Needs and Benefits of Life Insurance

Buying life insurance has become extremely simple and also necessary in India. Life is completely unpredictable. Things can change in the blink of an eye and plunge the family into chaos. Since there is no way to avert or eliminate a tragedy, it is better to buy life insurance to safeguard one's financial future.

Benefits Of Life Insurance Policy

Let’s discuss some of the many benefits offered by life insurance policies:

• Financial Security: Life insurance policies are tailored to provide financial security for your loved ones. Take term insurance, for example. If you were to unfortunately pass away during the policy's term, your insurance would pay out a predetermined amount to your family. This money can serve as a replacement for your income, assisting with everyday costs and alleviating financial strain.
• Long Term or Short Term Protection: Some life insurance plans have a limited duration, while others offer lifelong protection. Take whole life insurance, for instance. It covers you for your entire life, up to 99 or 100 years old. If you unfortunately pass away during the policy term, your family will receive the sum assured amount. And if you live to be 99 or 100, you'll receive the sum assured yourself.
• Death Benefit: If you happen to unfortunately pass away while your life insurance policy is still in effect, the insurance company will pay a death benefit to your nominee. This death benefit is a predetermined amount of money that will be given to your nominee, as long as you have been consistently paying your premiums on time.
• Maturity Benefit: If you manage to make it through the entire policy term, certain life insurance plans may offer a maturity benefit. This benefit typically consists of the sum assured you chose when purchasing the policy, along with any bonuses that have accumulated over the years. The specific terms and conditions of the policy will determine how you can receive the maturity benefit. You have the option to receive it as a lump sum payment, monthly instalments, or a combination of both. Please bear in mind that not every life insurance policy includes a maturity benefit. For instance, term insurance policies do not provide a maturity benefit. This means that if you outlive the policy term, you will not receive any payment.
• Survival Benefit: Certain life insurance policies also offer survival benefits that are paid out at the conclusion of the premium payment term. For example, let's say you purchase a money-back plan with a sum assured of INR 10 lakhs for a period of 20 years. If you opt for the 10-year limited pay option, you will need to fulfil all your premium payments within the next 10 years. Once your premium payment term is complete, which is typically after 10 years, the insurance company will provide you with survival benefits. You have the flexibility to choose how you want to receive these benefits - whether as a lump sum, periodic payments, or a combination of both.
• Benefit of Cash Value: Certain life insurance policies have the benefit of generating a cash value. This cash value starts to accumulate as soon as you begin paying your premiums. The more premiums you pay, the more cash value builds up over time. In times of financial need, you have the option to borrow against this accumulated cash value. Take, for instance, a whole life insurance policy that you've faithfully paid premiums on for nearly three decades. If you find yourself in a financial bind and need some extra cash, you can reach out to your insurer and inform them of your intention to withdraw from your policy. They will then provide you with details on the amount of cash value that has accumulated under your policy and how much you can withdraw. You can then proceed to withdraw the money as needed.
• Tax Benefits^: You can enjoy tax advantages on both the premiums you pay and the payouts you receive from your life insurance plan. Under Section 80C of the Income Tax Act, 1961, you can claim tax benefits* on the premiums you pay for your life insurance. Additionally, the payouts you receive from your life insurance plan are completely tax-free, as stated in Section 10(10D)** of the Income Tax Act.

How Can Life Insurance Benefit Your Family?

Let’s find out…

Life insurance offers a vital financial safety net for your loved ones, guaranteeing^ that they will have the necessary funds to handle immediate expenses and sustain their way of life if you were to, unfortunately, pass away while the policy is active. The policy serves as a reliable source of income replacement, which is especially significant for families who heavily rely on the income of the deceased. This ensures that the family can maintain their current standard of living and meet their financial responsibilities. Life insurance is also a dependable way to deal with debts like mortgages and loans. It protects your loved ones from inheriting these financial responsibilities. Further, you can also use the money from a life insurance policy to support your children's education.

What Are 3 Things Life Insurance Covers?

Let’s look at the significant aspects that life insurance provides coverage for

1. Covering Your Income: Life insurance serves as a backbone for your family, stepping in to replace your lost income in the unfortunate event of your passing. By doing so, it provides your family with the financial stability they need to meet their daily living expenses and maintain their well-being.
   
2. Covering Your Outstanding Debts: Life insurance plays a crucial role in handling any outstanding debts, such as mortgages, loans, and other financial responsibilities. By receiving the claim payout, your family's financial stability remains intact, shielding them from the weight of debt.
   
