A life insurance policy is a must in today’s world as it protects one’s family against financial uncertainty in the unfortunate event of the policy holder’s passing. By providing monetary assistance, the best life insurance policy not only helps the family tide over any immediate financial requirements but also ensures that the family can continue to meet their expenses like continuing education, repaying EMIs on loans, health expenses, etc. In doing so, it provides a safety net like no other investments can because other types of investments might take a long time to liquidate, while a life insurance policy grants immediate assistance.
However, getting a policy might be a bit confusing for the average consumer, as there is a variety of policy options available in the market. So, how do you choose the best life insurance policy that is the most suited to your unique requirements.
In this article, we will look at a few of the features that you should look for in a policy before buying one, as they are some of the most essential and offer all-around coverage against exigencies in life.
But first, let’s look at a few options you have when it comes to life insurance policies!
- Term Life Insurance- This is a pure life policy that doesn’t have any savings or maturity benefits, and only offers a payout up to the sum assured in case the policyholder passes away. They are comparatively more affordable as the premiums are often low. However, you can opt for certain riders and additional benefits to increase the scope and cover of the policymaking them one of the most popular life insurance policies in the industry.
- Unit Linked Plans- If you want a policy that’s a mix of investment and insurance cover; a unit-linked plan is the go-to life insurance policy. However, it often comes with a 5-year lock-in period making it suitable for individuals looking for long term investment with risk protection.
- Endowment Policy – For someone who wants a savings component to a part of the life insurance policy; an endowment policy is the best option as you get a lump sum amount on maturity with the benefit of life cover.
- Whole Life Insurance- These types of policies offer continued coverage for a period of up to 100 years of age. Therefore, the insured is covered for life, and in case of the untimely passing of the policyholder, the nominees are entitled to get the death benefit. However, if the policyholder survives till the end of the policy term, they are eligible to get a maturity benefit.
Coming back to the benefits you need to look for in a life insurance policy, there are a few that play the most critical role in helping you make a decision. Let’s have a look.
Tax Free Payouts
In case of untimely demise of the policy holder, the sum assured paid to the next of kin or nominee (s) is a tax-free payout. Therefore, your family has access to the entire amount without needing to file any taxes on the money received.
Yearly Tax Benefits
Apart from the point above, you are also eligible to get deductions up to ₹1.5 lakh under Section 80 C of the Income Tax Act on the premiums you pay.
Critical Illness Cover
Some policies also offer a critical illness cover. They provide certain benefits of health insurance. In case the policyholder is diagnosed with a critical illness, they are eligible to receive a payout. This payout is given on diagnosis, without any requirement to submit any bills, and helps the policyholder and the family fare better financially while the person recovers.
Helps in Retirement Planning
If you choose a policy with a savings or maturity benefit component, the money that you get at the end of the policy term can help you sail smoothly through your retired life without having to scramble for finances giving you complete peace of mind.
Max life insurance offers one of the best life insurance policies that take care of all your needs, and they have some of the best plans across categories to help you choose one that’s perfect for your needs. So, now that you know about a few of the most important benefits you can expect, and a few types of life insurance policies you can buy—it’s time to secure your family!
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