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LIFE INSURANCE

Why Should you avail a life insurance policy

Karan Sharma Karan Sharma 06 June 2019

Thinking about purchasing a new life insurance plan? Find the right life insurance plan for yourself and your family.

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A life insurance policy is an essential part of your investment plan. Life is full of uncertainties and death is inevitable. An unforeseen event can leave your entire family financially drained. How would you protect your family in case something were to happen to you in the near future? The answer is simple, buy a life insurance plan. A life insurance plan provides financial protection to your dependents in case of your unfortunate demise. Here is a list of Top Life Insurance Plans in 2019

PlanTypeEntry AgePolicy TermSum Assured
SBI Life eShieldTerm18 years to 65 years5 years to 30 yearsMin - Rs. 20 lakhs Max - No limit
HDFC Life Click 2 Protect PlusTerm18 years to 65 years10 years to 40 yearsMinimum - Rs.25 lakhs Max - No limit
Aviva i-LifeTerm18 years to 55 years10 years to 35 yearsMin - Rs. 25 lakhs Max - No limit
Future Generali Care PlusRural18 years to 60 years5 Years to 30 YearsMin - Rs.15 lakhs Max - Rs. 50 Lakhs
Birla Sun Life BSLI Protect@Ease PlanTerm18 years to 65 years5 Years to 40 YearsMin - Rs. 30 lakhs Max - No Limit
LIC’s Jeevan Pragati PlanEndowment12 years to 45 years12 Years to 20 YearsMin - Rs. 15 lakhs Max - No Limit
Max Life Online Term Plan Plus Basic Life CoverTerm18 years to 60 years10 Years to 40 YearsMin - Rs. 25 lakhs Max - Rs. 100 Crores
ICICI Prudential iProtect SmartTerm18 years to 65 years10 years to 30 yearsMin - Rs. 2400 Per annum. Max - No Limit
Bharti Axa Life Elite SecureTerm18 years to 75 years10 years to 25 yearsMin - Rs. 25 lakhs Max - No Limit
PNB MetLife Mera Term PlanTerm18 years to 65 years10 Years to 40 YearsMin - Rs. 10 lakhs Max - No Limit

The essence of Life Insurance

Here are a few essential reasons for availing life insurance:

  • Save Tax - This is by far the most lucrative benefit offered by all life insurance policies. A life insurance policy helps you save tax. The premiums paid towards a life insurance policy is eligible for deduction under Section 80C of the Income Tax Act, 1961. The contributions made towards your pension plan is also eligible for deduction under Section 80CCC of the Income Tax Act, 1961.

  • Debt Protection - Over a period of time, you will be required to take a loan (home loan, car loan, education loan) to meet your rising financial obligations. In case of your unfortunate demise, the financial burden will fall in the hands of your spouse or your child. However, an adequate life cover will provide ample financial aid to your family in your absence.

  • Standard of Living - A life insurance policy will provide adequate financial protection to your family when you’re gone. Your family need not compromise on the standard of living after losing you.

  • Income Protection - If you are the primary breadwinner of your family, losing you will make them go through emotional as well as financial loss. A good life insurance plan will provide ample financial income in the hands of your wife and child post your demise.

  • Meet Goals - A life insurance policy not only provides cover, but savings as well. You can invest in a ULIP scheme as such a scheme offers investment as well as life cover.

Popular Misconceptions about Life Insurance

Here are 5 misconceptions about life insurance:

  • I’m 35 years old, I don’t need life insurance

A life insurance plan is an important part of your investment portfolio. Not only does it secure you, it protects your entire family (spouse, children, and parents) against uncertainties such as early death, illnesses and disabilities. If something happens to you in the near future, a life insurance plan will provide your family income replacement. In short, a life insurance plan is a must have for everyone.

  • A life insurance policy does not bear returns

This is not applicable to all policies. If you opt for a savings cum protection plan or an endowment plan, you will get life cover as well as sum assured on maturity. If you purchase a wealth/money back plan, you have the option to receive regular monthly income post the maturity date. Additionally, you can invest in a Unit Linked Insurance Plan, it offers the dual benefit of insurance and investment.

  • You cannot buy insurance for a child

Your children cannot purchase an insurance plan by themselves. You need to purchase an insurance plan on behalf of your child who is a minor. Many insurers offer child plans with a policy term of 15-20 years. A market-linked child plan can help beat inflation along with providing a huge corpus for your children.

  • There is no insurance plan for retirement

This is incorrect. There are plenty of life insurance plans which come with the feature of regular pay-outs for your retirement years. Some plans also come with an option of a joint annuity for life to ensure that your spouse continues to get the same amount in case he/ she outlives you. You can also nominate your children to receive the proceeds upon the demise of your spouse.

How can I save Tax?

The premium which you pay towards a life insurance plan is eligible for deduction as per Section 80C of the Income Tax Act, 1961. Also, under Section 10 (10D), the amount received from a life insurance policy is exempt from tax. You can simply mention these amounts while filing your ITR.

Now that we have cleared a few misconceptions about life insurance plans, you should buy one for yourself. A life insurance plan is an ideal component of your financial plan or investment portfolio. Based on the needs of you and your family, you can select a life insurance plan which will definitely help you achieve your goals and provide protection at the same time.

Karan Sharma
Written by Karan Sharma
Content Specialist and Strategist, foolishly creative and always ready for a game of 'Call of Duty'.