3. Covering Your Family’s Dreams & Aspirations: Life insurance goes beyond just providing financial protection. It plays a vital role in safeguarding your family's dreams and goals. Whether it's funding education or achieving long-term aspirations, the claim payout from life insurance offers the essential financial support needed to turn these dreams into reality.
   

Now that we know the core of life insurance, let’s delve deeper into how it can add value to your and your loved ones' lives.

How Are Life Insurance Plans Suitable For Your Needs?

Life insurance plans are incredibly flexible and can be customised to meet a wide range of personal requirements and situations. Let's explore how life insurance plans can cater to your specific needs:

• Option To Customise The Coverage: Life insurance plans give you the flexibility to choose coverage options that can be customised to align with your individual financial objectives and responsibilities. Whether you need your income replacement, settle debts, or achieve any other financial goal, life insurance can be tailored to suit your specific requirements.
• Availability of Flexible Policy Types: There's a wide variety of life insurance policies to choose from, such as term life insurance, whole life insurance, endowment insurance, money-back insurance, child life insurance, and more. Each type comes with its own unique set of features and perks, giving you the flexibility to select the policy that suits your financial goals and personal preferences.
• Covering Life Stages: Life insurance plans are crafted to adapt to the different phases of life and the ever-changing situations that come along. No matter if you're flying solo, happily hitched, embarking on parenthood, or preparing for retirement, there's a life insurance option that fits your evolving requirements at every step of the journey.
• Providing Financial Security: Life insurance is an essential way to secure your family's financial future if the unthinkable happens. By providing a death benefit, it offers a much-needed safety net to cover important expenses like living costs, mortgage payments, education fees, and other financial responsibilities.
• Settling Debts: The life insurance claim amount can be used to pay off any lingering debts like mortgages or loans. This way, your loved ones won't have to bear the heavy financial load if, unfortunately, you are no longer around them.
• Customising With Riders: Life insurance plans often offer the option to include riders, which can provide extra coverage that is customised to address specific risks or situations. A rider refers to an additional provision or feature that can be added to a policy to enhance its coverage. Some examples of riders include accidental death benefit riders, critical illness riders, and disability income riders.

Investment With Life Insurance

Investing with life insurance requires careful evaluation of different policies, taking into account factors such as the coverage amount, premium rates, potential investment returns, etc. It's important to thoroughly research and compare options to ensure you choose the policy that aligns with your investment goals and financial needs. One of the options you can consider is Unit Linked Insurance Plan (ULIP) ULIP: A Unit Linked Insurance Plan(ULIP), is a versatile life insurance policy that combines the benefits of both investment and insurance.
A ULIP consists of two parts: Investment and Insurance. When you pay the premium, a part of it goes towards providing life insurance coverage, while the rest is invested in various investment instruments. ULIPs are a great way to save money for long-term goals like your spouse's higher education, your child's wedding, or buying a home. Plus, they offer the chance to build wealth through market-linked returns. These plans guarantee^ that your loved ones will have financial security in case something unfortunate happens to you, thanks to the insurance coverage they provide. By investing in ULIPs, you not only get life insurance but also the chance to grow your wealth through market-linked investments. It's a comprehensive approach to both - building your assets and safeguarding your finances. It's like having the best of both worlds! Are you planning to buy life insurance? Consider buying from Aditya Birla Sun Life Insurance Company.

How To Buy Life Insurance From ABSLI?

It's simple, just follow the below-mentioned steps:

1. Visit our website.
2. Click on 'All Insurance'.
3. Select the type of life insurance you want to buy.
4. Explore the multiple plan options available for that type.
5. Check the brochure, policy wording, and other details for each plan.
6. Once you have decided on a plan, fill in the required details in the application and proceed

Wrapping Up:

By considering a life insurance policy, you are making a smart and responsible decision for yourself and your loved ones. Life insurance provides a crucial safety net that can offer financial protection in the face of unexpected events. Not only does it provide a claim payment to your beneficiaries upon your unfortunate passing, but it also offers peace of mind, knowing that your loved ones will be taken care of financially. Additionally, life insurance policies can be tailored to suit your specific needs, allowing you to choose the coverage amount and duration that best fits your circumstances. With the benefits of financial security, protection, and customisation, investing in a life insurance policy is a wise move that ensures you leave a lasting legacy for those who matter most to you.