Creating provisions for your near and dear ones after your death is a very important part of financial planning. Availing a life insurance policy enables the family of the insured to receive financial assistance following the death of the insured individual. It is an agreement with an insurer wherein the insured makes premium payments on a timely basis. In the event that the insured dies, the beneficiaries will receive a lump-sum payment, which is also referred to as a death benefit. The main aim of life insurance is providing a means of financial security for your loved ones after your death. Therefore before buying a life insurance policy, it is important that you take into consideration the standard of living that you want to maintain for your dear ones.
India’s life insurance sector has been growing in leaps and bounds since 2000. The industry comprises of public sector company Life Insurance Corporation (LIC) and other private sector players. All the insurance players are expected to comply with the rules set out by the Insurance Regulatory and Development Authority of India. There are several different types of life insurance products in the market such as whole life and term life. The whole life plan covers the individual throughout his or her life. Term life insurance is designed to provide financial protection for a certain period of time – 10 or 20 years. The premium usually remains the same for the coverage period one has chosen. After the completion of the coverage period, the policies are often charged for higher premiums. It is important to note that term insurance is less expensive than permanent life cover as the risk of death is relatively low. According to experts, term life is suited for those looking to get insured against unforeseen events. But if you are looking to start a family and require insurance to protect them then a permanent life cover is your best option.
There are several benefits of getting a life insurance policy. The insurance cover serves as an income substitute following the death of the insured. Such a policy can also be used to ensure that retirement savings last long. This can be done best when you avail the right death benefit for your loved ones at a minimal cost. Another benefit of availing a life insurance policy is that one can enjoy favourable tax treatment. Under most plans, there are tax-benefits during the time of entry and exit. It helps to understand all the aspects of tax benefits on premiums paid for a life cover so as to avoid losing it. Thus it can be concluded that a life cover serves as a means of risk protection as well as an asset in various stages of life.
Now coming to another important segment – Can a bad CIBIL score result in the payment of higher premiums for a life cover? If yes, what are the different ways to improve credit score fast? In some countries, life insurers will look into the applicants’ credit scores to determine their insurance premiums. Other countries are expected to catch onto this trend in the near future. Hence if you are struggling with a poor or a bad credit record, now is the time that you look at the different ways to improve credit score fast. One of simplest ways to improve credit score fast is by ensuring that payments are all made on a timely basis. Additionally it helps when you use your credit wisely i.e. by not using up your entire credit limit. Maintaining the right mix of secured and unsecured debt is one of the other ways to improve credit score fast.
It is true that no amount of money can ever serve as your substitute. But having a life insurance policy can provide financial protection to your loved ones in your absence. When you compare different insurance policies, look for one that is structured to meet all of your needs. You can consider availing the services of a trained professional who will help you understand the benefits and risks involved in different policies. Lastly, take into consideration the different ways to improve credit score fast so that you will be prepared at all times if any new rules are passed.