necessity. When you insure your life, in effect what you are doing is insuring your earning capacity. This guarantees that your dependants will be able to continue living without financial hardships even in case of your demise.

Most insurance plans available today come with a savings element built into it. These policies help you plan not only for protection against death but also for a financially independent future, which would enable you to have a comfortable retirement.

Who Is an Insurance Broker?

An insurance broker is someone who acts as a go-between for businesses and insurance companies.They typically have access to dozens of carriers, and can quickly find several policies for you to consider.Provided, you do not have to pay for the services of a business insurance broker; the insurance company you end up doing business with pays the broker a commission.A good insurance broker knows the industry, and can begin searching for additional insurance plans for you to consider. They know the procedures and processes of the various companies that offer coverage, and can cut through the red tape and interpret the jargon found in most contracts

Is there any other benefit of buying insurance other than the risk cover?

There are several benefits of buying insurance. Other than the risk cover, the most important benefit you receive is Income Tax Relief under Section 80C of the Income Tax Act, which means premiums paid by you reduces your tax liability. Besides it helps you build up compulsory savings. Also through a valid assignment the beneficiaries of the policy are protected from claims of creditors. One could also surrender his policy in case of emergencies. For a policy taken under the MWP Act 1874, (Married Women's Property Act), a trust is created for wife and children as beneficiaries

How much does life insurance cost?

In order to buy a life insurance policy, you must pay certain amount as premiums to the life insurance company. The amount of premiums payable depends upon the type of policy, term of policy contract, sum assured and your age. You could pay these premiums monthly/half-yearly/annually or as a single premium.