Insurance is no doubt most important and unavoidable and as we start earning, the first thought that strikes our minds is to get a life insurance. Most common reason for delaying this is lack of time and this makes us lose valuable time which can help us accumulate corpus.
In term insurance, you pay a premium for a specified period, for instance, 10, 20 or even 30 years, and at the end of that period, the policy matures and you get a lump sum amount which can be used or you can also reinvest if your financial position allows.
There are two situations which call for a term insurance – first is a longer life, which requires funds till longer period of time and second is dying too early, which requires you to financially secure your beneficiaries as soon as possible. However, it is not wise to delay such a crucial decision as no one knows when contingency knocks your door and so, it is good to stay prepared. Hence, we should never delay in taking up a life insurance, the best time to buy one is as soon as you accumulate the minimum amount required. This is because, it provides funds for coping up with adverse financial circumstances due to the death of the insured. Once, you decide to buy it, you will look for the best term insurance plan, which can be evaluated on the following features:
Death benefits are income tax free to the beneficiaries. If policy term is not over, and an adversary occurs, the cash withdrawals up to total paid premium is tax free and rest of it depends on the company.Policy loans are income tax free.Buying the policy online not only saves your valuable time, but also gives you the opportunity to weigh it against other options online, since all the information is provided on the websites.This has the most favorable tax treatment unlike other available financial instruments.
Life Insurance is designed keeping in mind that we are all prone to sudden or natural accidents and death. This is the best precaution one can take to ensure a supply of income in times of need when a person is disabled, retires from work or human life is lost. Though life cannot be priced in monetary terms, we can still accumulate this saving to support our beneficiaries even in our absence or in the absence of our regular income.
The last question you need to answers before you finally take up a life insurance policy is, how much insurance do you require?
This depends on several factors:
Affordability depending on current expenses and income
Number of dependents you have
How much and by when do you need for your major future expenses like children's weddings or educations, some planned medical expense etc.?What kind of lifestyle do you wish to live after you retire?What does your investment portfolio look like?
As a matter of fact, anyone who is the bread earner of the family or a household and has expenses to meet needs a term insurance to financially secure future needs and stay self-reliant even when a regular income discontinues.
Neha Jain writes for RelianceLife.com which is amongst top 5 private sector life insurance companies in terms of individual WRP (weighted received premium) and new business WRP. RelianceLife provides best term insurance plan , health plan, child plan, protection plan etc.