Life Insurance Policy
What is Life Insurance Policy…?
A life insurance policy is an agreement with an insurance agency. In return for premium installments, the insurance agency gives a singular amount installment, known as a demise advantage, to recipients upon the protected’s passing. Normally, extra security is picked in light of the requirements and objectives of the proprietor. Term extra security, by and large, gives assurance to a set timeframe, while perpetual protection, for example, entire and all-inclusive life, gives lifetime scope. Note that passing advantages from a wide range of life coverage are for the most part wage tax-exempt
Term life insurance is intended to give budgetary assurance to a particular timeframe, for example, 10 or 20 years. With conventional term protection, the top-notch installment sum remains the same for the scope time frame you select. After that period, strategies may offer proceeded with scope, normally at a significantly higher premium installment rate term life insurance is generally less expensive than permanent life insurance
Advantages of Life Insurance Policy
|The advantage of Life Insurance Policy|
- Life insurance provides an infusion of cash for dealing with the adverse financial consequences of the insured’s death.
- Life insurance enjoys favorable tax treatment, unlike any other financial instrument.
- Death benefits are generally income-tax-free to the beneficiary.
- Death benefits may be estate-tax free if the policy is owned properly.
- Cash values grow tax-deferred during the insured’s lifetime.
- Cash value withdrawals are treated on a first-in-first-out (FIFO) basis, therefore cash value withdrawals up to the total premiums paid are generally income-tax free.
- Policy loans are income tax-free.
- A life insurance policy may be exchanged for another life insurance policy (or for an annuity) without incurring current taxation.
Disadvantage of Life Insurance Policy
Disadvantage of Life Insurance Policy
- Policyholders forego some present consumption to pay strategy premiums. In addition, extra security is normally bought for the advantage of others and typically by implication for the protected individual.
- Money surrender esteems are normally not exactly the premiums paid in the initial a few approach years and once in a while, an arrangement proprietor may not recuperate the premiums paid if the strategy is surrendered.
- The disaster protection buys choice and the situating of the extra security can be intricate particularly if the protection is for home arranging, business circumstances or complex family circumstances.
- The disaster protection securing procedure can be irritating and astounding (e.g. Is the disaster protection specialist dependable? Is this the correct item and transporter? In what capacity can therapeutic guaranteeing to be streamlined?).
Type of Insurance Policy
1) Term Life Insurance: Term insurance is a life insurance product offered by an insurance company which offers financial coverage to the policyholder for a specific time period.
2) Whole Life Policy: The policyholder pays regular premiums until his death, upon which the corpus is paid out to the family.
3) Endowment Plans: Endowment plans pay out the sum assured under both scenarios – death and survival
4) Unit Linked Insurance Plans: ULIP is a life insurance product, which provides risk cover for the policyholder along with investment options to invest in any number of qualified investments.
5) Money Back Policy: Money back plan is a life insurance product as well as an investment plan which provides life insurance cover against the death of the policyholder along with periodic returns as a percentage of sum assured.
Here are the Top ten life insurance companies of India:
- Life Insurance Corporation of India (LIC)
- ICICI Prudential Life Insurance
- SBI Life Insurance
- HDFC Standard Life Insurance
- Max Life Insurance
- Bajaj Allianz Life Insurance
- Birla Sun Life Insurance
- Reliance Nippon Life Insurance
- Tata AIA Life Insurance.
- PNB Metlife India Insurance